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Item 7. Management’s Discussion and Analysis

2025-03-03 compared with 2024-03-05 · 84 added, 164 removed, 261 unchanged (49% of the section changed)

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Our historical results are not necessarily indicative of the results that may be expected for any period in the future .

This section generally discusses fiscal years 2024 and 2023 and year-to-year comparisons between those years.

Discussions of fiscal year 2022 and year-to-year comparisons between fiscal years 2023 and 2022 that are not included in this Form 10-K can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”) on March 4, 2024.

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.

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

Recent Developments - Business Combination

On January 6, 2025, the Company announced it had entered into a business combination agreement (the “Business Combination Agreement”) by and among the Company, The Walt Disney Company (“Disney”) and Hulu, LLC (“Hulu”), which contemplates, among other things, (i) Hulu contributing certain assets (the “HL Business Assets”) related to the business of negotiating and administering carriage agreements and similar contracts relating to and for the purpose of the retransmission, distribution, carriage, display or broadcast of any programming service, channel or network on the HL DMVPD Service (as defined below) to a newly formed entity to be jointly owned by Hulu and the Company (“Newco”), (ii) the Company undergoing an umbrella partnership C corporation reorganization (the “Up-C Reorganization”) and contributing its business to Newco in exchange for units in Newco (“Newco Units”) such that, after giving effect to such contribution, Hulu will hold a number of Newco Units representing, in the aggregate, a 70% economic interest in Newco and the Company will hold a number of Newco Units representing, in the aggregate, a 30% economic interest in Newco, and (iii) the Company issuing to Hulu shares of a newly created vote-only class of the Company’s common stock (“Class B Common Stock”) representing, in the aggregate, a 70% voting interest in the Company (calculated on a fully-diluted basis) (the transactions contemplated by the Business Combination Agreement, collectively, the “Business Combination”).

The HL Business Assets will include certain carriage agreements, rights under joint subscription agreements and related data and information about its subscribers, advertising or sponsorship agreements exclusively related to Hulu’s linear multi-channel subscription video programming distribution service component of the offering known as “Hulu + Live TV” as of the date of the Business Combination Agreement and operated by Hulu (such service, the “HL DMVPD Service”), all other assets (including intellectual property) exclusively related to the HL DMVPD Service and all intellectual property constituting the “Live TV” brand.

Upon the closing of the Business Combination (the “Closing”), our Board of Directors will initially be comprised of nine members, who will be designated as follows:

(i) five designated by Hulu, (ii) two designated by the members of our Board as of immediately prior to the Closing and who (x) are reasonably acceptable to Hulu and (y) qualify as independent, (iii) one designated by Hulu and who qualifies as independent and (iv) our CEO.

Following the Closing, the Company will be a “controlled company” for purposes of NYSE listing rules and will elect to be exempt from certain corporate governance requirements available to “controlled companies”.

Completion of the Business Combination is subject to certain closing conditions specified in the Business Combination Agreement, including (i) the approval of the Business Combination Agreement, the Fubo Issuance and the Fubo Conversion, each as defined in the Business Combination Agreement, (including a plan of conversion and a certificate of incorporation of Fubo) by the Company’s shareholders, (ii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the clearance or obtainment of applicable consents of any specified governmental entity required to be obtained with respect to the Business Combination under the Business Combination Agreement;

(iii) no enactment, issuance, promulgation or grant of any law or order, as applicable, by any governmental entity that is in effect and that has the effect of making the Business Combination illegal or prohibiting or otherwise preventing the consummation of the Business Combination, (iv) completion of the Hulu Reorganization and the Fubo Reorganization, each as defined in the Business Combination Agreement, in each case, in accordance with the Business Combination Agreement and the documents contemplated therein, (v) the acceptance of the Delaware Certificate of Conversion and Certificate of Incorporation of Fubo by the Secretary of State of the State of Delaware and the acceptance of the Florida Articles of Conversion by the Florida Department of State, (vi) the accuracy of the other party’s representations and warranties as of the date of the Business Combination Agreement, subject to certain customary materiality standards set forth in the Business Combination Agreement and the delivery by each party to the other party of a certificate certifying the same, (vii) compliance by each party, in all material respects, with its applicable pre-Closing obligations under the Business Combination Agreement, and (viii) delivery by each party to the other party of certain other closing deliverables, including, but not limited to, the ancillary agreements to which it is a party.

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

Our financial condition and results of operations have been, and may in the future be, affected by a number of factors and trends, such as those described in Part II, Item 1A, “Risk Factors” and the following:

Our financial condition and results of operations have been, and may in the future be, affected by a number of factors and trends, such as those described in Part I, Item 1A, “Risk Factors” and the following:

Brand Awareness

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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.

In recent years, 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 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.

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

While we believe consumers are increasingly favoring the streaming services based on, among other factors, customer experience and pricing considerations, these positive trends for our business may not continue during future periods.

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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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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.

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

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

Subscriber related expenses

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

Impairment of other assets

Impairment of other assets includes the impairment of assets based on the assessment of non-recoverability.

Other income (expense)

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.

Other income (expense) primarily consists of gains and losses in extinguishment of debt, interest income, interest expense and financing costs on our outstanding borrowings, and amortization of debt premium and discount.

Income tax (provision) benefit

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

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.

The net 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, 2024, and 2023 (in thousands):

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Depreciation and amortization 38,548 36,496

Impairment of other assets

Total operating expenses 1,818,817 1,657,575

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Interest income 7,157 10,971

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

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

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

Amortization of debt premium (discount), net

1,224 (2,574)

Gain on extinguishment of debt

Other income (expense) 1,860 (923)

Total other expense (4,631) (14,854)

Total other income (expense) 18,902 (4,631)

Loss from continuing operations before income taxes (177,119) (293,981)

Income tax benefit 879 1,666

Income tax (provision) benefit

Net loss from continuing operations (177,778) (293,102)

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Net income (loss) from discontinued operations before income taxes 1,687 — 5,185

Income tax — —

Income tax (provision) benefit

Net income (loss) from discontinued operations 1,687 5,185

Net loss (176,091) (287,917)

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During the year ended December 31, 2024, we recognized revenues of $1,622.8 million compared to $1,368.2 million during the year ended December 31, 2023.

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.

The increase of $254.6 million was primarily due to an increase in subscription revenue of $250.5 million, comprising $171.8 million from increases in our subscriber base and $78.7 million from increases in subscription package prices and attachments sold, and an increase in other revenue of $4.2 million primarily due to new contracts entered into during the year ended December 31, 2024.

Advertising revenue decreased by $0.2 million primarily due to a decrease in CPMs offset by an increase in the number of impressions sold.

Subscriber related expenses

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During the year ended December 31, 2024, we recognized sales and marketing expenses of $202.5 million compared to $207.0 million during the year ended December 31, 2023.

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 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 $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 $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 $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 $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):

For the Years Ended December 31,

Subscription $ 905,886 $ 564,441

Advertising 101,739 73,749

Other 1,071 180

Total revenues 1,008,696 638,370

Operating expenses

Subscriber related expenses 976,415 593,241

Broadcasting and transmission 73,377 55,563

Sales and marketing 183,615 135,720

Technology and development 69,264 55,418

General and administrative 81,151 89,039

Depreciation and amortization 36,731 37,666

Total operating expenses 1,420,553 966,647

Operating loss (411,857) (328,277)

Other income (expense)

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

Interest income 2,498 —

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

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

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

Other income (expense) 1,019 (90)

Total other expense (14,854) (26,190)

Loss from continuing operations before income taxes (426,711) (354,467)

Income tax benefit 1,666 2,681

Net loss from continuing operations (425,045) (351,786)

Discontinued operations

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

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.

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 $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 $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 $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 decrease of $4.5 million was primarily due to a $5.5 million decrease in stock-based compensation and a $1.5 million decrease in marketing expense offset by a $2.2 million increase in payroll expense.

Technology and development

During the year ended December 31, 2024, we recognized technology and development expenses of $80.0 million compared to $67.7 million during the year ended December 31, 2023.

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 increase of $12.3 million was primarily due to an increase in payroll and contractor expense of $11.3 million.

General and administrative

During the year ended December 31, 2024, general and administrative expenses totaled $75.1 million compared to $64.3 million for the year ended December 31, 2023.

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 increase of $10.8 million was primarily due to a $23.9 million increase in legal fees partially offset by a $12.1 million reduction in accrual for indirect taxes primarily due to expiration of statute of limitations.

Depreciation and amortization

During the year ended December 31, 2024, we recognized depreciation and amortization expenses of $38.5 million compared to $36.5 million during the year ended December 31, 2023.

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 increase of $2.1 million is primarily related to an increase in amortization from the capitalization of internal use assets.

Impairment of other assets

During the year ended December 31, 2024, we recognized impairment of other assets of $3.8 million due to non-recoverability.

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 $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 $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.

During the year ended December 31, 2024, we recognized $18.9 million of other income (net) compared to $4.6 million of other expense (net) during the year ended December 31, 2023.

The change of $23.5 million is primarily related to a $27.9 million increase in gain on extinguishment of debt partially offset by an increase in interest expense of $7.1 million.

Income tax (provision) benefit

During the year ended December 31, 2024, we recognized a provision for income tax of $0.7 million compared to an income tax benefit of $0.9 million during the year ended December 31, 2023.

The change of $1.5 million was primarily driven by foreign taxes related to our Indian operations.

The Company has not provided any income tax benefit relating to its current operating losses in the U.S., France, and Spain as the Company concluded that its deferred tax assets in those countries are not realizable on a more-likely-than-not basis.

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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During the year ended December 31, 2024, we recognized net income from discontinued operations of $1.7 million compared to $5.2 million during the year ended December 31, 2023.

The decrease of $3.5 million is primarily due to the change in impact from the re-evaluation of certain contract termination costs in each period.

We discontinued the operations of our wagering business in October 2022.

Key Performance Metrics

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Average Revenue Per User

Beginning in the third quarter of 2022, Average Revenue Per User (“ARPU”) is calculated using GAAP Subscription revenue and GAAP Advertising revenue.

Previously, ARPU was calculated using Platform Bookings, which consisted of GAAP Subscription revenue and GAAP Advertising revenue, adjusted for deferred revenue.

We believe ARPU provides useful information for investors to gauge the revenue generated per subscriber on a monthly basis.

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Our NA ARPU was $85.97 and $82.25 for the years ended December 31, 2024 and 2023, respectively.

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

Our ROW ARPU was $7.49 and $6.82 for the years ended December 31, 2024 and 2023, respectively.

Gross Profit and Gross Margin (GAAP)

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Our Gross Margin was 12.6% and 6.3% 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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ROW Monthly Average Revenue per User (ROW ARPU) $ 7.49 $ 6.82

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Liquidity and Capital Resources

The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

See Note 16 in the accompanying consolidated financial statements for a further discussion of our cash commitments and contractual obligations as of December 31, 2023, including lease obligations and sponsorship agreements, in addition to our discussion below regarding the dissolution of Fubo Gaming in October 2022.

Our primary sources of cash are receipts from subscribers and advertising revenue as well as proceeds from equity and debt financings.

See Note 15 in the accompanying consolidated financial statements for a further discussion of our cash commitments and contractual obligations as of December 31, 2024, including lease obligations and sponsorship agreements.

Our primary sources of cash are receipts from subscription and advertising revenue as well as proceeds from equity and debt financings.

Our primary uses of cash are content and programming license fees and operating expenses, including payroll-related, marketing, technology and professional fees.

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.

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.

On February 2, 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 Convertible Notes").

The 2026 Convertible 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 Convertible Notes for $3.3 million.

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

At our election for any interest period, the 2029 Convertible Notes will bear interest at a rate of (i) 7.5% per annum on the principal amount thereof if interest is paid in cash and (ii) 10.0% per annum on the principal amount thereof if interest is paid in kind, in each case payable semi-annually each year.

During the year ended December 31, 2024, we repurchased $46.9 million principal amount of the 2026 Convertible Notes for $27.1 million, including accrued interest.

Upon completion of the Exchange and the repurchases, the aggregate principal amount of the 2026 Convertible Notes outstanding is $144.8 million, and the aggregate principal amount of the 2029 Convertible Notes outstanding is $177.5 million.

On January 6, 2025, concurrently with the execution of the Business Combination Agreement (see "Recent Developments—Business Combination" above), the Company settled its antitrust litigation against Disney, Fox, and WBD and their affiliates (collectively, the “Defendants”).

In conjunction therewith, the Defendants made an aggregate cash payment to the Company of $220.0 million.

Legal Proceedings."

In addition, in connection with entering into the Business Combination Agreement, the Company and an affiliate of Disney entered into a commitment letter (the “Commitment Letter”) pursuant to which such affiliate committed to provide the Company, on January 5, 2026 and on the terms and subject to the conditions set forth therein, up to $145.0 million of indebtedness in the form of a senior unsecured term loan (the “Facility”), subject to customary conditions.

The proceeds of the Facility will be used for general corporate purposes of the Company.

The funding of the Facility under the Commitment Letter is not contingent on the occurrence of the Business Combination contemplated by the Business Combination Agreement.

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

333-258428) initially filed with the SEC on August 4, 2021, as amended (the “2021 Form S-3”), pursuant to 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.

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.

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.

In addition, we have an effective shelf registration statement on Form S-3 (No.

333-277677) filed with the SEC on March 5, 2024 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 (the "2024 Form S-3").

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.

On August 6, 2024, we filed a prospectus supplement to the base prospectus accompanying the 2024 Form S-3 in order to migrate the ATM Program from a prior effective registration to the 2024 Form S-3.

Upon the filing of such prospectus supplement, all offers or sales under the ATM Program shall be made under the 2024 Form S-3.

During the year ended December 31, 2024, we sold 33,218,851 shares of our common stock under the ATM Program, resulting in net proceeds of approximately $43.3 million, after deducting agent commissions and issuance costs.

As of December 31, 2024, there was $112.0 million of common stock remaining available for sale under the 2022 Sales Agreement.

As of December 31, 2024, we had cash, cash equivalents and restricted cash of $167.6 million.

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.

However, our future capital requirements will depend on many factors, including, but not limited to, those detailed in Part I, 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.

We also may 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.

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

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 and compete in a rapidly changing market with many competitors.

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.

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Year Ended December 31,

2023 2022 2021

Continuing operations:

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Net cash used in investing activities — —

Net increase in cash, cash equivalents and restricted cash (91,806) (32,854) 239,859

Net decrease in cash, cash equivalents and restricted cash (83,848) (91,806)

Continuing Operations

Operating Activities

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 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.

Net cash used in operating activities was $75.6 million during the year ended December 31, 2024 compared to $173.0 million during the year ended December 31, 2023.

The decrease was primarily driven by a decrease in net loss and an increase in cash receipts from accounts receivables partially offset by an increase in payments for programming license fees.

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.

Net cash used in investing activities was $15.8 million during the year ended December 31, 2024 compared to $25.4 million during the year ended December 31, 2023.

The decrease was primarily driven by lower capitalization of internal use software.

Financing Activities

For the year ended December 31, 2023, net cash provided by financing activities was $111.2 million.

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 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 $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 $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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Net cash provided by financing activities was $11.5 million during the year ended December 31, 2024 compared to net cash provided by financing activities of $111.2 million during the year ended December 31, 2023.

The decrease was primarily driven by the lower amount of proceeds from the ATM Program, repurchases of outstanding convertible notes during the year ended December 31, 2024 and payments for financing costs associated with the issuance of the 2029 Convertible Notes during the year ended December 31, 2024.

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, respectively, due to the launch of Fubo Sportsbook.

Net cash used in operating activities was $3.9 million during the year ended December 31, 2024 compared to $4.6 million during the year ended December 31, 2023.

The decrease was primarily driven by decrease in activity in the current year since the wind down of Fubo Sportsbook which was terminated in October 2022.

Critical Accounting Policies and Estimates

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We also review our intangible assets for impairment whenever changes in circumstances indicate that the carrying amount of an asset is not recoverable.

In accounting for the Merger described in Note 5 to our consolidated financial statements in Part II, Item 8 of this Annual Report, judgment was required in determining the accounting acquirer.

Our evaluation of the accounting acquirer considered various indicators including voting rights, minority voting interest, composition of board of directors, composition of management and relative size of the entities.

We ultimately concluded that Facebank Pre-Merger was the accounting acquirer in the Merger because (i) FaceBank Pre-Merger’s shareholders owned approximately 57% of the voting common shares of the combined company immediately following the closing of the Merger (54% assuming the exercise of all vested stock options as of the closing of the transaction) and (ii) directors appointed by FaceBank Pre-Merger would hold a majority of board seats in the combined company.

We test goodwill for impairment on an annual basis during the fourth quarter of each calendar year or earlier when circumstances dictate.

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

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.

We concluded that the fair value of goodwill attributable to the Wagering reporting unit was less than its carrying value, which resulted in full impairment of the goodwill of $10.7 million.

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

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.

The results of the impairment test also showed that the fair value of the streaming reporting unit was in excess of its carrying value by 3.5%.

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

In the first quarter of 2024, we identified a triggering event that required us to perform a quantitative assessment of impairment of goodwill as of March 31, 2024.

The results of the impairment test showed that the fair value was substantially in excess of its carrying value.

Therefore, it was determined that goodwill was not impaired.

We performed a qualitative assessment for our annual goodwill impairment test in the fourth quarter of 2024 and concluded that it was not more-likely-than-not that the fair value was less than the carrying value.

Intangible Assets

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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.

The Black-Scholes model assumptions are further described below:

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We account for forfeitures as they occur.

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.

Recently Issued Accounting Pronouncements

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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