LiveOne, Inc. Q4 FY2021 Earnings Call

Good afternoon, and welcome to the LiveXLive Media Fourth Quarter 2021 Business Update Call. All participants will be in listen-only mode. After today’s presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Michael Quartieri, Executive Vice President and Chief Financial Officer. Please go ahead.

Thank you. Good afternoon, and welcome to LiveXLive Media’s business update and financial results conference call for the company's fourth quarter and fiscal year ended March 31, 2021. Presenting today on the call are Rob Ellin, CEO and Chairman; and myself, Mike Quartieri, Executive Vice President and 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 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 for the year ended March 31, 2020, quarterly report on Form 10-Q for the quarter ended December 31, 2020, and subsequent SEC filings. 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, and the company encourages you to periodically visit its IR website for important content. The following discussion, including responses to your questions, contains time-sensitive information and reflects management's views as of the date of this call, June 28, 2021; 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 the call is being recorded. The company is making it available to investors and the 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, retransmission or rebroadcast of the call or the webcast in any form without the expressed written consent is strictly prohibited. Now, let me turn the call over to LiveXLive CEO, Rob Ellin.

Mike, thank you so much. Good afternoon, and thank you for joining us today for our fiscal fourth quarter and year-end business update. For most all of us, dealing with COVID over roughly the past 1.5 years has been a very challenging experience; the lockdowns meant remote learning for schools, limited social interactions, working from home, and, of course, no live music, no live events or festivals. But for LiveXLive, we’ve remained both true and opportunistic over the past year. We have made two major acquisitions and successfully completed the integration of all of our business units that make up our flywheel. We’ve substantially expanded our content offering. Today, I'm proud to announce we offer the ultimate audio and video, music and media subscription platform that includes approximately 30 million songs, 500 curated radio stations, 250 of the most important podcasts and vodcasts, newsroom, and original audio and video content, all for under $9.99 a month, plus 2,500 of the biggest live events around the world coming back in the very near future. During the pandemic, between March of 2020 and March of 2021, LiveXLive was far and away the leader in live streaming live music performances as we live streamed a staggering 146 live music events and over 1,750 artists across the LiveXLive platform, generating 149 million live views and 5 billion engagements. Through streaming, we brought many of the world's top artists, including the Rolling Stones, Billie Eilish, John Legend, Lady Gaga, Taylor Swift, and BTS, all genres and music from their homes and private studios to fans around the world via their mobile devices, living rooms, and wireless devices. For LiveXLive, the business environment created by COVID actually accelerated our business development, maturation, and most importantly, the brand recognition of what we built. Thankfully, it appears the U.S. is finally opening up, and that means a return of live music and live events. This is very good news for LiveXLive. LiveXLive has grown and evolved into the leading talent-first platform focused on connecting artists with superfans. We provide artists with numerous monetization opportunities, including pay-per-view, merchandise, tipping, and NFTs. We are building a long-term, sustainable, and valuable franchise in audio, music, podcasting, vodcasting, OTT, pay-per-view, live streaming, and video on demand. Our distribution continues to grow, reaching over 220 countries. The foundation of LiveXLive was built around a world-class management team and Board to deliver the most talent-centric platform focused on superfans. Largely through acquisitions, we have created a flywheel of wholly-owned businesses that work together in a complementary and synergistic fashion in subscription radio, Slacker app, live streaming, LiveXLive, podcasting, PodcastOne, merchandise, Custom Personalization Solutions, and a growing roster of original content franchises that are distributed through LiveXLive’s 24-hour linear OTT channel that reaches 294 million people a month. As we described, our audience can listen, watch, attend, engage, and transact. I'm pleased to report that the fourth quarter ended March 31, 2021, revenue increased 113% to $21 million, our 12th consecutive record quarter, along with a 108% increase in contribution margin. Given the momentum we see in nearly all of our business verticals, we're excited to once again raise our guidance for the current fiscal year to $110 million to $120 million, with adjusted operating income of $6 million to $12 million. We also have a meaningful improvement to our balance sheet as compared to fiscal 2020, with shareholder equity increasing by $15.3 million and working capital up by $14.4 million. As of this past Friday, June 25, we have our largest cash position in the history of the company at over $25 million. Over the past 18 months, we have de-risked the business by diversifying our revenue streams with the launch of pay-per-view and the addition of a substantial advertising and sponsored revenue component as a result of the acquisition of PodcastOne and the growth of our internal sponsorship. The acquisition of Custom Personalization Solutions gives us the ability to own merchandise in conjunction with the talent on our platform. Earlier, I mentioned the return of live music, which is very good news for LiveXLive, as there is significant pent-up demand for live music. With the imminent return of live music events, we expect an increase in revenues from nearly every aspect of our flywheel. Live ticket sales, live streams, pay-per-views, advertising, sponsorships, NFTs, and specialty merchandise. I'm happy to report our trophy live event, Spring Awakening, is back, which is the Midwest's largest electronic music festival, scheduled to return in Chicago on October 2nd and 3rd. The festival will feature 70 of the biggest artists in dance music, including Diplo and many others. The event has efficiently sold its first year of general admission and VIP, and only limited quantities of Tier 2 tickets are still available. Next up, we have the expansion of Spring Awakening, with an announcement for a 2022 live event in Cancun. Through our distribution partners and B2B around the globe, we have been able to grow our paid subscribers to over 1.1 million. Of significant importance is our exclusive partnership with Tesla. Through that arrangement, LiveXLive subscription is pre-installed with default revenue streams in every Tesla car sold in America, and LiveXLive is paid directly by Tesla for those subscriptions. The LiveXLive app is pre-installed in 85 other automobiles and growing across major carriers, including Verizon, Sprint, and T-Mobile. I previously mentioned numerous times that we see significant opportunity to expand LiveXLive's Slacker subscription business into Europe and compete for the opportunity to become the default radio for a number of European automakers. Our licensed style music labels are continuing and expanding quickly. We fully expect to be able to expand our licenses in this quarter of 2022. The acquisition of PodcastOne has been a home run for LiveXLive, complementing our music and video content by adding video podcasts, which we also call vodcast, and has further improved our content offering and diversified the revenue model by adding significant advertising and sponsorship components alongside our additional subscriptions. We also added PodcastOne's world-class team, including Norm Pattiz, who created Westwood One and their advertising and sales team, which tripled the overall headcount of our sales team. PodcastOne had over 2.27 billion podcast downloads in fiscal 2021, and its franchise of exclusive shows has now grown to more than 235 and produces more than 300 podcast episodes per week. With the launch of the live stream pay-per-view platform, LiveXLive has now generated over $16 million in the first year in pay-per-view packages, sponsorships, and merchandise sales. We recently produced the inaugural live events, Social Gloves, the largest social live event in history, which delivered over 3.5 billion impressions, and I'm proud to say that our approach to the tech stack distributed flawlessly. Our production and management of Social Gloves proved that LiveXLive can provide a full 360-degree suite of services, including live event production, security of venues, sponsorships, pay-per-view sales, live streaming platform, event production curation, merchandise, and incorporating NFTs and delivering monetarily. We delivered over $2 million from Hard Rock and the stadium for pay-per-view. We've now crossed over $3 million in NFT revenues, paid for upfront in cash for delivering the quality of content and talent that we have on our platform. The outstanding quality of Social Gloves' product raises the bar, and today I believe LiveXLive is the preeminent producer of live stream events. In fact, based on the conversations we have with owners of events, we believe there's a meaningful business opportunity for LiveXLive to produce and manage live stream events across all pop culture, sports, music, and e-sports. With the acquisition of the e-commerce merchandise company, CPS, in December, we are positioned to partner with talent, audience, social media stars, e-sport stars, and sports stars to own products in conjunction with their talent and drive brand new revenue streams for them. We think this is an immense opportunity to leverage our audience, platform, and artist relations to add specialized consumer product revenues as a unit component of our flywheel. Lastly, I would like to speak about our significant investment and commitment to original programming. Now more than any time in the past 20 years, content has once again become king. There are enormous amounts of media distribution outlets, which need our content. Our past year, we launched shows which we believe have a chance to become valuable franchises going forward, Self Made, a new online talent competition; Snubby's, Jeff Ross, the Lockdown, the first award show, beat every number of awards shows this year. These are additions to existing franchises like Music Lives, the largest festival ever created, and Music Lives On Artist DNA. LiveXLive presents our music version of SportsCenter called LiveZone. These series have attracted 23 new blue-chip sponsors, including Chipotle, Corona, Pepsi, Porsche, Hyundai, KIA, TikTok, and White Claw. With that, I'd like to hand this over to Mike, who has done an exceptional job since joining us as CFO and look forward to additional updates from him. Thanks, Mike.

Thanks, Rob. Let me spend a few minutes to provide a brief overview of the preliminary fiscal '21 and Q4 results. We ended our fiscal '21 with strong results, with revenue growing 69% year-over-year to a record $65.2 million. Our adjusted operating loss narrowed to $5.8 million with record KPIs, including a 27% net increase in paid subscribers year-over-year. Moreover, we had another record quarter in our fourth quarter, including revenue of $21 million, adjusted operating loss of $2.5 million, and contribution margin of $4.6 million. On a full year fiscal '21 basis, consolidated revenue was $65.2 million, up 69% year-over-year from $38.7 million in fiscal '20, due in large part to our successful acquisitions of PodcastOne and CPS, coupled with increases in pay-per-view and sponsorship revenue. We ended fiscal '21 with 1,073,000 paid subscribers, a net increase of 225,000 compared to 848,000 subscribers at March 31, 2020. Please note that included in the total number as of March 31, '21 are certain subscribers, which are subject to a contractual dispute, and we are currently not recognizing revenues from them. The acquisitions of PodcastOne and CPS were accretive to our operating results, enhanced our working capital position, and provided diversification to our revenue base. For fiscal '21, our revenue was comprised of 51% subscription and 49% advertising, sponsorship, merchandising, and pay-per-view ticketing, compared to 93% subscription and only 7% advertising in fiscal '20. Fiscal '21 contribution margin increased 177% year-over-year to $16.2 million compared to $5.9 million in fiscal '20. The year-over-year improvement was driven by the additions of PodcastOne and CPS during the year, along with margin improvement from our live events and related sponsorship revenue. During fiscal '21, we live streamed 146 events at an average cost of $56,000 per event, an improvement of over 60% year-over-year. In addition, our sponsorship revenue increased by $3.6 million during the year. The year-over-year improvement in our live events was largely driven by cost efficiencies realized from the scale of our business. Fiscal '21 operating loss was $5.8 million compared to $12.6 million in fiscal '20. This improvement stems from the improved contribution margin from our live events, increased sponsorships noted previously, and continued operating efficiencies in our subscription business. Now turning to the quarter, Q4 '21 was a record $21 million, up 113% year-over-year from $9.9 million in Q4 '20 due to the additions of PodcastOne, which is driving our increase in advertising, and CPS, which represents our merchandising revenue. These accretive acquisitions, along with the increase in pay-per-view and sponsorship revenue, were partially offset by the reduction in subscription revenue due to subscribers which are subject to the contractual dispute. In Q4 '21, our revenue was comprised of 41% subscription and 59% advertising, sponsorship, merchandising, and pay-per-view ticketing compared to 94% subscription and 6% advertising in Q4 '20. Contribution margin was $4.6 million, an increase of 108% compared to Q4 '20, which is primarily attributable to the addition of CPS. Our contribution margin percentage for the quarter was negatively impacted by a strategic investment in a marketing campaign to grow our listener base across the entire flywheel of approximately $1 million and our continued investment in our live event franchises, including Music Lives, LiveZone, and Snubby's, just to name a few, of approximately $700,000. We believe these investments will yield attractive returns over the short and long run. Adjusted operating loss in Q4 was $2.5 million, primarily due to these strategic investments outlined above. Turning to the balance sheet, we ended fiscal '21 with cash of $18.8 million, including restricted cash of $135,000, up from $12.4 million we had a year ago. Year-over-year increases were largely driven by net cash proceeds from financing activities of $16.6 million, offset by net cash outflows from operations of $9.5 million and investing activities of $800,000 during the year. I would now like to update you on a few additional items that occurred subsequent to our year-end. In June, we entered into a revolving credit facility with EastWest Bank with a borrowing capacity of up to $7 million and an interest rate of prime plus 0.5%. In connection with this credit facility, the holders of the company's senior secured convertible notes agreed to extend the maturity date of their notes to June 3, 2023, and subordinate their security interest in all of the company's assets. We also received notification from our lenders under the Small Business Administration's Payroll Protection Program that the entire balance of approximately $2.5 million of our and subsidiaries’ PPP loans were forgiven. Turning to financial guidance, with the return of live events, we expect an increase in revenue in nearly every aspect of our flywheel of associated businesses. As a result, we are increasing our revenue guidance for the fiscal year ending March 31, 2022, to be between $110 million to $120 million, with adjusted operating income of between $6 million to $12 million from our core operations. As we progress through the year, we'll be providing further updates as warranted. Lastly, given the two significant acquisitions that were consummated during fiscal '21, we are continuing to work with our auditors to finalize our financial reporting on Form 10-K, and we're utilizing the extra time allowed under Rule 12b-25 to formally file our Form 10-K with the SEC. And with that, let me hand it back to Rob.

Thanks, Mike. Great as always. So, this has been a spectacular year for this company during a very trying time. I couldn't be more proud of my team. We see the flywheel really exploding right now in every area of our business, right? And when you combine all of them together into one subscription property, now all of our audio, 30 million songs; all of our video, right, 140 live events, 1,800 artists approximately this year, all of our original programming is all in one, right? As you go out with that, on average, our ARPU has increased now to $3.50. I see telltale signs those prices could be increasing again. We have explosive growth in our pay-per-view business. We said we did over $16 million. We're only at $2 million the last time we reported. So you can imagine, in the last couple of months, how much revenues have been driven. So we see telltale signs here that we have now been able to integrate all the acquisitions, all the internal growth, and bring the management teams together—this world-class management—to really position this company to hit that goal of 10 million paid subscribers within 5 years right at $1 billion plus in revenues. So I want to thank everyone for their patience this year in sticking with this company, and I couldn't be prouder of our team.

Our first question today comes from Laura Martin with Needham.

Congratulations on the great numbers and fantastic reallocation of revenue diversification. That's fantastic news. Maybe a couple of questions. One is, I would say that fiscal '21 really demonstrates what the unit economics are for a digital LiveXLive. I'm interested in how you think the unit economics for live events compare to digital? So it is telling us that when they go back to live events, the margins fall, as live events are more expensive. So I understand that live events add revenue. What I'm sort of focused on is what's about to happen to profitability and return on capital as live events come back for the whole entity. Could you comment on that?

Sure. For us, this is the perfect opening trade because we're both a live events business as well as we're a distributor and partner for live events. As you look at Social Gloves, that we just launched, we were hired as a producer, we were hired as a sponsor, and we were hired to distribute it. We had no risk in it, right? We're getting paid for each component of it. It's really exciting that the talent of this team has come together and proven that they can deliver the live event, right, from a stadium, take it all the way to your home and make sure that throughout the process, we can drive new revenues with no risk. We're going to have some risk in our live side of the business where we're actually putting on those events, Laura. But I think the margins are going to get healthier and healthier for us because we have that mix of both, just like ESPN does in sports. To give you a little color, this event did over $10 million in revenues. So when you think of that $10 million in revenues, and we had no risk in it, we're getting paid for producing it, distributing it, and bringing in sponsors. Our margins are going to be very, very healthy this quarter coming up.

Okay. Great. And then advertising, I think there's an outlook for a really robust advertising outlook for the next 18 months as theaters reopen and travel comes back and the rest of the world solves COVID. My question is that's a huge part of your total revenue. Can you talk about where you guys are in the ad cycle for LiveXLive? And are you getting the benefit of some of the reopening trade and advertising strength? Or are you locked into sponsorship, so really, it is reactive to the upside as selling 30-second spots is proving out to be now as we come out of the recession?

We're in that fortunate position when you have AAA content. The advertisers are coming in with way bigger dollars. We have everything from branded content to sponsored dollars. Some of our podcasting will always be tied to spots and dots, and part of it. But because you have AAA content, you're going to have very robust numbers that come out of the sponsorship. As you saw, we just started to announce our first seven-figure deals with Hyundai and Hard Rock. So our sponsored dollars this quarter again, just in what we've publicly announced already will blow away any quarter in the history of the company. And as you see the new sponsorship team coming out...

I was just going to ask about programmatic versus sponsorship. So when I think about 30-second ad units compared to sponsorships, which are sort of presold big deals, what's the mix of those, Rob?

We don't break that down today, Laura. We haven't broken those down by pieces. As the maturation comes, I'm sure Mike is going to get into way more detail on that. But we got the luxury that we have all of it. The programmatic is important to us, but we're way more of a sales team. Our sales team, and you and I have had this conversation, we're probably getting close to 20 people in sales. This company is going to tip the opposite way, from going being one salesperson a year ago pre-COVID to being a large percentage of the company focused on sales, marketing, and driving revenues. This is an inflection point for the company. We grew from four to 23 sponsors. If you read between the lines, you can see in the events we've done this quarter, we've had over 23 sponsors. We're growing that substantially, and the integration between them and the cooperation between the teams is so unique that you can now sell across the board.

Our next question comes from Ron Josey with JMP Securities.

Rob and Michael, I wanted to ask a question on guidance and then just a little more on pay-per-view. So maybe Rob and Michael, can you go through just the guidance a little bit more? This is the third time you've raised this calendar year, I think. So can you maybe talk about the pipeline and what you're seeing as things open back up? Social Gloves is clearly a hit. We enjoyed it for sure. Spring Awakening is going, moving, is in the pipeline, I think CPS is contributing. So just help us understand a little bit more of just like the tailwinds to the business and how you view pay-per-view fitting in?

Yes. I'm going to give you the high-level view, and then I'm going to hand it to Mike. The starting point is that we wanted to prove our pay-per-view that our production and technology were all going to work. Because there are a lot of little companies and big companies, including Showtime, that have tested this and thought they could just enter the digital pay-per-view world. We proved to perfection two weekends ago. We did our biggest revenues in the history of the company and immediately announced the next one right behind it because of that success. You're going to see the same thing happening with artists. You'll see the same thing happen across multiple different genres of pop culture. We're really excited about that. As the world opens up and you see the reentry into this, we've only announced so far one live event outside of Social Gloves. We've announced Spring Awakening. You know we do 40 to 50 shows a month. The Chicago Midwest area has been slower to open, but we see telltale signs that things are opening widely right now, and I'd be really surprised if you didn't see us back to 40 or 50 events, it may even grow from there. We had great hesitancy in raising the guidance again, but we had no choice. It was too obvious in the numbers that we've hit and just people seeing it that we hadn't raised the guidance. We will have to reconsider it again soon.

Sure, in relation to where the tailwinds are coming from, if you really walk down the income statement, it's across all areas. Tesla will continue to pump out cars, and that helps our subscription business. When you look at the expansion of PodcastOne, we're seeing improvement in our rates as Rob describes them, spots and dots, but you're also getting new podcasts that are coming in. So that's part of that strategic investment we were making to help really emphasize and drive that. In addition, when you look at our CPS business, that’s contributing. CPS was only with us for a quarter and eight days. Where you really see the benefit of CPS is when it's fully integrated into one product offering that can support a pay-per-view event that is our event or someone else's event where we're the producer. The other side of that is the expansion within podcasts; we're getting more and more of that talent tied into the CPS business. The next big piece is, regarding live events and how many live events can we get moving forward in the next 6 to 12 months? That will be another key driver. Just like with Social Gloves, a live event for Spring Awakening, all merchandise will run through CPS. Getting that flywheel really humming is where we're at, and that's what makes it most exciting for us to then go out and raise our guidance.

Mike just added the two acquisitions that we just announced as well, which closed shortly, are great tuck-in acquisitions and again fit perfectly in the flywheel.

Our next question will come from Tom Forte with D.A. Davidson.

Great. So one question and one follow-up. So my original question, when you think about next fiscal year, what's your expectation baked into your guidance on live events? I know you talked about something in Chicago where you were selling tickets. Are you expecting gradual reopening? Are you only expecting the Chicago event? How are you thinking about live events over the next fiscal year, and how much of that is reflected in your guidance?

The only thing in that guidance today, Tom, is the beginning of Spring Awakening; we’re being super conservative on it. We haven't announced any of the typical 40 to 50 live events we do, including some of our smaller festivals. We fully expect that's coming, but we are being careful. There are still some issues globally that are happening and hotspots occurring. We want to be careful on that. But I tell you this, we didn’t stream 1,800 artists and 140 live events last year for no reason. The talent team that we've put together will be doing live events not only in the Midwest area but it will be expanding around the globe, both live and digital. I fully expect a lot more coming from the area of our live business in the very near future.

And then recognizing you might be early, how should we think about a very successful event like Social Gloves driving your subscriber count or your ability to leverage events like that to drive your subscriber count?

We've been careful for multiple reasons on what we've announced on this. You can read between the lines, we did over $10 million in revenues, and I think we announced 8,500 subscribers. You run the numbers and build back to a model. We've said that 6% to 8% of our pay-per-views or 6% of ticket sales convert to subscribers. If we continue at that rate, this would be a staggering number. You start adding all your live events and start to grab subscribers from your live events and from your digital events, the metrics explode. Mike, do you want to add anything on that?

No. I think that's the exact piece as part of the flywheel. Just the momentum and the tailwinds that we have behind us is that as we get more and more of these live events, we'll capitalize on that and get more subscribers into the flywheel. Unfortunately, when you look back to 2020, the company was completely hamstrung because there were no live events. So that piece of the flywheel that helps us acquire users was hampering the company, and now that's starting to come off.

And Tom, Spring Awakening is typically a third of the revenues of React, right, our Chicago division. So that $20 million in revenues approximately, you're talking about $6 million to $7 million from Spring Awakening. I think we can actually beat that number this year because ticket sales are just exploding. They are selling so quickly, and it looks like we can go higher. If they allow us in Chicago, we're going to try to increase it. We've moved into a park where we could eventually go to 60,000. If they increase that from 30,000 a day to 40,000, it could be bigger. The rest of those live events will really be another great enhancement to this company, and I'm hoping, knock on wood, we're going to be able to announce expansion for all those live events coming back very shortly.

Our next question comes from Brian Kinstlinger with Alliance Global Partners.

This is Jacob on for Brian. With advertising budget strengthening across the board, can you describe what this is net for PodcastOne? Are you back to pre-pandemic revenue contribution, which I believe is about $28 million? Or is PodcastOne on recovery? Maybe you can talk about the trends you've seen in the last six months or so?

Yes. So I mean, we're ahead of that $28 million. If you just take the last two quarters, this quarter was above $7 million and last quarter was also above $7 million. There is some seasonality here. We’re really excited about where PodcastOne is going. We've probably added 25 new podcasts, including Jay Cutler, Anitta, and Pitbull, among others, right? This will continue. The franchise of Podcast is just becoming an increasingly important brand. It’s one of the only independent networks left, and it provides a full 360 play. The second thing going on is expanding into broadcast, and we're seeing tremendous action coming from sponsors like the Hyundai deal.

Okay. Are you able to break down Social Gloves' revenue by offering such as ticketing, pay-per-view, and merchandise sponsorship?

We haven't, but again, if you look at our pay-per-view number, you can kind of back your way into pretty close to the number. This was a staggering event that was really well produced, critically acclaimed. We also own all the rights going forward to the docuseries, so it's not stopping. In the last 12 months, our socials have grown over 150%. LiveXLive as a brand is becoming synonymous with authentic voice in music, but now it's starting to become an authentic brand in pop culture itself.

Our next question comes from Barry Sine with Spartan Capital Securities.

I want to stay on the topic of live festivals. If I think about LiveXLive prior to the pandemic, you partnered with all the big festival promoters—Live Nation, iHeart, AEG—with some of the biggest festivals out there. Does that business come back? And to what extent does that old business come back?

It's fantastic. Just start with iHeart. The lineups are bigger than ever, and the traffic and ticket sales are bigger than ever. Look at Live Nation stock; look at iHeart stock. We have lineups with over 50 million social media followers. On September 17, you're going to see our next version of our boxing event, featuring Ariana Grande, Justin Bieber, Ed Sheeran, all on it. So you're seeing a vibrant—everyone has woken up and realized that the digital side is essential, and it’s now here to stay. Just like ESPN had in its first years, those live events drive everything, and they're going to continue to drive it. We have 2,300 events to choose from, and we're going to be selective and ensure that they're accretive.

And you're in a much better position now to monetize them than you were prior to the pandemic, I would assume as well?

Yes. I spoke to Steve Bornstein about this, who built ESPN, and he mentioned in his first 8 years, sponsors just didn't come. They had a fear factor about doing digital and what that would do to live events. But the digital aspect is now huge, with hundreds of billions of dollars being made across global live sports. I think the same thing is about to happen in music. One day, you may see LiveXLive as the first company that did what we did at Social Gloves—imagine Rock in Rio had 1 million people attending and 70 million watched last year. If just 1% of them bought a pay-per-view ticket, and let’s say the average ticket is $100, what if it sold for $10? That could open up a new revenue stream flowing from talent to managers, to agents, across the board. There is a maturation of sponsorship that is coming faster than we could have dreamed of. So I just want to thank everyone for your patience. This has been a trying year for everyone. I've been through this previously in previous companies during tough times. We went from $7 million of revenues to $38 million to now $65 million. The guidance of $110 million to $120 million today is looking really optimistic, and we're looking forward to talk to you at the end of this quarter. Our upcoming quarter is going to be by far our biggest in history, and I believe there’s way more to come. We've positioned ourselves uniquely to simplify the business model. Everything has been integrated, and we are purely a music and media subscription platform with the ability for you to come on today for an average of $3.50, with tremendous amounts of content and original programming that I don't think you can get anywhere else in the world. Thank you.

This concludes our question-and-answer session. I'd like to turn the call back over to Rob Ellin for any closing remarks.

I just want to thank everyone for your patience. This has been a trying year for everyone. I've been through this previously in previous companies. They're in tough times, or they’re in stock market times. We were a public venture capital company went public. Everyone that supported us from $7 million of revenues to $38 million to now $65 million, that 110 million is 120 million today that we've just announced in our guidance, we're really looking forward to this year. We're looking forward to talking to you at the end of this quarter. It's certainly going to be our biggest quarter, our 13th biggest—and biggest quarter by far in history, right? I think there’s way more to come. We’ve really positioned ourselves uniquely to simplify the business model and that everything has been integrated, and that we are purely a music and media subscription platform for an average of $3.50. Today, you can come for free or for $9.99, but you have access to such a tremendous amount of content and original programming that I don't think you can get anywhere else in the world. We look forward to speaking with you again at the end of this quarter, and I want to thank everyone for their support during tough times. Hopefully, this is now just a race to the top. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.