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Thank you for standing by, and welcome to the fubo Third Quarter 2025 Earnings Conference Call. I'd now like to turn the call over to Amit Pate, SVP, FP&A, Corporate Development and Investor Relations. You may begin.

Thank you for joining us to discuss fubo's Third Quarter 2025 results. With me today is David Gandler, Co-Founder and CEO of fubo; and John Janedis, CFO of fubo. Full details of our results and additional management commentary are available in our earnings release and letter to shareholders, which can be found on the Investor Relations section of our website at ir.fubo.tv. Before we begin, let me quickly review the format of today's call. David will start with some brief remarks on the quarter and our business, and John will cover the financials. Then we will turn the call over to the analysts for Q&A.

I would like to remind everyone that the following discussion may contain forward-looking statements within the meaning of the federal securities laws, including, but not limited to, statements regarding our financial condition, anticipated financial performance, expected synergies and other benefits from our business combination, business strategy and plans, including our products and subscription packages, market, industry and consumer trends and expectations regarding growth and profitability. These forward-looking statements are subject to certain risks, uncertainties and assumptions. Actual results could differ materially from our current expectations, and we may not provide updates unless legally required.

Potential factors that could cause actual results to differ materially from forward-looking statements are discussed in the earnings release we issued today, our letter to shareholders and in our SEC filings, all of which are available on our website. at ir.fubo.tv. Except as otherwise noted, the results we are presenting today are on a continuing operations basis, excluding the historical results of our former gaming segment, which are accounted for as discontinued operations. Please note also these results reflect fubo's stand-alone operations prior to the recent completion of our business combination with -- the Walt Disney Company's Hulu+ Live TV.

During the call, we may also refer to certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are available in our Q3 2025 letter to shareholders, which is available on our website at ir.fubo.tv. With that, I will turn the call over to David.

Thank you, Amit, and good morning, everyone. This quarterly earnings call is unlike any other in our history, coming just days after completing our transformative combination with the Hulu + Live TV business, setting a new stage for what's ahead. The combination of fubo and Hulu + Live TV forms one of the largest live TV streaming services in America. Our combined nearly 6 million subscribers in North America make fubo the sixth largest pay TV company according to recent UBS estimates. It's a defining moment for our team and our shareholders and the culmination of years of innovation and execution. Together with our strong stand-alone results, this combination underscores the enormous potential ahead, a consumer-first platform built on choice, value and profitable scale.

Now looking at our third quarter stand-alone results, fubo ended the quarter with 1,630,000 paid subscribers in North America, our strongest third quarter performance to date and $369 million in total revenue alongside solid contributions from our international operations. We're also proud to report that we achieved meaningful improvements in both net loss and adjusted EBITDA with the third quarter representing our second consecutive quarter of positive adjusted EBITDA. Beneath those strong headline numbers, the health of our underlying metrics continues to improve. Trial starts increased and conversions from trial to paid meaningfully improved year-over-year, while churn declined nearly 50% versus last year. At the same time, we reduced marketing spend during a highly competitive sports quarter, reinforcing our path toward profitability and stronger margin expansion.

These trends reflect growing consumer demand, higher engagement and the continued scalability of our model. Our mission remains clear: deliver must-have programming through a flexible value-forward experience. fubo continues to make watching live content easier and more valuable. The fubo channel store, similar in concept to Amazon Prime video channels, offers third-party premium services like RSNs, DA Zone 1, Hallmark Movies -- now and Paramount+ with Showtime into one sports-first interface, removing friction and simplifying viewing. Our fubo Sports skinny service added lower-priced, high-value access to top sports content, including the majority of ESPN unlimited content and is driving record trial conversions. Together with the expansion of pay-per-view, which delivered double-digit sales growth in October compared to the prior month, these initiatives demonstrate fubo's ability to innovate, scale engagement and strengthen our live platform.

We have built market-defining features, multiiew, game highlights, game alert push notifications and catch up to live that increase engagement and make watching sports easier and more entertaining. These are the types of personalized capabilities we will continue to scale across our growing membership base. Fubo's recent results gives us much to be confident about, and we envision unprecedented opportunities at the combined company. We're expanding choice, not forcing one bundle. The combined company offers consumers a broad set of sports and entertainment-focused programming offerings from fubo and Hulu+ Live TV, respectively. Together, we give families flexible ways to rightsize their spend while broadening access to the best content. In the near term, we'll focus on programming efficiencies, ad tech uplift and marketing at scale, including through ESPN's ecosystem as well as deeper personalization. These are 4 major drivers to grow our subscriber base and achieve our profitability goals. In closing, we could not be more excited about fubo's future.

We believe our third quarter stand-alone performance, coupled with the opportunities unlocked by our business combination with Disney's Hulu+ Live TV, solidly position fubo for future success. We want to thank our retail and institutional shareholders for your unwavering support and to our customers for your loyalty. We remain committed to building a consumer-first streaming service that delivers more live action, less friction and superior value. I will now turn the call over to John Ganz, CFO, to discuss our financial results in greater detail. John?

Thank you, David, and good morning, everyone. Our third quarter results reflect continued progress in both execution and profitability capped by a historic milestone, the completion of our business combination with Hulu + Live TV. We believe this transaction is a huge win for our company, shareholders and the market, and we could not be more excited about the opportunities ahead. Taking a look at the results for the quarter. In North America, we delivered total revenue of $368.6 million, down 2.3% year-over-year and reached 1.63 million paid subscribers, a 1.1% increase year-over-year and their highest ever third quarter subscriber count. In Rest of World, revenue was $8.6 million, and we ended the quarter with 342,000 paid subscribers. In North America, advertising revenue totaled $25 million, down 7% year-over-year, primarily reflecting the absence of certain ad insertable content and onetime benefits in the prior year period.

That said, demand indicators remain constructive, including upfront commitments for the 2025, 2026 cycle, up over 36% versus last year, with nearly 1/3 of advertisers new to fubo. Non-video formats such as pause ads and branded activations grew over 150% year-over-year. These personalized and dynamic ad experiences are driving greater engagement and reinforce the stickiness of CTV formats beyond standard video ads. Net loss was $18.9 million or $0.06 per share compared to a loss of $54.7 million or $0.17 per share in the prior year period. Adjusted EPS improved to $0.02 compared to a loss of $0.08 in the prior year period. Adjusted EBITDA was positive $6.9 million, representing a year-over-year improvement of more than $34 million. This marks our second consecutive quarter of positive adjusted EBITDA, underscoring the strength of our cost discipline and the scalability of our model.

I would also like to point out our continued improvement in expense efficiency with total operating expenses now approaching parity with revenue, our best ever third quarter performance. This reflects the benefits of disciplined content spending, optimization of marketing investments and ongoing focus on scalable growth. From a cash flow perspective, net cash used in operating activities was $6.5 million or a $9 million increase compared to Q3 2024, while free cash flow was negative $9.4 million, a decrease of $8.3 million compared to the prior year. Free cash flow improved sequentially versus Q2, but was lower year-over-year, driven primarily by working capital timing.

We ended the quarter with a solid liquidity position and balance sheet flexibility, including over $280 million in cash. In summary, Q3 was another quarter of steady financial progress and operational execution. We've demonstrated consistent improvement in profitability metrics, disciplined cost management and continued engagement growth. With the Hulu+ Live TV combination now complete, we enter the next phase of our journey as a stronger scaled player in the pay-TV ecosystem, positioned to deliver sustainable profitability and long-term shareholder value. With that, I'll turn the call back to the operator for Q&A. Operator?

Your first question today comes from the line of David Joyce from Seaport Research Partners.

First of all, congratulations on completing the combination early. I was wondering about the advertising side of the business. If you could delve in a little bit more into what the content that was removed to make the comparisons a little challenging. But going forward, you will have the new advertising relationship with Disney, where they're taking care of the ad sales, but you get the revenue net of the ad sales commission. So is that across all of the subscriber base that they have the ownership of on [indiscernible]?

David, this is John. Maybe I'll take the first part of that, and David will take the second. On the content portion of the question, just as a reminder, we dropped Univision effectively at the end of last year. So that had an impact as number one. Number two, we also had some residual maximum effort channel revenue in there as well. And then third, unrelated, but there was also a political comp in there. And so if I were to kind of normalize for the 3 of those, I would say ad revenue would have been up modestly year-over-year for the quarter.

Yes. And David, just to add to that. I think when you look at the results for the quarter, I think [indiscernible] has been the only minor blemish on an otherwise outstanding quarter, but that's a high-class problem given our combination with Hulu Live. As we've stated, Disney will be taking over advertising sales, and we expect that as we collaborate and integrate our inventory into Disney's ecosystem and ad server, we should see pretty strong results relative to where we are today. So we're very excited about that.

Your next question comes from the line of Patrick Sholl from Barrington Research.

Congrats on completing the transaction. I was wondering if you could -- now that the transaction has been completed, could you maybe discuss some of the differentiating factors on the basically the full services and why maintain both offerings in addition to the sports-focused package?

Yes. This is David. I'll take that. So one is, I think this is one of the few cases of when companies combine that do not have any overlapping customers. [indiscernible] not overlap with Puba. They're similar, but quite different. We've been very focused on driving our sports identity brand and delivering capabilities for sports fans that I mentioned in my opening comments.

Hulu has been more of a general entertainment bundle that has sports. And it's very important for us to continue to provide consumers with optionality and flexibility, and there's programming that we don't have on Tubo today, obviously, top quality networks that are available at Hulu. So this only adds to the spectrum of offers that we provide consumers at different price points. along the demand growth. So this is really part of our super aggregation strategy that we talked about as far back as 18 or 20 months ago.

Okay. And on the cost side, you had a pretty significant reduction in sales and marketing costs year-over-year. Is that partly a function just of kind of maintaining your target subscriber acquisition cost is about in that like 1x ARPU range? And just with the sports product being kind of lower cost and just being mathematic on that? Or is there any specific things to call out in terms of subscriber retention or additions that you're able to find efficiencies on?

Yes. Very good question. This is David. I'll take that. Look, I think that when you look at what we've been able to achieve -- this quarter, we had a 68% increase in net adds on a year-over-year basis while decreasing our marketing spend or sales and marketing line as a percentage of revenue by 21%. In part, that's due to the fact that we have many more offers in the market, everything from the [indiscernible] channel store to the skinny bundle to our Pro and Elite offers. And we've also begun to leverage AI both on channel optimizations and creative testing.

So all of these things have worked together, and we've stated many times that our goal is to be measured and disciplined, and we didn't see a reason to push any further given how expensive third quarter marketing is. And the last thing I'll say is that you're right, we have stated since 2020 that our goal is to maintain that SAC to ARPU of 1 to 1.5x. I'm very happy to say that this year, we've been well below the low end of that range. So we think we can become even more efficient, particularly as the structural shift and consumption continues to move in our direction.

Your next question comes from the line of Alicia Reese from Wedbush.

All right. First, I was hoping we could dig a little deeper on the skinny bundle. The 20% sequential subscriber growth suggested there you've seen a nice uptick so far in the subscription ARPU suggest that the impact was pretty limited. Can you speak to, at least qualitatively to the dynamics of the skinny bundle, like are these new subscribers? And for those that converted from existing subscription tiers, do they primarily come from the base tier or premium tier?

Lisa, this is Jon. I'll maybe start with that one. Look, I'd say it's early days, clearly, but I'll share a couple of data points for you. Number one, look, we feel good about the [indiscernible] price point. At launch, the REIT was about 1/3 of the country. Now it's north of 80% heading to full distribution by the end of the year. A couple of months in, we see virtually no cannibalization, and we think it's really expanding our addressable market. And I would just add a couple of metrics in the short term on retention and churn. It's early, but I'd say, performing as expected, meaning better retention and lower churn relative to Pro and Elite.

I was just going to add very quickly that we're seeing this type of success not only in skinny bundle, but this was a strong quarter across the board for all of our offers. But of course, the skinny bundle has really delivered on trial starts, conversion to pain net churn at least in the early days of the package. .

Okay.esense. And can you just discuss briefly how the Q3 marketing budget was allocated between promoting the heavy sports calendar and the skinny bundle?

Yes. Look, I think we have a world-class marketing team and retention team. And I think we're very focused on ensuring that we scale profitably. And we obviously manage almost in real time the different packages to ensure that we're continuing to drive both top and bottom line. .

Your next question comes from the line of Laura Martin from Needham & Company.

David, now that you guys have closed the Holi deal, I'm wondering, they have 4 million subs. You guys have $1.5 million round numbers, $1.5 million. Don't they sort of -- are they sort of the dog and you guys detail? I know you're running it, but I don't isn't the strategy to sort of get eclipsed by theirs because they have so many more subs? And can you talk about just over the next 6 months, 9 months, how much is really you driving this company compared to Fubo -- sorry, Hulu, which is so much larger?

Yes, Laura, thank you. This is David. Good to hear your voice. Look, you and I have been going at this now for, I don't know, 5 years I remember in the early -- my first meeting with you over COVID I told you 1 day we would be contribution margin positive. And then 2 years later, I told you we would be gross margin positive. And I can tell you that I don't know about dogs and tails, but I can tell you that this is no longer a ferry tail. Fubo will continue to drive significant growth. I can walk you through kind of areas in which that we believe that could be the case.

One is you're seeing very strong net adds in a quarter that is typically very competitive. And we've been able to add more products to market. We've had record churn -- net churn numbers, all positive. We removed Univision from the platform sometime in December. And just to kind of give you a little peek into Q4, we are seeing record Latino number once Univision, which is very positive. So I think actually Fubo is going to be a very important growth engine for the company. There are a few areas in which I think will really sort of hope to take advantage of this new collaboration. One, I think, is quite obvious.

ESPN's ecosystem of ESPN radio, espn.com, flagship and other spokes that they have within that ESPN flywheel probably averages somewhere in the sort of 100 million monthly active users. This is a funnel that we have never leveraged before. So we think that there's probably significant untapped value for us to grow our sub base, again, profitably, which means it could have a very positive impact on our sales and marketing line. The second thing is an area where I think you've had a lot of questions on and maybe a little bit of frustration around advertising. I think that there's significant upside in our relationship with Disney. One part of the Disney ecosystem, all of our football, basketball, baseball, soccer, all of that inventory will likely move over hopefully sooner rather than later, but we're targeting sometime in the first quarter given some of the technical hurdles that we need to go through.

We're transitioning our ad sales team over to Disney. So there's probably some pretty significant upside from where we are today relative to where we could be if you think about Disney Sports CPMs and their ability to just use their scale to fill our bills. The third area, which I'm really very excited about, which is an area that we've significantly underperformed the market and probably the reason why the stock has underperformed as programming efficiencies. We have not been able to achieve what I would believe to be fair deals, and that's because everything is related to size-based [indiscernible] but as the sixth largest pay TV player, it doesn't really tell you much. I look at this as the second largest virtual MVPD player in the market, which means that those structure will shift both from a consumption perspective as well as a monetization perspective are in our favor.

And we think that we'll be able to grow that. And last but not least, an area that we really don't discuss a lot, which is the international piece. We've been really focused on our unified platform. As I like to say, timing is everything. That platform is almost ready to go. We'll be onboarding Molitor migrating it onto the Fubo platform. And Disney has 100-plus international subscribers [indiscernible] s D+ service. And I think that similar to the way Hulu Live, has been embedded into Hulu and potentially into Disney+, we think that there's probably an opportunity for us to drive significant growth.

Our ambitions have not changed. We want to be the world's largest live TV provider. And we're using streaming to make a smarter, cheaper and more profitable TV product.

Super helpful. You guys have always had a world-class tech stack, do you find you're able to use any of the new generative AI capabilities to personalize the recommendation line or personalize what you're showing to different consumers? Are you using any of those capabilities to drive better product updates ?

Yes, of course. That's a great question. Look, I think what's interesting that people have not noticed or investors have not noticed about Fubo is that we have removed a significant number of channels from the platform yet add inventory or ad avails, I should say, has grown year-over-year by about 30%. So what we're really focused on is recommending the appropriate programming for the appropriate user at the appropriate time. And so we've been using our AI capabilities to develop highlights for all of our sports moments and really put those in front of the consumers that find that content most impactful.

One thing I will say as it relates to all of this is that I think when we started our -- I think during our testing the waters road show, Laura, you may remember this, but we had a long-term target, and we are basically almost there. So I think our target was roughly around $100 of revenue ARPU back then. And then what we said was that our goal was to achieve 30% gross margins, which would then drive about 15% EBITDA margins. I'd like to say we're almost there. We are now somewhere in that north of or roughly around 20% gross margin. This is a story that is just unfolding right now. We've got -- we need about 10 points to deliver on that 30% gross margin. And it's not much to believe.

You're talking about 300 basis points of programming efficiencies, 200 to 300 basis points of advertising uplift, 100 or 200 basis points in G&A and technology. And then -- as you see, our efficiencies on the sales and marketing side have also been pretty impressive. So my view is that we're almost there, and this transaction will allow us to amplify all of the innovation and success and execution that we put into this company. So I'm very excited about this. Our investors should be very excited about this, and I'm hoping Disney is excited about this as we are.

Your next question comes from the line of SebestianoPetti from JPMorgan.

Congratulations on the deal. Just maybe if you could kind of help us think about now with the added scale that you have from the live TV combination with Hulu, I mean, how are you thinking about rest of world? Is that still core to you over time? And if so, why? And as we're thinking about perhaps rest of world, I mean, are there synergies or maybe cross-bundling opportunities when you look at Disney's international streaming services? And then following up on that, I guess, maybe a quick one. Any benefit from the YouTube TV blackout of Disney from over the weekend?

Yes. Thank you. This is David. Look, I'm very bullish on rest of the world I have been. It's all about a timing question. Right now, as I just said, we are very focused on migrating [indiscernible] onto the Fubo platform. We'll look to partner with Disney internationally. I think this is going to create a tremendous amount of value for both companies, Disney will benefit from all the local programming that we're going to provide markets like France. There are probably 3 or 4 markets we'd like to start with in the next 18 to 24 months. and then quickly move in to other markets because the platform has been built so efficiently. It is obviously core. I don't know why there's always a question around rest of world. I mean, you tell me, I think Reed Hastings used to talk about the fact that he wanted to be like YouTube because 80% of YouTube's revenue came from outside of the United States.

We are no different. We think that we can be a global leader in the live TV streaming space. There are hundreds and hundreds of millions of people that still value live sports, live news, and we're going to focus on developing that strategy in the short term. And I think everyone on both sides is very excited about that. As it relates to YouTube TV, and their, I guess, their issues with Disney, that's not anything we can really talk about. What I can say is that just like last year, we see bumps all the time from people that are looking for programming. So there's not really much to say about that.

The interesting thing is that while we have seen an influx of YouTube TV customers. We're seeing all around improvements, as I just mentioned, including in Latino in terms of subscriber growth. So we haven't really marketed that. We're not attempting to take advantage of that. We'll let that play out as it will, and we're focused on our own business here.

Your next question comes from the line of Clark Lammin from BTIG.

John, maybe in light of the comments around LatAm customers trying to start -- could we dial it back a little bit and maybe talk about early October reads across the entire spectrum. And then if we were to sort of focus a little bit more medium to long term, fill rate programming efficiencies.

David, I think you said that you haven't had fair deals thus far. Maybe update us on revenue and expense synergies, I guess, on a go-forward basis and how that might impact profit trajectory? At what point could we start to see sustainable sort of EBITDA and net earnings profitability?

Clark, on the first part of that question, was that specific to advertising? Or was that more broad?

I -- correct me if I'm wrong, I guess, but the comment, it sounded like it was on a subscriber basis. So is it -- if we were thinking about the subscriber trajectory of the business for 4Q -- are you seeing the same strength with sort of core demos relative to LatAm? Or was there some bifurcation for 1 reason or another?

No. Actually, thanks for the question. Yes, so I'd say the strength we saw through the third quarter, meaning August, September has continued through October. And what I would say is that relative to plan, we're exceeding, I would say, on -- across all packaging. And so not just Latino but also in Canada. -- skinny bundle stand-alone RSN in English.

Yes, I would just add that, look, the reason why we're continuing to formulate these different services and packages is because we want to reduce the cost of entry and at the same time, create attractive user economics. And you're starting to see that unfold this quarter. And as I mentioned, Latino is really just a little seed is that we're seeing this across the board.

So typically, our strongest quarters, as you guys know, is the back half of the year, third and fourth quarter, given the strength of the sports calendar. So We're, again, very excited about this. We're excited about our new relationship with Disney. I have to say the first few days have been extremely exciting. Everybody seems to be on the same page. We all know what we want, and it's going to be Fubo's job to execute and drive shareholder value.

And then maybe on synergies. Look, when we announced the business combination in January, we highlighted content xenon advertising as were the key areas of synergies. David commented before about the ads team, they're already working with Disney in their offices as of this morning. So we are moving with urgency. So on the timing of that advertising synergy, I would say, we'll see that in the short to midterm on the content expense savings, remain very confident there as well. I think the opportunity is meaningful. And you're right. It's -- but it's not just fill rate for advertising. It's other factors as well. We think there's also CPM upside to name a couple. .

And that was our final question. This concludes today's conference call. We thank you for your participation, and you may now disconnect.

Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to Fubo 2Q '25 Earnings Call. [Operator Instructions]

I would now like to turn the call over to Ameet Padte, SVP, FP&A, Corporate Development and Investor Relations. Please go ahead.

Thank you for joining us to discuss Fubo's second quarter 2025 results. With me today is David Gandler, Co-Founder and CEO of Fubo; and John Janedis, CFO of Fubo. Full details of our results and additional management commentary are available in our earnings release and letter to shareholders, which can be found on the Investor Relations section of our website at ir.fubo.tv.

Before we begin, let me quickly review the format of today's call. David will start with some brief remarks on the quarter and our business, and John will cover the financials. Then we will turn the call over to the analysts for Q&A.

I would like to remind everyone that the following discussion may contain forward-looking statements within the meaning of the federal securities laws, including, but not limited to, statements regarding our financial condition, anticipated financial performance, business strategy and plans, including our pending business combination and our products and subscription packages, market, industry and consumer trends and expectations regarding growth and profitability.

These forward-looking statements are subject to certain risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from forward-looking statements are discussed in our SEC filings. Except as otherwise noted, the results we are presenting today are on a continuing operations basis, excluding the historical results of our former gaming segment, which are accounted for as discontinued operations.

During the call, we may also refer to certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are also available in our Q2 2025 earnings shareholder letter, which is available on our website at ir.fubo.tv. Please note as well that during Q&A, the company will not provide any information related to the pending business combination with Hulu+ Live TV, and ongoing regulatory matters beyond what we have already shared.

With that, I will turn the call over to David.

Thank you, Ameet, and good morning, everyone. We appreciate you joining us today to discuss Fubo's second quarter 2025 results. We are pleased to report that the second quarter represented Fubo's first quarter of positive adjusted EBITDA, an important milestone for our business. This achievement is the result of Fubo's focused execution, our ability to deliver on consumer needs and our commitment to value and relevance despite a fragmented and friction-filled streaming marketplace.

Our global streaming business exceeded both revenue and subscriber expectations in the second quarter. In North America, we delivered total revenue of $371 million, down 3% year-over-year and 1,356,000 paid subscribers, down 6.5% year-over-year. In the Rest of World, we closed the quarter with total revenue of $8.7 million, up 4.7% year-over-year and 349,000 paid subscribers, down 12.5% year-over-year. We have filed a preliminary proxy statement seeking shareholder approval of our agreement with the Walt Disney Company to combine Fubo with Hulu+ Live TV.

As previously stated, we continue to be excited about the potential to increase competition and consumer choice in the pay-TV space. The anticipated time line to close this transaction is currently the fourth quarter of calendar year 2025 or the first quarter of calendar year 2026. Closing remains subject to regulatory approvals, Fubo shareholder approval and the satisfaction of other customary closing conditions. Fubo has a demonstrated history of fighting for consumer choice, and we continue to focus on super serving customers with flexible content options at appropriate price points.

In the coming weeks, we will launch Fubo Sports, a skinny content service for sports fans. We look forward to sharing more details soon. Fubo's recent launch of pay-per-view further underscores our commitment to offering flexible content experiences. This new feature allows both subscribers and nonsubscribers to purchase access to premium live events, including boxing, wrestling and soccer on a one-off basis. By opening the door to a broader audience, Pay-Per-View not only expands Fubo's reach, but also creates a strategic pathway to convert casual viewers into monthly subscribers.

Our strategy to introduce the Fubo experience to new audiences is exemplified by our recent content partnership with DAZN in the U.S. Through this collaboration, Fubo Sports Network, our free ad-supported streaming TV channel, has expanded its distribution to DAZN's platform, increasing visibility and reach. In turn, Fubo subscribers now enjoy access to a premium content package that includes the DAZN1 channel, featuring select exclusive sports rights. Notably, Fubo was first to market with this offering, reinforcing our leadership in sports streaming.

At Fubo, we believe premium content must stand alongside product quality and user experience. Our recent launches of personalized features like Catch Up To Live, Game Highlights and Timeline Markers optimize the live sports viewing experience on Fubo and complement our strategy of delivering the moments that matter, such as scoring plays in addition to full game access. These and other engaging features enable our customers to consume content the way they choose and have driven a steady lift in time spent on Fubo.

In closing, the second quarter was a milestone for Fubo marked by our first ever quarter of positive adjusted EBITDA. We continue to focus on delivering a premium sports streaming experience at scale with flexibility and choice for every consumer. We look forward to keeping you updated on our progress.

I will now turn the call over to John Janedis, CFO, to discuss our financial results in greater detail. John?

Thank you, David. Our second quarter financial results reflect continued execution against our strategic priorities and profitability goals. Our performance once again demonstrates the value of our aggregated content model and technology-driven platform.

As disclosed last week in the announcement of our preliminary second quarter 2025 results, the company meaningfully exceeded revenue and subscriber guidance. We delivered North America revenue of $371 million and North America paid subscribers of 1.36 million, and we are pleased with our ability to deliver outperformance in the second quarter versus expectations. Ad revenue in North America totaled $25.5 million, a 2% year-over-year decline, primarily due to the loss of certain ad-insertable content from Warner Bros. Discovery and TelevisaUnivision.

Turning to Rest of World. Revenue was $8.7 million, and our subscriber count was 349,000 with both metrics also exceeding guidance. Net loss narrowed to $8 million or $0.02 per share compared to a loss of $25.8 million or $0.08 per share a year ago. We are also extremely pleased to report second quarter adjusted EBITDA of $20.7 million, an improvement of more than $30 million year-over-year.

As David mentioned, this marks a major milestone as our first ever quarter of positive adjusted EBITDA. This underscores our ongoing focus on driving operating leverage in the model to best position the company for long-term growth. Net cash used in operating activities in the quarter was $34.6 million and free cash flow declined by $2.4 million year-over-year to negative $37.7 million. We ended the quarter with over $285 million in cash, cash equivalents and restricted cash, providing ample financial flexibility.

In closing, I want to emphasize how proud we are of this quarter's performance and the momentum we've sustained. We are energized by what we believe we can achieve through our pending business combination with Hulu + Live TV and look forward to updating you on our progress. With that, I'll turn it over to the operator for Q&A.

[Operator Instructions] Your first question comes from the line of Patrick Sholl with Barrington Research.

Congrats on the EBITDA profitability. Just in terms of the third quarter, can you maybe just talk about some of the puts and takes and how we should formulate subscriber expectations for the quarter, just with the launch of products from competitors and near expected launch of a skinnier product? And with the competitive environment, how should we think about like the marketing efforts both to support -- to support your service relative to the traditional seasonal pattern?

Sure. Pat, maybe I'll start. This is John, and I think maybe David will jump in, too. But let me just start on July. Look, that finished in line in terms of the month with what we expected in terms of subscribers. What I would tell you, though, with the fall sports season starting soon, we would expect to see the typical seasonal uptick alongside of reactivations. In terms of puts and takes, we're mindful that the market is competitive. So the team spends a lot of time looking at SAC conversion and churn. David, I'm not sure you have much to add on that.

Yes. I would say, as you said on July, I think July, we're seeing some, I would say, relatively strong retention as it relates to our core English product. And because we've been so focused on more effective and efficient marketing, we believe that, that will lead to greater retention from this particular cohort going into the football season. And we're going to continue to maintain an effective and efficient approach to marketing in the third quarter because we do feel that there is that tailwind that we typically see in the season.

Your next question comes from the line of Laura Martin with Needham.

So David, I would like to go to the French acquisition. And the industrial logic there were not only were they great tech guys, but we also have really great like a free streaming service, and you're going to try to bring some of that know-how into Fubo to offer free -- can you update us on what's happening with the French assets? And were they -- did it actually come true? Did it actually, actually help you? Because I can't -- you haven't done that much with free services in front of the paywall in the end, right? So can you update us on whether the logic sort of worked there? And if not, why not? And if so, how?

Yes. Thank you, Laura. I think there were a few pieces to that acquisition that we talked about. One was our CTO, our current CTO led the Molotov streaming platform. So we've integrated the technology teams. We've been very focused on unifying our technology stack, which will give us a significant edge as we look to continue to drive value across the Rest of World.

I know we've been very focused on France. But at the same time, as you know, we've been really focused on achieving our profitability targets. That has been the priority. But I will say in France that we're in the midst of discussing French property, sports properties, in particular, I still want to talk about the ones that we're in the process of negotiating, but we believe that there will be some significant sports rights that will likely come online in the coming few weeks. So we are very focused on that. I do believe that there's a significant opportunity there. The technology stack is now capable of handling multiple services that we develop. So I'm very bullish on that.

The other thing is we haven't really provided Molotov with a lot of the ad technology that we've been developing over the last couple of years. And all of that, we believe, will become available to Molotov sometime in either end of fourth quarter or certainly around first quarter of 2026.

Interesting, David. And then the other one is, this is not you, this is me. Disney, in my opinion, has decided to collapse. They just told us that their launch of the new ESPN flagship service, ESPN+ is going to cost $30. And in that, you will get free Disney+ and Hulu. So they're collapsing all of their streaming services into this new ESPN flagship app. That's me.

So my question for you is, theoretical only, if you had an open book with unlimited access to all sports, having nothing to do with Fubo's pass, but just a much broader range of sports and you could overlay your tech aspirations onto the consumer experience. What would you say would be the ideal sort of upgraded consumer experience over what's in the marketplace today to give your offering -- your go-to-market a competitive advantage?

Yes. Look, I think we've been very focused on 2 things. One, we wanted to develop a super aggregated service where we can comfortably sell stand-alone offerings, which we've started to do as well as a more broad sports offering, whether it's the service or the bundle. And I think that that's where we're still headed.

We've seen a nice uptick on the stand-alone offers that we put out there. It's become very clear that consumers are very focused on spending less rather than more, and we see that in the data, at least across Latino and some of our stand-alone sorts bundles. But as it relates to a more broader opportunity, I do think that there continues to be a lot of fragmentation and confusion for consumers in the market.

We will be implementing -- yes, actually, I think we implemented as of today and e-mails will be going out over the next few days, the authentication to ESPN+. But my sense is that a broader package will appeal to many people. Lots of folks don't have interest in looking for programming. They're not sure where it can be found. But the market is evolving quickly, and I think we've been -- not only have we been proactive, but we've also been reactive very quickly to ensure that we remain at the forefront for consumers.

So broadly speaking, I do think that there's a need in the market for broad packages. And as we've always said, the goal is to deliver value to consumers along the demand curve at different price points. So that's what we'll continue to focus on. And again, as it relates to ESPN, I think everyone is looking for the right strategy. And again, this is just another example of a company that's looking to leverage all of its assets and create a better price-to-value equation for consumers in such a competitive environment.

Your next question comes from the line of Alicia Reese with Wedbush.

Congratulations on the positive EBITDA you printed in the quarter. So if I could, I'd like to start by asking about the ad trends in the quarter. Obviously, you had some nice uptick in the ad ARPU year-over-year. So that was really nice to see. I'm wondering if you've seen a slowdown in the ad bookings related perhaps to the tariff pressure on consumer brands. And if by what you surmised the Fubo Sports Network FAST channel is working to offset those trends, if that's the piece that's offsetting it or if there are other factors, if you could highlight those?

Alicia, this is John. There's a few things in there. So if I missed anything, let me know. But I'll start by saying on the [ tower ] front, I think I called out auto softness last quarter, particularly in foreign auto. I would say that's continued. But I wouldn't call the overall decline in dollars significant. I would say maybe it's 1 percentage point plus drag in terms of the total portfolio on growth. I'd say outside of auto, nothing stands out as it relates to, call it, tariff driven.

More broadly on the consumer, what I would tell you is that as I look at some of the stronger categories and some of the larger categories, retail e-com is one of our top 5 categories, and it was up double digits. Tech was up strong double digits. And so I would say nothing too obvious there as it relates to the tariff piece. I'd say more broadly on 3Q, I think too soon to call. July, as you know, is our smallest month of the quarter. I don't know that we have a strong read on back-to-school yet. And with the sports calendar hitting later this month, I'd say we'll have a better sense of the quarter kind of by mid- to late August. One last thing I'd also add -- sorry, go.

I was just wondering if you could highlight the -- at least qualitatively, how the FAST channel is contributing.

Yes, sure. Yes, sure. On the FAST channels, I think what David and I have said in the past is that in terms of the totality of it, the dollars are in the mid- to high singles and the growth is in the strong doubles. And so over time, that number has grown, meaning as a percentage of the total. So now FAST channels are, call it, high single digits, approaching low doubles and so -- and still growing strong double digits. And so a modest positive tailwind, if you will, to the overall ad growth.

Your next question comes from the line of Joseph Spiezio with BTIG.

In absence of guidance this quarter, I was just kind of hoping to get your thinking around the directional trend for EBITDA from here. If we strip out some of the onetime costs that were in the quarter, we still land at a pretty good number. So I was just curious if this is maybe the new normal in terms of EBITDA profitability or if there are some seasonal fluctuations that we should keep in mind looking forward?

Yes, sure. I'll take that. This is John. Look, I would say that, as you know, our business has been and remains seasonal. Historically speaking, 2Q has been our strongest adjusted EBITDA quarter of the year. And then in the back half of the year, while we grow our subs sequentially meaningfully typically, there's also marketing costs associated with that. And so I would say that the normal seasonal trends as it relates to profitability directionally should continue.

Your next question comes from the line of Doug Arthur with Huber Research.

A question either for David or John. Just interested in your take on the sub guide that -- the original sub guide for Q2 and then the revised sub guide a couple of weeks ago, what were the sort of puts and takes on that? And then a follow-up. In terms of these broad relationships that you have terminated over the last several quarters, where are we in terms of the arc of those like Univision? Where do you see that sort of annualizing?

This is John. Maybe I'll start with the sub guide. And so look, to your point, we guide more or less to where we're forecasted in terms of pacing. And so we came in, call it, 100,000 or so ahead relative to the original guide. I would say it was a couple of things there. One was that we continue to see strong interest in the Latino product given the price reduction there post the Univision drop. And then we've also seen better retention trends in terms of churn across the portfolio for the quarter.

Yes. And just to add to that, as John said, I mean, we have had a very difficult year that I think we've performed exceptionally well in with respect to the number of content channels and partners that have dropped since June of last year, as you've rightly stated, Warner Bros. Discovery as well as Univision. I think, again, as I said earlier, it's very clear consumers are price sensitive at this point. They're looking for a tremendous amount of value. And we have seen -- although we ended up not able to get to a deal with Univision, we've still seen a pretty strong conversion uptick on our Latino packages, which John briefly mentioned in his earlier comment.

And so we think that those deals will ultimately work themselves out. But I think right now, we're situated well. We've been able to stabilize the advertising business after losing a significant number of advertising-enabled channels. We've started to put together some stand-alone offers. We're very focused on our skinny sports service that we've called Fubo Sports.

And so again, we're really looking for price value equation. I think over time, particularly over the next year with some of the changes that are going to happen at the traditional media company side. We just -- we're keeping our options open. But again, we think those things will work themselves out in due time.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.