LVO - Earnings call transcript Q3 2021

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Operator

Welcome to LiveOne’s Business Update and Financial Results Conference Call for the Company’s Third Quarter and Nine Month period ended December 31, 2021. Presenting on today’s call are Rob Ellin, CEO and Chairman; and myself, Aaron Sullivan, Interim CFO. I would like to remind you that some of the statements made on today's call are forward-looking and are based on current expectations, forecasts and assumptions that involve various risks and uncertainties. These statements include, but are not limited to, statements regarding the future performance of the company, including expected future financial results and expected future growth in the business. Actual results may differ materially from those discussed on this call for a variety of reasons. year XX, Form reports XXXX, statements, subsequent company's XXXX could the results XX-Q cause the materially these along the about for the to to Form XX, June filings. March in quarters from XX, which described factors, the with annual forward-looking report ended for XXXX, ended on for XX-K refer filings SEC quarterly on with and SEC information differ the Please September company's those including company's actual

and available Investor and available replay it is by You including non-GAAP call. most as is this call. to information following management's your and XXXX, will responses time-sensitive the measures the of comparable you information via periodically date section company on is website February be as law, financial any GAAP release, encourages in this the views contains recorded. making the shortly company to important media to will website IR discussion, its Investor’s posted highlight earnings visit reconciliations today questions, webcast, reflects call at investors its Relations after being the website the except that find XX, of revise the to to ir.liveone.com, for on obligation The not the update call, to date the or undertake like its financial this investors required to the I'd measures company a does in of and company's of and conclusion which following discussed content. the of The

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

Ellin. Now I the CEO, would to over Rob call turn LiveOne's to like

Rob Ellin

maintaining million million and XXXX, fiscal in afternoon, $XX.X X bought months XXXX results. XXX% and XXXX, million million. for the $XXX a our quarter, to $XXX also our results happy And the QX revenues update million thank a XX% million in team company. Thank We we a $X posted guidance our of record today with between quarter million We're Good at year-over-year you, guidance million of million million third for for are through and adjusted financial raising buyback $XXX.X exploring I'm confirming we joining $XXX of the a fiscal XX, to EBITDA us in December Aaron. JPMorgan LiveOne fiscal shares our increase all and you to $XX even COVID QX partnership XXXX. The or first say as the variant. to our encouraging delivering continued business nine extension compared everyone. for options our and ended $XX.X and of and revenue has $X increase

First, more return the to annual remain to about we until events lost extremely positioned than and the almost pushed are COVID the all $XX live variant. well out variant. XXXX. said, restrictions. from that have of extremely live live going quarter Delta of necessitated Omicron we more of planned the And current we recently, for revenue With optimistic we that COVID events To-date, our calendar events has forward. million believe benefit

profitability path the quarter. to and strategically were environment the quarters, and EBITDA markets past pivoted As line over in we and backdrop two first time the capital has our changed in the forward

and pre-COVID COVID, as million as annual to down slate $X.X live million caused of XX-year announced programming content, reductions further the EBITDA in to a $XX of into previously fiscal building events that due back operations as implementing cost investment to cost corporate to over year franchises. to live are which an swing in a anniversary including LiveOne’s of We to well return and very estimated We anticipated And adjusted XXXX. $XX fiscal shut $XX important to annually. expanded implemented events in from million savings to-date creating from million with negative million adjusted our XXX original is overhead, of It's increase music we from expense now note, $X.X positive around expect expects subsidiary the of year. levels this Awakening EBITDA React festival, Spring multiple XXXX

our and business bottom We EBITDA in profits. quarter. that coming and are and LiveOne we start the driving the leverage and now substantial six acquisitions, have line model I’m positioned achieve integrated up completed excited has scale June positive to now to in

from paid This podcast expanded Slacker you reach bring sold up-and-come with all network will in December, Tesla experience user without in and of directly streaming car the exclusive of through with enjoy as we all wide curity the including songs, well for vehicles. integrated Tesla, North we streaming radio consumers XXX a and LiveXLive’s into paid Google XX exclusive XX as original seamlessly Automotive Slacker on automotive be on pre-installed partnerships is partnering well Sprint other allowing and vehicles many is As as with Radio partnership automotive refresh Tesla by Lincoln last Automotive. mobile with part Volvo, Slacker completed as as to and a – from Slacker our allow app content, through our service their major white-label Nissan, us the nine-year devices year We in LiveOne Ford, over into Google listen others. LiveOne Android across OEMs, virtually devices. other and interface major experiences Tesla Verizon, and compelling every to which exclusive default Radio cars XX America a as carriers, automotive now recently well including subscriptions. Chevrolet, library BXB Dodge, subscribers pre-installed platform. see new is XXX opportunities services to growth Android including LiveXLive of with other and launch all know, as deals Android for the content stations subscription radio launched via LiveXLive million to current and allows Tesla, Tesla’s The stations up new the user podcasts service, Slacker We those a top automobiles broadcasts. from expanding interface default T-Mobile, just all automotive OEMs, radio their music is to see mobile as In our your adoption need PodcastOne did to car continues

XXXX, over over when X see $X.X XX we path we look over in a had And of subscribers, to paid have million of a increase paid five-year over over billion the subscribers million. prior over out reach a year. paying subscribers December and As the XXX,XXX We XX, revenues. X.XX over years we million net period, for

have members, expanding now over XXX,XXX also added to members. almost We XXX,XXX

produces distribution TVs our the as multiple and sponsorship we’ve job that also have than iHeart. across in its important people to downloads securing ranked advertiser-supported for Podcast as January Our a network number continue has recently LiveOne X.XX more content, to XXXX, per impress wholly-owned of an sponsors. sponsors subsidiary, metrics over recruiting grown platforms, PodcastOne, digital and sponsorship like exclusive the now and results more It exclusive Spotify, XXX we integration new XXXX, podcasts July advertising to XXX has can done we franchise robust the of over has episodes was our and leading on-demand year. and growth, as of and million outstanding including and which in audio the sales understand the advertising to as Warner of is acquired to different over podcast I where podcast, additional podcasts week. to to Samsung XXX podcast that had – as advertising XX all rights podcast in Viacom PodcastOne billion and experience Samsung, deals. would calendar continue team a added XXX ahead successful blue-chip access our as Apple, in has its listen of as now PodcastOne XX, well world. pipeline shows this in add division, XX And is meaningful than

fact, $X wins than PodcastOne of the this the company. million-plus In year history has more in

approximately launching pay-per-view and we of pay-per-view front, May million the On in generated sales events. pay-per-view live since pay-per-view in XXXX, related platform $XX.X

pay-per-view the half to company’s of As hopefully previously our of existing LiveOne’s announced our portion public spinout to we take separate a first company a We many business know, pay-per-view of equity in still you spinout the XXXX. of distribute to the stockholders. plan and anticipate place

return live of excited previously music. mentioned, As see to the we’re

a I merchandise enormous discounts munis, a in ticket content in-person over and off performances XXX we our CFO, hand now that pay-per-view the events Aaron paid light of recently purchase festivals, amount to music and next months. We live results. original review it all where provides have events, any the QX for will Aaron. XXX featuring new to booked live discounted currently programming. Thank of or like pay-per-view concerts receive program our one-year live than membership NFTs, XX would Finally, curated over all to to implemented who future Sullivan, more podcast and you, and

Aaron Sullivan

you, Thank Rob.

increase with XXXX Let our KPIs, a of We QX XX% a million. adjusted million record year-over-year loss margin in subscribers to QX and strong ended our provide results with increased revenue me EBITDA to spend a of fiscal paid million, as $XX.X net XX% $X.X a few XX% results. Contribution grew brief including to overview minutes was year-over-year. $X.X

nine-month the margin For $X.X to XXX% EBITDA million, to XX, XXXX, increased loss our while was million, $XX.X December adjusted a increased contribution ended of XX% period current million. and revenue year-over-year $XX.X

event due that subject in subscribers dispute and who October subscribers, at XXX,XXX paid not For Festival with in acquisition our a subscribers to revenue. EDM compared XXXX. the and XX, was events subscribers note We a live of subscribers, event is contractual currently Growth increase total QX December Spring ticket CPS. the increase Music the revenue Awakening a in fiscal net QX the as and which held XXXX for to are paid million QX million revenue, subscribers the X.X included XXXX. our in of successful in in results, of are large our we certain recognizing advertising revenue ticket Please result growth reported ended of are part

to related QX is events and of costs year year Year-over-year due was was in improvement in advertising sponsorship, October merchandising compared driven in which $X.X subscribers $X.X to the from The sponsorship the and to Delta-COVID $X.X compared was and from is million to XX% of increased loss EBITDA and million $X.X corporate Spring For – was events the loss margin Festival. and loss Spring million $X.X quarter. loss quarter. by CPS Awakening prior paid variant impacted the loss year-over-year in by live adjusted loss advertising the in to as by prior composition as from a addition $X.X weather a XXXX, the million XX% conditions. million prior $X.X Awakening of the comprised adverse contribution Fiscal year Fiscal Music loss subscription in our XX% of ticketing operations and Festival period driven in from of increase an increase million. and The the a ticketing the prior loss QX fiscal by our the subscription well was compared XX% year quarter. consolidated a offset to EBITDA from XXXX of adjusted Music QX million a XX% aforementioned revenue events XXXX XXXX

events, $XX.X in as driven the revenue record nine a the year-over-year an with to in ended in Spring along CPS XXX% partial period. million XX, up Awakening our The Podcast from year Music XXXX, including months For of each return the major wholly-owned was increase million, was our the subsidiaries compared well prior as December $XX.X acquisitions of revenue live and increase of Festival. as

the and For which for our and ticketing sponsorship, ticketing period. period, in XX, to the million, ended XX% revenue and increases increase an compared the events XXXX, sponsorship, along subscription in $X.X comprised and period. $X.X compared loss Contribution of to primarily ended QX the to and with was Briefly loss with $XX.X December nine of period Music cash We the margins of nine-month subscription turning months strategic and Again, into the merchandising the cash December EBITDA margin growth Awakening along ended and compared XX% events the of the Spring drive Festival, year. current result in advertising XX% to future December the was a million prior million, was the to $XX.X advertising is of CPS period. year million with XXXX, nine-month a loss investments attributed beyond event including the XXXX, XX% year of increased addition the prior sheet. XX% content $XXX,XXX. prior Adjusted of period balance ticketing ended XX, XX, in restricted from to revenue marketing of $XX.X loss in year a of our the million for is increase

to Turning guidance. financial

We $XX $XXX.X Awakening of XXXX $XX are result loss on to reaffirming million million primarily million and a EBITDA guidance loss for our financial adjusted the fiscal of XXXX million to $XXX reducing our guidance between Spring our to a as Music Festival. revenue

We million our to over Rob. to guidance and hand million are revenue me now million million. $XXX $X adjusted increasing And EBITDA XXXX $XXX to fiscal increasing back $X guidance to to let it

Rob Ellin

Thank you, Aaron.

listen, everything business and with subsidiaries that watch, $X rolled billion pieces now driving six flywheel spoken billion the previously a component into and brand, We’ve offering to about engage the we each attend, are to synergistic $XX to have I’ve As our unique revenues of consumers model create and plus upside. LiveOne transact. associated business from complementary

We’re acquisitions. not done with our

We’re next the excited about one.

in said, history publicly the future, the most and history we expect of largest accretive of the the company in As company. the the the will we in be very we near

just so to expand continue our any hand time stock I'm opportunity this and questions. to undervalued you. with an we of at we business, million growth off is the X trading business. ask happy shares, is any. reiterated revenues, partnership you want I And and all our here buyback of as And you we our we watch feel to almost have explore As JPMorgan, Thank the this XX% options the of feel build to offer answer exciting like as to it

Operator

[Operator Instructions]

Unidentified Analyst

Hi. This is Matt in Kinstlinger. for Brian

if are have brings the return hurt coming June I not events you events to line is during the highlighted question they quarter taking What occur achieve to that release, your large profitability. you place do the goals? get ability in they large that, and first earnings So could bottom or of delayed, cost

Rob Ellin

Yes.

I think we're highly confident. first, So

confident and right? As you it money do right so into because And had such it, to know, an we right, a to year launched and franchise it, market much had difficult some powerful we we on last had Spring value, Awakening move October. But it Live extremely it's to which a growing, that lost June, October. by right? to chunk be because weather it's We're collected even to open insurance of open, think we of back we is from company be further. the is will even as highly going moved conditions that Live And

So we're highly confident in that.

to We have to very XXX little XXX. in the XXX

as our it's across us music. we have that live. year, We have quarter to media tent then of Gloves for and move year, we you the Social right, of and exciting very as little into into calendar into an know, first launched and pole opportunity of And move year expansion next back last big event this expand most right, social

Unidentified Analyst

higher one, ad economics second a drive the any just the vehicles, a service of way? follow-up. price revenue? Or improve Tesla monthly And of the much. that so in does a the podcasting it podcasting in does the Does Thanks addition for

Rob Ellin

you advertising being Sure. Any the more more have, It's pays, traffic a right? self-fulfilling time the prophecy.

across announced across just it across million Tesla. Facebook, we and podcast XX So Samsung TVs across putting our

So the for the the larger and it more the bigger the traffic, audience, is better us.

Unidentified Analyst

you so thank much. Great,

Rob Ellin

questions? other Any

Operator

Rob, looks no questions. like further it we have

Rob Ellin

you for really great our Have going joining, the company and supporting of thank conference and And you evening. a but call, difficult Great. Well, excited for through and everyone we thank much. to the look we're next thank company. the market, forward you a very growth is us where

LiveOne (LVO) 11 Feb 222021 Q3 Earnings call transcript