LiveOne Incorporated (LVO) recently announced its Q1 fiscal 2025 financial results, showcasing significant growth in its Audio Division, which includes Slacker Radio and PodcastOne. The division achieved record-breaking revenues of $31.9 million and adjusted EBITDA of $5.1 million.
Although LiveOne reported a consolidated net loss of $1.7 million, the company foresees a strong year ahead, with projected revenues of $130 million to $140 million and adjusted EBITDA between $20 million to $25 million for the Audio Division. LiveOne highlighted its expanding B2B partnerships, membership base, and the extension of its stock buyback program.
Key takeaways from the report include LiveOne’s Audio Division’s record-breaking revenues, strong membership growth, and the expansion of its publishing business. The company aims to become a thought leader in music across audio and video platforms and plans to increase its inventory and audience through major streaming network partnerships.
Despite some challenges, such as the net loss and higher content acquisition costs, LiveOne remains optimistic about its future. The company is focused on growth through strategic partnerships, membership expansion, and aggressive advertising efforts. With a pipeline of potential deals and a commitment to enhancing shareholder value, LiveOne is positioning itself for a successful fiscal year ahead.
InvestingPro Insights indicate LiveOne’s commitment to growth and expansion, with a market capitalization of $144.88 million and a healthy revenue growth rate. While the company faces challenges, its strong revenue growth and gross profit margins offer a positive outlook for investors. For more in-depth analysis and insights, investors can access InvestingPro’s tips on LiveOne’s dedicated page. This discussion, along with responses to your questions, contains time-sensitive information and reflects management’s view as of the date of this call, August 13, 2024. Unless required by law, the company does not commit to updating or revising this information after the date of the call. Please note that the call is being recorded and will be made available to investors and the media via webcast, with a replay accessible on the company’s website in the Investor Relations section shortly after the call ends. Redistribution, transmission, or rebroadcast of this call or webcast in any form without the company’s express, written consent is strictly prohibited. Now, I will turn the call over to LiveOne’s CEO, Rob Ellin.
Rob Ellin: Thank you, Aaron, and good morning, everyone. I am excited to share the exceptional progress and success that LiveOne has achieved, driven by our creator-first model. In Q1 of fiscal 2025, our Audio Division, comprising Slacker Radio and PodcastOne, reached significant milestones. We recorded $31.9 million in revenues and $5.1 million in adjusted EBITDA, showcasing the strength of our business strategy. Looking ahead, we anticipate a stellar year for the Audio Division in 2025, with projected revenue of $130 million to $140 million and adjusted EBITDA ranging from $20 million to $25 million. Under Brad Konkol’s leadership, Slacker Radio has experienced remarkable growth, securing partnerships like Tesla and signing major deals with significant companies. Our B2B team has expanded, and we are on track to close partnerships with companies ranging from $1 billion to $1 trillion in market cap. PodcastOne, led by Kit Gray, has seen success in adding new podcasts and transitioning shows to television and film. Our publishing business, led by Josh Hallbauer, has grown significantly and earned accolades. We are also launching celebrity brands and expanding our stock buyback program. We are confident in the company’s future and committed to enhancing shareholder value. Thank you for your support and belief in LiveOne. I will now hand it over to Aaron Sullivan to review the Q1 results.
Aaron Sullivan: Thank you, Rob. I will provide a brief overview of our Q1 fiscal 2025 results. Consolidated revenue for the quarter was $33.1 million, with Slacker and PodcastOne both posting record revenue. Membership and advertising revenue breakdowns have shifted slightly compared to the previous year. Our adjusted EBITDA for the quarter was $2.9 million, with a consolidated net loss of $1.7 million or $0.02 per diluted share. Total members, including free members, were approximately 3.9 million as of June 30, 2024. Back to you, Rob.
Rob Ellin: Thank you, Aaron. Our focus now is on expanding our B2B partnerships, with the first $24 million deal already showing revenue growth. We see significant opportunities in various verticals with major companies, and our team is well-positioned to capitalize on these opportunities. We are expanding the team for the first time in almost four years to focus on big $20 million plus partnerships with major partners across various verticals. We are excited about the B2B partnership that has already started and is expected to grow in each quarter going forward. We have signed four additional major partnerships and will provide more details soon. The $24 million partnership mentioned is the same one that started in November and is scaling up. Our focus is on increasing traffic and audience through these partnerships to increase advertising revenue. We are utilizing various platforms like Spotify and TikTok to acquire new listeners and increase market share. I believe that we are poised for significant growth in the coming year, with the addition of new auto companies and a strengthened balance sheet from debt conversion. This allows us to expand globally and take advantage of opportunities with carriers worldwide. I am particularly excited about the potential for our retail partnerships, as we see major retailers like Walmart making moves to compete with Amazon by creating their own content. Our unique content and original programming, such as the event we are hosting tonight, position us well in the market. We have several deals in the pipeline that are progressing well and expect to announce them soon. These partnerships are with significant players in the industry and have the potential to significantly impact our revenues. Our goal is to reach 10 million subscribers and achieve $0.5 billion in revenues in the next few years. Additionally, our focus on global expansion and partnerships with carriers overseas will be a key driver of our growth. We have overcome challenges, such as the impact of COVID, and are now in a strong position to pursue opportunities worldwide. Our long-term goal is to establish long-term partnerships and expand the reach of our content internationally. Live events, while impacted by COVID, remain an important part of our strategy and we are optimistic about their future prospects. I observed that you have put out a press release about an upcoming live event in the Hamptons, which caught my interest. Previously, you had mentioned that you would only do live events if they were profitable and had a sponsor. Is the company now testing the waters with live events again? Have you found a way to make them more profitable?
Rob Ellin responded affirmatively, stating that they have secured great sponsors for the event and are moving forward with their plan. He emphasized the importance of being a thought leader in music and how they are leveraging their resources and relationships to make live events more successful. He also mentioned their partnerships with celebrities and their focus on creating products with talent to drive revenues.
Overall, it seems like the company is confident in their strategy and is excited about the potential for growth in their live events and podcast acquisitions. Their focus is on expanding their audience and distribution to increase revenues in the future. I would be surprised if we don’t raise our guidance again at the end of next quarter. Let’s closely monitor our growth at PodcastOne and ensure we surpass our targets in this challenging market. We are actively exploring acquisition opportunities and are excited about the prospects. With over 40 patents, our intellectual property is valuable and has the potential to generate significant profits with minimal additional costs. We are energized about owning our own IP and leveraging our team’s skills in this area. Yes, I believe the question was whether G&A expenses have increased, and the answer is yes, there are two factors contributing to that.
Unidentified Analyst: Yes, that’s correct.
Aaron Sullivan: One factor is the additional stock-based compensation. Some executive contracts include stock-based compensation across various business units. Additionally, in relation to PodcastOne, there are extra G&A expenses due to being a separate public entity. This includes legal, accounting, and general public company expenses, driving the increase in G&A.
Unidentified Analyst: So there are no extraordinary costs included in the G&A costs?
Aaron Sullivan: I believe that was –
Rob Ellin: Yes, I think it’s difficult to hear you, but to clarify, our finance team has done a great job handling the additional costs of filing audited financials for both LiveOne and PodcastOne. There are legal and accounting costs for both public companies, as well as costs related to the potential merger with Slacker Radio. Stay tuned for updates on that. There are additional legal and accounting costs involved.
Unidentified Analyst: Thank you. Another question – is the revenue from the Audio Division affected by seasonal factors?
Rob Ellin: Could you repeat that? I apologize for the difficulty in hearing.
Aaron Sullivan: I believe the question is whether there are seasonal pressures across the business units.
Unidentified Analyst: Seasonal factors?
Aaron Sullivan: In our merchandise and podcast businesses, our Q3 is the largest quarter. However, our subscription business does not have seasonal fluctuations, which helps balance things out.
Unidentified Analyst: Thank you.
Operator: [Operator Instructions]. There are no further questions. I will now pass it back to Robert Ellin for closing remarks.
Rob Ellin: Thank you all for joining today. We have covered a lot, especially the impressive earnings numbers. We appreciate your support and look forward to announcing some major B2B partnerships soon. Stay tuned for updates on the partnerships we have already signed, with more to come. Thank you all, and we are excited for the next call.
Operator: Ladies and gentlemen, the call has now ended. Thank you for your participation. You may now disconnect.
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