Q1 2025 FuboTV Inc Earnings Call
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Tiffany: Hello, and thank you for standing by my name is Tiffany and I will be your conference operator today at this time I would like to welcome everyone to the Bubo first quarter 'twenty 25 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will.
Tiffany: My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fubo First Quarter 2025 Earnings Conference Call.
Tiffany: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. We kindly ask that you limit yourself to one question. Thank you.
Speaker Change: A question and answer session, if you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star. One again, we kindly ask that you limit yourself to one question. Thank you I would now like to turn the call.
Ameet Padte: I would now like to turn the call over to Ameet Padte, SVP, FP&A, Corporate Development and Investor Relations for Fubo. Please go ahead. Thank you for joining us to discuss Fubo's first quarter 2025 results.
Amit: All over to Amit could tape S. P. P. F. P N a corporate development and Investor Relations for flu BOE. Please go ahead.
Amit: Thank you for joining us to discuss <unk> first.
Amit: First quarter 2025 results.
Ameet Padte: With me today is David Gandler, co-founder and CEO of Fubo and John Janedis, TFO 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.
John <unk>: With me today is David Candler, co founder and CEO of <unk>, and John <unk> CFO of <unk>.
John <unk>: 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 <unk>.
John <unk>: Our thoughtful about TV.
Ameet Padte: Before we begin, let me quickly review the format of today's call. David will start with some brief remarks on the quarter and our business, and John will cover the financials and guidance. Then we will turn the call over to the analysts for Q&A.
John <unk>: Before we begin let me quickly review the format of today's call.
Speaker Change: David will start with some brief remarks on the quarter and our business and John will cover the financials and guidance.
Speaker Change: Then we will turn the call over to the analysts for Q&A.
Ameet Padte: 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, including our pending business combination, and our products and subscription packages, market, industry, and consumer trends, and expectations regarding growth and profitability. These four looking statements are subject to certain risks, uncertainties, and assumptions. Important factors that could cause actual results to differ materially from forward-looking statements are discussed in our SEC file. 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.
Speaker Change: 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 is the strategy and plans, including our pending business.
Speaker Change: Combination and our products and subscription packages market industry, and consumer trends and expectations regarding growth and profitability.
Speaker Change: These forward looking statements are subject to certain risks uncertainties and assumptions.
Speaker Change: Important factors that could cause actual results to differ materially from forward looking statements are discussed in our SEC filings.
Speaker Change: 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.
Ameet Padte: 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 2025 earnings shareholder letter, which is available on our website at ir.fubo.tv.
Speaker Change: During the call. We may also refer to certain non-GAAP financial measures.
Speaker Change: Conciliation of these non-GAAP measures to the most directly comparable GAAP measures are also available in our Q1 2025 earnings shareholder letter, which is available on our website at IR Dot <unk> Dot TV.
Ameet Padte: Please note as well that during Q&A, the company will not provide any information related to the pending business combination with Hulu plus live TV and ongoing regulatory matters beyond what we have already shared.
Speaker Change: Please note as well during Q&A the company will not provide any information related to the pending business combination with Hulu plus live television and ongoing regulatory matters beyond what we have already shared.
David Gandler: With that, I will turn the call over to David. Thank you, Ameet, and good morning, everyone. Thank you all for joining us today to discuss Fubo's first quarter 2025 results. In the first quarter, our global streaming business exceeded our subscriber forecast and achieved our revenue guidance. We are pleased with these results, which came against a typically lighter first quarter sports calendar and a broader backdrop of economic uncertainty. Looking at our North American streaming business, we delivered 1.47 million paid subscribers down 2.7% year over year, but exceeding our Q1 guidance of 1.46 million at the high point.
David Candler: With that I will turn the call over to David.
David Candler: Thank you Amit and good morning, everyone.
David Candler: Thank you all for joining us today to discuss <unk> first quarter 2025 results in.
David Candler: In the first quarter, our global streaming business exceeded our subscriber forecast and achieved our revenue guidance. We are pleased with these results, which came against a typically lighter first quarter sports calendar and a broader backdrop of economic uncertainty.
Looking at our North American streaming business, we delivered one $4 7 million paid subscribers down two 7% year over year, but exceeding our Q1 guidance of 1.46 million at the high point Tony.
David Gandler: Total revenue in the region was $407.9 million and that was up 3.5% year over year. Notably, we once again improved our global profitability metrics by more than $100 million for the trailing 12 months. These results demonstrate our team's ongoing execution as we focus on profitability in 2025 for our global streaming business.
David Candler: Total revenue in the region was $407 9 million and that was up three 5% year over year.
David Candler: Notably, we once again improved our global profitability metrics by more than $100 million for the trailing 12 months.
David Candler: These results demonstrate our team's ongoing execution as we focus on profitability in 2025 for our global streaming business.
David Gandler: We remain excited about our agreement with the Walt Disney Company to combine Fubo with Hulu plus live TV and the potential to increase competition and consumer choice in the pay TV space. We continue to work through the regulatory process and look forward to sharing more information when we are able. The streaming landscape continues to evolve and grow more fragmented, further demonstrating the importance and relevance of Fubo's aggregation model. We remain committed to providing customers multiple and flexible packaging options, from skinny bundles to the full virtual pay TV bundle and everything in between. In recent months, we've seen the industry follow our lead and introduce skinnier content bundles.
David Candler: We remain excited about our agreement with the Walt Disney Company to combine <unk> with Hulu, plus live television and the potential to increase competition and consumer choice in the pay television space. We continue to work through the regulatory process and look forward to sharing more information when we are able the.
David Candler: The streaming landscape continues to evolve and grow more fragmented further demonstrating the importance and relevance of <unk> aggregation model, we remain committed to providing customers multiple and flexible packaging options from skinny bundles to the full virtual pay TV bundle and everything in between in recent months, we've seen the industry.
David Candler: Following our lead and introduce skinny year content bundles, we are gratified by this because we believe a streaming landscape with multiple options benefits all consumers. We continue to focus on meeting consumer needs at every point along the demand curve.
David Gandler: We are gratified by this because we believe a streaming landscape with multiple options benefits all consumers. We continue to focus on meeting consumer needs at every point along the demand curve. As we have previously communicated, our Skinny Bundle offering will include a sports and broadcasting service. In addition to featuring content from the Walt Disney Company, we are working hard to secure content from non-Disney programmers for the new service. It is critical for Fubo subscribers that we are able to negotiate content licensing agreements at fair rates and terms. Our goal remains to launch this service for the fall sports season.
David Candler: As we have previously communicated our skinny bundle offering will include a sports and broadcasting service. In addition to featuring content from the Walt Disney Company, we are working hard to secure content from non Disney programmers for the new service.
David Candler: It is critical for <unk> subscribers that we are able to negotiate content licensing agreements at fair rates and terms. Our goal remains to launch this service for the fall sports season.
David Gandler: In closing, we continue to focus on consumers and what they expect from a streaming service, namely premium content, an innovative product experience, value, and above all, choice. At the same time, our priority is providing value for our shareholders and we remain focused on achieving profitability in our streaming business this year. We look forward to keeping you updated on our progress.
David Candler: In closing, we continue to focus on consumers and what they expect from a streaming service, namely premium content and innovative product experience value and above all choice at.
David Candler: At the same time, our priority is providing value for our shareholders and we remain focused on achieving profitability and our streaming business. This year. We look forward to keeping you updated on our progress I will now turn the call over to John <unk> CFO to discuss our financial results in greater detail John.
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. Our performance during the first quarter validates our strategy to optimize our aggregated content platform, even amidst changes in the media landscape and a potentially cautious consumer outlook. We achieved North America revenue growth of 3.5% within our guidance range and our North America subscriber count of 1.47 million was ahead of expectations. From an advertising revenue standpoint, ad revenue for the quarter was $22.5 million, down 17% year-over-year, largely due to the discontinuation of Warner Bros.
John <unk>: Thank you David and good morning, everyone.
Our performance during the first quarter validates our strategy to optimize our aggregated content platform, even amidst changes in the media landscape and a potentially cautious consumer outlook.
John <unk>: We achieved North America revenue growth of three 5%.
John <unk>: Within our guidance range and our North America subscriber count a 1.47 million was ahead of expectations.
John <unk>: From an advertising revenue standpoint AD revenue for the quarter was $22 $5 million down 17% year over year, largely due to the discontinuation of Warner Brothers Discovery and Televisa Univision networks.
John Janedis: Discovery and Televisa Univision Network. Excluding these impacts, our underlying performance improved year over year. Net income from continuing operations was $188 million or $0.55 per diluted share compared to a net loss of $56.3 million and a loss per share of $0.19 in the prior year period. It is important to note that net income includes the $220 million gain on settlement of litigation. Adjusted EPS loss improved to $0.02, a marked improvement compared to a loss of $0.14 a year ago, as we made meaningful progress reducing non-operating expenses and narrowing adjusted losses. The adjusted EBITDA was negative $1.4 million, a $37 million improvement year over year, highlighting our ongoing focus on cost control, efficient growth, and driving leverage in the model.
John <unk>: Excluding these impacts our underlying performance improved year over year.
John <unk>: Net income from continuing operations was $188 million or <unk> 55 per diluted share compared to a net loss of $56 $3 million and a loss per share of <unk> 19.
John <unk>: In the prior year period.
It is important to note that net income includes the $220 million gain on settlement of litigation.
John <unk>: Adjusted EPS loss improved to two <unk>, a marked improvement compared to a loss of <unk> 14, a year ago, as we made meaningful progress, reducing non operating expenses and narrowing adjusted losses.
John <unk>: Adjusted EBITDA was negative $1 4 million, a $37 million improvement year over year, highlighting our ongoing focus on cost control efficient growth and driving leverage in the model.
John Janedis: Turning to cash flow, net cash provided by operating activities was $161 million, reflecting the $220 million impact of the gain on settlement of litigation. Free cash flow improved by $9 million year over year to negative $62 million as we remain disciplined in our capital allocation and working capital management. On a trailing 12-month basis, we improved both adjusted EBITDA and free cash flow by more than $100 million, underscoring the effectiveness of our profitability initiatives and operating efficiency. Looking ahead, our North America guidance for 2Q 2025 calls for subscribers of 1.225 million to 1.255 million or a 14 percent year-over-year decline at the mid-point.
John <unk>: Turning to cash flow net cash provided by operating activities was $161 million.
John <unk>: Reflecting the $220 million impact of the gain on settlement of litigation.
John <unk>: Free cash flow improved by $9 million year over year to negative $62 million as we remain disciplined in our capital allocation and working capital management.
John <unk>: On a trailing 12 month basis, we improved both adjusted EBITDA and free cash flow by more than $100 million underscore.
John <unk>: Underscoring the effectiveness of our profitability initiatives and operating efficiency.
John <unk>: Looking ahead, our North America guidance for <unk> 2025 calls for our subscribers of one point to two 5 million to 125 5 million or a 14% year over year decline at the midpoint.
John Janedis: and revenue of $340 million to $350 million, a 10% decline at the mid- Note that this guidance includes the continued impact of our recent drop of Televisa Univision content and reflects the benefit of one-time sports events in 2Q2024. For rest of the world, our Q2 guidance projects subscribers of 325,000 to 335,000 down 17% year-over-year, and revenue of $6.5 million to $7.5 million, reflecting a 15% decline at the midterm. In closing, for several years, we've been driving important investments in Fubo's technology and have made strategic content changes resulting in significantly improved profitability and cash flow under challenging circumstances.
John <unk>: And revenue of $340 million to the range of $50 million, a 10% decline at the midpoint.
John <unk>: Note that this guidance includes the continued impact of our recent drop of Televisa and Univision content and reflects the benefit of onetime sports events in <unk> 2024.
John <unk>: For rest of World, our Q2 guidance for JAKKS subscribers of 325000 to 335000 down 17% year over year and revenue of $6 5 million to.
John <unk>: To $7 $5 million, reflecting a 15% decline at the midpoint.
John <unk>: In closing for several years that we've been driving important investments in both technology, and then made strategic content changes, resulting in significantly improved profitability and cash flow under challenging circumstances.
John Janedis: Looking ahead, we are energized by what we believe we can achieve through added scale with our pending transaction with Hulu Plus Live TV.
John <unk>: Looking ahead, we are energized by what we believe we can achieve through added scale with our pending transaction with Hulu plus live TV.
John Janedis: In the meantime, we remain firmly focused on achieving profitability in 2025, alongside executing on our long-term strategic priorities.
John <unk>: In the meantime, we remain firmly focused on achieving profitability in 2025 alongside executing on our long term strategic priorities.
Unknown Executive: I would now like to turn the call over to the operator for Q&A. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We kindly ask that you limit yourself to one question. We will pause for just a moment to compile that Q&A roster.
Speaker Change: I would now like to turn the call over to the operator for Q&A.
Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad, we kindly ask that you limit yourself to one question, we will pause for just a moment to compile that Q&A roster.
Unknown Executive: Your first question comes from the line of Dave Joyce with Seaport Research Partners, please go ahead. Thank you. A little bit more color on the content front, please.
Speaker Change: Your first question comes from the line of David Joyce with Seaport Research Partners. Please go ahead.
Speaker Change: Thank you on the little bit more color on the content front. Please.
Unknown Executive: Given that Televisa Unusión did say on their earnings call that they would look forward to being in discussions with you again, is there anything new that you can report on that front since they expressed that interest?
Speaker Change: Given the Televisa.
Speaker Change: Young did say on their earnings call that the.
Speaker Change: I would look forward to being in discussions with you again is there anything new that you can report on that front since they expressed that interest.
Unknown Executive: And also on the content side, how are you progressing on getting your programming contracts all realigned for skinnier packages in time for the football season? Thanks.
Speaker Change: And also on the content side, how are you progressing on on giving your programming contracts all realigned for skinnier packages in time for the football season.
John Janedis: Hey David, this is John. I'll take the first one and maybe David will talk to the skinny package progression. Look, on Televisión Univisión, I would say no update to share, but as you know, look, there's been content we've dropped in the past that we brought back.
John <unk>: Hey, David This is John I'll take the first one and maybe David will talk to these skinny package progression look on TV <unk> I would say no update to share, but as you know.
Speaker Change: Look there has been constantly have dropped in the past that we brought back.
David Gandler: Consistent with what we said last quarter, I think we're certainly open to those discussions with acceptable terms And that's important, but in the interim we've lowered the price on our Latino package We're seeing solid interest and we're always looking to improve our offerings to our customers But I'd also say as we mentioned the impact will continue into the second quarter You know, we're now about four and a half months since the drop But as the time goes on the impact on a scrapper base will be more modest Yes, and this is David.
David: Consistent with what we said last quarter I think we're certainly open to those discussions with acceptable terms.
David: And that's important but in the interim we've lowered the price on our Latino package and we're seeing solid interest and we're always looking to improve our offerings to our customers, but I would also say as we mentioned the impact will continue into the second quarter. We're now about four five months since the drop but at the time goes on.
David: The impact on our subscriber base will be more modest.
David: Yes, and this is David.
David Gandler: As to the second part of your question, look, we're very focused on releasing skinny bundles. We've stated this many times. We started offering some stand-alone services and early indications, you know, really, I think, create a situation for us where we feel very comfortable that there's probably a growth opportunity headed into the fall.
David: As to the second part of your question.
David: We are very focused.
David: Releasing skinny bundles. We've stated this many times we.
David: We started offering some standalone services.
David: Early indications.
David: Really I think.
David: Create a situation for us where we feel very comfortable that theres, probably a growth opportunity headed into the fall. So we're very focused on.
David Gandler: So we're very focused on, you know, completing our content deals with non-Disney partners. But of course, we've made it very clear that it has to be on acceptable terms at a fair market price with the same flexibility as other distributors. So that'll be our focus in the short term. And we look forward to providing you more information as we move forward on that front.
David: Completing our content deals.
David: With non Disney partners, but of course, we've made it very clear that it has to be unacceptable terms at a fair market price with the same flexibility as other distributors, so that'll be our focus.
David: In the short term and we look forward to providing you more information as we move forward on that front.
David: Okay.
Unknown Executive: Your next question comes from Clark Lampen with BTIG, please go ahead. Thank you. Good morning.
Speaker Change: Your next question comes from Clark Lampkin with BT RG. Please go ahead.
Clark Lampkin: Thank you good morning.
Unknown Executive: For David or John, I'll sort of ask the obligatory macro question and curious if you guys have seen any impact 2Q to date or whether maybe you expect as a result of some lag effect impact, any impact on your gross additions churn or on the ad side of your business demand in the US. And then for 2Q, John, I don't know if it's possible to quantify for us or give us a sort of even directional sense for what 2Q growth would have looked like had you not had the COPA America and Televisa impacts. It might be challenging to quantify, but would just be curious, I guess, if you have a sense for what like for like performance across the US is looking like right now.
Speaker Change: For David or John I'll sort of ask the obligatory macro question.
Clark Lampkin:
Clark Lampkin: Curious if you guys have seen any impact.
Clark Lampkin: <unk> to date or whether maybe you expect as a result of some lag effect impact.
Clark Lampkin: Any impact on your gross additions churn.
Clark Lampkin: Or on the outside of your business demand in the U S. And then for QQ, John I don't know if its possible to quantify for us or give us a sort of even directional sense for what <unk> growth would have looked like had you not pad the Copa America, and Televisa impacts it might be challenging to quantify but would just be curious I guess.
Clark Lampkin: If you have a sense for what.
Clark Lampkin: Like for like performance across the U S is looking like right now thank you.
Unknown Executive: Thank you.
Unknown Executive: Yeah, sure. I'll take those, Clark.
Clark Lampkin: Yes, sure I'll take those Clark so maybe I'll start with the second question first look on <unk> at.
John Janedis: So maybe I'll start with the second question first. Look, on 2Q, to your question, look, we have ongoing churn in the Latino package as we referenced. And then to your point, we had COPA last year. If I were to kind of clean it up and calculate the same store, if you will, I would say on the same store basis, our subscriber growth looks to be relatively flattish.
Speaker Change: To your question, but we have ongoing churn in the Latino package as we referenced and then to your point, we had Copa last year, if I were to kind of clean it up and calculate our same store. If you will I would say on a same store basis, our subscriber growth looks to be relatively flattish.
John Janedis: On the macro side, what I would say is, short answer, nothing stands out in terms of tone from both our customers and our advertising partners. I'd say on the customer side, to your question, I think overall churn for our English package is relatively in line or actually slightly better on a year-over-year basis, even with the price increase. I would say also that reactivations were better than we expected for the month of April, which I think is relevant given the timing of some of the macro headlines out there. And then on the advertising side, I would say if I look at what I would just call year-to-date on a monthly basis, April is actually our best month in terms of growth.
Speaker Change: On the macro side, but I would say is look the short answer nothing stands out in terms of tone.
Speaker Change: From both our customers and our advertising partners I'd say on the customer side to your question I think.
Speaker Change: Overall churn for our English package is relatively in line or actually slightly better on a year over year basis, even with the price increase I would say also that reactivation or better than we expected for the month of April which I think is relevant given the timing of some of the macro headlines out there and then on the advertising side I would.
Speaker Change: Say, if I look at what I would just call year to date on a monthly basis April is actually our best month in terms of a growth.
John Janedis: And I would say that, just as a reminder, in terms of modeling, that we lapped the discovery scripts drop as of the end of April. And so we'll see more of a normalization of our advertising business starting now.
Speaker Change: And I would say that just as a reminder, in terms of modeling that we lap the discovery scripts drop as of the end of April and so we will see more of a normalization of our advertising normalization of our advertising business starting now.
Speaker Change: Okay.
Unknown Executive: Your next question comes from Laura Martin of Needham, please go ahead. Good morning. Okay.
Speaker Change: Your next question comes from Laura Martin of Needham. Please go ahead.
Laura Martin: Good morning, Okay. So.
Unknown Executive: So, David, I wanted to ask you about Rest of World. We've got the Rest of World subs down 11% for the last six months now, ARPUs down, revenues down. I know this was, my recollection is sort of it was an OCU hire, but is this business, is this business just going to shrink structurally? And how are you thinking about Rest of World?
Laura Martin: David I wanted to ask you about rest of World We've got.
Laura Martin: Rest of World sales down 11% for the last six months now <unk> down revenues down I know this is my recollection is sort of what was an argue higher but it is this business is this business shrinks actually and how are you thinking about rest of World and then also for you David I wanted to know about Gen. AI what are you guys doing.
Unknown Executive: And then also for you, David, I wanted to know about Gen AI. What are you guys doing with Gen AI integrating some of the new forms? Are you doing anything with creative or advertising with using Gen AI tools?
Speaker Change: With Gen AI integrating some of the new forms are you doing anything with creative or advertising with using gen AI tools and.
Unknown Executive: And then, John, for you, ad revenue down 17%, sort of disappointing. And I didn't understand why it mattered if we dropped certain networks. You guys got plenty of networks. So why would, did they have some kind of commitment where they had to advertise with you? Because you have plenty of ad inventory. So I don't understand why I don't either. Two big content players would actually drive ad revenue down 17% year over year.
Speaker Change: And then John for you AD revenue down, 17% sort of disappointing and I didn't understand why it mattered if we dropped.
Speaker Change: Certain networks.
Speaker Change: Many of networks. So why would did they have some kind of commitment where they had advertised with you guys.
Speaker Change: Yes plenty of that inventory, so I don't understand why losing.
Speaker Change: The content players would actually drive AD revenue down 17% year over year. Thanks, guys.
Unknown Executive: Thanks, guys.
David Gandler: Okay. Yeah, Laura, I'll take that first question. There's a lot in there.
Okay.
David Candler: Yes, Laura I'll take that first question Theres a lot in there.
David Gandler: On the Molotov side, I think we've said this many times, it's really about team technology and the synergies that we see with that business. As we've stated now since 2022, despite all of the whiplash that we've seen over this period of time from larger companies like Netflix and others and plus services, et cetera, our goal has always been profitability, profitability over growth. Molotov, like Fubot, we've set that same expectation and they have to get to profitability. And we feel comfortable that they will get there.
David Candler: On the malt upside I think we've said this many times, it's really about <unk> technology.
David Candler: And the synergies that we see with that business as.
David Candler: As we've stated now since 2022.
David Candler: Like all of the.
David Candler: Whiplash that we've seen over this period of time from the larger companies like Netflix and others.
David Candler: Plus services et cetera, our goal has always been profitability profitability over growth.
Speaker Change: Molotov and likes Lebow.
David Candler: We've said that same expectation and they have to get to profitability.
Speaker Change: We feel comfortable that they will get there.
David Gandler: And then on the other side of that coin is the fact that we are really focused on building out our unified platform. We feel very good about where the platform is today. Fubot itself is now on that platform. We are now onboarding Molotov.
Speaker Change: And then on the other side of that coin is the fact that we are really focused on building out our unified platform, we feel very good about.
Speaker Change: Where that platform is today full bore itself is now on that platform.
Speaker Change: We're now Onboarding Molotov.
David Gandler: And in terms of subscriber growth, it's very simple. It's a relatively straightforward formula. You have to invest in marketing. And as we stated, investing in marketing is an upfront cost that has short-term cost implications. And so that has not been on the forefront for us.
Speaker Change: And.
Speaker Change: In terms of subscriber growth, it's very simple.
Speaker Change: It's a relatively straightforward formula you have to invest in marketing and we.
Speaker Change: We stated investing in marketing.
Speaker Change: There's an upfront cost that has.
Speaker Change: Short term.
Speaker Change: Cost implications and so that has not been on the forefront.
David Gandler: But yeah, international is an important piece to the long-term trajectory of this business. We see what YouTube has been able to accomplish on a global basis and where the majority of viewership and revenue is coming from international. We see the same trend with Netflix. I think even Reed Hastings, when he was still CEO, had mentioned that many, many times, the importance of international. And we're getting everything ready to expand at the right moment, at the right time. And so this will be a testing ground, as it has been, and we're almost there.
Speaker Change: For us, but yes international is an important piece to the long term trajectory of this business, we see what Youtube has been able to accomplish on a global basis.
Speaker Change: And where the majority of.
Speaker Change: Your ship and revenues coming from international we see the same trend with Netflix I think even Reed Hastings. When he was still CEO had mentioned that in many many times the importance of international and we're getting everything ready.
Speaker Change: To expand.
Speaker Change: At the right moment at the right time, and so this will be a testing ground because it has been and we're almost there John.
John Janedis: John, would you like to take the rest? Yes, sure. And, Laura, I would just add one thing to David's comment that, to your point, even with the subscriber decline there, we had, or the team had EBITDA that came in comfortably ahead of budget. So, again, profitability remains the focus.
Speaker Change: John.
John <unk>: Would you like to take the rest of this.
Speaker Change: Yes, sure and Laura I would just add one thing to David's comment that to your point, even even with the Scriber decline there we had or the.
John <unk>: The team at EBITDA that came and comfortably ahead of budget.
John <unk>: So again profitability remains the focus in terms of your question on the ads I would say a couple of things. One is don't forget that we do have AD insertion for those networks. So for instance.
John Janedis: In terms of your question on the ads, I would say a couple things. One is, just don't forget that we do have ad insertion for those networks. So, for instance, both on the Univision nets and on the Discover Scripts nets, you know, we're losing ad-insertable hours. And so, and there's a direct impact on that. If I were to normalize for that, I would tell you that Q1 would have actually been upsliding on a year-over-year basis. And I would tell you that 2Q looks to be a little bit better than Q1.
John <unk>: Both on the Univision network and on the discovery scripts nets were losing Adam charitable hours and so and there is a direct impact on that if I were to normalize for that I would tell you that Q Q1 would've actually been up slightly on a year over year basis, and I would tell you that.
John <unk>: <unk> looks to be a little bit better than Q1.
Unknown Executive: Your final question comes from Alicia Reese of Wedbush, please go ahead. Hey guys, thanks for taking my question. I have a few as well. On the ad spend, I'm wondering if you could dig in a little bit on how your gamified ads are tracking and how you can get more advertiser interest while the budgets are tightening with features such as that. If it's gotten much traction so far, we had heard in the quarter that it has, just double click on that. I'd appreciate it.
Alicia Reese: Your final question comes from Alicia Reese of Wedbush. Please go ahead.
Alicia Reese: Hey, guys. Thanks for taking my question.
Speaker Change: Have a few as well and on the AD spend.
Speaker Change: I'm wondering if you could dig in a little bit on how you're gamify. It adds are tracking.
Speaker Change: How you can get more advertiser interest, while it budgets are tight and tightening with feature.
Speaker Change: Teachers, such as that.
Speaker Change: Cotton much traction so far we had heard in the quarter that it has changed doubleclick on that I'd appreciate it.
John Janedis: Yes, sure. Hey, Alicia, this is John. I'll take it.
Jon: Sure Hey, Lisa this is Jon I'll take it.
John Janedis: Look, I'd actually broaden it out from gamified to what I would just call interactive ads. And look, over the past, I'd say, couple of quarters or a few quarters, you've seen us and read about us launching various new formats that I would just call, you know, interactive, gamified, et cetera. We'll also be launching shoppable. But if I take that as a larger bucket, I would say that we're really starting to see some good traction. And so our interactive ads are up 30% or 37% year over year. And I'd say that interest is actually accelerating. You know, I'd say ad products overall, in terms of, you know, big picture, up 41% year over year for the first half.
Speaker Change: I would actually broaden it out.
Speaker Change: From Gamify too, but I would just call them interactive ads and look over the past couple of quarters or few quarters, <unk> CNS and read about us launching various new formats that I would just call interactive gamify et cetera will also be launching shop level, but if I take that as a larger bucket I would say that we're really starting to see some.
Speaker Change: Traction.
Speaker Change: And so our interactive ads are up 30% or 37% year over year.
Speaker Change: And I would say that interest is actually accelerating.
Speaker Change: I would say our AD products overall in terms of big picture up 41% year over year for the first half and so we're seeing an acceleration I would say candidly.
John Janedis: And so we're seeing acceleration.
John Janedis: Look, I would say, candidly, you know, the sale cycle was a little bit longer than I would have expected initially. But I'd say that we're actually like what we're seeing.
Speaker Change: Sales cycle was a little bit longer than I would've expected initially.
Speaker Change: But I would say that we're actually like what we're seeing and then in terms of.
John Janedis: And then in terms of advertiser interest as budgets potentially shrink, look, I think that we need to innovate. And I would say our ad sales team was at a conference earlier in the week. We had very strong interest from a variety of parties, including the hold codes, about a new ad format that we've just brought to market. And I expect that I'll start talking about that on our next quarter's call. But we do like what we're seeing from our pause ads, from marquee, among others.
Speaker Change: Is there interest as budgets potentially shrink.
Speaker Change: Think that we need to innovate and I would say our <unk>. Our AD sales team was was at a conference earlier in the week, we had very strong interest from a variety of parties, including the Holdco.
Speaker Change: A new AD formats that we've just brought to market and I expect that I'll start talking about that on our next quarter's call, but we do like what we're seeing from our pause ads from marquee.
Speaker Change: Among others.
Speaker Change: Okay.
Unknown Executive: There are no further questions at this time.
Speaker Change: There are no further questions at this time, ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.
Unknown Executive: Ladies and gentlemen, that concludes today's call. Thank you all for joining.
Unknown Executive: You may now disconnect.
Speaker Change: Okay.
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Speaker Change: Sure.
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Speaker Change: Okay.
Speaker Change: Yes.
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