Fubo (FUBO) Q3 2025: Hulu Live Deal Adds 4M Subs, Unlocks Scale and Margin Leverage
Fubo’s Q3 marks a turning point as its Hulu Plus Live TV merger creates a 6M-subscriber platform, cementing its place as the sixth largest pay TV provider in North America. The quarter delivered improved profitability, churn reduction, and subscriber growth, all while slashing marketing spend. With the Disney partnership now live, Fubo’s path to margin expansion, ad tech uplift, and global scale is in sharper focus than ever.
Summary
- Scale Inflection: Hulu Plus Live TV merger instantly propels Fubo to a top-tier pay TV position.
- Margin Expansion: Cost discipline and improved subscriber quality drive second straight quarter of positive adjusted EBITDA.
- Strategic Leverage: Disney ad sales, programming synergies, and international tie-ups set the stage for accelerated growth.
Performance Analysis
Fubo’s standalone Q3 results showed operating momentum ahead of its transformative Hulu Plus Live TV merger. North America revenue landed at $368.6 million, down slightly year-over-year, but subscriber count reached a record Q3 high of 1.63 million, up 1.1%. International operations added $8.6 million in revenue and 342,000 paid subscribers, showing continued traction outside the core U.S. market.
Advertising revenue declined 7% YoY, mainly due to the loss of Univision and certain one-off prior year benefits. However, advertising demand signals remain constructive, with upfront commitments for the 2025-2026 cycle up over 36% and nearly a third of advertisers new to Fubo. Dynamic ad formats, such as pause ads and branded activations, surged over 150%, underscoring the platform’s engagement strength. Cost discipline was clear, as operating expenses nearly matched revenue, and Fubo posted a second consecutive quarter of positive adjusted EBITDA, highlighting scalable operating leverage.
- Subscriber Quality Gains: Churn dropped nearly 50% YoY, while trial-to-paid conversions improved, reflecting higher engagement and stickiness.
- Marketing Efficiency: Sales and marketing spend as a percentage of revenue fell 21% YoY, despite a competitive sports calendar, aided by AI-driven optimizations and diversified offers.
- Cash Flow Dynamics: Free cash flow improved sequentially, though remained negative year-over-year, with working capital timing as the primary drag.
Fubo’s topline stability and margin progress provide a solid foundation as it enters a new era of scale and synergy with Disney and Hulu Live TV.
Executive Commentary
"The combination of Fubo and Hulu plus 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."
David Gandler, Co-founder and CEO
"This marks our second consecutive quarter of positive adjusted EBITDA, underscoring the strength of our cost discipline and the scalability of our model. With the Hulu plus 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."
John Giannidis, CFO
Strategic Positioning
1. Super-Aggregation and Product Optionality
Fubo’s merger strategy is built on super-aggregation, offering both sports-first and general entertainment bundles under one roof. By maintaining distinct Fubo and Hulu Live offerings, the combined company targets a wider demand curve, letting families flexibly right-size spend and access top content at different price points. The Fubo Channel Store, a la carte add-on hub, and the sports-focused Skinny Bundle (low-cost, high-value tier) are central to this approach, driving record trial conversions and expanding the addressable market.
2. Ad Tech and Monetization Synergies
Fubo’s integration into Disney’s ad sales ecosystem is a game changer. Disney will handle ad sales for the combined subscriber base, unlocking higher fill rates, CPM (cost per thousand impressions) uplift, and access to premium sports advertisers. Dynamic formats like pause ads and branded activations are already scaling, and the move to Disney’s ad server should further boost monetization, especially as Fubo’s inventory is integrated with ESPN and broader Disney properties.
3. Programming Efficiencies and Margin Expansion
With scale comes bargaining power. Fubo expects to extract better programming terms, having previously struggled with size-based MFNs (most favored nation clauses) that limited content cost leverage. As the second largest virtual MVPD (multichannel video programming distributor), Fubo now targets 300 basis points of programming cost savings, 200-300 basis points of ad uplift, and additional G&A and tech efficiencies. The company is on a path toward 30% gross margins and mid-teens EBITDA margins, with only 10 percentage points of improvement to reach its long-term model.
4. International Growth Platform
International remains a core pillar, with Molotov (Fubo’s European streaming asset) set to migrate onto the unified Fubo platform. Disney’s 100+ million international streaming subscribers present cross-bundling and local programming opportunities, with initial market launches planned over the next 18 to 24 months. Fubo’s ambition is to be the world’s largest live TV provider, leveraging streaming to deliver smarter and more profitable TV globally.
5. AI-Driven Personalization and Engagement
Fubo is deploying AI to personalize recommendations, highlight sports moments, and optimize channel and creative testing. This has enabled inventory growth despite a smaller channel lineup, improved trial conversions, and supported both engagement and ad monetization. The company’s tech stack is positioned as a competitive differentiator in driving user value and retention.
Key Considerations
Fubo’s Q3 and strategic merger with Hulu Plus Live TV mark a new phase defined by scale, synergy, and operational discipline. The company is now positioned to leverage its expanded subscriber base, Disney partnership, and product innovation for sustainable growth and profitability.
Key Considerations:
- Subscriber Mix Evolution: Skinny Bundle is expanding reach with minimal cannibalization and better retention, while core offers remain robust.
- Ad Monetization Upside: Disney’s ad platform integration is expected to drive CPM and fill rate improvements, with dynamic formats gaining traction.
- Programming Leverage: Scale unlocks improved content deals, supporting gross margin expansion toward long-term targets.
- International Leverage: Unified platform and Disney’s global reach open new markets, with cross-bundling potential in Europe and beyond.
- Cost Discipline: AI-driven marketing and retention strategies are delivering lower subscriber acquisition costs and improved operating leverage.
Risks
Integration risk remains high as Fubo and Hulu Live TV combine operations, ad tech, and content strategies. Ad revenue visibility is still limited due to recent content drops and the transition to Disney’s ad sales. Competitive intensity from other vMVPDs and legacy pay TV, as well as the risk of programming cost inflation, could pressure margins if scale synergies are slower to materialize. International expansion is promising but unproven and subject to local regulatory and market adoption hurdles.
Forward Outlook
For Q4, Fubo expects:
- Continued subscriber growth across all packaging, with Latino and Skinny Bundle segments outperforming.
- Ad sales transition to Disney’s platform, with initial synergy benefits in early 2026.
For full-year 2025, management maintained its focus on:
- Margin expansion, cost discipline, and scalable subscriber growth.
Management highlighted several factors that will drive results:
- Programming cost savings and ad tech uplift as primary synergy levers.
- International platform migration and cross-bundling with Disney as medium-term growth catalysts.
Takeaways
Fubo’s merger with Hulu Plus Live TV is a scale and margin inflection point, transforming its business model and strategic leverage in the pay TV ecosystem. The company’s disciplined execution, subscriber quality improvements, and partnership with Disney position it for sustainable growth and profitability.
- Scale and Synergy: Fubo now operates at a scale that unlocks content, ad, and tech synergies previously out of reach, with margin expansion in focus.
- Subscriber Quality and Retention: Churn reduction and improved trial conversions signal underlying health, while new offers expand the addressable market.
- Watch for Integration Progress: Investors should monitor the pace of Disney ad sales integration, programming deal renegotiations, and international expansion for proof points in 2026.
Conclusion
Fubo’s Q3 results and Hulu Live TV merger mark a new era of scale, operating leverage, and strategic optionality. Execution on ad tech, content cost, and international expansion will determine whether Fubo realizes its ambition to become the world’s leading live TV streaming platform.
Industry Read-Through
Fubo’s scale-up via the Hulu Plus Live TV merger signals a new phase of consolidation and vertical integration in streaming pay TV. The move to Disney-managed ad sales highlights the growing importance of ad tech scale and premium inventory aggregation. As Fubo leverages its expanded base for programming and margin leverage, other vMVPDs and legacy pay TV providers will face increased pressure to find similar scale or risk margin compression. The success of Fubo’s super-aggregation and international strategy will be a key read-through for global streamers seeking to balance content breadth, margin, and subscriber growth in a maturing market.