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Operator
Ladies and gentlemen, thank you for standing by. Welcome everyone to the Podcast One, Inc. Q3, Fiscal 2024, Financial Results and Business Update Conference Call. At this time, 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'd like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you'd like to withdraw your question, please press the star followed by the one once again. Thank you. I would now like to hand the call over to Mr. Aaron Sullivan, Chief Financial Officer, who may begin your conference.
Aaron Sullivan
Thank you, and welcome to Podcast One's third quarter fiscal 2024 business update and financial results conference call and webcast. Presenting on today's call are Kit Gray, President of Podcast One, Rob Allen, CEO and Chairman of LiveOne and Executive Chairman of Podcast One, and myself, Aaron Sullivan, CFO of both LiveOne and Podcast 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 goals in the business. Actual results may differ materially from those discussed on this call for a variety of reasons. Please refer to Podcast One'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 Podcast One's special financial report under the cover of Form 10-K for the year ended March 31, 2023, filed by the company with the SEC on June 29, 2023, and subsequent SEC filings made by the company. You will find reconciliation with non-GAAP measures in 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 its 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, and except as required by law, the company does not undertake any obligation to update or revise this information after the date of this call. I'd like to highlight to investors that this call is being recorded. Podcast One is making it available to investors and media via webcast, and a replay will be available on the Podcast One IR website in the events section shortly following the conclusion of the call. Additionally, it is the property of the company, and any redistribution, retransmission, or rebroadcast of the 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 Podcast One's Executive Chairman, Rob Allen.
Kit Gray
Good morning, everyone. And thank you. Mostly this morning, you're going to hear from Kit Gray, our president of the company. But I just wanted to highlight in 2020, when we acquired the company, Podcast One was doing 20 million in revenues and losing over $5 million a year. We had 50 some odd podcasts. We've just passed 180 podcasts. Kit, Sue, and Eli, our management team, have done a spectacular job. We're now doing over $10 million a quarter in revenues. And we're the first ever, first public company in the podcast space, PurePlay, trading on NASDAQ, which gives us some great advantages. It gives us advantages in acquisitions of podcasters. It gives us opportunities for acquisitions of additional podcast networks. And this is kind of the perfect storm and opportunity where it's been a seller's market for podcasters, $28 billion of acquisitions. You're seeing some of these deals still happening today with Joe Rogan signing for $250 million and SmartList leaving Amazon and going over to Cirrus for $100 million. It really puts us in the sweet spot of the place we're in, which is the smaller podcast between $250,000 and $5 million. Proud to introduce Kit. We've signed over 24 new podcasts this year and an average of $350,000 a year per podcast. And thank you for a great quarter kit and your team. I'm going to hand it off to you and I'll jump on at the end. Thank you everyone.
Kit Gray
Great. Thanks Rob. Um, and thank you, uh, Aaron for the introduction. Um, Aaron will go into a little bit more on the financials after I speak, but, uh, again, I appreciate it. We're, uh, Really excited to be here. We had a great first three quarters of the year and really looking at a strong finish in this current quarter that we're in and really amazing momentum and opportunities as we lead into 2025. Year to date, as Rob just mentioned, we've added 24 new podcasts to Podcast One, with four of them being in the original IPTV film world, including our new hit podcast, Barnumtown. If you haven't had a chance to listen, we're on our first season there. The third episode just dropped yesterday. It's ranking in the top 10 on Apple charts for true crime. It's an amazing show that features Twin Peaks star Kyle McLaughlin. Really a fun, fun true crime show that's exploding, and we have many great opportunities in the IP second window opportunity for that and many more as we move into next year. In total, we have over 180 shows on our network, 300 million hours of programming. Just recently, as of this week, one of our new hit shows, I've Had It, was nominated for two iHeart Podcast Awards. This year, uh as uh we have signed one of our largest deals ever actually the largest deal ever over 20 million dollars in revenues um with a distribution partner that is going to strategically help us for marketing growth uh content creation and and really we see this not only helping us in this current quarter that we're in right now but really ramping up over the remainder of this year so we're really excited about that opportunity and what it's going to bring to us um One of our core jobs every year is to make sure our current shows are not only growing and seeing healthy CPM increases and revenue increases and number increases, but we got to make sure we assign them and we've done that. Adam Carolla, Adam and Drew, Dr. Drew, Lady Gang, Gals on the Go, Our Fake History, Melissa Gorga, Kelly Stafford, and others, they'll all react for extensions with our network. Our programmatic advertising, which you've seen in the news quite a bit, has grown significantly. We had tremendous growth in quarter two and that continued in Q3. Our sellout rates are the highest ever, which makes a ton of sense as it's great fill inventory. We saw our best sellout rate in December of this past year. So that's also exciting. We are diving into many of the AI opportunities to not only help with production and marketing and sales targetability, but really just to become a better, more efficient company. So we've done some tests with some companies and we have a lot of other exciting opportunities with others on the horizon. Our new show list continues to grow. We actually just signed this morning, one of our main competitors, we signed a show called Bitch Bible with Jackie. shimmel she's a tremendous talent we've actually been courting her for over three years and we're excited to have her and play she will bring great revenues great numbers to us and we're actually going to launch her as a video opportunity as well we'll be doing pay-per-view events with her and and more super talented woman we're excited for her to be part of our family um The January PodTrack numbers just came out, and Podcast One just moved back into the top 10 for publishers. So we're really excited about that. It was in the press this morning, and you can read more about that. There's some nice growth statistics for us in there. At this point, I'd like to hand it back to Aaron, who's going to touch a little bit on our finances for the year, and I'm available to answer any questions. But we're really excited for the future of Podcast One, and thank you all for your time today.
Aaron Sullivan
Thanks, Kit. I'll spend just a minute providing a very brief overview of our results for the third quarter of fiscal year 2024 and December 31st, 2023. Consolidated revenue for the three-month period ended December 31, 2023 with $10.4 million, an increase of 21% from the prior year period. Consolidated revenue for the nine-month period ended December 31, 2023 with $31.6 million, an increase of 22% from the prior year period. Consolidated adjusted EBITDA for the Q3 24 period with a loss of $400,000, which is primarily driven by the timing of content acquisition costs and some marketing spend and consolidated adjusted EBIT after the nine month period ended December 31, 2023 was $405,000. Following our successful listing on NASDAQ, the remaining bridge notes were converted into shares of common stock and we no longer have any debt outstanding. And that concludes the Financial presentation operator, can you please open up for questions? Thank you.
Kit
Thank you. At this time, I would like to remind our teleconference participants, in order to ask a question, please press the star followed by the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.
spk05
Thank you. Our first question comes from the line of Leo Carpio. Please go ahead. Mr. Copier, your line is open. Please go ahead.
Copier
Yeah, good morning. Can you hear me?
Kit
We can now, yes.
Kit Gray
Okay, perfect. Good morning, gentlemen. Just a couple of quick questions. First, Aaron, congratulations on the promotion. Secondly, can you walk me through this new B2B deal that you have, this eight-figure partnership, and will that revise or have an impact on 2025 guidance? Thanks.
Copier
Thanks, Leo.
Aaron Sullivan
I'll provide a very brief overview, and maybe Kit or Rob can provide a little bit more color. Yeah, so we've got a new partnership deal. It'll hit the advertising line. We expect it, you know, it's kind of in the calendar year 24, so impacting our fiscal 25 primarily. We expect it to ramp up over the quarters. It should initially come in. a little lighter at the top of the year and then kind of ramp up towards the end. You know, let's see how it goes. You know, we haven't issued any updated guidance for 25 yet, but as we see those revenues kind of come in, we'll update there.
Kit Gray
Yeah, just to give you a little color, you know, we haven't raised the guidance since we put out the 45 to 50. we will have to clearly look at that carefully. This will scale up. So we'll have to look at it very shortly as that business grows. This is one of the biggest streaming networks in the world. It's the first of many partnerships like this, which will spread our content and all this great content we've created right around those networks. So really exciting. And we'll certainly be revisiting that guidance in the very near future as we finish this year.
Copier
Okay, and then a couple other questions I wanted to follow through on.
Kit Gray
First, how does the whole Spotify situation with Joe Rogan, that non-exclusivity, how does that impact you? Does that get you access to more of their talent to put on your platform? And how would the revenue share be in that situation? And then a follow-up to that one is, how is the advertising environment looking like heading into 2024, given we've got a strong economy, election year, And it seems the consumer still remains strong. And is that translating into better CPIs for you? Yeah.
Kit Gray
Hey, Leo. It's Kit Gray. Good to hear from you. And thanks for the questions and support, as always. I'll take the first part of that question first. First of all, congratulations to Joe Rogan. Obviously, great, great stuff. Great for the medium. know we're we're big fans of his work and and love uh love that so it's an interesting deal if you notice and you read about it there's um an actual revenue share split to it as well so it's not just the payment it's a uh rev split so he's still incentivized to um you know do the best he possibly can for advertisers and so forth so uh again that's an interesting play. I would even note that the smart list deal moving over from Amazon to SiriusXM is even a little bit more interesting for us in the sense that these big players, as we like to call them, that are versed in many different things beyond just podcasting, they're playing in a world that we really don't play in. We are more in that middle to upper tier podcasting world where we see the opportunities to grab a lot of those because those Spotify's, those Amazon's, those XM Sirius, even iHeart in a way are really concentrating on those top players because they really move the needle for us. Like Rob mentioned in his part of the presentation this morning, when we sign a show, on average, they bring $350,000 to $600,000 of revenue to our bottom line. And, you know, if we can go out and get 25, 30 of those, you guys can do the math on what that will bring to the table for us. So we see those opportunities, you know, more and more from those competitors because, again, their focus is on those other ones. So we're excited about our position in the marketplace because of that. uh as far as the advertising um world we're seeing again you know tremendous growth in that space you know you can just read the trades on how um ad spends are kind of ramping up as as the economy is awakening um obviously the political world is uh is going to be flooding in with lots of money and capital into Many of the different advertising platforms, we don't play too heavily in the political dollar spend. A lot of that's on the localized level, but what that does mean is there's going to be high rates in TV, high rates in radio, high rates in print, and other forms of media, digital media, that will have a trickle-down effect, or we believe will have a trickle-down effect onto our media, increasing CPMs and spend. We see that as a great thing. And as always, the programmatic side of things, having high fill rates and really unsellable inventory is bringing, you know, great new revenue for us. And, you know, one of our initiatives this year is really to find other revenue initiatives. And, you know, we talk about creating products. I talked a little bit about IP and the second windows of of selling these podcasts to, you know, movie houses and so forth, bringing in other revenue channels through pay-per-view events, touring, merch, that type of stuff is really complementing our business with not just advertising. So I hope that answers your question, Leo.
Kit Gray
Yes, it does. And just the last question. Previously you said you got about 100 shows in your pipeline, about 10 or so acquisitions. Is that the same? And could you give us a sense in terms of the potential revenues of that pipeline?
Kit Gray
Yeah. It's still, I would say it's still around the same, maybe even more in terms of shows. You know, some we lose, some we win, but I would say it's still as strong, if not stronger, than it was when we stated that originally. You know, on average, like I mentioned, it's anywhere from $350,000 to $600,000 per show that we add to the network. So we're looking to add, you know, two a month, maybe more if we can get to it. you know, and we're obviously looking for some of these anomalies, right. And, you know, we believe that that's a bitch Bible show that I just talked about this morning, um, you know, has potential to, to, to move that average up quite nicely. Right. And especially when we bring in her power of video, social, uh, pay-per-view events, um, you know, hopefully that, that, that, you know, counts for four or five shows. Right. So we're, um, We're looking for more of those. There's a lot of those in that bucket. You know, if we get them, we can grow even faster.
Copier
Okay, thanks, and congrats on the quarter. Oh, thanks, buddy. I appreciate it. It's good to hear from you.
Kit
Thank you. As a reminder, if you'd like to ask a question, please press the star followed by the number one on your telephone keypad. There are no further questions at this time. Mr. Aaron Sullivan, Chief Financial Officer, I'll turn the call back over to you.
Kit Gray
Yeah, I'm going to jump in. Guys, Aaron, Rob Allen joining in. Just to finish off, we want to show our confidence to our shareholders. We've just increased our buyback at the parent company at Live1 from $4 million to $10 million. And one of the things that we stressed was that that will be utilized at both Podcast One as well as Live1. So we fully expect to, now that the earnings are out, to be acquiring stock back at these prices. We're trading below one times revenues. When you're seeing still the current deals, Sirius just bought a podcast a year ago, Network, paid 15 times revenues. The Joe Rogan deals and these deals are still big, big numbers. And so we're trading at a huge discount. We're going to continue to buy. You'll see myself buying as well. So congratulations, kid, on a great quarter. The team did a great job and And we look forward. And thank you to all the shareholders who have joined us. And have a great day.
Kit
Thank you. This concludes today's conference call. We thank you for participating. You may now disconnect.
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