LiveOne, Inc. Common Stock 2027 Q1 Earnings Call

Thank you. Good afternoon, everyone, and thank you for joining us. This was one of the most important and strongest quarters in the history of LiveOne. We delivered $19.3 million in revenues and $18.6 million of audio revenues at a record $6.3 million of adjusted EBITDA. Our podcast delivered record revenues over $16.2 million and $1.6 million of adjusted EBITDA. But maybe just as importantly, we increased our cash position by $3.3 million, increased our stockholders' equity by $7 million, and eliminated $5 million of liabilities for the quarter. We have now completed $7 million of our $12 million of stock repurchase program and fully are prepared to continue to grow that and buy more and more stock at these low prices. We also acquired 150,000 shares of PodcastOne and paid off all of the junior debt at PodcastOne.

Our focus is simple: grow revenues, grow EBITDA, generate cash, strengthen the balance sheet, and create shareholder value. For the first time, I believe, we see a very clear path to the next level of scale. Our B2B pipeline is stronger than it ever has been. We now have partnership and opportunities with over $10 trillion worth of companies across the world. We have signed major retail agreements with a four-year agreement with one of the biggest retailers in the world. We are very close on a second retailer. For the first time ever, we have partnered with Netflix and their 700 million global members. Our relationships continue to grow across Apple, Amazon, Alphabet, AT&T, Samsung, LG, Vizio, and many of the most important, largest companies in the world.

We are also seeing very meaningful expansion with our existing partners, Amazon representing over $20 million, and Paramount has now passed and on its way to over $27 million in revenues. This continues to demonstrate the accelerating opportunity across our major global distribution partners. Based on the momentum we are seeing, we believe there is a clear path to over $250 million in revenues over the next three years. Importantly, this growth is happening against a dramatically leaner cost structure. We have cut our staff down from 350 people at a high to now around 80, and we are not just simply rebuilding revenues. We are building a much more profitable, scalable LiveOne with the potential for dramatically increasing EBITDA and cash flow. Our M&A pipeline is the strongest it is ever been with over $400 million of potential deals in the pipeline.

We are evaluating carefully acquisitions, mergers across our businesses while continuing to receive substantial inbound interest from strategic and financial buyers looking to acquire individual LiveOne subsidiaries, assets, or potentially the entire company. That gives us tremendous optionality. We can buy, merge, partner, or monetize assets, depending on which path creates the greatest value for our shareholders. PodcastOne is another critical part of our flywheel. We believe audio and video belong together. We are watching a transformative move in the industry, as you see Netflix enter in a very strong way into podcasting, and you see the likes of Fox buying up many podcast networks, as well as OpenAI paying 13 and a half times revenues for a podcast network.

This is the second round of acquisitions where there was over $10 billion of them in the first round, and I fully expect there will be a larger scale acquisition mode happening in the overall industry. It is a very strong belief that you are going to see every streaming network, including the Apples, the Amazons, and the Alphabets of the world, or the YouTubes of the world, acquiring podcast networks. We have also now officially sold our podcast, "Barnum Town," to a major streaming partner, and we are hoping for a green light on that in the very near future. This adds to our PodcastOne IP of podcasts that can turn into television or films and dramatically increases our opportunity of generating substantial cash flow from these. AI adds another major layer across our audio and video content data and intellectual properties.

We have over 250,000 hours of video content and over 500,000 hours of audio content and growing. We see telltale signs that the LLMs are going to be buying up intellectual property content data at somewhere between $100 and $500 per hour on a non-exclusive basis. The most important message I want investors to take away from this, LiveOne flywheel is robust, it is working, and is accelerating. More partners create more distribution, more distribution creates bigger audiences, more audience creates more revenues, and more content creates more IP. The more IP creates more opportunities across streaming, television, AI licensing, commerce, and M&A. There is the valuation. The industry companies are trading at about 3.7x revenues, while LiveOne is trading at about 65% of revenues. We believe this represents an extraordinary valuation disconnect.

As we execute, grow revenues, expand EBITDA, generate cash, and strengthen the balance sheet, we believe there is a significant opportunity to close that gap. After more than 30 years of building media and technology companies to over $10 billion worth of companies, I believe this is the strongest and most powerful collection of assets and opportunities I have ever assembled. I have been through this journey with many companies where stock has had its difficult times and then rebounds in a very extraordinary way. We watched this with Digital Turbine dropping to almost $40 million, and then five years later, trading to a $12 billion valuation. I believe LiveOne has today more assets, more revenue streams, and more ways to win. Now it comes down to final execution. The flywheel is accelerating, and we see a very strong sign of hitting over $100 million in revenues in the very near future.

With that, I want to hand it off to Craig, our CFO, who has done an amazing job, and look forward to finalizing our call at the end. Thank you, Craig. Thanks, Rob.

I will spend a few minutes just providing a brief overview of the results for our first quarter. Consolidated revenue for the three months ended June 30, 2026, was $19.4 million, with positive adjusted EBITDA of $4.3 million. Our audio division posted revenue for Q1 of $18.6 million and adjusted EBITDA of $6.3 million. The biggest driver of adjusted EBITDA was our Slacker business with stock for service deals that covered certain past liabilities as well as credit for future services. On a U.S. GAAP basis for the first quarter, LiveOne posted a consolidated net loss of $3.1 million or negative $0.23 per basic and diluted share. This compares to net loss of $3.9 million or negative $0.40 per basic and diluted share in the same quarter last year. At the operating level, our PodcastOne business reported record revenue $16.1 million and adjusted EBITDA of $1.6 million.

Our Slacker business posted Q1 revenue of $2.5 million and adjusted EBITDA of $4.7 million. This was primarily driven by stock for service deals and the elimination of certain past liabilities. Overall, we see strong momentum in the first half of fiscal 2027, led by the continued growth of PodcastOne. As Rob mentioned, we have several strategic opportunities gaining traction, which we believe can support the continued growth and create long-term value. Rob, I'll turn it back over to you.

Just to finalize, we are well in the process of our next M&A transaction. It's been a few years since we've completed one. For anyone that knows me, they're usually super accretive, very much like PodcastOne. We acquired it doing $17 million in revenues and losing $5 million a year. It's now on a run rate to do well over $60 million this year as we finished off the quarter with almost what we started with five years ago when we acquired it, and now is very strong EBITDA. We are going to continue to buy back stock aggressively down at these low valuations. As a team, I couldn't be more proud of what they've accomplished this quarter to eliminate this kind of liabilities, create this kind of EBITDA, has really been special and really special to see what our team has done.