LiveOne, Inc. (LVO) Q2 2027 Earnings Call Transcript

Good morning, and thank you for standing by. Welcome to Live One Inc. Q2 Fiscal 2027 Financial Results and Business Update Conference Call. During today's call, all participants will be in a listen-only mode. Following the presentation, the conference will be opened for questions. Presenting on today's call 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 those forward-looking statements, including those described in its annual report on Form 10-K for the year-ended March 31, 2026, 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, 2026. And except as required by law, the company does not undertake any obligations to update or revise this information after today's call. I'd like to highlight to all participants that this call is being recorded. The company will make it available to investors and media via webcast, and 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 Live Ones CEO Rob Ellen.

Great. Good morning, everyone. Good morning, and thank you for joining. This is the last earnings call before the biggest launch in LiveOne's history. Let me start with the opportunity. We have announced over $12 trillion in B2B partnerships, companies that combine have a massive reach of billions of people. On a combined scale of our partners, the largest platforms in the world, device makers, distributors in the world, we do not have to build this audience. They already have it. Hot off the press, AT&T Mobility, 63 million users with the opportunity to expand into all of AT&T. Vizio, 65 million users with expansion into Walmart, Sam's Club, and into an overall partnership. LG. Samsung, nursing homes, hospitals. This combined with our last two major B2B partners, Amazon and Paramount. Amazon's grown from starting a year and a half ago to now being a $20 million multi-year partner. Paramount grew from being a $1 million Pluto TV to now being over $25 million partner. And that $25 million partner was just combined with Warner, potentially much larger scale and size of five to seven times what they are previously. Add that to a massive distribution across our long-term partnerships with Spotify, Apple, Alphabet, YouTube, and our community reaches billions of people. For a first time ever, our content is on Netflix, Disney, and Hulu. We also still somehow survived the loss of $55 million of revenues and $15 million of EBITDA with our partnership with Tesla. But with that, Tesla, we are now, in perpetuity, the branded on every home screen of every Tesla car, is a live one button to click and play your music. We have over 1 million users on Tesla today. We have proven without a shadow of a doubt to be resilient. We survived COVID. We've survived market conditions, and now we've survived the loss of Tesla revenues. We continue to prove we can replace those revenues and beat them shortly and dramatically. Our first half revenues were $37.3 million in revenues, with record EBITDA of $7.8 million, up a staggering 619%. Our consolidated adjusted EBITDA was an improvement of over $6.4 million from last year. We've cut our staff from 350 people to about 80. Utilizing AI in multiple places has been a huge help in doing that, but it also was by no choice. We had to cut the cost to get the business to EBITDA levels and now focus our energy on bottom line. Our audio is profitable, it's scaling, and it's driving this company. We currently have a $36 million market cap. We did $37 million for the first half. The industry is trading at three times revenues or above. We're trading at half of revenues. So what did we do? We bought back $7 million of stock. And I personally have committed to buy a large block of stock as soon as this major launch is officially done this year. Our confidence going forward. $70 to $75 million in revenues, $10 million plus in adjusted EBITDA for this year. And for the first time ever, we're announcing for next year, we expect to do over $100 million plus in revenues, and within 36 months, over $250 million in revenues. These numbers are not coming pie in the sky. These are from the launches with these partners and the massive launch that will happen before year end. We gave the fiscal 2028 guidance because the largest partnership in history is launching. We delayed fiscal 2027 a little bit as that partnership grew, and now we'll launch to over 50 million monthly paying subscribers. Not many of our numbers is our 750,000 hours of audio and video content to be licensed to the LLMs and AI businesses that desperately need this. We currently have over $10 million in potential deals in the pipeline. These deals to the largest LLMs in the world who have staggering balance sheets and must fill those pipelines. For those AI models, including the practice models, in order to be able to continue to build. Our second window is television. We have poised for it. The original podcasts are already at networks. We have three of them today, already at three major networks, and fully expect this year to have a television show, a documentary, or a movie greenlit by one of the major streaming platforms. As we come out of this restructuring and we again build to over $100 million next year, we are plans to strengthen the team and expect to announce our new president by year end, who has built and led over a billion-dollar-plus companies in both public and private sectors in media and technology and has a laser focus on B2B deals. This team will be the next phase required for us to be able to achieve those goals of hitting $250 million in the next 36 months. Our podcast business. Podcast is now top 10 for 12 straight months and number six last month with record revenues for half the year. Okay, our biggest numbers in history, our biggest EBITDA numbers in history. We have now done all the hard work. And we are in a collection point. We're about to launch the biggest partnership, the biggest B2B partnership in the history of the company. And when it lands, it could change the landscape of LiveOne forever. 50 million plus active monthly subscribers. Again, today, we have over $70 million in revenues. We're confident in $100 million next year, and we're trading at a $37 million market cap. We're looking forward to this launch. We are looking forward to adding senior management, and we want to thank everybody for joining this call and for staying patient in a difficult market. We have great hopes ahead of us, and we look forward to any questions from anybody on this call. Thank you very much, and look forward to the questions.

We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Brian Klintzinger with Alliance Global Partners. Brian, your line is open. Please go ahead.

Great. Thanks for taking my questions. As it relates to the launch of your partnership with this $50 million member company, can you provide some details about the structure so we can get comfortable with the $100 million guidance next year? First, is there a minimum contribution this partner has committed to, and if so, what is that? And then second, in order to acquire paid subscribers for Live One from this partner, Do consumers have to opt in and pay, or will the partners subsidize and pay LiveOne to bring those paid subscribers?

Again, you know, Brian, we can't answer those questions, but I can give you just, you know, 40,000 feet that this will be very similar to how we did with Tesla. There will be all elements of a free premium subscription all the way up to paid subscribers. Right? And the beauty of this is when you start with an audience that is this big and this broad, right, when we had Tesla, it was only 2 million cars at the end, right, and we grew that over 12 years, and you had to get the consumer to opt in for $10, put up their credit card, right, and decide whether or not they're going to choose to use connectivity in that car, right? I hear very differently. Our partners are very incentivized. We're very incentivized to not only to drive that consumer to subscribe, right? Because they're using it to keep the consumer in the funnel to do other things, right? They're doing it for, they have an extraordinary opportunity on their side to keep the consumer engaged, okay? And for us, we couldn't be more excited about this. This is subscriber with a credit card, spending on a weekly basis, a monthly basis. It's very, very different than even our Tesla partnership. This is a consumer that's active on a literally… Pretty nonstop minute. So we're really excited. You can hear a lot more about it quickly. But this is not a lot of revenues. If we were doing $55 million with Tesla on 2 million cars at the end, and the consumer had to choose whether they spend $10 a month, this is very different. This is a consumer that's already spending on a regular basis, and you only need a tiny percentage to convert, to have a way bigger number than we've had previously. So I think we're being conservative in the number, but I will, you know, we'll be, you know, articulating a lot more of this partnership in the very near future. And, you know, again, as I said, before year end, we expect this full launch. And this is the most exciting opportunity we've had, you know, in the history of the company. And very much like when I had digital turbine, we announced our deals of this size, right? You can't really dynamically put a number today. It could be way higher than we imagine here if you just take those Tesla numbers in comparison.

Well, as you're comparing it to the Tesla deal, I'm just trying to – is it the Tesla deal before – the original Tesla deal where Tesla brought the subscriber and paid when you got a new car in North America? So that was Tesla paid generally, not consumer paid.

Yeah, that was very small, Brian. That was a super high-end customer, right? So maybe you want to think about it the same. And you can think about how you choose. I can't give any more information about a partner than I can. But if you think about it, that was the very beginning of Tesla. And that was only for a short period when the real revenues kicked in. And it was about the, when it kicked in, you remember they grew, they grew their subscription when we started with them, we were doing $200,000 a month, right? That's when I bought the company seven, you know, called seven years ago, right? Yeah, by the end, they had grown from $200,000 a month to $55 million. Most of that revenues came from the subscriber paying themselves into that connectivity.

Okay. And moving on, you announced B2B partnerships with three of the largest smart TV OEMs in February and March of this year. Can you share additions to paid subscribers or any evidence on how you're attracting paid subscribers from those relationships?

Yeah, we haven't given any numbers on that yet, and the launches didn't happen until recently. They're just getting going, but we're super excited about those opportunities. Again, we're just looking for a small percentage to convert, right? There's no marketing dollars. As you know, LiveOne does not spend literally a nickel on marketing. This is done in partnership with our partners with these large audiences, so it's really in their hands to do the marketing. We're really excited about it, and we're really excited about where they can go, even bigger than just the current partnerships, right? No different than what's happened when we started with Pluto TV, right? It was a tiny little deal. Now we're doing over $25 million a year. Same thing with Amazon, right? Same thing with Tesla, right? These things grow, and they grow slowly, and then they explode as you start to build some scale. So we're really excited about and we're really enthusiastic about the direction we're going and really about the relationship with each of those partnerships. And if we weren't, if the ones that weren't, we're not, we'll cut back, right? You know, the time that we're going to spend going forward is going to be in the partnerships that can really grow and mature. And as you look at the Paramount deal, and I know you're talking about the ones that didn't explode. I'm not sure you're not talking about the ones that did, right? You know, Paramount went from a million, we didn't even know it was going to be a big piece of business at the time, right? Now it's a gigantic piece, and now they're a way bigger company. So we're really focused as they start to work, we're going to step on the gas. If they're not working, we're going to spend our time on the ones that will.

Okay. Last question for me. Looking at the podcast one press release, they cited 15 million downloads. It looks like a meaningful decline over the last five to six months. So I'm just curious, as it relates to your newly issued guidance for this year, how are you thinking about year-over-year revenue trends for the remainder of the year, and maybe touch on CPM as well as volume Thank you. I think we put out guidance, Brian.

It's pretty clear, right? We put out revenue guidance of 70 to 75 million. We just did 37 million. All right. So how I think about it is, is I think about it as, as right now in this environment, we want to stay focused on bottom line. That's where our energy is. That's where the excitement of the business is, right? And that's what we're going to do. Okay, thanks.

As a reminder, if you would like to ask a question, please press star 1 to raise your hand. To withdraw a question, press star 1 again. There are no further questions at this time. We have reached the end of the Q&A session. I will now turn the call back to Rob Allen for closing remarks.

Yeah, I just want to thank everyone for your patience, and we will continue to deliver. We're really excited about our EBITDA numbers. We're really excited about our pipeline. As you look at the optionality in this business, right, you're now looking at a market cap of $38 million, right, on revenues of $70 million plus on its way to doing over 100, right? As you look at that, the optionality in this is each of these B2B partners can grow. Not everyone will hit it. Not everyone will crush it. You don't know which ones they're going to be, but you have a lot of really exciting ones that have just been announced over the last six months. These partnerships take time. They take time to sign. Right? The sales cycle is very long, and the cycle for them taking off takes time. And when you start to hit it, it starts to get energy behind them, then the partners start to step on the gas. We couldn't be more excited about this next launch. It's coming before year end. And as that comes out, I think it's going to open up the floodgates to the rest of our pipeline, where there's still over 75 dynamic partners around the globe, right, who we are in deep discussion with to keep adding to those lineups. And now that we've added carriers, we've added retailers, we've added social media companies, we've added just about AI companies, as we continue to scale these B2B deals, I think you're going to see a lot of excitement and energy around this. And you're going to see it with a way-long cost structure. We're down from 350 to down to 80 people. The cost structure is way lower. If we continue to do that, we're going to keep delivering higher and higher EBITDA numbers. I'm really excited to do over $10 million in EBITDA this year. It's a massive turn from last year. We've had a pivot. We've got to make some changes. I'm proud of my team. They keep fighting through. We've had some difficulty along the way, but I think this is going to be one of the most exciting years to come in the history of the company. So thank you, everyone, and thanks for joining and look forward to our launch.

This concludes today's call. Thank you for attending. You may now disconnect.