October 18, 2022
VIA EDGAR SUBMISSION
Attn: Rob Shapiro and Theresa Brillant
Division of Corporation Finance
Office of Trade & Services
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
| Re: | fuboTV Inc. |
| Form 10-K for the Fiscal Year Ended December 31, 2021 | |
| Filed March 1, 2022 | |
| File No. 001-39590 |
Dear Mr. Shapiro and Ms. Brillant:
fuboTV Inc. (the “Company”) is pleased to respond to the comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) contained in your letter dated September 21, 2022. For ease of reference, the comments are repeated in italics below and followed by the Company’s response.
Form 10-K for Year Ended December 31, 2021
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Key Metrics and Non-GAAP Measures, page 57
| 1. | We note your response to prior comment 5. Average Revenue Per User (ARPU) implies that the measure is based upon revenue recognized in accordance with GAAP. However, the numerator, Non-GAAP Platform Bookings, includes revenue recognized on both a cash and accrual basis. Please refer to Question 100.04 of the Compliance and Disclosure Interpretations on Non-GAAP Financial Measures and revise both measures accordingly. |
The Company acknowledges the Staff’s comment regarding the Company’s current method of calculating Average Revenue Per User (ARPU). In recognition of the Staff’s comment, the Company proposes to revise the presentation of ARPU in its future periodic reports and other public disclosures so that the numerator consists of Subscription revenue and Advertising revenue, each of which is a component of GAAP revenue presented on the face of the Company’s income statement. In addition, the Company plans to remove any statement indicating that ARPU is a non-GAAP financial measure.
The Company believes that Subscription revenue and Advertising revenue are appropriate to include in its calculation of ARPU because these two categories reflect revenue sources that are impacted, either directly or indirectly, by subscriber enrollment and engagement. As described in the Company’s Quarterly Report on Form 10-Q, filed with the Commission on August 8, 2022 (the “Q3 2022 10-Q”), Subscription revenue consists primarily of subscription plans sold through the Company’s website and third-party app stores, and Advertising revenue consists primarily of fees charged to advertisers who want to display ads within the streamed content.
Consistent with the Company’s current reporting approach, the Company plans to provide a geographic breakdown of ARPU for U.S. and Canada (“North America”) and the remaining territories in which the Company operates (“ROW”). The Company will also include the geographic breakdown of revenue between North America and ROW in the notes to the financial statements, consistent with the presentation of U.S. and Canada and Rest of world subscription and advertising revenues included in Note 5 to the consolidated financial statements included in the Q3 2022 10-Q. In addition, the Company is considering providing a further breakdown of ARPU for each geographic region into Subscription ARPU, calculated solely using Subscription revenue, and Advertising ARPU, calculated solely using Advertising revenue.
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For the Staff’s reference, below is an illustrative example of planned disclosure with respect to ARPU:
Average Revenue Per User
We believe ARPU provides useful information for investors to gauge the revenue generated per subscriber on a monthly basis. ARPU, with respect to a given period, is defined as total Subscription revenue and Advertising revenue collected in such period, divided by the average daily paid subscribers in such period, divided by the number of months in such period. Advertising revenue, like Subscription revenue, is primarily driven by the number of subscribers to our platform and per-subscriber viewership such as the type of, and duration of, content watched on platform. We believe ARPU is an important metric for both management and investors to evaluate the Company’s core operating performance and measure our subscriber monetization, as well as evaluate unit economics, payback on subscriber acquisition cost and lifetime value per subscriber. In addition, we believe that presenting a geographic breakdown for North America ARPU and ROW ARPU allows for a more meaningful assessment of the business because of the significant differences in both Subscription revenue and Advertising revenue generated on a per-subscriber basis in North America when compared to ROW due to our current subscription pricing models and advertising monetization in the two geographic regions.
| North America (NA) ARPU | Rest of World (ROW) ARPU | |
GAAP Subscription Revenue | GAAP Subscription Revenue | |
GAAP Advertising Revenue | GAAP Advertising Revenue | |
Subtract | Subtract | |
ROW Subscription Revenue | NA Subscription Revenue | |
ROW Advertising Revenue | NA Advertising Revenue | |
Total | Total | |
Divide | Divide | |
Average Subscribers (NA) | Average Subscribers (ROW) | |
| Months in Period | Months in Period | |
| NA ARPU | ROW ARPU |
| 2. | We note your explanation related to the presentation of non-GAAP ACPU in your response to comment 5. It appears that Non-GAAP Variable COGS and ACPU substitute individually tailored recognition and measurement methods for those of GAAP. Please refer to Question 100.04 of the Compliance and Disclosure Interpretations on Non-GAAP Financial Measures and revise accordingly. |
In recognition of the Staff’s comment, the Company will remove the presentation of ACPU in its future periodic reports and other public disclosures.
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| 3. | In connection with the previous two comments, please remove the presentation of Non-GAAP Adjusted Contribution Margin as it substitutes individually tailored recognition and measurement methods for those of GAAP. |
In recognition of the Staff’s comment, the Company will remove the presentation of Non-GAAP Adjusted Contribution Margin in its future periodic reports and other public disclosures.
Please do not hesitate to telephone the undersigned at (212) 672-0055 if you have any questions regarding this response letter.
| Very truly yours, | ||
| /s/ John Janedis | ||
| Name: | John Janedis | |
| Title: | Chief Financial Officer | |
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