FuboTV's Margin Gains, NFL Bundle Plan Keep Analyst Bullish Despite Subscriber Dip

Needham analyst Laura Martin maintained FuboTV FUBO with a Buy and lowered the price target from $3.35 to $3 on Monday.

Last Friday, FuboTV reported first-quarter growth of 8.1% year over year to $405.96 million, marginally missing the analyst consensus estimate of $415.45 million. Adjusted EPS loss of two cents beat the analyst consensus estimate of nine cents.

Also Read: FuboTV Stock Drops After Q1 Subscriber Losses And Lower-Than-Expected Outlook

FuboTV reiterated plans to launch a new skinny bundle before the fall 2025 NFL season, including content from Walt Disney Co DIS and non-Disney linear TV programmers.

These bundles should represent more choices and lower content costs for FuboTV.

FuboTV stated that the Disney deal is still on track to close by the second quarter of 2026.

The company also noted that higher churn is not seen on English-language packages, which were flat to up Y/Y, even after its price hikes.

Also, reactivations exceeded expectations in April, and ad trends improved, with April marking the strongest ad revenue month year-to-date.

FuboTV reported revenue of $416.3 million (up 3% Y/Y and 1% above Martin’s estimates) and an adjusted EBITDA Loss of $1.4 million (better by 96% Y/Y and 58% better than Martin’s estimate).

First-quarter 2025 revenue from subscriptions was $391.4 million (up 5% Y/Y and 3% above Martin’s estimates), and ad revenue was $22.9 million (down 17% Y/Y and 31% below Martin’s estimates).

The second-quarter 2025 guidance is for North American (NA) revenue of $340 million-$350 million (down 10% Y/Y at the midpoint), plus rest of world (ROW) revenue of $6.5 million-$7.5 million (down 15% Y/Y at the midpoint), NA subscribers of 1.225 million-1.255 million (down 14% Y/Y at the midpoint), and ROW subscribers of 325K-335K (down 17% Y/Y at the midpoint).

FuboTV subscribers were 1.824 million (-8,000 sequentially) on March 31, down 4% Y/Y and 2% above Martin’s estimate.

North America reached 1.47 million subscribers (down 206,000 sequentially), down 93% Y/Y and 10% above Martin’s estimate. North America subscriber ARPU rose 4% Y/Y to $81.25. ROW subscribers declined by 8,000 to 354,000, up 11% Y/Y and 71% above Martin’s estimate.

FuboTV guided to 1.225 million–1.255 million North American subscribers in the second quarter of 2025 (down 14% Y/Y).

Subscriber guidance reflects churn from Fubo dropping the Univision channels and content and the non-recurrence of Copa America in this year’s second quarter.

FuboTV reported a substantial gross margin of 16.6%, up >2 times from first-quarter 2024 gross margins of 6.9% and well above Martin’s estimate of 9.5%. It also improved its adjusted EBITDA loss by $37.4 million Y/Y. The company’s net income of $188.5 million in the first year of 2025 was better than its reported loss of $56.3 million in the first year of 2024, with the first of 2025 impacted positively by $220 million associated with the gain on litigation settlement. Excluding this impact, the net loss would have been $7.9 million, much better than last year’s adjusted loss of $34.1 million in the first quarter of 2024.

Free cash flow was a loss of $62 million, up by $9.3 million Y/Y.

FuboTV ad revenue declined by 17% Y/Y in the first quarter of 2025 (31% below Martin’s estimate), primarily due to the loss of Warner Bros. Discovery, Inc WBD and TelevisaUnivision content, which removed MMs of ad units for sale and resulted in Spanish-language bundle disconnects by certain subscribers. Normalized for these, ad revenue would have been up Y/Y.

Martin estimated that FuboTV’s direct sales force commands a 30%- 50% premium CPM to open-auction, biddable programmatic. Interactive ad formats were up 37% year over year in the first quarter of 2024, and they projected these ads would be up 41% in the first half of 2025.

Martin projected second-quarter revenue of $352.84 million and adjusted EPS of $0.03.

Price Action: Fubo stock traded higher by 0.21% at $2.43 at last check on Monday.

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