fuboTV(US:FUBO)2022-11-06 16:00PART I - FINANCIAL INFORMATION Item 1. Financial Statements This section presents fuboTV Inc.'s unaudited condensed consolidated financial statements for Q3 and nine months ended September 30, 2022, highlighting revenue growth, widening net loss, and significant cash usage Condensed Consolidated Balance Sheets As of September 30, 2022, total assets decreased to $1.27 billion, while total liabilities increased to $806.5 million, leading to a significant reduction in stockholders' equity Condensed Consolidated Balance Sheet Data (in thousands) | Account | Sep 30, 2022 (Unaudited) | Dec 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $201,221 | $374,294 | | Total current assets | $394,034 | $428,505 | | Goodwill | $607,223 | $630,269 | | Total assets | $1,268,027 | $1,369,778 | | Liabilities & Equity | | | | Total current liabilities | $355,498 | $337,297 | | Convertible notes, net of discount | $393,462 | $316,354 | | Total liabilities | $806,481 | $698,897 | | Accumulated deficit | ($1,406,107) | ($1,009,293) | | Total stockholders' equity | $460,018 | $670,881 | Condensed Consolidated Statements of Operations and Comprehensive Loss Q3 2022 total revenues grew 43.5% to $224.8 million, but operating expenses and a $35.5 million impairment charge led to a widened net loss of $152.6 million Q3 2022 vs Q3 2021 Performance (in thousands, except per share data) | Metric | Q3 2022 | Q3 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Subscription Revenue | $201,911 | $138,119 | 46.2% | | Advertising Revenue | $22,714 | $18,570 | 22.3% | | Total Revenues | $224,813 | $156,690 | 43.5% | | Subscriber related expenses | $214,466 | $143,370 | 49.6% | | Impairment of goodwill, etc. | $35,454 | $0 | N/A | | Operating Loss | ($150,329) | ($103,258) | 45.6% | | Net Loss Attributable to Common Stockholders | ($152,648) | ($105,851) | 44.2% | | Net Loss Per Share (Basic & Diluted) | ($0.82) | ($0.74) | 10.8% | Nine Months Ended Sep 30, 2022 vs 2021 Performance (in thousands, except per share data) | Metric | Nine Months 2022 | Nine Months 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Subscription Revenue | $621,022 | $359,601 | 72.7% | | Advertising Revenue | $67,886 | $47,642 | 42.5% | | Total Revenues | $688,722 | $407,294 | 69.1% | | Subscriber related expenses | $679,027 | $377,177 | 80.0% | | Impairment of goodwill, etc. | $46,136 | $0 | N/A | | Operating Loss | ($398,095) | ($249,406) | 59.6% | | Net Loss Attributable to Common Stockholders | ($409,496) | ($270,876) | 51.2% | | Net Loss Per Share (Basic & Diluted) | ($2.32) | ($2.02) | 14.9% | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities more than doubled to $294.5 million for the nine months ended September 30, 2022, while financing activities decreased significantly Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($294,464) | ($143,030) | | Net cash used in investing activities | ($110,827) | ($35,673) | | Net cash provided by financing activities | $233,237 | $441,014 | | Net (decrease) increase in cash | ($172,054) | $262,311 | - Financing activities in 2022 were primarily driven by $229.0 million in net proceeds from an At-the-Market (ATM) common stock offering. This contrasts with 2021, which saw $389.4 million from a convertible note issuance and $70.0 million from an ATM offering40274275 Notes to Condensed Consolidated Financial Statements The notes detail the company's business, the dissolution of Fubo Gaming, liquidity assessment, accounting standard adoption, Molotov acquisition, impairment charges, debt, and commitments - On October 17, 2022, the Company ceased operation of its Online Sportsbook in connection with the dissolution of its subsidiary, Fubo Gaming Inc47196 - Management believes that current cash, cash equivalents, and short-term investments of $307.4 million (as of Sep 30, 2022) are sufficient to continue as a going concern for at least one year, despite incurring a net loss of $409.8 million for the nine months ended Sep 30, 20224952 - During Q3 2022, the Company recognized a non-cash impairment charge of $35.5 million on intangible assets, prepaid market access agreements, and property related to the Online Sportsbook. For the nine months ended Sep 30, 2022, total impairment charges for the wagering segment were $46.1 million, including a $10.7 million goodwill impairment74111244 - During the nine months ended September 30, 2022, the Company raised net proceeds of approximately $229.0 million from the sale of 31.7 million shares of common stock through its At-the-Market (ATM) sales agreements51143 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses performance drivers, including subscriber growth, the Molotov acquisition, increased operating expenses, the dissolution of Fubo Gaming, and liquidity Results of Operations Q3 2022 revenue increased by $68.1 million, primarily from subscription growth and the Molotov acquisition, while subscriber-related expenses and a $35.5 million impairment charge also rose significantly - Q3 2022 revenue increased by $68.1 million YoY, primarily due to a $52.5 million increase from a larger subscriber base, $5.7 million from add-on sales, and $5.6 million from the Molotov acquisition229 - Subscriber related expenses for the nine months ended Sep 30, 2022, increased by $301.9 million YoY, mainly due to a $288.3 million rise in affiliate distribution rights from subscriber growth and higher affiliate agreement rates232 - An impairment expense of $35.5 million was recognized in Q3 2022 related to the wagering segment as a result of the dissolution of Fubo Gaming243 Key Performance Metrics As of September 30, 2022, North America paid subscribers reached 1.2 million with an ARPU of $71.52, while Rest of World had 0.4 million subscribers and an ARPU of $5.46 Key Performance Metrics as of September 30, 2022 | Metric | Q3 2022 | Q3 2021 | | :--- | :--- | :--- | | Paid Subscribers (North America) | 1.2 million | 0.9 million | | Paid Subscribers (Rest of World) | 0.4 million | N/A | | Monthly ARPU (North America) | $71.52 | $70.19 | | Monthly ARPU (Rest of World) | $5.46 | N/A | - Beginning in Q3 2022, ARPU is calculated using GAAP Subscription and Advertising revenue, whereas it was previously calculated using Platform Bookings, which adjusted for deferred revenue253 Liquidity and Capital Resources As of September 30, 2022, the company held $207.4 million in cash and equivalents plus $100.0 million in short-term investments, with management believing these are sufficient for the next twelve months - As of September 30, 2022, the company had cash, cash equivalents, and restricted cash of $207.4 million and short-term investments of $100.0 million264 - The company sold 31.7 million shares of common stock through its ATM programs in the first nine months of 2022, generating net proceeds of approximately $229.0 million264 - The dissolution of Fubo Gaming is expected to reduce planned cash outlay, allowing the company to allocate additional funds to its streaming segment265 - Management believes its existing cash and short-term investments are sufficient to fund operations for at least the next twelve months, supporting the going concern assumption267 Quantitative and Qualitative Disclosures About Market Risk The company faces minimal market risk from interest rate fluctuations on its fixed-rate convertible notes and negligible foreign currency risk, as non-U.S. dollar revenues are only 2.6% of the total - The company's indebtedness, including $402.5 million of convertible notes, bears interest at a fixed rate, mitigating interest rate risk on liabilities285 - Foreign currency risk is minimal, as revenues denominated in currencies other than the U.S. dollar represented only 2.6% of the total for Q3 2022. A hypothetical 10% change in the euro would not materially affect results286 Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that as of September 30, 2022, the company's disclosure controls and procedures were effective289 - No material changes to internal control over financial reporting were identified during the third quarter of 2022290 PART II - OTHER INFORMATION Legal Proceedings The company is vigorously defending an ongoing consolidated class action lawsuit alleging federal securities law violations through false and misleading statements - A consolidated shareholder class action lawsuit (In re fuboTV Inc. Securities Litigation) is ongoing, alleging false and misleading statements regarding the company's financial health and prospects between March 2020 and January 2021294297 - The company filed a motion to dismiss the class action complaint in September 2021 and believes the claims are without merit298 Risk Factors The company faces significant risks including a history of operating losses, need for additional capital, intense competition, reliance on content providers, and regulatory compliance challenges - Financial Risks: The company has a history of operating losses ($409.8 million net loss for the nine months ended Sep 30, 2022) and may require additional capital, which might not be available on acceptable terms302303 - Content & Competition Risks: The business is highly dependent on licensing content, especially sports, on favorable terms. It faces intense competition from well-funded virtual MVPDs (e.g., YouTube TV, Hulu Live) and large technology companies327363 - Operational & Technology Risks: The company relies on third-party partners for device availability (e.g., smart TVs) and critical infrastructure (Google Cloud Platform, Amazon Web Services), and any disruption could adversely impact the business346348 - Regulatory & Legal Risks: The business is subject to complex regulations regarding data privacy (CCPA, GDPR), internet commerce, and potential liabilities from past gaming operations. It also faces ongoing securities class action litigation422405 Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported for the period covered by this report - None reported for the period466 Other Information No other information is required to be reported under this item for the period - None reported for the period469 Exhibits This section lists all exhibits filed with the quarterly report, including corporate governance documents, agreements, and required CEO/CFO certifications - The exhibits include CEO and CFO certifications pursuant to Rule 13a-14(a)/15d-14(a) and 18 U.S.C. Section 1350, as well as the Inline XBRL documents472