FUBO Q1 Results: Revenue Missed Estimates, but EBITDA Gains Highlight Structural Progress Amid Subscriber Challenges

FUBO Inc. (NYSE: FUBO), the live TV and sports streaming platform, reported its Q1 2025 earnings this week, revealing a complex interplay of financial progress and operational headwinds. While the company’s adjusted EBITDA improved dramatically year-over-year, its revenue of $407.9 million fell short of analysts’ expectations of $415.4 million, and subscriber declines in both North America and international markets underscored ongoing challenges.

Revenue Misses and Subscriber Declines

FUBO’s revenue growth has stalled, with Q1 2025 revenue rising just 3.5% year-over-year to $407.9 million. This missed the $415.4 million consensus estimate, reflecting the impact of lost TelevisaUnivision content and weaker advertising sales. North American subscribers dropped 2.7% to 1.47 million, while international subscribers (primarily in Europe) fell 10.9% to 354,000. The company attributed these declines to content reductions and competitive pressures in a crowded streaming market.

The stock reacted negatively, falling 1.9% to $2.85 on the earnings release, despite the EBITDA beat. Investors appear focused on the top-line weakness and management’s cautious Q2 2025 guidance: revenue is projected to drop 10% year-over-year to $340–350 million, with further subscriber losses expected.

EBITDA Improvements and Profitability Gains

FUBO’s financial discipline is paying dividends. Adjusted EBITDA improved to -$1.4 million in Q1 2025, a $37.4 million reduction in losses compared to -$38.8 million in Q1 2024. This marked the ninth consecutive quarterly improvement in adjusted EBITDA and a margin expansion from -9.4% to -0.34%. The company also reported a $188.5 million net income gain, driven by a one-time litigation settlement, though this is non-recurring.

Management emphasized its goal of achieving global streaming profitability in 2025, citing cost-cutting measures, infrastructure investments, and a focus on high-margin sports content. However, its balance sheet remains strained: $373.4 million in debt exceeds cash reserves of $327.8 million, raising concerns about future capital needs.

Strategic Crossroads: Hulu Merger and Market Positioning

FUBO’s pending merger with Hulu + Live TV, pending regulatory approval, could be pivotal. The deal aims to combine FUBO’s sports-centric streaming with Hulu’s broader content library, potentially stabilizing subscriber numbers and reducing competition. Yet, the merger’s value hinges on regulatory clearance and execution risks.

The company also faces intense competition from giants like Disney+, YouTube TV, and Dish Network, which are expanding their live TV offerings. FUBO’s niche in sports streaming remains its strongest asset, but its subscriber base is shrinking, and ad revenue fell 17% year-over-year due to reduced content.

Valuation and Investor Sentiment

FUBO’s stock has surged 113.87% year-to-date, reflecting optimism around its turnaround efforts. However, the $2.93 closing price remains far below its 52-week high of $5.25, and analysts’ average one-year price target of $4.81 suggests limited upside unless profitability accelerates.

The disconnect between EBITDA improvements and stock performance highlights investor skepticism. While FUBO is making progress on margins, the market is penalizing its inability to grow revenue or stem subscriber losses. The Q2 guidance, which forecasts a steep revenue drop, adds to these concerns.

Conclusion: Progress, but Uncertainty Remains

FUBO’s Q1 results are a mixed bag. The company has made significant strides in reducing losses and improving margins, with EBITDA losses shrinking by over 90% year-over-year. However, its inability to grow revenue or retain subscribers—coupled with a debt-laden balance sheet—suggests the path to sustained profitability remains rocky.

Investors should weigh two critical factors:
1. Profitability Timeline: FUBO’s 2025 profitability target depends on cost controls and the Hulu merger. If realized, the merger could stabilize its business, but delays or regulatory hurdles could prolong losses.
2. Subscriber Dynamics: With North American and international subscriber counts declining, FUBO must prove it can reverse this trend or risk becoming a niche player in a crowded market.

For now, FUBO’s stock reflects a gamble on execution. While the EBITDA gains are encouraging, the revenue and subscriber challenges are real. At current valuations—0.4x forward price-to-sales—the stock may offer upside if the Hulu merger succeeds and margins continue to improve. Yet, with debt exceeding cash and a volatile streaming landscape, caution remains warranted.

As FUBO navigates this critical juncture, investors must ask: Can its operational improvements outweigh its structural headwinds, or will it remain a high-risk bet on a consolidation-driven turnaround? The answer will shape its trajectory in 2025 and beyond.