PodcastOne, Inc.

Hello and thank you for standing by. My name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to Podcast One's third quarter fiscal 2026 financial results and business update conference call. 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 this time, simply press star then the number one on your telephone keypad. To withdraw your question, press star 1 again. I would now like to turn the conference over to Ryan Carhart, Chief Financial Officer. Please go ahead.

Good morning and welcome to Podcast One's fiscal third quarter 2026 conference call. The earnings release, which we issued this morning, is available on our website at ir.podcastone.com under the News and Press Release tab. During today's presentation, all participants will be in listen-only mode. Following the presentation, we will have a question and answer session. On the call today is Kit Gray, president and founder of Podcast One, and myself, Ryan Carhart, chief financial officer. I would like to remind listeners that some of the statements made on today's call are forward-looking and based on current expectations, forecasts, and assumptions that involve various risks and uncertainties. Actual results may differ materially. Please refer to Podcast 1's filing with the SEC for information about factors which could cause actual results to differ materially from these forward-looking statements. Reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed today are available in the company's earnings release on the Investor Relations website. This discussion, including responses to questions, contains time-sensitive information and reflects management's view as of February 12, 2026. Except as required by law, the company does not undertake any obligation to update this information after today's call. This call is being recorded and will be available via webcast replay on Podcast One's Investor Relations website shortly following the conclusion of the call. Redistribution without the company's express written consent is strictly prohibited. With that, I would now like to turn the call over to Podcast One's president, Kit Gray.

Thank you, Ryan, and welcome to our fiscal third quarter 2026 earnings call. As a reminder, our fiscal year begins on April 1st. This quarter was defined by strategic partnerships, long-term talent renewals, and meaningful expansion of our own and original content network. Podcast One continues to distinguish itself as the leading pure play podcasting platform in the public markets through a vertically integrated model that combines talent development, content creation, distribution, analytics, and monetization and operational efficiencies, all strengthened by our AI-powered infrastructure. Our AI toolkit continues to enhance performance across every aspect of the business. Flight Path drives predictive profitability, booster scales advertising management and proposal recommendations. Adobe Audition ensures best-in-class audio quality. PodEngine supports discoverability through SEO and insights. Magellan AI powers advertising attribution and Opus Pro converts long form video into short form content that fuels audience growth across platforms. Our team consistently uses AI-based search components to discover new talent, match trending topics to specific content created on our programs, and more. These tools directly support how we grow shows, monetize audiences, and operate more efficiently at scale. This quarter, we announced one of the most significant strategic initiatives in Podcast One's history through our partnership with Dr. Phil's Envoy Media Company. Together, we are launching a new podcast-based original and own content network anchored by the all-new daily Dr. Phil podcast. This initiative expands Podcast One beyond traditional podcast distribution into a true multi-platform owned media, reinforcing our position as a content network rather than simply a podcast publisher. We also proudly renewed Lady Gang in a multi-year agreement. This year marks 10 years of podcasting, 1,000 episodes, and over 300 million downloads. Few podcasts in the industry demonstrate that level of longevity and audience loyalty. In health and wellness, the Dr. Gundry Podcast continues to be a standout performer with 18 million all-time downloads across 548 episodes, educating millions globally on gut health, nutrition, and longevity through science-backed insights. This show exemplifies the long-tail value of evergreen, expert-driven content. Additionally, we renewed The Adam Carolla Show in a multi-year agreement with the show now joining the Megyn Kelly channel on SiriusXM, extending its reach into new distribution channels and audiences. Further strengthening our slate, we renewed Bitch Bible, Some More News, and The Prosecutors, and acquired For Your Amusement in a multi-year agreement, expanding both genre diversity and monetization opportunities across the network. We also signed a multi-year partnership with AIDrivenListener.com, further advancing our data and audience intelligence capabilities. Our monetization engine continues to show measurable progress. Podroll revenue increased more than 5% quarter over quarter, reflecting growing adoption of our dynamic ad marketplace by brands and agencies seeking efficient access to premium podcast inventory at scale. This growth, paired with our talent renewals and own content strategy, continues to move Podcast One into a higher revenue tier and reinforces the scalability of our platform. Lastly, Paramount's recent acquisition of Varnum Town from Podcast One for development as a streaming project underscores the strength of Podcast One's original IP and storytelling slate. Brian, back to you for financial results.

Thank you, Kit. As a reminder, our fiscal year began on April 1st. Revenue in the fiscal third quarter of 2026 was a record $15.9 billion. Operating loss in the quarter was $153,000 compared to an operating loss of $1.6 million in the same year-ago quarter. This improvement was driven primarily by higher advertising revenue and operational efficiencies across production and distribution. Net loss for the quarter was $154,000, or negative $0.01 per basic and diluted share, compared to net loss of $1.6 million, or native $0.06 per share, in the year-ago quarter. Adjusted EBITDA for the quarter was a record $2.8 million, compared to a negative $670,000 in the same year-ago quarter, driven by revenue growth and disciplined cost management. We ended the quarter with $3.4 million in cash and cash equivalents and no debt on the balance sheet. With that, I'll turn the call back over to Kit.

Thank you very much, Ryan. This quarter demonstrated Podcast One's evolution into a true content and monetization network powered by technology, talent relationships, and owned media strategy. From the launch of the Dr. Phil's Network Initiative to long-term renewals of legacy shows like Lady Gang and Adam Carolla, to the growth of pod role and expansion of our AI capabilities through listener.com, we are building durable assets that extend well beyond individual podcast titles. We remain focused on compelling content, strategic monetization, and long-term partnerships with creators and advertisers. With our AI-powered infrastructure and growing portfolio of owned and original content, we are exceptionally well positioned for continued growth, throughout fiscal 2026 and beyond. I want to thank our team, our creators, our partners, and our shareholders for their continued dedication and trust. With that, we'll now open the line for questions. Operator?

We will now begin the question and answer session. In order 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 Barry Sine with Litchfield Hills Research. Please go ahead.

Hey, good morning, Kit. Two questions, if you don't mind. The first one is around Dr. Phil. Obviously, huge potential. We're, I think, about a month and a half, maybe two months into his podcast on Podcast One. What are you seeing in terms of streams and downloads, you know, from him? And then secondly, what has been the advertiser response as, you know, to sell advertising on that program.

Hey, Barry. Good to talk to you. Thanks for the questions. Appreciate it. Yeah, we're all really excited about the Dr. Phil relationship and he's got a lot of things going on that it's really exciting. You've got the Dr. Phil podcast. You've got his Mystery and Murder podcast, which is doing great. And You know, he's really getting his feet wet. We just had him on the Adam Carolla show. We have him scheduled over the next month and a half to go on some of the biggest podcasts in the world and, you know, talking about his story. So he's well positioned for some great growth in the space. He's a pro, right? I mean, you know, there's not a bigger name in television history. really than him and advertisers are definitely uh listening um you know and and excited to hear more about his offerings as we go to market but um yes his his show is great and i think we have some great projects that we're going to be launching over the next three to six months within that envoy media company um you know dr phil has uh has a really big rolodex of great people that we're going to want to pull in to do video audio content for us. So we're excited about that opportunity. But yeah, all things are great so far and we're really excited about it.

And the advertiser response so far?

Yeah, it's been great. You know, they want to know more about what we're going to be offering. So we've just started putting some presentations together and some offerings that not only just the podcast, but you know, they've got a ton of distribution through some relationships that they have too. So we're really working towards bigger deals that will include that as well as, you know, the podcast on YouTube and obviously the RSS feeds that go out through iTunes and iArt Radio and Podcast One and all these different places. So it's exciting because we're, you know, we're a different company, as you guys know. We like to look at ourselves as thought leaders and game changers in the sense that, you know, no one else is going out doing this. We're going to include, you know, social media, video, audio, the podcast, his TV distribution deals as well. So, you know, that's something that nobody else has done. So we're kind of educating the marketplace on those opportunities and they're excited to hear from us. You know, 15 years ago, no one even believed in podcasting and here we are. So, We've got to keep changing things and evolving and leading the way, and that's why advertisers always take our phone calls because of that.

Okay. My second question is around B2B deals. Rob talked extensively about what LiveOne is doing with B2B deals and, you know, their numbers, the number of active deals and the number in the pipeline. Some of those, many of those include Podcast One deals. content although i guess not all um can you talk specifically about how b2b deals are impacting your current results and then what is what is the outlook going forward for the impact on results from a b2b deals that are in the works that will include podcasts yeah i mean we have um you know the the amazon r19 deal is is

definitely one of the biggest deals we have in our company uh that's continuing to do you know just great things for us um they're great partners they've they've helped us in terms of efficiencies and cost cutting but also being able to get different revenue channels right and i've explained this in the past you know we we have our direct sales we have you know, the Art19 ad inventory marketplace where their sellers are including podcasting, you know, run a network deal to their advertising relationships, which continue to expand. And then we have our access to the programmatic desk through them and relationships through them. So that has been tremendous, you know, diversifying our ad sales revenue generation channels. and being able to continue to grow and put pressure on an inventory. So we have moved up to a second tier with impressions that we are able to offer, which gives us a really nice minimum guarantee from them. And we continue to grow that relationship continues to grow and there'll be more money involved in that. So that's exciting. We have a great relationship with Pluto TV for You know, for years now, that also has been a great relationship and continues to evolve. We're now talking to them about doing our, you know, a Pluto TV podcast where, you know, we'll be reviewing their programming, new programming, historic programming that they give their, you know, in their platform. So those are really big deals that we have going on. You know, Sue and her team, continue to crack the code of new brands and new advertising relationships I was you know just listening to Adam Carolla on he was doing a live show up in Sugarloaf and I just listened to it the other day at the gym and you know the amount of brands that are in there and Adam's doing fantastic reads for and they're great companies you know it's amazing they're different ones they're new ones so people are diving into the space on that front as well and You know, we have a lot of other relationships on the docket that we'll, you know, expand into this year and next. But, yeah, positioned pretty well there.

So, specifically, Rob called out three major new ones that are just coming online. Do any of those include podcasts, or do all of them, or how many of them include podcasts?

Well, you know, we work hand in hand with a lot of one team on a bunch of initiatives. So yes, there's talk about content development for some of those relationships. As they create music channels for for them, we would create podcasts, offerings, content offerings. A lot of them are in early discussion, so I can't really talk too much about them. But they're excited about it. I mean, this is a new world where we have access to talent and great content and audience that you can now engage with those brands.

Kit, if you don't mind, I'll jump in just for a second in that. Barry, as you know, when our app goes into any one of our partners, whether it's carriers, retailers, so on, podcasting is a big component of it. If you can reach audiences of 50 million plus, our podcasts get a whole new audience that happens as part of the deal. All of a sudden, we don't count that in our revenues today, but if you reach 50 million people, all of our podcasts are in their hands as well. Anytime the Live One app is there, our podcasts, even though we have influence podcasts, our podcasts are always highlighted in the first position. So, you get a new brand new massive audience amongst those three B2B deals and more to come.

I'm well aware I have the live one half of my iPhone, my iPad, and my Apple TV. Thank you very much, gentlemen.

Hey, good to talk to you, Barry.

Our next question will come from the line of Sean McGowan with Roth Capital. Please go ahead.

Hi, guys. Thanks for taking the call. Can you hear me okay? I got some construction going on.

Yeah. Hey, son. How are you?

Pretty good, kid. Thanks. A couple of questions for me, too. So on cost of sales, you know, nice reduction in cost of sales as a percentage of revenue. And I imagine that some of that is, you know, revenue from things like, you know, selling programs like Barnumtown where there really isn't a lot of incremental cost that there's revenue. So can you give us a sense of if you excluded that kind of revenue with like really no cost associated with it, has there been another shift in cost of sales as a percentage of revenue or is the reduction pretty much due just to that X issue?

Sure, I'll let Ryan.

Go ahead, Ryan.

Yeah, thanks, guys. Hey, Sean, so, yeah, it's a good question. I mean, our margin generally has been, you know, slightly ticking up all year, so there is a little bit of just improvement based on all the hard work that Kit and his team is doing to improve that. You know, additionally, you know, there were one-time – benefits coming through from certain things that were sold during the quarter. So, yeah, it was a strong quarter for us. There was one one-off item in there, but otherwise, you know, it's positive and strong. Okay.

And kind of related to that, when, I just love that, when do you think that would be kind of available for general consumer viewership, you know, with the partner?

And guys, I'll jump in on that. You never know the date, but they're in for a lot of money. They've now spent at least a million and a half, probably $2 million on options, getting the rights to it. It's now at the streaming partner. If that gets greenlit, as you know, Sean, you've been around me for a long time when I did the movie 300 and Spider-Way Chronicles. We did a billion dollars in revenue in these. If you get a TV show on the air on a major streaming network, that could be millions to tens of millions of dollars with zero additional cost to us. So we couldn't be more excited. And there's four of those, right, that have now been sold. There's 12 total. I'm sorry, there's 15 total in the pipeline. In fact, we're going to market with another two of them shortly. It couldn't be really more exciting than that. We've always talked about original IP and what original IP can do for us and how it changes the dynamics of the industry dramatically. And those second windows of original programming to television and film, products owned in conjunction with the talent, which Kit's going to be talking about a lot more over the next couple of quarters, and live shows, which is just exploding in podcasts. As you know, whether it's All In or it's Rogue In or so on, the live shows are just expansive, and you're seeing so many people enter that live market. I just saw Ari Emanuel just raise $2 billion to expand the market, and you see Irving Yeas off in the market. The live market is robust. and just opens up the floodgates for additional revenues and way bigger margins for us going forward.

Thank you. And then, you know, Ryan, like you talked about the one off on the cost of sales. How about some of the other cost trends? You know, would you expect G&A to kind of stay at this level? Or should we be looking for increases?

You know, you I would say you would expect G&A to stay at this level, you know, short-term. There were some awards that are, you know, driving that right now, in addition to sales and marketing. But it's mostly stock comp which gets adjusted out. But, you know, I think the team – has done a great job of containing, not only containing costs, but Kit and team have done a really good job of doing a lot more with the same amount of resources and trimming costs wherever they can. So yeah, we should expect, you should expect more of the same going forward. Okay.

So then in terms of cost of sales, you know, X this one-off, and I know there'll be other one-offs and probably bigger down the road, but excluding that, would you expect the overall cost of sales and the percentage of revenue to kind of get back to where it was earlier, you know, kind of rise back up to where it was earlier in the fiscal year?

I mean, that would be sort of like the normalized one that we're seeing going forward, you know, maybe a blend of that and maybe a little bit better because we continue to improve on our contractual negotiations, which you'll see it creep up as those start flowing through. But, yeah, to your question, they're not exactly easy to predict the timing of, right? But, yeah, you should expect these coming through occasionally as we do more of these deals and they start coming to fruition.

Okay. And then looking at stock-based comps, it was like roughly $2 million year-over-year increase. How does that divide out between G&A and cost of sales? Is some of that taken in cost of sales?

So we have a contribution margin reconciliation that's in the queue that kind of breaks that out. So you can kind of see that break out there. Okay. So I think if you're looking at the quarter, yeah, so you're looking at the quarter, north of a million, about 1.4 coming out of cost of sale.

Okay. Thank you. And then my last question is, you know, You guys pre-announced a couple weeks ago. You came in a little better even than that in the fourth quarter. The guidance, though, I mean, in the third quarter, the guidance for the fourth quarter kind of implies a pretty significant deceleration. I think at the bottom end, it actually would be down. So what's driving that not raising the guidance for the March quarter? Yeah, I'm happy to take both of those.

Yeah, go ahead. No, this is actually probably one for you to answer. Yeah, go ahead, buddy.

Sure, no problem. So, you know, typically calendar year for a quarter is always the biggest in terms of, you know, ad revenue spent, right? And we're still, that's still a majority of our business. So as you go into the new year, advertisers really kind of flow down, um, and then restart up, they've got ads in place, you know, and, and then they kind of ramp it up on what's working, what's not, and, and kind of pivot from that. But yeah, typically if you look at all our history, it's always this, this Q4 fiscal year, calendar year, Q1, you know, that January, February, those are usually our slower revenue ad generation March, um, um, months. So it's normalized. I think we're still going to beat what we did in last year's quarter if I had to bet. But, you know, I think that's just kind of normal for all the businesses and media. Okay. Thank you.

And our final question comes from the line of Leo Carpio with Joseph Gunner. Please go ahead.

Good morning, gentlemen. I actually have a couple of questions. First, regarding the EBITDA, it seems like this quarter on an EBITDA basis, you kind of hit that pivot point, yet it sounds like there's a quarter benefit from a couple of one-offs. So the question is, looking into the fourth quarter and then looking into fiscal 2027, is it possible that the EBITDA is going to be breakeven again? And is it going to be like one-off driven or pure straight efficiency driven?

Thanks, Leo. We expect, you know, adjusted EBITDA to continue in the future quarters. You know, the one off this quarter wasn't driving all of the EBITDA by any stretch of the imagination. What you've seen in the first two quarters this year is minimally what we expect on top of what we did this quarter. So we expect it to kind of slowly continue and climb, and we put that out as well in this release.

Okay. And then turning toward the talent pool. Now that you've been successfully adding new shows and looking at bigger and better contracts, what is the talent environment out there in terms of are you able to find, like, good mid-tier talent that brings a solid franchise? And are the economics still favored? In other words, is it still a buyer's market for you, or is it beginning to shift?

Yeah, you know, it's a good question, Leo. what we're seeing, I actually read something this morning in the trades that in January, there were more new podcasts launched than last January, which is really a good sign for the health of the industry in the sense that more people are getting into the space and developing great content, which opens more opportunities for us, right? So that's That's a great sign. It's still competitive for sure. There are companies out there that'll, you know, go low on margins and take what we would consider deals that we wouldn't take. I don't know. I could say they're bad deals or not, but they're not, they wouldn't work for us. So we continue to, you know, switch forward with our method of making smart deals that work for us, that we know we can grow. You know, so we have a big funnel of shows and companies that we're still talking to on the M&A side that would be not just, you know, one-off shows here and there, but actual networks of programs, putting them in our systems, cutting some costs and growing those. That's still a huge part of what we do. But, you know, we've been really lucky with some of our long-term relationships, like even the Chrisleys, right? They're launching another show, you know, with Todd and his two boys. And we are in talks with A&E about not only continuing that relationship, which has been a nine-year relationship and a great one where we've launched, you know, now four or five shows with them. We've got three or four with them as well. So, they're, you know, these relationships that we have are continuing to expand. I talked about the Lady Gang show and them being with us for 10 years now. We're actually going to be launching a parenting program or segment in that show as well. So, Not only are we out there getting new podcasts, but the ones that we're doing, you know, having great success with or wanting to do more with us, they're seeing how profitable, how big in terms of creating communities it is for them. So, yeah, it's great. It's still challenging. I mean, you know, the agents are doing a great job of representing great podcasts and bringing them to us. But that makes it a competitive environment. But we're well positioned for success there as well. So, yeah, we're really excited about where that stands right now.

Okay. And then in terms of acquisitions, anything on your horizon that seems appealing to you or it's more a case of just looking at talent first and then acquisitions if it's an opportunity that comes about?

Yeah, there's some great ones out there. We are in deep in talks with a couple of them, some that are bigger than us, believe it or not, and some that are smaller that would compliment us. So we're really excited about those discussions and where they stand. Steve Raymond and team are doing great things there. We're all having conversations. I think it'd be a there's a lot of these companies, you know, not the big ones that are still trying to find their way and have great opportunities and great growth potential. So we're talking to all of them. And, you know, at the same time, our talent acquisition team is out there talking to individual shows, you know, every day.

Okay, and the last question regarding the industry environment in general, how are you seeing advertiser spending? Is it still Is it robust? Is it improving? And is it driven at any particular demographic group or show category style?

Yeah, we're really fortunate. The media spending level is increasing. Every report I see, it's continued growth, record growth. When you look at the companies that are out there and tracking, you know, who's spending in the space, you're You're looking at, you know, the Amazons of the world, the progressives of the world, the state farms of the world. These are big brands with big media budgets that, that are shipping their spends to this podcasting world. And they continue to believe in it. They continue to dive into it. And, um, you know, I, I think the median is just exploding and the technology, the ROI, the attribution. All of that allows these companies to not suspend blindly like they may have in the past with other mediums. They really have a true tell that this is working. Okay, thanks.

And this concludes our question and answer session. I'll hand the call back over to Kit Grice for any closing comments.

Well, thank you very much, everybody. I really appreciate your time today. We had a really strong quarter. great results. I can't thank my team enough and all the people that believe in us in terms of investors and Live One for all their support. Ryan and Rob, appreciate you guys. And we're excited to You know, developed some great things moving forward and excited to talk to you throughout the year. Thank you very much, everyone. Appreciate it.

Yeah, just before we hang up, I'm just going to add to that. I just want to thank you, Kit and Ryan, for a great job. This is a spectacular quarter. It's going to continue. And what I would tell you is that LiveOne, not only is a supporter, but we're buying back a lot of stock. We're going to continue to add to our position. You'll see us. I think we bought 657,000 shares recently. We'll be adding to that substantially. Success of this company, Kit, has just done an absolutely spectacular job at delivering revenues and EBITDA. So couldn't be prouder of my team. And you'll see us in the market very shortly as soon as we have approval from our attorneys to buy back more stock.

Everyone, this will conclude our call today. Thank you all for joining. You may now disconnect.