Imagine celebrating, after reaching $1 billion in annual revenues, that your company has finally produced a gross profit. That's exactly what fuboTV (FUBO +0.00%) did in its fourth-quarter letter to shareholders on Monday.

The sports-centric live TV streaming service has had no problem gaining subscribers, which is not surprising given that the company is essentially giving away its service at cost. Its nearly 1.5 million subscribers drove just over $1 billion of revenue in 2022, with 90% coming from subscription fees and 10% coming from advertising. If only it didn't cost fuboTV about the same amount to actually deliver its service.

Printing stock and incinerating cash

In the fourth quarter, FuboTV managed to push total revenue barely above the direct costs to deliver its streaming platform to subscribers. Subscriber-related expenses plus broadcasting and transmission costs added up to $316.7 million -- a hair below the $319.3 million in revenue the company generated.

Unfortunately, there are other costs associated with running fuboTV: It generated a net loss from continuing operations of $95.9 million in Q4. For the year, its net loss totaled $425 million, and free cash flow was a loss of around $320 million.

The cash on fuboTV's balance sheet only dipped slightly to $337 million as of the end of 2022 because the company funded its cash incineration operation by issuing $292 million worth of new stock last year.

The result of this stock issuance, combined with the impact of a crashing stock price, was an explosion in the outstanding share count. fuboTV ended the fourth quarter with just over 200 million basic and diluted shares outstanding, up from 148 million a year prior.

The game that fuboTV is playing can only go on for so long. After briefly trading above $60 per share in 2021, the stock has crashed to around $2 per share. For the company to raise enough cash to fund another year of cash burn, it would need to issue around 150 million new shares. That's ... probably not possible. Who, exactly, would buy them?

When fuboTV reaffirmed its long-term plan to reach positive free cash flow by 2025 in its letter to shareholders, it was not hard to laugh. Increased scale has barely changed the story at fuboTV. A big push into advertising has helped, but its gross profit is still right around zero.

Given enough time, is it possible that fuboTV could eventually reach positive free cash flow? Sure. But fuboTV doesn't have much time at all. At its current cash burn rate, the company will be out of cash in a year, and its ability to raise more funds through stock sales seems limited at best. Where the money will come from for this company to survive until 2025 is a mystery.