Q1 2024 FuboTV Inc Earnings Call
Good morning, My name is Dennis and I will be your conference operator today at this time I would like to welcome everyone to the food. Both first quarter 2024 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.
I'll ask a question simply press Star then the number one onward telephone keypad to withdraw your question Press Star one again.
I would now like to turn the conference over to Alison Sternberg Senior Vice President of Investor Relations at <unk>. Please go ahead.
Thank you for joining us to discuss <unk> first quarter 2024 with me today is David Gambler, cofounder and CEO through Bell and John Geneva, CFO Sue about 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 relation.
Section of our website at IR docs at about Dot TV.
Before we begin let me quickly review the format of today's presentation.
David is going to start with some brief remarks on the quarter and full year and for the 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 and anticipated financial performance business strategy and plans industry and consumer trends anti competitive practices, among our competitors and our response.
Plan, including our antitrust lawsuit 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 Q1 2024 earnings shareholder letter, which is available on our website at IR Dot <unk> Dot T V.
With that I will turn the call over to David.
Thank you Allison.
And thank you all for joining us today to discuss <unk> first quarter 2024 results.
We are very pleased with our strong start to 2024 per BOE again exceeded guidance with double digit growth across key financial and operating metrics in North America. During the first quarter. We ended the quarter with $394 million in total revenue up 24% year over year and paid subscribers at one five.
111000 up 18% year over year.
Our AD sales business continues to be an expanding revenue source for <unk> in Q1, we delivered north American AD revenue of $27 $2 million, an increase of 21% year over year, demonstrating an accelerating business.
We are also pleased to report that the first quarter marked yet another period of steady progress towards achieving positive cash flow and adjusted EBITDA in Q1, adjusted EBITDA margin reached minus 10%, representing a significant improvement of 796 basis points or an increase of approximately.
<unk> 18 million in absolute dollars compared to the first quarter of 2023. Additionally, Q1 represents the fifth consecutive quarter of year over year improvement in free cash flow and adjusted EBITDA underscoring our forward momentum in the right direction.
Notably we have grown our market share in the pay television space since our October 2020, and listing on the NYSE.
In Q1, we achieved our lowest subscriber acquisition costs to average revenue per user ratio or stack to ARPA ratio well below the low end of our target range of one to one five times.
This demonstrates our increased efficiency and customer acquisition.
Additionally March 2024 represented the lowest churn rate for any March on record for the company.
These results are demonstrative of through both continued ability to grow quickly efficiently and effectively since our 2015 founding performing well against the benchmark companies across the media and tech sectors.
While these statistics are impressive when comparing our growth timeline to industry leaders and applying moneyball metrics. These results are even more profound.
For instance, <unk>.
<unk> achieved $1 billion in revenue in 2022, just seven years after its founding this.
This achievement is particularly striking when compared to larger scaled companies like Netflix and Roku, which reached the $1 billion revenue Mark 10 years 17 years after their respective launches.
In 2023, hobo generated $2 $6 million of revenue per employee globally. A figure. We believe we can improve further based on our latest projections. We believe this sets <unk> apart as one of the most productive companies and direct to consumer streaming for.
For context in the same period, Netflix also generated $2 6 million of revenue per employee, while both roku and Spotify achieved less than $2 million during the same period.
These examples highlight the strength of <unk> Tech stack and management team, which we believe underscore our position as a leading operator in the streaming market.
<unk> operates efficiently each quarter, but we continue to be challenged by excessively above market content licensing costs and other onerous contractual terms imposed by programmers.
In the first quarter, we spent approximately 90% of our total revenue on content the exorbitant fees imposed on us and consequently on our customers are well above the market.
The same is true of other owners contractual terms such as penetration rates.
These issues are at the core of our current litigation against the Walt Disney Company Fox Corp, and Warner Brothers Discovery.
We alleged that this JV has engaged in long standing anti competitive practices aimed at monopolizing the market suppressing competition and depriving consumers a choice affordability pricing and innovation.
The pending launch of those companies joint venture is an existential challenge that we face one that we are committed to meeting in part through our suite to enjoin the launch of the joint venture until and unless the playing field in the industry has been leveled.
Nearly 90 days after filing a lawsuit while it remains early we are encouraged by the progress we have made so far.
Notably we were encouraged by the support received by our competitors Directv and dish were filed declarations backing our motion for a preliminary injunction against the JV. Additionally.
Additionally, the U S District Court has granted our request for limited discovery and set a hearing date for our motion.
We are eager to present, our claims and preliminary injunction motion in court beginning August 7th.
Equally noteworthy we have received very strong support from Capitol Hill.
Congressman Jerry Adler of New York, and Joaquin Castro of Texas are also concerned that the JV has control of 80% of broadcast sports content will negatively impact consumers and market competition.
In April the Congressman sent the JV Ceos, a letter requesting that they address 19 concerns. They also asked that these responses be shared with the department of Justice.
Just this week a co signers representing companies like <unk>, Directv dish newsmax as well as multiple consumer advocacy groups sent a letter to Congress requesting they hold a hearing on the JV.
And last but not least we are also encouraged by the Doj is reported investigation into the JV.
At a minimum all distributors, including kouba should receive fair and equitable terms from programmers, we should be able to offer our subscribers competitive pricing packaging flexibility and the ability to launch innovative products that further enhance the sports streaming experience.
This history of programmers, forcing unfair deals is the reason why only a few days ago <unk> customers loss of discovery networks owned by Warner Brothers Discovery well.
While negotiating a renewal we also requested to license the Turner sports networks and asked for flexible packaging. The same packaging, we expect the JV will offer.
<unk> did not want to discuss terms instead, they offered an extension for the discovery content on the previous status quo terms and flexible and above market.
Meanwhile, <unk> has never strayed from our mission to delight consumers with an aggregated sports entertainment offering that leverages, a personalized and intuitive streaming experience from.
From the outset <unk> has been committed to tech innovation alongside sports at this week's advertising Upfronts, we announced several new offerings that enable our brand partners to reach passionate sports fans. These.
These include interactive ads pause ads banner ads with enhanced targeting and what we are calling the marquee a branded carousel takeover displayed prominently on our home screen.
On the consumer Tech front, we are introducing AI driven platelets in beta within the DVR for basketball content imagine a playlist of just the three pointers from last night's game or just the foul shots from a gain recorded last weekend. Our plan is to vastly improve for consumers our DVR experience, enabling you.
<unk> controls and maximizing the value of their DVR with platelets, the consumer could personalize their sports recordings watching and rewatching the moments that matter most to them we.
We believe this will also help drive tune in for our league and programming partners.
In closing Q1 represented another strong quarter of exceeding forecast and making substantial progress we are steadfast in our execution and proactive in addressing these hurdles head on despite market challenges our vision promotes a competitive streaming landscape that offers consumers choice fair pricing and innovative products.
This is the vision upon which <unk> was founded and is only achievable and a truly competitive market.
I will now turn the call over to John <unk> CFO to discuss our financial results in greater detail John.
Thank you David and good morning, everyone.
I am pleased with our ability to deliver another quarter of strong results, including top line growth and continued improvement across just about every key performance indicator.
The first quarter results service support that our operational initiatives around bringing added effectiveness and efficiency to the business are working and that our customer acquisition and retention actions are also having a positive impact.
Above all the results over the past few quarters provide further evidence that our business model positions us well for continued growth.
Taking a look at the results for the quarter, we continued to see healthy topline and subscriber growth with global revenue growing by over a 24% to $402 3 million driven by 24% growth in North America, and 7% growth in rest of world.
We're also pleased with our overall subscriber growth, including 18% growth in North America to 1.5 dollars 1 million subscribers and a 5% increase in rest of world subscribers.
Our progress is not only reflected in our revenue and subscriber growth, but across key performance metrics as well.
As an example, we continue to gain added leverage over our subscriber related expenses, which decreased from 93% to 90% of revenue in Q1.
We expect this trend to continue as we work to grow subscribers further optimize our pricing and continue to fine tune, our cost structure and mix of premium plans.
In addition, <unk> in North America improved to $84 54 and.
A meaningful improvement compared to $76 79 and.
In the prior year period.
We also saw an improvement in <unk> and our rest of our business to $7 from $6 57.
Importantly, we expect this trend in year over year <unk> improvement to continue.
As it relates to some of the key revenue drivers, let me turn to our advertising business a segment of our company that has been significantly improving and which we're confident will continue on this path. Despite the choppiness that the overall advertising industry continues to face.
During the first quarter AD revenue totaled $27 5 million or a 21% increase versus the prior year period.
Turning to the operational side of the business, we continued to make progress in lowering expenses and increasing efficiency.
Starting with gross margin, we saw a nearly 600 basis point improvement in gross margin to 7%, marking our sixth consecutive quarter of positive gross margin.
Our ongoing progress across the income statement also led to a significant reduction in net loss for Q1 net loss of $56 $3 million or a 32% year over year reduction from a loss of $83 4 million in the prior year period.
This resulted in a net loss margin improvement to negative 14% favorably compared to a negative 25, 7% lost margin in the prior year period.
This led to a first quarter 2024 per share loss of <unk> 19.
A significant improvement compared to a loss of <unk> 37.
In the first quarter of 2023.
First quarter adjusted EBITDA loss also improved to a loss of $41 1 million compared to a loss of $58 9 million in the first quarter of 2023.
Adjusted EBITDA margin was a negative 10, 2% a significant improvement from a negative 18, 2% in the prior year period.
This resulted in an adjusted EPS loss of <unk> 11.
An improvement compared to an adjusted EPS loss of 27.
In Q1 2023.
In short our results for this quarter in recent quarters underscore the progress we are making across the business <unk>.
Importantly, we believe the direction. The company is moving in reflects the potential and resilience of the business.
And positions us well to advance on our profitability goals.
Moving to the balance sheet, we ended the quarter with $175 million of cash cash equivalents and restricted cash.
Looking ahead, we believe that we have sufficient liquidity to both invest in the business as well as continue to support our path to profitability setting aside any potential impact of the launch of the sports streaming JV.
In addition, our ongoing efforts to identify efficiencies and maximize leverage across the business resulted in a $10 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 quarter.
Now turning to guidance, our second quarter, North American subscriber guidance is $1 million 275000 to $1 million 295000 subscribers, representing 10% year over year growth at the midpoint, while our second quarter revenue guidance projects 357, 5% to 306.
Second $5 million, representing 19% year over year growth at the midpoint.
This leads to our full year 2020 for North America subscriber guidance of $1 675 to $1 695 million subscribers, representing 4% year over year growth at the midpoint.
This reflects our current outlook and in particular, our exposure to a potential industry volatility along with our intention to maintain discipline and subscriber acquisition costs relative to monetization, but does not reflect any potential impact from the JV.
And for full year 2024 in North America revenue, our guidance is for $1 billion $525 million to $1.545 billion, representing 15% year over year growth at the midpoint.
Our projections of revenue growth outpaced in subscriber growth reflects our expectation of continued <unk> expansion and improved unit economics.
And for rest of World, We expect 395000 to 401000 subscribers in the second quarter, representing 1% year over year growth at the midpoint, while our revenue guidance projects 8 million to $9 million.
Representing 4% year over year growth at the midpoint for the second quarter vis vis the guidance of 395.
To 405000 subscribers for the full year 2024, representing a 2% year over year decline at the midpoint and a full year 2020 for revenue guidance of 33% to $35 million.
Representing 4% year over year growth at the midpoint.
Given the many unknowns related to the potential launch of the joint venture, including the outcome of our lawsuit and the Doj's investigation, our guidance and our planned path of profitability do not reflect any potential impact of the joint venture launch to our business.
In summary, we are pleased with our ability to post a record revenue and to continue to have success across our operational initiatives, while managing through an ongoing challenging environment.
Our continued strong performance of furthers our confidence in our future success and increases our belief that we are on the right path to deliver value to shareholders.
Operator.
At this mine.
Remind everyone in order to ask a question separately Brent Star then the number one onshore telephone keypad. Please limit yourselves to one question and one follow up.
Our first question is from the line, but Laura Martin with Needham. Please go ahead.
Good morning.
You first talk on churn lower and Sac customer acquisition cost, Florida could you talk about what's driving that please.
Hello, Hey, this is John I'll start so in terms of stack, but I would say is that our marketing team has done an amazing job and so.
We saw I'd say reasonably good improvement in churn for the quarter. Our sack is the lowest it's been I think in the history as it relates to our multiple.
I think we feel pretty good about it I would say.
They've done a really good job of spending at the right time and moving budget around and.
David anything else and yes, so hi, Laura how are you.
Yes look the team has done I would say a phenomenal job, making sure that we're able to retain that fall cohort and we've been able to find some overlap with other sports programming.
At Entertainment programming I think one of the unexpected positives in the quarter was the impact of women's College basketball.
That was certainly a driver that we didn't anticipate at the same time.
As you know we didn't have TNT and so we.
There was no real impact from the lack of coverage on the men's side.
Okay.
That's helpful. Thank you and then advertising very strong in the quarter.
You actually relate that to a better like you've got the sales force in order or are you doing better programmatic very strong add numbers, which is really helpful to margin could you talk about those trends and whether you see them continuing and accelerating.
Yes.
We're very focused on our advertising business and we've strategically invested in our monetization capabilities as I. Just mentioned, we're focused on releasing new AD formats to drive value and I think one of the key pieces of that is our focus on better ads as you know roku does a phenomenal job.
Selling banner ads on its platform and we've we finally and product ties. They are our new unit, which we call the marquee, which is prominently displayed on our homepage. We've also focused on ensuring that we're meeting the needs of.
Our many advertisers and where specifically are responding.
This quarter and next quarter to the growing issues around fragmentation of the media landscape.
And so we've currently.
Signed an agreement with Comscore.
To provide more cross platform measurements for advertisers and I think one thing that you and I have talked about several times I think throughout the year what was the importance of the deprecation of third party cookies on Google site.
And so we've also locked in a deal with Trans Union Japan.
Japan demo data to the food both subscriber and household information. So we're very focused on advertising. We're focused on new units. The banners are actually quite interesting because it doesn't require any improvement in engagement. Although engagement already is very high on average our customers are watching over five hours per day.
On a monthly averaged just north of 100 hours engagements.
2% I believe year over year so.
All of that really speaks to our excitement around advertising we've gone to market. Our go to market strategy continues to be strong we have an audience.
That has really high discretionary income as you know our subscribers pay call it 80% 80 Bucks plus per month.
And we're looking forward to continuing to drive our advertising business, we're very confident about that yes, Laura I would actually add a couple of points there too and I think you touched on it but our new SaaS leadership team started actually exactly a year ago. This week and there was an instantaneous type of response to them and so for <unk> last year, we grew advertising 34.
And then <unk> was in the mid teens and then as you noted this quarter was plus 21% and I would say, we like what we're seeing as it relates to how how April ended up and I'd say there is a little more visibility today.
Looking ahead versus last quarter looking ahead.
Your next question is from the line of Gen <unk> with Evercore ISI. Please go ahead.
Great. Thanks, This is Jamie with Evercore.
First on just the North America subs guide for the year.
I understand that JV impact is not baked in.
How much of the trends in our license negotiation headwind are you factoring in with the discount rate coming offline and any other sort of major content upfront right now that we should keep in mind.
Yeah I'll start this is John so in terms of specific content renewals, we don't disclose those what I've said and we've said historically is that we have one or two a year clearly the discovery one was the most recent one as it relates to the outlook. What I would say is simply that look we've never actually disclose or talk to specific deals in terms of subscriber impact.
But what I can tell you is that our.
Our full year outlook and also our second quarter outlook does assume an impact from that drop.
Great that's very clear and the second one is.
Given just the strong customer acquisition efficiency, you're seeing and the tailwind in advertising would you consider like maintain at this level are actually leaning in a bit more <unk>.
Target range of iPad in fact, the LTV.
Sorry, what was that are you, saying leaning more into what.
Into customer acquisition, just given that you are seeing this tailwind in <unk>.
And advertising.
Yes, very good question look I think our goal from the outset has been about achieving.
Profitability in 2025, and as you know as subscriber models marketing is a.
And expense that you have to do.
Kurt today with potential value created over time, and so we just don't have.
That much room for us to be able to do that make those kind of investments. However, you are correct.
With this type of <unk>.
Efficient acquisition cost.
Under normal circumstances, we would certainly want to invest now versus later, so that makes a lot of sense, but again, we're very measured and very disciplined with a key focus on achieving profitability as we plan.
Your next question is from the line of David Joyce with Seaport Research Partners. Please go ahead.
David Carl Joyce: Thank you.
<unk> had some.
Some significant outflows of cash in the first quarter, even though youll free cash flow.
Training was better.
Could you help us understand what was that.
Just the unusually heavy quarter, because you were standing up this who will free tier and prepping the using the technology for the new.
The new AD units that were unveiled at the new fronts.
Hey, David This is Jonathan Thanks for the question.
Look I'd start by saying that our cash usage is highly seasonal I think as you know and so <unk> is our highest cash use this quarter as a result of that but I would say going back to our investor day in August of 'twenty two.
With that we would see improving cash usage on a year over year basis going forward and Thats. What we have done so for modeling purpose I would not use <unk> as a run rate and I would also add that <unk> cash usage came in better than our internal forecast and so for the rest of the year cash usage will improve on an absolute basis and then as a reminder, I say.
Our cash usage in the fourth quarter of last year was very modest so theres nothing to call out in terms of investments in the quarter and I would add that our investments through our premium again it was very modest.
And are there other products that you are still working on the advertising front beyond what was announced this week.
Yes.
This was our first full year.
Actually really focused focused on modernization.
These are significant number of units that we've just released there are other areas that we're focused on.
And there are some things that we're really looking at sort of very forward looking opportunities and the use of AI.
To me, it's an area that I think we can really have positive impacts.
I'd Modernizations think about a situation where.
The AI can actually read what's happening on screen at the end.
Okay.
I have an episode or whatever content, you are watching and to be able to then call. An AD that is relevant to that piece of content that you. Just watch. So we think that there is many many areas in which we can continue to innovate.
Around monetization, particularly around AD units and add capabilities, and obviously data becomes a key component of that and I think what's what's most important.
<unk> is the engagement level of the platform is extremely high which is really sort of an area that most advertisers are focused on high quality content high levels of engagement I believe Netflix has also highlighted the fact that engagement is a key area in which their focus to really drive advertising interest and brand awareness.
Your next question is from the line of Darren <unk> with Roth.
Please go ahead.
Hey, good morning, Thanks for taking my questions. Two if I may just can you kind of give your thoughts on the free tier will launch later this year and then.
I'll just talk about the SaaS channel.
You guys said you had 165.
Channels now just the contribution to the AD business today, and how that May change going forward. Thanks.
Yeah, Hey, Darren this is David look.
I would say a year ago, maybe year and a half ago, we started adding fast channels.
Behind our paywall.
I can tell you they've actually performed quite well just looking at the most recent numbers I think that SaaS channels now account for about 9% of viewing.
So roughly call it nine hours I mean, thats, a tremendous amount of hours.
<unk> content that.
So folks believe may not be as high quality as cable content. So.
David Carl Joyce: We're we've been conservative monitoring that very closely.
Part of that calculus is tied to.
Our discovery negotiation.
We've attempted to.
Negotiate in good faith with them as you know that didn't really work out very well, but the fast channels have really absorbed some of that viewing so we're very happy about that.
With the number of trials that are coming into the platform of people testing. The service. We also want to make sure that we are engaging consumers along the demand curve and so having a free tier we think will allow us to continue to monetize users both.
In the sort of.
Subscription realm, as well as when they're pausing their subscriptions and waiting for the next sports season to start.
And again, we're very bullish on that as we've just said, we're very focused on introducing new advertising units interactive AD units and we're going to do our best to continue to moderate monetize that.
And as you know we have a goal of really growing our at <unk>. This is sort of.
Helps us get to that next level.
Now did that a couple of things and metrics as it relates to that to help you had in terms of thinking about the opportunity.
March on the SaaS channel side hours per SaaS far over indexed our growth in overall subs in terms of the Google platform. The fill rate was I would say probably consistent with the overall cohort of the property and broadcasting and transmission. Despite that significant increase in hours and also channels was actually down year over year.
So from a profit perspective is turning into a pretty good profit driver for the company.
Thank you.
Your next question is from the line of James Goss with Barrington Research. Please go ahead.
Okay. Good morning.
Couple of things first in terms of the personalized DVR strategy in play lists.
Clearly the technology is there.
Is the issue.
That there is an unwillingness to provide their rights to do the sort of things you are trying to do it or are they is the incremental rights fee. So high that there is not room for negotiation or something else might talk about that and then my second question would be.
Malakov.
David Carl Joyce: It was noted to have a $7 our pool.
And it seems like it's a fairly robust service and.
An important brand in France.
In the European Union and I Wonder if.
What are what are the issues there in terms of competitiveness and the potential for a higher price point on that service.
Which is not very largely penetrated at this point.
Yes, sure I think I'll see if I can answer all of your questions.
With respect to the platelet service as well.
This is a very unique feature.
Recall that this is a DVR feature. So this is within the realm of what consumers control they own and we built this feature in a way and I think we referred to it.
Earlier as a user control. This is user initiated its a user control, it's a way to really increase engagement.
And give our subscribers the control within their DVR to really watch things that are exciting to them relevant to them.
And in sort of improve their user experience so.
Again, I'm not sure that there is anything that needs to be.
Discussed with any of the programs given the fact that it is within the DVR that being said there obviously our difficulties.
Our ability to.
Rich.
Our programmers and <unk>.
Way that allows us to really maximize the service and our goal has always been to improve our service for consumers as well as <unk>.
Ensure that they're that we're driving tune in.
For their programming and obviously the league IP. So we will continue to do that and we'll look for ways to be able to work within our agreements and I think this is our first attempt to do that and I will mention as part of our alleged claims is the fact that we are unable to offer features that others offer.
As you know Youtube TV.
Offers highlights.
And Hulu has stacking rights, which we don't have and other distributors are allowed to.
Offer ESPN plus as part of their service. So we're dealing with it the best we can but again, we believe that we're really focused on consumer quality and building a product that people love and that again is reflected in the strong subscriber growth the strong revenue growth and strong advertising growth as it relates to Molotov.
Again, that's a service that again just to level set everyone. We took over that service when it was back in 2021.
In 2020, Molotov delivered about $7 million of revenue.
That business now is north of $30 million, we've been very efficient. We're very excited about their gross margin profile, which is just south of 40%, which really speaks to the opportunity in a large market.
We have been very efficient they are cutting cost.
And our attention is to get them to profitability and at the same time, we've been very focused on really building out a unified technology platform, which I think so far bubo in the United States has been able to take advantage of and we haven't really provided most of the resources they need to be able to drive that business forward, but what's really.
Citing about that as you said was the fact that it is a scaled player in France.
We've been able to drive growth.
Without a marketing budget, which I think is also pretty speaks.
Speaks to the potential opportunity there.
<unk>.
I'll pause there for any questions.
Okay.
That covers it for now thank you very much David.
Your next question is from the line of Brett Knoblauch with Cantor Fitzgerald. Please go ahead.
David Carl Joyce: Yes.
Hi, guys. Thanks for taking my question on the Warner Brothers Discovery.
I guess contract negotiations I was just curious from a pricing perspective, now that I guess youre not paying this distribution fees would that alter your pricing strategy.
Is that something that youre going to leave pricing the same and the savings book.
The bottom line.
Yes, well as you know it's not like we have that much room in our current pricing we have.
<unk> been under pressure by the defendants.
For a long period of time.
We're dealing with pernicious tactics that they continue to apply on our business owner's terms that make it quite difficult for us to reach profitability quickly.
And so at this point in time, we believe our pricing will remain status quo and this should flow to the bottom line.
And is it possible for you to quantify it.
This savings fees from that.
David Carl Joyce: I guess termination of service.
Yes.
The short answer is we don't disclose our content deals and the impact of those contract deals on our business, but I'm sure you would probably see that reflected.
And the next quarter.
I will begin to be reflected in the next quarter.
Thank you all for your questions I will now turn the call back to Alison Sternberg.
Okay.
Thank you everybody for your thoughtful questions. This morning, before we conclude I did want to take.
One question from our phase shareholder portal this I'm going to direct to you David.
Question is what measures is the company currently taking to ensure sustainable long term growth and shareholder value creation.
Thank you Allison well I think its been evident over the last five quarters that we are really focused on creating shareholder value.
David: <unk> been very focused on cost cutting if you look at our operating leverage you'll note that the two key areas gross gross margin drivers our subscriber related expenses, which is down.
This year year over year as well as continued improvement on our broadcasting and transmission lines. So those two lines are continuing to help.
Drive.
Operational costs down leading to greater value and then we've been really focused on doubling down on our content strategy. As you see we were very much sports first we have over 35 regional sports networks, we're continuing to look for more content opportunities in that area. We're very focused on continuing to develop.
Our technology and product capabilities.
Featuring our AI powered.
Our capabilities and Youll, probably see more of that as the team starts to experiment.
With more features and then in terms of.
Reach and distribution, we're looking to continue to drive engagement.
Across the demand curve as they just.
Just mentioned and we're looking forward to the forthcoming free tier that will be launched.
The next couple of quarters.
Excellent. Thank you David.
Back to you operator.
This concludes today's <unk> first quarter 2024 earnings call. Thank you all for joining you may now disconnect.
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