PodcastOne, Inc. (PODC) Q3 2026 Earnings Call Transcript

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to Podcast One's third quarter fiscal 2026 financial results and business update conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Ryan Carhart, Chief Financial Officer. Please go ahead.

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

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

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

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

We will now begin the question and answer session. In order to ask a question, Simply press star, followed by the number one on your telephone keypad. Our first question will come from the line of Barry Sign with Litchfield Hills Research. Please go ahead.

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

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

And the advertiser response so far?

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

Okay, my second question is around B2B deals. Rob talked extensively about what LiveOne is doing with B2B deals and their numbers, the number of active deals, the number in the pipeline. Some of those, many of those include Podcast One content, although I guess not all. Can you talk specifically about how B2B deals are impacting your current results? And then what is the outlook going forward for the impact on results from B2B deals that are in the works that will include podcasts?

Yeah, I mean, we have, you know, the Amazon R19 deal is definitely one of the biggest deals we have in our company uh that's continuing to do you know just great things for us um they're great partners they've they've helped us in terms of efficiencies and cost cutting but also being able to get different revenue channels right i've explained this in the past you know we we have our direct sales we have you know the art 19 um ad inventory marketplace where their sellers are including podcasting, you know, run a network deal to their advertising relationships, which continue to expand. And then we have our access to the programmatic desk through them and relationships through them. So that has been tremendous, you know, diversifying our ad sales revenue generation channels and being able to continue to grow and put pressure on an inventory. So we have moved up to a second here with impressions that we are able to offer, which gives us a really nice minimum guarantee from them. And we continue to grow. That relationship continues to grow and there'll be more money involved in that. So that's exciting. We have a great relationship with Pluto TV for years now. That also has been a great relationship and continues to evolve, we're now talking to them about doing our, you know, a Pluto TV podcast where, you know, we'll be reviewing their programming, new programming, historic programming that they give their, you know, in their platform. So those are really big deals that we have going on. You know, Sue and her team continue to crack the code of new brands and new advertising relationships. I was, you know, just listening to Adam Carolla on, um, he was doing a live show up in Sugarloaf. And, uh, I just listened to it, um, the other day at the gym and, and, you know, the amount of brands that are in there and Adam's doing fantastic reads for, and they're great companies. Um, you know, it's, it's amazing. They're different ones. They're new ones. So, uh, people are diving into, to the space on that front as well. And, you know, we have a lot of other relationships on the on the docket that will you know expand into this year and uh and next but yeah positioned pretty well there so um specifically rob called out three major new ones that are just coming online um do any of those include podcasts or do all of them or how many of them include uh podcasts well you know we work um hand in hand uh with the live one team on a bunch of initiatives. So yes, there's talk about content development for some of those relationships as they create music channels for them. We would create podcast offerings, content offerings. A lot of them are in early discussion, so I can't really talk too much about them, but they're excited about it. I mean, this is a new world where we have access to talent and and great content and audience that we can now engage with those brands.

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

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

Hey, good to talk to you, Barry.

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

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

Hey, Sean.

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

Sure, I'll let you.

Go ahead, Ryan.

Yeah, thanks, guys. Hey, Sean, so yeah, it's a good question. I mean, our margin generally has been, you know, slightly ticking up all year. So there is a little bit of just improvement based on all the hard work that Kit and his team is doing to improve that. Additionally, you know, there were one-time benefits coming through from certain things that were sold during the quarter.

So, yeah, it was a strong quarter for us. there was one one off item in there uh but otherwise um you know it's it's positive and strong and okay quarter of a quarter uh i'm kind of related to that when uh i just love that when do you think that would be kind of available for general consumer viewership um you know with the partner and guys i'll i'll jump in on that um you know you never know the date but they're in for a lot of money, right?

They've now spent, you know, at least a million and a half, probably $2 million, right? You know, on options, getting the rights to it. It's now at the streaming partner, right? If that gets greenlit, you know, as you know, Sean, you know, you've been around me for a long time when I did the movie 300 and Spider-Man Chronicles. We did, you know, a billion dollars in revenue. If you get a TV show on the air on a major streaming network, There could be millions to tens of millions of dollars with zero additional cost to us. So we couldn't be more excited. And there's four of those, right, that have now been sold. There's 12 total. I'm sorry, there's 15 total in the pipeline. In fact, we're going to market with another two of them shortly. It couldn't be really more exciting than that. We've always talked about original IP and what original IP can do for us and how it changes the dynamics of the industry dramatically. And those second windows of original programming to television and film products, owned in conjunction with the talent, which Kit's going to be talking about a lot more over the next couple of quarters, and live shows, which is just exploding in podcasts. As you know, whether it's All In or it's Rogan or so on, the live shows are just expansive, and you're seeing so many people enter that live market. As you saw, Ari Emanuel just raised $2 billion to expand the market, and you see Irving Azov in the market. the live market is is robust and uh just opens up the floodgates for additional revenues at way bigger margins for us uh going forward thank you um and then you know ryan like you talked about the that one-off on the cost of sales how about some of the other uh cost trends you know would you expect gna to kind of stay at this level or should we be looking for increases um you know you know, I would say you would expect G&A to stay at this level, you know, short term.

There were some awards that are, you know, driving that right now in addition to sales and marketing, but it's mostly stock comp, which gets adjusted out. But, you know, I think the team has done a great job of containing, not only containing costs, but kit and team have done a really good job of doing a lot more with the same amount of resources and trimming costs wherever they can. So, yeah, we should expect, you should expect more of the same going forward.

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

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

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

Yeah, some of it's taken in cost of sales. So we have a contribution margin reconciliation that's in the queue that kind of breaks that out.

So you can kind of see that break out there um so um you know i think if you're looking at the court yeah so you're looking at the quarter it's about north of the million about 1.4 uh coming out of cost of sale okay thank you and then my last question is um you mean you guys pre-announced a couple of weeks ago you came in a little better even than that in the fourth quarter the guidance though i mean in third quarter the guidance for the fourth quarter kind of implies a pretty significant deceleration uh i think at the bottom end it actually would be down so what what's driving is that not raising the guidance for the march quarter yeah i'm happy to take both of that yeah no this is actually

probably one for free for you to answer it's uh yeah go ahead buddy sure no problem so you know typically um calendar year fourth quarter is always the biggest in in terms of um you know ad revenue spent right and we're still uh that's still a majority of our business so as you go into the the new year advertisers um really kind of slow down um and then we start up they've got ads in place you know and and then they kind of ramp it up on what's working what's not and and kind of pivot from that but yeah typically if you look at all our history it's always this this q4 fiscal year calendar year q1 you know that january february those are usually our slower revenue ad generation march um months so it's it's normalized i think we're still gonna uh beat what we did in in last year's quarter if i had to bet but um you know i think i think that's just kind of normal for the for all the businesses and media okay thank you and our final question comes from the line of leo carpio with joseph gunner please go ahead good morning gentlemen uh actually i have a couple of questions uh first regarding the uh

evita uh it seems like this quarter on an evita basis you kind of hit that pivot point yet it sounds like there's a quarter benefit from a couple of one-offs so the question is looking into the fourth quarter and then looking into fiscal 2027 uh is it possible that the EBITDA is going to be break even again and is it going to be like one-off driven or pure straight efficiency driven thanks Leo um well we expect you know adjusted EBITDA to continue in the future quarters you know the the one-off this quarter wasn't wasn't driving all of the EBITDA by any stretch of the imagination uh what what you've seen in the first two quarters this year is minimally what we expect uh on top of what we did this quarter so we expect it to kind of slowly continue and climb and we put that out uh as well uh in this release okay and then turning toward the talent pool um now that you've been successfully adding new shows and in looking at bigger and better contracts and uh what is the talent environment out there in terms of are you be able to find good mid-tier talent that brings a solid franchise? And are the economics still favored? In other words, is it still a buyer's market for you or is it beginning to shift?

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

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

Yeah, there's some great ones out there. We are in deep in talks with a couple of them, some that are bigger than us, believe it or not, and some that are smaller that would complement us. So we're really excited about those discussions and where those stand. Steve Lehman and team are doing great things there. We're all having conversations. I think there's a lot of these companies, you know not the big ones uh that are are still trying to find their way and um have great opportunities and and great growth potential so we're talking to all of them and uh you know at the same time our talent acquisition team is is out there talking to individual shows uh you know every day okay and the last question regarding the industry environment in general how are you seeing uh advertiser spending is it still is it robust is it improving and is it driven at any particular demographic group or show categories uh style yeah we're we're we're really fortunate um the media spending level is increasing uh every report i see it's it's continued growth record growth um when you look at the companies that are out there and and tracking you know who's spending in the space, you're, you're looking at, you know, the Amazons of the world, the progressives of the world, the stage farms of the world. These are big brands with big media budgets that, that are shifting their spends to this podcasting world. And they continue to believe in it. They continue to dive into it. And, um, you know, I, I, I think the medium is just exploding and the technology, the ROI, the attribution, all of that allows these companies to not just spend blindly like they may have in the past with other mediums, they really have a true tell that this is working. Okay, thanks.

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

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

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

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