FuboTV stock rallies after outlook hiked, sports-betting business dropped

FuboTV Inc. shares rallied in the extended session Monday after the streaming TV platform hiked its sales forecast for the third quarter, said it was dropping its sports-betting businesses and reaffirmed its outlook of positive cash flow four years from now.

FuboTV
FUBO,
+6.30%
shares surged as much as 12% after hours, and were last up around 8% in the extended session, following a 6.3% climb to finish the regular trading day at $4.05 a share.

Late Monday, the company said it expects more than 1.22 million paid subscribers in North America for the third quarter, an increase of more than 27% year over year, with rest-of-the-world paid subscribers expected to reach about 350,000, or more than 1.57 million combined. Analysts surveyed by FactSet estimate 1.44 million total subscribers.

FuboTV’s previous third-quarter subscriber guidance was 1.14 million to 1.16 million for North America, and 340,000 to 360,000 rest-of-world subscribers, or a combined range of 1.48 million to 1.52 million subscribers.

Also, the company said it expects third-quarter North American revenue of at least $210 million, up about 34% year-over-year, and rest-of-world revenue of at least $5.5 million, for a total of at least $215.5 million. Analysts estimated revenue of $209.6 million for the third quarter.

Previously, FuboTV forecast North American revenue of $200 million to $205 million, and $5 million to $6 million for rest-of-world, or $205 million to $211 million combined.

 “We expect to deliver strong revenue and subscriber growth in Q3, exceeding our previously issued guidance in North America, against the backdrop of a highly competitive operating environment,” said David Gandler, FuboTV’s co-founder and chief executive, in a statement. “We’re pleased with this expected performance, and our progress toward achieving our positive-cash-flow target in 2025. “

The company also announced it will discontinue its Fubo Gaming and Fubo Sportsbook “in this challenging macroeconomic environment,” following a strategic review. “We have made the difficult decision to exit the online sports-wagering business effective immediately,” Gandler said, adding the company will provide more color, as well as a full-year outlook, when it reports results on Nov. 4.

Nearly a month ago, one analyst upgraded FuboTV, calling the stock’s price of around $4 a share a “compelling entry point.”

Shares are down 74% for the year, compared with a 23% fall by the S&P 500 index 
SPX,
+2.65%,
and a 32% drop by the tech-heavy Nasdaq Composite Index 
COMP,
+3.43%.