Q4 2022 LiveOne Inc Earnings Call
Speaker 1: The.
Speaker 1: Thank you for standing by and welcome to the live one incorporated fourth quarter and full year fiscal 2022 webcast. My name is sammon and I will be your moderiator for today's call. All lines will be needed during the presentation portion of the call, with an opportunity for questions and answers at the end. If you'd like to ask your question at this time, please press Star one on your cellphone KE pad.
Speaker 2: I'd now like to turn the call over to our host, Aaron Sullivan, and irha CEO Aaron.
Speaker 1: Thank you.
Speaker 3: Good morning and welcome to L one's business update and financial results conference call for the company's fourth quarter and full fiscal year ended March 31. twent thousand and twenty-two.
Speaker 3: Presenting on today's call are: Rob belle, n CEO and Chairman, and myself, Iron Sullivan, interim dfo.
Speaker 3: I would 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.
Speaker 3: These statements include, but are not limited to, statements regarding the future performance of the company, including expected future financial results and expected future growth in the business.
Speaker 4: Actual results may differ materially from those discussed on the call for a variety of reasons. Please refer to the company's filings with the SEC for information about factors which could cause the company's actual results to differ materially from these forward-looking statements.
Speaker 3: Including those described in a annual report on Form 10-K to the year ended March 31. twent thousand and 22 and subsequent efficsec filings.
Speaker 3: You'll 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 investors Relations website at IR live one Com.
Speaker 3: And the company encourages you to periodically visit its IR website for important content.
Speaker 3: The following discussion, including its responsees to your questions, contains time-sensitive information and reflects management's viees as of the date of this call: D 29 2020 -two.
Speaker 5: And except as required by law, the company does not undertake any obligation to update or revise the information after the date this call.
Speaker 3: I'd like to highlight investors that could cause being recorded. Companies is making it available to investors and the media via webcast and a replay will be available on its website in the Investor Relations spection shortly following the conclusion of the call.
Speaker 6: Additionally, it is the property of the company and any redistribution, retransmission or rebroadcast of the call or the webcast and I performmed without the company.
Speaker 6: The breathwritten consent is strictly prohibited. Now I would like to turn the call over to lag 1, CEO : Rob bellant.
Speaker 7: Thank you Aaron, and good morning everyone. I would like to thank you for joining for our fourth quarter and fiscal year 2022: business update and financial results.
Speaker 8: Despite this challenging environment, we posted a record hundred and 17 million in revenues in fiscal year 2022 endedin March 30 to 22, a year-over-year increase of over 51 million or 79%, and revenue for the quarter of 23.4 million, an 11% increase compared to last year.
Speaker 8: I'm happy to repimport. We are maintaining our previous guidance of 125 million to 14 million and adjusted EBITDA five to $1 million.
Speaker 9: For the current first quarter of fiscal' 22, we expect to report revenues of approximately 23 million. Adjust EBITDA of 500 to $1 million positive. This will be the first time in the company's history that we will achieve positive EBITDA.
Speaker 8: As the environment in the backdrop in the capital markets has changed over the past two quarters, we have strategically pivoted to accelerate our path and time leng to achieve positive EBITDA. As part of lione's plan to focus on generating cash for operations and consolidated basis, our team has implemented in cost and expense reductions from both operations and corporate overhead, which is anticipate the result in over $23 million in current savings.
Speaker 8: I believe we still have an opportunity to further increase efficiencies and reduce costs as we focus on streamlining our business operations and generating positive EBITDA.
Speaker 9: In addition to cost savings, we improved our balance sheet again. We though a five a half million dollars in payables and short-term liabilities extinguished.
Speaker 8: As many of you may know, to a nine -year exclusive partnership with Tesla.
Speaker 8: A live one Slacker radio membership is pre-installed as its fault radio service in every new Tesla car sold in America.
Speaker 8: My one is paid directly. Testament for all these memberships, we recently completed our user interpage refresh of all new and top stations within test in the car and proudly announced we have added our podcast into the cars as well.
Speaker 9: In December , we launched liveone's music streaming service, including podcast one content on Google androidges automotive platform.
Speaker 8: This launch brings live one into the car with a seamlessly integrated in-car user experience without the need for your mobile device, and allows us to reach all current in upcoming vehicles.
Speaker 8: We have now passed over 86 cars, up from 45 last year, allowing consumers to enjoy our library of over three million songs, an original exclusive content of 500 curated radio stations, 250 podcasts and podcast and all the original live events.
Speaker 10: androidautomotive continues to see wide adoption fromconvirtually all the major automotive OEMs, including Ford chevvallet Lisa dodge, robo Lincoln and others. The live one slack rap is.
Speaker 8: Is preinstalled in 85 automobiles, as well as across major cell carriers veri, zon sprintking T-Mobile, which allows Slacker members to listen their cars and their mobile devices.
Speaker 8: We are compelling growth opportunities for slack by partnering with other aumotive OEMs, just as we do a testament to that default radio service, as well as white label, B two B partnerships through a Android automotive partnerships.
Speaker 8: As of June twenty-sixth 2022. We have now passed one point six million pain members.
Speaker 8: And close to two point four million total members we esee a path for paid members to reach two million as we look over the next few years and ultimately reach one million paid subscribers by 2020 -seven and.
Speaker 9: The addressable market is one point seven billion.
Speaker 8: With that, that's under 1% of the current market and would put us in line to a billion dollars plusing revenues.
Speaker 8: Our wholly-owned subsidiary podcast 1, which we acquired in July 2002, and 20 is leading advertisment supported on demand. Digital audio network was ranked number seven on podtrack.
Speaker 8: With this unique monthly audience exceeding six point nine million and a global downloads and stream exceeding forty-four million.
Speaker 9: That is ranking us above CN FOX spar new sports as one of the top independent podcast platforms in a list of 10 podcast publishers.
Speaker 8: The market is growing fast.
Speaker 7: With looking at over $5 billion in revenues by 2027 as we look at them over the next four years as a top 10 provider of podcast around the globe. There's a unique.
Speaker 9: Opportunity to expand those revenues. We did over eight million last quarter and this quarter will be our largest quarter in the history of the company.
Speaker 8: Podcast one' continuous to experience robust growth, as more than 50 new podcast series have been launched since 2020. upon acquisition, we've expanded our distribution by making podcasts one available in all Tesla cars, Andrew automotive devices Spotify, Apple.
Speaker 8: Samsung devices.
Speaker 8: Simply put, the podcast team has done an outstanding job in both recurring new podcast as well as securring meaningful advertising. Sponsors, as we have now passed over 300 sponsors.
Speaker 11: It's important to understand that podcast one has the exclusive advertised sponsive rights for all of our podcasts.
Speaker 8: But people can access and listen podcast shows on both podcast one exclusive platform, as well as a number of outlookts including Spotify Apple Samsung, IR. Podcast one franchise of exclusive shows is grown to more than 250 podcasts and produces 300 podcast episodes per week.
Speaker 8: I would like to add, as a result of successful integration of our advertising sales division. Why one is added: over one hundred lead chip sponsors, over 300 total and as over one hundred and Seventy-five in our pipeline alone for the first quarter of this year.
Speaker 8: In fast popcse one has more- one million plus sales lead in calended two, point 22- than any time in the history of the company.
Speaker 8: On the paayper review front. Since launching our ay review platform in May 2020, we generated 26.7 million a paayper review related sales and liveing paay review events. Imagine live now opening up. The opportunity is massive. As many of you know, we previously announced our intention to spit out an existing paper review business as a separately traded public company and plan to distribute a portion of the new company's equity to our existing live one shareholders.
Speaker 9: We anticipate the paper view spin out to occur in fiscal 2020. -three.
Speaker 12: I would now like to hand it back over to Aaron sulliomon, who review the full fourth quarter numbers.
Speaker 7: Area.
Speaker 1: Thanks Rob. I'll then just a few minutes to provide an overview of the results for our year-end and fourth fiscal quarter ended March. thirty-first twent, Y and twenty-two.
Speaker 13: Full year. Fiscal 2022 revenue was a record 117 million, a 79% increase as compared to 65.2 million in fiscal 2021. contribution margin increased 48% to a record 24 million, versus 16.2 million in fiscal 2021, and our adjusted EBITDA was a loss of 13.4 million, with record KPIs including a fortyy-seven percent net increase in paid members year-over-year.
Speaker 14: For full fiscal year 2022, our revenue was comprised of 34% subscription.
Speaker 5: A 56% advertising sponsorship, merchandising and taicking events, compared to 51% subscription and 49% advertising sponsorship and taicting events in the prior year period.
Speaker 14: For the fourth quarter of fiscal 2022, revenue increased 11% year-over-year to 23.4 million, while contribution margin increased 12% to 51- sorry, the fifit five point one million and our adjusted EBITDA was a loss of four point to eight million.
Speaker 5: We ended Q4 with one point 4: eight million page members and net increase of.
Speaker 3: four thousand as compared to one point zero seven million paid members reported at March 30. twent thousand and twenty-one.
Speaker 5: notal members, including three memberships, was over two point 3, five million at June 20. sixth, 20: 20, two.
Speaker 3: ded in the total members are certain membber. Source: the subject of the contracts with disputed, for which we are currently not recognizing revenue.
Speaker 5: Briefly Turning to the balance sheet. We ended Q4 with cash of 13.2 million, including in restrictedve cash of 300 debt.
Speaker 3: And now let me hand it back over to Rob.
Speaker 7: Great ironand and thank Thank you for the great job you one I've previously spoken about our unique flywheel business model.
Speaker 9: Associated in a complementary business where a component pieces create a synergistic offering to consumers. Listen, watch 10, engage in transact. We are expanding revenue opportunities. Would B to see customers for further monetization through subscriptions and memberships, premium content, paper view and live events on spelling. Membership packages including merchandise NFTs and integrating consumer products that will have ownership positioning.
Speaker 8: Our B two B activities and opportunities continue to grow traction, especially with significant advertised sponsored deals that we are securing from bluechip companies, as well as H our other NFT and gamification opportunities.
Speaker 9: I fully expect this year to be able to expand our partnership with sponsors. Our seven -figure deals are growing almost on a monthly basis and we fully expect our first eight -figure deal this year. We see significant opportunity to grow our Slacker streaming radio membership service, go through new partnerships with major automotive, sogle Android platform and with white label partnerships of Internet, with things from smartwatches markets to connected fitness device devices, manufacturerures to outdoor video.
Speaker 9: We also expect this year to be able to expand our relationship with carriers around the globe, as we see the cycle starting to change carriers of fighting back with appleand Android to own their own content and own their own partnerships with their consumers.
Speaker 9: We are excited about the return of our live music events through count and calendted to twent-two and to really press the gas metal on live events in calendar 23. lastly, we have strategically implemented significant cost expense reduction from both operations in corporate ohead and we are now positioned to achieve positive EBITDA for the first time in our history in current June 2022 quarter, with at least five thousand to $1 million of EBITDA for the quarter.
Speaker 8: I want to thank Gi everyone for this forort, especially our shareholders, for their continued support.
Speaker 9: Thank you very much. Now open it up to any questions.
Speaker 1: Thank you. We LL now begin the QA session. If you'd like to ask your question, please press Star one on your telephone keypad, and if, for any reason, you'd like to remove that question, please press Star two as a reminder, if you're using a speaker phone, Please remember to pick up your handset before asking your question.
Speaker 15: We'll pause here for just a moment to compile the QA roster.
Speaker 1: Our first question comes from the line of Brian kisfinger with allines global partners.
Speaker 2: Brian , your line is open.
Speaker 7: Great thanks, so much. Great to really see the cost cutting and the change that are coming in the business. I could start with the cost. Can you break down the cost cutting effort at a high level? How much is people, how much is maybe office space or supplier agreements to just want to get a handle on what's being cut?
Speaker 7: Yeah to. To start with Brian , the beginning part in this is is one of the big cost and we had last year is our content costs. Right, becausest the world was shut down two years. You order program. All of our original program or Wood shows, are music events and so on. The cost was was close to $2 million. That cost is going to drop in a half because you now have most of that program been built, those franchises that built. We now have a well of a 300 franchises across our platform's a big cost savings. Then, in terms of people, we've been able to consolidate as the doors have open from COVID-19. Right, we've been able to consolidate the six acquisitions and the cream has rise, the top of the stars of this company, and you're going to see more and more of thoseyou know, as you see the spin off of those divisions, you', re going to see those, those operations of those division divisions, really shine and be able to pick their teams across the Board. So I had a sales or had a marketing across the company and we've been able to put synergies together. And then and then we've, we've we worked hard to clean up our balance sheet. As you know, we acquired flack radio. A big part of that acquisition is we took on close to $5 million of pables. We've done an exceptional job this year and Aaron has done just, you know, little posvision to be just a superstar cf fo and doing this because really clean the balance sheet up tremendously is you see that five and a half million dollars of additional additional extinguishment payables and you're going to see more of those coming.
Speaker 7: And inclde how you want anything around you see. ok, sor.
Speaker 16: I think you cover it, Rob thanks.
Speaker 7: So with the $2 million in.
Speaker 8: Cost of content last year that's coming down dramatically is that where we'll start to see the gross margin expand some of the some of the goals that you'd talked about in the past maybe the mid-to upper Twenty's maybe even.
Speaker 17: Is that what the majority of the cost cuts are and where we'll see the benefit to EBITDA positive?
Speaker 9: And you want to take that.
Speaker 16: Yes I think there's a significant portion there. That'. That' absolutely right. So we're expecting to see. In the past we haven't had positive contribution margins from our live events business. We're expecting to see.
Speaker 5: Contribution margin in that piece of the business. But there is a substantial amount of operating expense coming out. So I would say you expect to see in those two lines.
Speaker 8: Right and then can you remind us of the seasonality in the revenue guidance based on live events? And know you have some major events and sbring and waaking you. You know you've got some seasonal businesses. How do, how do we think about that based on you know, basically COVID-19 not being an impact to live events as much as it ever liise in a while.
Speaker 18: Yes M this going to be seasonality in this business in multiple ways? Right, our 10 pole events are going to kick and kick in the in the third and fourth quarter. As well as that fourth quarter, advertising and all advertising businesses is going to grow substantially and then, on merchandise business, a large portion is going to come in that fourth quarter as well. So this was a terrific. This was a terrific quarter and I think you'll see growth every quarter going forward. As you look at that hundred and 25 hundredand $2 million guidance number, you'll continue to see growth in each quarter going forward.
Speaker 6: It's the fourth fourth quarter in December when advertise are just fourth. fisco cour third.
Speaker 19: Yeah verarify that to be Q through our, our Q3 is is where we see, you know the, the advertising and and the merchandising go Q3, and that's what we did before.
Speaker 1: Yes two more questions. Firstly, how do you think about a recession impacting paid subscribers? You've done really well in the last two quarters adding paid subscribers, So how could that eight impact that or churn and or ticket tailes? Is that contemplated at the low end of revenue guidance?
Speaker 20: I think I think we pretty, we Ty pretty unate andwe've been, you know, very ccautious in our numbers in that and that you, starting with Tesla right, you have 100 doll oil price plus. Right, you're going to see a tremendous amount of automated cars rightyou 'you know, getting the road: in every car that hits the road we ickup another subscriber. You, I think we're be pretty conservative in those numbers. But then our expansion into these B to B partnerships and we've talked about, and I think you're going to see more and more of those across all platforms that have 10.000002 million and a half billion eyeballs. Right, you know, know we're we're going to win this. Right you, on B to B partnerships, we're not going to win it on one customeryat of time. So a lot of those nerships already have a tremend amount of subscribers, both free and paid, that're to partner up with. And you, I think you're going to see in this the second and third couring to see a tremendous amount of thoseb to B partnershi. And it's a one area that we're growing the business. Right, you know've gotten a lot of calls on that last couple of days and that you know, even though we've made substantial uts, you're seeing us higher on the B to B side and we're only hiring know know, as we land those B to B partnerships.
Speaker 8: Great lastly, on cressla, on the connectivity side- customers staying connected- how could changes to their policies improve your churn or impact churn at all?
Speaker 21: You I mean it's it's been, it's been quite interesting. You know, and this has been exciting for us. We're built into the conctivity package now and trying to imagine with the $7 thousand average car that anybody is ever going to have a car without the conctvity ever know, especially it those levels. So we're seeing a tremendous pound's built to that $10 package for the first time. You know, Tesla has always pid us direct. They're going to continue to pay us directly but they're starting to take some of their cost out because consumers paying for probably- you know, probably- 10% of those so far and by the end of this year be 30% of those, are going to be paid directly from from the customer to teslaer and then to us. We get our piece of that $10. So I think I think it's excellent and I think it's exciting and you know puts us in very strong, strong position, you know, going forward to continue to grow. That and you know. You know. You know next nextx is hopefully we expand and we've talked about this a lot. You, it's been hard for us to expand with those payables outstanding, you know, rectcord labels and publishers. We're getting pretty close now where we can really expand overseas and expand the rest of the world.
Speaker 5: ok thanks Gu.
Speaker 1: Thank you, goodbyeinean.
Speaker 22: The next question is from John Hickman with ladenberg: John , Please go ahead.
Speaker 1: Rob Aaron, I'm just wondering if you could elaborate a little bit on your kind of the key event live events for the September and December quarters. I know there's spring Awakening, but could you talk about others?
Speaker 23: That you were expecting. Yeah, I WOn't.
Speaker 9: Yeah and I want to be a little bit camp- this, that and that you- we've an announced that we going to spit out our paper view business, right. You know, just this weekend, last two week, just the last two weekend alone, we did P pains, we did B I, So you're going to see a lot of those digital live EV events and that both fly wheel kicking in where it's a live event but it also is a paperviewevent, right. And so, as many you know, our social boxing right will be a 10 poll event this year again, and you know, you know, stay tun, you know they'll be an announcement on that quicklyweve just announced a partnership with Ben IL like to produce the office and some of the bigga reality T vs chosen the world not only to do that next event but to actually launch a League and react and announcedounced a reality T V show around it and I think you're going see the spin off of that division very shortly. And, as that happens, there'll be multiple announcements where, like like U F C, like wrestling, we're going to see many events happening around that and you know that was that was, that was a big part of revenues, if they live last year. And we've announced over 100 live music events right, and you know those continue to grow. youre going to see it from all fronts. Don't think you're going see that it's. I don't think you going to see justone event, as you going to see many events and we're really excited to talk about that. You know, in this upcoming quarter.
Speaker 24: Okay one more cush. So if I look at your guidance for Q1 and your 23.000023 million a half million and your EBITDA.
Speaker 8: zero point five to $1 million. It looks to like you're going to have to have cash operating expenses somewhere in like eight and a half million of my.
Speaker 8: counctelling that right.
Speaker 1: And I take that.
Speaker 1: Yeah I think that's a.
Speaker 3: Pretty close to what we have.
Speaker 24: ok and then there was a fairly big drop in stock based comp for Q4. Is what do you expect going forward?
Speaker 1: I think it's going to. There was.
Speaker 3: The onetime impact there. I think you'll see it's the increase, but not quite to the levels. That has been previously.
Speaker 1: More like a million dollars a quarter, something like that.
Speaker 1: I mean that's probably a good benchmarket.
Speaker 25: ok thanks, that's it for me. Nice quarter by the way.
Speaker 9: Yeah and John Jon, just you know to highlight that. You know, as we said, we expect five to $1 million of eevada right, you this year, So each quarter of the year agrow, you know, significant. It's going to grow significantly from here and you up and uh, you knowtherethese a lot of these cost savings, a lot of the change we make, just kicking in. So it'was really, really exciting to see this company and you've been around me for a long time and you, when the cyclists change right, you know you gotta change with it. You got move quickly. So we're fighting ard, you know we're should $1 million this year.
Speaker 1: ok.
Speaker 1: Thank John .
Speaker 22: The next question comes from line of Kevin D D with hc wayane. Right Kevin, Please go ahead.
Speaker 26: Thanks uh, borren Rob Aaron. I thanks for taking my call.
Speaker 27: So Rob, when does your superstar CFO become permanent?
Speaker 9: You know it's a great couldnt. I couldn't ask room. You've done a better job and you know he's. He's just completely clear the K and moved from there. So you know, stay tuned, it's coming, coming imminently and I mean this jur he's done is as good a job as anybody I work with over the years and really, really proving in a difficult situation right stepping up. You know, and you know my que was excellent. You know myike took a very, very big job. You know Aaron, at a step in the last second, really replac most of his team. He's just done an outstanding job. And you know I keep hearing- I keep here in the credits across the Board, from our banks to investors across the board- what a great job he's doing. So we're proud hour and in. Stay tuned.
Speaker 28: You mentioned two million subbs.
Speaker 29: Right So that's paid subscribers, and is that this calendar year is your target?
Speaker 16: Yeah So we have have get the on.
Speaker 9: You we've even given an exact day, we've even given an exact on that. But you know, listen just on test Alan, if they do a million cars this year, you got expect, you know they could sell every car they can make right now. You're going to grow substantially on that, now being in 86 other cars. The partnership with Android automotive, as I said, you're going to see more of those B to B deals. Like we did we did with Facebook for pay perreview and like we did ticktock whenwe did Music lives. We're going to be leveraging and partnering with massive audiences. youthey're already built right, who need music and and I think that you know, and I've been talking about this for long time and there's part of why we hire morg right, you know, as you know, you know you'just going to see more of these B to B partnerships. You know, likewhen we want to built digital tur, you'restarting to see that cycle change. Every just seven to eight years, the carriers start fighting back you right, and all these distributors to starting to fight back with it a they want to own their own content, be they want to own their own relationship with their customers and we're seeing tell, tell signs that the flood gau your opening to massive B two B partnersh ships like teslers, like we have with Verizon, T mobile and sprging in the past. I think those doors are starting open them back up and as that cycle changes, that puts us in a verystrong visiness that we have so much robust content. We have all the commodity content right that everyone else has. We're half the price right of our competitors and and we're offering all the original programming: five cred radio stations, two thousand artis on a platform, 300 original podcast and I just see tell they a lot of to deals coming that you know have very low risk to us. You excellent margins in the real, substantial upside to us without us having to go out and market and spend eight a sub. We're to be partnering with those, those partnership who already have those subs and already have that traffic audience.
Speaker 30: So it just seems to me- and you know a apologies for my ignorant perspective on this, but it seems to me that in order to expand that as rapidly as you hope, you're going to need a little more international expansions. Could you give us an update on on where that stands and the acquisition of licenses you'll need?
Speaker 7: Yes So. So 2: we fully expect to start announcing licenses in the very near future. Right, expanding those. As you know, about a third of our audiences overseas already. Right, that trafficking audience coming in. So we're already seeing advertising dollars and sponsored dollars come that way. But next of these subscription, and you know what I would say is that two million doll does not include any overseas right. As you know, Spotify 50% U's 50% overseas. Same same thing would Netflix right, So we land those overseas licenses. We're going to be talking about a lot bigger number in the very near fure.
Speaker 31: And then last question from you, Rob. Please just give us some insight on your conversion from members to paid subscribers. Can you give us any indication on the trends you're seeing and churn?
Speaker 21: Yeah I mean we have the lowest chturn in the industry. The membership program is start. They're really kick a high year. What we've always talked about is super fans. We're a creative first platform focus on super fans. Those super fans spend money on everything from subscription right and having that audio music So on to watch our live events to our paper view events. To buying a hat, buyinga T shirt, buying an F T right. As you know, we did our first dollars and in n F T last year and it was millions of dollars. We expect we expect that to grow substantially. So we're looking for is creative first platform focus on those super fans. The more superfans we get, the stickyer they are and more relevant they are in terms of spending across our entire platform. And we're seeing more and more of that every day and we seeing the same customers. It's So exciting to put our podcast and Tesla and now be able to not only a subscription but also be able to have our creators talking to that audience on a regular basis. And you know, the same thing across our website is same thing across our app. Right, we're we're seeing more and of that trafficto translate to super fans that want to stay with us and and not just listen the audio, not just listen to a podcast, not just watch paper view will be able to touch. Touch all the techentacless we built here and all those TAMs across all those subsidiaries. Right, all have massive upside but together some of the parts gives you the most significant membership I think ever created a music right that is builton original programming and if we keep beating and keep building on original programming, have that uniqueeness to uswe're really putting ourselves in a in a unique position, position to build this company.
Speaker 1: ok thanks for the detail. Rob appreciate it.
Speaker 32: Thank you. That's done a great job, eron.
Speaker 33: Thank you. Thank you, Kevin.
Speaker 34: We have a follow up from the line of Brian kisspuner with the Lions. Brian great, great things. I have a few. First of all, you've added more than a hundred thousand paid subscribers for three consecutive qures, which obviously is great and it makes sense to in test of sales have been so strong and I want to look at it a different perspective.
Speaker 5: If what is the conversion cycle for nonpaid members and what is the conversion rate? I know Tesla is doing so strong But on the other side of the business, how well are you doing conversion conversting and how long is it taking?
Speaker 1: It's a a great question. We're converting about six to 8% to into long term memberships right, and you know, as we said, live is just opening back up right, just the beginning of it. Right, you know the conversion of a ticket buyer, conversion of a paper review buyer. You know the habitual behavior of that consumer. You know what music they like, you know what sports they like you, you understand what they're doing in advance. It's a lot ofeasy to to Taylor right, and our tech team and our tech is one of the grace in the world right, so much of that is now built again for those super fans. I think you know we're going to continue in that 6- 8% rate and if we do, we're going to succeed and beat that, you know two million number quickly. And most important is for long term investors. weve said we're going to get to one million dbvers.
Speaker 7: That's less than 1% of the addressable market by 2027 and they get to one million subscribers's a half a illion dollars in revenues, which's only 1% of this of this market. Right in podcasting, podcasting is growing, going to $1 billion. Right, it's just starting. Right's just taken off. There was a six million doll industry're now talking about well over a billion, going going to five billion by 2027. right we, the world in it, our paper view business same thing. And as you cost over these right, the more, the more you hit those super fans, the better the conversion is. And it's not just conversion, it's that stickiness and how long they stay with you and how much they spend. Right, you know we're never going to, we're never going to beat spotifyer in them to get to, you know, a hundreds of million of subscribers we're focused on. Those superfans are sticky fans and we're giving this amazing content right all to half the price of any of our competitors.
Speaker 6: Great to more numbers. What would the impact of spinning off paper review B on your EBITDA guidance and is it mean ingqual?
Speaker 35: Well remember, you know we're not. It's still going to be a wholyownsubsidiary. We're only sping out a piepiece of it. Right, and being capful on these valuations- right, you know where these valuations are. Right, we're. We're trading it such a low valuation that, A- we're buy back stock. We just announced we bought back one point two million shares. Right, we're going to expand that buyback now to the two million share shares we promise. I personally, as well as Board members and buyback stock're trading at such a low valuation. But if you separate the parts of this, we're only going to sell a percentage of any one of these divisions and you know, hold on tight when that happens. Right, we may leash a tremendous amount of value to our share shareholders, including a. they'll get a piece of the subsidiary right, and B and B is is that you know those subsidiary is going to get value right in the fair, in the open market privately, like these valuations are are way more robust and we're looking at today and where we're trading at, we're trading at, you know, 50% of of this year's revenues. That opportunity is really unique to spend out the division, but the revenues and bottom line will still- will still fall to the live one and that will have the control positionion that subsidiary. It may be multiple subsidaries that end up spittingitting out in this market.
Speaker 5: gotitokay. And then lastly, I didn't see the 10 -k. maybe it's out since the call, But given the buybacks, as well as using stock, I think pay for to take out some of the payables. Where is the outdown outstanding showre count ident.
Speaker 1: soit's about right, about eight million fully polluted. Maybe a little bit lower now with the shares that we bought back and we've just got available to.
Speaker 36: Not eating or no sorry sorry ry Yeah ex giving somethingcoming elseso you have say.
Speaker 32: You about that 80, about 80 million. So again,'re we're trading, get a six million dollarsarmore market cap on $12.54 billion in revenues. So we're going to continue to buy back. And you, we just got the approval to continue that buy back. And you know, as we certainly plan to do that, and you know I've stated to the street every time the windows open I continue to buy in the open market, as well as many of my Board Board members, and you know So we'll continue. We'll continue to do that. And as we do the spin out right, you know, as you do, that spin out is going to give us a bunch of cash as well. skcheating an opportunity may maybe that expands the buy back. You know at that point, if to ues to tradethe it'strading ton I.
Speaker 5: okc, it great. Thank you so much for goodbye.
Speaker 1: Thank you, brrian.
Speaker 22: We have no further questions waiting at this time, So I'd like to hand the call back over to Robert for closing remarks.
Speaker 1: That's one one of fact. one for first report: a difficult market. This is an exciting time for live one really hitting, you know, just about every metric across the Board: billions of downloads of our podcast. We've now broken through five billion listens across our audio. Since inception I, you know, we've had five billion engagements across our live streaming. Not only did the consumer listened, but that and watch. They actually repurpose that, set that back out to the social. So we're starting to build a brand. We start to build a mode here that you know, see the up. I see the- a tremendous amount upside and you know, and I look forward, I look forward to our que coming out, which only a couple weeks away, and showcasing that EBITDA positive, the changes that a and I have implemented, the disciplines that we have implemented it, and I expect that EBITDA to continue to grow and you, as I said earli, a five to one million this year, But my entire team is focused on it- and that 10- $1 million bitda number. So I thank you have one and I appreciate your time and and appreci all shareholders in this difficult market.
Speaker 1: That concludes the livel incorporated fourth quarter and full year 2022 webcast. Thank you all for your participation. You may now disconnect your line.