Q3 2024 LiveOne Inc Earnings Call

Operator: Hello everyone, and welcome to the LiveOne Inc. Q3 Fiscal 2024 Financial Results and Business Update Call. We will begin shortly. All lines have been placed on mute for the presentation today, but if you would like to ask a question, please press star followed by one on your telephone keypad. Thank you for your patience, www.

Hello, everyone and welcome to the life, One Inc. Q3 fiscal 2024 financial results and business update call will begin shortly all lines have been placed on mute the presentation today, but if you would like to register a question. Please press star slipped by one or no telephone keypad.

Thank you for your patience.

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Operator: LiveOneLive.com Hello everyone and welcome to the LiveOne Inc. Q3 Fiscal 2024 Financial Results and Business Update Call. We will begin shortly. All lines have been placed on mute for the presentation today, but if you would like to register a question, please press star flip by one on your telephone keypad. Thank you for your patience, www. LiveOne.com Hello everyone and welcome to the LiveOne Inc. Q3 Fiscal 2024 Financial Results and Business Update Call. Thank you for standing by. My name is Daisy, and I'll be coordinating your call today.

Operator: If you would like to register a question, please press star followed by one on your telephone keypad. I'd now like to hand the call over to your host, Aaron Sullivan, CFO, to begin. So Aaron, please go ahead.

Aaron Sullivan: Thank you. Good morning, and welcome to LiveOne's business update and financial results conference call for the company's third quarter ending December 31, 2023. Presenting on today's call with me is Rob Ellens, CEO and Chairman of LiveOne. 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 and expected future growth in the business. However, actual results may differ materially from those discussed on this call for a variety of reasons.

Hello, everyone and welcome to the life, One Inc. Q3 fiscal 2024 financial results and business update call. We will begin shortly all lines have been placed to meet the presentation. Today. If you would like to register a question. Please press star slipped by one on your China. Thank you Pat Thank you for your patience.

Aaron Sullivan: Please refer to the company's filings with the SEC for information about factors that 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-end of March 31, 2023, and subsequent SEC filings. 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 Investor Relations website. The company encourages you to visit its investor-related website for important content. The following discussion, including responses to your questions, contains time-sensitive information and reflects management's views as of the date of this call, February 8, 2024. Although acceptance is required by law, the company does not undertake any obligation to update or revise this information after the date of the call.

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Okay.

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Aaron Sullivan: I'd like to highlight to investors that this 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, this call or webcast is the property of the company, and any redistribution, transmission, or rebroadcast of this call or webcast in any form without the company's express written consent is strictly prohibited.

Hello, everyone and welcome to the like one Inc. Q3 fiscal 2024 financial results and business update call and thank you for standing by my name is David and I'll be coordinating your call today.

Rob Allen: Now, I would like to turn the call over to LiveOne's CEO, Rob Allen. Thank you, Aaron. And good morning, everyone.

Rob Allen: I'd like to thank you for joining us today. It's a really exciting time at LiveOne. I'm extremely pleased at how all areas of our business are performing. It was truly a spectacular quarter and one that illustrates the power of our creative first model focused on superfans, which rewards talent and enriches shareholders. As we near the close of fiscal 2024, we conservatively guided consolidated revenues to $115 to $120 million, and we raised our guidance for fiscal 2025 to $145 to $155 million.

If you would like to register a question. Please press star followed by one on your telephone keypad and I would now like to hand, the call him to hoist arent Sullivan CFO, which begins on R&D. Please go ahead.

Thank you.

Good morning, welcome to <unk> business update and financial results Conference call for the company's third quarter ended December 31 2023.

On today's call with me is Rob Allen CEO and chairman of like one 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.

Rob Allen: Of note, our audio division contributed revenues of $130 to $140 and $20 to $25 million of EBITDA, with over $17 million of positive cash flow. I'm so proud of our audio team, considering at the time of the acquisitions of Slacker Radio and Podcast One, the combined pro forma revenue was around $40 million, with 400,000 members losing $15 million a year. Today's Slacker Radio has proudly passed three and a half million members, and this past quarter added over 300,000 members and close to 700,000 year-over-year.

Financial results unexpected future growth of the business actual results may differ materially from those discussed on the bulk.

Bulk or 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, including those described in its annual report on Form 10-K for the year ended March 31, 2023, and subsequent SEC, one you'll find reconciliations of non-GAAP financial measure.

As to the most comparable GAAP financial measures discussed today in the company's earnings release, which is posted on its investor Relations website.

We encourage you to periodically visit Investor relations website for important content. The following discussion including responses to questions contains time sensitive information and reflects management's view as of the date of this call February eight 2024.

Rob Allen: We are guiding this year over a million new members. This past quarter, we onboarded 24 new podcasts signed to a long-term contract, and we've signed almost every one of our current podcast shows. We have a pipeline of over 100 existing podcasts. That's 10 times the amount of any company in history.

And except as required by law. The company does not undertake any obligation to update or revise this information. After the date of the crops I'd like to highlight to investors that this call is being recorded the company's making it available to investors and media via webcast and a replay will be available on its website and the Investor Relations section shortly following the call. Additionally, it is the properties.

Rob Allen: It shows us that we believe in many will join our network. We focus on great creators with amazing stories that can benefit and achieve increased engagement by joining our family. These shows are averaging about $350,000 in annual revenue. It's over $7 million added. This gives us unique clarity and strong confidence in our ability to achieve our 2025 financial guidance.

The company and any redistribution retransmission or rebroadcast of this call or webcast in any form of the company's expressed written consent is strictly prohibited.

I would like to turn the call over to <unk> CEO, Rob <unk>.

Yeah.

Thank you Erin and good morning, everyone I'd like to thank you for joining us today.

It's a really exciting time at <unk> and I'm extremely pleased with how all areas of our business are performing well.

Rob Allen: Also, as we expand our podcast roster and our sponsorship, we now have over 600 advertisers and partners and growing, as well as over 10 podcast networks as potential acquisitions, very similar to what we did with Cast Media. Kit, Sue, Eli, and the rest of the podcast team have done an amazing job, and you'll have an opportunity to listen to Kit presenting at 1130 Call. I'm excited to announce this past quarter we closed a first ever 20 plus million dollar B2B deal with one of the largest streaming platforms in the world, a Fortune 500 company. This, combined with our extension of our 10 year partnership with Tesla, extending their contract for at least another 18 months ensures increasing monthly revenues, which provides us with full confidence, and our business plan will provide.

Truly a spectacular quarter and one that illustrates the power of our creator first model focus on Super fans, which rewards the talent and enriching the shareholders as we near the close of fiscal 2024, we conservatively guided consolidated revenues to 115 to 100.

And $20 million and we raised our guidance for fiscal 2025 to $145 million to $155 million.

Of note our audio division.

<unk> revenues of 130 to 140 and $20 million to $25 million of EBITDA with over $17 billion of positive cash flow.

I am so proud of our audio team considering at the time of the acquisition of Slacker radio and podcast one the combined pro forma revenue was around $40 million.

Rob Allen: More and more of these B2B deals. We now have over 42 potential B2B partnerships in our pipeline across eight verticals. In my 30 plus year history of high-level involvement in media and technology companies, any time our companies have passed exceeded that $100 million in revenues, with most of this almost guaranteed recurring. It has always provided both myself and my management team with confidence in the runway and the ability to drive further revenues and sizable EBITDA for our shareholders. This is the reality. LiveOne Flywheel.

With 400000 members, losing $15 million a year.

Today's slacker radio is proudly past three and a half million members. This past quarter added over 300000 members a close to 700000.

Year over year.

We are guiding this year over 1 million new members.

Past quarter, we on boarded 24, new podcasts signed some long term contract we signed almost every one of our current podcast shows we have a pipeline of over 100 existing podcast. That's 10 times the amount that any in any in history shows that we believe in many will join our network we focus on.

Rob Allen: It starts with creativity first, focusing on superfans, driving traffic and engagements, and producing multiple revenue streams from the same piece of content. This quarter, our only negative EBITDA division, our merchandise division, CPS, has cut over $5 million in costs and will continue to cut up to $7.5 to $10 million in costs and use that cost savings to accelerate our celebrity brand. We will launch between eight to 12 celebrity brands, starting with birthday sex with Jeremiah and Russell Bevan. We sold out in our first few weeks of the first round of products. This past year, proudly, our publishing division, Drumify and Splitline, was nominated for three Grammys and took home two Grammy awards. And the awards were just the beginning; we created Sounds Productions platform to compete with splice where producers upload their beats and sounds to a storefront for other creators to purchase. Like Splice, this is a subscription-based service.

Great creators with amazing stories that can benefit and achieve increased engagement by joining our family.

Yeah.

These shows are averaging about $350000 annual revenues to over $7 million at it.

This gives us a unique clarity and strong confidence in our ability to achieve our 2025 financial guidance.

Also as we expand our podcasts roster and our sponsorship we now have over 600 advertising.

And partners and growing.

As well as over 10 podcast network's as potential acquisitions very similar to what we did with cash media.

Kit shoe, Eli and the rest of the podcast in.

Have done an amazing job and you'll have an opportunity to listen to the kit presenting at $11 30 call.

I'm excited to announce this past quarter, we closed our first ever.

20, plus million dollar <unk> deal with one of the largest streaming platforms in the world a fortune 500 company.

This combined with our extension of our 10 year partnership with Kessler.

Rob Allen: However, the big difference is that our company and the creators own the IP and receive royalty payments. There is nothing better for our young artists than receiving mailbox money every month. This model motivates and attracts creative talent to our platform, driving traffic, audience, and engagement. Again, with very little cost to us and unlimited revenue potential. Revenues increased over 300% in our first year.

The contract for at least another 18 months ensures increasing monthly revenues, which provides us with full confidence in our business plan will provide.

More and more of these <unk> deals, we now have over 42 potential <unk> partnerships and our pipeline across eight verticals.

In my 30, plus year history of high level of involvement in media and technology companies anytime or companies had passed surpassed that $100 million in revenues with most of this almost guaranteed recurring next year.

Rob Allen: I'd also like to highlight that we created a subsidiary, a podcast one called Studio One, focused on ownership of scripted IP, more specifically on second windows of selling to television and film. This quarter, we proudly announced the acquisition and launch of four shows, Opportunist, Lost in Panama, Vigilante, and Vardom Town, which has already partnered with a major streaming platform and is waiting to be greenlit as a scripted Another one of those has partnered with a different platform and is already sold as a documentary, our supplies are plentiful, and our possibilities are endless. I really hope everyone had an opportunity to listen to our newest podcast, Varnumtown, hosted by Carl McLaughlin.

It has always provided both myself and my management team the confidence and the runway and the ability to drive further revenues.

It's sizable EBITDA for our shareholders.

Yeah.

This is the life.

Flywheel it starts with creative first focus on Super fans, driving traffic and engagement and producing multiple revenue streams from the same piece of content.

This quarter, our own our only negative EBITDA division, our merchandize Cps has cut.

Cut over $5 million of costs, and we will continue to cost up to $7 five to 10 million of cost.

And use that cost savings to accelerate our celebrity brands, we will launch between eight to 12 celebrity brands, starting with birthday sex with Jeremiah and Russell debit we sold out in our first few weeks.

Aaron Sullivan: This is a great example of the type of podcast we are targeting, which has the traction to be major studio productions. We believe we currently have eight to 12 current podcasts that have the potential to turn into scripted shows and even more on the horizon, either creating our own or acquiring existing podcasts and then promoting them within our community. Once again, owning more and more IP and licensing merchandise in the coming years, the division could become the most profitable division within the company. Given the current strength and future potential of our business, we believe our stock remains extremely undervalued. We increased our buyback from $4 million to $10 million, leaving approximately $6 million in capacity. Thank you, everyone, for your time and attention, and I'd like to hand it back to our CFO, Aaron Sullivan, for our Q3 results. Thanks, Rob. I'll spend just a few minutes providing a very brief overview of our results for the third quarter of fiscal 2024, the quarter ended December 31st, 2023. Consolidated revenue for the three-month period ended December 31, 2023 was $31.2 million. Packer posted record revenue for Q3 of $16.8 million and adjusted EBIT of $6.8 million.

Of the first round of product.

This past year proudly our publishing division drama <unk> split mine was nominated for three Grammys and to come to granules.

And then just the beginning we created challenge productions platform to compete with splice, where producers upload their beats and sound to a storefront for other creators to purchase them.

<unk>. This is a subscription based service, but the big difference is our company and to create is only IP and received royalty payments. There is nothing better for our young artist and receiving mailbox money every month this.

This model motivates and attract creative talent to our platform driving traffic audience engagement.

With very little cost to us an unlimited revenue potential revenues increased over 300% in our first year.

I'd also like to highlight we created a subsidiary of podcast one called studio on.

Focus on ownership of scripted IP.

Specifically focused on second windows of selling to television and film.

This quarter, we proudly announced the acquisition launch voice shows opportunist, Washington, Panama vigilante and bottom town.

Aaron Sullivan: Podcast One posted revenue of $10.4 million and an adjusted EBIT loss of $400,000. For the third quarter of fiscal 2024, revenue consisted of 54% membership and 46% advertising, sponsorship, merchandise, and other compared to 49% membership and 51% advertising, sponsorship, and merchandise and other in the prior year period. Consolidated adjusted EBIT for Q3 fiscal 2024 was $3.3 million, and on a U.S. GAAP basis, LiveOne posted a consolidated net loss of $2.6 million, or $0.03 per diluted share, for Q3 fiscal 2024.

Which is already partnered.

With a major streaming platform and is waiting to be green lit a scripted television show.

Another one of those is partnering with a different platform and has already sold as a documentary.

Our supplies deepen our possibilities are endless and I really hope everyone had an opportunity to listen to our newest podcast Martin down.

Posted by Paul Mclaughlin is a great example of the type of podcasts were tardy targeting which have the traction to be major studio productions. We believe we currently have eight to 12 current podcasts have the potential to turn into scripted shows any more on the horizon.

Rob Allen: Rob, I'll turn it back to you. Great. Thank you, Aaron. Again, another spectacular quarter for the company. Huge growth again. In conclusion, I just want to reiterate, as each of my prior companies have broken that $100 million mark in revenues, whether it was Digital Turbine, iOne, Jaxx, THQ, Forward Industries, Grant Toys, each has had substantial 5 to 100 times growth for their shareholders. I'm confident and excited because I believe this is the biggest opportunity in my career. I personally invested over $18 million in this company, and I increased our company stock buyback to $10 million because I see where we're headed and strongly believe our stock is undervalued.

Our own or acquiring existing podcasts and then promoting them when there are community once.

Once again, only more and more IP licensing merchandising coming years division could become the most profitable division within the company.

Given the current strength and future potential of our business, we believe our stock remains extremely undervalued.

We increased our buybacks and 4 million to $10 million, leaving approximately $6 million of capacity.

Yeah.

Thank you everyone for your time and attention and I'd like to hand, it back to our CFO Aaron Sullivan for Q3.

<unk>.

Thanks, Rob I'll spend just a few minutes, providing a very brief overview of our results for the third quarter of fiscal 2024.

Operator: We've said we were going to achieve hitting 10 million subscribers in over a five-year period. We're well on that way and super confident we're going to get there. If we do, we'll be over a billion dollars in revenues, and the stock will be substantially higher. I want to thank everyone for their support and look forward to any questions. Thank you. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star followed by two.

The quarter ended December 31, 2000 come true.

Consolidated revenue for the three months period ended December 31, 23 was $31 2 million soccer posted record revenue for Q3 of $16 8 million and adjusted EBITDA of $6 8 million podcast, one posted revenue of $10 4 million and adjusted EBITDA loss of 400 that the third quarter of fiscal 2004 revenue consists of <unk>.

The 4% membership.

36% advertising sponsorship merchandize and other compared to 49% membership from 51% advertising sponsorship and merchandize and.

And other than the prior year period.

Adjusted EBITDA for Q3 fiscal 'twenty four it was $3 3 million on our gas in the U S. GAAP basis, <unk> posted a consolidated net loss of $2 6 million or <unk> <unk> per diluted share for Q3 fiscal 'twenty four.

Operator: And when preparing to ask your question... Make sure you are unmuted, and then use a star followed by one on your telephone keypad to register a question. Our first question today comes from Brian Kinstlinger from Alliance Global Partners. Brian, please go ahead; your line is open. Great. Thank you. Congratulations on your eight-figure sponsorship deal with podcast one. First, is this a new sponsor or a larger agreement from an existing sponsor? I guess I'm trying to understand if this is all incremental revenue to the podcast's current run rate. Yeah, so this is a brand new partner. It started at the end of last year when we announced it. It will continue to grow, and it's way more than eight figures.

Rob ill turn it back to you.

Great. Thank you Erinn.

Again, a spectacular quarter for the company.

Huge growth again in conclusion, I just want to reiterate as each of my prior companies has broken that $100 million Mark in revenues, whether it's digital turbine I want Jack's THQ forward industries Grant toys, each have had substantial five to 100 times runs for their shareholders I am competent incited because I believe this.

The biggest opportunity in my career I personally invested over $18 million of this company and I increased our company's stock buyback to $10 million because they see where we're headed and strongly believe our stock is undervalued.

<unk> said, we were going to achieve getting 10 million subscribers is over a five year period, we're well on that way and supercomputing going to hit there. If we do we'll be over $1 billion in revenues.

Rob Allen: It's well over $20 million, and you'll start to see that incremental growth in this quarter and substantially higher as each quarter goes forward. This gives us a streaming partner, one of the biggest in the world, a Fortune 500 company, and gives us a massive audience to reach. Showcase.com.

And this will be the stock will be substantially higher I want to thank everyone for their support and look forward to any questions. Thank you.

If you would like to ask a question. Please press star followed by one on your telephone keypad. If you would like to withdraw your question. Please press star led by Kay.

Rob Allen: Fantastic. And then more broadly, we've heard from the Googles and Facebooks of the world that the ad market is finally beginning to strengthen. And then we also have an election year ahead, which usually helps the ad market. First, are you seeing the same signs in the market where pricing might begin to strengthen? Will podcasts benefit from political ad trends? The answer to both is yes.

Pairing to ask your question. Please ensure you are muted likely.

Slipped by one on your telephone keypad to register a question.

Our first question today comes from Brian Kingston.

Global Partners Brian. Please go ahead your line is open.

Great. Thank you congrats on your eight figure sponsorship deal with podcast one.

Rob Allen: We're already seeing that, and we're seeing telltale signs that this is going to be a fantastic year, as you can see by the numbers we announced this morning in podcast one. We almost matched last year, right? We did 32 million last year. We're at 31 million and change already with a quarter to go, and obviously, our fourth quarter, right, especially with this new contract, is going to be the best ever. We're in the history of the company. We're seeing telltale signs that it's strong.

First.

Is this a new sponsor or a larger agreement from an existing sponsor I guess I'm trying to understand that this is all incremental revenue to podcasts current run rate.

Yes. So this is a brand new partner.

It started started the end of last year, when we announced it it will continue to grow and it's way more than eight figures, it's well over $20 million and youll start to see that incremental growth in this quarter.

<unk> substantially higher as each quarter goes forward.

This gives us a streaming partner.

Rob Allen: Politics does work in advertising. But I think the biggest thing, Brian, to look at is the trends in podcasting, the usage, the number of people that are moving to podcasts, and demographics that are moving. It's getting younger and younger as well. And also, the number of sponsors that are moving into podcasting. It's, it's really a maturing business. And what I've told everyone is this business was going to grow when we bought podcast one from 4 million to eventually five to 7 million. What I would tell you now is that it's going to be way more like seven to 10 million by 2030.

What are the biggest in the World Fortune 500 company and gives us a massive audience to reach to showcase our content.

Fantastic.

And then more broadly we've heard from.

The googles and Facebooks of the world that the AD market is finally, beginning to strengthen and then we also have an election year ahead, which usually helps the ad market.

First are you seeing the same signs in a market where pricing might begin to strengthen and then we'll podcast benefit from political ad trends.

The answer to both is yes, we're already seeing that and we're seeing telltale signs that this is going to be a fantastic year as you can see by the numbers, we announced this morning in podcast one we almost matched last year right. We did 32 million last year were $31 million and changed already with according to go with.

Rob Allen: So there's a big market developing, and this is really a unique time for our advertising podcast. Right, the heart of the question, it's clear, Podcast One revenue is growing. I think you grew downloads by 15% if I read the article correctly, or unique visitors. So I guess I'm wondering, what are the pricing trends as I speak to the ad market? Pricing has generally been flat, and you expect it to increase. Has it been increasing? Just speak to pricing on the ad side, if you can.

Obviously, our fourth quarter, especially with this new contract is going to be the biggest quarter ever in the history of the company. So we're seeing telltale signs of strong politics does work in advertising, but I think the biggest thing Brian to look at is the trends in podcast.

Rob Allen: Yeah, I mean, I can talk from the overall market, which is increasing somewhat, right? But really, what's happening for us is because we built this community, right? We're able to sell across the community. And part of the excitement, and you'll see, you know, when podcasts like Brendan Schwab move over, and Brendan moved over doing, you know, doing, he's already doing twice what he was doing before, because of our community. We're able to upsell and sell very different CPAs, CPMs, and some of the bigger guys are, who are mostly doing programmatic advertising. So as a trend, the Great. I have a couple more if you don't mind.

The usage the number of people that are moving to podcast. The demographics that are moving it's getting younger and younger as well and also the number of sponsors that are moving into podcasts in which it's really a maturing business and what I've told everyone. As this business was going to grow when we bought podcast one from $4 million to eventually $5 million to $7 million.

What I would tell you and Alex can be way more like $7 million to $10 million by 2030.

Big market developing and this is really a unique time for our advertising and podcast business.

The heart of the question.

It's clear podcast when revenue is growing.

Growth is a function of downloads versus price I think you grew downloads, 15% if I read an article correctly.

Or unique visitors. So I guess I'm wondering what are the pricing trends as I speak to the AD market is pricing generally been flat and you expect to increase has it been increasing just speak to pricing on the AG side, if you could.

Rob Allen: First, and I asked this every quarter, I may have missed it. Can you speak to the number of podcasts that are pending onboarding and speak to the expected timeframe? I could be wrong, but I think last quarter you had 6 of the 27 from CAST. I might be reading my notes wrong.

Yes, I mean I could talk for the overall market right is increasing somewhat but really what's happening for us is because we built this community right, we're able to sell across the community and part of the excitement and Youll see when you see podcasts like Redmond Schwab move over and Brendan moved overdoing.

Rob Allen: So if I'm wrong, sorry. And then there are probably others pending. So just maybe take us through what's pending in the timeframe. Yeah, so we announced we added 24 this year. That's by far a record for the company, right? We're now up to close to 180 podcasts. What we said is that, for the first time in history, we have over 100 podcasts on our pipe. And the reason that that's happening is, if you read the announcement on Spotify, they hired a massive team with a very talented team of creators. And they just got rid of all of them.

He is already doing two times when he was doing before the cost of our community, we're able to upsell and sell at very different CPA CPM and some of the bigger guys are who mostly doing programmatic advertising. So as a trend. The trend is your friend the industry itself is going up but for us we're going up even higher because our community continues to grow.

Great I have a couple more if you don't mind.

And I ask this every quarter I may have missed it can you speak to the number of podcasts that are pending on boarding and speak to the expected timeframe I could be wrong, but I think last quarter. You had six of the 27 from cast I might be reading my notes wrong. So if I'm wrong, sorry, and then there is probably the other spending so just maybe take us through what is pending in the timeframe.

Rob Allen: And they woke up and realized they're the best at distribution. Right. And we're a great partner for them.

Yes, So we announced we added 24 this year that's by far a record for the company right. We're now up to close to 180 podcasts.

Rob Allen: But they're really managing these small podcasts is not does not make sense for. So a lot of these contracts, there were twenty eight billion dollars of acquisitions in the industry. The industry trend was that it was a seller's market for podcasts, both podcast networks, as well as podcasters. Right now, as a buyer's market, you're going to see from Amazon and Spotify and Apple and Cirrus, a lot of these podcasts that do two hundred fifty thousand to five million dollars in revenues, their contracts are coming up, and they really need a place that can't hold them and support them right in this market And it's really not going to happen in these big companies. It's not really the right place at the base.

<unk> for the first time in history, we have over 100 podcasts on our pipeline and the reason that that's happening is if you read the announcements Spotify they hired a massive team with very talented team of creators and they just got rid of all of them and they woke up and realized they are the best distribution right. We're a great partner for them there.

<unk>, but theyre really managing these small podcasts is not does not make sense for a lot of these contracts that was $28 billion of acquisitions.

Positions in the industry the industry wise the trend was it was a seller's market for podcasts.

<unk> networks as well as podcasts right now is a buyers market youre going to see from Amazon and Spotify and Apple with serious a lot of these podcast with U 250000 to $5 billion in revenues contracts are coming up and you really need a place that can can't hold them and support them right in this.

Rob Allen: So this is the biggest pipeline we've ever had, and I fully expect to beat that 24 number. We'll still have a lot more coming this fourth quarter, and I expect to beat that number of, you know, call it twenty seven to thirty. This year, I fully expect to beat that next year.

Market and it's really not going to happen in these big companies, it's not really the right place in the base. So this is the biggest pipeline we've ever had and I fully expect to beat that 24 number will have still a lot more coming in the fourth quarter and I expect to beat that number of P&L call. It 27 to 30 this year I fully expect to beat that.

Rob Allen: And just looking at our pipeline and how close we are on many of these, I think you'll see some really exciting announcements. You'll see some major, major podcasters moving over to our platform, like Brendan did. It's rare that you see those kind of moves, but you're going to see them in a unique way.

Next year I mean, just looking at our pipeline and how close we are on many of these I think youll see some really exciting announcements you'll see some major major podcast is moving over to a platform like Brendan did.

Rob Allen: And the big guys are going to, they're going to, they're going to control distribution, which is wonderful that we have these partnerships with Spotify and Apple and Samson's and so on. Right. But they're also going to be focused on the Joe Rogans of the world.

It's rare that you see those kind of moves, but you're going to see them in a unique way and the big guys are going to they're going to control distribution, which is wonderful that we have these partnerships with Spotify and Apple and Samsung and so on right, but they're also going to be focused on the Joe Rogan, the world decided a new $250 million drag right.

Rob Allen: $250 million contract, right? And the show just moved over from Amazon; $100 million a year for SmartList, right? So there's more and more money pouring into the system, but the big guys are gonna focus on the Howard Sterns and the Joe Rogans, and we're gonna have an unbelievable opportunity to acquire existing podcasts with traffic and audience, as well as, like we did with Cast Media. I fully expect, we said we had 10 acquisitions in the pipeline, I fully expect additional acquisitions in the podcast space as well this year that are hugely acc I don't think you discussed it, but I think it's a really important point that you and I have discussed in the past.

And this shows just moved over from Amazon $100 million.

A year for Smart list right.

More and more money pouring into the system, but the big guys are going to focus on how it serves and Joe Rogan and we're going to have an unbelievable opportunity to acquire existing podcast with traffic and audience as well as like we did with cash media I fully expect we said we had 10 acquisitions in the pipeline I fully expect additional acquisitions in the podcast space.

This year that are usually accretive to our bottom line.

Great last question I have.

I don't think you discuss it but I think it's really important point that you and I have discussed in the past. So maybe you could share any stats for recently on boarded podcast, how they perform compared to when they were on other platforms not on the podcast one platform in the first six months or so I think that we've had a good discussion of it I think it would be helpful. If you could.

Rob Allen: So maybe you can share any stats for recently onboarded podcasts, how they perform compared to when they were on other platforms, not on podcast one platform in the first six months or so. I think that we've had a good discussion, and I think it would be helpful if you could share some stats. And I think this is a credit to Kit, Eli, and Sue. And they've got 65 years of history and are making billions of dollars in revenues from radio, right? Sue ran all the sales for Howard Stern and Mel Carmisen.

Sure there's some staff.

And I think this is this is a credit to kit, Eli and Sue and they've got 65 years of history in doing billions of dollars of revenues in radio Reits, who ran all of sales for Howard Stern and Mel Karmazin in all three of them trained on their new on patents, who is a pioneer in radio.

Rob Allen: And all three of them trained under Norm Paddox, who was a pioneer in radio and created one of the great public companies in radio with his company, Westwood One. Now, our team has been able to move over to podcasts. And without giving names, we moved over one podcast that literally had 20,000 downloads. It was making a couple of dollars. Very talented, two women, very talented from a small town. We moved them onto our platform. We put them on with the Vanderpumps.

Created one of the great public companies are great radio.

With his company previously with Westwood one.

Our team has been able to move over podcasts and without giving names. We moved up one podcasts literally had 20000 downloads, which make it a couple of hours very talented two women very talented from a small town, we moved them onto our platform. We put a moment the band of pumps, we put them onto all the housewives, who put them on all of our female network.

Rob Allen: We put them on all the Housewives. We put them on all of our female networks, which are the most powerful, have now grown to 150,000 downloads, and they're making millions of dollars in revenue. So, there are multiple stories like that. And very few companies are left that can do that where they have a community where they're really working on the sales, the marketing, the PR, the production, all of it in one and working with that talent to deliver them way better CPAs, way more traffic, way more audience. We also put them on Good Morning America and put them on TV and, you know, did all the cross work of a PR firm to really grow them. And, you know, couldn't be more proud of it.

Where we're most powerful.

And have now grown to 150000 downloads and theyre doing millions of dollars of revenues.

No.

There is multiple stories like that.

Very few companies have left that can do that where they have a community that they are really working on the sales the marketing the PR the production all of it in <unk> and <unk>.

Working with that talent to deliberate way better CPA is way more traffic way more audience. We also put them on good morning America and put them on TV.

It all all the cross work, a PR firm to really grow them and.

It couldn't be more proud of it Brendan Brennan shows exploded since he came on a network it's up to five times since said from from being a broadcast media.

Rob Allen: Brendan's show has exploded since it came on the network. It's up two and a half times since since it was over at Cast Media. Great. Thanks for all the details.

Yeah.

Great. Thanks for all the detail.

Brian David Kinstlinger: Thanks, Brian. I appreciate you. Our next question is from John Hickman from Leidenberg. John, please go ahead, your line is open.

Thanks, Brian I appreciate you asking.

Our next question is from Jon Hickman from Ladenburg. John. Please go ahead. Your line is open.

John Hickman: Hey Rob, could you walk through how a podcast becomes a, you know, a streaming or television-type asset and what the revenues, what your portion of the revenues could be? Yeah. Great. Thanks. Thanks, Sean. I mean, you and I go back a long way.

Hey, Rob could you walk through like how podcast becomes a.

Our streaming or TV type.

Asset and what the revenues.

Your portion of the revenues could be.

Yes, great.

Great. Thanks nice job.

Rob Allen: I think I met you when I owned Atmosphere Films, and I had a slate of television and film that I was very fortunate, you know; those films turned out to be one. One turned out to be the movie 300. Another one turned out to be Spider-Web Chronicle, and we did well over a billion dollars in revenue. Here's the beauty of this model. You take a podcast like Varnamtown. My partner and board member, Patrick Waksberger, one of the great creators of content, maybe in history, just won an Academy Award for CODA, created Twilight, La La Land, came to us with a show called Varnamtown. Okay? An amazing story, right? I'll make it really brief, but 300 people, little town. For any of you old enough to know this, this band is called REO Speedwagon.

Go back a long way I think I met you when I owned atmosphere films I had.

Sleet of television and film that I was very fortunate those films turned out to be one where it turned out to the move to be the movie 300, and the other one that turned out to be Spiderwick chronicles and we did well over a $1 billion in revenues Here's the beauty of this model you take of podcasts like Barnum town.

Partner and board member Patrick Wachsberger, one of the great creators of content maybe in history. Just wanted an Academy award for Coda created Twilight La La land.

To us with a show called Barnum down Guy, an amazing story and I'll make it really brief but 300 people little town for any of you old enough to know this the span coach Oreo Speedway a plan a plane lands in this little town of 300 people in North Carolina, and all of a sudden everybody explosion becomes rich monies coming at it.

Rob Allen: A plane lands in this little town of 300 people in North Carolina, and all of a sudden, everybody explodes and becomes rich. Money's coming out of their pockets. It's so wild how much money is created in the system. And, of course, what happens: murders and CIA and FBI and drug enforcement and tax authorities and so on. This little town of 300 people. That show, I highly believe it's gonna become a bidding war for the streaming networks. It's the story of Pablo Escobar infiltrating a little town in North Carolina. And if anyone who has an opportunity to listen to it, I think you're going to really enjoy it. If you've seen the show Ozark, or you've seen any of these true crime type shows, this is one of the best I've ever seen.

The money is coming out of their pockets. So so wild how many how much money is created system and of course, what happens murders.

CIA and FBI and drug enforcement and tax authorities and so there's little kind of 300 people.

That show.

Highly believes it's going to come a bidding war for the streaming networks. It's the story of Pablo Escobar infill trading a little town in North Carolina.

Got it.

For anyone who has an opportunity to listen to it.

You can get a really enjoy it if you've seen the show Ozark are you seeing any of these true crime trying to type shows. This is one of the best Ive ever seen and I think that's one of our four shows we've announced so far.

Rob Allen: And I think that's one of our four shows we've announced so far. Stay tuned, because there's gonna be a lot more announced any minute now. These four are all in this quarter, right?

I'll stay tuned because it can be a lot more announce any minute now. These four all in this quarter right opportunist vigilante has already sold to a major studio. They just wired is $70000 just to start with John when you look at these things you're going to start to get production money.

Rob Allen: Opportunistically, Vigilante is already sold to a major studio. They just wired $70,000 just to start with. So John, when you look at these things, you're gonna start to get production money, you're gonna start to get, you know, back-end money. And as we grow it, we expect to do 10 to 12 of those shows, which we're doing anyway, right? They're on our platform. You know, make some money off the podcast, but then sell it for that second window where there's no risk, and Netflix or Apple or Amazon or HBO buys the rights to it. And, you know, we sit there with the catchers and collect money for the rest of our lives. I'm very fortunate that when I did 300, it was now almost 20 years.

You're going to start to get back and money and as we grow it we expect to do 10 to 12 of those shows a year, which we're doing anyway right there on our platform.

Some money off the podcast, but then sell to that second window, where there is no risk and netflix or apple or Amazon or HBO buys the rights to it.

And we should stay with the catcher's Mitt and collect money for the rest of our lives I'm very fortunate when it did 300, it's now almost 20 years.

Rob Allen: You know, those royalty checks come into life. And so this is really exciting, you know, the next generation of where podcasting is going. So is there any cost?

Those royalty checks coming to life.

It's a really exciting next generation of where podcast is going.

So is there any cost to you to do that.

Rob Allen: Do that. Zero, I mean, zero. In fact, in fact, not only is it 100% March- Correct, once, once we, once we, Yeah. So as an example, right on Vigilante, we just got a $70,000 check, right? We get that check, right? It's already handed off, right? They've already hired the writers to produce it, right?

Zero zero.

Zero impact in fact, none of those.

What everyone's bacon.

100% margin.

Correct once once we once we.

Yes, so as an example, right on vigilante, we just got a $70000 check right, we get that check right. It's already handed off right they've already hired the writers to produce so on it right were executive producers on it and we'll continue to get paid as producers on it we will continue to get paid back and it is successful.

Rob Allen: We're executive producers on it, and we'll continue to get paid as producers on it. We'll continue to get paid back if it's successful. And, you know, literally, if it makes it, you know, you make it the first year, you're going to get paid a lot of money. If it makes the second and third year, yeah, this becomes mailbox money for life. So who in your shop is shepherding that initiative? Yeah, so this is a team of people.

Literally if it makes it.

You make it the first year, you're going to get paid a lot of money and mixed second and third year.

Comes mailbox money for life.

So.

Linear shop is shepherding that IND.

Initiative.

Yes.

Rob Allen: So remember, it starts as a podcast, right? So the podcast, yeah. Imagine that now you can go instead of scripts and books selling for a million dollars, $2 million, right? Then you've got to hire a writer.

As a team of people. So remember it starts as a podcast right. So the podcast.

Imagine imagine that now you can go instead of scripts and booked shell for 1 million $2 million right. Then you've got to hire a writer here you already a proof that the shows already up the traffic I'm sure. He's add the audience is already there and now you are selling to Netflix and do your own. Okay. The show is already number four on Apple right. It's already had a 100.

Rob Allen: Well, here, you already have proof that the show's already up, the traffic is already there, the audience is already there. And now you're selling to Netflix, and you're going, okay, the show is already number four on Apple, right? It's already had 100,000 downloads in the first week. They've got proof of concept, they've got proof of customer base. It's a very unique model.

Downloads in the first week.

They've got proof of concept proof of customer base to very unique model.

Rob Allen: And, you know, I'm really excited about this. I think it's going to be a real winner for us. And it'll take a little bit of time. But, you know, just as the small bits of money coming in next year could be very substantial money coming in and growing every year. Okay, real quick. Can you remind the four that you've already announced? Vigilante, Barmintown, what are the other two?

I'm really excited about this I think it's going to be I think it's going to be a real winner for us and we will take a little bit of time, but just the small the small bits of money coming in from next year could be very substantial money coming in and growing every year.

Okay real quick can you remind us of four that you've already announced the July any environment town what are the other two yep.

Rob Allen: Yep, to Opportunist, which amazingly just so we run. Just the reruns are doing 100,000 downloads. We're making a lot of money just off the reruns already, right? So that first three years of it, we acquired that from CastMedia. Vigilante is already sold to a major network. Opportunist is partnering with a network to do a documentary on just one season of it.

Yep.

So opportunistic.

Which amazingly gestural relaunched.

The reruns you're doing 100000 downloads will make it a lot of money just not just off the reruns already show that first three years of it when we acquired that from cash media.

<unk> has already sold to a major network Guy.

Opportunities opportunities has partnered with a network to do a documentary of just one season of it Guy where we're at with two other seasons.

Rob Allen: We're out with two other seasons on the networks, and the other one is called Lost in Panama. Okay. And I think we'll add another one almost every couple of weeks, John, right now. Okay. Okay, go, go, and do it.

It works and the other one is called loss in Panama.

Okay.

Thank you we will add another one almost will probably add another one every couple of weeks John right now.

Okay.

Okay.

Go into.

Rob Allen: Thank you. I appreciate you. Thank you. Our next question is from Sam Lee. Sam, please go ahead. Your line is open. Sam, please unmute yourself later.

Okay. Thank you I appreciate you.

Thank you.

Our next question is from Sam Lee Sam. Please go ahead. Your line is open.

Sam Please on mute yourself lately.

Operator: Pays, connected, so I'll move on to our next question. Our next question is from Sean McGowan from Roth MKM. Sean, please go ahead. Your line is open. Are you able to hear me?

Okay.

Okay.

Okay.

It appears that Tom has disconnected so I'll move on to our next question. Our next question is from Sean Mcgowan from MGM. Shaun. Please go ahead. Your line is open.

Are you able to hear me.

Sean McGowan: Yeah. Hey, John. How are you doing, buddy?

Yeah, Hey, John how are you doing buddy.

Sean McGowan: Yes. Pretty good. How are you?

Yes pretty good how are you.

Sean McGowan: Let me start with Aaron. First of all, congratulations, Aaron, on your recent promotions. But second, can you give us an idea of exactly when the 10Q will be out? Thanks, John. I appreciate it.

Let me start with with Aaron first of all congratulations iron on the recent promotions.

Then secondly can you give us an idea of exactly when the 10-Q will be out.

Thanks, Sean.

Aaron Sullivan: So we are looking at early next week, you know, deadline is Wednesday the 14th. We're hoping to get it out maybe a day or two sooner. Okay, would you mind repeating those percentage breakdowns on the revenue, you know, between subscription and ad revenue and, you know, and any kind of color you could provide on revenue outside of those two categories? Yeah, sure. So let's see, I think We mentioned that Flacker revenue was $16.8 million for the quarter, and podcast one was 10.4. So that's two big buckets there.

So we are looking at.

So it will be early next week.

Deadline is Wednesday, 14th we're hoping to get it at maybe a day or two sooner.

Okay would.

Would you mind repeating those percentage breakdowns on the revenue between subscription and AD.

And any kind of color you can provide on revenue outside of those two categories.

Yes sure.

So the I.

Hi, Thank you.

We mentioned that slacker revenue was $16 8 million for the quarter.

A podcast one was $10 four.

So that's the two big buckets, there and then in terms of the percentages that 54% membership.

Aaron Sullivan: And then in terms of the percentages, it's 54% membership, and then 46% advertising, sponsorship, merchandise, and other for the current quarter. And then the prior year quarter was 49% membership and 51% advertising, sponsorship, merchandise, and other. But that's just within audio, but can you give me any color on, you know, revenue outside of that? meaningful trends going on.

And then 46% advertising sponsorship merchandize another for the current quarter and then the prior year quarter was 49% membership.

And 51% advertising sponsorship merchandising another alright.

That's just within audio.

Can you just give me any color on.

Revenue outside of that.

Any meaningful trends going on there.

So the.

Aaron Sullivan: So the outside of that, you've got basically merchandise revenue making up the remainder. And then on the $20 million deal, if you could provide a little bit more color on that, for example, what time frame does that cover, and is all of that revenue going to be booked in kind of in one bucket, or will it be spread around? So that's over the course of calendar 24.

Outside of that you've got basically merchandise revenue makes up the remainder.

Okay.

And then on the $20 million deal.

If you could provide a little bit more color on that for example.

What timeframe does that cover.

Is all of that revenue going to be booked in kind of in one bucket or will be will it be spread around.

So that's.

Over the course of calendar 'twenty four.

Aaron Sullivan: So you should see it in a relatively straight line manner over that period, and that will be in the advertising category. So it's all podcasts. Correct. Then back to Slack for a second. Any updates or... color on the expanded relationship with Tesla or with any other equipment manufacturers? I think you've hinted in the past that they're Additional partners. Audio, there.

So you should see it.

<unk>.

A relatively straight line monitor over that period.

That will be in the advertising category.

Okay. So it's all podcast.

Correct.

Okay.

The back to slacker fixed for a second any updates or.

Color on expanded relationship with Tesla or with any other equipment manufacturers I think you hinted in the past that there could be.

Some additional partners.

For audio streaming anything new there.

Rob Allen: Yeah, so let me jump in on that, Sean. So what we just announced is that we expanded our pipeline from 35 to 42 partners, right? Our streaming partner is the first of many of these B2B deals. And we fully expect that at those 42, somewhere in the 5% to 10% of those will close this year, so anywhere from two to four of those.

Yes, let me jump in on that Sean So when we just announced.

We expanded our pipeline from 35 to 42.

Partners right.

Our streaming partners. The first of many of these <unk> deals.

And we fully expect that add those 42.

Somewhere in the 5% to 10% of those those will we'll close this year.

So anywhere from two to four of those in each of those are with building into multi trillion dollar companies.

Rob Allen: And each of those is with billion- to multi-trillion-dollar companies, very similar to this type of deal. And so we couldn't be more excited about the pipeline. We brought a great team out of Microsoft who have done billions of dollars in B2B deals. And as you know, John, my entire business in Digital Turbine was built off the backs of B2B deals. That was just with carriers and hardware companies. We have eight verticals here.

Very similar to this this type of deal and so we couldn't be more excited about the pipeline. We bought a great team at a Microsoft who has done billions of dollars of <unk> deals as you know John my entire business in digital turbine, which built off the backs of <unk> deals that was just with carriers and hardware companies. We had eight verticals here. So we fully.

Rob Allen: So we fully expect to expand our auto business. We fully expect to expand our carrier business. And historically, Slacker has had partnerships with everybody from Samsung to Verizon to T-Mobile.

Back to expand our auto business.

We fully expect to expand our carrier business.

And historically slacker has had partnerships with everybody from Samsung the Verizon T mobile and as interest rates rise and you're going to hear this theme exactly as I described to the digital turbine form of seven years here is the same trend. This year as interest rates are going up those commodity businesses must have a closer relationship and must own the data.

Rob Allen: And as interest rates rise, and you can hear this theme exactly as I described it in Digital Turbine for over seven years, the same trend is here. As interest rates are going up, those commodity businesses must have a closer relationship and must own the data of their customers. And you're seeing more and more of those partners now signing up for content and owning their own content and having their own content deals versus giving it to Apple and Android and just allowing them to own all that data. So really exciting pipeline, the biggest by far in the history of the company. It's the one area that we're adding people to. We're now up to four people in our B2B. We'll continue to add to that group.

Their customers and you are seeing more and more of those partners now signing up with content and owning their own content and having their own content deals versus giving it to apple and Android and just allowing them to own all that data.

Really exciting pipeline the biggest by far in the history of the company.

The one area that we're adding people we're now.

For people in all <unk>.

Continue to add to that group and you'll probably see some announcements around that and expanding that <unk> as we announced the next deal.

Rob Allen: And you'll probably see some announcements around that and expanding that B2B as we announce the next deal. Okay, and when you talk about those 35 to 42 partners, is that all within Blacker, or does that include partnerships that would be in podcasts? You know, you know, audio auto partnerships, right? So even though this first deal is per podcast, that doesn't mean it can't expand to radio, right? So that doesn't mean it can't expand to our live streaming of our pay-per-view; we have these massive libraries of video.

Okay, and when you talk about those 35 to 42.

Partners or is that all within <unk>.

Blacker or does that include partnerships that would be in podcast.

Yes.

Audio auto partnerships right. So even though this first deal is put podcasts that doesn't mean it can't expand to radio right. So it doesn't mean it can't expand to a live streaming of our pay per view. We have these massive libraries of video so there'll be surprise do you start to see announcements at crossover both of them.

Rob Allen: So don't be surprised if you start to see, you know, announcements that cross over both. Okay. Thank you. And then last thing, Rob, can you give us a little bit more color on what we should expect to see in other products, you know, coming soon in Celebrity? Can you give us a little peek there?

Okay.

Thank you and then last thing Rob could you give us a little bit more color on what we should expect to see other products coming soon and celebrities and can you give us a repeat there.

Rob Allen: Wine is off to a great start, but one of the things we should expect, Yeah, I mean, be patient because it's coming any minute now, right? You know what I said, you're going to see another two or three products launch. So we have two wines already that are being launched. You're going to see us across big spaces, things like coffee, right? And cosmetics.

One is off to a great start, but one of the things should we expect to see in the coming quarters.

Yes.

Be patient because it's coming any minute now right. What I said is you're going to see another two or three products launched so we have two lines already that.

That would be a launch you're going to see us across big spaces things like coffee like cosmetics. So when you think about what's happened in the industry. The social media stars, which we live with every day with their podcast with the musicians with social media stars. We worked with all of them right. You think Logan Paul in Prime and how it's now doing 1 billion half hours of revenues right.

Rob Allen: So when you think about what's happened in the industry, these social media stars that we live with every day, whether podcasts or musicians with social media stars, we work with all of them, right? You think of Logan Paul and Prime and how it's now making a billion and a half dollars a year, right? And you think of Kim Kardashian, $700 million in revenues in two years, and what she's done for the cosmetic industry. And you think of, you know, go back, go back to, you know, Avion right inside of Entourage, and, you know, Tequila being created inside of it.

Can you think of Kim Kardashian, and $700 million of revenues in two years and what she's done to the cosmetic industry and you think.

I'll go back go back too.

Two <unk> lighting side of entourage in it.

<unk> being create inside of it.

Rob Allen: We see this great opportunity with very little to no cost to us to be able to partner with our creators, with already having the revenue shares built, and be able to launch products and find out if their social media drives it. If their social media drives it, you're going to have a great brand. If it doesn't drive it, there's a pretty good chance that it's going to be one you're going to pass on.

We see this great opportunity with very little to no cost to us to be able to partner with our creators with already having the Rev shares built and be able to launch products and find out if there are social media drives. It if there are social media drives it you're going to have a great brand if it doesn't drive it pretty good chance that is going to be when youre going to pass on so we expect to launch 10 to 12.

Rob Allen: So we expect to launch 10 to 12, or 8 to 12, this year, and we'll expand to 10 to 12, the year after, and further the year after. And these will all be at very little cost to us. It's really just an extension of our content and new revenue streams that come out of it. And I can't wait to do the ones with podcasters because with podcasters, just think about it, right?

Im sorry, eight to 12 this year.

And we will expand it 10% to 12% year after it and for the year after and these will all be with very little cost to us. It's really just an extension of our content and new revenue streams that come out of it and I can't wait to do the ones that podcast is because with podcast. There's just think about it right 50% of the business is direct response, so they are proof.

Rob Allen: You know, 50% of the business is direct response. So they have proven records that you're selling products right directly off that podcast because these podcasts have super fans. So they don't have to be massive businesses, but they can be hugely creative and usually grow our business overnight.

And records that Youre selling products right directly off that podcast because these podcasts have super pads.

So they don't have to be massive businesses, but can they can be usually accretive and usually grow our business overnight.

Sean McGowan: Great, thank you very much. Thank you. Our next question is a follow-up from Brian Kinstlinger. Brian, please go ahead, your line is open. Thank you, and I too. The first one, I just want to make sure lots of people are thinking this about this $20 million deal.

Great. Thank you very much.

Yeah.

Thank you our next.

Next question is a follow up from Brian singer Brian. Please go ahead. Your line is open.

Thank you I have two.

The first one I just want I'm sure lots of people are thinking this about this $20 million deal. So I'm going to ask it to make sure. We're all thinking about it the right way if I look at podcast ones revenues, you've been at about 10 $5 million for each of the first three quarters plus or minus.

Brian David Kinstlinger: So I'm going to ask it to make sure we're all thinking about it the right way. I'll look at podcast one's revenue. You've been at about $10.5 million for each of the first three quarters, plus or minus. Yeah, the way to think about it is that you're going to do $42 million-ish this year, whatever it is, plus or minus. And next year is... You're already off to $20 million higher. So 50% growth based on that $20 million deal, or is there something I'm not thinking about the right way? Yeah, we'll come out, Brian. We can't go any deeper than we publicly announced.

Is the way to think about it.

<unk>.

Youre going to do $42 million ish. This year, whatever it is plus or minus and next year is.

You're already at the $20 million higher so 50% growth based on that $20 million deal or is there something I'm not thinking about the right way there.

We will come out Brian we can't go any deeper than we publicly announced what we said is we expect to be on a run rate of $45 million to $50 million with four to five years.

Rob Allen: What we said is we expect to be on a run rate of 45 to 50 million with four to five. We're going to have to update that shortly, and give us a minute to do that. But we haven't publicly announced anything deeper there. But, you know, you're certainly thinking the right way, right?

We're going to have we're going to have to update that shortly.

And give us give us submit it to do that but we haven't publicly announced anything deeper there but.

You certainly you certainly thinking the right way.

Rob Allen: And one of the exciting things here is you now have your advertising business growing almost as fast as your audio business, right? So this is the first time we have two moonshots, you know, happening at the same time. That's good to hear. The second one, I just, maybe for Aaron on the cost side. The pros and cons, if you could just walk me through it.

Right and one of the exciting things here as you know have you now have you or your advertising business growing almost as fast as your audio business right. So this is the first time, we have two moon shots happening at the same time.

Okay. That's good to hear the second.

One I just.

Maybe for Aaron on the cost side.

Sure.

The pros and cons. If you can just walk me through it the first.

Brian David Kinstlinger: The first, on the OPEC side, substantially down in the December quarter to the September quarter. I assume that's your cost cutting efforts. I want to make sure there's nothing wrong this time.

On the Opex side, it substantially down in the December quarter for the September quarter.

Assume that your cost cutting efforts I want to make sure. There's nothing one time and this is kind of indicative of the near term.

Aaron Sullivan: And this is kind of indicative of the near term, uh, or lower, as you've talked about in the past. And then on the gross margin side, I'm not sure what impacted the mix. It was a little bit lower than it's been for the last few quarters. So, just, could you just take me through the dynamics on the cost side and how we should think about them going forward? And that's all the questions I have.

Or lower as you've talked about in the past and then on the gross margin side I'm not sure what impacted the mix it was a little bit lower than it's been for the last many quarters. So just if you could just take me through the dynamics on the cost side and how we should think about them going forward and thats all the questions I have thank you.

Aaron Sullivan: Yeah, thanks, Brian. So, the OPEX question, I think we're, you know, there's not, overall, there's not any one-time, significant one-time matters here.

Yeah, Thanks, Bryan so.

Opex question I think we are.

This does not.

Overall, there is not any one time significant onetime matters and here it came down a little bit from last quarter.

Aaron Sullivan: It came down a little bit from last quarter, simply because we had substantial costs related to spinning off Podcast One, so you had accounting and legal costs, et cetera, public filing costs in previous quarters, so you don't have that noise kind of going forward. And so that's that. And then on the margin side, there's about 3 percentage points of additional spend in the current quarter where we're out acquiring content. You know, we expect that to kind of normalize in the coming quarter. So, you should see an increase of about, you know, 2-3% there. I think that's the runway we've been on previously.

Simply because we.

We have substantial costs related to spinning off podcast ones. So you had accounting legal costs et cetera.

Public funding costs in previous quarters.

So you don't have that noise kind of going forward.

And so that's that's that and then on the margin side Theres about three percentage points of the.

Additional spend in the current quarter, where we are acquiring content.

We expect that to kind of normalize in the coming quarters. So you should see an increase of about two 3% there.

And I think thats kind of the run rate we've been on previously.

Aaron Sullivan: So, it should drop down this quarter. It should pick back up in the coming months. Great, thanks for the explanation.

So it should drop.

It dropped down this quarter should pick back up.

Of course.

Great. Thanks for the explanation.

Brian David Kinstlinger: Thanks, Brian. Thank you. Before we take our next question, I'd just like to remind everyone, to register a question, please press star followed by one on. Our next question is from Thierry Williard from WaterTowel Research. Thierry, please go ahead with your line.

Thanks, Brian.

Thank you before we take our next question I'd, just like to remind everyone too, but just a question. Please press star followed by one on those kind of thank you Pat.

Our next question is from Jerry William.

<unk> Research Geri. Please go ahead your line is open.

Yes. Thank you very much good quarter, guys and you've already covered a lot of ground. So I just have just one question you're guiding to a <unk>.

Thierry Williard: Yes, thank you very much. It's been a good quarter, guys, and you've already covered a lot of ground. So I just have one question. You're guiding to a very substantial jump in EBITDA for the fourth quarter, and I was wondering if you could give us some color on how much of that is seasonal, if it's driven by a one-time deal, or..., and what part of it is maybe leveraging in the model. So, I'll take this Robin, then you can, you can jump in.

A substantial jump in EBITDA for the fourth quarter and I was wondering if you could give us some color how much of that is seasonal driven by by a onetime deal.

And what part of it is maybe leverage in the model.

So I'll take this Robin you can you can jump in so for Q4.

Aaron Sullivan: So, for Q4, as I mentioned earlier, we had a lot of kind of one-time noise in kind of Q2, Q1, Q2, with a little bit leading into the current quarter on our efforts to spin out Podcast One. So that's behind us. So we're expecting to see some cost savings there. As the audio business continues to grow into Q4, we should just see additional contribution down to the bottom line there. And that's really kind of the two driving trends there in the EBITDA for our expected EBITDA for Q4. I don't know, Rob, if you have anything else to add. Yeah, I mean, I would just say, not just podcast one, we had also filed a public offering for Slack Radio to merge into a SPAC, which we subsequently pulled because the market was so terrible, but also because the company is growing so fast, right? Revenues and even that. So we had the cost of three, you know, three audits, legal fees, so on. It was very expensive.

Ah.

As I mentioned earlier.

We had a lot of kind of one time noise in kind of Q2, Q1, Q2 with a little bit leading into the current quarter on our.

Efforts to spin a punch as one so that's.

Behind us.

So we're expecting to see some some cost savings there.

And.

The audio business continues to grow into into Q4, we just seeing additional contribution down to the bottom.

Bottom line, there and Thats really kind of the two driving trends there in the EBIT for our expected for Q4, I know, Rob if you have anything else there.

Yes, I mean, I would just say not just podcast one that we had also filed a public offering for slacker radio and emerging to respect, which we subsequently pulled because the market was so terrible but also because the company is growing so fast right revenues and EBITDA. So we had the cost of three three.

<unk> three audits legal fees so on was very expensive.

Rob Allen: And Aaron, who has just made CFO, has just done a great job of that. And, you know, a great job of managing it. And you'll see, you'll I think you'll see those margins come back this coming quarter. Great. So, I mean, if I could summarize that the EBITDA level you're forecasting for the fourth quarter is, maybe, a sustainable level going forward and kind of a new quarterly basis. Yeah, I mean, our EBITDA, as you can see, and, you know, we don't break down by quarter, but we did put out guidance for next year, where we said our audio business is going to do $130 to $140 million, So you're starting to see some real traction and, you know, and a real, real move towards cash, cash flow, and the bottom line.

And Aaron who has just made <unk> just done a great job of that great.

Great job of managing it and you'll see you'll I think you'll see those margins come back this coming quarter.

Great. So I mean, if I, if I summarize that.

EBITDA level, you are forecasting for the fourth quarter is.

May be a sustainable level going forward and and and.

The new quarterly basis.

Yes R E.

EBITDA as you can see and we don't break down by quarter, but we did put out guidance for next year, where we said our audio business Raj can do 100 $130 million to $140 million right with $20 million to $25 million of EBITDA right. So you're starting to see some real traction in them.

Real real move towards cash cash flow and bottom line.

Rob Allen: Great, that's it for me guys. Thank you very much, guys. Thank you. We have no further questions, so I'd like to hand you over to Robert Ellen. I just want to thank everyone and appreciate your time, and in a difficult market like this, you know, this is a great time for our company and growth. We're going to continue to buy stock, and you know we'll be able to buy stock in the next couple of days now if the earnings are off. And we'll continue to buy stock, and if we trade down these low levels, we'll expand that buyback again if So I want to thank everyone, thank you for spending the time, and we appreciate your support in a tough market. Thank you everyone for joining today's call. You may now disconnect your lines and have a lovely day at www.LiveOneLive.com

Great. That's it for me guys. Thank you very much.

Thank you.

Thank you we have no further questions. So I'd like to hand back to Bob and then for any closing remarks.

I just want to thank everyone and I appreciate your time and in a difficult market like this.

This is a great time for our company and growth, we're going to continue to buy stock and we will be able to buy stock in the next couple of days now that the earnings are often we will continue to buy stock and if we get a trade that at these low levels, we will expand that buyback again, if we need to so I want to thank everyone and thank you for spending the time and we appreciate your support in a tough market.

Thank you everyone for joining today's call you may now disconnect your lines and have a lovely day.

Yeah.

[music].

Yeah.