LiveOne, Inc.

Thank you for your patience. This morning's call will begin shortly. Please stay on the lines. Thank you. Good morning or good afternoon all and welcome to the Live One Inc Q1 fiscal 2024 financial results and business update webcast. My name is Adam and I'll be your operator for today. If you'd like to ask a question at the Q&A portion of today's call, you may do so by pressing star followed by one on your telephone keypad. I will now hand the floor to Aaron Sullivan to begin. Aaron, please go ahead when you are ready.

Thank you. Good morning and welcome to Live One's business update and financial results conference call for the company's First quarter ended June 30, 2023. Presenting on today's call is Rob Allen, CEO and Chairman of LiveOne. I would like to remind you that some of the statements made on today's call are forward-looking and are based on current expectations, forecasts, and assumptions that involve various risks and uncertainties. These statements include but are not limited to statements regarding the future performance of the company, including expected future financial results and expected future growth in the business. Actual results may differ materially from those discussed on this call for a variety of reasons. Please refer to the company's filings with the SEC for information about factors which could cause the company's actual results to differ materially from these forward-looking statements, including those described in its annual report on Form 10-K for the year ended March 31, 2023 and subsequent SEC filings. You'll find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed today in the company's earnings release, which is posted on its investor relations website. The company encourages you to periodically visit investor relations website for important content. The following discussion, including responses to your questions, contains time-sensitive information and reflects management's views as of the date of this call, August 10th, 2023. And except as required by law, the company does not undertake any obligation to update or revise this information after the date of the call. I'd like to highlight to investors that this call is being recorded. The company is making it available to investors and media via webcast, and a replay will be available on its website in the investor relations section shortly following the conclusion of the call. Additionally, it is the property of the company, and any redistribution, transmission, or rebroadcast of this call or webcast in any form that has the company's express written consent is strictly prohibited. Now, I would like to turn the call over to Live One's CEO, Rob Allen.

Thank you, Aaron, and good morning, and thank you all for joining this very special day for Live One. Five years ago, my team entered the fast-growing digital audio market with the acquisition of Slacker Radio. At the time of acquisition, it was a very distressed asset with $20 million in revenues and almost $10 million in losses. It has spent over $180 million building the assets. Today, I'm proud to say that we've just raised our guidance to $123 to $130 million in revenues. On the audio side of it alone, we raised our guidance to $103 million to $110 million with a staggering $18 to $21 million of EBITDA. We promised the street when I started this that by the end of 2027, LiveWarm Slacker Radio would capture 10 million subscribers and over 1 billion in revenues by the end of 2027. The opportunity is so big that PAM for this industry, according to Goldman Sachs, is over 1.7 billion paying subscribers alone. Today, I can humbly guide by the end of 2027, we expect not only to reach that 10 million, that could pass over 15 million subscribers. We say this with confidence because LiveOne is growing over 800,000 subscribers, so you're at a 50% increase and our pool of over $3. The pipeline for our B2B partnerships has never been greater. Each of these potential partners have 10 million to 2.5 billion addressable eyeballs. At $15 million and $3 ARPU, we'll pass over $600 million in revenues. That's before any ad revenues or an increase in pricing, of which LiveWin and Slacker have been the only one in the industry to not raise prices, and we're at a 65% discount to all of our competitors today. Slacker Radio expects to begin trading in a reverse merger with ROCL SPAC by the end of October. Separately, we then acquired, in the beginning of COVID, we acquired Podcast One, also doing about $20 million in revenues. Today, I can proudly announce that Kit and our team did over $10.6 million for the quarter, for a run rate of $42 million. When you add that together with the acquisition of the Cast Media Assets, which we've been announcing multiple podcasts, and the acquisition of Fantasy Gurus, Our run rate will be well over $50 million. For the first time ever, we'll talk about our guidance for 2027 for podcasting as well and expect that to continue to grow at this rate and hit over $250 million in revenues. The podcast industry has matured from $400 million to over $1.4 billion since COVID. Industry expects it to grow now to $5 to $7 billion by 2027. We've just moved up the ladder dramatically from number 13 to number 10 on PodTracks, passing the likes of CNN. We expect this year to be in the top seven. We also excitingly, even though it's been delayed multiple times, expect to start trading on a major exchange under the symbol PODC in the next two to four weeks. With the largest pipeline of potential podcasts and over 10 potential acquisition candidates, we will continue to roll up. We expect to continue to grow at a 30 to 50% year-over-year rate of growth. We now have over 250 podcasts on our network, a 150% increase since acquiring the company. Pre-COVID, LiveOne had 10 sponsors, Proudly today, we have passed over 700 sponsors on our network. As we move from audio back into video, Pay-Per-View One has been announcing multiple different Pay-Per-View events across podcasts with Adam Krohler, key pains, music festivals, and social media events, social gloves. We delivered over $28 million and $4 million of events during COVID-19. into a $60 billion market and growing. Our tech team has delivered world-class technology that has live streamed to over 5 billion engagements and 350 million live streams and 3,000 artists. We humbly project by 2027 over 100 million in revenues in our pay-per-view and live streaming business. And it could easily be multiples of that number based on our size of our audience. SplitMine and Drumify, our newest acquisition, publishing arm is revolutionizing the industry, utilizing the best producers, artists, songwriters, combined with AI to deliver the first of its kind royalty sharing platform. With a TAM of over $100 billion, we guide to over $100 million in revenues by 2027. Our merchandise business has struggled, right? We acquired it during COVID. It suffered because we didn't have any of our live events or any of our partnerships live in AEG. But we've just announced a very unique collaboration, the first of many to come, with Jeremiah and Russell Bevan, who is the Babe Ruth of Napa Valley, the one winemaker, 100-point winemaker in history, to launch with the brand name Birthday Sacks with Jeremiah. And we've run out of bottles already. We sold out in the first week. And we are now growing substantially. We're guiding that business where we expect to have 10 to 20 celebrity brands this year to over $100 million as well in 2027. Together, these five divisions to easily surpass a billion dollars in revenues and over $150 million of EBITDA. I want to thank everyone for their patience and staying with us. And we couldn't be more excited about the company the spin-outs that are about to happen with Podcast One and Slack Radio, and the opportunity of each of our five divisions to grow and mature. With that, I want to open it up to any questions anyone has, and I want to thank you again for attending.