LiveOne Targets $10M EBITDA as PodcastOne Growth, Cost Cuts Reshape Business

Key Points

• LiveOne reported quarterly revenue above $19 million and EBITDA above $6 million after restructuring and cost cuts, including reducing its workforce to 80 employees from 350. Management is targeting full-year EBITDA of $8 million to $10 million and aims to exceed $10 million by year-end.
• PodcastOne is the company’s main growth driver, generating $16 million in quarterly revenue and $1.6 million in EBITDA. Its advertiser base has expanded from about 70 to more than 500, while management cited strong podcast rankings and guidance ranging from $68 million to $90 million in annual revenue.
• LiveOne is reducing losses in its Custom Personalization Solutions business and expanding distribution through partners such as LG, Vizio, AT&T and Samsung. The company is also returning to live events through Team Boxing League and sees opportunities in content licensing and artificial intelligence.

LiveOne NASDAQ: LVO Chairman and Chief Executive Officer Rob Ellin said the audio and entertainment platform recorded quarterly revenue of more than $19 million and EBITDA of more than $6 million, following what he described as a period of restructuring and cost reductions.

Speaking during a company presentation after the release of first-quarter results, Ellin said LiveOne expects full-year EBITDA of $8 million to $10 million. He said the company reduced its workforce to 80 employees from 350 after restructuring its Tesla arrangement, removed more than $5 million of liabilities during the quarter, increased net equity by more than $7 million and added $3.3 million of cash.

Ellin also highlighted LiveOne’s share repurchase activity, saying the company had repurchased more than $7 million of its own stock and acquired an additional 150,000 shares of its PodcastOne subsidiary. He said LiveOne was trading at approximately half of revenue, compared with music subscription peers that he said trade at roughly 2.94 times revenue.

PodcastOne Growth and Advertising

PodcastOne generated $16 million in quarterly revenue and $1.6 million of EBITDA, according to Ellin. He said the business produced $61 million in revenue during the prior year and that management had provided guidance of $68 million to $75 million for the current year. Later in the presentation, Ellin also referred to PodcastOne guidance of $85 million to $90 million and EBITDA of $8 million to $10 million.

Ellin said PodcastOne has ranked in Podtrac’s top 10 for the past 12 months and was ranked sixth among podcasts in the prior month. He cited shows including those hosted by Adam Carolla and Jordan Harbinger, as well as true-crime programming developed in partnership with A&E. He also pointed to the addition of Dr. Phil to the platform approximately three months earlier.

The company has expanded its advertiser base from about 70 advertisers at the time it acquired PodcastOne to more than 500 advertisers, Ellin said. He added that LiveOne has placed its first podcasts on Netflix and said major video streaming companies are increasingly entering the podcast market.

Distribution, Content and Live Events

Ellin characterized LiveOne as one of 10 digital music subscription platforms, alongside companies such as Spotify, Apple and SiriusXM. He said the company’s Slacker Radio service has more than 50 million tracks, over 100 million app downloads, 82 billion listens, more than 400,000 hours of podcast episodes and 500 curated radio stations.

During the past six months, LiveOne announced distribution arrangements with LG, Vizio, AT&T and Samsung, Ellin said. He also said the company had signed a four-year contract with one of the world’s largest retailers, though he did not identify the retailer.

The company reported a content library of more than 250,000 hours of video, over 500,000 hours of audio content and more than 1 billion codes. Ellin said the library could create opportunities involving artificial intelligence training models, while also supporting distribution relationships with platforms including Paramount, Amazon, Spotify and Apple.

LiveOne is returning to live programming through its partnership with Team Boxing League, which Ellin said plans to hold more than 60 events annually. He noted that the company’s prior Social Gloves boxing business generated more than $25 million in revenue and $4 million of EBITDA before COVID-19.

Cost Reductions and Strategic Focus

Ellin said LiveOne is reducing the cost structure of its Custom Personalization Solutions business, which he described as a money-losing operation affected by the pandemic. The company has cut more than 100 positions in that operation and plans to focus the business on celebrity brands connected to LiveOne’s podcast, music and boxing talent, he said.

He added that LiveOne partnered with a Chicago-based distributor that has assumed distribution and manufacturing functions for the business.

Ellin said LiveOne spends no money on marketing and instead seeks to grow through distribution partners that provide audience reach in exchange for access to the company’s content. He said the company has 46 patents and continues to add distributors monthly.

Looking ahead, Ellin said management is focused on exceeding $10 million in EBITDA by year-end, expanding revenue beyond $100 million and ultimately targeting revenue of more than $250 million. He also cited LiveOne’s approximately $250 million net operating loss carryforward and said the company expects artificial intelligence to support both revenue opportunities and cost savings.

About LiveOne (NASDAQ:LVO)

LiveOne, Inc NASDAQ: LVO is a digital media and entertainment company specializing in live and on-demand music, podcasts and original content. The company provides streaming access to live concerts, festival performances and exclusive artist-driven programming through its digital platform and mobile applications. Its service offerings include ad-supported free tiers as well as premium subscription packages that deliver high-quality audio and video experiences for music fans worldwide.

The LiveOne platform aggregates a diverse range of content, including live concert streams, curated on-demand playlists, artist interviews and behind-the-scenes footage.

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