Q4 2023 FuboTV Inc Earnings Call
Operator: www.lrcgenerator.com Good morning.
Good morning, My name is Krista and I'll be your conference operator today at this time I would like to welcome everyone to the football fourth quarter full year 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
Krista: My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Fubo fourth quarter full year 2023 earnings conference call. All lines have been placed on mute to prevent any background noise.
Alison Sternberg: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star followed by the number one on your telephone keypad. And if you'd like to withdraw that question, again, press star one. Thank you. I would now like to turn the conference over to Alison Sternberg, Senior Vice President of Investor Relations. Alison, you may begin your presentation. Thank you for joining us to discuss Fubo's fourth quarter 2023. With me today is David Gandler, co-founder and CEO of Fubo, and John Janedis, CFO of Fubo. Full details of our results and additional management commentary are available in our earnings release and letter to shareholders, which can be found on the Investor Relations section of our website at ir.fubo.tv. Before we begin, let me quickly review the format of today's presentation.
If you would like to ask a question during that time simply press star followed by the number one on your telephone keypad and if you'd like to withdraw that question again press star one. Thank you I would now like to turn the conference over to Alison Sternberg Senior Vice President of Investor Relations. Alison you May begin your conference.
Thank you for joining us to discuss <unk> fourth quarter 2023 with me today is David Gambler, co founder and CEO of for about and John Geneva CFO for about full.
Full details of our results and additional management commentary are available in our earnings release and letter to shareholders, which can be found on the Investor Relations section of our website at IR Docs Blue Bell Dot TV.
Before we begin let me quickly review the format of today's presentation.
Alison Sternberg: David is going to start with some brief remarks on the quarter and full year and Fubo's strategy, and John will cover the financials and guidance. Then we will turn the call over to the analysts for Q&A. I would like to remind everyone that the following discussion may contain forward-looking statements within the meaning of the federal securities laws, including, but not limited to, statements regarding our financial condition, anticipated financial performance, business strategy and plans, industry and consumer trends, anti-competitive practices among our competitors and our response plan, and expectations regarding profitability. These forward-looking statements are subject to certain risks, uncertainties, and assumptions. Important factors that could cause actual results to differ materially from forward-looking statements include those discussed in our filings with the SEC. Except as otherwise noted, the results and guidance we are presenting today are on a continuing operations basis, excluding the historical results of our former gaming segment, which are accounted for as discontinued operations. During the call, we may also refer to certain non-GAAP financial measures.
David is going to start with some brief remarks on the quarter and full year and food both strategy and John will cover the financials and guidance then we will turn the call over to the analysts for Q&A.
I would like to remind everyone that the following discussion may contain forward looking statements within the meaning of the federal securities laws, including but not limited to statements regarding our financial condition anticipated financial performance.
Business strategy and plans industry and consumer trends anti competitive practices, among our competitors and our response plan and expectations regarding profitability.
These forward looking statements are subject to certain risks uncertainties and assumptions.
Important factors that could cause actual results to differ materially from forward. Looking statements include those discussed in our filings with the SEC.
Except as otherwise noted the results and guidance. We are presenting today are on a continuing operations basis, excluding the historical results of our former gaming segment, which are accounted for as discontinued operations.
During the call. We may also refer to certain non-GAAP financial measures reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are also available in our Q4 2023 earnings shareholder letter, which is available on our website at IR Docs Bubo Dot TV.
Alison Sternberg: Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are also available in our Q4 2023 Earnings Shareholder Letter, which is available on our website at ir.fubo.tv. With that, I will turn the call over to David. Thank you, Alison, and good morning, everyone.
With that I will turn the call over to David.
Thank you Alison and good morning, everyone. We appreciate you joining us today to discuss <unk> fourth quarter and full year 2023 results.
David Gandler: We appreciate you joining us today to discuss Fubo's fourth quarter and full year 2023 results. We are pleased to report that Fubo, once again, exceeded guidance across key financial and operating metrics in North America, with double-digit year-over-year growth during the fourth quarter. We delivered a record 1.62 million paid subscribers, an increase of 12% year-over-year, and $402 million in total revenue, up an impressive 29% year-over-year. Average revenue per user also reached an all-time high of $86.65, an increase of 15% year-over-year.
We are pleased to report that once again exceeded guidance across key financial and operating metrics in North America with double digit year over year growth during the fourth quarter.
We delivered a record 162 million paid subscribers, an increase of 12% year over year and $402 million in total revenue up an impressive 29% year over year.
Average revenue per user also reached an all time high of $86 65, an increase of 15% year over year.
David Gandler: In the context of a challenging year for the advertising industry, the accomplishments of our ad sales team are indeed noteworthy. Delivering a record $114 million in annual revenue, a 14% increase over the prior year, demonstrates remarkable resilience and effectiveness in our strategy and execution. Our balance sheet is healthy, reinforcing our confidence in achieving our profitability target in 2025. In 2023, we improved free cash flow by $101 million and adjusted EBITDA by $122 million, both over the prior year. This $100 million plus adjusted EBITDA improvement was fueled by robust revenue growth, enhanced operational efficiencies, and stringent cost management.
In the context of a challenging year for the advertising industry. The accomplishments of our AD sales team is indeed noteworthy deal.
Delivering a record $114 million in annual revenue, a 14% increase over the prior year demonstrates remarkable resilience and effectiveness in our strategy and execution.
Our balance sheet is healthy reinforcing our confidence in achieving our profitability targets in 2025.
In 2023, we improved free cash flow by $101 million and adjusted EBITDA by $122 million both over the prior year.
This $100 million plus adjusted EBITDA improvement was fueled by robust revenue growth enhanced operational efficiencies and stringent cost management.
David Gandler: Our ability to efficiently and substantially narrow our losses has been outstanding, setting a benchmark for exceptional performance within our industry. Even with our significant momentum in 2023, had Fubo been afforded the opportunity to compete on fair market terms in line with other distributors, such as Hulu, Comcast, Charter, and DirecTV Stream, we believe our results could have been even better. In fact, considering the estimated $200 million plus we were forced to pay last year to all of our media partners for content consumers don't want, as well as the outsized penetration rates and excess fees paid, we believe Fubo may have been able to break even in 2023. And, most compelling of all, we would have had the opportunity to return these savings to customers in the form of promotions and future discounts. Instead, our customers are hit with annual price hikes because they are forced to buy content they don't want just to access sports. Last week, we filed an antitrust lawsuit against the Walt Disney Corporation, Fox Corporation, and Warner Bros.
Our ability to efficiently and substantially narrow our losses has been outstanding setting a benchmark for exceptional performance within our industry.
Even with our significant momentum in 2023 had <unk> been afforded the opportunity to compete on fair market terms in line with other distributors such as Hulu, Comcast charter and Directv stream, we believe our results could have been even better.
In fact, considering the estimated $200 million plus we were forced to pay last year to all of our media partners for content consumers don't want as well as outsized penetration rates and excess fees paid we believe <unk> may have been able to breakeven in 2023.
And most compelling a wall, we would have had the opportunity to return these savings to customers in the form of promotions and future discounts instead, our customers are hit with annual price hikes, because they are forced to buy content. They don't want just to access sports.
Last week, we filed an antitrust lawsuit against the Walt Disney Corporation, Fox Corporation, and Warner Brothers Discovery, we're forming a sports streaming joint venture expected to launch this fall.
David Gandler: Discovery, who are forming a sports streaming joint venture expected to launch this fall. We assert that this JV is an attempt to monopolize the sports streaming industry and eliminate competition. Their proposed venture is, we believe, just the latest example of this sports cartel's attempt to block and steal Fubo's vision of what a sports streaming bundle should look like, resulting in billions of dollars in damages to our business. We consider the defendant's pernicious contractual terms and other anti-competitive practices borderline racketeering.
We assert that this JV is an attempt to monopolize the sports streaming industry and eliminate competition.
They are proposed venture is we believe just the latest example of the sports cartels attempt to block and steel <unk> vision of what a sports streaming bundle should look like resulting in billions of dollars in damages to our business.
We consider the defendants pernicious contractual terms and other anti competitive practices borderline racketeering as stated in our complaint. This sports cartel has levied content rates on us that our 30% to 50% plus higher than those of other distributors forced us to license unwanted.
David Gandler: As stated in our complaint, this sports cartel has levied content rates on us that are 30 to 50 percent plus higher than those of other distributors, forced us to license unwanted non-sports content to access their must-have sports program, imposed higher than market penetration rates for this content, and restricted our ability to offer certain features while permitting competitors and their own vertically integrated services to do so. And this sports cartel further attempts to stifle and destroy competition by forcing Fubo to license content it doesn't even own, which bloats our bundle and further raises prices for consumers. We have been dealing with widespread and rampant misconduct from this group and the industry at large. It has to stop. Consumers deserve choice and quality. They should only pay for the channels they want.
Non sports content to access their must have sports programming.
Imposed above market penetration rates for this content.
And restricted our ability to offer certain features while permitting competitors and their own vertically integrated services to do so.
And this sports cartel further attempts to stifle and destroy competition by forcing Fu bow to licensed content, they don't even own which <unk> bundle and further raises prices for consumers.
We have been dealing with widespread and rampant misconduct from this group and the industry at large it has to stop.
Consumers deserve choice they should only pay for the channels they want.
David Gandler: They should be able to access delightful products, enjoy the streaming experience the way they want to, and they should get all of this at a fair price. I want to be clear that, despite these challenges, we remain focused on executing our operating plan. Our ability to improve our business, top and bottom line, in a persistently anti-competitive landscape underscores our team's capacity for sustained execution. We remain focused on offering consumers a dynamic, sports-centric, entertainment content service and continuing to demonstrate to investors that they can rely on Fubo's consistent performance in meeting our business goals. Delivering an unparalleled streaming offering means solving problems for. As we have said for the past three years, friction and fragmentation in the streaming industry are forcing consumers to pay for multiple services to access must-have content. And with exclusive content fragmented across many services and packaged alongside non-exclusive programming, customers are ultimately paying multiple times for much of the same content. It's a well-established fact that, for the benefit of consumers and to maximize the monetization of sports leagues' intellectual property, sports need to be broadly disseminated.
They should be able to access delightful product features to enjoy the streaming experience the way they want to and they should get all of this at a fair price.
I want to be clear that despite these challenges we remain focused on executing our operating plan.
Our ability to improve our business top and bottom line in a persistently anti competitive landscape underscores our team's capacity for sustained execution.
We remain focused on offering consumers a dynamic sports centric entertainment content service and continuing to demonstrate to investors that they can rely on through both consistent performance and meeting our business goals.
Delivering an unparalleled streaming offering means solving problems for consumers.
As we have said for the past three years friction and fragmentation in the streaming industry is forcing consumers to pay for multiple services to access must have content.
Ed with exclusive content fragmented across many services and packaged alongside non exclusive programming customers are ultimately paying multiple times for much of the same content.
It's a well established fact that for the benefit of consumers and to maximize the monetization of sports leagues intellectual property.
<unk> needs to be broadly disseminated.
David Gandler: This is the rationale behind our ambition to become a super aggregator, which we believe addresses the challenge effectively for consumers while also serving as the optimal strategy for our media and advertising partners. Our goal is to engage consumers along the demand curve and deliver aggregated video bundles focused on the consumer experience at different price points. We are not trying to be an app store.
This is the rationale behind our ambition to become a super aggregator, which we believe addresses the challenge effectively for consumers. While also serving as the optimal strategy for our media and advertising partners.
Our goal is to engage consumers along the demand curve and deliver aggregated video bundles focused on the consumer experience at different price points.
We are not trying to be an app store, our vision is to offer different types of packages, including free fast Avon pay per view, Teva and a virtual mvpds channel bundle and provide consumers with a seamless experience that lets them access just the channels they want when they want and add.
David Gandler: Our vision is to offer different types of packages, including free, fast, AVOD, pay-per-view, TVOD, and a virtual MVPD channel bundle, and provide consumers with a seamless experience that lets them access just the channels they want, when they want, and at a fair price. First in our super aggregation strategy will be the forthcoming launch of a free content tier to include the nearly 160 fast channels we have launched since 2022 By providing these channels outside of the paywall, we plan to leverage this tier to retain and monetize consumers who sign up for Fubo but either don't convert into paying users or who cancel their subscription. Our goal is to keep customers inside the Fubo ecosystem. There's a lot to enjoy with Fubo, and we intend to deliver multiple content and product options, letting consumers choose the Fubo experience that's right for them.
A fair price.
First in our Super aggregation strategy will be the forthcoming launch of a free content tier to include the nearly 160 <unk> channels, we have launched since 2022 five.
By providing these channels outside of the paywall, we plan to leverage this tier to retain and monetize consumers who sign up for <unk>, but either don't convert into paying users or who cancel their subscription our goal is to keep customers inside the <unk> ecosystem.
There is a lot to enjoy with Google and we intend to deliver multiple content and product options letting consumers choose the <unk> experience that's right for them.
In summary in 2024, we're focused on solidly executing our business plan, even as we manage headwinds our Q4 and full year 2023 performance reaffirms our belief that <unk> aggregated video bundle delivered through a premium personalized streaming experience offers.
David Gandler: In summary, in 2024, we are focused on solidly executing our business plan, even as we manage headwinds. Our Q4 and full year 2023 performance reaffirms our belief that Fubo's aggregated video bundle delivered through a premium personalized streaming experience offers value for customers, shareholders, and partners. Importantly, we strive to be champions of consumers, who are entitled to choose a Sports First bundle that's right for them and at a fair price. And we will fight for their right to do so.
<unk> for customers shareholders and partners.
Importantly, we strive to be champions of consumers, who are entitled to choose a sports first bundle that's right for them and at a fair price, we will fight for their right to do so.
John Janedis: I will now turn the call over to John Janedis, CFO, to discuss our financial results in greater detail. Thank you, David. And good morning, everyone.
I will now turn the call over to John <unk> CFO to discuss our financial results in greater detail John.
Thank you David.
Everyone.
John Janedis: Our fourth quarter results reflect the ongoing improvement across our key performance indicators. The fourth quarter marks more than a full year of this trend, serving as proof that our operational initiatives around bringing added effectiveness and efficiency to the business have been working and that our customer acquisition actions have also had a positive impact. We continued to see healthy top line and subscriber growth, with Q4 revenue growth in North America of 29% and rest of world revenue growth of 18%. We are equally pleased with our overall subscriber growth, including 12% growth in North America, well ahead of our initial guidance of 5% growth at the start of 2023. This brings us to $1.37 billion in global revenue for the full year, representing 28% growth year-over-year.
Our fourth quarter results reflect the ongoing improvement across our key performance indicators.
The fourth quarter marks more than a full year of this trend serving as proof that our operational initiatives around bringing added effectiveness and efficiency to the business have been working and that our customer acquisition actions have also had a positive impact.
We continued to see healthy topline and subscriber growth with Q4 revenue growth in North America of 29% and rest of world revenue growth of 18%.
We are equally pleased with our overall subscriber growth, including 12% growth in North America, well ahead of our initial guidance of 5% growth at the start of 2023.
This brings us to 137 billion in global revenue for the full year, representing 28% growth year over year.
John Janedis: As we continue to grow subscribers and become more strategic around our pricing and packaging, we expect to see continued leverage on the subscriber-related expense line, which in the fourth quarter decreased 662 basis points to 87% of revenue versus the prior year period. On the operational front, our poo in North America reached $86.65, an all-time high, while the rest of the world ARPU was $6.81.
As we continue to grow subscribers and become more strategic around our pricing and packaging. We expect to see continued leverage on the subscriber related expense line, which in the fourth quarter decreased 662 basis points to 87% of revenue versus the prior year period.
On the operational front <unk> in North America reached $86 65.
An all time high while rest of World ARPA was $6 81.
The improvement in <unk> was largely the result of the various pricing initiatives undertaken throughout 2023.
John Janedis: The improvement in ARPU was largely the result of the various pricing initiatives undertaken throughout 2023. Turning to advertising, we are pleased with the growth and trends we are seeing on this front, especially given the continued volatility many advertising businesses are facing. During the fourth quarter, global ad revenue totaled $39 million, or a 15% increase versus the prior year period.
Yes.
Turning to advertising, we are pleased with the growth and trends we are seeing on this front.
More so given the continued volatility many advertising businesses are facing.
During the fourth quarter global AD revenue totaled $39 million.
Or a 15% increase versus the prior year period.
John Janedis: Taking a look at the operational side of the business, we continue to make meaningful progress in our efforts to lower expenses and increase efficiency. Starting with gross margin, we saw a near 900 basis point expansion to 10 percent, marking our fifth consecutive quarter of positive gross margin and a record for the company. This is on the back of another near 900 basis point improvement in the prior quarter. The improvements across the income statement also led to a significant reduction in net loss, with a Q4 net loss of $71 million, or a $25 million year-over-year reduction. This resulted in a net loss margin improvement to negative 17%, favorably compared to a negative 30% loss margin in their prior year period. This led to a fourth quarter 2024 net loss per share of 24 cents.
Taking a look at the operational side of the business, we continue to make meaningful progress in our efforts to lower expenses and increase efficiency.
Starting with gross margin, we saw in near 900 basis point expansion, 210%, marking our fifth consecutive quarter of positive gross margin and a record for the company.
This is on the back of another 900 basis point improvement in the prior quarter.
The improvements across the income statement also led to a significant reduction in net loss with Q4 net loss of $71 million or a $25 million year over year reduction.
This resulted in net loss margin improvement to negative 17% favorably comparing to a negative 30% loss margin in the prior year period.
This led to a fourth quarter 2024 net loss per share of <unk> 24.
A significant improvement compared to a loss of 48.
John Janedis: A significant improvement compared to a loss of 48 cents in the fourth quarter of 2022. These results demonstrate that we are making meaningful progress towards our 2025 positive cash flow goal. Fourth quarter adjusted EBITDA loss also improved to a loss of $50.7 million compared to a loss of $75.4 million in the fourth quarter of 2022.
In the fourth quarter of 2022.
These results demonstrate that we are making meaningful progress toward our 2025 positive cash flow goal.
Fourth quarter adjusted EBITDA loss also improved to a loss of $50 7 million.
Compared to a loss of $75 4 million in the fourth quarter of 2022.
John Janedis: Adjusted EBITDA margin was negative 12.4%, a significant improvement from a negative 23.6% in the prior year period. This resulted in an adjusted EPS loss of $0.17, an improvement compared to an adjusted EPS loss of $0.39 in Q4 2020. Moving to the balance sheet, we believe we have ample liquidity to both invest in the business as well as continue to support our path to profitability, ending the quarter with $251 million of cash, cash equivalents, and restricted cash. In addition, our ongoing efforts to identify efficiencies and maximize leverage across the business resulted in a $15 million improvement in free cash flow.
Adjusted EBITDA margin was a negative 12, 4% a significant improvement from a negative 23, 6% in the prior year period.
This resulted in an adjusted EPS loss of <unk> 17.
An improvement compared to an adjusted EPS loss of 39.
In Q4 2022.
Moving to the balance sheet, we believe we have ample liquidity to both invest in the business as well as continue to support our path to profitability.
And in the quarter with $251 million of cash cash equivalents and restricted cash.
In addition, our ongoing efforts to identify efficiencies and maximize leveraged across the business resulted in a $15 million improvement in free cash flow.
We continue to focus on maintaining rigor and discipline around our companywide costs and are pleased with the progress we made throughout the year.
John Janedis: We continue to focus on maintaining rigor and discipline around our company-wide costs and are pleased with the progress we made throughout the year. Now turning to guidance for the full year 2024, we expect full year 2024 North America subscribers of 1.665 million to 1.685 million, representing four percent year-over-year growth at the midpoint, and full year 2024 revenue of 1.505 billion to 1.525 billion, representing 13 percent year-over-year growth at the The subscriber outlook reflects some conservatism in our plan, in particular our exposure to potential industry volatility. However, we expect significant revenue growth outpacing subscriber growth due to anticipated ARPU expansion given our continued focus on unit economics and margin improvement. As for the first quarter, we expect subscribers of 1.415 million to 1.435 million, representing 11% year-over-year growth at the midpoint, and revenue of 365 million to 375 million, representing 17% year-over-year growth at the midpoint.
Now turning to guidance for the full year 2024, we expect full year 2024, North American subscribers of 1.665 million to one 6% to $85 million, representing 4% year over year growth at the midpoint and the full year 2024.
<unk> of 1.5 dollars 5 billion to one point.
$5 5 billion, representing a 13% year over year growth at the midpoint.
The subscriber outlook reflects some conservatism in our plan in particular, our exposure to potential industry volatility.
However, we expect significant revenue growth outpacing subscriber growth due to anticipated <unk> expansion given our continued focus on unit economics and margin improvement.
As for the first quarter, we expect subscribers of 141 5 million to 1.435 million, representing 11% year over year growth at the midpoint and revenue of 365 million to $375 million, representing 17% year over year growth at the mid <unk>.
<unk>.
For rest of World, our full year 2024 guidance projects 390000 to 410000 subscribers, representing a 2% year over year decline at the midpoint.
John Janedis: For the rest of the world, our full year 2024 guidance projects 390,000 to 410,000 subscribers, representing a 2% year-over-year decline at the midpoint, and revenue of $31 million to $35 million, representing 2% year-over-year growth at the midpoint. In the first quarter, we expect subscribers of 380,000 to 385,000, representing 1% year-over-year growth at the midpoint, and we expect revenue of $6.6 million to $8.6 million, representing a 2% decline year-over-year at the midpoint.
And revenue of $31 million to $35 million, representing 2% year over year growth at the midpoint.
In the first quarter, we expect subscribers of 380000 to 385000, representing a 1% year over year growth at the midpoint and we expect revenue of $6 6 million to $8 6 million, representing a 2% decline year over year at the midpoint.
John Janedis: In summary, we are encouraged by our strong fourth quarter and full year results and the progress we are making on our long-term plan. We are driving improvement across our business, including marked progress around ARPU, advertising revenue, and subscriber-related expenses. This progress positions us well for future success and increases our confidence that Fubo has the foundation necessary to deliver enhanced value to shareholders.
In summary, we are encouraged by our strong fourth quarter and full year results and the progress we are making on our long term plan.
We are driving improvement across our business, including Mark progress around <unk> advertising revenue and subscriber related expense.
This progress positions us well for future success and increases our confidence that Google has the foundation necessary to deliver enhanced value to shareholders.
Operator.
Thank you as a reminder, if you would like to ask a question. Please press star followed by the number one on your telephone keypad and if you would like to withdraw that question again Press Star. One. We also ask that you limit yourself to one question and one follow up your first question comes from the line of Laura Martin from Neil.
Operator: Thank you. As a reminder, if you would like to ask a question, please press star followed by the number one on your telephone keypad. And if you would like to withdraw that question, again, press star one. We also ask that you limit yourself to one question and one follow-up. Your first question comes from the line of Laura Martin from Needham & Company. Please go ahead. Good morning.
<unk> company. Please go ahead.
Good morning.
Good morning.
Laura Anne Martin: So I guess the first one is, your gross margins were fantastic. Can you remind us who's coming up for renewal and how you think the lawsuit impacts your ability to actually get costs lower since you've now sort of sued your major supplier? Hey Laura, this is John.
So I guess first one is on your gross margins were fantastic can you remind us choose coming up for renewal and how you think the lawsuit.
Impacts your ability to actually get costs lower since you've now sort of suite of your major suppliers.
John Janedis: I'll start with gross margin and then maybe David will take the second part of the question. So, look, to your point, I think we had a great year in terms of gross margin improvement, you know, caught around 1,000 basis points versus 2022. And I think we also feel good about further expansion in 2024 as well. You know, in terms of renewals, I think you know that we don't call out specific renewals, but what we said historically, and that hasn't changed, is that we typically have one to two renewals per year, but we don't comment specifically on who or when. Okay, okay, cool.
Yes.
Hello. This is John I'll start with the gross margin and then maybe David will take the second part of the question. So to your point I think we had a great year in terms of the gross margin improvement call. It around 1000 basis points versus 2022.
And I think we also feel good about further expansion in 2024 as well.
Renewables I think you know that we don't call out specific renewals, but what we said historically and that hasn't changed is that we typically have one to two renewals per year, but we don't comment specifically on <unk>.
Okay.
Okay Cool and then my other question is about the lawsuit so.
John Janedis: And then my other question is about the lawsuits. So, John, what are you thinking the overall cost of the lawsuits will be in 24? Does it affect your promise to hit free cash flow breakeven in 25? And worst case, I mean, you guys have competed. There are lots of streaming sports out there, like Paramount has streaming sports, Hulu, and YouTube TV have lots of streaming sports.
John what are you thinking overall cost of the lawsuits are in 24 does it affect your promise to hit free cash flow breakeven in 'twenty five.
And.
Worst case.
You guys have competed I mean, there's lots of screaming sports out there like Paramount has three main sport.
At Hulu and Youtube TV have lots of streaming sports.
David Gandler: So, really, these guys have just fun; they're really just marketing a sports bundle, but there are lots of sports. So, I guess my question is, if you lose everything, the courts don't get involved, or the DOJ doesn't do anything, like, can you? The fact you launched the lawsuit sort of signals that you're not sure you can compete with this version of a skinny bundle. So, can you speak to that? And what happens if none of these injunctions, no one intercedes on your behalf, and you have to compete against this new entity? Yeah. Hey, Laura, this is David.
So really these guys have just but they're really just marketing or sports bundle, but theres been lots of sports. So I guess my question is if you lose everything the courts don't get involved or the Doj doesn't do anything like can you.
The fact, you've launched the lawsuit sort of signals that you're not sure you can compete with this version of a skinny bundle. So can you speak to that and what happens if none of these injunction knowing interest feeds on your behalf and you have to compete against this new entity. Please.
Yes.
Hey, Laura this is David.
David Gandler: Well, you know, I think that, as you said, we've been competing with these very large companies for nine years now, and we have an overwhelming amount of evidence over these years that demonstrates the anti-competitive patterns that, you know, we've been dealing with. I think, as we've said, a win for us is really outlined in the complaint. We just want parity. Parity means that they don't levy rates on us that are 30 to 50 percent above market. They also don't force us to license unwanted content to be able to access must-have programming.
I think that as you said, we've been competing with these very large companies for nine years now.
And we have an overwhelming amount of evidence.
Over these years that demonstrates.
The anti competitive patterns that.
We've been dealing with I think as we've said a win for US is really outline in the complaint. We just want parity <unk> parity means that they don't levy rates on us that our 30% to 50% above market. They don't force us to license unwanted content to be able to access must have programming.
David Gandler: You know, and they don't impose on us penetration rates that are above market, along with some of these restrictions. Like, for instance, we don't get to sell ESPN Plus despite the fact that we offered to pay for it, and Charter received it for free. So that's on the win side. On the loss side, I guess, you know, it's very difficult to say, but ultimately, I think things will remain status quo. You know, we'll continue to have to deal with unreasonable and above-market economic terms. And as you can see, historically, 11 out of 12 quarters, we're continuing to fight the good fight. And so that's sort of where we land in these two situations. And Laura, maybe I'll just wrap up on the lawsuit costs.
And they don't impose on us.
Penetration rates that are above market.
Along with some of these restrictions like for instance, we don't get to sell ESPN plus despite the fact that we offered to pay for it and charter received it for free so that's on the on the wind side on the loss side I guess, it's very difficult to say, but ultimately I think things will remain status quo.
We will continue to have to deal with unreasonable and above market.
<unk> terms in <unk>.
As you can see historically 11 out of 12 quarters, we're continuing to fight the good fight and so that.
That's sort of where we land within these two sort of.
Situations.
And then Laura maybe I'll just wrap up on the lawsuit cost what I can tell you that it's factored into our budget.
John Janedis: You know, what I can tell you is that it's factored into our budget, but it's too soon to give you a number in terms of the totality. Your next question comes from the line of David Joyce from Seaport Research Partners. Please go ahead.
But it's too soon to give you a number in terms of the totality.
Your next question comes from the line of David Joyce from Seaport Research Partners. Please go ahead.
Thank you on.
David Joyce: On the advertising side, your 15% growth seems to be in line with other digitally native video peers. But I was wondering what you are seeing in the current quarter, given that there's incremental inventory coming online from Amazon. And also, what do you think the impact could be on the ecosystem with Walmart acquiring Vizio, which has some of that connected TV verticality in their strategy? Thanks.
On the advertising side, your 16% growth seems to be in line with other digitally native video peers, but I was wondering.
What you're seeing in the current quarter given that there is incremental inventory coming on line from from Amazon and.
Also what do you think the impact could be to ecosystem with Walmart acquiring vizio, which says some of the connected TV.
<unk>.
John Janedis: Maybe I'll start with the advertising question and then David will jump on the vizio part of the question. You know, actually, Q4 came in better than we expected. I think when we spoke about three months or so ago, I said that we expected single-digit ad growth, and we ended up, as you know now, in the double digits. And so for 4Q, we saw more or less mid-singles plus or mid-singles for October into mid-November.
And their strategy.
David This is John maybe I'll start with the advertising question and then David will hop on the Vizio part of the question.
Actually Q4 came in better than we expected I think when we spoke about three months or so ago I said that we expected single digit AD growth and we ended up as you know and now in the double digits and so for <unk>.
More or less mid singles plus for mid singles for October into mid November and then we saw a real acceleration in December for Q Q1, but I can tell you is that we had a solid January.
John Janedis: And then we saw a real acceleration in December. For Q1, what I can tell you is that we had a solid January. I think we feel good about February, so I would assume we could also post, call it, double-digit growth for the first quarter. And I would just say from a category perspective, for Q1, at least, we're seeing strength in, within the larger categories, I'd say Healthy Home and Garden, QSR, Gambling and Gaming, and then I'd say Autos, all ranging from strong double to triple digits for Q1. And David, do you want to take this?
We feel good about February Savi I assume we could also post call it double digit growth for the first quarter.
And I would just say from a category perspective for Q1 at least we're seeing strength in within a larger categories I would say.
Healthy home and Garden <unk>.
Gambling and gaming and then I'd say autos all range of from a strong double to triple digits.
For Q1, and David you want to take that but to your question, yes sure.
David Gandler: Yeah, sure. Yeah, with respect to Visio, you know, we think this is obviously a positive outcome for the industry. Fubo is a very high-quality audience that is sports-first, and so if, to the extent that, you know, Walmart will help Visio overlay retail data, we think that this could be a big win not only for advertisers, but for Fubo and Walmart as well. Thank you very much.
Yes with respect to video what we think obviously this is a positive outcome for the industry, who was a very high quality audience that is sports first and so if to the extent that.
Walmart will help vizio overlay retail data, we think that this could be a big win not only for advertisers, but for <unk> and Walmart as well.
Okay. Thank you very much.
Your next question comes from the line of Nick <unk> from Jpmorgan. Please go ahead.
Nick Aluru: Your next question comes from Nick Aluru from J.P. Morgan. Please go ahead. Hey guys, good morning. Thanks for taking the question. Um, if I could drill in on the 1Q guide a little bit. Is there anything baked in there from what you observed from the exclusive Peacock playoff game in January?
Hey, guys. Good morning, Thanks for taking the question.
If I could drill in on the <unk> guide a little bit is there anything baked in there from what you observed from the exclusive Peacock playoff game in January.
David Gandler: Um, you know, did you notice any incremental churn or if it changed the usage behavior afterwards from your regular NFL fans? Yeah, hi. Very good question. We actually didn't see anything because most people that visit Fubo or use Fubo are using it for the vast portfolio of sports content we have. And based on some of the data that we've seen with respect to plus services, and this may be the reason why the JV has become a hot topic, three out of four customers prefer to watch their content on our platform versus a plus service. So actually, I think we've also seen that people are confused. About 70% of our customers also prefer to use Fubo for content that is also streamed exclusively on these plus services.
Did you notice any incremental churn or if it changed the usage behavior afterwards from your regular NFL fans.
Yes, hi, very good question, we actually didn't see.
Anything because.
Most people that visit <unk> are used <unk> are using it for the vast portfolio of sports content, we have and based on some of the data that we've seen with respect to plus services and this may be the reason why the JV has become a hot topic is that three out of four customers prefer to watch.
Their content on our platform versus a plus service.
Actually I think we've also seen that people are confused.
About 70% of our customers also prefer to.
To use <unk>.
For content that is also streamed on exclusively on these plus services. So all of that I think we're in a relatively good spot and it's clear people are concerned that customers are tired of friction and fragmentation.
David Gandler: So all in all, I think we're in a relatively good spot. And it's clear people are concerned that customers are tired of friction and fragmentation. And maybe if I could follow up on the plus services, I mean, I guess, you know, when you guys discussed Charter and Disney in the past, you've talked about how that suggests the industry is heading towards re-aggregation, which should benefit the company. But I'm curious if you think that there's any longer-term risk from what Charter is doing, or potentially other future similar DTC bundles, in that it could slow the pace of cord cutting, and if that might shift the magnitude of new customers entering your funnel. I'm just curious how you think about that. Thanks. Yeah, thank you. You know, I don't think we really think about that.
Understood and.
Maybe if I could follow up on the plus services.
I mean, I guess when you guys discuss charter in Disney in the past you.
You've talked about how that suggests the industry is heading towards reactivation, which should benefit the company.
But I'm curious if you think that there's any longer term risks from what charter is doing or potentially other future similar DTC bundles in that it could slow the pace of cord cutting.
And if that might shift the magnitude of new customers entering your funnel.
I'm just curious how you think about that thanks.
Yes. Thank you I don't think we really think about that as you know we've continued to take share analysis.
David Gandler: As you know, we've continued to take share now for eight years annually. So, you know, this is a very robust market. And, you know, we are all for competition, and we think consumers should have choice. And, you know, we believe the product that we are distributing is a product that people enjoy. So, you know, we don't really see any impact on that front. Thank you. Thank you. Your next question comes from the line of Darren Aftahi from Roth MKM. Please go ahead.
For eight years.
Annually. So this is a very robust market.
We are all for competition and we think consumer should have choice and we believe that product that we are distributing this product that people enjoy so.
We don't really see any impact on that front.
Your next question comes from the line of Darren <unk> from Roth and KN. Please go ahead.
Good morning, Thanks for taking my questions.
Darren Paul Aftahi: Morning, thanks for taking my questions. Could you talk a little bit about, in general, the more near-term, year-to-date ad trends you're seeing, particularly in SaaS and then CTV? Yeah. Hey, Darren, it's John.
You talk a little bit about in general.
More near term year to date AD trends, you're seeing particularly in SaaS and in CTV.
Yes.
Hey, Darrin, it's John I'll start and maybe I'll add a little bit on to what I responded to with with David's question and so but we actually we saw some good health again coming out of December as you know, David and I spend a lot of time with our with our add our ads team what I can tell you for Q1 is that we're actually seeing.
John Janedis: I'll start. Maybe I'll add a little bit to what I responded to with David's question. And so we actually saw some good health again coming out of December. As you know, David and I spend a lot of time with our advertising team. What I can tell you for Q1 is that we're actually seeing improvement in terms of the demand factor as the quarter progressed. And so what I mean is that for, call it... And as of January, February, we were seeing demand coming closer to the run date. I would say now we're at a point where we're actually seeing demand beyond 1Q, meaning March, but also into 2Q and into the 3Q. So I think we feel relatively good about it.
Improvement in terms of the demand factor as the quarters progressed and so what I mean is that for call. It <unk>.
January February we're seeing the demand come in closer to run rate I would say now we're at a point, where we're actually seeing demand for beyond <unk> meeting in March but also into <unk> and ended the <unk>. So I think we feel relatively good about it.
John Janedis: On the political side, off of a small base, we saw triple-digit growth in Q1. As a refresher, we put up about 4 million plus in 2022. I'd expect meaningful growth off of that in 24, but the majority is going to come in, call it, from August and beyond. And then again, from a category perspective, I mentioned the stronger ones for Q1. I would say on the softer side, I'd call it maybe CPG and travel and tourism, if I call that too.
On the political side off of a small base, we saw call it triple digit growth in Q1.
Yes, it's a refresh we put up about call it $4 million plus in 2022, I would expect meaningful growth off of that in 'twenty four but the majority of them to come in the color from August and beyond and then again from a category perspective, I mentioned the stronger ones for Q1.
I would say on the softer side I'd call. It a big CPG and travel and tourism, if I call that too that were a little bit softer than the portfolio, but again I still expect to see double digit growth for <unk> for Q1.
John Janedis: That was a little bit softer than the portfolio. But again, I still expect to see double-digit growth for Q1. Great, and then maybe just one more philosophical question as it relates to the lawsuit. So there are a lot of examples of monopolistic practice by big tech out there, and antitrust regulators have done nothing about it. So I'm just curious, in the spirit of the lawsuit, you know, given you don't have unlimited resources, what is your propensity to, I guess, dig in kind of to defend your ground here? Is this to the death, or is it something where if you don't see progress, you know, you might relent, just given there's a very competitive product out there and legal bills are not going to be cheap.
Great and then maybe just one more philosophical question as it relates to the.
Lawsuit.
So there's a lot of examples of monopolistic practices with big Tech out there an antitrust regulators have done nothing about it so I'm just curious in the <unk>.
Spirit of the law suit.
Given you don't have unlimited resources, what is your propensity to I guess dig in.
Just send your ground here.
Two the desk or is it something where if you don't see progress.
You might relent.
Just given there is a very competitive products out there and legal bills are not going to be cheap.
David Gandler: Thanks. Yeah, well, again, a good question. I think that this is a duel to the death.
Yes, well again good question I think that this is a dual to the debt. It has been when we started this company. We are fighting for consumers. We are fighting for our customers. We are fighting for the tens of billions of dollars that are wasted annually by consumers paying for the same content multiple times. This.
David Gandler: It has been since we started this company. We are fighting for consumers. We are fighting for our customers. We are fighting for the tens of billions of dollars that are wasted annually by consumers paying for the same content multiple times. This is a very important process.
Is a very important process, we are sticking to our principles to our guns and we're continuing to be able to chew gum and walk at the same time as you can see from our numbers were.
David Gandler: We are sticking to our principles, to our guns, and we're continuing to be able to chew gum and walk at the same time, as you can see from our numbers. We're continuing to do very well. We're continuing to see revenue growth, and we're operating efficiently. And, you know, again, we think that we can handle both of these things at the same time. Your next question comes from the line of Shweta Khajuria from Evercore ISI. Please go ahead.
We're continuing to execute very well.
We're continuing to see revenue growth, we're operating efficiently and.
We think that we can handle both of these things at the same time.
Your next question comes from the line of <unk> <unk> from Evercore ISI. Please go ahead.
Okay. Thank you for taking my questions.
Shweta R. Khajuria: Okay, thank you for taking my questions. Could you please comment on subscriber churn that you saw from Q4 into Q1 and then what is baked into your guidance as the year goes through? Do you expect an ongoing improvement if it has continued to improve versus the prior seasonality that you've seen? And then question two is just a follow-up on your prior answer, David, regarding the lawsuit in the event that it goes against you. How do you see the future of Fubo? You said you've been fighting the good fight, but the fight may get a little bit tougher, so could you comment on that? Shweta, hey, it's John.
Could you please comment on subscription churn our subscriber churn that you saw from Q4 into Q1 and then.
What is baked into your guidance as the year goes through do you expect an ongoing improvement is it has continued to improve versus prior seasonality that you've seen and then question. Two is just a follow up on your prior answer David regarding the lawsuit in the event that it goes against you.
How do you see the future football I mean, you you said you you've been fighting the good fight, but the fight may get a little bit tougher sales would you comment on that thank you.
John Janedis: I'll start with churn, and what I would say is that we don't disclose exact churn numbers, but I could say a couple of things about that. One is, as a reminder, there is seasonality by quarter to churn, and so I would say it's hard to give you kind of a differential from Q1 to Q4 because I don't know if it's overly relevant. What I can tell you, though, directionally, when we look at it year-over-year, it's been relatively stable. Sorry, Shweta, could you just repeat the litigation question?
Hi, it's John I'll start with churn and what I would say is that we don't disclose the exact numbers, but I can say, it's a couple of things. So that one is as a reminder, there is seasonality by quarter to the churn and so I would say hard to give you a kind of a differential in Q1 to Q4, because it's unknown globally relevant what I can tell you that.
So directionally when we look at it year over year, it's been relatively stable.
Sorry could you just repeat the litigation question I think there were a few questions within the overall comment.
John Janedis: I think there were a few questions within the overall comment. Sure, I was just wondering what you think if the lawsuit goes against you. You mentioned that you've been fighting the good fight, but that fight could get a little bit tougher in the event that you lose the lawsuit. So how does the business change, and what are your thoughts about that event happening? Right. Well, as I said, we're fighting for our customers. We don't anticipate... Well, first of all, losing the lawsuit doesn't really change anything.
Sure I was just wondering what you think is the lawsuit goes against you I mean, you mentioned that you've been fighting the fight, but that fight could get a little bit tougher in the event that you lose the lawsuit so how does the business change and what's what.
What are your thoughts for that event happening.
Well as I said, we're fighting for our customers, we don't anticipate well first of all losing the lawsuit doesn't really change anything as we said if things remain status quo, we'd have to deal with unreasonable pricing in.
David Gandler: As we said, if things remained status quo, we'd have to deal with unreasonable pricing and, you know, above market terms. And so, you know, I don't believe that any of these companies would retaliate against us for filing what we believe is a credible complaint, www.thevenusproject.com. Your next question comes from the line of Clark Lampin from BTIG. Please go ahead.
Above market terms, and so I don't believe that any of these companies would retaliate against us for filing what we believe is incredible.
Complaint.
Okay.
Your next question comes from the line of Clark Lampkin from BTG. Please go ahead.
Thanks for taking the question good morning.
John I wanted to follow up on some of the add comments.
Clark Lampin: Thanks for taking the question this morning. John, I want to follow up on some of the ad comments. You mentioned that you were seeing momentum and sort of demand persist beyond 1Q and into 2Q and 3Q. Could you help us understand, I guess, what sort of baked into guidance for the year and how much, I guess, the lift that we've seen in the back half of 2023 is systematic, or maybe conversely, a function of some of the improvements in the go-to-market that you've implemented? www.larryweaver.com Yeah, sure.
You mentioned that you were seeing momentum in sort of demand persists beyond <unk> and into <unk> and <unk> could you help us understand I guess, what's sort of baked into guidance for the year and how much I guess the lift that we've seen in the back half of 2023 is systematic or maybe Conversely, a function of some of the improvements in the go to market.
That you've implemented.
Yes, sure look as you know, we don't guide specific advertising.
And so again I'll start with Q1 in terms of the double digit growth I would say hard to say solicit with specifics on <unk>, but we continue to expect growth I don't want to be more precise than that just given lack of visibility.
John Janedis: As you know, we don't guide specific to advertising, and so again, I'll start with Q1 in terms of double-digit growth. I'd say, you know, hard to say with specifics on 2Q to 4Q, but we continue to expect growth. I don't want to be more precise than that just given the lack of visibility.
I would tell you that from a.
Direct and programmatic guarantee perspective.
Continue to see momentum there in terms of mix improvement and so that number kind of tripled colleagues from around six 5% of the total being program or are those two I should say versus 90% plus programmatic in the fourth quarter. It was more like 20% I would say for 2024 that number will improve I would also remind you there.
John Janedis: I would tell you that from a direct and programmatic guarantee perspective, we continue to see momentum there in terms of mix improvements. And so, you know, that number kind of tripled, call it from around 6.5% of the total being those two, I should say, versus 90% plus programmatic. In the fourth quarter, it was more like 20%.
Is that a fair amount of the political money comes into the programmatic side.
But if I had kind of pull that out on a like for like basis direct will be call. It low to mid Twenty's that was assumed and that also as you know it comes with a benefit in terms of pricing.
And so a higher CPM for that business relative to the programmatic business.
He didn't ask this but from a given the supply coming on that we spend.
Time talking to our teams around that.
Yes, there is a little bit of weakness on pricing call. It in the long tail.
I'd say for Prime we look at that as more of a differentiated supply.
John Janedis: I'd say for 2024, that number will improve. I would also remind you, though, that a fair amount of political money comes in on the programmatic side. But if I kind of pull that out on a like-for-like basis, direct will be, you know, call it low to mid-20s. That was assumed. And that also, as you know, comes with a benefit in terms of pricing. And so, a higher CPM for that business relative to the programmatic business. You didn't ask this, but from a given the supply coming on, like we spend time talking to our teams around that, there is a little bit of weakness on pricing, call it in the long tail. You know, I'd say for Prime, we look at that as some more undifferentiated supply that's seeing pricing pressure. But given our sports focus, I'd say we're relatively immune to that.
Seeing pricing pressure.
But given our sports focused I'd say, we're relatively immune to that.
Okay.
Kind of a bigger picture question, but in the shareholder letter you sort of emphasized that you want to continue delivering a differentiated experience for consumers I was wondering if maybe you could shed some light on whether there are fees.
<unk> updates or releases that you guys have planned for 2024 that youre comfortable talking about at this juncture or just sort of broadly.
Sort of what I guess will help bring that sort of differentiated experience to life for the user.
Yes, why don't I take that question.
So I think over the last year and a half.
Since our acquisition of Molotov, we've been very focused on the platform. This is a very forward thinking company. We've been ahead of the curve now on multiple fronts for for many years and the three areas that we've really focused on is really developing a backend driven platform that enables us to rapidly and <unk>.
John Janedis: Okay, and kind of a bigger picture question, but in the shareholder letter, you sort of emphasize that you want to continue delivering a differentiated experience for consumers. I was wondering if maybe you could shed some light on whether there are feature updates or releases that you guys have planned for 2024 that you're comfortable talking about at this juncture, or just sort of broadly, you know, sort of what I guess will help bring that sort of differentiated experience to life for the user. Yeah, why don't I take that question?
Ms Li.
Lease product features that's important because we collect a lot of data and we're doing a lot of AB testing hundreds of AAV tests are running simultaneously.
And that will inform us on the direction, we're going to take some will be larger bet. Some smaller best the second piece is the best data and AI platform.
That we have really developed and we started to release. Some features I think we've announced the instant headlines that we're starting to see some traction with if youre not familiar with that feature to feature of that.
David Gandler: So I think over the last year and a half since our acquisition of Molotok, we've been very focused on the platform. This is a very forward-thinking company. We've been ahead of the curve now on multiple fronts for many years, and the three areas that we've really focused on are really developing a back-end-driven platform that enables us to rapidly and seamlessly release product features. That's important because we collect a lot of data, and we're doing a lot of A-B testing. Hundreds of A-B tests are running simultaneously.
Allow us to overlay the thumbnail on the homepage that will immediately recognize what is being discussed on our newscast. So if youre talking about the elections.
You'll quickly see.
Headline change to whatever is there so consumers.
Are more apt to click on that and the last thing is the just the the flexible architecture that we built that allows us to rapidly.
Changes to configurations, which would enable very quick rollouts efficiently across the globe again right now we're very focused on our U S plan and achieving our profitability targets in 2025, but the baseline on the backend of the platform is prepared we're running some tests as I said.
David Gandler: And that will inform us of the direction we're going to take. Some will be larger bets, some smaller bets. The second piece is the advanced data and AI platform that we've really developed, and we started to release some features. I think we've announced the instant headlines that we're starting to see some traction with. If you're not familiar with that feature, it's a feature that allows you to overlay a thumbnail on the home page that will immediately recognize what is being discussed on a newscast.
And we're looking forward to starting to rollout features.
David Gandler: So if you're talking about the elections, you'll quickly see a headline change to whatever is there. And consumers are more apt to click on that. And the last thing is just the flexible architecture that we've built that allows us to rapidly make changes to configurations, which enable very quick rollouts efficiently across the globe. Again, right now, we're very focused on our US plan and achieving our profitability targets in 2025. But the baseline on the back-end of the platform is prepared.
Towards the back half of the year. The first feature as I mentioned in my opening remarks was our premium platform, which will give.
Give us an opportunity to collect even more data. So we're very excited we've always said that we wanted to compete on a nonexclusive basis on fair terms and we look forward to doing that.
Your next question comes from the line of Jim Goss from Barrington Research. Please go ahead.
Okay.
Good morning.
David Gandler: We're running some tests, as I said, and we're looking forward to starting to roll out features towards the back half of the year. The first feature, as I mentioned in my opening remarks, was our premium platform, which will give us an opportunity to collect even more data. So we're very excited. We've always said that we wanted to compete on a non-exclusive basis on fair terms.
I had a couple of questions. One I was wondering about.
Your programming fee with your program providers are they generally on a per sub basis or are they in.
Sure aggregate basis for certain markets and on a related basis, how many options do you feel you would be inclined to provide consumers.
David Gandler: And we look forward to doing that. Your next question comes from the line of Jim Goss from Barrington Research. Please go ahead.
In terms of.
Mixes of programming in a given market to provide the choice you think they deserve and then secondly.
Jim Goss: Thank you. Thank you. Good morning.
Jim Goss: I had a couple of questions. One, I was wondering about your programming fees with your program providers. Are they generally on a per-sub basis, or are they on a sort of aggregate basis for certain markets? And on a related basis, how many options do you feel you would be inclined to provide consumers in terms of mixes of programming in a given market to provide the choice you think they deserve? And then secondly, the rest of the world is fairly modest and stable.
Rest of World is.
Fairly modest and stable I'm wondering what your commitment to that effort is and what is the continuing rationale.
Yeah, sure Hey, Tim It's John I'll start with the subscriber fees and look.
It's a combination but I said the vast majority is on a per sub basis, but we also have I'd say, a fair amount of flat veeva, but so it's a combination but again the vast majority of the total fleet will be on a personal basis. They are out there are some situations where.
John Janedis: I'm wondering what your commitment to that effort is, and what the continuing rationale is. Sure. Hey, Jim, it's John.
There is some flexibility in terms of pricing based on volume.
Okay and Jim.
Okay sorry.
Your next question comes from the line of Brett <unk> from Cantor Fitzgerald. Please go ahead.
John Janedis: I'll start with the subscriber fees. And look, it's a combination, but I'd say the vast majority is on a per subscriber basis. But we also have, I'd say, a fair amount of flat fees. But so it's a combination.
Hi, guys. Thanks for taking my question, it's been nice thing.
Sequential gross margin improvement and I was curious if you could provide any color as to.
How that will trend throughout the year and then maybe as a follow up is it possible for you guys maybe launch a skinny bundle of your own with.
John Janedis: But again, the vast majority of the total fee would be on a per sub basis. However, there are some situations where there is some flexibility in terms of pricing based on volume. Okay, and Jim, hold on just a second. Oh, sorry. Your next question comes from the line of Brett Nobeck from Cantor Fitzgerald. Please go ahead. Hi guys, thanks for taking my question. It's been nice seeing the potential Gross Market Improvement, and I was just curious if you could provide any color as to how that will trend throughout the year. And then maybe, as a follow-up, is it possible for you guys to maybe launch a, you know, called Skinny Bundle of your own with, you know, the most relevant sports channels that you guys currently distribute? Or is that kind of against the policies or contracts that you have signed with?
The most relevant.
Sports channels that you guys currently distribute.
Or is that kind of again.
The policies or contracts that you've signed with.
Call it to buy companies.
Great actually you broke up a little bit can you repeat the first half of the question.
Okay.
Yeah could you talk about the pace of gross margin improvement, we should be expecting throughout 'twenty 'twenty four.
Yes, sure Alright, so look as I mentioned before we saw that 1000 basis points of improvement.
In 2023.
Don't guidance specific to gross margin.
I would tell you though is that.
Okay.
That said, we continue to expect Thats a healthy improvement.
Throughout the course of the year, but I don't want to be more specific than that but probably not as rate of improvement in 24 versus 23, but I would say still very healthy.
Thanks.
Thank you I will now turn the call back over to Alison.
Brett Nobeck: called to the company. Great, Ashley. You broke up a little bit.
Thank you operator, and thank you to everyone for your very thoughtful questions and we will look forward to speaking with all of you next quarter before I turn it back to the operator to close out the call I did want to surface.
Brett Nobeck: Can you repeat the first half of the question? Yeah, could you talk about the pace of gross margin improvement we should be expecting throughout 2024? Sure. All right. So, look, as I mentioned before, we saw about a thousand basis points of improvement in 2023. You know, we don't guide specific to gross margins. What I would tell you, though, is that we continue to expect, I'd say, healthy improvement throughout the course of the year, but I don't want to be more specific than that. The problem is not as great of an improvement in 24 versus 23, but I'd say it's still very healthy.
Some questions.
Related to our seed technologies investor.
Platform and one question that got a lot of votes. I think this is really appropriately directed to you David is sort of a meta question a very high level question, which is.
What long term strategies do you have in place to ensure the sustainable growth and success of the company, yes very good.
<unk>.
I tried to hit on that.
During my opening remarks, one of our key goals as part of being a video aggregator is to really drive a super aggregation strategy.
John Janedis: Thanks. Thank you. I will now turn the call back over to Alison. Thank you, Operator, and thank you to everyone for your very thoughtful questions. We'll look forward to speaking with all of you next quarter. Before I turn it back to the Operator to close out the call, I did want to raise some questions related to our SAIT Technologies investor platform. One question that got a lot of votes, and I think this is really appropriately directed to you, David, is sort of a meta question, a very high-level question, which is, what long-term strategies do you have in place to ensure the sustainable growth and success of the company? Yeah, very good question.
I think we've said.
Many times now that we are not we have no plans to be an app store, we want to create a seamless and premium experience for customers and we will look to target those customers at different points on the demand curve, which by the way will change given the seasonality.
<unk> of content, that's available and so.
So as we said we're going to start to build on our strong advertising business.
<unk> launched a free tier sometime.
Sometime in the back half of the year to leverage the 160 or roughly 160 SaaS channels that we already have behind the paywall.
We're focused on continuing to develop some some technology in house that will allow us to create more personalized experiences.
Alison Sternberg: You know, I tried to hit on that during my opening remarks. One of our key goals as part of being a video aggregator is to really drive a super aggregation strategy. I think we've said many times now that we are not, and we have no plans to be an app store. We want to create a seamless and premium experience for customers. And we'll look to target those customers at different points on the demand curve, which, by the way, will change given the seasonality of content that's available.
And upsell customers on things like keyboard and pay per view initially.
And as we work through our content deals, we'll hopefully get to a place where we can unbundle some of the programming.
At the same way the media companies would plan to do so and I think thats going to drive a lot of value both for customers for our media partners as well driving revenue for them and our shareholders.
Excellent and one other question that received quite a few up votes, not surprisingly and you've addressed it.
David Gandler: And so, as we said, we're going to start to build on our strong advertising business and launch a free tier sometime in the back half of the year to leverage the 160 or roughly 160 fast channels that we already have behind the paywall. And, you know, we're focused on continuing to develop some technology in-house that will allow us to create more personalized experiences and upsell customers on things like TVOD and Pay-Per-View, initially. And as we work through our content deals, we'll hopefully get to a place where we can unbundle some of the programming the same way the media companies plan to do so.
Throughout the course of the call, but we will this new JV and sort of the associated impact or anticipated impact change our path to profitability by 'twenty five.
Well the answer is no as you know the last.
Four quarters, we've really delivered on the bottom line. This last quarter was a really impressive move an improvement of $100 million.
Our free cash flow.
Demonstrates our commitment to achieving our profitability targets.
That doesn't mean, it's going to be an easy road, but this company has demonstrated time and time again its resilience.
Sure.
David Gandler: And I think that's going to drive a lot of value both for customers and for our media partners as well, driving revenue for them, and for our shareholders. And one other question that received quite a few upvotes, not surprisingly, and you've addressed this throughout the course of the call, but will this new JV and sort of the associated impact or anticipated impact change our path to profitability by 25? Well, the answer is no.
If that's all I'd like to ask one thing of all of our friendly listeners.
The majority of the people that follow us as I really encourage you to visit save my sports Dot com.
In support of consumer choice, there's a letter out there that are posted.
And you'll be able to find your local Congress men and women feel free to reach out to them. Because this is a really important topic and you'll be saving customers tens of billions of dollars a year. Thank you.
David Gandler: As you know, the last four quarters we've really delivered on the bottom line. This last quarter was a really impressive move; an improvement of $100 million in free cash flow really demonstrates our commitment to achieving our profitability targets. That doesn't mean it's going to be an easy road, but this company has demonstrated time and time again its resilience. If that's all, I'd like to ask one thing of all of our friendly listeners and the majority of the people that follow us. I really encourage you to visit savemysports.com in support of consumer choice. There's a letter out there that I've posted, and you'll be able to find your local congressmen and women. Feel free to reach out to them because this is a really important topic and you'd be saving customers tens of billions of dollars a year.
Thank you David again, thank you to everyone on the call for your thoughtful questions I'll turn it back over to you operator to conclude the call.
Yes.
This does conclude today's conference call. Thank you for your participation and you may now disconnect.
Yes.
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Yes.
Okay.
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David Gandler: Thank you. Thank you, David. Again, thank you to everyone on the call for your thoughtful questions. I'll turn it back over to you, Operator, to conclude the call. This does conclude today's conference call.
Operator: Thank you for your participation, and you may now disconnect. Thank you for joining us.
Yes.
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Okay.
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