Shares of a live sports streaming platform fuboTV (FUBO 16.84%) rose on Friday after it reported financial results for the second quarter of 2022 and said it was considering strategic options. fuboTV stock ended the session up an impressive 17%.
In the second quarter, fuboTV generated revenue of $222 million, a year-on-year increase of 70%. Average subscription revenue (ARPU) per user was a modest 2% year-over-year. However, the company was able to offset the modest ARPU growth with strong customer growth overall. At the end of the quarter, fuboTV had approximately 1.3 million subscribers worldwide, up 57% from the same quarter last year.
The problem is that fuboTV’s streaming service itself is still a negative-gross-margin business doomed to lose money. Management hoped to counteract this by monetizing its large, growing customer base in more diverse ways. And one of those potential sources of income was sports betting. However, the company said it was evaluating “strategic opportunities” to work with another company in the region.
For 2022, fuboTV lowered its revenue forecast and overall subscriber forecast. On the bright side, however, the forecast still shows growth of 45% and 19% for the full year, respectively. In addition, it does not include any potential profit from sports betting.
On a less positive note, fuboTV reported an operating loss of $91.3 million in the second quarter alone. And management said it doesn’t expect positive free cash flow until 2025.
In the face of years of losses, fuboTV this morning made a $750 million shelf offer where it can sell shares to raise funds if needed. For comparison, fuboTV’s market cap is currently $642 million. So this is a huge potential stock offering that shareholders need to be aware of, especially as losses continue to mount.
John Quast has no position in any of the stocks mentioned. fuboTV, Inc. at The Motley Fool. Has reviews and is recommended. The Motley Fool has a disclosure policy.