LiveOne, Inc.

Good morning. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to Live One Earnings Call. At this time, all participants are in listen-only mode. Please be advised that this call is being recorded. You will have the opportunity to ask questions during the Q&A session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, press star 1 again. Thank you. I will now turn the conference over to Aaron Sullivan. You may begin.

Thank you. Good morning and welcome to Live One Business Update and Financial Results Conference Call for the company's second quarter ended September 30, 2024. Presenting on today's call with me is Rob Allen, CEO and Chairman of Live One. 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 at the year-end of March 31, 2024, 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 websites. The company encourages you to periodically visit the 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, November 7th, 2024, 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 by 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 the company has expressed written consent is strictly prohibited. Now, I'd like to turn the call over to LiveOne CEO, Rob Allen.

Thank you, Aaron. Good morning, everyone, and thank you for joining us today. We appreciate your continued support. I'll begin with a brief overview of our record-breaking financial results, followed by updates on recent developments and our vision for the future. Due to financial overview, we achieved record revenues in the history of the company for the first six months. Consolidated revenues are $65.7 million, with adjusted EBITDA of $6.6 million. Due to consolidated revenues, our quarter was $32.6 million, a 14% increase. Our audio revenues delivered $31.7 million, an 18% growth. Our adjusted EBITDA just on the audio division was $5.6 million. We closed the quarter with $11 million in cash, up over $4 million from the previous quarter. And again, earlier in the year, we converted all of our debt at $2.10. Now onto our opportunity with Tesla. Tesla has been a little misconstrued in that we extended our contract through May of 2026 under new terms. These new terms are now the seventh different iteration of a 12-year partnership with Tesla. Exciting part is this is everything that our management team has asked for at Tesla, which is to give us the opportunity to market to our customers, to expand to all devices. With that, Tesla will be helping us and has started to already to market our offering to the millions of cars existing out there in North America. We got prominent space on the home screen of Tesla in perpetuity. That beachfront property, you think back to Cirrus or XM radio, they spent billions of dollars getting to this point to have that ability to convert these customers. We now have direct access to Tesla customers for cross-selling and to upsell them from a $3 subscriber who can only use it in the car, right, to our larger opportunities of podcasting, eBooks, live streaming, pay-per-view. Tesla will continue paying monthly fees on existing grandfathered cars. What's exciting about this opportunity is we've never been able to be valued base per sub. Subs in this space get valued between $200,000 and $1,000 a sub. This has also opened the floodgates to major opportunities with other automakers. We publicly said we are in deep discussions with eight of the major auto companies around the world. I humbly believe it feels like since the announcement that people believe that we were under exclusivity with Tesla. We have an opportunity now to really expand those partnerships with other auto companies. That will lead into the diversification of our business that we've been talking about for the last 12 months. We hired Bill Wilchris as our head of B2B. We've now expanded that B2B team to 11 people. From one person hired a year ago, just over a year ago, to now 11 people. We see eight verticals. with huge opportunities to diversify and expand the business across automotive, carriers, hardware, retail, hospitality, airlines and travel, loyalty programs, credit card companies. We announced one of those first major deals was a $24 million, $2 million a month major streaming partner. Then we announced TechSnow, over 100 million users. We've announced partnerships with eBay, Facebook, TikTok, We are in active negotiations with dozens of Fortune 500 and Fortune 250 companies, including those eight auto companies. We fully expect to announce at least two before year-end and two before March 31st, our fiscal year-end. Now, as you go into our podcast business, really exciting quarter as well. Podcast one, success continues. We've delivered. We've gone from $20 million. to a run rate of $50 million over the past four years. We have 100 podcasts in our pipeline, 10 times our normal amount in history. We have eight podcast networks in our M&A pipeline, 185 podcasts, now adding 50 more in the next 24 months. We are adding almost a new podcast every two weeks. LiveOne has also acquired 224,000 additional... Podcast shares this quarter and over 550,000 shares this year. We will continue to buy back additional stock in Podcast One, and we now own over 73% of the company. We are on our way to over $100 million over the next 24 months. Podcast to TV and film adaptations. I've talked about this a little bit on our conference calls before. This is just starting to really, really start to take off. We now have a slate of over 10 podcasts that have potential to be TV and film adaptations. We have signed two of them to streaming partners, including Barnum town and vigilante, and a third opportunist to a documentary. And we see material opportunities to turn these without any additional costs to the company and massive upside for the company. Next door celebrity brands. We've just announced with SuperDuper Kyle, our second celebrity band called Smiley. We see, again, seven to 10 of these celebrity brands a year for the next five years, with potential of 10 million to a billion dollars of upside, with very little cost to the company as we utilize our partners in social media, artists, actors, producers, podcasters, social media stores to drive these brands across their social media. Our publishing business grew over 300%. Tonight, we are launching our live streaming pay-per-view event for SuperDuper Kyle's album, of which we own 50% of the publishing. Our live streaming pay-per-view has had over 5 billion engagements in the last four years. With that, we continue to buy back stock. I've now bought back almost 4.5 million shares of stock. We have increased the buyback to 12 million and will continue to buy back at these levels. I'm proud of my team. I'm proud of what they've been able to accomplish. We've gone through tougher times than this, including when COVID hit. We lost all live streaming business and came out of it stronger than ever. When you think back, when COVID hit, we were at 38 million in revenues, lost a third of our revenues. all of our live business, all of our live streaming, and we came out of it, and now we did $65 million for the six months. So we're looking forward to any questions from everyone. I'm going to hand it off to my CFO, Aaron Sullivan. Thank you very much.