Fubo Q3 2026 Earnings Conference Call

and Hulu Plus Live TV have very distinct and valuable subscriber bases that are anchored in what those brands stand for. Fubo has a really strong platform across news, sport and entertainment and that sports first DNA has been a key differentiator and it's something that the Fubo subscribers really love about the product. Equally, Hulu Plus Live TV is very strong in the entertainment side of things and long recognized as a leader in entertainment television and And together with the Walt Disney Company S-BOD bundles that are a part of the Hulu Plus Live TV package really speaks to a broader entertainment customer. So I think having both in the market gives us the opportunity to really bring to market a range of products and services that meet different consumers where they are along that price value curve. And that's something that we're going to continue to lean into. We think that those opportunities give us the maximum reach and the chance for us to get to the most subscribers out there in the marketplace. And even within those product suites, we see the opportunity for increased segmentation. For example, there's a place for the very affordable Fubo Latino product, even alongside Hulu Plus Live TV's Espanol offering, which also includes Univision. So having both in the market and being able to operate that as a portfolio of offers, I think gives us the best chance of continuing to grow and reach as many consumers as possible. On your second question around AI, I've been actually very impressed with the way that the organization here is driving AI through every element of the business operations. Of course, we're using it in product features like content discovery and search and personalization. In fact, there were quite a number of user experience innovations delivered in time for the World Cup most recently that our viewers and subscribers engaged with really strongly. Those are things that help consumers find the content they're looking for with less friction and more quickly and get right to the point in play that they're seeking. And so we're very excited about how some of those features have performed, and we're on track to deliver the AI-driven voice search discovery feature that we previewed on a previous call, that was previewed on a previous call this fall in time for the football season. But in addition to the features that AI is being used for here, I've also been pretty impressed with how our product and engineering teams are prototyping, developing, and using AI to solve problems. There are some very innovative tools that are changing the way that the engineering teams and the product teams here work. And, of course, those things are more about bringing to market better features more quickly. So this is a growth business. Rather than thinking about AI as an opportunity to save costs or reduce resources, we're actually seeing it as an accelerator to bring better features to market more quickly and more of them. And then last but not least, I'd call out marketing technology, where AI has been an important step forward for the teams, both in terms of how we optimize our acquisition campaigns and also how we vastly increase the volume of creative that we have out in the market at any one point in time, which, of course, drives efficiency for us on the acquisition side. So for us, AI is more about doing more with the team we have and moving more quickly.

Your next question comes from the line of Kutkin Morrow with Evercore ISI. Kutkin, your line is open. Please go ahead.

Good morning, and thanks for taking the question. I wanted to ask about your capital allocation priorities. You've got it to positive free cash flow in fiscal 27 and 28, and you're in cash above $200 million. As that cash builds, how are you prioritizing growth investments, the balance sheet, and the 2029 converts? Thank you.

Hey, Gachlan. Thanks for the question. I'd say to your point, based on our outlook and our cash balance, our balance sheet has never been this strong. So in terms of the balance sheet, our current cash level is actually greater than the outstanding face value of those 29 converts. So that does give us a lot of optionality. On the investment front, your question we will continue to invest in growth and i think we've been pretty consistent on what that may include meaning programming marketing tech and product understood thanks john you're welcome next question your next question comes from the line of brent penter with raymond james brent your line is open please go ahead hey good morning everyone

thanks for taking the questions and elisa looking forward to hearing your strategic roadmap in November. Can you all update us on the performance of the Fubo sports package and how you're thinking about the competitive landscape there, particularly with YouTube TV's recently introduced sports package?

Morning, Brent. Thanks for that question. We're really happy with the range of packages that we have and the optionality that's giving us to lean into the market at different moments in both the sports calendar and in our business cycle as well. So I think the sports package is one part of that. And given what I said in the prepared remarks about pricing and packaging, I think that is an advantage we have and something that we're really happy with. Our package competes with a YouTube TV sports package, obviously, but there are differences between each of these. And for example, the Fox News component in our sports package is something that's particularly valued by our subscriber base and is working well for us. Zooming out a little bit, I think we really like the ability for us to compete with competitors' programming options in a range of different ways. So, for example, the RSNs have been a long-term differentiator for Fubo in certain markets, and that ability to provide local sports gives us a competitive edge in certain packages. Hulu plus Live TV has the SVOD bundles, which again is unique as a proposition for those product lines. And even something like Fubo Latino, which I mentioned earlier, a very price competitive proposition for access to key sports for that particular segment is proving valuable to us. So there are multiple different ways that we intend to continue leaning into these different market segments with different offers beyond just the sports and news package that we've been marketing during the World Cup.

Okay, got it. And then the second question for me, one feature that I think is important for sports fans is multi-view, particularly as we get into heavier sports season here into the fall. You all have rolled that out, obviously, across Fubo. How should we think about your multi-view roadmap and particularly progress toward bringing that to Hulu Live TV?

Yeah, thanks for that question. We did launch multi-view on Fubo for the LG platform in the quarter, along with several of those other UX improvements that I mentioned earlier. Zooming out, though, Fubo has long had a real emphasis on UI innovations and that is an area that we're going to continue to focus on as a team and make sure that we are investing to protect our edge there. Deeper product and tech roadmap plans are part of the strategic review that I mentioned that is underway at the moment and we'll be sharing more about what that roadmap looks like when we regather together in the November time frame. As it relates to the Hulu Plus Live TV integration onto the Disney Plus app, we're looking forward to seeing that come to market at the end of this calendar year. And there'll be more to share from Disney's perspective about what the Hulu Plus Live TV roadmap looks like as we get closer to that milestone.

Your next question comes from the light of Matt Condon with Citizens Bank. Matt, your line is open. Please go ahead.

Thank you for taking the questions. Alisa, welcome aboard. I had a question for you. What excites you most about the opportunity you see ahead for Fubo, and where are the biggest areas you see of untapped potential today?

Good morning, Matt. Nice to meet you. Well, as I mentioned in my prepared remarks, FuboTV is now the number one virtual pay TV operator in the U.S. market. And I think that position of scale, which is new for this business, is a very unique vantage point to start thinking about what the growth trajectory of this business could really look like as we double down on the combined business entity. So I think the distinct core advantages remain our products, our technology, that scale I mentioned, as well as a talented team. And this is obviously a business and an industry that I know very well. So those opportunities to lean into that strength and to partner with Disney on making sure that we're able to develop new innovations in this market is something that I think will unlock significant new growth opportunities. So that's what really attracted me to this opportunity. I think the business is very well poised to take that next step in a number of strategic directions that we'll be sharing more on in November.

Great. We look forward to that. And Alisa, just given your background at Disney, what opportunities do you see to more deeply integrate Fubo into the Disney ecosystem? How should we think about driving subscriber growth as well as revenue growth going forward? Thank you so much.

Well, obviously, I know that team very well. And I'm very confident that we'll continue to strengthen those relationships as we work together on what the future opportunities for both Fubo and Hulu Plus Live TV are. But even today, nine months, just nine months after the close, there are some really interesting areas of opportunity that we're very enthusiastic about. First and foremost, in our opening remarks, we mentioned the marketing partnerships. The ESPN relationship is at its very early stages. And while the numbers are small, the signals are very convincing. There's better conversion and retention from that heavily enthusiastic sports base for the Fubo products versus some of the other marketing media channels that we have. And tapping into that audience that ESPN serves so well is a clear opportunity. And then I've mentioned also in other questions that I've answered here that Disney's plans to integrate Hulu and Hulu Plus Live TV into the Disney Plus app will be a key step forward in a similar vein. So I think that is a great opportunity to broaden the top of the funnel for the Hulu SKUs and the Fubo SKUs that we're offering out in the marketplace. As it relates to advertising, again, we're very bullish on our opportunity to best leverage the Disney ad sales operation in a couple of regards. First and foremost, we're thrilled to be part of Disney's upfront activities this year. That really provides Fubo with access to the power of Disney's scale and reach in that upfront process, and a great opportunity for us to be part of their story around live and sports in a year when they're going to market with an unprecedented array of live and sports assets for advertisers to get associated with. So that's a great opportunity. And then I've mentioned the capacity and utilization improvements that we've seen and pricing improvements. That really speaks to the power of the technology that Disney's ad sales operation is built on and their ability to serve the Fubo audience to advertisers, you know, in a highly segmented way using the Disney audience graph. So in both of those areas, I think there's a lot of opportunity for us to continue building on that. At the same time, Fubo's products and services retain a certain level of customization and flexibility. So we can benefit from the scale of Disney's ad-serving platform as well as their sales approach, while also still serving advertisers with customized executions, creative content, and other integrations that have been historically part of the FUBO ad sales proposition. And then, of course, there are other operating savings that the team have previously alluded to and will continue to drive those synergies. So as we think about the future of our relationship with Disney, I think it's doubling down on many of the strategies and initiatives that have already been delivered or outlined by the team and yet to be delivered, as well as a range of new opportunities that we see to try and best leverage those marketing and advertising relationships that we have.

Your next question comes from the line of David Joyce with Seaport Companies. David, your line is open. Please go ahead.

Thank you. With the World Cup having been so popular and FUBO's origins and carrying soccer programming, you did get the NBC and Telemundo content just in the nick of time. What was the subscriber lift from that event? And then separately, I wanted to see if the FUBO TV and Hulu Live programming contracts are getting close to being coterminous terminus or when that might happen and what the margin scale benefits could be.

Okay. Thanks, David. So on your first question, to your point, we're pretty happy to be able to bring back Telemundo on our FUBO Latino package in time for the World Cup. And for some markets, we brought NBC back on FUBO English by the end of June. I would say as a reminder, Hulu Live had the NBC programming all along. So while we don't break out the performance of individual services, the availability of World Cup programming did have a favorable impact on subscribers in the quarter. And maybe I'll give a little bit more context there in terms of what that means. If you look back to fiscal 3Q25, we saw pro forma sequential declines. You know the seasonality of our business of about 250,000 subscribers when compared to the prior quarter. If you look this year we posted a gain of 25,000 sequentially or a slight sequential improvement. So really a step function change in trajectory that, again, we're very happy about. As it relates to your second question, I would just say that the short answer is yes, and there's still work to be done. And I think what you've heard me say historically is that when we look at the three buckets of synergies, we have the programming piece, the advertising piece, and the procurement piece. Programming really is the medium to longer-term opportunity for us based on the timing of our renewals that are typically multi-year agreements. And so nine months in, what I can tell you is that on the renewals that have come up, and there's been a handful, we have seen the benefits of our scale, and those deals are now determinants.

As it relates to margins, we haven't specifically broken out that opportunity on the margin dollars or margin percentage, but I would say that we're happy with what we've seen and they should be a creative upon renewal your next question comes from the line of tyler dimatteo with btig tyler your line is open please go ahead morning everyone thanks for taking the questions appreciate it uh i wanted to come back to the to the ad revenue trends i know we gave some comment on capacity and pricing seems like that's trending in the right direction just curious maybe broadly speaking how is that tracking with hulu versus the expectations, just given the first half integration that we're at. That's my first question. And then my second question, John, for you, just on the guidance, you know, we increased EBITDA, again, maintained free cash. I'm curious, can we just talk a little bit about levers and where there's upside or opportunity from here and where you could see that from the integration?

Okay. Thanks, Tyler. I'll take your first question. And I'm just going to circle back to David's as well and just point out that in addition to the subscriber benefits from World Cup, World Cup was also a key driver of engagement that obviously led to some significant advertising impacts that we were really pleased to see as well and that bodes well as we head into football season. Obviously you know it's a great time of year for us but more broadly in terms of advertising and how those trends are tracking for the Fubo TV business. I'd say we're very happy with what we've seen. Our full integration including all the technology aspects of integrating with the Disney ad sales organization only wrapped in June and those results have been very strong as we mentioned earlier. Meaningful uplifts in CPM and fill rates versus the prior period. In terms of how the product performances compare I want to take one step back back here and just just explain the Disney ad server is really and the Disney ad sales strategy is really an audience first strategy and that is really important for us and we see it as a great opportunity what that means is that the Disney ad sales proposition is really selling the entire reach of the portfolio indifferent to specific platforms or brands, and then leveraging the capability of the ad server for audience-based targeting. And so that gives Fubo two distinct advantages. Firstly, we're part of the scale and reach that is the primary selling proposition, but also we're able to make sure that the fandoms and the data signals that are coming from the sports-specific TV viewing, which is an area in and very strong demand from advertisers is a part of the way that advertisers are able to reach our audience and we're feeding into the Disney audience graph very actively in that regard. So, we have the benefit of the scale and being part of the larger organization while also being able to benefit from and contribute to the audience graph for specific audience targeting metrics. So, that actually is a powerful lever. It means that the sports audiences and the fandoms that advertisers are looking for can be found on the Fubo platform and also followed through to the other platforms where they're consuming perhaps entertainment content or VOD content in a different context. So that kind of world-class technology through the ad platform is one of the reasons that I'm really optimistic about our ability to monetize our direct-to-consumer engagement and that the upside from that will be important for our business. John, do you want to speak to the follow-up commentary on some of the rates that we're seeing for July?

Yeah, sure, Ashley. Let me speak on the ad piece to Elise's point. First, let me stick to the sports theme. I would just add that what we're seeing in terms of the upfront, we are seeing sports CPMs showing healthy increases, so we're pleased with that. And then I would say separately, with the enhanced targeting capabilities that Alisa spoke to, for instance, in June, which is really when they started to kick in, June, we saw at the Fubo business the best month of ad growth, I'd say, in at least a couple of years. And I'd also say related to that, although we've been talking about relative softness and entertainment now as it relates to CPMs for a while, it is worth noting that CPMs were up in June year-over-year for new sports and entertainment. So, again, we're pretty pleased with that outcome. As it relates to your question around the leverage on guidance, I'd say a couple things. One is, on a positive note, we feel really good about delivering the year in terms of adjusted EBITDA. at the upper end of the original guidance range for the year. And as I said in my prepared remarks, we now expect 90 to 100 million, up 10 million at the low end of the range. In terms of levers, I'd highlight a few. One, on advertising, again, given Elise's comments on how well the advertising integration is going on the Disney ad server, all things equal, that could be a lever not only for the fourth quarter, but I'd also say for the next several quarters. And then on marketing, look, our team saw an opportunity to invest in marketing channels that delivered high LTV subscribers in terms of the third quarter. That opportunity may present itself again as it relates to the fiscal fourth quarter. And then I guess I'd say on how integration is tracking, I'd say ahead of plan, again, in advertising, we achieved the CPM lift that we had expected to take, I'd say, a fair amount longer to recognize them than we actually did. And then the team has done a really great job. great job of integrating and selling the Fubal inventory.

Your next question comes from the line of Patrick Scholl with Barrington Research. Patrick, your line is open. Please go ahead.

Hi, thanks for taking the question. Maybe just following up on the ad graph and kind of the list that you expect on advertising from that, like how do advertisers currently value like the respective inventory and how long do you think there would be to kind of like ramp up the value that they're placing on the Fubo inventory? Is it just a function of getting enough engagement or maybe just a little bit more discussion on how those work?

Okay, Pat. I'll add a little bit more color to that by saying I think that the technical integrations just wrapped in June, as I mentioned earlier, so that certainly unlocks one lever now. And then in addition to that, Fubo was part of Disney's upfront sales process this year for the first time. That also is in the process of wrapping or is just wrapped. So they're two new key levers that we should see in a go-forward basis reflected in our numbers. Obviously, the specifics around what that means for the business will be part of the strategic review that we're in the process of completing at the moment. We'll have more to share as we get further into that and on our next call. But I think also the other thing I'd point out is that, you know, if you look at the landscape or just double down on what John mentioned, while there are some areas of softness across the advertising marketplace in general, what really stands out is live and sports. And so as we head into college and NFL seasons, that is obviously there's been a lot of momentum to continue building on and will continue to be a core focus. Advertisers value the opportunity to meet consumers where they are in those zeitgeist moments and there's nothing more compelling when it comes to those kinds of events and opportunities for reach at scale as live sports. So as we head into that football season and in the run-up to Super Bowl, that's obviously something that is going to continue to be a distinct advantage for the FUBO proposition and more broadly for the FUBO TV proposition across the rest of the Hulu live programming.

Okay. And then you had talked earlier about like the synergy opportunities. Can you provide some of the opportunities around vendor contracts and maybe just the timing of executing on that?

Sure. Let me ask John to take that one.

Hey, Pat. Yeah, sure. So as a reminder, going back to the timing of the business combination, we did not assume any benefit related to any improved vendor contracts. I'd say as of now, in many instances, from what we've seen, the difference in pricing is significant. And to date, again, we've executed on a handful of those deals with a substantial improvement in rates for the ones that we've actually completed. I'd say looking ahead, we've identified several larger opportunities. It's still early because some of those larger contracts are multi-year in nature. But I'd say the annual savings could be significant as they come up, and this is really a priority for our team.

Your next question comes from the line of Drew Crum with B. Riley Securities. Drew, your line is open. Please go ahead.

Okay, thanks. Good morning, everyone, and Lisa, welcome. You addressed the lift. you saw from World Cup in the quarter? How about baseball, which seems to be enjoying some resurgence in popularity? And given that, looking ahead to fiscal 27, a work stoppage for MLB seems increasingly likely. Obviously, difficult to predict, but can you address potential impact to your business and what you're doing to prepare for such a scenario? Thanks.

Morning, Drew. It's obviously way too early and premature to speculate on what might happen as a result of some of the noise around MLB and what that might mean for our business. I mean, our focus in terms of mitigating any risk from that or any other content disruption is really to focus on having the most diversified content portfolio we can across both news, sports, and entertainment. So that certainly helps us mitigate some reliance on any single programming category, and that's something that the team has continued to be really focused on. And this industry is in constant change, and particularly in sports, there is a lot of movement on the rights front. So our focus is on staying agile and making sure that we can adapt and be as flexible as possible as the context unfolds, and we'll continue to do that into the baseball season.

Your next question comes from the line of Alicia Reese with Wedbush. Alicia, your line is open. please go ahead.

All right. Thanks. I have a couple for Alisa. I know it's only been a few weeks so far, but I was wondering if you can expand upon any of the low-hanging fruit that you've identified for improvements, particularly within the four areas of strategic growth that you identified between the pricing tier, optimization, content expansion, distribution development. I think you talked about innovation investing already. And I have a follow-up.

Okay. I think that providing more granular detail on those areas is something that we're planning to do when we circle back in the November timeframe, Alicia. So I think what I can say is that many of the areas that are already working well that might be characterized as low-hanging fruit, as you put it, would include some of the focus on the ad sales upside that we've talked about, as well as our retail acquisition plans, and how we think about the Disney streaming platform as a source of retail acquisition. And then as we lean into the launch of the football season, the team is actively working right now in terms of how we balance the portfolio of products that we have to emphasize different propositions to different segments of the So there are a few of the areas tied to the overall four strategic priorities that we're particularly focused on in the very short term, but we'll have more to share on all of these topics with you at our next call.

Excellent. And I was wondering if you could talk about just your philosophical approach to balancing margin expansion opportunities with as you approach carriage deals and whether you would go the direction that FUBA has historically gone in terms of, you know, going into full disputes and then prioritizing on the other side consistent and more reliable content availability for subscribers, perhaps that being at the expensive margin or increasing the subscription pricing. Can you just talk about that, how you'd approach that philosophically?

Yeah, I think Alicia, you articulated the real trade-off there as they are. And look, nobody likes blackouts. That's not good for us. It's not good for the subscribers and it's not good for programmers. But we do have an obligation to make sure that we're delivering the value that our subscribers are seeking and that we have the flexibility to continue innovating as an industry because consumers are demanding it. So the best way that we think we can manage that is to provide the broadest possible reach and subscriber base because that does matter to programmers and we want to be the best possible partner that we can be to them. So now as the second largest virtual pay TV provider by subscriber count in the US, I do think that that's an opportunity for our scale to play a role and it is also the reason that we're most critically focused on growth. that's my top priority to make sure that we are continuing to expand that subscriber base and therefore a more valuable partner to the programmers as we go into those discussions this concludes the q a session i will now turn the call back to alisa bowen ceo for closing remarks thank you operator and thank you to all the analysts uh who joined the call i really appreciate your questions. It was great for me to get a sense of what you're most interested in as we continue to refine this strategy and to share with you our third quarter results today. I want to thank you again for joining and I hope that you've managed to take away from this a sense of the energy and enthusiasm that we have around four key pillars of focus. The pricing and packaging, programming and content, our distribution and marketing opportunities, and the user experience innovations that we intend to continue developing. So I'm really looking forward to updating you with more on our progress against each of these areas and our focus going forward when we regroup on the November quarterly call. Thank you all for joining and have a great day.

This concludes today's call. Thank you for attending. You may now disconnect.