fuboTV Inc. (FUBO) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to fuboTV's first-ever Investor Day. I'm Alison Sternberg, and I oversee Investor Relations here at fubo. We are incredibly excited to have you join us today, and we hope you find today's agenda, both interesting and informative. Most importantly, however, we hope you walk away feeling as excited about the future of fubo as we do. We look forward to giving you greater visibility into the key components of our strategy and how each of these parts enfold into our long-term plan for growth alongside profitability. Before we dive in, I wanted to give you a quick overview of our agenda for the afternoon. Our CEO and Co-Founder, David Gandler, will kick things off with some opening remarks. David will be followed by Mike Berkley, our Chief Product Officer, who will discuss the product and technology momentum we are seeing across the business. We will then hear from Alberto Horihuela, Co-Founder and Chief Growth Officer, who will give an overview of our acquisition and retention efforts and how they support continued strength in unit economics. Henry Ahn, our Chief Business Officer, will then walk you through our content strategy and approach before turning it back to David for an overview of our ad sales efforts and our tactics to capture the massive opportunity we see ahead of us. Scott Butera, President of Gaming will then step you through our gaming strategy and time line; and John Janedis, our CFO, will step you through how all of these elements tie together to drive market share gains while also advancing us towards our profitability goals in 2025. We will then open it up to Q&A before turning it back to David for closing remarks. Before turning it over to David, I'd 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, including cash flow and adjusted EBITDA targets, market opportunity, expectations regarding growth and profitability, subscription levels, the Molotov and Edisn acquisitions, expected synergies of the technology platforms and related savings business strategy and plans, the continued shift in consumer behavior and our strategic plans regarding fubo Sportsbook. 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 can be found in the Risk Factors section of our quarterly report on Form 10-Q for the quarter period ended June 30, 2022, filed with the Securities and Exchange Commission on August 8, 2022, and other periodic filings with the SEC. These statements reflect our current expectations based on our beliefs, assumptions and information currently available to us. Although we believe these expectations are reasonable, we undertake no obligation to revise any statements to reflect changes that occur after this presentation. Over the course of today's presentation, we also refer to certain non-GAAP financial measures. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are also available in our Q2 2022 earnings shareholder letter which is available on our website at ir.fubo.tv. Now here is our CEO and Co-Founder, David Gandler.

Hello, everyone, and welcome to fuboTV's first Investor Day. I'm David Gandler, Co-founder and CEO of fuboTV. As you may well know, fubo is a sports-first cable TV replacement service for the entire family. We offer leading premium sports, news and entertainment programming for both live and on-demand. Our category is typically referred to as the virtual MVPD. It's important to know that we do not compete directly with SVOD and streaming Plus services like Netflix and Amazon. But we do compete directly with traditional cable and satellite. Like those traditional services, we aggregate the best content. But because we are a streaming platform, we offer so much more. fubo's aggregated sports, entertainment and news programming presented through a custom and interactive premium viewing experience is, we believe, the future of TV. fubo has been public for just 22 months, and our story is still new and often misunderstood. We plan to clarify that today. Our industry is evolving quickly. We are in a massive market transition where consumers are opting out of expensive cable and satellite packages into more efficient pay-TV Internet bundles. As the advertising industry follows the audience, traditional media dollars are chasing those digital consumers, and fubo is moving even faster to capitalize on the moment at hand. Having reached the milestone of 1 million paid subscribers at the end of 2021, we see an opportunity to drive operating leverage in our business as we continue to achieve scale and advance against the total addressable market, over 65 million traditional cable and satellite households. So let's review the milestones we've achieved. Number one, business growth. We began as a soccer streaming platform 7 years ago. Today, we're a full cable replacement service with coverage of more than 50,000 premium events across all sports. Number two, our proprietary technology. Supporting our expansive content offering is a scalable, highly automated technology infrastructure that's purpose-built, giving us a structural advantage to help drive subscriber acquisition content strategy and product decisions. fubo's tech stack proudly built in-house means product innovation is at the core of everything we do. And we're focused on adding interactive features that turn passive viewers into active participants. Number three, acquisitions. M&A in the streaming, wagering, gaming and computer vision sectors across the U.S., France and India, have enabled us to more quickly scale our platform, which we believe, in turn, allows us to drive business outcomes well ahead of the market. Number four, our geographic expansion. fubo is the only virtual MVPD that is global. We now operate in the U.S., in Canada, in France and in Spain. Today, we will give you a full picture of our strategy, including visibility into our product and technology momentum, our opportunity to massively expand our subscriber base, further expansion of our nascent Canadian and engaging Latino businesses, growth of our targeted advertising opportunity, the rollout of fubo Sportsbook and how all of these collectively are designed to drive us towards positive cash flow. We believe our thesis is more relevant today than it was when we went public 2 years ago. The traditional cable satellite model is under immense pressure. Consumers are switching from higher-priced pay-TV boxes to streaming TV. As I said earlier, there are still over an estimated 65 million people who subscribe to DISH or DIRECTV, Comcast, Charter, Altice, and many others. We are replacing the decades-old basic cable package by giving consumers diverse and expanding content, anytime, anywhere access, increased choice and flexibility and personalization and interactivity, all at an attractive price. We believe customers will continue to migrate from cable to streaming services, given the better experience overall value proposition. We've already seen this disruption start to unfold. Entertainment was the first domino to fall. An entertainment viewership at top cable networks is falling as audiences migrate to streaming services like Netflix and Amazon Prime. Still, cable has remained the stronghold of sports. That's until now. We are seeing a real shift as sports audiences move from cable to streaming. With our growing portfolio of sports content aggregated into a single platform, fubo aims to drive that disruption. You'll hear more today from the fubo team about why we believe aggregation platforms are the gateway to television. And the key to capturing consumer mindshare. We believe fubo sits at the intersection of 3 mega opportunities. These are: continued acceleration of cord cutting, shift of TV ad dollars to connected devices and differentiation through interactivity. First, cord cutting. The number of pay-TV households has been decreasing as more subscribers cut the cord. According to eMarketer, there will be 68.5 million pay-TV households at the end of 2022. We believe that while it is likely that traditional pay-TV will continue to post high single-digit year-over-year declines, fubo will grow at a 20% plus compounded annual growth rate over the next few years. Consumers are favoring services like fubo over legacy cable due to a robust content portfolio and a differentiated personalized user experience, all at exceptional value. Secondly, advertising. Ad dollars are shifting towards connected devices away from traditional cable and satellite. For context, 46% of global impressions are on connected TV, yet only 22% of ad budgets are spent on CTV. But brands advertising on digital platforms still. Require high-quality audiences, measurement capability, and first-party data for superior targeting, all of which fubo offers. Fubo's differentiated sports focus also gives advertisers the opportunity to target consumers when they are most engaged emotionally and psychologically focused on their favorite teams. We continue to invest in our ad sales team, technology and infrastructure to capitalize on this trend. And last, but not least, interactivity. As the streaming industry becomes more competitive, companies want more attention and hours from consumers. Media and technology companies have adopted different strategies to expand offerings beyond streaming, hardware control, Roku; devices and ecosystem, Amazon; mobile gaming, Netflix, et cetera. At fubo, we're betting on interactivity literally. Our subscribers in the aggregate stream an average of 100 million hours of content a month and we are actively working to grow engagement even further by enabling our users to interact with their favorite content. fubo's proprietary interactive features are integrated into the live TV streaming platform, enhancing the user's experience, creating a flywheel engagement effect and differentiating us from our competition. Our CPO, Mike Berkley, will take you through our interactive experiences shortly. Our goal with these products is to offer consumers flexibility and choice. With Fubo, they can enjoy a lean back or lean forward interactive experience. It's up to them. As many of you know, we always look for innovative, creative and efficient ways to grow our reach and get in front of new audiences. So we are excited by our recently announced multiyear first lift production partnership with Ryan Reynolds and his maximum effort studio. Ryan needs no introduction, of course, but you may not know this. Ryan has been a major Hollywood star for over 30 years. His career box office receives total billions of dollars. He has 3 movies on Netflix top 10 most watched movies ever list including Red Notice at #1. Ryan is a serial entrepreneur, deeply involved in companies across marketing, content and advertising. He also owns a soccer club in the U.K. We've partnered with Ryan and his team to launch a maximum effort network on fuboTV with rights to distribute the channel to other platforms. We're working with Ryan to create content for the channel and plan to partner with brands to underwrite production. This deal aligns with our strategy of growing subscribers and expanding ad revenue. It also complements our original content strategy by adding premium entertainment content alongside sports. Ryan's goal for the channel is in his words to create joyful entertainment. Notably, Ryan and maximum effort are taking an equity stake in fuboTV, demonstrating their confidence in our business. To sum it up, Ryan is one of the biggest stars in the world who can work with any media and entertainment company he chooses. He picked fubo. We believe we are at an inflection point in the business given the size of our subscriber base and pace of innovation. Let me reiterate the key pillars of our growth strategy: grow subscribers, monetize through subscription and advertising, optimize our content portfolio, all while advancing towards our long-term target of positive cash flow in 2025. Our objective for today is to provide a deep dive into each of those pillars. We'll present our long-term financial plan showcasing our path to sustainable revenue growth and margin expansion. You'll hear from our executive team on how each component of our business unfolds into the long-term plan. I will now turn it over to Mike Berkley, our Chief Product Officer. Mike?

Thank you, David. My name is Mike Berkley, and I'm the Chief Product Officer. That means that my teams are responsible for all product and technology development at the company. fubo is truly a tech-first media company. In fact, the tech team is more than half the headcount for the entire company. Today, I'm really excited to tell you about what we're doing because really, no one else in the industry is doing what we're doing. In particular, I want to tell you how we're creating the most engaging way to watch live sports on TV. fubo is the home for live sports. Unlike other TV platforms that are focused more broadly on entertainment, the vast majority of fubo subscribers choose fubo specifically for sports. In fact, 96% of our subscribers watch live sports every month. This is very attractive from a cost standpoint because we can spread the cost of our sports content across our entire subscriber base. With more sports channels than any other streaming service, we offer 50,000 live events each year. We have more soccer and college football channels than any other live TV streaming platform, and we have significant NFL, MLB, NBA and NHL coverage. As David mentioned, live sports has become very fragmented, and it's only getting harder for consumers. But it used to be easy not to date myself, but when I was growing up, there were only 4 or 5 channels that carried all sports events. There were no alternatives. And there was never any confusion about how or where to watch my favorite team. Well, fast forward to today, live sports events are spread across many dozens of TV channels, dozens of different streaming apps and across all kinds of devices, it's become so confusing for consumers to know which service to use to find the game that they want to watch. Fubo solves this. It's a modern product that brings back the simplicity of the old days. We offer a single location to get all leading sports. That's one app and one subscription. It's so much easier and ultimately less expensive for consumers, and that is the beauty of aggregation. As a result of aggregating all live TV together and our obsession with perfecting the product experience, we have incredible engagement on our platform. Our subscribers are glued to the TV. Our daily active users watch on average, 6 hours a day. Think about that, 6 hours a day, that's way more than Netflix. Zooming out to the big picture, overall, our subscribers stream 100 million hours of content each month. And that 100 million hours is just the average. In the big months, like last January at the peak of the football season, they streamed over 140 million hours of content. This captive audience is also watching on the largest screens in the house. Over 94% of all viewing hours are on a connected TV. It's a large format, premium experience and one that is also in high demand by advertisers seeking to reach a TV audience in a highly targeted manner. You'll hear more about how we offer this unique value proposition to our advertising partners later today. Unlike traditional cable TV, which is honestly a dumb pipe. We have first-party data and insights into every consumer interaction and choice that they make on the platform. In fact, we collect over 2 billion data points every day, such as funnel entrances, engagement with interactive elements, video starts, positives, rewinds and much more. And really, that means 3 things: first, we can create a better, more personalized product experience; second, we can anticipate what our viewers want to watch as soon as they turn on the TV; and third, we can offer insights to our advertising partners to help them better target their campaigns. We'd like to say that our subscribers come for the sports, but then stay for the entertainment. Not only is that true, it's really important. It allows us to minimize the impact of seasonality, which is a huge challenge for sports-only subscription services. Remember when I mentioned the 140 hours of content that we streamed in January, well, most of that was actually entertainment and news, not sports. This allowed us to minimize the churn impact when the NFL season ended in February. Now whether it's sports, entertainment or news, another key point is that fubo is mostly used as a live viewing experience. In fact, over 90% of all viewing hours on fubo is live. This means that we have a high volume of people all watching the same event unfold at the same time. There's a sense of shared experience and community on fubo that just doesn't exist with on-demand services like Netflix or Disney+. This allows us to tap into real-time community engagement like voting and making predictions about what's going to happen next in the game. These are fun experiences that can only happen with live TV. And of course, live audiences on the largest screen in the house, watching premium content are the most coveted audiences for advertisers. So let's talk about the platform. As a technology-first media company, we've built a proprietary platform. Why does that matter? Well, it matters because we aren't relying on vendors for our core technology like so many media companies do. We control our own destiny. We can build as fast as we want to. And it also means that we have features that no one else has. Remember those live, highly engaged viewers, well, my team's obsession is creating products that are interactive, tapping into the passion of those viewers and even giving them a way to put their own skin in the game. We're taking a passive experience, and we're making it active. So let's take a closer look at some of these features. I'm going to walk you through 5 quick feature demos. The first is content discovery, the second is multiview, the third is FanView, the fourth is free-to-play contest and then the fifth is our integrated sports betting. As I mentioned, fubo aggregates 50,000 live events each year. The job of the product is to make it super easy for viewers to navigate through it all and find exactly what they're looking for and also to discover new content that they're going to fall in love with. There are a few ways that we do this. On the homepage, you have quick access to your favorite channels and shows as well as the personalized recommendations based on your viewing preferences. And more times than not, you'll quickly find what you want on this first screen when you first launch the app, but you can also go deeper and browse event schedules by specific sport and league. On the sports page, you can see the huge diversity of supports that we have on the platform. And then you can drill down to see the schedules for each league we carry. And then in the guide, you can filter down hundreds of channels to just the sports channels that you care about. These tools make it super easy for sports fans to find the specific games that they're looking for. For many sports fans, especially on college football Saturdays, there are multiple games on at the same time that they want to watch. But bouncing back and forth between channels has always been a bit cumbersome with traditional cable TV. fubo solves this with a feature called multiview. It allows you to select up to 4 different channels to watch at once, all on the same screen. It's become one of our most popular and unique features, and you can only get this on fubo. No other streaming platform has it. Again, this is super helpful on Saturdays and Sundays during the football season or even during tournaments with lots of events happening at the same time, like the World Cup or the Olympics. And earlier this year, we updated multiview to add even more value. Now you can add live stats to the screen. So you can watch multiple games and you can see how individual players are performing. By the way, it's been really fun watching how our subscribers creatively use multiview even outside of sports. For instance, during elections or breaking news events, our viewers bring up multiple live news channels on the screen at once so they can bounce back and forth to make sure they're getting all angles of the story. There really are no limitations to multiview. You can even watch a live game, you can watch news and you can watch a movie all simultaneously on the same screen. Our goal is to create the most engaging live sports experience in the world. The more our viewers interact and engage the more they watch. And the more that they watch, the more that they lean in and interact, so we created FanView for viewers who want to lean forward and engage with what they're watching. In FanView, you can track live stats and engage with free-to-play games all while you're watching. You can also get quick access to the scores of all the other sporting events that are also happening at that moment. But honestly, these are just the tip of the iceberg for what's possible in FanView. As part of our product roadmap, we want FanView to provide a lot more value. We want to add live betting odds and integrate with the fubo Sportsbook app so that you can track your wagers on the screen next to the game that you're watching. Eventually, we also want to add the ability to buy merchandise like jerseys and order food like pizza within FanView, straight from your TV. And of course, all of this creates engagement that can be monetized with ads and sponsorships. Now probably since the beginning of civilization, humans have competed in sport in front of live audiences. And along with that, audiences have been making predictions and bets on who's going to win in those competitions. fubo is bringing this innate human behavior to the modern TV experience. We've done this first with free-to-play contests where you can predict what's going to happen next in the live game and then you can even win cash for getting the most predictions correct. So far, we found that when viewers lean in and engage, they end up watching longer, which creates even more advertising inventory for us to sell. So let's check out a quick demo of our free-to-play games. [Presentation]

All of this is available to you on your TV while you're watching. Free-to-play is really fun and engaging, but we want to go even further. We want to enable viewers to truly put their own skin in the game. We've rolled out the fubo Sportsbook app across multiple states, including New Jersey, where we soft launched yesterday. With our Sportsbook, we're providing real money betting opportunities integrated directly into the TV viewing experience. And we're the only ones doing this. Let's check it out. [Presentation]

This kind of integrated TV and betting experience just doesn't exist on any other platform. When you're using the fubo Sportsbook app, it will automatically detect what you're watching on TV and display bets in the app related to that game. And when you change the channel to a different game on TV, the Sportsbook app will automatically update with bets for the new game. It's really magical. We believe only fubo can do this because our TV and Sportsbook products share a common back end and data platform. These valuable TV integrations are also something that we could potentially sell to other sportsbook operators in states where we don't yet have market access. And this allows us to generate revenue from our own sportsbook but also from partner's sportsbooks. In addition to all of the product innovation that I just walked through, I also want to highlight my team's intense focus on our path to profitability. The technology team plays a big role in this, driving many of our advertising and growth initiatives. For advertising, we are hyper-focused on making our technology perform better. Now backing up for a second. As a TV distributor, we're allowed to sell 2 minutes of TV commercials for every hour across all of the cable networks that we carry. And on our free fast channels, we can sell all of the ad breaks and then do a revenue share with our content partners. The role of advertising technology is to make sure that we're filling as much of the ad breaks as possible with the highest-price adds available. The tech is dynamic. It can choose which ads to show in order to maximize the amount of revenue that we generate in each ad break. We believe we have a lot of room to improve how this technology performs and we should see significant increase in our ad revenue per user in the second half of the year. In a few minutes, David is going to walk you through our ad business in more depth. On subscriber growth, over the last few months, the tech team has been working really, really closely with the marketing team on critical initiatives to increase our margin. These include: first, selling higher-priced plans in our sign-up funnels. Second, selling more add-ons during the sign-up process like adding a Showtime subscription. And then third, selling add-ons directly in the product experience at the exact moment when the user shows an intent to buy additional content. So I'm talking about a lot of specific tactics here. But we believe, ultimately, what's most important to profitable growth is long-term retention of our customers. And as we continue to improve the quality of the product experience, we expect to not only delight our customers, but to also see their retention increase over time. I also want to touch on a few really important cost-saving measures within the tech organization. With the acquisitions that we made at the end of last year, we now have high-caliber technology teams across the U.S., France and India. We also have access to the large and highly talented engineering market in India. In fact, we expect India will be where we grow the technology team for the next 3 years. This is smart growth. First off, like in the U.S., India has really smart and innovative engineers. Secondly, we believe it will save us $75 million over 3 years, while we also increased our pace of innovation. It's also important to note that we're now developing the fubo product around the clock and around the world. It's literally continuous development 24/7. With our acquisition of Molotov in France, we acquired the leading video streaming platform in France. And since the acquisition, we've been developing a unified platform to combine the best elements from fubo and the best elements from Molotov into a single product. Just like Netflix and Spotify, we're designing a single app and a single back-end platform that can work anywhere in the world. In the short term, it means that every fubo team across the globe will be building and innovating on the same platform, eliminating redundant work. This will unify the fubo product and the Molotov product. They will become the same app. This new platform is also expected to give us new capabilities like the potential to add a free tier to fubo in the U.S. and new pay-per-view options for monetizing our content. And because it's being built as a flexible platform, we believe we'll be able to expand into new markets across the globe much faster when the time is right for the business. Okay. I just took you through a lot. Let me summarize. Our product and tech platform is unlike anything else on the market. It is a key asset driving fubo's business forward. The incredible user engagement that we have, remember, 6 hours a day is also unmatched. That engagement is driving all aspects of our business. It drives our subscription business. It drives our advertising business. And now it's driving our sports betting business. It's really the foundation of fubo. And with our new global tech team spanning 3 continents, we believe we can slash our costs while continuing to innovate. We expect all of this together accelerates our path to profitability. And with that, I'm going to pass the mic over to Alberto. Thank you so much. I really appreciate it.

Hi. My name is Alberto Horihuela. I'm Co-Founder and Chief Growth Officer of fuboTV, and it's a pleasure to be here. Today, I'd like to discuss our acquisition and our retention efforts, especially in relation to our path to profitability. I'm also going to tell you about some key initiatives designed to improve our unit economics. I think we have a solid plan, and I'm excited to tell you about it. So let's kick it off. So first, on subscriber acquisition strategy. As you know, we are in a unique time in the history of television. There are over 65 million households still on traditional pay-TV. Of those nearly 9 million are expected to cut cable in the next few years. Companies like fubo are set to benefit from that shift in consumption. And we believe that our aggregated streaming service remains the best value for cord cutters. And that's because narrow services provide an incomplete offer especially when it comes to key programming like football. Here then our strategy is simple. It is to provide a well-rounded live sports and TV offer at a fair price to consumer. And so far, our strategy is working. Not only have we grown our base year-over-year, but the cost to acquire customers has remained efficient relative to our average revenue per user. We believe our marketing strategy allows us to efficiently target and capture demand from cord cutters. Now let me tell you more about how we acquire customers. Our in-house team uses over 20 different acquisition channels, and no one channel accounts for the bulk of our growth. We are constantly optimizing this effort, introducing new channels and tactics always to maximize our return on ad spend. We do this by looking beyond acquisition cost, keeping a close eye on our customer behavior after they sign up. And let me give you an example. Having streamed the World Cup twice already. Once in 2014 and again in 2018, we will use this past data to predict customer quality this time around. Specifically, we'll look at past conversion rates, engagement, which has an impact on our ARPU and pass retention after the event. This data gives us incredible insight into how customers engage and how to optimize our marketing spend year after year. And the result is that we have derived growth while reducing our marketing spend as a percentage of revenue. It really is remarkable. Since 2018, we have reduced our sales and marketing spend as a percentage of revenue by 2/3. This is great operating leverage. And more importantly, we expect this trajectory to continue. Last thing on this front. Over the last 12 months, we have seen meaningful share of customers coming to fubo organically. That is to say that they're not attributed to any paid marketing. This is important because if we kill all marketing tomorrow, we would still expect to see meaningful gross adds. I think this shows the power of word of mouth and the fact that our customers love our service. Needless to say, I'm very proud of our marketing team and the work that they've done. In fact, according to signs, when looking at the percentage of net adds among our peers, we have continued to capture market share. nearly 40% of net adds in the last 12 months. This gives us confidence in our strategy and the value that we provide our customers. And speaking of value, in recent quarters, we have introduced some truly phenomenal bundles. fubo Elite and fubo Ultimate, which our customers love. Not only are these plans packed with value and extended channel lineup, lab games in 4K, a best-in-class DVR that never expires, but they're also backed by strong unit economics. Customers that choose Elite and ultimate are more engaged, more profitable and retain better than customers in our entry-level plants. And the best thing is that we now see about half of new customers taking these premium plans. This makes us very excited because we expect it to have a material positive impact in our passive profitability. And next, I want to pivot to our pricing strategy and resulting churn dynamics. But first, let me reiterate, we believe the virtual MVPD product percents of winning value proposition relative to cable. Even now, the average cable bill is about $130 per month. That is nearly 2x the entry price of fubo. I think this explains some of the dynamics that we've seen around our customers' price elasticity. Most recently, we migrated our fubo starter customers to the fubo pro plan, effectively making fubo pro our entry plan. Although this migration provided our customers with an extended DVR service, it did increase our prices from $64.99 to $69.99 per month. Now when we price up customers, we try to keep a close eye on the churn baseline relative to the expected baseline. In all our recent price ups, we have seen a very modest onetime increase in churn followed by a return to baseline. And indeed, our most recent migration saw even less than expected churn, which is a testament to the value of our product. Having changed prices now several times, I think we have a strong pulse in our customers' price elasticity. Now that said, we aren't going to put on this lever willy-nilly. But it's important to note that relative to the average cable subscription, fubo continues to provide excellent value for sports fans and their families. And to make this last point even more plainly, you just have to look at our cohort of retention. Despite having raised prices now several times since 2018, which you would think would have a detrimental impact to our retention. The amazing thing is that we've been retaining customers at better and better rates year-over-year. We love seeing results like these. They are a testament to our marketing team's ability to attract premium customers and our products team ability to provide an exceptional user experience. Now beyond our pricing efforts, our growth team has done an incredible job enticing new customers to try premium items such as Showtime and Sports Plus. We now see 14% of new customers attending a premium add-on when signing up for fubo. That is relative to only 5% during the same time last year. That's a 3x increase year-over-year. This is another great trajectory with material implications on our long-term profitability. Lastly, we've begun to roll out new ways for customers to append premium add-ons to their subscription right from their TVs. Our first effort features premium programming available in fubo, yet not included in the customer subscription. This effort launched just this quarter and is already showing promise. I look forward to telling you more in the coming quarters. To wrap it up, there are over 65 million households on legacy pay-TV who have yet to discover the joy of live TV streaming. That makes us very excited about the market opportunity, not to mention our growth trajectory. And we believe we have a robust strategy to influence monetization, including continuing to drive efficient growth and customer quality, lowering our marketing spend relative to revenue, increasing the penetration of our premium add-ons Elite and ultimate, improving the retention of new and current customers; and lastly, growing the take rate of add-ons at different stages in the customer's journey. We have much to do. Did I believe we have a clear strategy on how to deliver it and the right team to make it happen? Now, I'll pass it on to Henry to Discuss our content strategy after a short break. [Break]

Good afternoon. My name is Henry Ahn. And I'm the Chief Business Officer. Let me start by taking a step back and sharing my perspective on the generation shift that's taking place in the TV subscription business. The traditional bundled TV subscription business up until a decade ago, worked pretty well. Legacy cable understood better than most that there is value and simplicity. That is a singularly price aggregated bundle experience offers terrific value to consumers. You can sign up either for DIRECTV or XFINITY and we see all such a great content in one place for one price. It also worked well as a business because for the most part, consumers really not having any options like they do today, but this terrific business proposition was challenged not only by competing means of entertainment, but by the actual value proposition of the bundle itself. As more and more channels were added, the cost of TV bundle increased rather dramatically. And consumers started to ask if paying for the ever higher price services was really worth it. Then came live TV services like ours, fuboTV, offering better user interface and product. And quite frankly, they made a traditional TV services feel rather integrated. Hence, we are now in a situation where the traditional bundled TV business is in perpetual decline. However, one element that still helps the legacy cable is that the consumers are willing to pay for live content, primarily for sports. Sports are very different than other forms of genre in the media business. People watch it to follow their heroes and be witnessed to the events as they occur. The main thing that's keeping the legacy TV model from floating under the weight of cord cutting quite frankly, sports, whose live and immediate nature makes all other channels less valuable in today's largely on-demand world. The original proposition of fubo TV was to be the destination to stream all things sports. And that original proposition still holds very much true today. Remember, approximately 96% of our customers watch sports. Folks, our strategy is pretty simple, provide single platform bundle experience with as much sports content as possible, adding interactive and waiting capabilities and do all that in a very affordable way. We believe that by providing the best bundle live TV experience, focus on sports, we will give consumers a reason to stick around and continue to pay for a streaming service. However, nonsports content has significant value to us as well. It allows us to provide regions for our customers to stick around and continue to use fuboTV even after their favorite event is over. which allows us to make more through advertising. Almost 2/3 of our customers come for the sports. However, sports hours account for less than 1/3 of total hours watched. This type of behavior reinforces our saying, come for the sports, stay for the entertainment. As we aim to be the place for all things Sports, we believe having some exclusive sports content can help to grow our subscriber base. But it really has to be done with proper rate of return in mind. In the U.S. even though we remain engaged in the market for exclusive rights, we believe that the most efficient way to aggregate sports content is through our major media partners. Our belief is that no single entity can control and being the place for exclusive sports content, whose aggregate price tag now sees staggering $25 billion a year. It is just too expensive and economically unjustifiable. In fact, arguably, the most desirable product, the NFL, is knocked up for the next 10 years with all the major media companies. But in non-U.S. markets, we see some opportunities for exclusive sports content that we think that can help jump-start our business. We are now the exclusive home of the English Premier League in Canada, and the early results of subscriber sign-ups are incredibly encouraging. Next, I'd like to discuss how we're fulfilling the non-sports content needs of our customers while improving our operating leverage. The rise of free ad-supported networks, also known as FAST channels has been pretty exciting one for us. FAST channels give foot replacement content at superior economic terms, compared to traditional linear networks. FAST channels do not have any license fees and have better advertising splits compared to traditional cable networks. For us, a standard deal may have us selling all of the advertising inventory and that splitting that revenue 50-50% to 75% in our favor, and this is a huge improvement compared to the standard cable inventory split of only 15% to 20% for us. Said another way, 0 license fees plus better ad terms equal more operating leverage for fubo. Not only the economics of FAST channels, much more favorable. A majority of Americans are watching them more than ever before. A recent research report shows that 60% of U.S. TV households now watch FAST channels. The growth has been rather staggering in a very short period of time. And I bet you, there'll be much more growth to be had in the coming years. Since the beginning of the year, we've added over 40 FAST channels, bringing the total to about 50 today, and our goal is to have about 100 by the end of the year. Looking at our progress over the past year, customers are watching 25% more FAST channels on our platform than before. And that share is being mostly coming from traditional cable entertainment networks. These growing hours are also helping to drive our long-term goal of attaining $15 to $20 of ad ARPU which David will expand upon a bit later. So to recap, here's what we're doing in content. First, we're aggregating sports content in the most affordable manner. Second, we're being extremely selective in securing any direct sports license rates, especially in the U.S. And lastly, we're complementing our sports portfolio with content that is affordable or with FAST channels. We firmly believe that no single piece of content is a must have relative to its inherent value. And everything is relative to the overall cost of the package and folks for us, alternative options are always available in the marketplace. Now that we have covered our content strategy, let's talk about how we are planning to improve our unit economics. In our business, scale really matters. We are now big enough that we have some options in the marketplace. We have deals in place where we don't have to distribute content to all of our subscribers, which allows us to lower unit cost, and that, in turn, brings the overall content cost down. We have shown willingness to get creative as well. For example, with one sports provider, we reduced the cost by 25% during the term with another, the unit cost dropped by 50%. Additionally, we've never had all major content providers on our platform at one time and that was on purpose, not by chance. Yet we have driven subscriber growth over the past several years, often at a faster rate than our competitors. Importantly, we're now a meaningful partner to our content providers. We're now a top 10 distributor and one of only a few that is still growing meaningfully. We now have a better negotiating position with our content owners because of our current scale, cost trajectory and the overall decline of cable and satellite providers. This allows us to grow our partners' distribution and advertising revenue. And since there are no new distributor that can write 8- to 9-figure checks, we're not that easily replaceable by them. We also have executed new deals that are not variable in nature, and this allows us to outgrow carriage costs, making the channels become margin positive through advertising dollars. And I'd be remiss if I did not mention add-ons. Every one of our add-on packages is margin positive. Add-ons allows us to provide options to customers without forcing them to pay for things they don't want to watch. And no surprise, they love it. So let me share some numbers with you. We retain customers with add-ons 28% longer, and they watch football 32% more. We've grown add-ons per subscriber over 500% over the past 3 years. And finally, and subscribers now average over 3 add-ons. And add-ons can be bundled with service level upgrades like DVR storage or additional streams, and this creates, obviously, higher-priced packages. And just like Mike told you, we have more data than anyone else. We have the ability to track and measure viewerships, viewership levels all the way down to a program level. So we can be confident when we make decisions about adding repackaging or removing content, putting the right content in front of the right people allows us to generate most upselling opportunities, which helps to produce profitable long-term customers. So let me summarize here. First, we plan to continue to expand our content offering by introducing fast channels, giving us more money to spend on networks with sports. Second, we are extremely focused on controlling our unit and total costs, and we continue to scale as we continue to scale. We expect that our deals will become more favorable and we will continue to bend the cost curve down. And third, we are focused on driving up sales, both in add-ons and higher-priced bundles, which improves and expands our margins. Our strategy is to be the streaming service of choice for sports fans and that means the most sports content at the most affordable price. Thank you for your time today. And I would hand it back over to David.

Hello, everyone. I'm back to take you through our advertising strategy and how we are positioned to capture this massive opportunity. But before I do, and in case you missed it yesterday, we have announced Lynette Kaylor as our new SVP Ad Sales. I'm very excited to welcome Lynette to fubo. Lynette has deep experience in the programmatic ad space where she led M1 partnerships. Lynette's mandate is to expand key advertiser relationships, increase fubo's direct and programmatic ad business and more effectively monetize our CTV ad inventory. We expect big things from Lynette, who officially joins fubo on Monday. Now let's dive into Fubo's ad opportunity. As I said in my opening comments, 50% of consumers' time is spent streaming TV. Yet only 22% of traditional ad budgets are spent on connected devices. More recently, however, eyeballs are shifting to CTV and dollars have continued to follow. This trend represents a very exciting opportunity for us. We believe as traditional linear TV continues to decline, we are uniquely positioned to capture a growing share of television ad dollars. Let me first tell you about our high-quality, engaged audience and premium programming. Based on our data, we believe our subscriber base skews significantly younger and more affluent, more sophisticated and more tech-savvy than traditional cable and satellite audiences. Advertisers are willing to pay a premium to get in front of our unique audience, which cannot be reached on linear TV or through other virtual MVPDs. In a nutshell, we deliver a highly targeted unduplicated audience within a premium contextually relevant environment. In addition, 94% of viewing hours are consumed on CTV and over 90% of content is viewed live. This means that our audience can be reached with contextually relevant and timely marketing messages in the most premium viewing experience available. In addition, our programming has unique breadth and depth as we offer over 50,000 live sporting events per year. And we are the only live TV streaming platform with every Nielsen-rated sports channels. This means fuboTV provides a completely brand-safe environment. Now I'll turn to our tech capabilities. We have a proprietary technology stack designed to enable both an exceptional user experience and a premier advertising opportunity. We've attracted blue-chip advertisers who are willing to pay a premium for measurement, addressability and targeting. First, we leverage first-party subscriber data to create custom audience segments. As Mike Berkley alluded to, we captured 2 billion data points per day, allowing us to serve marketing messages to users at the most opportune moments. We've partnered with leading data enablement platforms in order to deepen our household targeting efforts on an ongoing basis. Additionally, since it's an election year, we are prepared to light up the kind of micro-targeting with psychographics, demographics and buyer behaviors that modern-day political campaigns seek. On the measurement and attribution side, fubo measures the results of addressable campaigns and leverages data partners for third-party attribution studies. We allow advertisers to measure ROI in an environment where companies are increasingly viewing advertising dollars as an investment versus an expense. We also enable innovative branding and engagement opportunities, which complement our focus on interactivity. As noted earlier, interactivity is the cornerstone of our product roadmap. We can monetize FTP, FanView, pick 'Ems and any elements of the product or video experience. Our unique positioning has resulted in rapid ad revenue growth of over 150% over the past few years. Most importantly, advertising is essentially 100% gross profit and accrues materially to EBITDA. We are targeting $15 to $20 in ad ARPU over the long term. We are confident in our ability to meaningfully expand ad ARPU from our current levels given that traditional cable and satellite companies are already in our targeted range, and they don't even have our measurement and data capabilities. In short, we are just getting started. So how do we get there? We plan to expand CPMs from our current levels of low 20s to over $30, and that's through targeting and addressability. We plan to maximize fill rates while optimizing ad pods between 15 and 30-second ads. We are in the very early stages of this particular effort. We plan to continue to implement AI to drive users towards content best optimized for monetization, including fast channels and cable networks and introduce new, unique ad formats, more monetizable interactive elements. Collectively, these efforts are designed to extend the lifetime value of our subscribers, enhance our unit economics and deliver value to both our customers and advertising partners. We are pleased with our progress to date, and we are excited about the investments we continue to make in our technology, our team and infrastructure. We look forward to bringing a new dimension of value to our advertising partners as we scale and advance towards our long-term ad ARPU and profitability goals. I am now going to turn it over to Scott Butera, our President of Gaming. Scott?

I'm Scott Butera, President of fubo Gaming. fubo's strategy is based on the strong relationship of watching and wagering on sports. We are seeking to revolutionize the mobile sports betting industry by creating the first integrated watching and wagering platform. This creates great live viewing experiences for our customers and has many business advantages. Now, you may have seen, we've recently announced that we're doing a strategic review of our wagering business. And we've decided we no longer want to pursue this business on our own. Now why would we decide that? Building and running a national sportsbook requires significant capital. There are large start-up costs and risk of occasional losses, which also requires capital. When we started fubo Gaming, markets were flush with cash, and investors value growth over profitability. Today, the market is the opposite. Capital is expensive and investors want to see profitability now. In light of this, we are strategically evaluating our gaming business, including seeking potential partners who share our vision for the platform. However, we remain committed to our strategy of being the first true watch and wager platform. And now, I will tell you why. fubo subscribers are sports fans who have a strong demographic profile that matches the profile of a quality better. They have an average net worth of just under $900,000 and income of $88,000, 75% owner residents and just under half have college degrees. Most importantly, approximately 60% are males who watch a ton of sports, the sweet spot of the sports betting demographic. These subscribers are very likely to bet on sports, which gives us a built-in customer base. Let's talk about sports fans when it comes to wagering. 80% of those who place bets are likely to watch sports. Now, why is this? Let's take CNBC. Most of you here today are investors in public companies. I'm certain you track your positions through media outlets like CNBC and Bloomberg. Well, betters want to do the same. Just as you want to know how a position is doing and potentially make adjustments -- so does it better. But how does he or she do this? Well, just like the securities market, dynamic in-game betting allows for continuous wagering. The value of a bet actually adjusts during a game. This means a better can double down or cash out of a position or prop bet while also placing prop bets upcoming events during the game he or she is watching. Through our integrated platform, a better is able to quickly past bets on what they are watching. Watching sports excites and engages fans, driving billions of dollars of sports-related transactions. Consider your last experience at a stadium or arena. Fans were not just sitting in their seats watching the game, but buying merchandise, consuming higher-end food and beverages, congregating in clubs and now wagering. Other sportsbooks have recognized this correlation, but to date, have only placed betting content on media platforms. Only fubo's platform allows a better to both watch and bet in 1 environment. Now, we have a unique ability to acquire quality betters. As stated, over 96% of fubo subscribers watch live sports, giving us a built-in customer base. As mentioned, our subscribers stream over an average of 100 million hours of content a month. And last January, during football season, they streamed 140 million hours. We also offer 50,000 live sporting events a year. This gives us many opportunities to access potential betters, a huge distinction and advantage over our rivals. Getting sports betters isn't enough, though. You need the right ones. As a quicker side, I grew up in Gloucester, Mass, the fishing capital of the U.S. There, Captains established their reputation by knowing where to catch big fish, same with sports betting operators. Approximately 90% of sports betting revenues come from 10% of the betting population. By analyzing viewing patterns, particularly how much sports a viewer watches a day, we can identify the most valuable customers among fubo subscribers. This allows us to prudently allocate marketing spend to these customers and avoid spray and pray marketing such as expensive ad campaigns, sponsorships and big free bet promotions that have attracted the wrong type of customer. To execute our strategy, we have many engagement features in our product plans. First, our odds integration where sportsbook odds will pop up on the TV. This feature has several advantages. It allows us to teach newer betters, the vocabulary and strategy of betting as they are actually watching what is being described. It also provides functionality demanded by the most sophisticated betters like displays where they can track their bets. We can highly personalize the user experience by servicing relevant bets. Because we know our customer, we can offer timely bets, we believe they will like. For example, we can offer boosted odds or we can push a bit on an event that's about to take place. Imagine it's the end of a football game, and there's a last-minute field goal attempt you want to bet on. We can push that to you versus having to navigate multiple pages to find this bet on other platforms. Our metrics are outperforming competitors. For example, our subscriber population outperforms other sportsbooks in terms of average bet size. We also have high penetration, meaning fubo subscribers are placing more deposits on sports betting sites than do subscribers of other streaming services. Again, it gets back to that strong demographic we have. Our subscribers are very likely to bet and the statistics are demonstrating that. As we have executed our strategy, we've also seen a significant decline in our customer acquisition cost or CAC. In fact, for the last 8 months, our blended CAC has decreased by 72%. As we continue to convert viewers into betters, we expect to see further reductions. We have also seen a steady repeat deposit rate of 72% while our deposit size and debt size have grown by 10%. fubo has made significant progress in developing our sports betting business. Sports betting licenses are limited by the number of licenses available in each state. A mobile operator must obtain a license from a casino operator, sports leagues, teams, racetracks are by directly applying to the state. fubo has successfully obtained market access agreements via all of these avenues in 10 states. We have successfully launched our mobile app in Iowa and Arizona and soft launched in New Jersey yesterday. We expect to launch an additional state in time for the upcoming football season. To maximize the value of our subscriber base, our growth strategy will be based on converting subscribers to betters. We are also focusing on states where we have strong content providers. To summarize, the current sports betting market has $12 billion in revenues across 25 states with more to come soon. We believe our great product, significant market access and the ability to efficiently tap into this makes teaming up with fubo an attractive opportunity. This is evidenced by our early results in acquiring, retaining and providing integrated viewing experiences to the most sought-after sports betters. And with that, I will hand it off to our Chief Financial Officer, John Janedis.

Hi, everyone. I'm John Janedis, CFO of fubo. Thank you for joining us today. You've heard a lot from some of the members of our leadership team this afternoon. When I think fubo, I think about a tech company in the media space. I say that because many of you see how hard it is for media companies to transform themselves into tech companies. Roughly half of our employee base resides under Mike's team: engineers, producers and designers. This is a testament to our product and technology-first approach to transforming the consumer experience and capturing market share. And speaking of teams, the themes around the focus on profitability are consistent across all of them. I want to pull these teams together and provide more detail on our business model and how we plan to get to profitability. We continue to work towards our long-term targets of adjusted EBITDA profitability and positive cash flow in 2025, and the fubo flywheel will help us track towards that goal as we execute a plan of controlled growth alongside margin expansion. On the subscriber front, we expect to see growth of nearly 200,000 in the third quarter alone, ending the year with North America subscriber growth of nearly 20% to more than 1.3 million subscribers. And we're also focusing on more profitable subscribers. We posted positive adjusted contribution margin in the second quarter, and we expect to see continued improvement in ACM going forward. How do we get there? We see the individual pieces as working together to achieve a significant goal, which is, yes, I've said it before and I'll say it again, profitability. Here's our vision: Henry's content team will use data to drive decisions around our renewals in support of maintaining a portfolio, a differentiated and compelling content with the greatest level of return. And here's a hint: not all content is worth renewing. Alberto's team will continue to optimize around the most ROI-positive acquisition channels in order to drive stickier, more profitable subscribers to our platform, and he'll do it efficiently. Our ad sales team will leverage our sports-centric audience in order to drive high-margin ad revenue dollars on a per-subscriber basis. As many of you know, the sports ad market is resilient and tends to outperform the broader marketplace through an economic cycle. And this is on top of the shift of ad dollars from linear to CTV. Mike's team will help in the monetization and retention of those subscribers and, even more importantly, bringing joy to the subscriber's experience through continued product and technology innovation. So take the right content at the right subscribers, throw in our spend on our tech platform, and you've got an incredibly engaged consumer. And then we monetize them through high-margin ad dollars. We're also focused on our cost structure. We've identified potential cost savings in the low- to mid-tens of millions of dollars on an annualized basis starting next year. Based on our expectation of the benefits of scale when negotiating outside of our content partners, we expect that number will move higher. We see further opportunities in media, software, technology, to name a few. And what we've done to date in North America streaming is pretty special: an independent virtual MVPD competing against tech conglomerates and entrenched incumbents. As Alberto explained, we've garnered approximately a 40% market share of new virtual MVPD subscribers over the past year. But let me dig in a little bit deeper. Again, we expect to end this year with more than 1.3 million subscribers. We know we're in the sweet spot. We've got the secular tailwind of being a streaming TV cable replacement. And we plan to grow subscribers through marketing channels that are super efficient. We're highly focused on our subscriber acquisition cost and continue to expect a significant number of subscribers coming through organic or 0-cost channels like word of mouth or reactivations. And we continue to feel confident that we can post positive adjusted EBITDA with well below 3 million subscribers. We also expect leverage on the adjusted contribution margin front as our subscriber base grows. Between our expected subscriber growth and other tactics, we forecast revenue to more than double between 2022 and 2025. And there's a multiplier on our subscribers to revenue of roughly 1.5x. We also believe we have multiple paths to expand average revenue per user or ARPU. And not just from increasing the price of our monthly subscription, we have other ways. We have a highly desirable customer: younger, higher-income, engaged. Our subscribers are nearly 10 years younger than our peers', roughly 20 years younger than the typical broadcast viewer. And sports-focused subscribers, they tend to be less price-sensitive. In our $5 price increase for the majority of our base in the second quarter, churn was below our expectations. But beyond price, we're seeing success with upsells, add-ons, and we feel good about the changes we're making for that to improve even further. To get a monthly ARPU of approximately $100 by 2025, we need to post growth in the high single-digit range annually, and we think that's achievable. On the ad ARPU side of our business, there are multiple paths to growth. We see upside coming from CPM growth, from increased bill rates and investments in our team, including more sales resources. On the CPM side, marketers like our data and the ability to better target potential customers. In total, we think ad ARPU has the potential to double over the next few years. Now think about that, simple math here, if we more than double monthly subscribers and double ad ARPU, we're going to potentially see triple-digit growth in ad revenue over the next 3 years, potential growth in the 4x range from current levels. For our Rest of World streaming, predominantly our Molotov business in France, the business is tracking ahead of our expectations this year after closing the transaction last December. We expect paying subscribers will nearly double this year, and the team continues to focus on the 3 Cs: contribution margin, content costs and cash flow. Contribution margin ticked positive at the end of the second quarter. And free cash flow is tracking roughly 10% better than planned as of the second quarter. We expect subscriber growth to slow in future periods, but remain north of 20% as we test new pricing models to accelerate the path to profitability. And we expect revenue growth will more than double over the next 3 years, allowing the global streaming business to post positive EBITDA. As you've heard earlier, we expect that our unified tech platform will also allow us to gain operating leverage in this business as revenue scales. Now look, I've talked a lot about our revenue drivers, but I want to walk through our cost structure to talk about the operating leverage inherent in our model. Between 2018 and 2021, we've seen a significant amount of operating leverage in our 4 major cost buckets: G&A, tech and development, sales and marketing, and subscriber-related expense. We look at operating expenses as a percentage of revenue, over that time, improving by more than 100 percentage points, and we expect another 50 points of improvement from 2021 to 2025. As I've said, we've been reviewing our cost structure, and we continue to find areas to operate more efficiently, ways to use our increasing scale to negotiate better deals with our vendors, including reopening contracts prior to scheduled renewals. We're also seeing inquiries around partnering in certain areas of our business, providing opportunities for us to increase engagement and drive subscriber or advertising growth without the need to increase headcount. Since I joined fubo about 6 months ago, our content team has renewed distribution deals with several of our content partners, and in aggregate, unit economics have improved. And since content deals tend to be multiyear in nature, then it takes time to start seeing the benefits. But we think these benefits will become more visible to investors and analysts as we bend the cost curve. Henry's team also uses a tremendous amount of data to help make decisions on content to either drive or retain our subscribers. That puts us in a good position when it comes to renewals or dropping content. Putting it all together, where does that lead us in terms of EBITDA and free cash flow? On the revenue side of fubo, we see it more than doubling over the next 3 years, and our unit economics improve as we execute on that plan. Through the first half of this year, our cash flow usage was $210 million, and we expect 2022 will be our peak cash burn. So where does that leave us in terms of our balance sheet and runway? As a reminder, we announced earlier this month that we are putting our wagering business under strategic review. Given the range of outcomes, I want to isolate our cash needs, excluding gaming for modeling purposes. Based on our cash balance as of the end of Q2 and our current operating assumptions, we believe the cash needs to get our core streaming business to free cash flow positive or self-funding are modest. How do we define that? Less than $100 million. As you can see in the chart, we expect to be there in 2025. When we ultimately decide to raise capital, we expect to maintain optionality, and we'll use the most efficient means possible. Our options could range from raising equity or debt like we have in the past. Or among others, we could also be more strategic. While we look for opportunities to reduce cost, I also tell our leadership that we need to invest in areas that have high returns and will drive growth. We have no debt maturities until 2026. Opportunities, though, may present themselves to optimize our balance sheet, and we will review those over time. But we are committed to being good stewards of capital. We made several acquisitions in 2021. We will continue to focus on integration this year. Molotov and Edisn.ai, in particular, while based outside the U.S., benefit us across platforms. And between our businesses in North America, including Canada, as well as France and Spain, we are becoming increasingly efficient. With Molotov specifically, we are sharing engineering resources, and we are also going to market in a global unified fashion. One of the expected benefits is extracting better terms from suppliers. With the ongoing macro uncertainty, our focus this year is going to be squarely internal. We're planning to invest in ourselves, and we believe the growth opportunities that we can capitalize on are a significant, as we've shown you today. Finally, we announced one of those growth opportunities last week. As David mentioned earlier, we announced that we entered into a first-look deal for unscripted content with Maximum Effort Productions, a production company co-founded by Ryan Reynolds; yes, the Ryan Reynolds, whose movies have gross billions at the global box office. Together, we expect to launch the Maximum Effort Network on fuboTV next year. From a funding perspective, we'll be reallocating a portion of our programming budget from the Fubo Sports Network and, when appropriate, look to co-finance production. Sponsors have already expressed interest. By the way, our outlook does not assume any benefits to our subscriber base from this partnership. And Ryan and the team have chosen to take compensation in the form of equity, some of which won't be issued unless fubo stock trades above $30 for a period of time. That's a big vote of confidence in our ability to jointly create shareholder value. We thank you for your time today. And with that, we look forward to your questions after a short break. [Break]

Welcome back. I have with me on stage the fubo leadership team. We have been receiving your questions during the course of the live stream, and thank you for the very thoughtful questions. And now we're going to do our very best to answer them. So why don't we get started?

First question. I think this is probably some combination of David and Mike. When you look at your product road map, when do you actually foresee integrated wagering directly integrated into the TV screen? Or is it fair to say that the current thinking is that wagering will stay on a second screen for the next several years?

Yes. So we are live with our Sportsbook in 2 states right now. I think we just announced that we are in soft launch in New Jersey as of yesterday. And with that, we do have a lot of different integrations between the Sportsbook app, which is on mobile, and the TV experience. And actually, over the next month or so, we're going to be releasing more integration points between the 2. Right now, the sports betting -- the actual transaction of a sports bet is happening on the mobile app. Big picture, long term, we do see eventually some merging there where there could be the possibility of betting straight from your TV. We don't have that now, but it is something that we're looking at longer term.

Yes. I would just say, the one thing we don't do here is do anything in years. Everything is in months, everything is iterative. And we're going to continue to test, as we always have, features that we think will resonate with our customers. But of course, having capabilities on screen is one of those things that we're looking at very closely.

Great. Our second question really relates to the ad market. So right now, the overall ad market is soft for many companies owing to some macro headwinds. Are we seeing that in our business? Or are sort of the CTV adds more immune to this overall macro climate?

Yes. So I mean you know this about me, I'm extremely bullish on advertising. And CTV advertising, in particular, the tailwinds are extremely strong. You have a migration of TV ad dollars to connected devices. That macro trend will continue. Of course, there will be some volatility in the short term. But when we look at our July numbers, we are seeing an increase year-over-year. So we feel pretty good about at least in July. So overall, I think the trend is your friend, and we'll continue to see success in the advertising space.

Great. Thank you. John, this one is for you. How should we think about EBITDA margins in '25? So you have a slide that shows the trajectory of these OpEx line items by category out to '25. Help us think about adjusted EBITDA when we get to the point of self-funding in '25. And as a follow-up to that, is the margin expansion a straight line between then and now? What's really the cadence? And I guess, as a sub to that, how should we sort of incorporate the $75 million in cost savings that Mike alluded to due to some of the synergies as we think about that trajectory?

All right. There's a lot there. Let me start with a couple of things. One is, as it relates to the adjusted EBITDA margin, and I forget the exact slide number, but if you go back to the slide where I went through the operating leverage in the model, I talked about 2021, our operating expense or costs were about 133% of revenue. And if we look out to 2025, we assume it's more like 85%. And so there's an implied 15%-or-so EBITDA margin within that, okay? Now how do we get that? Where does the leverage come from? A couple of pieces there. One is at the top, given it's our largest bucket of cost, subscriber-related expense would be the biggest bucket of improvement on the operating leverage. Second would be sales and marketing, followed by G&A and then tech and development. And let me just add a point to that actually -- well, back to the question. One would be in terms of the cadence, it's -- it basically compounds upon itself. And so I don't know that I would call it 1 individual year. Now part of that is also based on the timing of our renewals, and those are actually pretty staggered over the next 3 years. So I would add that -- one last thing also in terms of the EBITDA margin, I would add -- so as I said, we expect a 15% EBITDA margin in '25. I think consensus numbers suggest an EBITDA margin somewhere in the negative 5% to negative 10% range. And so -- and our view is we have a lot of earnings power that's not fully appreciated by the marketplace. Was there one other piece to that? Or...

Yes. We're just trying to figure out how to feather in the $75 million in cost savings that Mike alluded to as a result of some of the synergies that we see from our acquisitions and how to think about that.

Yes. Actually, it's important to distinguish what Mike said in terms of his $75 million and then what I said in terms of our low to tens -- low- to mid-tens of millions of savings. And I think my comment was we've identified low to tens of millions for 2023 annualized. I think that by the time we get to '23, that number is firmly in the tens of millions, not low to tens of millions. And then Mike's number said that $75 million is incremental to the, call it, the tens of millions that I referred to. And so a lot of cost savings to come.

Great. Thank you. That's helpful. Thank you. David and John, this is really for you both. We've seen a lot of consolidation across the industry. So what gives you confidence in the future of fubo as a stand-alone entity? How do you think about that?

I'll start. Look, I would say, look, we love our hand, okay, as a stand-alone. Why do we love our hand? Well, you heard us just talk about a bunch of things, right? We have a multiyear secular tailwind of, call it, strong double-digit growth on subscribers. We have what we think will be a multiples of growth in terms of the ad side of our business. And going back to the comment before, the earnings power here is really significant, particularly relative to our market cap. And so again, we like the opportunities that we have in front of us in terms of the deal with Ryan Reynolds from last week. If you think about the comp structure there for Ryan, it's all equity. A part of that equity isn't actually invested unless the stock trades above $30 for a period of time. And so I think that's also a vote of confidence in terms of the equity value we can create or we think we can create. Now obviously, we're a public company. And so if there is an offer that comes on the table, the Board will discuss that and make a decision.

Yes. I would just add that, obviously, we have a fiduciary responsibility to our shareholders. But the reality is, is that the market is moving in our direction. This is a company that has demonstrated, over the last 12 months, it's able to take more than its fair share of customers against some pretty, I would say, formidable competitors. We've got 3 major trends that are in our favor, and we've seen a lot of great companies evolve over the last 20 years, companies like Roku that have been able to really grow. And as a stand-alone company, we're very focused. We have to figure this out, and we will; whereas larger conglomerates, they just don't have to do it, and we've seen it before. Cisco can't do a Zoom does. You think that would be pretty easy to do. So again, as John said, I think we have a great hand. We're growing quickly. We're just getting started on the advertising piece of this. $15 to $20, I can see that type of ad ARPU over the short term. Molotov is doing well. The unified platform that Mike is working on right now, which is key to driving a lot of the cost savings. So overall, I think we're really well situated, particularly when you look at the plus services and other streaming services that are really finding it difficult to keep churn levels down, to keep pricing down and to keep customers engaged. With 6 hours a day of viewership, again, I feel like we're in a really good spot, and we have a lot of optionality, inherent optionality that's built into the business, and we're excited to take this further.

Excellent. So both you, David and John, talked a little bit about this Ryan Reynolds deal, and we do have a question about that. So can you kind of give us a sense of how this deal unfolds and just sort of the long-term plan and some of the marketing and branding benefits that you expect to realize as a result of this partnership?

Sure. Look, I don't know what to say for the first time in my life. Ryan is an amazing human being, and he's even more of an amazing actor. This is a person that has over 100 million followers. People love his movies. I mentioned that he's one of the best-performing actors on Netflix. He's got 3 movies in the top 10. He is super entrepreneurial. And if I was going to start a business with anyone, I would put my chips on this one guy, and his team is phenomenal. So when I look at all of his capabilities and his relationships in Hollywood and in marketing, there is no person that I would like to sit next to when I'm thinking about my business and my shareholders. That's the first thing. The second thing is he's provided us with maximum flexibility. So we do not intend to spend a lot of money in development, right? We have relationships with him, and we're going to leverage his relationship with brands and with Hollywood in general. And we're probably going to look at this more as a studio model where there'll be several buckets that we could leverage, buckets like windowing strategies before we put content on the network. And I think, ultimately, people need to understand how Ryan thinks. I think one of his quotes that I took back after our last meeting with him was, "the enemy of creativity is too much money and too much time." And you can see that with some of the movies that he's already developed that are, I believe, upwards of 50% below the cost of other major blockbusters, so Deadpool being one of them. So again, I'm super bullish. These guys are really excited. We're already in development. We've got some really good ideas. And I think over the course of the next 6 months, we'll look to clarify that vision for everybody.

Excellent. Thank you. Okay, we're going to switch gears just a little. We have a question on gaming. So you mentioned the possibility of potential partnerships on gaming. What arrangements are you contemplating? And how would economics work? I think this is directed at David, John and Scott. So I posit that to the 3 of you.