What happened
Shares of fuboTV (NYSE: FUBO) were falling today after the sports-focused streaming service issued disappointing guidance in its fourth-quarter earnings report this morning and revealed it had sold stock at a deeply discounted price.
Notably, the stock was actually up in pre-market trading as it beat estimates in its fourth-quarter earnings report, but the other updates spoiled those gains.
As of 1:32 p.m. ET, the stock was down 11.9%.
So what
fuboTV got a lift in the fourth quarter from the FIFA World Cup as revenue jumped 38% to $319.3 million, which beat estimates at $285.6 million. Subscribers rose 29% to $1.445 million in North America and 117% to 420,000 in the "rest of the world" segment, where it monetizes at a much lower rate.
The company struggled to convert those top-line gains into improvements on the bottom line and its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss expanded from $73.4 million to $75.4 million. On a generally accepted accounting principles (GAAP) basis, the company's per-share loss from continuing operations narrowed from $0.64 to $0.48, which beat estimates at a loss of $0.71.
In its letter to shareholders, management said: "We surpassed $1 billion in total annual revenue and $100 million in ad sales annual revenue for the first time. The quarter also marked our lowest level of quarterly cash usage in Fubo's time as a publicly traded company and we achieved positive gross profit."
After it filed the report, the company also made another Securities and Exchange Commission (SEC) filing saying it sold 36.7 million shares for $68.1 million, or an average price of $1.86, significantly below the $2.32 it closed at on Friday. That's a sign that management is desperate enough for cash that it's selling at a significant discount.
Now what
The company's guidance was mostly in line with expectations as it warned of potential churn following the World Cup. For the first quarter, it expects revenue of $300.5 million to $306.5 million, compared to the consensus at $304.33 million.
For the full year, it sees revenue of $1.22 to $1.25 billion, just shy of estimates at $1.26 billion.
The company also expects to finish the year with total subscribers at 1.9 million to 1.95 million, a slight increase from the 1.87 million it finished 2022 with.
With weak expected subscriber growth, losses mounting, and share dilution continuing, it's easy to see why the stock is down double digits today.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends fuboTV. The Motley Fool has a disclosure policy.
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