PodcastOne, Inc.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Podcast One Fiscal Fourth Quarter 2025 Business Update and Financial Results Conference Call and Webcast. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. On our call today is Kit Gray, President and Founder of Podcast One, and myself, Ryan Carhart, Chief Financial Officer. 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 Podcast 1's filing 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 1's Form 10-K for the year ended March 31, 2025, filed by the company with the SEC on July 2, 2025, and subsequent SEC filings made by the company. You will 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 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, July 3, 2025. 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 the media via webcast. And a replay will be available on Podcast One's 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 President, Kit Gray.

Thank you, and welcome to our fiscal fourth quarter 2025 earnings call. As a reminder, we are not on a calendar reporting year, and our fiscal year 2025 ends on March 31st. Today, I will provide a brief overview of Podcast One in the continuously growing podcast market and highlight our recent successes before passing on to Ryan for the financial results. After his comments, I will close with an update on our strategic initiatives and what we are looking forward to in the quarters to come. Lastly, we will open it up for Q&A. Podcast One is a premier podcasting network that has played a key role in the evolution of the podcast industry since its founding in 2012. As the only pure play publicly traded podcast company in the United States, Podcast One provides a platform for top tier content creators offering comprehensive support across production, marketing, sales, and distribution. Podcasting has become one of the most trusted and engaging media formats with over 4 million podcasts registered worldwide as of 2025. The industry continues to grow with advertisers projected to invest over $2.4 billion in podcast advertising this year. Podcast One is a sales network for over 500 of the largest advertisers to reach core demographics effectively and efficiently. Podcast One and its 206 shows are positioned at the center of this growth, capitalizing on both the increasing audience demand and the effectiveness of podcast advertising as a high ROI media channel. Podcast One has been ranked as a top 10 U.S. podcast publisher for the six consecutive months by PodTrack with a monthly unique U.S. audience of 6 million and 16.9 million U.S. downloads and streams. With our industry-leading platform, we empower podcast hosts to reach their full potential by providing comprehensive world-class support. Our 360-degree marketing capabilities drive growth and exposure, enabling talent to focus on what they do best, creating great content. This support includes access to studio space, marketing, production, editing, distribution, and public relations. Additionally, our experienced direct sales team leverages longstanding relationships with advertisers and brands seeking to connect with the highly engaged audiences of podcasts on our platform. In Q4, we renewed several of our highest performing legacy shows, including the Adam Carolla Show, Off the Vine, the Adam and Drew Show, and the Brendan Schaub Network. further solidifying our foundation of long-standing high-engagement content. We also expanded our partnership with A&E and the History Channel by adding Ancient Aliens to our roster, a key addition that blends mass appeal with cult fandom. New original titles this quarter include Kate and Ty Break It Down and Detox Retox with Tom Schwartz, each drawing strong early audience. We successfully began our official migration to Amazon's Art19 platform, hitting our minimum guarantee milestone in April. This migration introduces a new core monetization channel alongside our direct sales and programmatic revenue streams. Additionally, our innovative pod role network and Podcast One Pro services have begun contributing meaningfully to our revenue mix. Podcast One Pro, launched with our new state-of-the-art studio in Beverly Hills, has quickly become a draw for brands like Lovesac and Motor Trend. These clients rely on our infrastructure and talent to produce high-quality branded content. Podcast One Pro offers a la carte or full 360-degree production solutions, empowering brands to harness podcasting with unmatched efficiencies. We also completed a fully renovation of our Beverly Hills studio, further elevating the quality, flexibility, and aesthetic appeal of our in-house production capabilities. We continue to drive value through brand integration, celebrity guest appearances, and experiential events. Q4 guest highlights include Mel Robbins on both Off the Vine and I've Had It, Sebastian Maniscalco on The Adam Carolla Show, and Tamron Hall on Lady Gang. Speaking of Lady Gang, we are proud to announce the upcoming Lady World Tour, which builds on their incredible brand equity and community. We expect this initiative to drive incremental audience growth, brand sponsorships, and live event revenue in the second half of 2025. Thanks to these expanding revenue streams, Part 19, PodRoll, Podcast One Pro, and premium subscriptions, we saw a 20% year-over-year increase in revenue from Q4 2024 to Q4 2025. This performance reflects our continued focus on monetization, diversification, and premium content. Now, before going any further, I'd like to turn the call over to Ryan, our CFO, to walk through the financial results for the fiscal fourth quarter. Ryan?

Thank you, Kit. As Kit mentioned at the beginning of the call, I want to again remind listeners that our fiscal year ends on March 31st. As a review of the fiscal fourth quarter financial results, revenue in the fiscal fourth quarter of 2025 increased 20% to $14.1 million compared to $11.7 million in the same quarter a year ago. Operating loss in the fiscal fourth quarter of 2025 was $1.8 million compared to an operating loss of $1.2 million in the same quarter a year ago. This was primarily driven by higher non-cash stock compensation expense. Net loss in the fiscal fourth quarter of 2025 was 1.8 million or a loss of six cents per basic and diluted share compared to a net loss of 1 million or five cents per basic and diluted share in the quarter a year ago. Adjusted EBITDA in the fiscal fourth quarter of 2025 was positive 0.9 million compared to adjusted EBITDA of positive 0.3 million in the same quarter a year ago. The change in adjusted EBITDA was primarily due to timing of content acquisition costs. We ended the fiscal fourth quarter with no debt on our balance sheet and $1.1 million in cash and cash equivalents as of March 31st, 2025. As a review of the fiscal FY25 financial results, revenue in the fiscal year of 2025 increased 20% to $52.1 million compared to $43.3 million in fiscal year 2024. Operating loss in the fiscal year of 2025 was 6.4 million compared to an operating loss of 5 million in fiscal year 2024. This was primarily driven by higher non-cash stock compensation expense. Net loss in the fiscal year 2025 was 6.4 million or 27 cents per basic and diluted share compared to a net loss of 14.7 million or 68% loss per basic and diluted share in fiscal year 2024. Adjusted EBITDA in the fiscal year of 2025 was negative $0.5 million compared to adjusted EBITDA of positive $0.5 million in fiscal year 2024. As we look ahead, I'd like to also briefly touch on guidance. We are pleased with the progress this quarter and given the revenue generating deals that are currently in place for fiscal year 2026, along with the equity based revenue share deals with certain podcast talent, we are comfortable raising our fiscal year 2026 guidance. We expect revenues for the full year to be between $55 and $60 million. We are also expecting adjusted EBITDA for the full year to be between positive $3 and $5 million. Additionally, we have completed our financing after year end with our partners at JGB Capital, replacing our East West Bank line of credit. This will help facilitate the growth of our business, allowing us to sign new podcasts and potentially acquire podcast networks. We are poised for the future and excited about our next phase of growth. Now, I'd like to turn the call back to Kit for some additional comments on the quarter and fiscal year before wrapping up with questions from the audience.

Thanks, Ryan. In closing, we delivered a strong fiscal fourth calendar first quarter, achieving double-digit revenue growth, once again signifying Podcast One's largest ever revenue result for the period. The momentum continued into the start of calendar 2025, marked by major accomplishments, including the new relationship with Amazon's Art19, the extension of flagship podcasts from Adam Carolla, Brendan Schaub, and Caitlin Brisseau, as well as the expansion of Kale Lowry's award-winning slate of shows through the Killer Network under Podcast One's umbrella. Podcast One now hosts 206 shows, having added 64 new programs in 2024 and 10 exciting new shows this last quarter alone. Podcast One's talent roster continues to expand, supported by a debt-free balance sheet and multiple accretive growth opportunities. We are actively evaluating M&A prospects, not only to acquire top content and networks, but also to enhance our platform with production, sales, and technology acquisitions that strengthen our offerings for hosts, advertisers, and shareholders. Podcast One remains the only pure play, publicly traded podcast company in the U.S. Our consistently expanding and evolving content portfolio, strategic partnerships, diversification of revenue streams, and our innovative approach to audience growth and retention continues to create long-term shareholder value. Thank you for joining us, and at this time, I'd like to turn the call over to the operator for Q&A. Operator?

Before we do that, I'd like to give a few minutes to our Vice Chairman, Steve Lehman. He has a tremendous background in the audio space and running publicly traded companies. Some of you have spoken with Steve or heard from him on our last investor call. Steve is not only leading our M&A initiatives, but is now heading up our Web3 crypto initiatives. I'll give it now over to Steve to give a couple comments on what he has coming up.

Thanks, Kit. Hi, everybody. So as Kit just mentioned, I was brought into Podcast One to look at strategic opportunities in M&A. We continue to head down that path and are looking at some interesting things for the company. That role has now been expanded to look at strategic opportunities in crypto and Web3. By way of background, I am on the board of Valkyrie Crypto ETFs owned by Coinbase. There is, I think, an incredible opportunity for consolidation in the crypto podcast space. There are hundreds of crypto podcasts, and I think This creates a really interesting opportunity for Podcast One to not only look at roll up and consolidation, but to really form powerful strategic alignments. It's an opportunity for Podcast One to become a crypto megaphone in both audio and video, and to become what I see as a credible source of crypto information. This could lead to expanded opportunities in showcasing new coins, new players in the industry, and other opportunities. So I think this crypto initiative, which I'm really excited about, is very timely for Podcast One and could create a powerful new vertical within the company. Kip?

Thank you, Steve. I really appreciate that exciting update. Now I can hand it over to the operator to initiate some questions.

Thank you. And we'll now begin the question and answer session. If you'd like to ask a question, simply press star followed by the number one on your telephone keypad. Our first question will come from the line of Sean McGowan with Roth Capital. Please go ahead.

Hey, Kit. How are you doing? Thanks for the call. Hey. There are a couple of things I wanted to ask you about that you've talked about on previous calls, and I just want to see if things are kind of in line with what you'd expected. So stock-based comp fairly meaningfully, is this related to the initiatives that you have discussed in the past of making that a bigger component of compensation to the talent? And is this current level something we should expect, or could it go up or down from here?

Hey, John, thanks for the question. Yes, the answer is that's definitely part of the reason why it's gone up. And yeah, it's a really exciting opportunity for our talent, something that's unique that other networks and other companies aren't able to offer. Part of the reason why we're on the NASDAQ and publicly traded, we're able to offer a our uh partners in the content space um the ability to be you know part of the bigger picture you know being part of podcast one so um we talk to uh hundreds and hundreds of podcasts and podcast networks and companies and um stock is always a part of that conversation and we'll be moving forward but it's worked out quite nicely um for our our initiatives and talent acquisition so far, and I think everybody's pretty happy with it, and we'll continue to do more of it.

Okay, thanks. And kind of a follow-up, maybe Ryan can chime in on this. It looks like the increase in stock-based comp was bigger in dollars than the increase in G&A. So was there a reduction in these kind of non-stock-based comp G&A, and what's going on there, and what can we expect in the future?

Yeah, thanks for the question. The stock comp was up, you know, I think you nailed it. GNA was up as well. I think going forward, you know, what you saw here at the end of this year is kind of what you can expect going forward. We're always looking for efficiencies, and we're going to continue to do that. But yeah, on a run rate, you know, the office that we saw coming out of Q4 is going to get reduced a bit in Q1, and then the stock comp will stay where it's at.

Okay. T. All right, very helpful. Thanks. Back to you, Kit. Regarding the ART 19 deal, have you gotten the benefits so far that you expected, or is there a lot more to come? And how's that whole thing going?

Yeah, it's been great so far. There's a ton of operational efficiencies that we've talked about and cost savings with that deal. And as we implement Some of the other more efficient, better services to replace what we had in the back set up with our previous partners is being implemented as we speak. So there'll be, you know, some great cost savings throughout the year moving forward. As far as revenue generation, it's been tremendous. I mentioned in my explanation we hit the NG in April, which is really exciting. May, I know we definitely hit it there, too. We're right on the cusp of the next level, and I think I've explained that this is a tiered deal, so as we grow, that deal grows, right? So we're seeing more demand on our inventory, and as our inventory grows, we're seeing, you know, great fill rates, higher CPMs. You know, when you look at, you know, our other programmatic revenue, which is really the third tier, right? So it goes our sales group, direct sales team that you know all about, and then our 19 Amazon's platform and how they monetize their inventory. And then the programmatic desk that we are tied to and continue to expand upon. You'll see that going lower and that's by design because the other two are picking up. So that's been great so far and we're really excited about it moving forward.

Thank you. Last question, and then I'll jump back in the queue. So cost of sales as a percentage of revenue was down. I think we've talked about this, maybe the last quarter being unusually high, and we would expect to see it drop down. So I was wondering if this just was what you expected, and should this level of, you know, around 89, 90 percent, is that what we should expect going forward, or could there be further reductions?

yeah thanks sean i mean i think you saw uh q4 improve right and i think you'll continue to see that improvement so that at a minimum it will hold steady and we hope and we think that it will uh jump up from there so um yes um we expect it to continue and hopefully even even get better when you say jump up you mean gross margin like you know drop as a percentage of revenue the cogs Yeah, basically our contribution margin should be improving going forward. And it should be similar or better to what was in Q4.

Okay, thank you. I'll jump back in. Thank you.

Our next question comes from the line of Leo Carpio with Joseph Gunner. Please go ahead.

Good morning, gentlemen. I have a couple of questions. First question is regarding the advertising environment. Given the uncertainty we're having in the economy, have you seen any shift in terms of advertisers' appetite for putting ads on your network?

No, you know, we're having a good quarter. We are seeing, you know, higher CPMs, more advertisers jumping into the space, doing different things beyond just what we talked about, right? the revenue channels have diversified. So it's not just the ad spots and you're seeing higher growth on the programmatic side, the DAI side, the embedded side, live shows, social media, expansion into the campaigns, live events. So the side of our business is pretty good in the advertising world. That being said, the competition is tough. You've got a lot of these big players like iHeart and Spotify that package in radio stations and music streaming, and they try to take market share on the advertising dollars out there. That's just the nature of the business. That being said, we do a heck of a job managing and working with our talent. Our talent is engaged. They are excited about doing great things for our advertisers, understanding you know, that the competition's out there. So we've got to do, you know, great audio ads. We've got to do great video ads now and, you know, pick up our game. So we're able, being the size of the company that we are, we're able to kind of move and strategically position ourselves with advertisers to be not only a great network of great content, but actually people that they can trust to do a great job for them and their advertisers. So everything seems pretty good. Good to hear from you, Leo, by the way.

Likewise. So the follow-up question is regarding talent acquisition. What is the environment you see here? Is there still good talent that's available, and can you negotiate favorable terms? Or just try to get a sense in terms of how fast you can continue growing the shows on a platform.

Yeah, like we said, I think we added 10 shows. We've got a funnel of a lot of really exciting ones that, you know, should be announced within the next week, to be honest. The talent pool is out there. You know, there's a lot of great shows out there that may not be getting the services that they want or need. We have a great reputation out there for, you know, servicing those partners, working with them to monetize their content, not only to add to what they're doing, but get higher CPMs, higher demand on their impressions, monetize their backlog, market their shows and help them grow. So we're in a good spot to just acquire more and more shows and grow. It's interesting, the time never stops, right? And a lot of the shows maybe that we lost a year ago for whatever reason, they're starting to come around now. you know, seeing the strengths and the weaknesses of other networks and we're able to tell our story and, you know, I'm hopeful that we can land some of those shows as well. You know, the great thing is our current partners are adding to it, right? And we talk about A&E and now their history channel and adding more shows there and the Killer Network with Cale Lowry adding more shows under their network. So the people that we are working with are continuing to grow and evolve, and that's helpful as well.

Okay. And then another question. On the Amazon deal you have, could you remind us what are the terms and what you need to fulfill to reach the minimum thresholds?

Oh, sure. So basically how it works is they are giving us a minimum guarantee on a monthly basis. that is basically just adjusted on the impressions that we're able to give them to sell. So we track it throughout the month, almost on a daily basis, just to see if we're hitting that goal. Right now, the first threshold, if I remember correctly, is 90 million impressions. Threshold up would be 110 million impressions. So we are very, very close to that. I'm hopeful that even the June month that we'll get there. Once I believe in the contract says over three months, I think we got to keep it at that level, that next threshold for three months. And then, you know, we'll get a higher minimum guarantee. You know, that being said, they have more inventory to sell and monetize. And as their demand goes up and Amazon continues to, package podcasting with all their other, you know, advertising opportunities to their clients. We're seeing higher CPMs, higher sellout rates. So, you know, everything seems really good on that front. I believe it was a three-year deal. But, you know, we're really happy with Andy and team over at the Art19 side of things. And they're a fantastic group of people. I believe our shows are enjoying the experience as well. It was really a seamless transition on the production side. There's a lot of great information that we're able to provide to our shows on their audience and where they're at and fill rates and our management team and our tech team here has done a really good job identifying new companies that we're working with. We mentioned PodRoll, but there's other companies now looking at ways to even become more efficient and better in terms of optimizing our inventory to We're starting to work with some of those, and that should be great for us and the whole picture.

Okay. And then the last question. Can you walk us through the terms of the rationale for entering into the crypto and creating the network aiming for that market?

Yeah. You know, I was actually talking to Steve this morning about this, and we're starting to do a bunch of calls with some really exciting people in the crypto space. know they leverage uh social media blogs podcasts uh youtube channels they're doing um live shows now uh virtual shows and really everything that we do right so we do that for our partners and what we love about it and when you get on the call with these guys and you talk to them about it is their passion for the crypto space and when you think about communities and passion and connection to host, I mean, that's really podcasting. So whether it's, you know, listening to a crime show or a Beverly Hills household, you know, reality store, that fan base is the same. They're connected at that same level. They're very passionate about it. So when we look at the crypto space, it's an exciting one because You're high qualitative, very connected, very passionate, loyal fan base. And if we can package a bunch of those together, cross promote, do some of the things that I just talked about in terms of offering other revenue channels and services for them where they can even create more content, I think we're in a really exciting spot to not only create a really cool podcast, podcast network that drives revenue and value, But also, you know, it offers just a great place for people to come to discover that content as they dive into the ever-growing crypto space.

Yeah, this is a really passionate group. And I think it opens podcast one up to a new slate of advertisers. For example, you know, Bitcoin miners are advertising on crypto podcasts. You know, so this is an opportunity to not only expand into the content of a new vertical, but also opens this up to a slate of new advertisers.

All right. Well, thank you.

Our next question is a follow-up from the line of Sean McGowan with Roth Capital. Please go ahead.

You touched on some of my questions already, but one sort of overarching question I have is that you grew 20% year-over-year in this quarter, and you're number 10. That's great, but is the industry going faster than the industry? Are you picking up shares in measurable ways, and should we expect that growth to accelerate?

yeah you know i think there's two levels of it um we want to grow and acquire new exciting content producers and new excited communities but we also want to make sure that we're really uh you know picking maximizing our opportunities with our current inventory and our current partnerships right so you know to become profitable and and do what we need to do as a company we need to make sure that the producers of the content and all the content that they have are getting those premium CPMs, those high sellout rates, those diversified revenue. So it's really two things, right? We want to make sure we're doing that for our current partners and growing there. But as we acquire new shows, new content providers that we put them in the right spot for them to be successful, where they can have higher CPMs, higher sellout rates, we can make them more efficient to do more content for us and grow. Because that's really important when we look at the margins on our deals and minimum guarantees and red splits and all that. So we look at it two ways. When you compare us to the industry, look, there are companies out there, our competitors that don't care about losing money and throwing money at some big shows. We're not that company. We've talked about that in the past. We do a calculated look at what the demand is out there in the marketplace, where the CPMs are, where we can get good margins, how we can make the shows better, how they fit into our network, how they work with advertisers, all of these things before we just just sign a bunch of shows, right? It's that would be a mistake that would let down some of those shows might even let down some of our current shows. And that's not the business that we're in. So we are going, as you know, but but, you know, it's really important for us to go on a revenue basis as well.

Thanks. Great answer. Thank you.

And that will conclude our question and answer session. I'll hand the call back over to Kit for any closing comments.

Well, I appreciate everybody. I hope you guys all have a fantastic 4th of July weekend with your families and be safe. And keep listening to those podcasts as you sit in traffic around the country. And, you know, we're really excited about the future. You know, I think the team is just fantastic. We're in a great position. Appreciate your support and stay tuned. You're going to hear some great things. Take care.

This will conclude today's call. Thank you all for joining. You may now disconnect.