Q1 2025 PodcastOne Inc Earnings and Bussiness Update Call
Desiree: Ladies and gentlemen, thank you for standing by. My name is Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to the podcast one in first quarter fiscal 2025 financial results and business update.
Operator: Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to the Podcast One Inc. First Quarter Fiscal 2025 Financial Results in Business. All lines have been placed on mute to prevent any background noise.
Desiree: All lines have been placed on mute to prevent any background noise.
Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star 1.
Speaker Change: After the speaker's remarks, there will be a question and answer session.
Speaker Change: If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again, press the star 1.
Operator: I would now like to turn the conference over to Aaron Sullivan, Chief Financial Officer. You may begin. Thank you, and welcome to Podcast One's first quarter fiscal 2025 business update and financial results conference call and webinar. Presenting on today's call are Kit Gray, President of Podcast One, Rob Allen, CEO and Chairman of Live One, and Executive Chairman of Podcast One. My name is Aaron Sullivan, CFO of Live One and Podcast One. I'd like to remind you that some of the statements made on today's call are forward-looking and are based on current expectations, forecasts, and assumptions that involve various risks and uncertainty.
Speaker Change: I would now like to turn the conference over to Aaron Sullivan, Chief Financial Officer. You may begin.
Operator: These statements include but are not limited to statements regarding the future performance of the business, including expected future financial results and expected future growth in the business. Actual results may differ materially from those discussed on this call for a variety of reasons. Please refer to Podcast One'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 Podcast One's Form 10-K for the year ended March 31, 2024, filed by the company with the SEC on July 1st, 2024, and subsequent SEC filings made by the company. 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.
Aaron Sullivan: Thank you and welcome to Podcast One's first quarter fiscal 2025 business update and financial results conference call and webcast.
Aaron Sullivan: The company encourages you to periodically visit its Investor Relations website for important content. The following discussion, including responses to your questions, contains time-sensitive information and reflects management's view as of the date of this call, August 13, 2024. As required by law, the company does not undertake any obligation to update or revise this information after the date of this call.
Aaron Sullivan: Presenting on today's call are Kit Gray, President of Podcast One, Rob Allen, CEO and Chairman of Live One and Executive Chairman of Podcast One, and myself, Aaron Sullivan, CFO of Live One and Podcast One.
Speaker Change: 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. Thank you.
Speaker Change: These statements include but are not limited to statements regarding the future performance of the business including the expected future financial results and expected future growth in the business.
Speaker Change: Actual results may differ materially from those discussed on this call for a variety of reasons. Please refer to Podcast One'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 Podcast One's
Speaker Change: Form 10-K for the year ended March 31, 2024, filed by the company with the SEC on July 1, 2024, and subsequent SEC filings made by the company.
Speaker Change: 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.
Speaker Change: The company encourages you to periodically visit its Investor Relations website for important content.
Speaker Change: The following discussion, including responses to your questions, contains time-sensitive information and reflects management's view as of the date of this call, August 13, 2024. And as required by law, the company does not undertake any obligation to update or revise this information after the date of this call.
Aaron Sullivan: I'd like to highlight to investors that this call is being recorded. Podcast One is making it available to investors in the media via webcast, and a replay will be available on Podcast One's investor relations website in the events section shortly following the conclusion of the call. Additionally, the call or the webcast 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 express written consent is strictly prohibited.
Speaker Change: I'd like to highlight to investors that this call is being recorded.
Speaker Change: Podcast One is making it available to investors in the media via webcast and a replay will be available on Podcast One's IR website in the events section.
Speaker Change: 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 express written consent is strictly prohibited.
Aaron Sullivan: I'll spend just a minute providing a very brief overview of our results for the first quarter of fiscal 2025 ended June 30th. Consolidated revenue for the three-month period ended June 30, 24, was a record $13.2 million, an increase of 24% from the prior year period. Consolidated adjusted EBITDA for the Q1 fiscal 25 was a loss of $300K, which is primarily driven by the timing of content acquisition costs.
Speaker Change: I'll spend just a minute providing a very brief overview of our results for the first quarter of fiscal 2025 ended June 30th. Consolidated revenue for the three-month period ended June 30, 2024, was a record $13.2 million, an increase of 24% from the prior year period.
Speaker Change: Intolerated adjusted EBITDA for the Q1 fiscal 25 was a loss of $300,000, which is primarily driven by the timing of content acquisition costs.
Speaker Change: The company is debt-free and Live One owns approximately 72% of Podcast One.
Aaron Sullivan: The company is debt-free, and Live One owns approximately 72% of Podcast One. In the month of July 2024, the company had a U.S. unique monthly audience of approximately 5.5 million and global downloads and streams of approximately 17.8 million. Now I would like to turn the call over to Podcast One's President, Kit Gregg. Thank you very much, Aaron, and thank you everyone for your time today. I hope you're having a good one.
Speaker Change: In the month of July 2024, the company had a U.S. unique monthly audience of approximately 5.5 million and global downloads and streams of approximately 17.8 million. Now I would like to turn the call over to Podcast One's President, Kit Gray.
Kit Gray: Thank you very much, Aaron, and thank you everyone for your time today. I hope you're having a good one. As you can see from Aaron's earlier comments, we've had a very productive and positive quarter at Podcast One.
Kit Gray: As you can see from Aaron's earlier comments, we've had a very productive and positive quarter at Podcast One. The core of our business is performing very well. We are acquiring sales representation and distribution rights for new shows at a great pace. We are growing our existing programs in terms of audience and monetization and launching some very successful new programs. In the last 12 months, we've added 37 new podcasts, bringing the total number of shows to 187.
Kit Gray: The core of our business is performing very well. We are acquiring sales representation and distribution rights of new shows at a great pace. We are growing our existing programs in terms of audience and monetization and launching some very successful new programs.
Kit Gray: In the last 12 months, we've added 37 new podcasts, bringing a total of 187 shows. This year alone, our fiscal year, we've added 9 new podcasts and sold our second major show to a top 5 streaming platform.
Kit Gray: This year alone, our fiscal year, we've added nine new podcasts and sold our second major show to a top five streaming platform, further solidifying our position in podcasting and creating a slate of podcasts primed for TV and film enthusiasts. Our downloads are 6% higher than they were in fiscal year Q4 2024.
Kit Gray: further solidifying our position in podcasting and creating a slate of podcasts primed for TV and film adaptation.
Kit Gray: Our downloads are 6% higher than they were in fiscal year Q4, 2024.
Kit Gray: Our programmatic advertising continues to lead, and we're 18% higher than it was in fiscal year, fiscal year Q4 2024, allowing us to monetize not only our current consumption of podcasts but old episodes. So as new people find our shows, they can go back and listen, and we can monetize those, those decades. Our hit shows are doing great. I've Had It was nominated for two iHeart podcast awards, and Baby Mama No Drama won for the second year in a row a Webby.
Kit Gray: Our programmatic advertising continues to lead, and we're 18% higher than it was
Kit Gray: in fiscal year Q4 2024, allowing us to monetize not only our current consumption of podcasts, but old episodes. So as new people find our shows, they can go back and listen, and we can monetize that consumption.
Kit Gray: Our hit shows are doing great. I've Had It was nominated for two iHeart podcast awards, and Baby Mama No Drama won, for the second year in a row, a Levy.
Kit Gray: So congrats to those two terrific properties. We value those relationships. And in fact, we have just recently signed them both to extensions. We're very excited about this. They're core to our network and our future. We have new projects in line with them, and it's very exciting. We are also finding success in developing new revenue channels for existing partners and company resources and using our company resources that are already existing, which limits cost and has high margins of profitability.
Speaker Change: So congrats to those two terrific properties. We value those relationships. And in fact, we have just recently signed them both to extension. We're very excited about this. They're core to our network and our future. We have new projects in line with them, and it's very exciting.
Speaker Change: We are also finding and developing new revenue channels for existing partners and company resources and using our company resources that are already existing, which limits costs and has high margins and profitability. As I mentioned earlier, we're using...
Kit Gray: As I mentioned earlier, we're using... We're really growing our second window slate of programming for TV and film, but you'll also hear about us in the near future launching Podcast One Pro, which is our production division that allows our expert producers and our network of 187 shows and millions of downloads on a monthly basis to attract companies that want to create their own podcasts. We offer our expertise, and our credibility, and we help them build their shows. We actually have been doing this for quite some time, but we're ramping this part of our business up over the next six to 12 months. We just got an extended renewal from MotorTrend, their competitor.
Speaker Change: We're really growing our second window slate of programming for TV and film, but you'll also hear about us in the near future Launching podcast one pro which is our production division
Speaker Change: that allows our expert producers and our network of 187 shows and millions of downloads on a monthly basis attract companies that want to create their own podcast.
Speaker Change: We offer our expertise.
Speaker Change: our credibility and we help them build their shows.
Speaker Change: We actually have been doing this for quite some time, but we're ramping this part of our business up over the next 6 to 12 months.
Speaker Change: We just got an extended renewal from MotorTrend, their force. We've done deals with Microsoft and one of our leading advertising agencies, Oxford Road, and we just recently signed a deal where the CEO and founder of LoveSat will be doing a podcast.
Kit Gray: We've done deals with Microsoft and one of our leading advertising agencies, Oxford Road, and we just recently signed a deal where the CEO and founder of Lovesat will be doing a podcast to talk about his business and how he grew his business and continues to grow it throughout our network. We're very excited about this new division and putting more resources into it. We are also revamping some of our paywall projects. We have the Adam Carolla Network that just relaunched their strategy, which includes new programming from Jay Moore and Adam Carolla that will be exclusively behind the paywall.
Speaker Change: to talk about his business and how he grew his business and continues to grow it throughout our network. We're very excited about this new division and putting more resources into that.
Speaker Change: We are also revamping some of our paywall projects. We have the Adam Carolla Network that just relaunched their strategy which includes new programming from Jay Moore and Adam Carolla that will be exclusively behind the paywall.
Kit Gray: We are having a relationship with Apple on the A&E slate and creating commercial-free programming and other offerings on the cold case files, I Survive, and their other new hit show, Crime and Investigation, and we're launching a soon-to-be Housewives paywall that you guys will learn more about in the next. But that's very exciting and offers really new revenue channels for us with limited work on both the talent and our side, so we're excited about that.
Speaker Change: We are having a relationship with Apple on the A&E slate and creating commercial-free programming and other offerings on the cold case files I Survive and their other new hit show Crime and Investigation.
Speaker Change: And we're launching a soon-to-be housewives paywall that you guys will learn more about in the next week or two.
Speaker Change: But that's very exciting and offers really new revenue channels for us with limited work on both the talent and our side, so we're excited about those.
Kit Gray: As always, our focus will be again to launch, grow, and acquire representation for existing podcasts. We still have a very, very strong funnel of shows that we're considering to be a part of Podcast One, and those new programs will be highlighted throughout the next year.
Speaker Change: As always, our...
Speaker Change: Focus will be, again, to launch, grow, and acquire the representation of existing podcasts.
Speaker Change: We have
Speaker Change: a still very, very strong funnel of shows that we're considering to be a part of Podcast One and those new programs will be highlighted throughout the next year. We have many bigger deals too with some eight secret B2B business deals such as the one we mentioned earlier this year. We have probably four or five of those in the funnel and this will help us not only with our business operations and growth on that side of things, but acquire new companies and.
Kit Gray: We have many bigger deals, too, with some age-secret B2B business deals, such as the one we mentioned earlier this year. We have probably four or five of those in the pipeline, and this will help us not only with our business operations and growth on that side of things, but acquire new companies and get really on our path to being a hundred million dollar company in the next few years. So, as you can see, we're really excited about what we're doing at PodcastOne.
Speaker Change: get really on our path to being a $100 million company in the next few years. So as you can see, we're really excited about what we're doing at Podcast One. Our core business is growing. We have great new revenue channels and we're excited about the future.
Kit Gray: Our core business is growing. We have great new revenue channels, and we're excited about the future. That being said, I'm going to hand this over to our CEO, Rob Ellen, and he can take it from here. Thank you.
Speaker Change: That being said, I'm going to hand it over to our CEO, Rob Ellen, and he can take it from here.
Rob Allen: Yeah, thanks, Kit, and congratulations. I think you're hearing it in Kit's voice, and I think you're hearing it in the messaging of the numbers that are coming out. This B2B deal has been spectacular. We'll add $2 million a month as this is ramping up. And as you can hear from Kit, there are four or five others that are very close.
Rob Ellen: Thanks, Kit, and congratulations. I think you're hearing it in Kit's voice, and I think you're hearing it in the messaging of the numbers that are coming out.
Speaker Change: This B2B deal has been spectacular, will add $2 million a month as this is ramping up.
Speaker Change: And as you can hear, you know, from Kit, there's four or five others that are very close. And if you can land a couple more of those, we're going to be quickly talking about a hundred million dollar plus podcast business. So very much like Slacker, we bought it doing 20 million in revenues, losing money.
Rob Allen: And if you can land a couple more of those, we're gonna be quickly talking about a $100 million plus podcast business. So, very much like Slacker, we bought it doing 20 million in revenues, losing money. It's now on a run rate to do 85 million and is very profitable. Kit's done a great job with his team, with Sue and Eli, to do the same here.
Speaker Change: It's now doing on a run rate to do 85 and very profitable.
Speaker Change: Kit's done a great job with his team, with Sue and Eli, to do the same here. They've taken it from $20 million in revenues, since Kit became president, we're now at a run rate to do well over $50 million, and we'll shortly be talking about how this is moving towards $100 million.
Rob Allen: They've taken it from $20 million in revenues since Kit became president. We're now at a run rate to do well over $50 million, and we'll shortly be talking about how this is moving towards $100 million. So really exciting and really energized about where the business is going. Kit didn't talk much about the television side, but we've sold our second major podcast to television. This is hugely advantageous to us and has no cost to us.
Speaker Change: So, really exciting and really energized where the business is going. Kit didn't talk much, but you know, about the television side, but we've sold our second major podcast to television.
Speaker Change: This is hugely accretive to us, has no cost to us, and I can tell you that each of the networks will be in for well over a million dollars, right, by the time they get it off the ground, and could be millions and millions of dollars to our company, and we've got about ten projects in the works.
Operator: And I can tell you that each of the networks will be in for well over a million dollars right by the time they get it off the ground. And it could be millions and millions of dollars to our company. And we've got about ten projects in the works. We expect to have a slate of podcasts made for television. And I couldn't be more excited about where it's going. So, the team's done a great job.
Speaker Change: We expect to have a slate of podcasts made for television and it could be more excited about where it's going. So teams have a great job. We'd like to open it up to any questions and any thoughts you have. Thank you.
Operator: We'd like to open it up to any questions and any thoughts you have. Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone key to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your question.
Speaker Change: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone key to raise your hand and join the queue.
Speaker Change: If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your question. Again, press star 1 to join the queue.
Operator: Again, press star 1 to join the call. Your first question comes from the line of Sean McGowan with Roth Capital. Your line is open. Morning, kid. How are you?
Speaker Change: Thank you very much for watching this video.
Speaker Change: Your first question comes from the line of Sean McGowan with Roth Capital. Your line is open.
Kit Gray: Hey, Sean. Good to hear from you, man. Thanks. I'm doing well. How about yourself?
Sean McGowan: Morning, kid. How are you?
Speaker Change: Hey, Sean. Good to hear from you, man. Thanks. I'm doing well. How about yourself? Good. Very good. Very good. Yeah, the earthquake notwithstanding, but it's all good. Yeah, crazy. Could you – yeah, I bet you felt it even more than we did down here in Newport.
Sean McGowan: Good. Very good. Very good. Yes, the earthquake notwithstanding, but it's all good. Yeah, crazy. Could you?
Sean McGowan: I bet you felt it even more than we did down here in Newport. Could you help us contextualize some of these new shows, like, you know, without giving numbers, just sort of maybe rank some of the new shows in terms of, you know, the descending order of revenue importance, so we have a? Kind of a little sense of what the key ones are. Sure. As the new shows come on, it's really exciting because you've got the focus of the talent. You're really launching a heavy marketing campaign, introducing our huge fan base to these shows. And then their fans are testing it too, right?
Speaker Change: something. Could you help us contextualize some of these new shows, like, you know, without giving numbers, just sort of maybe rank the some of the new shows in terms of, you know, the descending order of revenue importance, just so we have a, you know, kind of a little sense of what the key ones are?
Speaker Change: Sure, um, you know, as the new shows come on, uh, it's, it's, um...
Speaker Change: It's really exciting because you've got really the focus of the talent.
Speaker Change: really launching a heavy marketing campaign introducing our huge fan base to to these shows and then their fans are testing it too right as they use their social media and their communities to
Kit Gray: As they use their social media and their communities to dive in and test the show, see if they like it, and hear what they have to say. We've had some great press with some of the most recent shows, and they're having great success. Unfortunately, one show that we launched as the campaign managers. We had to put that on a little bit of a hiatus as David Sleuth actually got hired by Kamala Harris to be on her staff to speak at Presidencies.
Speaker Change: dive in and test the show, see if they like it, hear what they have to say. You know, we've had some great press with some of the most recent shows, and they're having great success. So, you know, unfortunately, like one show that we...
Speaker Change: we launched the campaign managers. We had to put that on a little bit of a hiatus as David Sleuth actually got hired by Kamala Harris to be on her staff to seek out presidency. So, you know, you never really see that coming, but it's pretty neat, right? I mean, there's a show that we launched maybe three or four months ago that was growing really nicely, had some really good engagements and good press.
Kit Gray: So you know, you never really see that coming, but it's pretty neat, right? I mean, there's a show that we launched maybe three or four months ago that was growing really nicely, had some really good engagements and good press, and then David has to head off. So we're talking about doing some things that the campaign will, or Kamala's team will let us do, but it was interesting. Now the other shows that we have launched that are really in our real, you know, our sweet spot, I guess you'd say, the female acting shows, those are doing great, you know. So they're right off, they're really doing an excellent job. We've got advertisers testing them. The talent is working hard.
Speaker Change: you know, and then David has to head off. So we're talking about doing some things that the campaign will, or Kamala's team will let us do, but it was interesting. Now, the other shows that we have launched that are really in our real.
Speaker Change: You know, our sweet spot, I guess you'd say, the female acting shows.
Speaker Change: Those are doing great, you know, so they're right off, they're really doing an excellent job. We've got advertisers testing them, the talent is working hard, we're doing, you know, every couple of weeks we do calls with the talent to make sure, you know, they're motivated and staying on path.
Kit Gray: We're doing, you know, every couple of weeks we do calls with the talent to make sure they're motivated and staying on track. So, you know, it's part of the process, and it's not like you just start out and have 50,000, 100,000 listeners. It takes a little bit of time, but we are seeing some really, really good growth in them. You know, so that's, that's good news. I, you know, really they're on the path to what we thought they would do. Um, we've had some really neat ones too.
Speaker Change: You know, it's part of the process, and it's not like you just start out and have 50, 100,000 listeners. It takes a little bit of time, but we are seeing some really, really good growth in those.
Speaker Change: You know, so that's that's good news. I you know, really they're on on path to what we thought they would do we've had Some really neat ones to like the opportunist had some
Kit Gray: The opportunists, um, had some new episodes come out, and you know, those are actually far exceeding what we had thought. Um, so that's great news. And that's, uh, keeping that network of programs, uh, or seasons of programs, doing really well too. So yeah, we're, we're in line.
Speaker Change: New episodes come out and you know, those are actually far exceeding what we had thought So that's great news and that's keeping that network of programs Or seasons of programs doing really well, too. So yeah, we're in line You know
Kit Gray: We're doing great, and really, I think the key to seeing real, significant growth is acquiring shows that have an audience and then making sure the ones that we have that are successful continue to grow and evolve. I mentioned I've had it. We're actually in the process of, we just signed them to an extension, and they're adding a political show. If you ever listen to that program, you'll know they're very politically motivated, so they're going to actually have a political show that will run two or three times a week, which is really exciting for us, too.
Speaker Change: We're doing great and really I think the key to seeing you know real significant growth is acquiring shows that
Speaker Change: have an audience and then making sure the ones that we have that are successful continue to grow and evolve. I mentioned I've had it you know we're actually in the process we just signed them to an extension and they're adding a
Speaker Change: political show. If you ever listen to that program, you'll know they're very politically motivated. So they're going to actually have a political show that'll be running two or three times a week, which is really exciting for us too. So you'll see more about that in the press.
Kit Gray: So you'll see more about that in the press, but yeah, there's a lot of cool things. We've got another show that's about to start with.., wrestlers comedians the NamUs brothers We have ownership in that show As well, so you know that's one that I think has a real chance would become You know kind of like the patent a Kefi before you got hired by a year span of wrestling right and to bring the comedic side of things Ikka like a part might take a barstool that into wrestling world So we're really excited about that and really excited about a lot of the conversations.
Speaker Change: Yeah, there's a lot of radical things. We've got another show that's about to start with
Speaker Change: to wrestlers slash comedians.
Speaker Change: the Namath Brothers, we have ownership in that show as well.
Speaker Change: So, that's one that I think has a real chance to become kind of like the Pat McAfee before he got hired by ESPN of wrestling, right? And to bring the comedic side of things, aka like part of my take of Barstool, that into wrestling world. So, we're really excited about that and really excited about a lot of the conversations we have going on.
Kit Gray: We have, Yeah, just to add to that with the opportunity with the opportunity, Sean. This is round three. This is after, you know, you've had Vigilante and Barnumtown, Opportunist, which we launched for almost nothing, literally almost no cost. It's getting great numbers. Again, I'm in deep conversations about a television show on it. And that's, it's got three seasons of it.
Speaker Change: Yeah, just answer that with the opportunities, Sean.
Speaker Change: This is round three, this is after you've had vigilante.
Speaker Change: in Barnumtown, Opportunist, which we launched for almost nothing, literally almost no cost.
Speaker Change: It's having great numbers again. I'm in deep conversations about a television show on it. And that's got three seasons of it. So there's multiple different potential opportunities there. So we're hoping to see a third television show sold this year.
Sean McGowan: So there are multiple different potential opportunities there. So we're hoping to see a third television show sold this year. A great segue into my next question.
Speaker Change: Great segue into my next question. So as you talk about that for a second form
Sean McGowan: So as you talk about that sort of second-form monetization, can you remind us what the upfront is a kind of de minimis, but what would be the timing of when these things would actually come to fruition and be seen by an audience? And related to that, what's the timing of any additional revenue? to Podcast One. I assume that comes in through Podcast One and not through, you know, some other entity of Live One. Correct. Correct.
Speaker Change: monetization. Can you remind us what the, I know the upfront is a kind of de minimis, but what would be the timing of when these things would actually come to fruition and to be seen by an audience? And related to that, what's the timing of any additional revenue?
Speaker Change: To podcast one I assume that comes in through podcast one and not not through you know some other entity of live one is that right?
Rob Allen: It comes through podcast one, and it's not a small amount, right? These can be, you know, right up front money can be anywhere from $250,000 to a million dollars day one. And I think they're going to go higher. When you think about scripts selling for a million dollars, right here, you have a script, but you also have proof that you have millions of downloads. So there can be very substantial money in them, and there was a terrific, tremendous amount of money in the last one.
Speaker Change: Correct. Correct. It comes comes through podcast one and it's not a small amount
Speaker Change: Right, you know, these can be, you know, right up front money can be anywhere from 250,000 to a million dollars day one and I think they're gonna go higher when you think about scripts selling for a million dollars Right here. You have a script, but you also have proof that you have millions of downloads
Speaker Change: So there could be very substantial money in it and there was a terrific amount of money in the last one So we think we'll start to see that and the timing timing get them off the ground could be anywhere from 90 days to 12 months depends how fast the studios are moving what's later in what time of year you sign them
Rob Allen: So we think we'll start to see that. And the timing, timing, to get them off the ground could be anywhere from 90 days to 12 months. It depends on how fast the studios are moving, what slate they're in, what time of year you sign them. So the goal is to have a slate of 12 of these, right? And keep moving these.
Speaker Change: So the goal is to have a slate of 12 of these, right, and keep moving these. And again, candidly, we never expected to sell two so quickly and be on to the third and potential fourth with ransom as well. So we're really excited about it, could be, you know, very significant money over the next couple of years.
Rob Allen: And again, Cambly, we never expected to sell two so quickly and be onto the third and potential fourth with Ransom as well. So we're really excited about it. Could be, you know, very significant money over the next couple of years. And what's the timing then of revenue recognition on that? You get an upfront payment, but you probably don't book that right away as revenue.
Speaker Change: What's the timing of the revenue recognition on that? You get an upfront payment, but you probably don't book that right away as revenue, and then what happens when additional cash comes in?
Sean McGowan: And then what happens when additional cash... No, I think we'd book it right away, right? Yeah, the upfront, we can record straight away. There's no further obligation.
Speaker Change: No, I think we'd book it right away, right?
Speaker Change: Yeah, the up front we can record straight away. There's no further obligation. You know, it can get a little complicated. It's all tied to future performance, right?
Rob Allen: It can get a little complicated. It's all tied to future performance, right? If the upfront is associated with future obligations, we spread it over time. But generally, there is no further obligation on an upfront.
Speaker Change: If the upfront is associated with future obligations, we spread it over time, but generally there is no further obligation on an upfront.
Sean McGowan: Okay. And then does that sort of count as against future royalties, that there could be a delay between that recognition and then when you could recognize additional revenue once you get turned out? Just remind me of what the accounting is. Not really.
Speaker Change: Okay, and then does that count as against future royalties, that there could be a delay between that recognition and when you could recognize additional revenue once you get turned out? Just remind me of what the accounting is.
Rob Allen: The upfront money is to buy the rights to it, but it all depends. These are all negotiations as to what the structure is. So every one of them is going to look a little differently.
Speaker Change: Not not not really not really it's you know, the upper the upper money is to buy the rights to it
Speaker Change: But it all depends, you know, these are all negotiations as to what the structure is.
Speaker Change: So every one of them is going to look a little differently.
Rob Allen: But most of the upfront money is not going to be counted against the royalty. That's to buy the rights to it. Then they have to go spend substantial money, right? Vigilante, they've already spent, their studios are already in for a million dollars plus, scripts and redoing the scripts and rewriting.
Speaker Change: But most of the upfront money is not going to be counted against the royalty. That's to buy the rights to it. Then they got to go spend, you know, substantial money.
Rob Allen: And with our options coming up again shortly, they're going to have to write another check on it. All right, great. Well, congratulations on the progress. Your next question comes from the line of, Hey, good morning, folks. Hey Barry, how are you doing?
Speaker Change: Vigilante, they've already spent, the studio's already in for a million dollars plus, scripts and redoing the scripts and rewriting and our options coming up again shortly, they're going to have to write another check on it.
Speaker Change: All right. Great. Well, congratulations on the progress. Thank you.
Speaker Change: i
Operator: Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to the PodcastOne in first quarter fiscal 2025 financial results and business updates. All lines of each reason you to prevent any background noise.
Speaker Change: Your next question comes from the line of Barry Sine with Litchfield Hills Research. Your line is open.
Barry Sine: Hey, good morning, folks.
Barry: Hey, in terms of additional monetization, you guys covered a lot on TV and film, right? You also have a live event, I know, coming up in October, and I guess you're planning more of those. Could you talk a little bit more about live events? I know there's one, but what else are you doing there, and might that be a more significant revenue driver going forward? Yeah, so we just did a live event in New York City with a show called The Gals on the Go. They went to a new store opening and did a podcast there. They did some social media around it.
Barry Sine: Hey Barry, how are you doing?
Barry Sine: Hey, in terms of additional monetization, you guys covered a lot on TV and film rights.
Operator: After the speakers remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one.
Barry Sine: You also have a live event I know coming up in October, and I guess you're planning more of those. Could you talk a little bit more about live events? I know there's one, and what else are you doing there? And might that be a more significant revenue driver going forward?
Aaron Sullivan: I would now like to turn the conference over to Aaron Sullivan, Chief Financial Officer. You may begin. Thank you.
Aaron Sullivan: Welcome to PodcastOne's first quarter fiscal 2025 business update and financial results conference call and webcast.
Speaker Change: Yeah, so we just did a live event in New York City with a show called The Gals on the Go. They went down to a new store opening and did a podcast there. They did some social media around it.
Aaron Sullivan: Presenting on today's call are Dick Gray, President of PodcastOne, Rob Ellen, CEO and Chairman of LiveOne and Executive Chairman of PodcastOne. Myself, Aaron Sullivan, CFO of LiveOne and PodcastOne. I'd like to remind you that some of the statements made on today's call are forward looking and are based on current expectations, forecast and assumptions that involve various risks and uncertainties. These statements include but are not limited to statements regarding the future performance of the business, including expected future financial results and expected future growth in the business.
Kit Gray: You know, it was a substantial six-figure deal for maybe an hour and a half of work for us. So it was tremendous. It didn't take into our already existing revenue. It was just an added show that they did. That was awesome.
Speaker Change: You know, it was a substantial six-figure deal, or maybe an hour and a half of work for us. So it was tremendous, it didn't take into our already existing revenue, it was just an added show that they did.
Barry: I think we're looking at doing more of those when they come across our desk. We'll be, you'll be seeing more of that. It's a big initiative of ours. Part of all the Podcast One Pro that I mentioned earlier, that will be some of the things that we incorporate into those deals as well, where, you know, once they get the brands to get their feet wet, they'll start to work with our talent to do live shows from stores and stuff like that.
Speaker Change: That was, you know, that was awesome. I think we're looking at doing more of those when they come across our desk.
Aaron Sullivan: Actual results may differ materially from those discussed on this call for a variety of reasons. Please refer to PodcastOne'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 PodcastOne, Form10K for the year ended March 31, 2024, followed by the company with the SEC on July 1, 2024 and subsequent FUC problems made by the company.
Speaker Change: We'll be you'll be seeing more of that It's a big initiative of ours part of all the podcast one pro that I mentioned earlier that will be
Speaker Change: some of the things that we incorporate into those deals as well where
Speaker Change: Once the brands get their feet wet, they'll start to work with our talent to do live shows from stores and stuff like that. So those types of opportunities are really, really neat for us. I think you'll see with us over the next...
Barry: Those types of opportunities are really, really neat for us. I think you'll see with us over the next six months, especially with the I've Had It team. We might do some special debate podcasting that will be live, so you'll be able to hear their take. They'll be able to do some live pay-per-view meet-and-greet type stuff coming up around the elections with their new show. That's part of the... So, you'll see more and more of that as we get into it. Our fans love that kind of stuff, so there's that.
Aaron Sullivan: You will find recommendations of non-GAAP financial measures to the most comparable GAAP financial measures that's cooked today in the company's earnings release, which is posted on its investor relations website. The company encourages you to periodically visit its investor relations website for important content. Following discussion, including responses to your questions contains time-sensitive information and reflects management view as of the date of this call, August 13, 2024. And as required by law, the company does not undertake any obligation to update or revise this information after the date of this call.
Speaker Change: six months, especially with the iPad it
Speaker Change: team, we might do some, you know, special
Speaker Change: debate.
Speaker Change: podcasting that will be live, you know, so you'll be able to hear their take.
Speaker Change: They'll be able to do some live pay-per-view, meet-and-greet type stuff, coming up around the elections with their new show. That's part of the, part of the...
Aaron Sullivan: I'd like to highlight some investors that this call is being recorded. PodcastOne is making it available to investors in the media via webcast and replay will be available on PodcastOne's IR website and events section, shortly following the conclusion of the call.
Speaker Change: of the deal. So you'll see more and more of that as we get into it. Our fans love that kind of stuff.
Aaron Sullivan: Additionally, it is the property of the company and any redistribution, retransmission, or rebarcast of the call to the webcast in any form that has the company expressed for its consent, its critique, prohibited.
Kit Gray: And then from a revenue standpoint, the top line was obviously very strong in the quarter. But was that all advertising? I assume there's some non-advertising revenue from some of these licensing deals that's starting to contribute to the top line. Yeah, some of it will be, you know, mostly still advertising is our core business, but you'll see, you know, we've had some production deals as well. Like I said, the Motor Trend and those other deals that they've added to our bottom line, some of these live shows will be in it as well.
Speaker Change: So, there's that.
Speaker Change: And then, from a revenue standpoint, the top line was obviously very strong in the quarter. Was that all advertising? I assume there's some non-advertising revenue from some of these licensing deals that's starting to contribute to the top line?
Aaron Sullivan: I'll send just a minute providing a very brief overview of our results for the first quarter of fiscal 2025 and its June 30. Consolidated revenue for the three months period and the June 30, 2024 was a record 13.2 million and increased 24% from the prior year period. Consolidated adjusted either for the Q1 fiscal 2425 was a loss of 300K, which is primarily driven by the timing of content acquisition costs.
Speaker Change: Yeah, some of it will be you know, mostly still advertising is our core business, but you'll see You know, we've had some production deals. Well, like I said the motor trend and
Speaker Change: Those other deals that they've added to our bottom line, some of these live shows will be in it as well.
Aaron Sullivan: The company is debt-free and live one on approximately 72% of PodcastOne. The month of July 2024, the company had a US unique monthly audience of approximately 5.5 million and global downloads and streams of approximately 17.8 million.
Speaker Change: We're revamping our, you know, our paint wall experience, like I mentioned, so that will also be.
Kit Gray: And we're revamping our, you know, our paint wall experience, like I mentioned. So that will also be included in our revamp. And what you're also seeing is that you're starting to see that $20 million plus contract kick in, right, as that's ramping up.
Speaker Change: Included into our revenue
Speaker Change: and may not fall in the name of the Father.
Speaker Change: Yeah, I wish.
Speaker Change: And what you're also seeing is you're starting to see that $20 million plus contract kicked in, right, as that's ramping up.
Rob Allen: So that distribution will ramp up, and you'll start to see better margins later in the year on that. There are just some costs going into it, and then, eventually, it'll be way more profitable to us. But it's a great win for us in terms of revenues, but even more importantly, how much traffic and audience there is. And in that traffic and audience, having these mass distribution deals, and Kit, again, just repeating it, is very shortly going to be announcing multiple deals like that that are going to give us distribution in other places. And we've done a brilliant job. The team has done a great job. We're on Spotify, Apple, Amazon, and Samsung TVs. He's right across this big streaming platform.
Keir Craig: Now, I would like to turn the call over to PodcastOne's president, Keir Craig. Thank you very much, Aaron, and thank you everyone for your time today. I hope you're having a good one. As you can see from Aaron's earlier comments, he's had a very protective and positive quarter at PodcastOne. The core of our business is performing very well. We are acquiring sales representation and distribution rights of new shares at a great pace.
Speaker Change: so that distribution
Speaker Change: We'll ramp up and you'll start to see better margins later in the year on that as there's some costs going into it
Speaker Change: and then eventually it'll be way more profitable to us. But it's a great win for us in revenues, but even more importantly, how much traffic and audience there is. And in that traffic and audience and, you know, having these mass distribution deals and, you know, kid again, just repeating it is.
Keir Craig: We are growing our existing programs and terms of audience and monetization and launching from very successful new programs. In the last 12 months, we've added 37 new podcasts, bringing in total of 187 shares. This year alone, our fiscal year, we've added nine new podcasts and told our second major shows to a top five streaming platform, further solidifying our position in podcasting and creating a slate of podcasts. We've added a prime for TV and film adaptation.
Speaker Change: very shortly going to be announcing multiple deals like that. They're going to give us distribution in other places. And we've done a brilliant job. The team has done a great job. We're in Spotify, Apple, Amazon, Samsung TVs, Israel across this big streaming platform. You're going to see, you know, multiple, you know, B2B deals that have 10 million to 3 billion in audience that want to have podcasts on their network.
Barry: You're going to see multiple B2B deals that have $10 million to $3 billion in audience that want to have podcasts on their network. Okay, and then we turn to EBITDA. EBITDA was slightly negative in the quarter, and I know you and I have discussed a goal to get that positive and to grow that in line with what LiveOne is doing on an overall basis. It would seem to me there's some drivers that are going to help drive that positive, which are the rights you've talked about and then this $24 million contract. The other thing within EBITDA I want to confirm, and maybe this is for Aaron, is that it looks like there was an impairment charge that's not backed out of the EBITDA, and that's non-cash.
Speaker Change: Okay, and then turning to EBIDTA, EBIDTA was slightly negative.
Speaker Change: in the quarter, and I know, Kit, you and I have discussed a goal to get that positive and to grow that in line with what Live One is doing on an overall basis.
Keir Craig: Our downloads are 6% higher than they were in fiscal year Q4 2024. Our programmatic advertising continues to lead and we're 18% higher than it was in fiscal year Q4 2024, allowing us to monetize not only our current consumption of podcasts but old episodes. As new people find our shows, they can go back and listen and we can monetize those that consumption. Our hit shows are doing great. I've had it, it was nominated for two iHeart podcast awards and baby mama no drama won for the second year in a row, a webby.
Kit Gray: It would seem to me there's some drivers that are going to help drive that positive, which are the rights you've talked about, and then this $24 million contract. The other thing within EBITDA I want to confirm, and maybe this is for Aaron, is there's a
Speaker Change: It looks like there was an impairment charge that's not backed out of the EBITDA, and that's non-cash. So the real EBITDA loss, I would think, is a little bit less than what you've reported. So can you comment on EBITDA, please?
Aaron Sullivan: So, the real EBITDA loss, I would think, is a little bit less than what you've reported. So, if you can comment on EBITDA, please. Yeah, so that impairment charge was related to a show we acquired that we're no longer pursuing. So, that's that.
Keir Craig: So congrats to those two terrific properties, we value those relationships. And in fact, we have just recently signed them both to extension. We're very excited about this. They're core to our network and our future. We have new projects in line with them and it's very exciting. We are also finding and developing new revenue channels for existing partners and company resources and using our company resources that are already existing, which limits cost and has high margins and profitability.
Aaron Sullivan: Yes, so that impairment charge was related to a show we acquired that we're no longer pursuing. So that's that. Yeah, look, we're very close to kind of adjusting to break even. We've had some...
Aaron Sullivan: Yeah, look, we're very close to kind of adjusting to break even. We've had some additional content acquisition costs that are hurting that number, and that's just the volume of new shows, right? So we expect those to be profitable in the near term over the next kind of 12 months or so. We expect to see that as we're adding those shows, contribution margin increases a little bit, and that'll flow right down to our adjusted EBITDA line.
Speaker Change: Additional content acquisition costs that are.
Speaker Change: hurting that number and that's just simply kind of volume of new shows right so we expect those to be
Speaker Change: Profitable.
Keir Craig: As I mentioned earlier, we're using, we're really growing our second windows slate of programming for TV and film, but you'll also hear about us in the near future launching podcast one pro, which is our production division that allows our expert producers and our network of 187 shows and millions of downloads on a monthly basis attract companies that want to create create their own podcast. We offer our expertise, our credibility and and we help them build their shows.
Speaker Change: in the near term over the next kind of 12 months or so. So we expect to see that as we're adding those shows, contribution margin increases a little bit and that'll flow right down to our adjusted EBITDA line.
Aaron Sullivan: And Aaron, just to confirm, that impairment was not backed out in the reconciliation you did on EBITDA, even though it's non-profit. Um, let me get back to you on that, Barry. It might be in the depreciation line.
Speaker Change: And Aaron, just to confirm, that impairment was not backed out in the reconciliation you did on EBITDA, even though it's non-cash?
Aaron Sullivan: Let me get back to you on that, Barry. It might be in the depreciation line.
Keir Craig: We actually have been doing this for quite some time, but we're ramping this part of our business up over the next six to 12 months. We just got an extended renewal from motor trend, their force. We've done deals with Microsoft and one of our leading advertising agents, Steve Oxford grown and we just recently signed a deal where the CEO and founder of love that will be, we'll be doing a podcast to talk about his, his business and how he grew his business and continues to grow it throughout our network. We're very excited about this new division and putting more resources into that.
Aaron Sullivan: Okay, got it.
Barry: Okay, got it. Okay, and then, Kit, can you kind of elaborate a bit more on the, you know, corporate strategies? I think I understand some of them that's going to drive that EBITDA line positive. Yeah, sure, Barry.
Speaker Change: Okay, and then Kit, can you kind of elaborate a bit more on the, you know, corporate strategies, I think I understand some of them, that's going to drive that EBITDA line positive?
Kit Gray: You know, basically, as we add shows and, you know, start up new shows, the costs are pretty insignificant, and, you know, we don't need to hire more salespeople or really more producers currently at the current pace that we're at. So when we add these shows, it will mostly decide on like sales commission and some, you know, bandwidth costs and stuff like that. The margins will be great, right?
Kit Gray: Yeah, sure, Barry. You know, basically, it's as we add shows and
Kit Gray: you know, start up new shows, the costs are pretty insignificant and, you know, we don't need to hire more salespeople or really more producers currently at the current pace that we're at. So, when we add these shows, it will mostly decide to, like, sales commission and some, you know, bandwidth costs and stuff like that. The margins will be great, right? So, that's where we need to just continue to harp on, you know, acquiring more shows, launching more shows, again, because...
Keir Craig: We are also revamping some of our paywall projects. We have the Adam Corolla network that just relaunched their strategy, which includes new programming from Jay Moore and Adam Corolla that will be exclusively behind the paywall. We are having a relationship with Apple on the A&E slate and creating commercial free programming and other offerings on the co case files, I survived and there are other new hit show crime and investigation and we're launching a soon to be housewives paywall that you will you guys learn more about in the next.
Kit Gray: So that's where we need to just continue to harp on, you know, acquiring more shows, and launching more shows, again, because, you know, that baseline cost won't, you know, expand that much, right? So we continue doing that and then do like what Rob said about the second window, using our content that we have and our access to talent to sell things like the Gallup on the Go Live show, which isn't really adding to our costs and more work and stuff like that.
Kit Gray: you know, that baseline cost won't, won't...
Kit Gray: you know, expand that much, right? So we continue doing that and then.
Rob: Like what Rob said about the second window, using our content that we have and our access to talent to sell things like the Gallup on the go live show, which isn't really adding to our costs and more work.
Keir Craig: Week or two. But that's very exciting and offers really new revenue channels for us with limited work on both the talent and our side. So we're excited about this. As always, our focus will be, again, to launch, grow, and acquire the representation of existing podcasts. We have a still very, very strong funnel that shows that we're considering to be a part of Podcast One. And those new programs will be highlighted throughout the next year.
Kit Gray: So that's just doing a little bit more to get a lot more in terms of revenue and better margins. You'll see... Making sure we have social media involved in it to kind of add more to what we have where we're not actually doing more shows and more programming, but we're getting more stuff to sell, bigger deals. You'll see the same thing with the paywall, and again, with Podcast One Pro, you know, we're charging really good money for these clients to do podcasts and run promotion through our network of podcast fans, which is, there's no cost to that, really.
Speaker Change: you know, making sure, you know, we have social media involved in it to kind of add more to what we have, where we're not actually doing more shows and more programming, but we're
Speaker Change: We're getting more stuff to sell, bigger deals. You'll see.
Speaker Change: The same thing with the paywall and again with Podcast One Pro, we're charging.
Keir Craig: We have many bigger deals, too, with some a secret B2B business deals, such as the one we mentioned earlier this year. We have probably four or five of those in the funnel. And this will help us not only with our business operations and growth on that side, but acquire new companies and get really on our path of being a $100 million company in the next few years. So as you can see, we're really excited about what we're doing at Podcast One. Our core business is growing. We have great new revenue channels, and we're excited about the future.
Speaker Change: really good money for these clients to do podcasts and run promotion through our.
Speaker Change: Our network of podcast fans, which is, there's no cost to that, really.
Kit Gray: We'll be able to just use existing producers and so forth. So that's all going to be high-margin type stuff. So we're starting to put more and more focus on those types of things and keep our core business going, and we should see some great events next year or next year. Okay, we'll hold you to that. Thank you very much. Thank you. Again, if you would like to ask a question, press star then the number 1 on your telephone keypad.
Speaker Change: We'll be able to just use existing producers and so forth. So That's all going to be high margin type stuff So we're start to put more and more focus on through those type of things And keeping our core business going and and it should it should see you should see some great even the next year
Speaker Change: our next quarter.
Rob Ellen: That being said, I'm going to hand it over to our CEO, Rob Ellen, and he can take it from here. Thank you. Yeah, thanks, Kent. Congratulations. I think you're hearing it and Kits Royce, and I think you're hearing it and the messaging of the numbers that are coming out. This B2B deal has been spectacular. We'll add two million dollars a month as this is ramping up. And as you can hear, you know, you can kit this four or five others to a very close.
Speaker Change: Okay, we'll hold you to that. Thank you very much, Shaloma.
Barry Sine: Thanks, Barry.
Speaker Change: Again, if you would like to ask a question, press star then the number 1 on your telephone keypad.
Speaker Change: i
Operator: And we have our next question comes from the line of Leo Carpio with Junor. Your line is open. Good morning, gentlemen, from Cape Cod.
Speaker Change: And we have our next question, comes from the line of Leo Carpio with Junor. Your line is open.
Leo Carpio: I wanted to dig in to the advertising environment for podcasting. What have you been seeing in terms of the rate and economic impact? And what's the potential impact of the upcoming 2024 presidential election on your average listener?
Speaker Change: Good morning, gentlemen. I'm Kay Conn. I wanted to dig in onto the advertising environment for podcasting. What have you been seeing in terms of the race and the economic impact? And what's the potential impact of the upcoming 2024 presidential election on your audience? Thanks.
Rob Ellen: And if you can land a couple more of those, we're going to be quickly talking about a $100 million plus podcast business. So very much like Slacker, we bought it doing 20 million of revenues, losing money. It's now on a run rate to do 85 and very profitable. Kits done a great job with his team with Stuart Eli to do the same here. They're taking it from 20 million of revenues. Since Kent became president, we're now on a run rate to do well of a $50 million, and we'll shortly be talking about how this is moving towards 100. So really exciting and really energizing where the business is going.
Leo Carpio: Thanks. Uh, you know, we don't have as much of an impact, you know, really besides David taking that job, which we didn't, we didn't see coming, um, which isn't necessarily the worst thing. If that show comes back, uh, depending on what happens to him, if he stays with Kamala or, or if Trump wins.
Speaker Change: Uh, you know, we don't have as much of an impact, you know, really besides David taking that job, which we didn't see coming, you know, which isn't necessarily the worst thing if that show comes back, depending on, you know, what happens to him if he stays with Kamala or, you know.
Rob Ellen: Kits didn't talk much, but, you know, about the television side, but we've sold our second major podcast to television. This is hugely accretive to us. It has no cost to us. And I could tell you that each of the networks will be in for well over a million dollars right by the time they get it off the ground. And could be millions of millions of dollars to our company. And we've got about 10 projects in the works. We expect to have a slate of podcasts made for television. And it could be more exciting about where it's going. So teams are a great job.
Kit Gray: However, that works out. I think it gives him even more credibility in terms of having a good show. But besides that, we don't have a lot. I mean, what I think you're going to see in podcasting is people will try to, you know, the campaigns will try to get advertising into a lot of the shares, but a lot of the talent won't let, you know, those types of advertisements be part of their programs, understanding that, you know, half of the people in the world like one side and half of the people like the other side, is a great cause, it marketing spends will be pushed and I believe that will fall or trickle down into your pocket, the advertisers that still need to advertise and grow that aren't going to buy into the cluttered world of local media, print, all that type of stuff.
Speaker Change: If Trump wins, however that works out, I think it gives him even more credibility in terms of having a good show.
Speaker Change: There's that, but besides that, we don't have a lot. I mean, what I think you're gonna see in podcasting is people will try to, you know, the campaigns will try to get advertising into a lot of the shows, but.
Speaker Change: A lot of the talent won't let, you know, those types of advertisements be part of their programs understanding that
Rob Ellen: We'd like to open it up to any questions and any thoughts you have. Thank you.
Speaker Change: You know, half of the people in the world like one side and half of the people like the other side. And it's usually...
Operator: We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone key to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via speakerphone in your device, please pick up your handset to ensure that your phone is not unmute when asking your question. Again, press star one to join. Thank you.
Speaker Change: you know, creates conflict. Such an intimate listening experience, so they don't really like having that involved. What it will help is you'll see cable and prints and online.
Speaker Change: Marketing spends will be pushed and I believe that will fall or trickle down into podcasting where you're going to see
Speaker Change: Advertisers that still need to advertise and grow that aren't going to buy into the cluttered world of local media, print, all that type of stuff. And that should help us out in terms of advertising rates and dollars flowing into podcasting.
Kit Gray: And that should help us out in terms of advertising rates and dollars flowing into podcasts. Okay, and then turning to talent, how's the pipeline for new talent and potential acquisitions? Is it still the same 100 plus shows you're looking at? Or has it changed?
Sean McGowan: Your first question comes from the line of Sean McGowan with Roth capital. Your line is open. Morning, kid, how are you? Hey, Sean, good to hear from you, man. Thanks for doing well. How about yourself? Good, very good. You're quick, notwithstanding, but it's all good. Yeah, amazing. I bet you felt it even more than we did down here in Newport.
Speaker Change: Okay. And then turning to talent, how's the pipeline for new talent and potential acquisitions? Is it still the same hundred-plus shows you're looking at, or has it changed?
Leo Carpio: Yeah, you know, we win one, we lose one, another new one comes in, right? So there's a constant influx of podcasts either reaching out to us, or we have a team that goes out and reaches directly to podcasts, to managers, to agents. We're in constant review of a lot of shows. We're also, we've got a bunch of M&A type opportunities. So I think that's probably remained pretty consistent and is growing a little bit in our list, I would guess. So yeah, still really strong on that front.
Speaker Change: Yeah, you know we we win one we lose one another new one comes in right, so it's a there's a constant influx of Podcasts either reaching out to us, or we have a team that goes out and reaches to directly to podcasts to managers to agents We're in constant
Keir Craig: Could you help us contextualize some of these new shows? Without giving numbers to sort of maybe rank the something new shows in terms of, you know, the descending order of revenue importance, just so we have a little sense of what the key ones are? Sure. You know, as the new shows come on, it's really exciting. You've got really the focus of the talent. You're really launching a heavy marketing campaign, introducing our huge fan base to these shows, and then their fans are testing it too, right?
Speaker Change: Review of a lot of a lot of shows. We're also we've got a bunch of
Speaker Change: M&A type opportunities. So I think that's probably remained pretty consistent and growing a little bit, I would say, in our list of our guests.
Kit Gray: There are a lot of shows that need some help, and we're there to take them off. So it's exciting. It's exciting to be Okay. And the last question, looking back on two, three years ago versus today, the conversations with podcast talent, is it a case where they're coming to you now, whereas two years ago or three years ago, you had to go and make the pitch for them? Is that the situation you're having now?
Speaker Change: Yeah, still really strong on that front. A lot of shows that need some help and we're there to take them on, so it's exciting to be in a watch right now.
Speaker Change: Okay and the last question looking back like two three years ago versus today the conversations with podcast talent is it a case where they're coming to you now whereas two years ago you had to go and make the pitch to them is that the situation you're having now?
Keir Craig: As they use their social media and their communities to dive in and test the shows, see if they like it or what they have to say. You know, we've had some great press with some of the most recent shows, and they're having great success. So, you know, unfortunately, like one show that we launched the campaign managers, we had to put that on a little bit of hiatus as David Tlusef actually got hired by Kamala Harris to be on her staff to speak out presently.
Leo Carpio: You know, I think there are more agents involved in the process now that are reaching out just like we are reaching out to the shows. What I think you're finding is that there are more shows that aren't getting the deals that they got the first or second time around. Those are changing. Maybe they're not getting as much in terms of a minimum guarantee payment or the right split.
Speaker Change: I think there's more agents involved in the process now that are reaching out just like we are reaching out to shows.
Speaker Change: What I think you're finding is that there's more shows that
Speaker Change: aren't getting the deals that they got the first or second time around, those are changing.
Keir Craig: So, you know, you never really see that coming, but it's pretty neat, right? I mean, there's a show that we launched maybe three or four months ago that was growing really nicely, had some really good engagements and good press, and then David had to head off. So, we're talking about doing some things that the campaign will or Kamala's team will let us do, but it was interesting. Now, the other shows that we have launched that are really in our real, you know, our sweet spot, I guess you'd say, the female acting shows, those are doing great.
Speaker Change: Maybe they're not getting as much in terms of a minimum guarantee payment or the right split.
Kit Gray: The big ones seem to still be getting those big deals. You know, you see the Smart List and the Back Shepherds and the Call Our Daddy type shows. They're still getting pretty significant deals, even with Rogan and so forth.
Speaker Change: The big ones seem to still be getting those big deals, you know, you see the Smart List and the Back Shepherds and, you know, the Call Our Daddy type shows, those are, they're still seeing pretty significant deals even, you know, with Rogan and so forth, but
Kit Gray: You know, these middle tiers are... It's competitive out there. I'm not going to mislead you guys, but there is a lot more conversation. There are a lot of people that are saying, hey, I want the right partner, understanding that they might get a smaller piece of a much larger pie rather than a big piece of a small pie.
Speaker Change: You know these middle tiers are
Speaker Change: It's competitive out there. I'm not going to not going to mislead you guys, but it's there's a lot more conversation
Speaker Change: There are a lot of people that are saying, hey, I want the right partner, understanding that they might get a bigger piece of, or a smaller piece of a much larger pie rather than a big piece of a small pie. So there's a lot of conversations going on. I, it's just always evolving.
Keir Craig: You know, so they're right off. They're really doing an excellent job. We've got advertisers testing them. The talent is working hard. We're doing, you know, every couple weeks we do calls with the talent to make sure, you know, they're motivated and staying on paths. You know, it's part of the process, and it's not like you just start out and have 50,000,000 listeners. It takes a little bit of time, but we are seeing some really, really good growth and knows.
Leo Carpio: So there's a lot of conversations going on. It's just always evolving. All right, thanks, and congratulations on the quarter. Thank you. Appreciate it. There are no further questions at this time. Mr. Gray, I turn the call back over to you. Okay.
Speaker Change: [inaudible]
Speaker Change: All right, thanks, and congrats on the quarter.
Speaker Change: Thank you. Appreciate it.
Speaker Change: There are no further questions at this time. Mr. Gray, I turn the call back over to you.
Kit Gray: Thank you so much, everyone. I really appreciate it and look forward to having another great quarter. And I'm always available if you guys need to make a call or have some questions, please feel free to reach out and listen to your podcast on Podcast One. Thank you very much. Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Thanks for watching!
Speaker Change: [inaudible]
Mr. Gray: Okay, thank you so much everyone. I really appreciate it and look forward to having another great quarter and I'm always available if you guys need to do a call or have some questions Please feel free to reach out and listen to your podcast on podcast one. Thank you very much. Bye
Keir Craig: And, you know, so that's that's goodness. You know, really, they're on on path to what we thought they would do. We've had some really neat ones to do like the opportunists had some new episodes come out, and you know, those are actually far exceeding what we had thought. So that's great news, and that's keeping that network of programs or seasons of programs, doing really well too. Yeah, we're in line, you know.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. You may now disconnect.
Keir Craig: We're doing great, and really I think the key to seeing, you know, real significant growth is acquiring shows that have an audience and then making sure the ones that we have that are successful continue to grow and evolve. I mentioned I've had it, you know, we're actually in the process, we just signed one to an extension and they're adding a political share. If you ever listen to that program, you'll know they're very politically motivated. So they're going to actually have a political show that'll be running two or three times a week, which is really exciting for us to you. So you'll see more about that in the press.
Keir Craig: But yeah, there's a lot of radical things.
Keir Craig: We've got another show that's about to start with two wrestler slash comedians.
Keir Craig: The name is brothers. We have ownership in that show as well. So, you know, that's one that I think has a real chance to become, you know, kind of like the Pat McAfee before he got hired by a fan of wrestler, right, and to bring the comedic side of things. So I K K a like part of my take of our school, that into wrestling world. So we're really excited about that and really excited about a lot of the conversations we have going on.
Keir Craig: Yeah, just to add to that with the opportunity with the opportunists shown this is this is round three. This is after you've had vigilante and bottom down opportunists, which we want for almost nothing, literally almost no cost. It's having great numbers again. I'm in deep conversations about a television show on it. And that's that's got three seasons of it. So there's multiple different potential opportunities there. And so we're hoping to see, we're hoping to see a third television show sold this year.
Barry Sine: Great segue into my next question. So as you talk about that. I'm going to put a second form monetization.
Aaron Sullivan: Can you remind us what the, I know the upfront is a kind of the minimalist, but what would be the timing of when these things would actually come to fruition and to be seen by an audience and related to that. What's the timing of any additional revenue to podcast one? I assume that comes in through podcast one and not through, you know, some other entity of live one. Is that right? Correct.
Aaron Sullivan: It comes comes through podcast one and it's not a small amount. Right. You know, these can be, you know, right up front money committee, where from 250,000 to a million dollars day one. And I think they're going to go higher when you think about script selling for a million dollars. Right here you have a script, but you also have proof that you have millions of downloads. So there can be very substantial money in it.
Aaron Sullivan: And there was a terrific amount of money in the last one. So we think we'll start to see that. And the timing, timing, get them off the ground could be anywhere from 90 days to 12 months depends how fast the studios are moving. What's later in what time of year you sign them. So the goal is to have a slate of 12 of these right and keep moving these. And again, can we never expect to sell to so quickly and beyond to the third and potential fourth with ransom as well. So we're really excited about it could be could be, you know, very significant money over the next couple of years.
Aaron Sullivan: What's the timing of a revenue recognition on that? You get enough front payment but you probably don't book that right away as revenue and then what happens when additional cash comes in? No, I think Aaron, we book it right away, right? Yeah, the upfront we can record straight away is there's no further obligation. You know, it can't get a little complicated. It's all tied to future performance, right? If the upfront is associated with future obligations, we spread it over time, but generally there is no further obligation on an upfront.
Aaron Sullivan: Okay, and then does that kind of sort of count as against future royalties that they could be a delay between them when you would, you know, that recognition and then when you could recognize additional revenue once it gets earned out just to remind me of what the accounting is. Not really, not really, it's, you know, the upfront money is to buy the rights to it, but it all depends. You know, these are all negotiations as to what the structure is to every one of them is going to look a little differently, but most of the upfront money is not going to be counted against the royalties.
Aaron Sullivan: That's to buy the rights to it. Then they got to go spend, you know, substantial money, right? Digilante, they're in, they've already spent the studios already in for a million dollars plus scripts and, you know, and redoing the scripts and rewriting, you know, our options coming up again shortly, they're going to have to write another check on it.
Barry Sine: All right, great. Well, congratulations on the progress.
Unknown Executive: Thank you.
Barry Sine: Your next question comes from the line of Barry sign with Litchfield Hills Research. Your line is open. Hey, good morning, folks. Hey, in terms of additional monetization, you guys covered a lot on TV and film rights. You also have a live event. I know coming up in October and I guess you're planning more of those. Could you talk a little bit more about live events? I know there's one and what else are you doing there? And might that be a more significant revenue driver going forward?
Keir Craig: Yeah, so we just did a live event in New York City with a show called The Gals on the go. They went down to a new store opening and did a podcast there. They did some social media around it. And, you know, it was a substantial six-figured deal where maybe an hour and a half of work for us. So it was tremendous. It didn't take into our already existing revenue. It was just an added show that they did and that was, you know, that was awesome.
Keir Craig: I think we're looking at doing more of those when they come across our desk. You'll be seeing more of that. It's a big initiative of ours. Part of all the podcasts, one pro that I mentioned earlier, that will be some of the things that we incorporate into those deals as well, where, you know, once they get the brands get their feet wet, they'll start to work with our talent to do live shows from stores and stuff like that.
Keir Craig: So those type of opportunities are really, really neat for us. I think we'll see with us over the next six months, especially with the iPad team. We might do some, you know, special debate podcasting that will be live, you know, so you'll be able to hear their take. They'll be able to do some live pay-per-view, meet-and-greet-type stuff coming up around elections with Indonesia. That's part of the, part of the, you know, of the deal.
Keir Craig: So we'll see more and more of that as we get into it or a fan. Love that kind of stuff. So there's that. And then from a revenue standpoint of the top line was obviously very strong in the quarter. Was there was that all advertising? I assume there's some non advertising revenue from some of these licensing deals that started to contribute to the top line. Yeah, some of it will be, you know, mostly still advertising is our core business, but you'll see, you know, we've had some production deals as well.
Keir Craig: Like I said, the motor trend and that those other deals that have added, they've added to your bottom line, some of these live shows will be in it as well. And we're revamping our, you know, our pain wall experience, like I mentioned, so that that will also be included into our revenue when we work forward. Yeah, which and what you're also, what you're also seeing is you're starting to see that $20 million plus contract kicked in right as that's ramping up.
Keir Craig: So that distribution will ramp up and you'll start to see better margins later in the year on that system costs going into it. And then eventually it'll be a way more profitable to us, but it's a great, it's a great win for us and revenues, but even more importantly, how much traffic an audience there is. And in that traffic and audience and, you know, having these mass distribution deals and, you know, kid again, just repeating it is, is very shortly going to be announcing multiple deals like that.
Keir Craig: They're going to give us distribution in other places and we've done a brilliant job. The team has done a great job. We're in Spotify, Apple, Amazon, Samsung, TVs, he's right across this big streaming platform. You're going to see, you know, multiple, you know, B2B deals that have 10 million to 3 billion an audience that want to have. That podcast on the network.
Aaron Sullivan: Okay, and then returning to EBITDA, EBITDA was slightly negative in the quarter and I know Kate, you and I have discussed, you know, a goal to get that positive and to grow that in line with what live one is doing on a overall basis. It would seem to me there's some drivers are going to help drive that positive, which are the rights you've talked about and then this 24 million dollar contract.
Aaron Sullivan: The other thing with an EBITDA I want to confirm and maybe this is for Aaron is it looks like there was an impairment charge that's not backed out of the EBITDA and that's non cash. I show the real EBITDA loss. I would think it's a little bit less than what you've reported, so you can comment on EBITDA please. Yeah, so that impairment charge was related to a show we acquired that that we're no longer pursuing.
Aaron Sullivan: So that's that. Yeah, look, we're very close to kind of adjusting the break even we've had some additional content acquisition costs that are hurting that number and that's just simply kind of volume of new shows, right. So we expect those to be possible in the near term over the next kind of 12 months or so. So we expect to see that as we're adding those shows contribute contribution margin increases a little bit and that will flow right down to our adjust city blind, and Aaron just to confirm that impairment was not backed out in the reconciliation you did on EBITDA, even though it's non-cash. Let me get back to you on that, Barry. It might be in the depreciation line. Okay, let me confirm.
Keir Craig: Okay, and then Kit, can you kind of elaborate a bit more on the corporate strategies. I think I'm going to understand some of them that's going to drive that EBITDA line positive. Yes, sure, Barry. Basically, as we add shows and start up new shows, the costs are pretty insignificant. We don't need to hire more salespeople or really more producers currently at the current pace that we're at. So when we add these shows, it will mostly decide to like sales commission and some bandwidth costs and stuff like that.
Keir Craig: The margins will be great, right? So that's where we need to just continue to harp on acquiring more shows, launching more shows. Again, because that baseline cost won't expand that much, right? So we continue doing that and then doing what Rob said about the second window, using our content that we have and our access to talent to sell things like the gals on the go lies show, which isn't really adding to our costs and more work and stuff like that.
Keir Craig: It's just doing a little bit more to get a lot more in terms of revenue and better margins. You'll see, you know, making sure, you know, we have social media involved in it to kind of add more to what we have where we're not actually doing more shows and do more programming, but we're getting more stuff to sell bigger deals. You'll see the same thing with the paywall and again, with podcast one pro, you know, we're charging really good money for, you know, these clients to do podcasts and run promotion through our network of podcast ends, which is there's no cost to that really. We'll be able to just use existing predictors and so forth. So that's all going to be high margin type stuff.
Unknown Executive: So we're starting to put more and more focus on to those type of things and keeping our core business going and and it should, it should, you should be some great even in the next year or next quarter. Okay, we'll hold you though that. Thank you very much, you know. Thanks very. Again, if you would like to ask a question, press star then the number one or your telephone key pass.
Leo Carpio: And we have our next question comes from the line of Leo Carpio with Jr. Your line is open. Good morning, gentlemen, some K-Chot. I wanted to dig it on to the advertising environment for podcasting. What have you been seeing in terms of the rate of the economic impact and what's the potential impact of the upcoming 2024 presidential election on your audience? Thank you. Uh, you know, we don't have as much of an impact, you know, really besides David taking that job, which we didn't see coming, um, you know, which isn't necessarily the worst thing.
Leo Carpio: If that show comes back, depending on, you know, what happens to him if he stays with Kamala or, you know, if Trump wins, however that works out, I think it gives him even more credibility in terms of having a good show. So, um, there's that, but besides that, we don't, we don't have a lot. I mean, when I think you're going to see and podcasting is people will try to, you know, the campaigns will try to get, um, advertising into a lot of the shares, but, um, a lot of the talent won't let, um, you know, those types of advertisements be part of their programs, understanding that, um, you know, half of the people in the world like one side and half of the people like the other side and it usually, um, you know, creates conflict, such an intimate listening experience so they don't really like having that in, in, in, in involve.
Leo Carpio: What it will help is, um, you'll see, uh, cable and print and online, um, marketing spends will be, you know, pushed and, and I believe that will fall or fickle down and see podcast that you're going to see, um, advertisers that certainly advertise and grow, um, that aren't going to buy into the cluttered world of, you know, local media, print, um, all that's like this love and, and that should help us out in terms of advertising rates and dollars flowing into podcasts. Thank you.
Leo Carpio: And then, turning to talent, how's the pipeline for need challenge and potential acquisitions or is it still the same 100 plus shows you're looking at as far as it's changed? Yeah, um, you know, we, we win one, we lose one, another new one comes in, right? So, um, there's a constant influx of, of podcasts, um, either reaching out to us or we have a team that goes out and reaches to directly to podcasts, um, to managers, to agents, um, we're in constant review of a lot of, a lot of shows, um, we're also, we've got a bunch of M&A type opportunities, so I think that's probably remaining pretty consistent and growing a little bit, I would say, in our list, it's, uh, I already guessed, so, yeah, still really strong on that front, um, a lot of shows that need, uh, that need some help and, uh, we're there to take them off. So, it's exciting, uh, it's exciting to be, you know, watch right now.
Keir Craig: Okay, and the last question, looking back like two, three years ago versus today, uh, the conversations in terms of podcast talent, is it a case where they're coming to you now where, uh, two years ago, three of those, you had to go and make the pitch for them? Is that the situation that's having us? Uh, you know, I think there's more agents involved in the process now, um, that are reaching out, just like we are reaching out to shows, um, what I think you're finding is that there's more shows that aren't getting the deals that they got the, the first or second time around, um, those are changing, um, maybe they're not getting as much, uh, in terms of a minimum guarantee payment or, uh, the right split, um, the big ones seem to still be getting those big deals, you know, you see the smart list and the DAC shepherds and, you know, the caller daddy type shows, those are, they're still seeing pretty significant deals, even, you know, was rogan and so forth, but, um, You know, these middle tiers are it's competitive out there.
Keir Craig: I'm not going to not going to mislead you guys, but it's there's a lot more conversation. There are a lot of people that are saying, hey, I want the right partner understanding that they might get a bigger piece of a smaller piece of a much larger pie rather than a big piece of a small pie. So there's a lot of conversations going on. It's just always evolving. All right, thanks, and congrats on the floor. Thank you. Appreciate it.
Unknown Executive: There are no further questions at this time.
Dick Gray: Mr. Gray, I turn the call back over to you. Okay, thank you so much everyone. I really appreciate it and look forward to having another great quarter.
Dick Gray: And I'm always available if you guys need to do a call or have some questions, please feel free to reach out and listen to your podcast on PodcastOne. Thank you very much. Bye.
Operator: Ladies and gentlemen, this concludes the conference call. You may now disconnect.