Standing by, welcome to Live 1 Q2 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 the star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, please press the star 1 again.

Thank you.

I would now like to turn the conference over to Ryan Carhart, Chief Financial Officer. You may begin.

Thank you. Good morning and welcome to Live One's Business Update and Financial Results Conference Call for the company's fiscal second quarter ended September 30, 2025. Presenting on today's call with me is Rob Ellen, CEO and Chairman of Live One. I would like to remind you that some of the statements made on today's call are forward-looking and are based on current expectations, forecasts, and assumptions that involve various risks and uncertainties. These statements include, but are not limited to, statements regarding the future performance of the company, including expected future financial results and expected future 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, 2025 and subsequent SEC filings. You'll find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed today in the company's earnings release, which is posted on its Investor Relations website. The company encourages you to periodically visit its Investor Relations website for important content. The following discussion, including responses to your questions, contains time-sensitive information and reflects management's view as of the date of this call, November 12, 2025. And, except as required by law, the company does not undertake any obligation to update or revise this information after the date of this call. I'd like to highlight to investors that this call is being recorded. The company is making it available to investors and 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 transmission or rebroadcast of this 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 CEO, Rob Ellen.

Thank you, Ryan, and welcome everybody, and thank you for joining us. This has been a transformative 12 months for the company. As we came out of the loss of over $50 million of revenues with Tesla, we not only survived, but we thrived. As you look at the numbers today, the highlights are going to be is how this team and how this company has utilized technology and being a talent-first platform to again prove that we can get back to EBITDA positive numbers, right? With that loss of $50 million in revenues, we're excited to tell you that we finished the quarter with 36 million, a little over 36 million, 36.6 million in our audio division with $1.1 million of adjusted EBITDA. How did we do that? The first thing we did is we leveraged technology. We embraced AI. We embraced the ability to use AI to be able to cut our staff and cut it from 350 people to 95. We've cut our costs down from $22 million down to $6 million. And with that, we now have aggressively moved on our B2B plan to move to partnerships that the history of this company has been built on, like Kessler. And with that, I'm excited to say we closed our seventh deal. We have now expanded our partnership with Amazon from $16.5 million in a three-year deal to over $20 million. That's all based on traffic and audience continue to grow massively. Our Fortune 250 partner increased from $2 million originally to $12 million to now $26 million plus a year run rate. Going back to Tesla, we converted over 60% of the total cars out there, which was $2 million. We now have almost a million three cars of both paid and free. One million of those free cars are now, those cars have now re-signed back up, okay, of where we finally now have data and information to those consumers and now the ability to try to convert those. And now using an AI marketing strategy, we are aggressively converting those and generating real cash every day and continue to grow that number of subscribers and see a really exciting opportunity now to convert into those million if we can convert 10% of them. We'll add another 100,000 paid subscribers. If we can convert 20%, the numbers start to skyrocket. We have 72 additional B2B partnerships and fully expect to announce multiple additional ones before year-end. Utilizing AI, we've increased our RPUs by 60%. We're starting to see a $5 plus RPU versus the $3 that we had previously. Our podcast business. Our podcast business has grown. We bought the company doing $20 million in revenues, losing five. We've just announced record-breaking revenues over $15 million for the quarter and announced that we expect to do $56 to $60 million this year and $4.5 to $6 million of EBITDA. That's a $6 to $8 million swing from last year. We've aggressively taken our podcast and now taking our True Crime podcast, which we have a slate of over 12 that we've now brought that to market to the streaming networks and we've sold three podcasts to television now what does that mean for the company it means hundreds of thousands of dollars in option money day one and could be millions to tens of millions of dollars in the very near future as those get greenlit we've now sold the show to cbs the peacock Peacock to Paramount and we fully expect to sell additional shows. We have our first giant upcoming live event. Our last major live event goes back to the days of COVID, which was called Social Gloves. That event did over $20 million and over $4 million of EBITDA. On December 11th, we are going to launch Reality Olympics. Reality Olympics will be at LFC Stadium, the BMO Stadium and be launched with YouTube committing over a billion impressions to the event. We've just announced our launch of our subsidiary Live One Africa with a commitment from Virtuoso Music to raise over $20 million to a market that will be bigger than the U.S. market in the next couple of years. Our buyback continues. We continue to buy back old stocks. We've now bought back over $6 million of stock in live one. We will continue to buy back stock. For everyone that remembers, we sold $10 million of stock at $7.5 only three months ago, two and a half months ago. We'll continue to buy that as well as you will see management and board members doing the same. As we look at the future, we see the highlight films of these B2B deals providing a massive opportunity for the company. Current Amazon deal, we'll see if this continues to grow. It's a highlight film as the more podcasts, the more traffic we drive, the bigger those revenues are going to be. As we launch our next major project, over 30 million monthly paying subscribers, we will talk about this in great detail over the next couple of weeks and expect to launch this year. If you think about the Tesla numbers, We had 2 million subscribers, 2 million cars, right? And we've now converted 60% of them. If you have 30 million, if you just convert a couple of percentages, we're going to start to really generate very serious subscriber growth, ARCA growth, as well as revenue growth. With that, I'm proud of my team. They've survived Tesla's loss of their revenues and come out of it stronger than ever. For those of you there, if you remember when COVID hit, we went from $38 million in revenues, we lost all of our live business, and somehow the following year we did well over $100 million in revenues. I see telltale signs that with the current B2B pipeline, the current B2B deals have already been announced, which are over $50 million in contractual deals, actually $52 million in contractual deals as they continue to grow. I see telltale signs this company is well on its way to, again, be well over $100 million. And with that, we will continue to buy back stock. And I want to thank everybody and appreciate everybody's support and open up the floor to Ryan to talk about the numbers. Thanks, Ryan.

Thanks, Rob. I'll spend just a few minutes providing a very brief overview of our results for the fiscal second quarter ended September 30, 2025. Consolidated revenue for the three-month period ended September 30, 2025 was $18.8 million. Our audio division posted revenue for Q2 fiscal 2026 of $18.2 million and adjusted EBITDA of $0.7 million. Consolidated adjusted EBITDA for the second quarter of fiscal year 2026 was $1 million. On a U.S. GAAP basis, Live One posted a consolidated net loss of $5.7 million, or $0.52, her diluted share in Q2 fiscal 2026. At the operating level, our Podcast One subsidiary posted record revenue of $15.2 million and adjusted EBITDA of $1.1 million. Our Slacker subsidiary reported Q2 fiscal 2026 revenue of $3.1 million and an adjusted EBITDA loss of $0.4 million. We are pleased to report continued record growth from our Podcast One subsidiary, which we anticipate will extend throughout the year. In parallel, we are advancing several transformative partnerships from our business development pipeline, creating significant opportunities for long-term growth and value creation in the near future. Rob, turn it back to you.

Just to wrap it up, I think we've covered just about everything. But just to wrap it up, can't be more excited about the B2B partnerships, the history of LiveOne, as well as the two subsidiaries that generate the revenues from Slack to Podcast One have had a history of B2B deals. And these B2B deals, there's a cycle that comes in. As you're watching the cycle, you're seeing an industry that is exploding. The audio industry, iHeart stock is up four times. Spotify stock is up 3x, almost $175 billion in value. Warren Buffett has been buying up Sirius Radio. There's so much math right now that shows that the partnerships that are being created, that are being announced in podcasting and audio across Netflix announcing they're going to the audio business and Spotify going to the video business, you're going to see more and more of this happening in the industry. And, you know, my humble opinion is that you're going to see amazing strategic deals, you're going to see investments in the space, and you're going to see acquisitions in the space. And the acquisitions are happening at multiples of revenues, right? We're trading at 60% of revenues. The industry is trading at three and a half times revenues. And I think you're going to see just about every streaming partner. Anyone who is missing an audio platform is going to need an audio platform. When you think about the cost of content and how expensive it is for all these streaming networks, they can increase their offers dramatically overnight by acquiring a music platform or investing in a music platform or white labeling a music platform. So with that, I'm going to open up to questions. And, you know, again, thank everyone for joining us and thank our team for just doing an amazing job of not only surviving, but coming out of this and thriving. And again, seeing those telltale signs where the revenue is going to start to ramp up dramatically in the very near future. Thank you.

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, simply press the Storm 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press the Storm 1 again. You are called upon to ask your question and are listening via loudspeaker on your device. Please pick up your handset and ensure that your phone is not on mute when asking your question. And your first question comes from Brian Kinslinger with Alliance Global Partners.

Great. Thanks so much. Last quarter, you discussed the stock launch at the beginning of August for a B2B partner with 30 million subscribers and said you'd share more information soon.

Is there any details you can share about this? Yeah, I mean, the success of the beginning launch was spectacular. I would say it was in line with the launch, the relaunch with Tesla, right, and succeeding. And again, without giving you exact numbers, in Tesla, as you know, we've succeeded in bringing back 60% of those 2 million cars, right? Which is kind of amazing in that, you know, we didn't necessarily have all those cars and not all those people even using the service, even if they paid through the connectivity package, right? I think you're seeing telltale signs of that as well with our next partner. And I think you're going to be able to highlight that as we enter, you know, year end.

So is this deal part of the $50 million plus B2B revenue, and if so, when does it begin to ramp?

No. No. What we said is that's not part of the $52 million. This will be an additional, right? We have not put out guidance yet, but fully expect that somewhere around year end, we're going to start to put out guidance. as we said, these deals are ramping up. They've ramped up faster than we expected, both at Amazon as well as their streaming partner. And we see a telltale sign that that new partner will be very similar. So we'll be talking about our guidance somewhere, probably before year end, but certainly by year end, we'll start to talk about it.

And I think the biggest question I think investors might have is when you provide the $52 million B2B revenue over the next 12 months, I think you said last quarter, and so I'm sure it's still the next 12 months. How much of that is incremental to the revenue you've just reported in the September quarter, which I assume includes Amazon and some of your other B2B partners?

Yeah, I mean, we can't give that, obviously, until we start to give guidance, right, which will happen again, as I said, before year end. Our year end is March 31st, and, you know, we're getting close to it fast, right? It's moving really fast to do that, and we'll start talking about that guidance. You've already seen us raise the guidance at Podcast One, and I fully expect we'll start to talk about live ones as well. That ramp up will start to happen, as I said, towards the end of the fourth quarter, right? Third a little bit, fourth quarter. So it's starting to ramp up. We're starting to feel the momentum coming, but we'll have a lot more clarity on that as we enter the fourth quarter this year. Thanks. Two more questions.

First, can you share the premium versus paid subscribers for Slacker? And maybe if you can or can't, can you talk about the conversion that you're seeing for Tesla, if at all?

Brian, do you want to give a little bit of that if we can?

Yeah, I mean, Brian, just real quick, I mean, premium versus paid. I mean, you're talking about premium versus plus. Is that kind of what you're thinking? Yeah, premium versus plus.

Yeah, you have subscribers that are freemium, especially in Tesla, and then you have paid subscribers. And so I'm curious what the total is, maybe the split, and then I'm curious how conversions are going for those freemium.

Yeah, so, you know, if you think of the combination of all of our paying subscribers, you're looking at a total of somewhere between $250,000 to $275,000 in terms of the paid. and then the free would be the rest that Rob talked about earlier on his call. Basically, the breakup between the two. And then, you know, Rob talked a bit about ARPU earlier as well.

Brian, does that answer the question? I'm just curious how conversions are going. It's been a few months. You know, we've been hearing about, you know, the focus on that. So is it 1%? Is it 2%?

Is it more or less? yeah we put out um i think it was a week or two ago uh an earnings release on um you know our new partnership with our rai driven data partner that's going to help us uh really ramp up the conversions so that was launched took a little longer we thought to get that fully to market so right now we're out there testing and optimizing the algorithm so i think you're really gonna start seeing that come through second half of this quarter um and then i you know we're we don't have full results yet as we're still kind of optimizing right now but it will ramp up you know we're expecting you know five ten percent increase is definitely within the ballpark it could be higher um we're we're still in that optimizing phase where the algorithm is doing

its work yeah and we're going to lose some free subscribers in that process as well right we'll lose some free and we'll gain some paid and one of the exciting things that you can be looking at just like last year last year sorry a large increase in cash right around the end of the year, right? As you start to see one-year subscriptions, A, you know, re-op, but also the new ones converting. So we're very aggressively out there trying to convert those now to continue to strengthen our balance sheet, buy back stock, and put cash on our balance sheet.

Great. Last question, Ryan. I didn't hear anything. The gross margin for the first half is about 13% last year, almost twice that. Is that a pure function of scale with the fall off of the revenue? Or is there something more to that? When might we think about getting to see a recovery? Thank you so much.

Yeah. I think the difference this year versus last year has been the change in the customer relationship with Tesla, right? Where the volume there lifted the margin because we were able to pull that offset slightly higher than what we do normally now. So I think that that difference that you're seeing is really just the volume from slacker changing and driving the overall down okay all right thank you um you know that's offset by you know increased margin at um podcast one so slightly offsets that but yeah that's the cost okay thank you and the next question comes from the line of sean mcgowan with vod capital please go ahead hi rob hi ryan um Following up on Brian's question on cost of sales, so what portion of that increase as a percentage of revenue is stock-based comp?

Is that a factor?

Yeah, stock comp is definitely higher in cost of sales versus year-over-year, if you just do the comparison. So you'll see it's not out yet in the queue, but we'll fully disclose that so you can see it. But, you know, it kind of shifted categories. You can see more stock comp in the cost of sales line this quarter versus last quarter. You know, a little bit lower just on the lower G&A that you're seeing year over year. And then last year we had a little bit more in G&A. So you're going to see a decrease in stock comp in G&A this quarter year over year. Definitely notice a difference there. So less year over year, but still a chunk there.

And when will the Q be out, Ryan?

You know, filing date's Friday, hoping to get it out sooner. So we're hoping to file tomorrow.

Okay. Thanks. So on G&A, I imagine stock-based comp plays a role in that, too. But is this level of G&A, you know, likely to be what we should expect to see, or were there extraordinary factors driving that up?

Yep. Good question. And so, you know, year over year, obviously, you know, we're seeing definitely a lot of strong increases or decreases in the G&A. If you look at this quarter or last quarter, there was a couple of one-time things that flowed through. So we expect it to be lower next quarter than it was this quarter. So what you're seeing this quarter, you know, you'll see an improvement next quarter and in Q4 and going forward.

So even less than Q1. perfect thank you um you know ryan if i can ask you to repeat something right at the end of your prepared remarks i think you made some comment about podcast one you know over the next six months or something like that would you mind repeating that i just i i couldn't quite track what you said yeah all i'm saying is you know we expect continued growth with the podcast one uh subsidiary that that that's it uh okay you know okay we we have our guidance you know like Rob talked about.

So yeah, we just, we expect it to continue to grow as it has been.

Right. Got it. It was that word growth that I couldn't include quite yet.

I think, you know, Sean, just to add to that, you know, you've seen our 17th additional podcast announced, just announced, you know, and we're basically signing, you know, almost, you know, you sign 24 a year, as we said before, you know, you're picking up two things. Number one is you're up revenues most of these are existing podcasts so the space is really moved to you watch spotify and amazon basically fire their entire teams they keep their super big podcasts but they're all waking up to realize they're really distributors they're not curators of content and because we're a full 360 play these podcasts need hand-holding so we continue to add those as we add them it's a self-fulfilling prophecy one is you're going to add immediate revenues but two is you're going to add that immediate traffic and the more traffic we drive the bigger the amazon partnership going to grow i couldn't be more excited about where that's going and directionally right to think that you know it's only been a couple of months and we're ready you know from 16 and a half million going to 20 and it looks like you can go way higher than that and yeah i've talked about landing a anchor tenant on the podcast network if we land an anchor tenant right um which has been one of the the only things missing from that business you land an anchor tenant in there, you could add some very serious traffic, those metrics just keep going up. And if they keep going up, you're going to pick up a lot of revenues. A lot, a lot of revenues are going to move up the charts in terms of what number you are on pod tracks and the overall industry. And the respect from the industry is showing in a unique way.

Okay. Yeah.

If Adam Carolla is with him, he's probably like, what the hell, man? I'm right here. So I'm just kidding. No, Adam's the best. Adam's the best. I spoke to him yesterday. He's a great partner, and we just continue to grow with them.

Okay, last question for me. Kit did a great job yesterday of outlining the ways in which Podcast One has used AI kind of across the platform, across the whole enterprise, drive revenue, drive costs, drive efficiency, et cetera. In addition to what you talked about yesterday, could you describe some of the AI tools that are being deployed in the rest of the company, you know, just so we have a fuller idea of that?

Yeah, you know, as you know, Sean, you know me a long time. You know, all of my companies, you know, are media companies from a revenue standpoint, but are always focused on next generation technology. And we're right in the heart and the center of it. You're going to see more and more partnerships coming out of us in the AI space. but um the team brad and the team over at slacker you know under siege right you lose 50 million dollars in revenues you got to take costs down they've just done an amazing job of embracing technology but from a marketing standpoint right to convert subscribers to lock down to think that we locked down you know you know 60 of every tesla car you know and got them even though a lot of them are free is just it's just an amazing thing and that was utilizing ai they've also utilized ai and that we used to need way more hosts, right? You can now create a music channel, you know, way quicker and you can combine the use of AI with the human, with a human, right, as a DJ, DJ host. So we're able to cut those costs down. I think you're going to see a lot more of those initiatives happening as the revenues ramp back up, right, on the other side of the business as those ramp back up, we'll continue to grow those. And, you know, and we're looking at, you know, consistently looking at, you know, more and more ways to do it. And we've been able to cut our staff from 350 people to 95. Ryan's just done a great job of restructuring, fighting through this, literally surviving a loss of $50 million in revenues. Most companies can't survive that. We've come out and now we're thriving.

Thanks for that additional detail. On that, circling back for one second, I just thought of something else I wanted to ask. On the number of subscribers that you've converted, it is amazing. I never would have thought you'd get to that 60%. You kind of feel like you're at that limit now. I mean, it was never going to be 100. You know, it was probably never going to be even 60, and you managed that. But I noticed that the number is about the same as it was at the end of August. So have we converted pretty much everybody we're going to convert?

From a free standpoint, yes. from from a post standpoint now now we just started to put advertising in right so we partnered with dax the biggest you know you know ad agency to do that doing programmatic advertising and it does three things sean you know number one is number one is it annoys the hell out of people right all of a sudden you're all of a sudden you go from from no ads to a ton of ads right my son my son has given me a hard time because i had in my car because i want to hear actually what's happening in it. I want to make sure those ads are relevant, right? A, so the people that are going to stay for free are actually going to use it, right? That's A. And then B is I want to convert them, right? So we're now using Enthusi, right? Which is a amazing AI marketing technology platform, right? That really is able to find in multiple different spaces, first in the automotive space. Now the goal is to convert those people. And just think about if we converted a hundred thousand of the million, right? And the average are approved $60 a year. Most of that's going to be paid up front. We can generate a lot of cash right now, right? And that initiative has just started. We went from zero advertising. I think it was three months ago, Ryan, to today we're like 90% advertising, 90% fulfillment, which generates some revenues as well, right? It's a new revenue stream. They'll start to kick in the advertising side of it. But our real goal is, and Spotify says they convert 60 percent of every the reason they have a free tier there's a 60 convert i don't know what the time frame they convert but if we can convert 10 of this 20 of it if somehow we converted 60 obviously the numbers would be off the charts but if we can convert 10 to 20 we're going to generate a ton of cash up front and we're going to generate yeah long-term revenues with those subscribers that are going to be beyond the advertising side all right thank you very much Appreciate it. Any other questions?

And once again, if you would like to ask a question, seem to press the store one on your telephone keypad. I'm showing no further questions at this time. I would like to turn it back to Robert Allen for closing remarks.

I think we covered everything. I'm looking forward to our next call. I'm looking forward to the next major announcements of this company. As I said, there are 72 B2B deals in the works. This is what I've done in my career. It's always been sort of the smaller company that's been able to partner with these massive distributors. There's so many of them now that are out there that as the cycle has changed, right, and you look at the cycle, everyone from Facebook to Microsoft to every streaming partner to auto companies, everybody's fighting for data again. And I think we're right in the sweet spot that LiveOne has the opportunity to be that strategic partner that we're nimble with the lowest price and we're willing to white label. I think you're going to see more and more of those B2B deals. And you see a couple more Amazons. You see a couple more streaming partners. You see a couple more retail partners. You can easily see this company in the next five years doing a billion dollars in revenues and with zero cost of marketing, right? We're not chasing an individual subscriber. we're chasing a pool of subscribers. So we're looking at leveraging this great content we have, this original programming we have, and really leveraging and positioning ourselves that we partner with anyone who has 10 million to 3 billion eyeballs like Facebook. And we've partnered with a lot of them, right? You know, both before I owned this company and, you know, since we've owned it, we partnered with the likes of everyone from TikTok to Facebook, book, right, to Amazon, to Paramount, right? We continue to do that, and we continue to grow with it, and I see telltale signs that, you know, we're starting to build real momentum on those B2B deals. We land a couple more of these, and we're going to have another exciting run, and, you know, like I said, I'm proud of our team. I'm proud we fought through this battle, and I see the future extraordinarily bright right now for where the company is going. With that, thank you, everyone, and I appreciate your time.

Thank you. And this now concludes today's conference call. Thank you all for attending. You may now disconnect.