Fans of FuboTV (NYSE:FUBO) woke up to a surprise this morning as the streaming platform reported preliminary Q4 results. Revenue for Q4 is expected to be between $215 million and $220 million, up from prior guidance of $205 million to $210 million. As a result, 2021 full-year revenue guidance increased as well, to $622 million to $627 million. That’s a staggering 138% to 140% year-over-year (YOY) increase. However, FUBO stock is down today despite the strong numbers.
So, what gives?
Despite these seemingly good results, shares of FUBO stock are down over 5% on the day. The looming reality of a rising-rate environment may be to blame. Today, Goldman Sachs (NYSE:GS) announced that it now expects four interest rate hikes this year. The investment bank cited high inflation rates and a labor market near full employment as factors for the rate hikes. Wall Street firm Chief Economist Jan Hatzius added that:
“Declining labor market slack has made Fed officials more sensitive to upside inflation risks and less sensitive to downside growth risks. We continue to see hikes in March, June, and September, and have now added a hike in December for a total of four in 2022.”
Macroeconomic factors aside, FUBO stock reported a strong quarter with high growth rates. Let’s take a deeper look into the preliminary Q4 results.
FUBO Stock: What to Know About Preliminary Q4 Results
- FuboTV reported that paid subscribers at year-end should exceed 1.1 million, which represents a YOY increase of over 100%. Furthermore, the paid subscribers figure increased from prior guidance of 1.06 million to 1.07 million subscribers.
- Additionally, advertising revenue for Q4 is expected to be over $25 million. That’s up more than 90% YOY.
- The streaming service added that subscriber churn will likely decrease by 2% YOY. This would make Q4 the 13th consecutive quarter of churn improvements.
- Last December, FuboTV acquired Molotov, a Paris-based streaming platform. The acquisition is expected to create synergies and operating leverage that will help FuboTV expand globally. The Q4 results exclude the figures from the acquisition.
- “This wraps up a phenomenal year where we grew revenue by over 138% while advancing towards our path to profitability,” said FuboTV CEO David Gandler. “We look forward to discussing our full fourth quarter and year-end 2021 results including Adjusted Contribution Margin, Adjusted EBITDA, EPS and cash flow on our forthcoming earnings call.”
- 2021 was a pivotal year for FuboTV, as the streaming platform fully embraced live and interactive sports betting.
- Finally, FuboTV expects to end 2021 with more than $375 million in cash, cash equivalents and restricted cash.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.