LiveOne, Inc. Q1 FY2023 Earnings Call

Welcome to the Q1 Fiscal 2023 Business Update and Earnings Webcast for LiveOne, Inc. My name is Jordan, and I will be leading today's call. I will now turn it over to Aaron Sullivan, the CFO, to get started. Aaron, please proceed.

Thank you. Good morning, and welcome to LiveOne's business update and financial results conference call for the company's first fiscal quarter ended June 30, 2022. Presenting on today's call are Rob Ellin, CEO and Chairman; and myself, Aaron Sullivan, Interim CFO. I would like to remind you that some of the statements made on today's call are forward-looking and are based on current expectations, forecasts, and assumptions that involve various risks and uncertainties. These statements include, but are not limited to, statements regarding the future performance of the company, including expected future financial results and expected future growth in the business. Actual results may differ materially from those discussed on this call for a variety of reasons. Please refer to the company's filings with the SEC for information about factors which could cause the company's actual results to differ materially from these forward-looking statements, including those described in its annual report on Form 10-K for the year ended March 31, 2022, 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 at ir.liveone.com, and the company encourages you to periodically visit its IR website for important content. Following discussion, including responses to your questions, contains time-sensitive information and reflects management's view as of the date of this call, August 11, 2022. 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 company's expressed written consent is strictly prohibited. Now I would like to turn the call over to LiveOne's CEO, Rob Ellin.

Thank you, Aaron, and good morning, everyone. I would like to thank you for joining us today for our fiscal year 2023 first quarter business update and financial results webcast. We have now completed the consolidation of our six acquisitions, reducing costs and overhead by the expected $23 million a year on an annual basis. We just announced our first EBITDA positive quarter as promised with over $2 million in EBITDA. In addition, we emphasized and expanded our digital and audio platform while largely deferring or eliminating some of our live and streaming events that were not expected to be profitable this year. These initiatives have allowed us to significantly pull forward our path and timeline to achieve positive adjusted EBITDA as well as positive GAAP earnings. We are pleased to announce today that for the first time in the history of the company, we have achieved both positive adjusted EBITDA of $2 million as well as positive GAAP earnings. Our first quarter adjusted EBITDA of $2 million was well above our previous guidance of between $500,000 and $1 million and was a $3.8 million improvement when compared to Q1 fiscal 2022. I'm pleased to be able to increase our fiscal 2023 adjusted EBITDA guidance to between $7 million and $11 million. This is our fourth increase since the end of last quarter, and we see telltale signs there may be room for further growth, as we'll talk about a little bit deeper into the announcement of a major partnership with the record labels. We also maintained our revenue guidance of $125 million to $140 million. Our digital business alone is expected to record a staggering $80 million in revenue and generate $16 million in EBITDA at the operating level. We've made enormous progress with our balance sheet. We recently extended all of our short-term debt to the second quarter of calendar 2024. Thus far, we have completed a repurchase of 2 million shares of common stock from the current portion of our stock repurchase program. There's an additional substantial open market buying of LiveOne shares by a number of my Board members as well as myself. We will be actively looking to pursue and expand that buyback substantially in the near future if the stock remains at these low levels. Put simply, we feel strongly that the value of LiveOne stock is dramatically undervalued compared to the sum of our parts, which includes our Slacker and PodcastOne pay-per-view units. In July 2022, we just announced that our podcast subsidiary closed an $8.1 million financing at a $68 million valuation as part of our intention to spin out PodcastOne as its own separate public company and to give it in apportion to all of you shareholders. We now have over 15,000 shareholders who will be receiving shares in that spinout. With the successful completion of the spinout, we believe PodcastOne will be the only major pure-play podcast company trading on the national stock exchange. We acquired PodcastOne in July of 2020, doing around $20 million in revenues. We publicly stated well over $8 million in revenues for this quarter. It continues to experience robust growth with over 50 new podcast series that have been launched since 2020, and we have expanded distribution by making PodcastOne available in all of our Tesla cars and now in our Android Automotive vehicles partnership in North America. PodcastOne has the exclusive advertising sponsored rights for all of its podcasts and content. People can access PodcastOne through our partnerships in distribution with Spotify, Apple, Samsung, and iHeart. PodcastOne and its franchise of exclusive shows has grown to more than 250 podcasts and over 300 podcast episodes per week. PodcastOne was ranked #8 on Podtrac's list of top U.S. podcasts in July with a uniquely monthly audience of 6.1 million. The ranking puts PodcastOne ahead of CNN, Fox, and Barstool and is one of only two independent podcast platforms left among the top 10 podcast publishers in the world. We previously announced our intention to also spin out our pay-per-view business as a separate public company. We anticipate that moving rapidly and expect it to happen in fiscal 2023. As many of you know, through our nine-year exclusive partnership with Tesla, LiveOne's Slacker Radio membership is pre-installed in every single Tesla car sold in America. LiveOne is paid directly by Tesla for all those memberships. We recently completed a brand-new user interface to refresh all the new top stations within Tesla cars and added all of our podcasts into the vehicles. In December, we launched LiveOne's music streaming service, including PodcastOne content on Google Android Automotive, giving us the ability to white label to any car within that platform. The launch takes LiveOne into the car with a seamlessly integrated in-car experience without the need to use your mobile device and gives us distribution in many current and up-and-coming vehicles via Google Automotive, allowing consumers to enjoy a library of over 30 million songs, original exclusive content over five curated radio stations, over 250 original podcasts and broadcasts, and we've had over 3,000 orders streamed on our platform. Android Automotive continues to see wide adoption from virtually all major OEMs: Ford, Chevrolet, Nissan, Dodge, Volvo, Lincoln, and others. We've seen compelling growth opportunities to grow Slacker membership by partnering with other automotives just as we did with Tesla to their default radio service as well as other major B2B partnerships like exercise equipment, smartwatches, and being part of loyalty programs for restaurant chains, credit card issuers, and airlines. As of June 30, 2022, we had over 1.59 million paid members, a net increase of 432,000 or 37% compared to last year. Total members including free membership are now over 2.35 million. We see a path to hitting that 10 million paid subscribers by 2027. That number puts this company at over $1 billion in revenues. A recent industry report estimated that the total addressable market, or TAM, for streaming music to be 1.7 billion paying subscribers. So that 10 million is less than 1% of the addressable audience. If Slacker was able to capture just 1% of the TAM, that could mean well over $1 billion in average revenues. I would like to add that as a result of the successful integration of our advertising and sales division, LiveOne has grown our sponsorships from seven to well over 300 and growing. And we have over 700 sponsors in the pipeline right now. In fact, PodcastOne has seen more one million-plus sales weeks in calendar 2022 than any time in its history, and we see an opportunity for the first time for an eight-figure deal.

Thanks, Rob. I'll spend just a few minutes to provide an overview of the results for our first fiscal quarter ended June 30, 2022. Q1 2023 revenue was $23.2 million. Contribution margin increased to 34% compared to 20% in fiscal '22. And our adjusted EBITDA was a record $2 million in Q1 2023 compared to a loss of $1.8 million in fiscal 2022, along with record KPIs, including a 37% increase in paid members year-over-year. On a U.S. GAAP basis, LiveOne posted record net income of $1.35 million or $0.02 per diluted share in Q1 fiscal 2023 versus a net loss of $8.1 million or a loss of $0.10 per diluted share in Q1 fiscal 2022. For the quarter ended June 30, 2022, our revenue was comprised of 52% subscription and 48% advertising, sponsorship, merchandising, and ticketing events compared to 23% subscription and 77% advertising, sponsorship, and ticketing events in the prior year period. We ended Q1 with $11.3 million in cash, including restricted cash of $300,000.

Okay. Just to finalize for everybody... We now have grown since inception, surviving COVID. We now grow subscription and Slacker Radio to now well over 1.6 million members pre-COVID to now well over 200,000. I couldn't be prouder of earnings as well. So please, anyone have any questions, we'd be happy to answer them now.

Rob, just FYI, your audio is breaking up. The moderator comes through clear. I don't know if you can do anything, but let me go ahead with my questions. First of all, the sustainability of that positive EBITDA, the guidance is looking for a significant ramp-up in revenue over the next three quarters to hit your numbers versus Q1. What do expenses look like? And how do you sustain positive EBITDA as you ramp up revenue?

Great question. So as you know, we have some of our tentpole events, which will happen at the end of the third quarter and beginning of the fourth quarter. And hopefully, everyone can hear me clearly. You're going to have fluctuations, but as you know, right, as we did our big social media event last time, it was extraordinarily profitable with very, very healthy margins. So we feel very confident in that. Number two is we continue to take costs out of the business, right, and focus our energy as the temperature has changed on bottom line numbers. You're going to see more and more, right, EBITDA. You saw us just raise the guidance again to $7 million to $11 million of EBITDA, right, and we see big opportunities to potentially grow those again. And so we're really excited about where the margins are heading as well as where the bottom line is going.

Okay. Regarding live events, you mentioned a significant social media event. In the past, you've indicated that your approach focuses on only profitable events, which depend on advertising sponsorships. So, if you're considering returning to this type of event, does that imply you have a clear outlook on securing sponsorships to ensure these events are profitable?

Yes, we have exceptional visibility on the opportunities ahead of us. As Barry and I have discussed frequently, our content costs have decreased each year and continue to decline. This reduction in costs may now be attributed to the success and growth of our community. We are attracting festival owners, talent, and creators who want to showcase their content on our platform and are willing to pay for a range of our services, including production, distribution, marketing, delivery, and NFTs. The interest in our services has been increasing, similar to what we experienced with our Social Boxing project previously, where we received payment for every aspect without incurring any risk. With our community expanding and billions of podcast downloads, we find ourselves in a strong position.

That makes sense. And just kind of a longer-term question on these tentpole live events. How important are they to the long-term brand value, building the brand value and visibility of the company? I know you've taken a pause this year, Spring Awakening, et cetera. But longer term, do you really need to have a lot of events in the mix to build the visibility of the company and keep that flywheel spinning faster and faster?

Yes. I mean we do. We do. And part of the beauty of this, as you know, is we paid very nominal fees for most of those rights, right? I've always articulated this as the ESPN of music, right? Now ESPN, some of their events they own, some of them they rent and some they're just the newsroom for, right? But sponsors and advertisers come in, in droves. And we just see the advertising responses literally lining up now that it's lining up so healthy. But again, we have the largest pipeline in history of this company of million-dollar deals, let alone sitting on opportunities that could be eight-figure deals for the first time in the history of the company. And it's really just a self-fulfilling prophecy, Barry, the more traffic, the bigger audience you have, right, the more you're going to get paid.

And then my last question, just around the cash balance. There's one kind of non-GAAP cash item that I think is still out there and due, which is the insurance proceeds from the prior Spring Awakening that was interrupted by storms. And I think that was pretty significant. I know you can't book that in the financial statements. Is that still out there? What's the status on that? And what might we see in cash inflow when that comes in?

Yes, absolutely. The insurance company has been extremely difficult, but we have made a lot of progress recently in that they've just made this all public, so I can tell you. They've just moved the case into New York. So there could be settlement offers coming soon. Our lawyers take it all on a contingency basis and think we're going to win millions and millions of dollars. There could be worse damages that they caused us, the overall react business, by not making the payments they should have day one. There was no question of weather conditions, right? The entire event was shut down through for 8.5 hours at the heart of the festival. So we think we have a good opportunity there. I think there's huge potential there, and certainly, the lawyers would not have taken contingency. So we may see something very soon.

This is Sheridan calling in for Brian. First question is, could you please break down the first quarter revenue from subscriptions and podcasting separately?

Aaron, do you want to respond to that? I don't think we can break it down yet from that. But go ahead, Aaron.

Yes. I gave the percentage of subscription in the prepared remarks. So you can kind of back into that. So 52% of the quarterly revenue is subscription. And then, actually, Rob, we will see a table in the 10-Q that breaks out advertising revenue. I can say that that's primarily podcast-related, and that adds about $9 million for the quarter.

It's an exceptional number, Brian. As you know, we bought PodcastOne doing just about $20 million in revenues. That will put us on a run rate to almost double those numbers, right? If we continue at this level and podcast now that it's sitting in its own division may also be an acquisition vehicle to acquire other podcast companies. The opportunity is just growing for us. One of the only independent networks left. And as you can see, we just keep adding podcasts almost weekly as we pass Barstool and many others into that #7 or #8 slot every month.

All right. Second, in regards to the regional economy, how are CPMs trending in podcasting? And do you expect any pressure on pricing on advertising and sponsorship going forward in your business?

Well, I think you have a huge advantage in a difficult market. Media always does well, but most importantly, podcasting is getting so much attention. I mean, this is the beginning of the beginning. It's in the first inning of where it's going. The industry is only passing $1 billion in revenues. It feels like a lot more because Spotify, Sirius, and Apple have paid $20 billion for these companies. But the reality is only $1 billion, but it's on its way to $5 billion to $10 billion pretty quickly. So we're seeing more and more advertisers moving from other platforms and moving into podcasting and really understanding that direct response, a creator talking to their super fans is just an enormously successful way to drive a product and sell a product, and actually because it's digital, you know what the performance is in that. So we've seen telltale signs that there's going to be a very healthy market in podcasting.

Sure. Sure. I definitely agree with that. But do you see some pressure on pricing right now given the recessionary fears from the advertisers? Like how is the CPMs trending?

Yes. So far, terrific. We have not seen that at this point. And we're certainly preparing in case there is some downturn in it. But so far, we've seen extremely healthy signs right now of where advertisers are pointing and podcasting and utilizing podcast networks. As Brian, you and I have talked about, we're starting to see more and more of our flywheel, right, how the pieces fit together. We've just had Adam Carolla on the road, LadyGang on the road, Jay Cutler on the road, and more and more. So more and more of our podcasts are going to drive additional revenue to us, from sponsorships, the direct response, live shows. We'll shortly start to announce our first own products, owning merchandise in conjunction with those podcasters, right? Last but not least, as you know, with our partnership that we announced with Patrick Wachsberger on second and third windows of television and film. And you know my background and what I've done in that space, and the fun that we've had and the amount of revenues we've generated. We see really strong signs that more and more podcasts are going to turn into television and film. So there are a lot of revenue streams that come out of it.

All right. Just one last question. Could you talk about the success of converting members to paid subscribers? And do you think that conversion rate has been for improvements? And like what are you guys doing to get there?

We have been consistently converting about 6% to 8% of our free users. The conversion rate largely depends on their origin, and I expect it to remain stable. I don’t anticipate we will see conversion rates soaring to the levels of 30%, 40%, or 50%. Some of our initiatives promote great events that draw users in. We are integrating them into our ecosystem, gaining sponsorships, and familiarizing them with our brand. Over the past four years, we have successfully built a strong brand despite significant competition, and we are beginning to monetize our production efforts. We are seeing encouraging signs that our brand is becoming more valuable, and our social media numbers are also experiencing remarkable growth.

Nice quarter, by the way. Could I ask a couple of model questions? There was a fairly significant jump in gross margins. Going forward, when you have your tentpole events, are margins going to be similar?

Aaron, do you want to take that?

Yes. I think we have slightly higher margins in the current quarter than we'd expect on a tentpole quarter. So I would say our margin for the tentpole quarter will be closer to blended around 30% as opposed to our 34% in the current quarter.

And a little bit of that is going to depend on how the accounting is viewed. As you know, we have a new auditor, and we are looking forward to many things, including eliminating our going concern and other exciting changes resulting from the consolidation and restructuring of the company. Additionally, the way the previous accountants at BDO assessed the revenues from Social Gloves was, in our view, excessively high. Much of that figure was akin to barter deals, meaning that you weren't genuinely obtaining any margins from it. The numbers were essentially offsetting each other. We expect to have more clarity on this in the next 45 to 60 days as we announce some significant events.

Okay. And the big event is slated for the December quarter, right, not the September quarter?

I would think that it's more likely it is the end of the third quarter, the beginning of the fourth quarter. But I want to be a little bit careful in that, that we publicly announced a partnership with Ben Silverman, so Ben, right, at NBC and one of the most prolific reality TV creators ever, and created a little show called The Office. Ben and I are in heavy negotiations with many of the networks right now to do a reality TV show around that could change these numbers dramatically. So I want to be a little bit careful about picking the date because that could change it. It also can change our cost structure tremendously. Just think if you had a FOX, Netflix, Hulu, HBO or so on behind you. We're spending tens of millions of dollars putting a reality show to drive that show very much like what the Ultimate Fighter did for the UFC.

Okay. We're not expecting to see that in the September quarter. I wanted to confirm that. Regarding the expense reductions, should we expect that to remain relatively consistent for the rest of the year?

Yes. Yes. So the reason we raised our guidance again is those expense reductions are proving to be extremely successful. Aaron has done a masterful job of really consolidating the businesses, the cream rising to the top, right, and these top talents from sales side, marketing side, production side, and we've been able to take a tremendous amount of cost out of the business. So I couldn't be prouder of the work that Aaron and our finance team have done in really putting this piece of the puzzle together and consolidating. And you can imagine how hard it is to consolidate six companies in the heart of COVID, right? Now it's become a lot easier.

Okay. Then my last question, could you elaborate a little bit on the spin-off of PodcastOne? The money that went in, the $8 million that you raised, could you tell us what percentage those investors are going to own and what percentage do you think the company is going to own and what percentage existing shareholders of LiveOne might own when it's all said and done?

Let me provide you with the details from the 8-K. It states that the IPO will be valued at no less than $150 million. Additionally, the company will not give up more than 66%, ensuring we maintain control of that percentage. So figure if you did a $68 million valuation, right? You've got about 14% dilution, whatever you want to put in there, in that range, right? You can kind of come to that number that's going to be somewhere in that range. And then we're going to spin out as part of that, staying above that 64%. That will include any shares that we spin out to existing shareholders. And that will be a very healthy number. It'll be somewhere in the 5% to 10% range that will be spun out to shareholders. But it will be great to have a community of that massive size going public, profitable, EBITDA positive, profitable, with 15,000 shareholders day one, and very healthy margins.

It's Kevin Dede. Rob, you talked a lot about you're pulling cost out. Can you speak at all to investments you're making, whether it's improvements in software or anything else you're doing on the platform to enhance the experience?

Yes. I mean that's on a daily basis. As you know, we have a world-class tech team out of San Diego, out of the Qualcomm world. They built for Elon Musk and Tesla. They continue to do an amazing job of building on technology right onto our platform. We've announced a partnership with Polygon. In NFTs, we've added a digital meet-and-greet platform that we've used for LadyGang and others. This is all built by our tech team in-house. So I couldn't be prouder of them. We'll continue to upgrade them. And then just in the Tesla cars alone, we've just added our podcasts and just did a complete upgrade of all that technology. So not a big cash number, not a big expense, right? Really just a really talented team that has been able to do that and continue to upgrade our product and make it the best product in the world.

At one point, you were merging one tech platform with the Slacker platform. Can you update us on whether that is all complete?

Yes, we consistently make upgrades each month. Brad and his team are exceptional, and it's the best tech team I've ever worked with. They can handle nearly any project we assign them, including NFTs. We've also benefited from our partnership with Polygon, which has financed the entire development of our NFT platform. We plan to continue utilizing large audiences, extensive distribution, and significant partners who support and require our content.

You mentioned NFTs, Rob. I was hoping you could talk a little bit more about how your artist-first platform is evolving. Maybe speak to more content producers that you're attracting. And is there any way to sort of quantify the NFT development effort?

I mean, the only thing we could say to date is that right out of our Social Boxing, we did $3 million and sold 136,000 NFTs. What we try to do is no different than our merch side is listen, watch, engage, transact. We're not sitting here and coming out to you and saying, hey, we're going to create the greatest set created in the world on our own. We're going to leverage massive partners in that world, in the metaverse, in the NFT world. We're going to partner with them to do it in conjunction with them and grow with them and grow up the backs of both their capital as well as their distribution.

Okay. So if we take a step back, can you talk about the artists that are coming over and how they're trying to leverage your NFT capability?

Sure. I'll start by mentioning our collaboration with T-Pain, who engaged us to produce his festival in Milwaukee. They compensated us for our production efforts and created NFTs, marketing, and merchandise around the event. They appreciated our work on Social Boxing, allowing us to take on minimal risk while offering significant upside by securing sponsorships, receiving payments for our distribution, marketing, and services. Everything is managed on our platform, which means instead of financing the content ourselves, we're earning revenue while attracting traffic and audiences.

Okay. Is there any way to look at those 3,000 and try to figure how many of them have gone as far as having you guys build out NFTs for them? And then I guess I'm really curious about the Milwaukee example that you offered, Rob. Can you just kind of talk about the margin structure? Given that they're paying for the development of it, how much of the revenue do you get to keep?

Yes. So taking a step back, I'm going to use Social Gloves as an example because it's the easiest. All the revenues go to us. We got paid to bring in Hard Rock, they paid us $2 million. We got paid for the $3 million in NFT money that came in. We got paid for every single ticket that came through the platform, which is all on ours, all the pay-per-views. We got paid for the merchandise. In every component of that, we try to have healthy 20 to 30 points in margin on every one of the 360 positions that we have.

Okay. Could you give us an update on where you are in taking that Tesla platform internationally?

Yes. I mean I think as you read the 8-K this week, this is a telltale sign, LiveOne is now a three-year partner with one of the top 10 record labels. It's a herd mentality in the music industry in that usually multiple parties come to the table. I think you're going to see us sign on every one of the labels, every publisher, get two to three-year deals now. We've cleaned up our payables. We've cleaned up our balance sheet. We strengthened the company. And we proved that under the toughest times, we're going to grow, and we're going to perform. Just think about how big this could be, right? If record labels took stock instead of royalties, right, every dollar of that is cash flow, EBITDA, and earnings. So it's a self-fulfilled prophecy and that it's a win for them as well as they take equity.

Do you need four record labels though in order to solicit Tesla's business for all their cars outside of the U.S.? That's kind of where I was going, Rob. What steps do you need to best take in order to have all the licensing?

Just reading between the lines, Kevin, you're signing three-year deals. The next step is you're signing international deals. It means the relationship has now grown to the next level. The confidence in our balance sheet, the confidence in our ability to pay additional fees like the European rights, it's coming, and it's coming quick.

Okay. All right. That helps, Rob.

And just to understand, again, we've talked about this each quarter. Think about Spotify and Netflix and all these subscription models, 50% of their revenues is U.S. and 50% are overseas. So there's a massive growth opportunity for LiveOne. And one of the reasons that we win some of this business, including Elon, is our prices are so much lower, and our tech team works together in collaboration to white label these so that everyone can be as smart as Elon. It can be your Tesla radio. Now we don't have an ego here. You're seeing more and more of those B2B partnerships. As you saw the announcement with Android Automotive and the recent announcement with ZYNC, these are all just uniquely positioned that the Spotifys of the world aren't going to white label for you. They're too big, and they're too powerful, and they've done too much work to build those brands. We're very confident and very comfortable in being a B2B partner, which is not about branding. It's about bottom line revenues and profits.

Okay. Rob, just to clarify on some comments that you and Aaron made regarding the spin-off. Did I understand correctly you're going to retain 64% or 66%? And if that's the case, that means that PodcastOne remains consolidated within LiveOne in the financials, correct?

Correct. We expect both PodcastOne and the pay-per-view business to be consolidated inside of the parent company. The one risk that you have to that is that obviously, when you announced this, which up to the world, we're one of the only independent podcast networks left. Everything else has been bought. It's been bought at huge valuations, including only a month ago, in the heart of this market crash, Conan O'Brien sold his to Sirius for $150 million. If you go read Sirius' story, they paid $150 million in cash for $10 million in revenues, right? So if we did $9 million this quarter, obviously, one of the exciting parts. Our objective is to be consolidating them and keeping them, but we did re-up with JPMorgan. Part of it is offensive and part of it is defensive. Our job here as a fiduciary is to make sure that we again run the stock and get it to $5, $10 that we have multiple times before in any shape, fashion we can and making sure that we're a good fiduciary, and we look at all the different ways to monetize for our shareholders.

I'm really interested in the live video streaming entertainment aspect. There aren't many public opportunities focused solely on that area. I asked Eric Yuan about it over Zoom, and I find the potential for AR and VR very intriguing in the next five years, although he's cautious about the short-term outlook. Given that it's such an appealing market, what do you see as your sustainable advantages compared to others who haven't entered yet, like Spotify, Pandora, and LiveNation? I realize that's a basic question, but I'm trying to understand how sustainable your advantages really are.

Yes, that's a great question. I'm a strong proponent of live streaming. I previously sold liveone.com to Barry Diller for $1 billion nearly 20 years ago. We have always believed in live streaming, particularly in music, not because we were smarter, but because there was a clear opportunity. MTV departed from the music industry two decades ago, leaving a gap. Today, there are significantly more festivals, concerts, and content available. Social media now allows creators to connect with their audience in unique ways. We have recorded 5 billion engagements on our platform, meaning that consumers not only watched but also shared content across their social media with friends. We currently have over 3,000 artists on our platform, and that number is growing rapidly. Just last week, we added around 27 new artists. All 3,000 artists actively promote watching and listening on LiveOne through their social media channels. COVID woke up the world because no one can make money going out and performing live. It's a lot easier for Justin Bieber to perform digitally and do a live stream than it is for him to go travel 176 days and go on tour. Or maybe even better is the hybrid of it where it's part digital, part live. If you think about this, we've streamed the biggest festivals on Earth. No different from ESPN streams, the Yankees, the Dodgers, the Rangers, whatever your favorite team is. In music, we've done everything from Rock in Rio to EDC, EDC China, Japan, Jazz Montreux, and the biggest artists around the world. Nobody has ever tested whether or not that works in pay-per-view. We know some sponsor dollar is going to come in because MTV, they spend millions and millions of dollars on it. My humble opinion is our pay-per-view business has absolutely explosive growth in that we just put a K-pop artist online, and we did $600,000 in a night. All they had to do was perform from a little theater. We are about to have a young star from Israel do the same. When you have super fans, there's a dollar amount sold. My belief is Rock in Rio had 89 million people watch and 1 million people attend. If you just hit 1 million people that pay $0.10 on the dollar to what they pay for a ticket. A ticket in Brazil is $100 on average. It is really expensive in Brazil. If you got $10, you got $10 times 1 million, you just created $10 million of revenues in the weekend of the festival, a brand-new revenue stream that goes into the artist's hand, the agent's hand, the manager's hand, the writer's hand. You just increased the penetration of the dollar amount to everyone in music substantially. So I think there's a massive opportunity, and I truly believe our pay-per-view business can be a unicorn on its own.

We have no further questions on the phone line, so I'll hand back for any closing remarks.

To finalize, I just want to thank everyone and appreciate your support in a difficult market. We are going to continue as a company to underpromise and overperform. I'm proud of my team. We promised we were going to hit our first EBITDA positive of $500 million to $1 million. We were 4 times from the bottom of that number and 2 times from the top of that number. We just raised our guidance to $5 million to $11 million. That will be a $23 million, $24 million swing from last year. We're laser-focused. We understand the temperature out there. We understand the world has changed, and we're laser-focused on delivering EBITDA and bottom line to our shareholders and increasing the value. We'll be looking very closely into increasing our buyback. I personally have been a buyer every quarter, and I'll be looking myself to the open market as soon as a window opens again. Thank you, everyone, and I appreciate your time and your interest in LiveOne. Our team loves this company, and hopefully, everyone else will soon as well. Thank you.

This concludes today's call. Thank you for joining. You may now disconnect your lines.