What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-03-05 compared with 2023-02-27 · 122 added, 165 removed, 303 unchanged (49% of the section changed)

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We are a sports-first, cable TV replacement product, offering subscribers access to tens of thousands of live sporting events annually, as well as leading news and entertainment content, both live and on demand.

Fubo allows customers to access content through streaming devices and on SmartTVs, mobile phones, tablets, and computers.

Fubo allows customers to access content through streaming devices and on Smart TVs, mobile phones, tablets, and computers.

Our business motto is “come for the sports, stay for the entertainment.”

First, we leverage sporting events to acquire subscribers at lower acquisition costs, given the built-in demand for sports.

We then leverage our technology and data to drive higher engagement and induce retentive behaviors such as favoriting channels, recording shows, and increasing discovery through our proprietary machine learning recommendations engine.

Next, we look to monetize our growing base of highly engaged subscribers by driving higher average revenue per user.

First, we leverage sporting events to acquire subscribers at efficient acquisition costs, given the built-in demand for sports.

We then leverage our technology and data to drive higher engagement and induce retentive behaviors such as watching content, favoriting channels, recording shows, and increasing discovery through our proprietary machine learning recommendations engine.

We monetize our growing base of highly engaged subscribers by driving higher average revenue per user.

We drive our business model with three core strategies:

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• Increase monetization through subscription and advertising.

Recent Developments — Fubo Gaming Dissolution

On October 17, 2022, we filed a Certificate of Dissolution with the Secretary of State of the State of Delaware to dissolve our wholly owned subsidiary, Fubo Gaming Inc.

(“Fubo Gaming”).

In connection with the dissolution of Fubo Gaming, we concurrently ceased operation of Fubo Sportsbook (as defined below).

Merger with fuboTV Sub

On April 1, 2020, fuboTV Acquisition Corp., a Delaware corporation and our wholly-owned subsidiary (“Merger Sub”) merged with and into fuboTV Sub, whereby fuboTV Sub continued as the surviving corporation and became our wholly-owned subsidiary pursuant to the terms of the Agreement and Plan of Merger and Reorganization dated as of March 19, 2020, by and among us, Merger Sub and fuboTV Sub (the “Merger Agreement”).

Following the Merger, we changed our name from “FaceBank Group, Inc.” to “fuboTV Inc.,” and we changed the name of fuboTV Sub to “fuboTV Media, Inc.” The combined company operates under the name “Fubo,” and our trading symbol is “FUBO.”

Unless otherwise stated, 2020 financial statements and metrics include FaceBank Pre-Merger from January 1, 2020 through March 31, 2020.

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Nature of Business

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Our platform provides, what we believe to be, a superior viewer experience, with a broad suite of unique features and personalization capabilities such as multi-channel viewing capabilities, favorites lists and a dynamic recommendation engine as well as 4K streaming and Cloud DVR offerings.

On October 17, 2022, we ceased operation of our business-to-consumer online mobile sports book ("Fubo Sportsbook") in connection with the dissolution of Fubo Gaming.

See "—Recent Developments—Fubo Gaming Dissolution".

The results of operations of Fubo Sportsbook are presented as discontinued operations in our consolidated financial statements.

On October 17, 2022, we ceased operation of our business-to-consumer online mobile sportsbook ("Fubo Sportsbook") in connection with the dissolution of our wholly-owned subsidiary, Fubo Gaming, Inc.

("Fubo Gaming").

The results of operations of Fubo Sportsbook are presented as discontinued operations in the accompanying consolidated financial statements.

In connection with the dissolution of Fubo Gaming and the termination of Fubo Sportsbook, assets and liabilities and the operations of our former wagering reportable segment have been reported in discontinued operations for all periods presented.

With respect to our continuing operations, we operate as a single reportable segment.

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Key Factors and Trends Impacting Performance

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Building and maintaining a strong brand is important to our ability to attract and retain subscribers, as potential subscribers have a number of pay TV choices.

We and our competitors must seek to attract a greater proportion of new subscribers from each other’s existing subscriber bases rather than from first-time purchasers of pay TV services.

As a result, we continue to experience increased competition, including from larger companies with greater resources to promote their brands through traditional forms of advertising, such as print media and TV commercials, as well as Internet advertising and website product placement.

We and our competitors attract new subscribers from each other’s existing subscriber bases as well as from first-time purchasers of Pay TV services.

We continue to experience increased competition, including from larger companies with greater resources to promote their brands through traditional forms of advertising, such as print media and TV commercials, as well as Internet advertising and website product placement.

We primarily rely on paid marketing channels (such as social media, search advertising, display advertising, radio, out of home and television) to grow our brand and reach new subscribers.

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Subscriber Acquisition, Retention and Engagement

Our long-term growth will depend in part on our ability to grow and retain our subscriber base, as well as increase engagement by our subscribers.

The relative service levels, content offerings, pricing and product experience of our platform will impact our ability to attract and retain subscribers versus our competitors.

If consumers perceive a reduction in the value of our platform because, for example, we introduce new or adjust existing features, adjust pricing or platform offerings, or change the mix of content in a manner that is not favorably received by them, we may not be able to attract and retain subscribers.

To the extent that our competition pursues aggressive promotional campaigns, our value proposition may also be adversely impacted.

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Our long-term growth will depend in part on our ability to grow and retain our subscriber base, as well as increased engagement by our subscribers.

The relative service levels, content offerings, pricing and user experience of our platform will impact our ability to attract and retain subscribers versus our competitors.

Any perceived decline in platform value, whether through new features, pricing adjustments, or content changes, could hurt our ability to attract and retain customers.

Aggressive promotions by competitors could further impact our value proposition.

Acceleration or Deceleration of Cord-Cutting

In recent years, including as a result of the COVID-19 pandemic, we and other streaming services experienced rapid growth in adoption as consumers engage with streaming video and audio through a variety of devices, including connected TVs, mobile phones, and tablets.

Although traditional pay TV currently accounts for the majority of TV viewing hours for U.S.

Although traditional Pay TV still accounts for a meaningful share of TV viewing hours for U.S.

the proportion has declined in recent years as customers cut the cord.

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In addition, advertising spend is affected by broader macroeconomic conditions, and therefore economic downturns and recessionary fears may also negatively impact our ability to capture advertising dollars.

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Content Acquisition and Renewal

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As a result, our margins may face pressure if we are unable to renew our long-term content contracts on acceptable pricing and other economic terms or if we are unable to pass these increased programming costs on to our subscribers.

In addition, as content providers bring to market their own direct-to-consumer streaming services, the differentiated value proposition offered by our content mix may diminish.

In addition, as content providers bring to market their own direct-to-consumer streaming services, including the simulcasting and/or exclusive distribution of sporting events, the differentiated value proposition offered by our aggregated content mix may diminish.

Moreover, if current or future content partners refuse to grant our subscribers access to stream certain channels, or make their content available on their own DTC platform or our competitors’ platforms, whether exclusively or at more attractive pricing, this could adversely affect our ability to acquire and retain subscribers, which could materially and adversely affect our business, financial condition and results of operations.

We generate significantly higher levels of revenue and subscriber additions in the third and fourth quarters of the year.

This seasonality is driven primarily by sports leagues, especially the National Football League.

This seasonality is driven primarily by an influx of new subscribers at the start of the National Football League and college football seasons.

Our operating results may also be affected by the scheduling of major sporting events that do not occur annually, such as the World Cup or Olympic Games, or the cancellation or postponement of sporting events.

In addition, we typically see subscribers on our platform decline from the fourth quarter of the previous year through the first and second quarter of the following year.

COVID-19 and Other Macroeconomic Factors

The COVID-19 pandemic has created significant volatility, uncertainty, and economic disruption.

In addition, mounting inflationary cost pressures and potential recession indicators have negatively impacted the global economy.

We continue to monitor the effects of the pandemic and macroeconomic environment and take appropriate steps to mitigate the impact on our business;

Macroeconomic Factors

Macroeconomic factors, including mounting inflationary cost pressures and potential recession indicators, have created significant volatility, uncertainty, and economic disruption.

We continue to monitor the effects of the macroeconomic environment and take appropriate steps designed to mitigate the impact on our business;

however, the nature and extent of this impact in future periods remains difficult to predict due to numerous uncertainties outside our control.

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Components of Results of Operations

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Advertising revenue consists of fees charged to advertisers who want to display ads (“impressions”) within the streamed content.

Software licenses, net

Software license revenue consists of revenue generated from the sale of software licenses at one of our former subsidiaries, Nexway eCommerce Solutions.

As a result of the deconsolidation of Nexway AG, which was effective as of March 31, 2020, the Company no longer generates revenue from software licenses.

Other revenue consists of a contract to sub-license rights to broadcast certain international sporting events to a third party and commissions earned on sales through a channel distribution platform.

Other revenue consists of distribution fees and commissions earned on sales through a channel distribution platform.

Subscriber related expenses

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Broadcasting and transmission

Broadcasting and transmission expenses consist primarily of the cost to acquire a signal, transcode, store, and retransmit it to the subscribers.

Broadcasting and transmission expenses consist primarily of the cost to acquire a signal, and transcode, store, and retransmit it to the subscribers.

Sales and marketing

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Depreciation and amortization expense includes depreciation of fixed assets and amortization of finite-lived intangible assets.

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Other income (expense)

Other income (expense) primarily consists of issuance gains/losses and the change in fair value of financial instruments, interest expense and financing costs on our outstanding borrowings and the loss recorded on the deconsolidation of a subsidiary.

Other income (expense) primarily consists of the change in fair value of financial instruments, interest income, interest expense and financing costs on our outstanding borrowings and amortization of debt discount.

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Income tax benefit

The income tax benefit is driven by the change in deferred tax assets and liabilities and resulting change in valuation allowance.

Loss from discontinued operations

The loss from discontinued operations primarily consists of operating expenses related to the launch of the wagering business and impairment expense associated with the write-off of goodwill, intangible assets, and other assets.

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Net income (loss) from discontinued operations

The income (loss) from discontinued operations primarily consists of operating expenses related to the launch and wind down of the wagering business, impairment expense associated with the write-off of goodwill, intangible assets, and other assets, and re-evaluation of certain contract termination costs.

Results of Operations for the Years Ended December 31, 2023, and 2022 (in thousands):

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Other income (expense)

Interest expense and financing costs (11,696) (13,451)

Interest expense (13,712) (14,194)

Interest income 10,971 2,498

Amortization of debt discount (2,574) (2,476)

Loss on extinguishment of debt — (380)

Gain (loss) on extinguishment of debt 1,607 —

Change in fair value of warrant liabilities — (1,701)

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Discontinued operations

Loss from discontinued operations before income taxes (136,874) — (31,177)

Net loss from discontinued operations (136,874) (31,177)

Net income (loss) from discontinued operations before income taxes 5,185 — (136,874)

Income tax — —

Net income (loss) from discontinued operations 5,185 (136,874)

Net loss (287,917) (561,919)

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During the year ended December 31, 2023, we recognized revenues of $1,368.2 million compared to $1,008.7 million during the year ended December 31, 2022.

The increase of $370.3 million was primarily due to an increase in subscription revenue of $341.4 million, comprising $290.5 million from increases in our subscriber base, $29.1 million from increases in subscription package prices and attachments sold and $21.8 million from the acquisition of Molotov S.A.S.

("Molotov") in December 2021.

Advertising revenue increased $28.0 million primarily due to an increase in the number of impressions sold.

The increase of $359.5 million was primarily due to an increase in subscription revenue of $343.7 million, comprising $205.7 million from increases in our subscriber base and $138.0 million from increases in subscription package prices and attachments sold.

Advertising revenue increased $13.6 million primarily due to an increase in the number of impressions sold offset by a decrease in CPMs.

Subscriber related expenses

During the year ended December 31, 2023, we recognized subscriber related expenses of $1,213.3 million compared to $976.4 million during the year ended December 31, 2022.

The increase of $383.2 million was primarily due to an increase in affiliate distribution rights and other distribution costs resulting from an increase in subscribers.

The increase of $236.8 million was primarily due to an increase in affiliate distribution rights and other distribution costs primarily resulting from an increase in subscribers and contractual rates.

Broadcasting and transmission

During the year ended December 31, 2023, we recognized broadcasting and transmission expenses of $68.8 million compared to $73.4 million during the year ended December 31, 2022.

The increase of $17.8 million was primarily due to a higher number of linear feeds due to additional channel launches.

The decrease of $4.6 million was primarily due to a reduction in expenses resulting from initiatives implemented by the Company to optimize our cloud infrastructure.

Sales and marketing

During the year ended December 31, 2023, we recognized sales and marketing expenses of $207.0 million compared to $183.6 million during the year ended December 31, 2022.

The increase of $47.9 million was primarily due to a $19.3 million increase in stock-based compensation, $21.3 million increase in marketing expenses to acquire new customers for the streaming platform and a $5.7 million increase in payroll expense due to an increase in employee headcount.

The increase of $23.4 million was primarily due to a $17.8 million increase in marketing expense to acquire new customers and a $5.3 million increase in payroll expense due to an increase in employee headcount and salaries.

Technology and development

During the year ended December 31, 2023, we recognized technology and development expenses of $67.7 million compared to $69.3 million during the year ended December 31, 2022.

The increase of $13.9 million was primarily due to an increase of $8.8 million in salaries due to an increase in employee headcount, $2.6 million in software expense and $3.7 million in cost from the acquisitions of Molotov and Edisn in December 2021.

The decrease of $1.6 million was primarily due to a decrease in payroll expense of $2.7 million and a decrease in contractor expense of $1.6 million partially offset by an increase of $2.0 million in stock-based compensation.

General and administrative

During the year ended December 31, 2023, general and administrative expenses totaled $64.3 million compared to $81.2 million for the year ended December 31, 2022.

The decrease of $7.8 million was primarily due to a decrease in stock-based compensation of $16.2 million, $7.6 million in sales tax and $5.7 million in professional fees, partially offset by a $15.6 million increase from the acquisition of Molotov and $4.7 million increase in salaries due to an increase in employee headcount.

The decrease of $16.9 million was primarily due to a decrease of $4.4 million for sales tax due to the absence of a reserve in the current year, a $4.0 million decrease in stock-based compensation, a $2.0 million decrease in professional fees, and an $8.8 million decrease in payroll expense, partially offset by a $2.9 million increase in amortization of content production costs.

Depreciation and amortization

During the year ended December 31, 2023, we recognized depreciation and amortization expenses of $36.5 million compared to $36.7 million during the year ended December 31, 2022.

The decrease of $1.0 million is primarily related to a reduction of amortization expense of $6.7 million, partially offset by increased amortization expense of $5.8 million from the acquisitions of Molotov and Edisn in December 2021.

The decrease of $0.2 million is primarily related to the full amortization of certain intangible assets in prior periods offset by an increase in amortization from the capitalization of internal use assets and the purchase of intangible assets.

Other income (expense)

During the year ended December 31, 2023, we recognized $4.6 million of other expense (net) compared to $14.9 million of other expense (net) during the year ended December 31, 2022.

The decrease of $11.3 million is primarily related to a $4.4 million reduction in the change in fair value of warrant liabilities, a $0.4 million decrease in loss on extinguishment of debt, and a $1.8 million reduction of interest expense, partially offset by an increase of $12.5 million in amortization of debt discount.

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The decrease of $10.2 million is primarily related to a $1.6 million gain on extinguishment of debt in 2023, an increase in interest income of $8.5 million due to an increase in cash invested in interest-bearing accounts, and a decrease in interest expense of $0.5 million due to the repurchase of convertible notes.

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Income tax benefit

During the year ended December 31, 2023, we recognized an income tax benefit of $0.9 million compared to $1.7 million during the year ended December 31, 2022.

The decrease of $1.0 million in the income tax benefit is primarily due to our inability to fully recognize the future tax benefits on current year losses.

Loss from discontinued operations, net of tax

During the year ended December 31, 2022, we recognized a net loss from discontinued operations of $136.9 million compared to $31.2 million during the year ended December 31, 2021.

The change of $105.7 million is primarily due to an increase in the operating expenses of the wagering business and a charge for the impairment of goodwill, intangible assets and other assets.

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The decrease of $0.8 million in the income tax benefit is primarily due to the change in the valuation allowance resulting from our inability to fully recognize the future tax benefits on current year losses.

Net income (loss) from discontinued operations, net of tax

During the year ended December 31, 2023, we recognized net income from discontinued operations of $5.2 million compared to a net loss of $136.9 million during the year ended December 31, 2022.

The net income in 2023 is due to a gain on the settlement and remeasurement of certain liabilities.

The net loss in 2022 is due to the discontinuance of the operations of our wagering business in October 2022.

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Results of Operations for the Years Ended December 31, 2022 and 2021 (in thousands):

On August 15, 2019 and September 16, 2019, the Company acquired Facebank AG and Nexway, respectively, and on April 1, 2020, the Company acquired fuboTV Pre-Merger.

The results of our operations for the year ended December 31, 2020 includes the results of operations of Facebank AG and Nexway, which were disposed of in July 2020.

Because of this, certain of our results of operations for the year ended December 31, 2021 are not readily comparable to the results of operations for the year ended December 31, 2020.

For the Years Ended

For the Years Ended December 31,

Subscription $ 905,886 $ 564,441

Advertising 101,739 73,749

Software licenses, net — 7,295

Other 1,071 180

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Depreciation and amortization 36,731 37,666

Impairment of goodwill and intangible assets — 248,926

Total operating expenses 1,420,553 966,647

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Other income (expense)

Interest expense and financing costs (13,451) (18,637)

Interest expense (14,194) (13,451)

Interest income 2,498 —

Amortization of debt discount (2,476) (14,928)

Gain on sale of assets — 7,631

Loss on extinguishment of debt (380) (24,521)

Loss on deconsolidation of Nexway — (11,919)

Gain (loss) on extinguishment of debt — (380)

Change in fair value of warrant liabilities (1,701) 2,659

Change in fair value of shares settled liability — (1,665)

Change in fair value of derivative liability — (426)

Change in fair value of profit share liability — 1,971

Unrealized gain on equity method investment — 2,614

Foreign currency exchange loss — (1,010)

Other income (expense) 1,019 (90)

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Discontinued operations

Loss from discontinued operations before income taxes (31,177) —

Net loss from discontinued operations (31,177) —

Net income (loss) from discontinued operations before income taxes (136,874) (31,177)

Income tax — —

Net income (loss) from discontinued operations (136,874) (31,177)

Net loss (561,919) (382,963)

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During the year ended December 31, 2021, we recognized revenues of $638.4 million, primarily consisting of $564.4 million of subscription revenue, $73.7 million of advertising revenue and $0.2 million in other revenue.

During the year ended December 31, 2020, we recognized revenues of $217.7 million primarily consisting of $184.3 million of subscription revenue, $24.9 million of advertising revenue, $7.3 million related to the sale of software licenses from our subsidiary Facebank AG and $1.2 million of other revenue.

We sold Facebank AG in July 2020.

The increase of $420.6 million was primarily due to a full year of revenue in 2021 of Fubo compared to nine months in the prior year period, $301.6 million of higher subscription revenue due to increases in our subscriber base, $78.5 million of higher subscription revenue due to increases in subscription package prices and a $48.8 million increase in advertising revenue resulting from an increase in the number of impressions sold.

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During the year ended December 31, 2022, we recognized revenues of $1,008.7 million compared to $638.4 million during the year ended December 31, 2021.

("Molotov") in December 2021.

Advertising revenue increased $28.0 million primarily due to an increase in the number of impressions sold.

Subscriber related expenses

During the year ended December 31, 2022, we recognized subscriber related expenses of $976.4 million compared to $593.2 million during the year ended December 31, 2021.

The increase of $389.0 million was primarily due to a full year of expenses in 2021 of Fubo compared to nine months in the prior year period comprised of an increase of $371.4 million in affiliate distribution rights and $12.5 million in other distribution costs primarily driven by an increase in the number of subscribers.

The increase of $383.2 million was primarily due to an increase in affiliate distribution rights and other distribution costs resulting from an increase in subscribers.

Broadcasting and transmission

During the year ended December 31, 2022, we recognized broadcasting and transmission expenses of $73.4 million compared to $55.6 million during the year ended December 31, 2021.

The increase of $26.1 million was primarily due to a full year of expenses in 2021 of Fubo compared to nine months in the prior year period and higher number of linear feeds due to additional channel launches.

The increase of $17.8 million was primarily due to a higher number of linear feeds due to additional channel launches.

Sales and marketing

During the year ended December 31, 2022, we recognized sales and marketing expenses of $183.6 million compared to $135.7 million during the year ended December 31, 2021.

The increase of $72.6 million was primarily due to a full year of expenses in 2021 of Fubo compared to nine months in the prior year period and increased marketing expenses incurred to acquire new customers to our streaming platform.

Technology and development

During the year ended December 31, 2022, we recognized technology and development expenses of $69.3 million compared to $55.4 million during the year ended December 31, 2021.

The increase of $25.2 million was primarily due to a full year of expenses in 2021 of Fubo compared to nine months in the prior year period including an increase of $16.9 million in salaries due to an increase in employee headcount and $8.6 million in stock-based compensation.

General and administrative

During the year ended December 31, 2022, general and administrative expenses totaled $81.2 million compared to $89.0 million for the year ended December 31, 2021.

The increase of $11.4 million was primarily due to a full year of expenses in 2021 of Fubo compared to nine months in the prior year period including a $5.2 million increase in sales tax reserves, $1.3 million increase in stock-based compensation and $5.0 million increase in salaries due to an increase in employee headcount.

Depreciation and amortization

During the year ended December 31, 2022, we recognized depreciation and amortization expenses of $36.7 million compared to $37.7 million during the year ended December 31, 2021.

The decrease of $6.3 million is primarily related to a reduction of $16.4 million of amortization expense related to intangible assets of FaceBank Pre-Merger that were subject to impairment charges in the third and fourth quarters of 2020, offset in part by a full year of expenses in 2021 compared to nine months in the prior year period.

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Impairment of intangible assets and goodwill

During the year ended December 31, 2020, we recognized an impairment of Facebank Pre-Merger intangible assets and goodwill of $248.9 million.

Other income (expense)

During the year ended December 31, 2022, we recognized $14.9 million of other expense (net) compared to $26.2 million of other expense (net) during the year ended December 31, 2021.

The decrease of $103.0 million is primarily related to an $86.0 million reduction in the change in fair value of warrant liabilities, a $24.1 million decrease in loss on extinguishment of debt, an $11.9 million reduction in loss on deconsolidation of Nexway during 2020 and a $5.2 million reduction of interest expense, partially offset by an increase of $14.9 million in amortization of debt discount, $7.6 million gain on the sale of the Facebank AG and Nexway assets during 2020 and $2.6 million unrealized gain on our equity method investment in Nexway in 2020.

Facebank AG and Nexway were sold in July 2020.

The decrease of $11.3 million is primarily related to a $4.4 million reduction in the change in fair value of warrant liabilities, a $0.4 million decrease in loss on extinguishment of debt, and an increase in interest income of $2.5 million, partially offset by an increase of $12.5 million in amortization of debt discount and a decrease of $0.7 million of interest expense.

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Income tax benefit

During the year ended December 31, 2022, we recognized an income tax benefit of $1.7 million compared to $2.7 million during the year ended December 31, 2021.

The decrease of $7.0 million in the income tax benefit is primarily due to our inability to fully recognize the future tax benefits on current year losses.

Loss from discontinued operations, net of tax

During the year ended December 31, 2021, we recognized a loss from discontinued operations of $31.2 million related to the Wagering business that was terminated in October 2022.

There is no comparable information for the year ended December 31, 2020.

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The decrease of $1.0 million in the income tax benefit is primarily due to the change in the valuation allowance resulting from our inability recognize the future tax benefits on current year losses.

Net income (loss) from discontinued operations, net of tax

During the year ended December 31, 2022, we recognized a net loss from discontinued operations of $136.9 compared to $31.2 million during the year ended December 31, 2021.

The change of $105.7 million is primarily due to an increase in the operating expenses of the wagering business and a charge for the impairment of goodwill, intangible assets and other assets.

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Key Performance Metrics

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As of December 31, 2023 and 2022, we had approximately 1.6 million and 1.4 million paid subscribers in the United States and Canada ("North America" or "NA"), respectively.

We had 0.4 million and 0.2 million paid subscribers in the remaining territories in which the Company operates ("Rest of World" or "ROW") as of December 31, 2022 and 2021, respectively.

We had approximately 0.4 million and 0.4 million paid subscribers in the remaining territories in which the Company operates ("Rest of World" or "ROW") as of December 31, 2023 and 2022, respectively.

Average Revenue Per User

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In addition, we believe that presenting a geographic breakdown for North America ARPU and ROW ARPU allows for a more meaningful assessment of the business because of the significant differences in both Subscription revenue and Advertising revenue generated on a per subscriber basis in North America when compared to ROW due to our current subscription pricing models and advertising monetization in the two geographic regions.

Comparable information for the year ended December 31, 2022 is not presented for ROW ARPU because until our acquisition of our French streaming service, Molotov, in December 2021, we primarily operated in North America and therefore we believe such a comparison would not provide useful information for investors in evaluating our business

Our NA ARPU was $82.25 and $72.74 for the years ended December 31, 2023 and 2022, respectively.

Our ROW ARPU was $6.14 for the year ended December 31, 2022.

Our ROW ARPU was $6.82 and $6.14 for the year ended December 31, 2023 and 2022.

Gross Profit and Gross Margin (GAAP)

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Our gross margin was 6.3% and (4.1)% for the same periods, respectively.

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The tables below provide a reconciliation of NA ARPU and ROW ARPU to GAAP Subscription and Advertising Revenue (in thousands, except average subscribers and average per user amounts):

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Years Ended December 31,

As-Reported As-Reported

Subscription Revenue (GAAP) $ 1,249,579 $ 905,886

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North America Advertising Revenue (114,247) (100,605)

Total 32,797 24,341

Average Subscribers (ROW) 401,009 330,222

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ROW Monthly Average Revenue per User (ROW ARPU) $ 6.82 $ 6.14

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Liquidity and Capital Resources

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In addition, prior to the dissolution of our subsidiary, Fubo Gaming, on October 17, 2022, and the concurrent termination of operations of Fubo Sportsbook, our primary uses of cash included expenses related to the launch and operations of our wagering business.

We successfully raised $389.4 million, net of offering expenses, through the sale of 3.25% senior convertible notes in February 2021.

In February 2021, we raised $389.4 million, net of offering expenses, through the sale of $402.5 million aggregate principal amount of 3.25% senior convertible notes due 2026 (the "2026 Notes").

The 2026 Notes bear interest at a rate of 3.25% per annum, payable semi-annually each year.

In October 2023, the Company repurchased $5.0 million principal amount of the 2026 Notes for $3.3 million.

In January 2024, we exchanged (the "Exchange") $205.8 million principal amount of the 2026 Notes for $177.5 million in aggregate principal amount of the Company’s new convertible senior secured notes due 2029 (the “2029 Notes”).

Upon completion of the Exchange, the aggregate principal amount of the 2026 Notes outstanding is $191.7 million, and the aggregate principal amount of the 2029 Notes outstanding is $177.5 million.

At our election for any interest period, the 2029 Notes will bear interest at a rate of (i) 7.50% per annum on the principal amount thereof if interest is paid in cash and (ii) 10.00% per annum on the principal amount thereof if interest is paid in kind, in each case payable semi-annually each year.

We currently have an effective shelf registration statement on Form S-3 (No.

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We also have an additional effective shelf registration statement on Form S-3 (No 333-266557) filed with the SEC on August 5, 2022 under which we may offer, from time to time, in one or more offerings any combination of common stock, preferred stock, debt securities, warrants, purchase contracts and units of up to $750.0 million in the aggregate.

On August 13, 2021, we entered into an at-the-market sales agreement with Evercore Group L.L.C., Needham & Company, LLC and Oppenheimer & Co.

Inc., as sales agents, under which we, from time to time, sold shares of our common stock having an aggregate offering price of up to $500.0 million through the sales agents (the “2021 ATM Program”) under our 2021 Form S-3.

On August 4, 2022, we terminated the 2021 ATM Program, and entered into an at-the-market sales agreement with Evercore Group L.L.C., Citigroup Global Markets Inc., Morgan Stanley & Co.

LLC and Needham & Company, LLC, as sales agents under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $350.0 million through the sales agents (the "2022 ATM Program," and, collectively, with the 2021 ATM Program, the "ATM Programs") under our 2021 Form S-3.

During the year ended December 31, 2022, we sold 50,620,577 shares of our common stock in at-the-market offerings pursuant to the 2021 Form S-3 and ATM Programs, resulting in net proceeds of approximately $292.1 million, after deducting agent commissions and issuance costs.

On August 4, 2022, we entered into an at-the-market sales agreement with Evercore Group L.L.C., Citigroup Global Markets Inc., Morgan Stanley & Co.

LLC and Needham & Company, LLC, as sales agents, under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $350.0 million through the sales agents (the "ATM Program") under our 2021 Form S-3.

During the year ended December 31, 2023, we sold 81,694,729 shares of our common stock under the 2021 Form S-3 and the ATM Program, resulting in net proceeds of approximately $116.9 million, after deducting agent commissions and issuance costs.

As of December 31, 2023, we had cash, cash equivalents and restricted cash of $251.4 million.

As a result of the dissolution of Fubo Gaming and termination of Fubo Sportsbook operations, we incurred immaterial charges for severance and other employee-related costs.

We also expect to incur other cash charges, the amount and timing of which cannot be estimated at this time.

We may be required to seek additional capital, including in the event we engage in repurchases of our debt or equity securities in the future.

Subject to market conditions, we are considering various financing opportunities, which may include one or a combination of secured indebtedness, unsecured indebtedness and equity or equity-linked securities.

As a result of the dissolution of Fubo Gaming and termination of Fubo Sportsbook operations, we have incurred immaterial cash charges to date and may incur further cash charges, the amount and timing of which cannot be estimated at this time.

Based on our current outlook, we expect to primarily use our cash and cash equivalents, and cash flows from operations, to fund our operations.

However, our future capital requirements will depend on many factors, including, but not limited to, those detailed in Part II, Item 1A, Risk Factors in this Annual Report.

We therefore may from time to time seek to raise additional capital, including selling shares of our common stock under our ATM program to, among other things, fund repurchases of our debt or equity securities or, if a change in market conditions or other circumstances impacts our current outlook and/or liquidity needs, to fund our operating plan.

Subject to market conditions, we also may opportunistically choose to raise capital from time to time to strengthen our balance sheet and enhance our liquidity.

In addition, we may seek to repurchase, refinance or restructure our outstanding debt securities prior to their maturity in one or more transactions, which may involve the payment of cash or the issuance of additional debt or equity securities.

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No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us.

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If we are unable to raise additional capital due to unfavorable market conditions, including rising interest rates, or otherwise, or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, operations, and financial condition.

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Our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully attract and retain subscribers, develop new technologies that can compete in a rapidly changing market with many competitors and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement our product and service offerings.

We believe our existing cash, cash equivalents and restricted cash will provide us with the necessary liquidity to continue as a going concern for at least the next twelve months.

In addition to the foregoing, based on our current assessment, we do not expect any material impact on our long-term development timeline and our liquidity due to the worldwide COVID-19 pandemic and other macroeconomic factors, including inflationary cost pressures and potential recession indicators.

However, we are continuing to assess the impact that COVID-19 and other macroeconomic factors may have on our operations.

Although the number of people who have been vaccinated has been increasing, the future effects of COVID-19 are unknown and the potential future impact on our results of operations, financial condition or liquidity depends on factors beyond our knowledge and control.

We believe our existing cash and cash equivalents will provide us with the necessary liquidity to continue as a going concern for at least the next twelve months.

In addition to the foregoing, based on our current assessment, we do not expect any material impact on our long-term development timeline, revenue levels and our liquidity due to macroeconomic factors, including inflationary cost pressures and potential recession indicators.

However, we are continuing to assess the impact that macroeconomic factors may have on our operations, financial condition and liquidity, which depends on factors beyond our knowledge and control.

See Note 11 in the accompanying consolidated financial statements for further discussion regarding our outstanding indebtedness.

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For the year ended December 31, 2023, net cash used in operating activities was $173.0 million, which consisted of our net loss of $293.1, adjusted for non-cash movements of $91.5 million.

The non-cash movements consist primarily of $36.5 million of depreciation and amortization expenses, $51.2 million of stock-based compensation, $2.6 million of amortization of debt discounts, $3.1 million amortization of right of use assets and $1.6 million gain on extinguishment of debt.

Changes in operating assets and liabilities resulted in cash inflows of approximately $28.6 million, primarily due to a net increase in accounts payable, accrued expenses and other current and long-term liabilities of $56.0 million due to timing of payments and a net increase in deferred revenue of $24.8 million, partially offset by increases in accounts receivable of $36.2 million and prepaid expenses, prepaid sports rights and other assets of $16.0 million.

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For the year ended December 31, 2022, net cash used in operating activities was $289.8 million, which consisted primarily of our net loss of $425.0 million, adjusted for non-cash movements of $95.9 million.

The non-cash movements consist primarily of $36.7 million of depreciation and amortization expenses, $52.5 million of stock-based compensation, $2.5 million of amortization of debt discounts and $3.1 million amortization of right of use assets, partially offset by $1.7 million of change in fair value of warrant liability.

Changes in operating assets and liabilities resulted in cash inflows of approximately $39.3 million, primarily due to a net increase in accounts payable, accrued expenses and other current and long-term liabilities of $63.3 million due to timing of payments and a net increase in deferred revenue of $21.1 million, partially offset by increases in accounts receivable of $9.8 million and prepaid expenses, prepaid sports rights and other assets of $35.3 million.

For the year ended December 31, 2021, net cash used in operating activities was $171.9 million, which consisted of our net loss of $351.8 million, adjusted for non-cash movements of $102.3 million.

For the year ended December 31, 2021, net cash used in operating activities was $171.9 million, which consisted primarily of our net loss of $351.8 million, adjusted for non-cash movements of $102.3 million.

The non-cash movements consist primarily of $37.7 million of depreciation and amortization expenses, $53.2 million of stock-based compensation, $14.9 million of amortization of debt discounts and $1.0 million amortization of right of use assets, partially offset by $2.7 million of change in fair value of warrant liability and $2.7 million of deferred income tax benefit.

Changes in operating assets and liabilities resulted in cash inflows of approximately $77.6 million, primarily due to a net increase in accounts payable, accrued expenses and other current and long-term liabilities of $73.4 million due to timing of payments and a net increase in deferred revenue of $26.1 million, partially offset by increases in accounts receivable of $15.0 million and prepaid expenses, prepaid sports rights and other assets of $6.8 million.

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For the year ended December 31, 2020, net cash used in operating activities was $149.0 million, which consisted of our net loss of $599.4 million, adjusted for non-cash movements of $456.2 million.

The non-cash movements included $248.9 million impairment of Facebank Pre-Merger intangible assets and goodwill, $83.3 million change in fair value of warrants, $50.7 million of stock-based compensation, $44.0 million of depreciation and amortization expenses primarily related to intangible assets, $24.5 million loss on extinguishment of debt, $12.3 million of amortization of debt discounts, $8.6 million loss on deconsolidation of Nexway (net of cash), $1.7 million of change in fair value of shares settled liability and $1.0 million of loss on foreign currency exchange, partially offset by $9.7 million of deferred income tax benefit, $7.6 million gain on the sale of assets, $2.6 million of unrealized gain on investments and $2.0 million change in fair value of profit share liability.

Changes in operating assets and liabilities resulted in cash outflows of approximately $5.8 million, primarily due to a net increase in accounts receivable, prepaid expenses and other current assets of $14.7 million, a decrease in accounts payable, due to related parties and lease liabilities of $40.5 million, and partially offset by an increase in accrued expenses of $40.8 million, and deferred revenue of $8.6 million.

Investing Activities

For the year ended December 31, 2023, net cash used in investing activities was $25.4 million, which primarily consisted of $1.1 million of capital expenditures, $17.3 million for capitalized internal use software, $3.6 million for purchase of software licenses and a $3.5 million strategic investment.

For the year ended December 31, 2022, net cash used in investing activities was $6.0 million, which primarily consisted of $1.1 million of capital expenditures, and $4.9 million for capitalized internal use software.

For the year ended December 31, 2021, net cash used in investing activities was $30.4 million, which primarily consisted of $3.4 million of capital expenditures, $4.1 million for capitalized internal use software, and $22.9 million for acquisitions.

For the year ended December 31, 2020, net cash used in investing activities was $1.5 million, which consisted of a $10.0 million advance to fuboTV Pre-Merger, $0.6 million related to the sale of Nexway and $0.2 million in capital expenditures, offset by net cash received of $9.4 million from the acquisition of fuboTV Pre-Merger.

Financing Activities

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The net cash provided is primarily related to approximately $116.9 million of net proceeds received from the “at-the market” offering and $0.4 million of proceeds received from the exercise of stock options and warrants.

These proceeds were offset by repayments of $1.7 million of outstanding debt.

These proceeds were offset by a $3.3 million repurchase of convertible notes and $2.1 million redemption of non-controlling interest.

For the year ended December 31, 2022, net cash provided by financing activities was $296.3 million.

The net cash provided is primarily related to approximately $389.4 million of net proceeds received from the issuance of senior convertible notes, $140.4 million of net proceeds received from the “at-the market” offering and $6.8 million of proceeds received from the exercise of stock options and warrants.

The net cash provided is primarily related to approximately $292.1 million of net proceeds received from the “at-the market” offering and $5.8 million of proceeds received from the exercise of stock options and warrants.

These proceeds were offset by repayments of $1.7 million of outstanding debt.

For the year ended December 31, 2021 net cash provided by financing activities was $512.0 million.

The net cash provided is primarily related to $278.9 million of proceeds received from the sale of our common stock, $33.6 million of proceeds received in connection with short-term and long-term borrowings, $3.9 million from the exercise of stock options and warrants and $3.0 million of proceeds received from the issuance of convertible notes.

These proceeds were partially offset by repayments of $35.4 million of notes payable, repayment of $3.9 million of convertible notes, and $0.9 million in connection with the redemption of Series D preferred stock.

The net cash provided is primarily related to $389.4 million of proceeds received from the issuance of senior convertible notes, $140.4 million of proceeds received from the “at-the market” offering, and $6.8 million from the exercise of stock options and warrants.

These proceeds were partially offset by repayments of $24.7 million of outstanding debt.

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Discontinued operations

Operating and Investing Activities

For the year ended December 31, 2023, net cash used in operating activities was $4.6 million relating to the settlement of certain liabilities of Fubo Gaming.

For the year ended December 31, 2022, net cash used in operating and investing activities was $26.9 million and $6.4 million, respectively, due to the launch of Fubo Sportsbook in the fourth quarter of 2021.

Fubo Sportsbook was terminated in October 2022.

For the year ended December 31, 2021, net cash used in operating and investing activities was $24.0 million and $45.8 million, respectively, to launch Fubo Sportsbook.

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For the year ended December 31, 2021, net cash used in operating and investing activities was $24.0 million and $45.8, respectively, due to the launch of Fubo Sportsbook.

Critical Accounting Policies and Estimates

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Any excess of the reporting unit’s carrying amount over its fair value will be recorded as an impairment loss.

During the third quarter of 2020, we identified a triggering event related to our Facebank reporting unit that required us to perform a quantitative assessment.

We concluded that the fair value of the reporting unit was less than its carrying value and we recognized an impairment charge of $148.1 million in third quarter of 2020.

The impairment charge was primarily related to the departure of the former executive of the Facebank business and our shift in focus to the Fubo business.

We performed our annual impairment test in the fourth quarter of 2021 and concluded that no additional impairment charges were necessary.

We performed our annual impairment test in the fourth quarter of 2023 and concluded that no impairment charges were necessary.

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In the second quarter of 2022, we identified a triggering event that required us to perform a quantitative assessment of impairment of goodwill as of June 30, 2022.

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There was no impairment identified for the Streaming reporting unit as of June 30, 2022.

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In the fourth quarter of 2022, we identified a triggering event that required us to perform a quantitative assessment of goodwill for the streaming reporting unit as of December 31, 2022.

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Therefore no impairment charge was recorded during the quarter ended December 31, 2022.

The process of determining the fair value of a reporting unit is highly subjective and involves the use of significant estimates and assumptions.

The Company’s December 31, 2022 goodwill impairment test reflected an allocation of 50% and 50% between income and market-based approaches, respectively.

The income-based approach also takes into account the future growth and profitability expectations.

Significant inputs into the valuation models included the control premium, discount rate, and revenue market multiples as follows:

December 31, 2022

Control premium 35%

Discount rate 31%

Revenue multiples 0.34x - 0.52x

Intangible Assets

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If the useful life of the asset is shorter than originally estimated, we accelerate the rate of amortization and amortize the remaining carrying value over the new shorter useful life

During the third and fourth quarters of 2020, we identified triggering events related to our Facebank intangible assets that required us to perform a quantitative assessment.

We concluded that the fair value of the intangible assets was less than its carrying value and we recognized impairment charges of $100.3 million related to the legacy Facebank intangible assets.

The Company determined that the initiation of a strategic review of its interactive wagering business in August 2022 constituted a triggering event, in that there would be a significant change in the extent and manner in which the long-lived assets of Fubo Sportsbook would be used, and there was an expectation that the assets would be sold or otherwise disposed of.

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Based on this analysis, the Company recognized an aggregate non-cash impairment charge of $76.7 million which represented substantially all of the long-lived assets of Fubo Sportsbook.

Stock Compensation

Stock-Based Compensation

We recognize stock-based compensation for stock-based awards (including stock options, restricted stock units, and restricted stock awards) in accordance with ASC No.

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For stock-based awards that have a performance component, stock-based compensation is measured based on the fair value on the grant date and is recognized over the requisite service period as achievement of the performance objective becomes probable.

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We estimate the fair value of our stock option awards on the grant date using the Black-Scholes option-pricing model.

The Black-Scholes option-pricing model requires the use of judgments and assumptions, including fair value of our common stock, the option’s expected term, the expected price volatility of the underlying stock, risk free interest rates and the expected dividend yield.

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The fair value of our restricted stock units and restricted stock awards is estimated on the date of grant based on the fair value of our common stock.

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• Expected Dividend - The Company has never declared or paid any cash dividends on its common shares and does not plan to pay cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models.

There were no stock options issued during the year ended December 31, 2022.

The following assumptions were used in determining the fair value of stock options granted during the years ended December 31, 2021 and 2020:

Years ended December 31

The following assumptions were used in determining the fair value of stock options granted during the year ended December 31, 2023:

Dividend yield — %

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Risk free interest rate 3.9 %

Expected term (years) 5.8 - 6.1 years 5.3 - 7.5 years

Expected term (years) 6 years

There were no stock options granted during the year ended December 31, 2022.

If any of the assumptions used in the Black-Scholes option-pricing model change significantly, stock-based compensation for future awards may differ materially compared with the previously granted awards.

We estimate the fair value of our market and service condition stock option awards on the grant date using a Monte Carlo simulation model.

The Monte Carlo simulation incorporates into the valuation the possibility that the stock price goals may not be satisfied.

One of the most judgmental assumptions in the Monte Carlo simulation is the estimated fair value of the common stock underlying the award.

If the stock price goals are met sooner than the derived service period, we will adjust our stock-based compensation expense to reflect the cumulative expense associated with the vested award.

We will recognize stock-based compensation expense over the requisite service period, regardless of whether the stock price goals are achieved.

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The following assumptions were used in determining the fair value of stock options granted during the years ended December 31, 2021 and 2020 in the Monte Carlo simulation model:

For the years ended December 31,

Dividend yield — —

Expected volatility 71.5 % 76.0%-88.1%

Risk free rate 1.3 % 0.24%-0.30%

Derived service period 2.0 years 1.6- 1.9 years

We account for forfeitures as they occur.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis