LiveOne, Inc.

ladies and gentlemen thank you for standing by my name is abby and i will be your conference operator today at this time i would like to welcome everyone to the live one incorporated third quarter fiscal 2025 financial results and business update webcast all lines have been placed on mute to prevent any background noise after the speaker's remarks there will be a question and answer session If you would like to ask a question during that time, simply press the star key, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you. And I would now like to turn the conference over to Aaron Sullivan, Chief Financial Officer. Mr. Sullivan, you may begin.

Thank you. Good morning and welcome to Live One's business update and financial results conference call for the company's third quarter ended December 31, 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 on its annual report on Form 10-K for the year ended March 31, 2024, and subsequent SEC filings. You'll find reconciliations of non-GAAP 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 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, February 14, 2025. 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 the webcast in any form without the company's express written consent is strictly prohibited. Now, I would like to turn the call over to LiveOne CEO, Rob Allen.

Thank you, Aaron. Good morning, everyone, and thank you everyone for joining. This has been an extraordinarily challenging and exciting quarter for the company. Thanks to the unwavering dedication and relentless drive of the LiveOne team, we've achieved record revenues of $95 million in the first nine months and $29 million plus for the quarter, underscoring our ability to navigate an extraordinary challenge and turn it into the biggest opportunity of the history of the company. Our audio business, Slacker Radio and Podcast One, I'm pleased to report, broke 90 million in revenues for the first time in the history of the company, accompanied by 14.1 million of adjusted EBITDA for the nine months. This outstanding performance demonstrates our ability to pivot, survive, and thrive. We've made significant strides to diversify the business and diversify our partnerships. especially in the B2B partnerships with five deals signed in the last 90 days, adding over $44 million in revenues, including $25 million with Fortune 500 Media Conglomerate and $16.5 million with Amazon. We expect to close at least two more partnerships by year end. Our pipeline is robust with over 70 B2B partnerships in various stages of development with billion to trillion dollar companies. now for the challenge and the opportunity of a lifetime our partnership with tesla changed dramatically from being a white label partner in tesla cars with a guaranteed three dollars a month from tesla as long as the customer that car owner signed up and paid 9.99 for connectivity we have now renewed our contract to the 12th straight year with tesla providing for the first time ever beachfront property with our logo, with our branding, right in the front of every single Tesla car. And the amazing part, this is in perpetuity. With the help and support of Tesla and using AI marketing and multiple strategies the company has used over the years to convert all of the car owners into true subscribers, both free and paid. For the first time ever, we will have data and information of each of our subscribers. This is a multi-billion dollar opportunity. For anyone that's been an investor or part of my companies over the years, we shoot for the moon. This is now that unique moonshot you have that you're going to struggle and take some hits and revenues for a period of time. But as you look at the future of this, all you have to believe is that you can get over $3 a month. So you have this beachfront real estate, and now the rents have been going up for 12 years, but we weren't able to raise our rents at all. These numbers have exceeded any expectations of management, analysts, and most of all, Tesla themselves. Since December, we signed over a staggering 800,000 plus new users. That's 40% of the entire pool of the 2 million Tesla cars in North America. This collaboration is the nothing short of transformative. We believe the partnership provides a proof of concept that can help us with the success of signing those B2B partners. Imagine partners with 10 million to a billion plus eyeballs. I've been talking about a flywheel for the last seven years. And as you see us sign those massive B2B deals, this proof Now think about whether a Facebook, an Amazon, a Walmart, a Microsoft, a Amex, anyone with 10 million to a billion eyeballs, if we can convert 40%, even if we can convert 1% or 2% of those users, we have a multi-billion dollar opportunity. As we move forward, we're pivoting our business model, leveraging our partnerships, and delivering our music platform to large user bases in B2B deals. In addition to our continued growth, I'm pleased to reiterate that LiveOne has committed $12 million to the stock buyback program. We currently have $6.2 million remaining on that buyback program and shows the confidence we will continue to buy and show our confidence in the future of our company and provide that proof of concept that the company and the management are backing and believers in our company. We are committed to continue our growth, both in terms of revenue and market presence. Our cash position increased by $4 million, almost 11 million, after paying off $3 million to EastWest Bank and acquiring 900,000 chairs of our subsidiary, Podcast One. I couldn't be more excited about where podcasting is going. The presidency was won with the help of podcasting. Fox just bought Red. podcast network for over 15 times revenues. Conan O'Brien's network sold for over 15 times revenues to Cirrus. You're seeing deals that Kelsey Brothers selling for $150 million, SmartList for 125. We have one of the biggest networks in podcasting. I'm excited to share the Podcast One subsidiary has achieved record revenues and traffic for the quarter. We've expanded our network to become the eighth largest in the industry. I've secured a major partnership with Amazon. a three-year deal worth $16.5 million, and have just guided to $51 million in revenues, and for the first time, positive EBITDA for the year. Positive EBITDA for the year means the fourth quarter has to be substantially EBITDA, and we fully expect that that number is going to continue going forward for the year. These achievements demonstrate our commitment to delivering high-quality content, innovative solutions to our audience, advertising partners, We're excited about the future of Live One and Podcast One, and we look forward to continued growth. To further accelerate growth, we are working with multiple bankers, including JP Morgan, to explore all M&A opportunities that can enhance our business and unlock additional values. These steps align our strategic goals of expanding our market presence and strengthening our office. I want to thank our employees, our partners, our shareholders for our continued trust and support, and I look forward to the following point. Thank you, everyone, and I'll open it up to Q&A.