Q4 2021 Livexlive Media Inc Earnings Call

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Good afternoon, and welcome to the lifetime live media fourth quarter 2021 business update call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the Starkey followed by zero.

After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then 1 on your Touchtone phone to withdraw your question. Please press Star then 2.

Please note this event is being recorded.

I would now like to turn the conference over to Michael Core Terry Executive Vice President and Chief Financial Officer. Please go ahead.

Thank you good afternoon, and welcome to live by live media business update and financial results conference call for the company's fourth quarter.

And the fiscal year ended March 31, 'twenty 1.

Presenting today on the call are Rod Ellen CEO, and chairman and myself, Mike <unk> Executive Vice President and Chief Financial Officer.

I'd like to remind you that some of the statements made on today's call are forward looking and are based on current expectations forecasts and assumptions that involve various risks and uncertainties. These.

These statements include but are not limited to statements regarding the future performance of the company, including expected future results and expected future growth in the business.

Actual results may differ materially from those discussed on this call for a variety of reasons.

Please refer to the company's filings with the SEC for information about factors, which could cause the companys actual results to differ materially from these forward looking statements.

Including those described in its annual report on form 10-K for the year ended March 31, 2020 quarterly report on form 10-Q for the quarter ended December 31, 2020, and subsequent SEC filings.

You will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed today in the company's earnings release, which is posted on its investor Relations website at IR Dot live by line Dot Com and the company encourages you to periodically viz.

Its IR website for important content.

The following discussion including responses to your questions contain time sensitive information and reflects management's views as of the date of this call June 28, 2021, and except as required by law. The company does not undertake any obligation to update or revise this information after the date of this call.

I would like to highlight to investors that the call is being recorded the company is making it available to investors and the media via webcast and a replay will be available on its website in the Investor Relations section. Shortly following the conclusion of the call. Additionally.

Additionally, it is the property of the company and any redistribution retransmission or rebroadcast of the call or the webcast in any form without the express written consent is strictly prohibited now.

Now, let me turn the call over to live by life CEO, Rob <unk>.

Mike. Thank you so much good afternoon, and thank you for joining us today for our fiscal 2000.

Fourth quarter and year end business update.

Almost all of us dealing with COVID-19 over roughly the past year and a half has been very challenging experience the locked and met with learning to schools limited social interactions.

Looking from home that of course, low like music low life events or festivals.

<unk> stated in.

And opportunistic over the past year, we made 2 major acquisitions and successfully completed the integration of all of our business units that make up our flywheel.

An extension of <unk> expanded our content offering.

Today I'm proud to announce we offer the ultimate audio and video music and media subscription platform that includes approximately 30 million songs 500 curated radio stations 250 of the most important podcast and Bob cash on.

Newsroom original audio and video content all 4 on the 999 a month.

2500 of the biggest live events around the world coming back from the very near future.

During the pandemic between March of 2020 in March 2021, <unk> slide was far and away the leader in live streaming live music performances as we live stream a staggering 146 live music events and over 7.

150 artists across the <unk> platform generating 149 million live views.

5 billion engagements.

Through streaming we bought many of the worlds top artists the Rolling Stones, Billy I wish John Legend, Lady Gaga Taylor Swift Bts, all genres of music from their homes private studios.

Fans around the world via their mobile devices.

Living rooms, and wireless devices, but lebeck slide the business environment created by Covid actually accelerated our business development maturation and most important the brand recognition of what we built.

Thankfully it appears the U S. Just finally opening up and that means you'll return of live music and live events. This is very good news for led by life.

<unk> has grown and evolved into a leading element first platform focusing on connecting artists with Super fans, we provide artists with numerous monetization opportunities, including pay per view merchandise pipping.

Nf piece.

We are building a long term sustainable valuable franchisee audio music podcasts broadcasting OTT pay per view live streaming and video on demand our distribution.

<unk> continues to grow reaching over 220 countries.

Foundation of LIBOR LIBOR is built around a world class management team and board to deliver the most.

Talent centric platform focused on Super fans.

Largely through acquisitions, we have created a flywheel of wholly owned businesses that work together on a complementary and synergistic fashion.

<unk> radio Slacker App live streaming live by live podcast, a podcast 1 merchandise customer personalization solutions and a growing roster of original content franchise that are distributed through live our lives 24 hour window on OTT channel that reaches 200.

94 million people a month as we describe our audience can listen watch 10 engage transact.

I am pleased to report that the fourth quarter ended March 31, 2 'twenty, 1 revenue increased a 113% to $21 million, our 12th consecutive record quarter.

Along with 108% increase in contribution margin.

Given the momentum we see in nearly all of our business verticals. We are excited to once again raise our guidance from the current fiscal year.

$110 million to $120 million.

Adjusted operating income of $6 million to $12 million.

We also have a meaningful improvement to our balance sheet as compared to fiscal 2020 as shareholder equity increased 15, 3% 3 million on working capital increased by $14.4 million as of this past Friday June 'twenty on.

Largest cash position in the history of the company and over $25 million.

Over the past 18 months, we have derisked the business diversify our revenue streams with the launch of pay per view. The addition of a substantial advertising and sponsorship revenue component as a result of the acquisition a podcast 1 and the growth of our internal sponsorship.

And finally, the acquisition of custom personal solutions gives us the ability to own merchandise in conjunction with the talent on our platform.

Earlier I mentioned the return on what he is very good news for <unk> is there a significant.

Significant pent up demand for live music, we're entering the worrying twenty's with the imminent return of live music events, we expect an increase in revenues from nearly every aspect of our flywheel.

Live ticket sales livestream pay per views advertising sponsorship and FTE specialty merchandize.

And I'm happy to report our Trophy live event spring Awakening is back.

Which is Midwest largest electronic music festivals scheduled to return on Chicago.

Second and third.

So we will feature 70 of the biggest artist and gas music, including dip low and many others have had to sufficiently sold its first year of general admission in VIP are only limited quantities of tier 2 tickets are still available.

Next up the expansion in the spring awakening, bringing announcement for.

For 2022 live event you can't Kuhn.

Through our distribution partners and <unk> around the globe, we have been able to grow our paid subscribers to over $1.1 million paid subscribers of.

Significant importance as exclusive partnership with Tesla.

That arrangement live my life description is pre installed in default with instruments and every Tesla are sold in America.

And <unk> is paid directly by Tesla for those subscriptions.

Bye Bye layback is pre installed in 85, although automobiles and growing across major carriers, including Verizon Sprint and T mobile.

I previously mentioned numerous times, we see significant opportunity to expand <unk> slacker subscription business into Europe and compete for the opportunity to become the default radio for a number of European automakers are licensed out with music labels is continuing expanding quickly we.

Fully expect to be able to expand on licenses.

In this quarter of 2022.

The acquisition of podcast 1 in July 2000, and has been a home run for live my life.

Cash flow on compliments on music and video content slack by adding video podcast, which we also call broadcast and has further improved our content offering and diversified revenue model by adding significant advertising and sponsorship component alongside of our additional subscriptions. We also added podcast wounds world.

Klas team, including norm patents, who created.

Would 1 and their advertising sales team, which tripled the overall headcount of our sales team.

Podcast, 1 head over 2.27 billion podcast downloads in fiscal 2021 and its franchise with exclusive shows is now shown more than growing 1.235 and produces more than 300 podcast episodes per week.

With the launch of like strength pay per view platform live my life is now generate over $16 million in the first year on pay per view packages sponsorship merchandize sales recently produced.

I'll go live events, social gloves, the largest social live event pay per view event in history Battle net platform, which delivered over 3.5 billion impressions and I'm proud to say our approach tech stack distributed flawlessly.

Our production and management of social gloves prove that <unk> can provide a full 360 degree suite of services.

<unk> production, including security of venue sponsored pay per view sales like stream platform event production curation heavily in merchandize and incorporating an NFC and delivering monetarily, we delivered over $2 million from hard rock from the stadium for pay per view, we've now crossed over $3 million and F team on.

On page 4 upfront in cash for delivering the quality of content and cash.

<unk> that we have on our platform the.

The outstanding quality of such a growth product raises the bar and today I believe lie by line as the preeminent producer of livestream events in fact.

Based on the conversation we have with owners of events. We believe there is a meaningful business opportunities for <unk> to produce and manage like extreme events across all pop culture sports music esports.

With the acquisition of ecommerce merchandise company Cps in December we are positioned to partner with talent.

Social media stars E Sports stores split sorry, just 1.

In conjunction with that talent and drive brand new revenue streams for them.

We think this is the most opportunity to leverage our audience platform an artist relationship.

Specialized consumer product revenues as a media component of our flywheel.

Lastly, I would like to speak about our significant investment and commitment to original programming now more than any time in the past 20 years content has once again become K and King Kong, there's enormous amounts of media distribution outlets, which need our content on our past year, we launched shows which can lead to have a chat.

Become valuable franchises going forward self make new Unlike county competition Snubby, Jeff Ross The Lockdown First award show beat every number of award shows. This year. These are additions to existing franchise in music lives the largest festival ever created and music lives on artist DNA libraries.

<unk> presents on music version of Sportscenter and called lives 1 day.

Series of attracted 23, new Blue chip sponsors, including Chipotle, Corona, Pepsi Porsche Hyundai Kia Tictoc White claw.

With that I'd like to hand, this over to Mike who has done an exceptional job is joining us as CFO and look forward to additional updates from them. Thanks, Mike.

Thanks, Rob let me spend a few minutes to provide a brief overview of the preliminary fiscal 'twenty, 1 and Q4 results we.

We ended our fiscal 'twenty, 1 with strong results with revenue growing 69% year over year to a record $65.2 million.

Our adjusted operating loss narrowed to $5.8 million with record Kpis, including a 27% net increase in paid subscribers year over year.

Moreover, we had another record quarter in our fourth quarter, including revenue of $21 million adjusted operating loss of $2.5 million and contribution margin of $4.6 million.

On a full year fiscal 'twenty 1 basis.

Consolidated revenue was $65.2 million up 69% year over year from $38.7 million in fiscal 'twenty.

Due in large part to our successful acquisitions of podcast, 1 and Cps.

With increases in pay per view and sponsorship revenue.

We ended fiscal 'twenty, 1 with $1.73000 paid subscribers a net increase of 225000 as compared to 800.

48000 subscribers at March 31, 2020.

Please note that included in the total number as of March 31, 'twenty, 1 are certain subscribers, which are subject.

Through a contractual dispute, which we're currently not recognizing revenue.

The acquisitions of podcast, 1 ens EPS were accretive to our operating results enhanced our working capital position and provided diversification to our revenue base.

For fiscal 'twenty, 1 our revenue was comprised of 51% subscription and 49% advertising sponsorship merchandising and pay per view ticketing.

Compared to 93% subscription and only 7% advertising in fiscal 'twenty.

Fiscal 'twenty, 1 contribution margin increased 177% year over year to $16.2 million as compared to $5.9 million in fiscal 'twenty.

The year over year improvement was driven by the additions of podcasts 1 on Cps during the year, along with margin improvement from our live events and related sponsorship revenue.

During fiscal 'twenty, 1 we live streamed 146 events at an average cost of 56000 per event and improvement of over 60% year over year.

In addition, our sponsorship revenue increased by $3.6 million during the year.

Year over year improvement in our live events was largely driven by cost efficiencies realized from the scale of our business.

Fiscal 'twenty, 1 operating loss was $5.8 million compared to $12.6 million in fiscal 'twenty. This improvement stems from improved contribution margin from our live events.

Increased sponsorships noted previously.

And continued operating efficiencies in our subscription business.

Now turning to the quarter Q4, 'twenty, 1 was a record $21 million up 113% year over year from $9.9 billion in Q4 'twenty due to the act.

<unk> of podcast, 1 which is driving our increase in advertising and Cps, which represents our merchandising revenue.

These accretive acquisitions, along with the increase in pay per view and sponsorship revenue were partially offset by the reduction in subscription revenue due to the subscribers, which are subject to the contractual dispute Q.

Q4, 'twenty 1 our revenue was comprised of 41% subscription and 59% advertising sponsorship merchandising and pay per view ticketing compared to 94% subscription and 6% advertising in Q4 'twenty.

Contribution margin was $4.6 million, an increase of 108% compared to Q4, 'twenty, which is primarily attributable to the addition of Cps.

Our contribution margin percentage for the quarter was negatively impacted by a strategic investment in our marketing campaign to grow our listener base across the entire flywheel of approximately $1 million and our continued investment in our live event franchises, including music lives lives zone.

<unk> just to name a few of approximately 700000.

We believe these investments will yield attractive returns over the short and long run.

Adjusted operating loss in Q4 was $2.5 million, primarily due to the strategic investments outlined above.

Turning to the balance sheet, we ended fiscal 'twenty, 1 with cash of $18.8 million, including restricted cash of 135000.

Up from $12.4 million, we had a year ago.

Year over year increases was largely driven by net cash proceeds from financing activities of $16.6 million offset by net cash outflows from operations of $9.5 million and investing activities of 800000 during the year.

I now would like to update you on a few additional items that occurred subsequent to our year end.

In June we entered into a revolving credit facility with east West Bank with a borrowing capacity of up to $7 million and an interest rate of prime plus <unk>, 5% in.

In connection with this credit facility the holders of the company's senior secured convertible notes agreed to extend the maturity date of their notes to June <unk> 2023, and subordinate their security interest in all of the Companys assets.

We also received notification from our lenders under the small business administration's payroll protection program that the entire balance of approximately $2.5 million of our and subsidiaries PPP loans were forgiven.

Turning to financial guidance.

With the return of live events, we expect an increase in revenue and nearly every aspect of our flywheel of associated businesses.

As a result, we are increasing our revenue guidance for the fiscal year ending March 31.2022.

To be between $110 million to $120 million with adjusted operating income of between $6 million to $12 million from our core operations.

As we progress through the year, we'll be providing further updates as warranted.

Lastly, given the 2 significant acquisitions that were consummated during fiscal 'twenty..1 we are continuing to work with our auditors to finalize our financial reporting on form 10-K, and well utilizing the extra time allowed under rule <unk> 25 to formally file our form 10-K with the SEC.

With that let me hand, it back to Rob.

Thanks, Mike Great as always some on this has been a spectacular year for this company during a very trying time I couldnt be more proud of my team.

We see the flywheel really exploding right now on every area of our business right and when you combine all of them together into 1 subscription property now all of our audio 30 million songs all of our video 1.

140 live events 1800 artist approximately this year all of our original programming is all on what's right as you go out with that and in average our op, who has increased now to $3.50.

I see telltale signs of prices could be increasing again.

We had explosive growth in our pay per view business. We said, we did over $16 million, we only get 2 million. The last time, we reported so you can imagine.

Last couple of months, how much revenue has been driven.

Although we see telltale signs here that we've now been able to integrate all the acquisitions all the internal growth, bringing the management teams together with World class Mat seemed together to really position. This company to hitting that goal of $10 million paid subscribers within 5 years.

At $1 billion plus in revenues, so I want to thank Gabe ones that came on to the patients this year.

And sticking with this company and I couldn't be prouder of our team.

We will now begin the question and answer session to ask a question you May Press Star then 1 on your Touchtone balance.

If you are using a speakerphone please pick up your handset before pressing the keys.

To withdraw your question. Please press Star then 2.

Our first question today comes from Laura Martin with Needham.

Hey, congratulations on the great numbers on fantastic.

Fantastic reallocation of revenue diversification, that's fantastic news.

Maybe a couple day.

1 is I would say that fiscal 'twenty, 1 Rob really demonstrates what the unit economics, Oxford digital live by live I'm interested in how you think the unit economics.

Economics for live events.

Our compared to digital so.

O W. E are telling us when they go back to live events the margins fall because a lot of events from our expenses. So I understand that live events at revenue what Im focused on is what's about to happen to profitability and return on capital as long as events come back to the whole entity could you comment on that.

Sure. So for US. This is the perfect opening trade because we're both our live events business as well as where a distributor and partner like the live events.

And as you look at social gloves that we just launched and we just launched the female version of it that we just announced coming up in September like that event, we were hired as a producer we have hired as the sponsor we have hired the distributed right. We had no risk in it but we're getting paid for each component of it so it's really exciting that.

The talent of this team cash come together and proven that they can deliver the live events right from the stadium take it all the way to your home and make sure that throughout the process. We can drive new revenue as well I would know risk. So we can have some risk in our lives side of the business, where we're actually putting on those Laura but I think the margins are going to get healthier.

Healthier for us because we have that mix of both just like ESPN does in sports.

Right and just to give you a little color.

This event at over $10 million on revenues.

So you can think of that 10 million on revenues and we had no risk in it where we're getting paid to produce it to distribute it to bring in sponsors while margins are going to be very very healthy this quarter coming up.

Okay, Alright, so okay, great and then advertising.

Theres on outlets aren't really robust advertising outlook for the next 18 months of theaters reopening in travel comes back and the rest of the world sales call. It My question is that.

A huge part of your total revenue can you talk about where you guys are in the AD cycles on allowed by law.

And what are you getting the benefit of some of the the reopening trade and advertising strength are you locked in the sponsorship so really it isn't as reactive to the upside.

Selling 32nd spots is proving out to be now as we come out of the recession.

We're in that fortunate position when you have a AAA content as you know the advertisers are coming in with way bigger dollars, but we have everything from branded content. The sponsorship dollars. Some of our podcasts will always be tied to spots and dots right on part of it but because you have AAA content right you're going to have very robust.

Numbers that come out of the sponsorship and as you saw we just started announced our first 7 figure deals with Hyundai and hard rock. So our sponsorship dollars. This quarter again, just from what we've publicly announced now already will blow away any quarter in the history of the company.

As you see these low when you have a sponsorship team coming out of it.

Okay.

I was just going to ask about programmatic vs sponsorship. So when I think about 32nd AD unit.

Compared to sponsorship so it's just sort of pre salt big deals, what's the mix of those Rob.

Yes, we don't we don't break that down today, Laura right. So we havent broken those down by pieces right is the maturation of this comes I'm sure Mike is going to get into way more detail on that but we got the luxury that we have all of it right that programmatic is important to us, but we're way more of a sales team our sales team and you and I've had this conversation.

We're probably getting close to 20 people in sales. This company has got a tip the opposite way from going be 1 salesperson a.

A year ago pre COVID-19 to being a large percentage of the company being focused on sales marketing and driving revenues. So this is an inflection point for the company and as we said we grew from 4 to 23 sponsors. If you read between the lines you just see any events. We've done this quarter. We've had over 23 sponsors so we will grow.

And that substantially and the integration between them and the cooperation between the teams is so unique that you can now sell radio has been around for 100 years podcast been around for 10 years. So arguably live streaming has been around for a minute, but now that you sold all of it across the board you're starting to see real revenue streams.

That was the whole process in building this flywheel that we're starting to see advertisers market across our entire platform.

Super helpful. Thanks, Thanks, very much on from your answers and congratulations on a great quarter.

Thank you Laura.

Our next question comes from Ron Josey with JMP Securities.

Great. Thanks for taking the question appreciate it.

Rob and Michael I wanted to ask a question on guidance and then just a little more on pay per view. So so maybe Rob and Michael can you go through just the guidance a little bit more of this is the third time raise this calendar year I think so you just talk about the pipeline and what Youre seeing as things open back up social gloves, clearly a hit we enjoyed it for sure. The spring Awakening is going moving us in the pipe.

Lyne I think CPE assets contributing so just help us understand a little bit more of just like a tailwind to the business. How you view of pay per view fitting in and then Rob to the pay per view question. We saw the net.

The next social club site coming on here, but just talk to us a little bit more about the pipeline coming up on pay per view and and how we might think about all of these shows that are being produced by line by line. Thank you.

Yes, so so I'm going to give you a 40000 feet then they hand it to Mike I think the starting point of it is is that and you and I have talked about this 1 we wanted to prove our pay per view that our production and our technology. We're all going to work right because a lot of little companies and a lot of big companies, including Showtime that have tested this and thought they could just answered the digital.

Pay per view world and Theres, a lot of issues right, including breakage in churn and <unk>.

Wait and see and so on we proved to perfection right 2 weekends ago.

We proved to perfection that everything worked perfectly and we did our biggest revenues in the history of the company and we immediately announced the next 1 right behind it like because of that success, you're going to see the same thing happened with artists you'll see the same thing that happened across multiple different genres of pop culture. So we're really excited about that too.

Is right as the world opens up right and you see the reentry of this we've only announced so far 1 live event other than social gloves gloves, 1 ly van outside the social side with social gloves in the female version right, we announced spring awakening.

We do 40 to 50 shows a month.

Chicago Midwest area, it's been slow to open right, we see telltale signs that things are opening you know.

Widely right now and I'd be really surprised if you didn't see.

Just back to 40 or 50 events. It may even grow from there. So what I say is we had we had great hesitancy in raising the guidance again, but we had no choice. It was too obvious in the numbers that we hit and just people seeing it that we had to raise the guidance and.

We're going to have to reconsider again soon so with that let me, let me hand, it to Mike and Mike want to articulate where we are on on all fronts.

Yeah, Hey look.

In relation to where the <unk> come in and just really walk down the income statement, it's across all areas.

Tesla is going to continue to pump out cars and so that.

It helps our.

Our subscription business obviously when.

When you look at the expansion of podcast 1 not only are we seeing improvement in our rates.

As Rob described them spots and dots.

But youre also getting new podcasts that are coming in and so that's part of that strategic investment that we're making in to.

To help really emphasize and drive that in addition, when you look at our Cps business that's contributing.

Cps as of these 331 numbers was only with us for literally a quarter on 8 days and so where you really see the benefit of Cps is really coming through on things like social gloves wear.

It gets fully integrated into 1 product offering that we have that not only can support a pay per view event that is our event or someone else's event in which where the producer and performing those services on their behalf as an agent.

Other side of that is the expansion within podcast, we're getting more and more of that talent tied into the Tcs business.

And so all of those EPS has been a great piece of business.

Prior to joining live by light now that it's getting more fully integrated into the flywheel, we see a lot of opportunities and benefit going forward.

The next big piece of it is to your point about live events and what is going to open and how many live events can we get moving forward with between now and call. It. The next 6 to 12 months out and Thats going to be another key driver just like with social gloves, a live event per spring awakening, all merchandise will run through Cps.

And so getting that flywheel really humming is where we're at and that's what makes it most exciting for US to then go out and raise the guidance that we did again this past today I should say.

But as we look into the future and we get more clarity as to the timing and the scope of those future events coming.

We will be adjusting our guidance accordingly, as a go forward basis.

Mike just to add.

Mike just hitting the 2 acquisitions that we just we just announced as well, which closed shortly which a great tuck in acquisitions and again fit perfectly in the flywheel.

Yeah.

Our next question will come from Tom Forte with D. A Davidson.

Great. So 1 question 1 follow up so on my original question. When you think about next fiscal year, what's your expectation baked into your guidance on live events. I know you talked about I think something in Chicago, where you're selling tickets are you expecting.

On a gradual reopening or you're only expecting the Chicago event.

Thinking about low events over the next fiscal year and how much of that is reflected in your guidance and then a follow up question.

So so the only thing on that guidance today, Tom is the beginning of spring awakening being Super Conservative on it right, we havent announced any of the typical 40% to 50 live events, we do including some of our smaller festivals. So fully expect that's coming.

But we are being conservative and careful right.

There's still some issues globally that are happening in some some hotspots that are happening. So we want to be we want to be a little bit cap on that but what I would tell you. This is we didnt stream 1800 artisan.

20, <unk> hundred 40 live events last year for no reason that talent team that we've put together is going to be doing live events not only in the Midwest area, but it's going to be expanding around the globe. So both live and digital so I fully expect a lot more coming from the area of our life business in the very near future.

And then recognizing it might be early how should we think about our very successful about like social gloves and that driving us towards subscriber counts.

Our ability to leverage events like that to drive your subscriber count.

We've been we've been careful for multiple reasons on what we've actually announced on this but you can read between the lines, we get over 10 million on revenues, we announced I think 8500 subscribers right. So you can kind of run the numbers.

Back to our model, we've said, 6% to 8% of the pay per views or 6% of ticket sales convert to subscribers. So if we continue at that rate there should be a staggering number right you start adding all your lives eventually start to grab subscribers from your live events and from your digital events.

The metrics on this explode.

My view on adding granddaddy.

No I think thats. The exact piece of also part of the flywheel on just the momentum and the tailwind that we have behind US is as we get more and more of these.

Live events to come up we'll be able to capitalize on that and get more subscribers into the flywheel. Unfortunately, when you look back to 2020, the company was completely hamstrung throughout that entire period and.

And most of the I'd say when I say 2020, I mean, the calendar year 2020, because there were no live events, so that piece of the flywheel.

In that realm of how we get an acquire.

Users was really Hamstringing the company and now that's starting to come off.

And Tom a question, Tom Spring and Tom Spring Awakening is typically a third of the revenues of react right. Our Chicago Division, so that $20 million on revenues approximately like you're talking about 6 million $7 million on spring awakened I think we can actually beat that number this year cause ticket sales are just they're just.

As we said in this press release that you're selling so quickly it looks like we'll go hiring if they allow us in Chicago, we're going to try to increase it because we moved into a park that we eventually could go to 60000, if they increase that from 30000, a day to 40, it can be bigger, but the rest of those live events just in that area will will really be another.

Great enhancement to this company and I'm, hoping knock on wood, we're going to be able to announce expansion to all those live events coming back very shortly.

Yeah.

Great. Thanks.

Okay.

Our next question comes from Bryan Spillane with Alliance Global partners.

Hi, This is Jacob on for Brian Thanks for taking my question.

With advertising budgets strengthening across the board and we described this is net for podcast 1.

Back to pre pandemic revenue contribution, which I believe is about $28 million or is podcast 1 on recovery and maybe you can talk about the last the trends you've seen in the last 6 months or so.

Yeah. So let me just just simply we're ahead of that $28 million. If you just take the last 2 quarters right. This was this quarter was above $7 million right last quarter was above $7 million right. As you enter there is some seasonality here. So we're really excited about where podcast 1 is going and as Mike articulated.

Before we've added some brand new revenue streams number 1 is we probably added 25, new podcasts, including.

Yes.

Jay Cutler and need Todd the biggest star in Brazil, and Pitbull, and many others right and I think the same thing. This is going to continue to occur the brand and the franchise of podcasts is just becoming a more and more potent brand. It's what are the only independent networks left and it's the only 1 that provides a full 360 play with the SEC.

1 thing we did is and we've talked about this a little bit more before is expanding into broadcast.

And we're just seeing tremendous tremendous.

Action coming from the sponsors right as you show on by a hung deal on a Pepsi deal coming into the podcast broadcast side, we didn't want to see they want to see these podcast is expand their offerings beyond just audio and then X will be we've announced with Patrick Blacksburg ring, which.

Jarrod jingle right, we've announced with both of them podcast networks like slate to movie and television from most of you know I on the atmosphere films through the moving 300 and so on this is an amazing model. These are podcasts, you're spending very little money on if they work and they turn into a TV show or moving as a whole secondary market of revenues.

Income from it including selling to Netflix isn't the Amazons of the world.

Okay and are you.

The breakdown social clubs or opening by offering such as ticketing merchandise sponsorship.

We have we haven't but again if you look at our pay per view number you can kind of you can kind of back your way into a pretty close number. This was a staggering it was an amazing event.

Really amazingly produced.

Critically acclaimed we also own all the rights going forward to the dock your series right to the Halo content on this so it's not stopping right and just to give you an idea and I apologize on left this out.

In the last 12 months, our Socials have grown over 150 per cent alright, So LIBOR live as a brand is becoming synonymous with that authentic voice and music, but now it's starting to become authentic brand in pop culture itself.

Alright. Thanks.

Okay.

Our next question comes from Barry Sine with Spartan capital Securities.

Hey, good evening gentlemen, 2 questions. If you don't mind first of all I want to stay on the topic of live festivals, if I think about lie by live prior to the pandemic you partnered with all the Big Festival from others Live Nation, I Heart AEG with some of the biggest festivals out there does that business.

It's come back and you've got more ways with the flywheel now to monetize that and to what extent I wouldn't think that react presents is much of a competitor to those guys. So you can still do their festivals as well as due to your own with react presents to what extent does that old business come back.

Oh, it's fantastic I mean to start with IHOP right lineups are bigger than ever.

Right the traffic is bigger than ever and the ticket sales are bigger than ever and just look at live nation stock look at IHOP stock right. So we have a lineup I can't I can't even remember how many 50.

50 million plus social media followers are on our lineup for I heart. So on September 17th Youre going to see on next version of our boxing right Guy, but you're also going to see Ariana Grande.

Justin Bieber.

Ed Sheeran on it so you're seeing a vibrant everyone has woken up and realized that the digital side is important and it's now here to stay but just like ESPN did 30 years ago, those live events drive everything and they're going to continue to drive it. So we couldn't be more excited and we have 2300 events to choose from.

We're going to be selective we're gonna be careful we're going to make sure that they are accretive moving to make sure. There's a sponsor or are you going to make sure that we can drive subscribers from it but I couldn't be more excited.

September 17th there's going to be the biggest weekend in the history of line by line by a distance.

And youre in a much better position now to monetize them than you were prior to the pandemic.

Assume as well.

Yeah, you know I spoke to seaborne side about this who built ESPN and its first 8 years sponsors just income right. There was this fear factor about doing digital and putting things on television that would hurt live events right. Whatever you look up to afterwards as live events right sports is growth, so big and so large that hundreds and hundreds of.

Billions of dollars a day made across the globe in late news and live sports I think the same things about that but the music and 1 day you may see why by live as the first company that did exactly what we did is social gloves on <unk>.

<unk>, we had rock in Rio had a million people attend and at 70 million people watch this year imagine of 1% of on board of pay per view ticket. So let's say the average ticket is $100 what if it's sold for $10.

And very much like social gloves, I think it's I think it's almost a guarantee so it's just a matter of time, it's a matter of acceptance in it right to matter of growing it but you're creating a brand new revenue stream that what happens that flows through from the talent to the managers to the agents debut on across the board and the second thing that happens is the maturation of sponsorship.

Hey, she is coming way faster than we could have dreamed up right now as you guys know I only hired my first sales person.

December ago, right before Covid Covid right and then Covid. It right. We're now up to probably 20 plus people in sales and we'll be at.

25 to 30 very quickly.

Why is that sponsorship has woken up to how big both the social adventure, but most important is music they've woken up to how big the traffic and audiences.

My second question, Rob you threw out a piece of news that nobody asked about it I thought it was a pretty big which is that you expect this quarter to.

To obtain a rights to streaming music for Europe, Obviously, you have the North America relationship with Tesla, that's a huge market for Tesla and I've heard in the past that you were 1 of the reasons you wanted those European rights was to be able to follow Tesla into Europe. So can we.

Am I reading this correctly is that a pretty big piece of news that I know it takes a while to do something with somebody like Tesla, but perhaps fiscal 2023, we could start seeing subscription revenue come out of tests on in Europe is that is that realistic.

Look at it that way.

I can't give you anything that isn't.

Materially done yet, but what I would tell you. This is there's a couple of things number 1 universal music converted 10 million of net payables at $4.14 into equity right now but to US all the record labels now all the payables, we picked up from Slacker now paid off our balance sheet is now acceptable to everyone right. Okay. We've had a weak balance.

We've done these acquisitions, we've done these partnerships right with a weak balance sheet and all the record labels and publishers new that we bought slacker right. They knew going in and they accepted and they they turned on the lights for US right now the lights are very different right. It's very different emotional the financial relationship to enable is very different and then you know as we publicly said from the.

First time Elon personally approved the budget for all of connectivity in the car right through the end of this year. That's the first time, we've ever seen that that has been done and approved and we can talk about it. So I think there's huge opportunities not only with Tesla, but across the board force to expand right and you may notice.

That we went from 73 cars I think day now 88 cars right media continue to see that and Theres No reason to believe that in this year, we couldn't land another car company as well as expanding with test flow across the globe.

Great. Thank you.

Yeah.

This concludes our question and answer session I'd like to turn the call back over to Rob Allen for any closing remarks.

I just want I just want to thank everyone for your patience.

This has been there's been a trying year for everyone.

I've been through this previously in previous companies during tough times or the stock market times or it's companies themselves. We were public venture capital Company went public so everyone that supported us from 7 million on revenues to 38 to now 65.

<unk> net 110 to 120 today that we've just announced our guidance too.

We're really we're really looking forward to this year. We're looking forward to talk to you at the end of this quarter, it's certainly going to be our biggest quarter on 13th biggest and biggest quarter by far in history, right and I think there's way more to come and I think we've really positioned our self uniquely to simplify the business model and that everything has been integrated that we have.

Julie a music and media subscription platform that you have the ability to come on today for an average of $3.50 right and you come in for free or benign 99, which you have the ability to get such a tremendous amount of content and original programming that I don't think you can get anywhere else in the world and so we look forward to talking to you again at the end of this quarter.

Want to thank everyone for the support during tough times and hopefully. This is this is now this a race to the top down so thank you.

Yes.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.