fuboTV (FUBO -1.67%) is a sports-centric streaming alternative to a traditional cable TV subscription. The company is gaining momentum on the back of a tailwind that has consumers choosing to stream more of their content. 

fuboTV announced third-quarter financial results after the market closed on Nov. 9. In that report, management revealed that the company has surpassed one million paying subscribers. Let's dive deeper into the quarters' results. 

A couple sitting on a couch watching TV.

Image source: Getty Images.

fuboTV reaches an impressive milestone

Interestingly, fuboTV did not surpass one million subscribers during its fiscal third quarter, which ended Sep. 30. Rather, the company eclipsed the milestone sometime after the end of the quarter and when it reported results on Nov. 9. This is what fuboTV management had to say about the achievement in its third-quarter shareholder letter:

This is an extraordinary milestone by any measure but particularly remarkable given the momentum of our business over six short years. To put this in perspective, as of the end of the second quarter 2020, we had approximately 286,000 subscribers. The implications of this milestone are significant and far-reaching. One million subscribers means increased relevance, leverage and influence with content partners and leagues and the opportunity to go upstream on tentpole sports properties.

Looking at the end of Q3 results, the company boasted 945,000 paying subs, an impressive 108% increase from the same quarter last year when it had 450,000. Folks are increasingly finding fuboTV's service a better alternative than a traditional cable TV subscription. The conveniences of the streaming alternative were highlighted during the pandemic when folks were hesitant to allow workers into their homes.

One of the annoyances of a traditional cable TV setup is that it requires a professional to come to your home for installation. With a deadly virus in circulation, it's understandable that folks are more cautious about letting people into their homes. 

Despite the impressive growth fuboTV is putting together, it has a long runway to continue. According to estimates by MoffettNathanson, there are 72.6 million people on traditional pay-TV subscriptions. That's a big opportunity for fuboTV to go after.

The market is not impressed with fuboTV's Q3 

Unfortunately for shareholders, fuboTV's stock dropped by more than 10% in the hours after announcing results on Nov. 9. The market could be skeptical about a couple of acquisitions fuboTV announced along with the third-quarter earnings report. Further, although the company did improve its adjusted contribution margin, which it defines as the average revenue per user subtracted by the average cost per user, fuboTV still generated an operating loss of $103 million on total revenue of $157 million.

Shareholders can be comforted by the company's improving economics and rapidly growing subscriber base. It would be troubling if fuboTV was losing money without making much progress, but it more than doubled its subscriber total year over year in Q3.

Long-term investors will need to acknowledge the company may not generate profits for some time until it reaches a larger scale. The good news is fuboTV's one-million-subscriber base leaves a lot of room for growth considering the roughly 73 million pay-TV households.