FuboTV's adjusted EBITDA could top $300 million in fiscal 2028.
The company might crank out free cash flow even sooner.
Shares of FuboTV (NYSE: FUBO) soared on Monday after the streaming service operator issued an upbeat earnings forecast.
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FuboTV projects pro forma earnings before interest, taxes, depreciation, and amortization (EBITDA) of $80 million to $100 million in fiscal 2026, up from $59 million in 2025. Looking further ahead, management expects that figure to rise to at least $300 million in fiscal 2028.
Better still, the sports streaming company expects to generate positive free cash flow beginning in fiscal 2027, and perhaps even sooner.
In turn, FuboTV does not intend to raise capital through fiscal 2028. "Our focus is on creating value, not diluting it," CEO David Gandler said in a letter to shareholders.
Gandler noted that much of this growth will come from contracted fees under its commercial agreement with Hulu, which are set to rise in the coming years.
FuboTV also recently boosted its content slate by gaining coverage of 17 professional baseball teams, including the popular regional sports network SNY in New York.
Additionally, FuboTV believes it will be able to cut costs as other, less desirable content agreements come up for renewal.
Gandler, however, warned that the company's focus on profitability could crimp subscriber growth in the short term.
The sixth-largest pay TV company in the U.S. appears to be nearing an inflection point. Limiting shareholder dilution, producing positive free cash flow, and progressing toward sustained profitability could all help to further FuboTV's share price appreciation.
Gandler seemingly agrees.
"We believe that our share price has not yet reflected the operational progress we have made nor the intrinsic value of the combined business," Gandler said. "I hope today's updates help to close that gap."
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.