In just six years, the first sports streaming platform fuboTV (NYSE: FUBO) went from zero subscribers to 1 million. Even just over a year ago, at the end of the tech company’s second quarter, fuboTV’s subscriber base was much smaller than it is today, at just 286,000. .
The surging growth in the company’s subscriber base is certainly impressive and a good reason for investors to be optimistic about the company’s long-term potential. But even this notable figure does not fully reflect fuboTV’s business momentum.
There’s an even more promising metric to keep fuboTV investors excited about the future: the company’s triple-digit ad sales growth. In the third quarter in particular, advertising revenue increased 147% year-over-year.
Here’s why investors should care about this metric.
About that skyrocketing ad revenue
While fuboTV’s value proposition clearly resonates with consumers, it is particularly attractive to advertisers. Combine streaming, sports, live TV, and the technology to buy and show programmatic ads, and you’ve got a recipe for some really compelling commercials. No wonder fuboTV’s third-quarter ad revenue grew 147% year-over-year.
What’s really impressive about this ad revenue growth is that it adds to an extremely difficult comparison. In the quarter of last year, advertising revenue grew 153% year-over-year.
Not only did ad revenue increase, but ad revenue per user grew 10% year over year to an impressive $ 74.54, well ahead of the $ 40.10 average revenue per user that Roku generates on its platform in the last 12 months.
All the right catalysts
In fuboTV’s letter to shareholders in the third quarter, management explained the many factors behind the surge in ad sales.
This continued momentum is fueled by strong subscriber growth and improved monetization, as we continue to take advantage of industry trends, particularly the rapid adoption of CTV devices by consumers, the migration of sports and the market. entertainment from linear broadcast to live television broadcast and the shift from linear broadcast advertising dollars to CTV.
More importantly, management says they expect these trends to accelerate in the future.
FuboTV management also highlighted a specific short-term catalyst. After seeing “a significant influx” of new subscribers in the last few weeks of September, fuboTV believes it can increase the monetization of these users, especially those who remain long-term subscribers. “This, combined with the continued acceleration in demand from advertisers and the growth of the overall market, will continue to strengthen our advertising business,” added management.
So why should investors care so much about fuboTV’s momentum in ad sales? It highlights both the company’s momentum with consumers and the seemingly insatiable appetite marketers seem to have for the fuboTV platform.
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