Q2 2023 LiveOne Inc Earnings Call
Excuse me everyone. Please remain holding the conference will begin shortly again, please remain holding the conference will begin momentarily.
[music].
Good afternoon. Thank you for attending today's live one Inc. Q2 fiscal 2023 business update and earnings call. My name is to me, yet and I will be your moderator for today all lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end if you would like to ask a question. Please.
Star one on your telephone keypad. It is now my pleasure to pass the conference over to your host Erin Sullivan interim CFO . Please proceed.
Thank you.
Good afternoon, and welcome to life, one business update and financial results conference call for the Companys second quarter of the fiscal year ended March 31, 'twenty twenty-three presenting on today's call are Rob Allen, CEO , and chairman and myself and Sullivan interim CFO .
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. These statements include but are not limited to statements regarding the future performance of the company, including expected future financial results unexpected future growth in the business actually.
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 more information about factors, which could cause the company's 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 2022.
Subsequent SEC filings you.
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 one dot com and the company encourage you to periodically visit its IR website for important content.
Following discussion, including responses to your questions contain time sensitive information and reflects management's view as of the date of this call November 10th 2022, 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'd like to highlight to investors that this call is being recorded.
Somebody who's making it available to investors and the media via webcast and a replay will be available on its website and the Investor Relations section. Shortly following the conclusion of the call.
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 company's written express written consent is strictly prohibited.
Now I would like to turn the call over to <unk> CEO , Rob Allen.
Thank you Eric and good afternoon, everyone.
Like to thank you for joining us for todays our fiscal 2023 first quarter.
Date financial results.
Over the past three quarters like one team.
We made a strategic decision to execute on a concise specific a number of initiatives number one.
Holiday integrate our sixth previous acquisitions.
Focus on reducing costs and overhead and.
And cherry picking the superstar talent from each of those divisions, they generate positive EBIT.
Number two to focus our resources and capital in growing our business.
That are profitable.
To aggressively grow our membership.
Remember subscribers and sponsors.
Number three to substantially improve our balance sheet.
Now before the board go producing or investing any large tentpole events without a sponsor pain for and being profitable.
Bye bye.
Buyback a substantial piece of stock in the open market at this giant discount to what fair market value would be.
So what do we have done to date.
To date through the consolidation of our prior six acquisitions and we have implemented cost and expense reductions that will result in $25 million.
And cost savings, including 2 million this quarter.
These cost savings include substantial headcount reductions, but we selectively retained our strongest madden juice employees and are focused on generating positive adjusted EBITDA.
Yeah.
With respect to focusing on a profitable business and growing our members and subscribers, we announced today that our audio division.
Which is comprised of streaming music theres, a slacker as well as podcast business delivered six month revenues of $42 million.
And a staggering $9.8 million and adjusted EBITDA.
And we expect the audio division to achieve revenues in excess of 88 million this year and approximately $17 million of EBITDA.
We have posted record growth in paints.
Having added 181000 subscribers this quarter.
Passing 1.8 million total members, including three in sponsored members, we have now hit $2.6 million.
We've grown our sponsors from Chevron pre called me to now over 300 last year and I would expect the number to surpass over 500 sponsors on our platform this year.
We are greatly expanding our <unk> partnerships, which includes a nine year just launched a partnership with cashless ATC.
86 other cars.
Adding Google Android automotive it gives us the opportunity to white label any other car within a matter of matter of days yeah.
Immediately change them from Ford cars.
Radio.
We're makers retailers sell carrier social media copies media needs.
All.
With 10 million to two and a half billion eyeballs must have wide and must have music, you'll see more and more <unk> deals on a weekly and biweekly basis over the next six months.
We recently launched live one brands.
A division featuring celebrity back branded products, we use life not community 55 billion lessons to point 1 billion downloads.
And 5 billion engagements across our live streaming.
Tempt to see whether or not we can launch specific brands starting with Jeremy.
Russell Bourbon newborn winemaker in the country.
On your point wines and when asked me to watch.
First ever white wine for chip Bergh.
Jeremy in.
In the second quarter this year.
We also have new initiatives publishing F T with polygon as a partner.
On the balance sheet, we've extinguished posted $20 million in payables.
In just six months without raising any capital.
And we have also paid and advanced many of the record labels.
And we expect the maturity of our seven unsecured facility a decent bank, which was just extended to 2020 for all of our senior debt speaking extended to 2024 or two years out.
Regarding our tentpole in pay per view events, we have kept our powder dry and personal to 'twenty three lets see substantial opportunity to produce and be part of some of the longest lives fiscal 2024.
Includes pay per view.
Balls.
Social media events, Botching that will create the opportunity to.
Finish the financing of our pay per view business and our spin off into its own public company sometime by the end of 2020 for fiscal 2024.
The street the strategic decisions before go live events in fiscal 2020 through has resulted in adjustment for our fiscal 2023 consolidated revenue guidance of between $100 million to $110 million in revenues.
But most important is it moves our EBITA number nine to 11 and a half million. This is more than a $20 million swing.
Positive swing from last year.
We respect.
With respect to podcast one.
We will file our S. One.
December 15th week.
We closed 90 days ago, approximately we closed $8 million and a $68 million valuation.
All of our shareholders of record Wuxi that pivot and apply 10% of block S. One who own the stock as of December 15.
And we will list that on a national exchange, NASDAQ or New York stock exchange in the early parts of next year.
I believe we have made enormous progress in a very short amount of time, which positions LIBOR with its shareholders the window.
The LIBOR, one board and I believe the chairs of LIBOR had been significantly undervalued.
We repurchased 2 million shares of one common stock in the open market and we announced today will be expanding that program to repurchase $2 million of additional staff.
Should additional substantial amount of open market insider buying with LIBOR and chairs and myself.
Other members of our board.
With that I would like to hand, it back over to Aaron someone or review our Q2 fiscal.
Fiscal 2020 results after a few closing remarks.
Eric.
Thanks, Rob I'll spend just a few minutes to provide an overview of the results for our fiscal 'twenty free second quarter ended September 32022 consolidated revenue for the three and six month periods ended September 32022 was $23 5 million and $46 8 million.
Secondly, our audio division posted revenue for the three and six months periods ended September 32022 of $21 1 million and 42 million respectively for the second quarter ended September 32022 revenue was comprised of 53% subscription 47% advertising.
Sponsorship merchandize and ticketing events compared to 45% subscription and 55% advertising sponsorship and ticketing and events in the prior year.
Consolidated adjusted EBITDA for the three and six months ended September 32022, with a record $4 4 million and $6 4 million respectively.
On a U S GAAP basis, LIBOR and post the consolidated net loss of $3 4 million or negative four cents per diluted share in Q2 fiscal 'twenty.
Twenty-three and a net loss of 21.
$1 million or two cents per share for the six months ended September 32022 are.
Our audio division's adjusted EBITDA for the three and six month periods ended September 30 was also a record $6 5 million and $9 8 million respectively.
As of November 9th we had $1 8 million paid subscribers a net increase of 209000 compared to June 32022, total members, including free memberships.
For $2 6 million at November 9th included in this total members are certain members who are the subject of a contractual dispute for which we are not currently recognizing revenue briefly.
Briefly turning to the balance sheet, we ended Q2 with cash of $7 4 million, including restricted cash of 300 K.
And now let me hand, it back over to Ralph.
Thank you Erin.
Highlight for everyone right, we've proven as a management team to be resilient.
When Covid hit we lost all of our life partners.
The exciting energy around a lot.
Our revenues when we were driving and yet we've grown the business from $38 million to over $100 million.
Today, as we enter a very difficult market and a very.
Different environmental or buying we look at very carefully right at where the opportunities are and where the cash flows are.
We're really excited to look at the growth in our subscription growth in our sponsorship the growth of our audience and we built here is we built a massive traffic of 2.4 billion downloads and robot, yes number seven podcast network at Barstool C. N N on pod track 55 billion listen across our audio.
And 5 billion engagements across all our music live streaming.
As we take that traffic and audience more and more of them will convert to subscription.
As a subscription grows what I've said it we will pass 2 million paid subscribers and over 3 million subscribers by year end.
And I fully expect within a five year period.
At 10 million subscribers with 10 million subscribers will do over $1 billion in revenues and over $150 million in EBITDA.
As you can see by the numbers are and walk you through $88 million and $17 million on our audio business alone.
This is a staggering number and a game changing number.
For the company after the company going forward as you look forward to 2024, if we grow at the same rate you level, but $25 million of EBITDA. If you just wrote that exact same rate.
So we're really excited we're really energized management team is working hard and we're looking forward to launching our IPO a podcast one we're looking forward to finalizing completing our financing of our pay per view business all completely non dilutive to our shareholders.
Looking forward to buying back stock and the stock maintained this level were looking forward to buying back a substantial amount of stock and showing.
Our hands on our feet in our mouths all moved in the same direction, where all huge believers in this company and you will see myself as well as other management and board buying stock I want to thank everyone for your support.
Thank you everyone for spending your time on this and I look forward to next quarter, our biggest quarter or third quarter I look forward to updating everyone. At the end of this quarter. So thank you very much and thank you for spending your time in the company.
This concludes the live one Inc. Q2 fiscal 2023 basis Athene earnings call. Thank you for your participation you may now disconnect your line.
Yeah.