Is fuboTV (FUBO) a Buy After Its First-Ever Positive EBITDA Quarter and Subscriber Declines?

The streaming wars have entered a new phase, where survival hinges not just on content but on strategic alliances. fuboTV (FUBO) has recently reported its first-ever positive Adjusted EBITDA of $20.7 million in Q2 2025, a stark turnaround from a $11 million loss in the same period last year. Yet, this financial milestone is shadowed by a 6.5% year-over-year decline in North American subscribers to 1.356 million and a 12.5% drop in international subscribers to 349,000. The question for investors is whether fuboTV's improved profitability and its pending merger with Hulu + Live TV can offset these subscriber attrition and advertising challenges in an increasingly fragmented market.

The EBITDA Turnaround: A Glimpse of Profitability

fuboTV's Q2 2025 results highlight a critical shift in its financial trajectory. Revenue surged to $379.97 million, exceeding the $367.08 million consensus estimate, driven by both North American and international operations. While North American advertising revenue dipped 2% due to the removal of ad-insertable content, the company's cost discipline and operational efficiency have narrowed its net loss to $40.9 million in Q4 2024, a 73% reduction from prior periods. This progress suggests fuboTV is learning to monetize its live sports audience more effectively, even as it grapples with subscriber churn.

However, profitability alone is not enough. The subscriber declines, particularly in North America, signal underlying challenges. The end of major sports seasons (e.g., NFL) and content provider negotiations limiting access to sports programming have eroded retention. For a sports-first platform, these are existential risks.

The Hulu Merger: A Strategic Lifeline or a Regulatory Gamble?

The proposed merger with Hulu + Live TV, announced in January 2025, aims to create a hybrid streaming entity with 6.2 million North American subscribers—second only to YouTube TV. Hulu's 70% economic stake in the combined entity underscores Disney's confidence in fuboTV's sports-centric model. The merger's strategic logic is compelling: fuboTV's live sports expertise and AI-driven personalization tools could complement Hulu's on-demand library and Disney's global content ecosystem.

Key synergies include:
1. Subscriber Growth: By bundling Hulu's broad entertainment content with fuboTV's live sports, the merged entity could attract a wider audience, including families and casual viewers.
2. Advertising Revenue: A shared ad platform leveraging fuboTV's real-time sports audience and Hulu's on-demand viewership could enhance ad targeting and yield higher CPMs.
3. Cost Savings: Consolidating programming deals and infrastructure could reduce costs by up to 20%, with Disney's $220 million antitrust settlement and a $145 million term loan in 2026 providing liquidity.

Yet, the merger's success hinges on execution. Regulatory scrutiny from the U.S. Department of Justice remains a wildcard, and integrating two unprofitable services into a cohesive business model is no small feat. Hulu's Live TV subscribers have already declined by 2% in Q2 2025, raising questions about whether the merged entity can reverse this trend.

Advertising Headwinds and the Path to Profitability

fuboTV's advertising revenue, while resilient, faces headwinds. The removal of ad-insertable content in Q2 2025 led to a 2% decline in North American ad revenue. However, the company has experimented with innovative formats like “pause ads” and a Women's Sports Zone, generating seven figures in ad revenue. Post-merger, the combined platform could leverage Disney's ad sales capabilities and fuboTV's AI-driven personalization to create a more attractive ad inventory.

The merged entity's ability to monetize live sports—still a high-margin segment—is critical. With sports driving 60% of fuboTV's engagement, the integration of Disney's ESPN and regional sports networks could solidify its position as a go-to destination for live events.

Risks and Realities

Investors must weigh several risks:
- Regulatory Hurdles: The DOJ's antitrust review could impose concessions, diluting the merger's strategic value.
- Subscriber Retention: The merged entity must address churn caused by content gaps and competition from YouTube TV and Netflix.
- Integration Costs: Merging technology stacks and customer bases could strain resources, delaying profitability.

Despite these challenges, fuboTV's $289.7 million in cash reserves and Hulu's financial backing provide a buffer. The combined entity's projected $8.2 billion revenue by 2029, driven by subscriber growth and advertising, suggests long-term potential.

Investment Thesis: A Buy with Caution

fuboTV's EBITDA turnaround and the Hulu merger present a compelling case for investors willing to tolerate short-term volatility. The merger's potential to create a hybrid platform with diversified content and advertising capabilities could position FUBO as a key player in the streaming wars. However, the stock's valuation remains tied to the success of the merger and its ability to retain subscribers.

Recommendation: Investors should consider a cautious buy, with a focus on monitoring the merger's regulatory progress and the merged entity's subscriber retention metrics. A long-term horizon is essential, as profitability may take 18–24 months to materialize.

In a market where differentiation is paramount, the Hulu-fuboTV merger could redefine the streaming landscape. For now, the jury is out—but the stakes are high, and the potential rewards are greater.