Earnings Call Transcript - PODC Q2 2026

Operator, Operator

Thank you for being with us. Welcome to the PodcastOne Q2 Fiscal 2026 Financial Results and Business Update Conference Call. I would now like to hand it over to Ryan Carhart, Chief Financial Officer. Please proceed.

Ryan Carhart, CFO

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to PodcastOne fiscal second quarter 2026 business update and financial results conference call and webcast. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. On our call today is Kit Gray, President and Founder of PodcastOne; myself, Ryan Carhart, Chief Financial Officer. I would like to remind you that some of the statements made on today's call are forward-looking and are based on current expectations, forecasts and assumptions that involve various risks and uncertainties. These statements include, but are not limited to, statements regarding the future performance of the company, including expected future 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 PodcastOne'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. 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. The company encourages you to periodically visit its Investor Relations website for important content. The following discussion, including our responses to your questions, contains time-sensitive information and reflects management's view as of the date of this call, November 11, 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. PodcastOne is making it available to investors and the media via webcast, and a replay will be available on PodcastOne's IR website in the Events 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 PodcastOne's President, Kit Gray.

Kit Gray, President

Thank you, and welcome to our fiscal second quarter 2026 Earnings Call. As a reminder, we are not on a calendar reporting year, and our fiscal year 2026 starts on April 1st. Today, I'll provide an overview of PodcastOne, share key highlights from the quarter, and discuss how our AI-powered platform continues to drive innovation, growth, and monetization across the network before turning the call over to Ryan for financial results. Finally, we'll open it up for Q&A. We're thrilled to report a strong fiscal second quarter, demonstrating the power of our AI-driven platform to scale revenue, expand audience reach, and support our creators in delivering outstanding content. PodcastOne continues to stand out as the leading pure-play podcasting platform in the public markets. Our vertically integrated approach from talent, development, and content creation to distribution, analytics, and monetization is strengthened by advanced AI tools that enhance efficiency and performance across every aspect of our business. Our AI toolkit is at the heart of this growth. Flightpath leverages predictive analytics to optimize profitability. Booster powers our advertising management, including a proposal recommendation engine that scales our ad revenue efficiently. Adobe Audition ensures superior audio quality through AI-driven noise and speech cleanup. OpusClip turns long-form video into shorts with a single click, boosting audience engagement across platforms. We also continue to attract high-caliber creators who recognize the strength of our platform. One of our recently acquired shows shared when the host asked ChatGPT which podcast network would be the best fit for her show, PodcastOne was the top recommendation. A great example of how our reputation and AI-driven innovation are resonating across the industry. Momentum remains strong and meaningful growth across multiple revenue channels. Pod Roll, our dynamic ad marketplace, generated a 71% increase, which nearly tripled since last year, underscoring its rapid adoption and scalability. This is now a 7-figure revenue generating tool for our podcast. Our creator monetization initiatives continue to perform exceptionally well. Adam Carolla's subscription and video channel spanning YouTube, Rumble, and Apple Plus rose 51% from last quarter, highlighting strong audience engagement and demand. Overall, we achieved a record high total revenues for the quarter, marking a significant milestone for PodcastOne. Additionally, programmatic and Amazon's ART19 revenue saw a 14% increase from Q1. Combined, the growing strength of our ad tech stack, demand from brand partners, and growth in our monthly capacity moved PodcastOne to a higher revenue tier. PodcastOne continues to attract high-profile talent and shows. This quarter, we celebrated Adam Carolla's record-breaking 4000th episode featuring Jay Leno. Other notable guests across the network included Bill O'Reilly, Amanda Knox, Mel Robbins, Charlie Sheen, and more. We also expanded our content portfolio through strategic partnerships and acquisitions, including a new collaboration with Media Giant BuzzFeed on a brand-new original podcast series, Phone a Fangirl, and the acquisition of Beach Too Sandy, Water Too Wet and exclusive sales rights to Notsam Wrestling. Apple Podcast also selected Pop Apologists for their Creators We Love campaign, a strong recognition of the quality and impact of our content. Our platform empowers creators with end-to-end support, enabling them to focus on producing exceptional content, while our AI-enhanced tools drive discoverability, audience growth, and monetization. From studio access and editing to distribution and marketing, combined with a data-driven sales approach, we ensure both creators and advertisers maximize value on our network. Operationally, this quarter was highly productive. Our AI-powered tools enable more efficient production, editing, and distribution, allowing our creators to focus on high-quality content. Video consumption continues to grow, supported by an expanded distribution across YouTube, Spotify, Apple Plus, TikTok, Rumble, and Substack. Popular titles like Bitch Bible, Fool Coverage, Pop Apologists, Some More News, The Adam Carolla Show, and You're Welcome experienced significant engagement, highlighting the ongoing demand for video-driven podcast content. Now before going further, I'd like to turn the call over to Ryan, our CFO, to walk through the financial results for the fiscal first quarter. Ryan?

Ryan Carhart, CFO

Thank you, Kit. As Kit mentioned at the beginning of the call, I want to again remind listeners that our fiscal year starts on April 1st. Revenue in the fiscal second quarter of 2026 was $15.2 million. Operating loss in the fiscal second quarter of 2026 was $975,000 compared to an operating loss of $1.7 million in the same year-ago quarter. This was primarily driven by an increase in programmatic revenue and lower costs and operating expenses. Net loss in the fiscal second quarter 2026 was $975,000 or $0.04 per basic and diluted share compared to a net loss of $1.7 million or $0.07 per basic and diluted share in the same year-ago quarter. Adjusted EBITDA in the fiscal second quarter of 2026 was $1.1 million compared to an adjusted EBITDA loss of $403,000 in the same year-ago quarter. The change in adjusted EBITDA was primarily driven by higher revenue and talent revenue share paid in the form of shares. We ended the fiscal quarter with zero debt on our balance sheet and $2.8 million in cash and cash equivalents as of September 30, 2025. As we look ahead, I'd like to also briefly touch on guidance, reiterating expected fiscal 2026 revenue of $55 million to $60 million in fiscal 2026, adjusted EBITDA of $4.5 million to $6 million. Now I'd like to turn the call back to Kit for closing statements and questions from the audience.

Kit Gray, President

Thanks. Looking ahead, we're excited to build on this momentum with several initiatives that leverage our AI capabilities to maximize impact and reach. From predictive ad analytics with Flightpath to streamlined ad management through Booster, our platform is continually optimizing operations and outcomes for creators and advertisers alike. We're also focused on expanding our audience through high-profile events and partnerships. In addition to our collaboration with BuzzFeed and key acquisitions, we are actively exploring opportunities to bring our creators to new audiences and continue strengthening PodcastOne's position as the leading destination for podcast talent and innovation. To close, I want to recognize the hard work and dedication of our team, our partners, and our creators. PodcastOne thrives because we stay focused on what matters most: compelling content, strategic monetization, and trusted relationships with talent and advertisers. With our AI tools and creator-first approach, we are well positioned for continued growth, deeper audience engagement, and expanded monetization opportunities in the months ahead. We remain proud of our achievements this quarter and confident in the path forward. With that, we'll now open the line for questions. Operator?

Operator, Operator

And your first question comes from the line of Sean McGowan with ROTH Capital Partners.

Sean McGowan, Analyst

I have a couple of questions to start with, Kit. Sometimes the podcast ranking numbers can be a bit unpredictable, and the growth in the audience doesn't always remain consistent over time. Could you clarify how much of your ranking success, currently at #9, is due to actual growth versus changes among your competitors?

Kit Gray, President

That's a great question. Rankings can be quite complex. They depend on which podcast networks have subscribed to the service and which specific shows are included. Not all shows are represented, and while we have built a strong relationship with Podtrac over the years, the timing of rankings can vary. For example, during the NFL season, sports networks see significant activity, while our content related to housewives and reality TV tends to do well when new shows like Vanderpump or Dancing with the Stars launch. It's very cyclical. There's also been some consolidation in podcast production, with new shows being introduced and others ending. We continuously monitor our network and keep an eye on what other networks are doing to ensure we stay aligned. Although rankings are important, they don't always accurately reflect real growth. Personally, I focus on revenue growth, sellout rates, and CPMs, which have shown strong results. We've seen growth, and I believe each impression we generate has become more valuable, which is how we assess our performance.

Sean McGowan, Analyst

That's helpful. I noticed that you did a great job highlighting the various ways that AI is benefitting you on multiple fronts. My question is how much of that involves new initiatives that you weren't doing before compared to previously established efforts that you are now bringing attention to. I'm curious about how many of these tools have been recently implemented versus those that existed earlier but were not discussed until now.

Kit Gray, President

Yes. I think we'd all agree that over the last 12 months, AI has just drastically changed. What people were doing a year ago, they're not doing now. And even the things that seem to be working, they've been enhanced tremendously over the last 6, 12 months. So we are doing a lot more with the ones that I highlighted, and there are others that we do work with as well. We're constantly talking to them about the enhancements that they're bringing to the table to make their products better or even new services. We really get approached almost daily by other AI like companies that are designed to help us. Now will they? Do they? That's really the question. So what we do as an industry or as our network, and what gives us the advantages being a small boutique company that can bring these new technologies on, we test them. We test them with some of our shows and then we activate if they work. And that has to do with the operational efficiencies, that has to do with production efficiencies, marketing and sales, and really every single level. So we're constantly looking at new things. These are ones that have been really useful for us, and we're doubling down if not tripling down on them. And we'll be continuing to add more over time.

Sean McGowan, Analyst

That's helpful. I have a couple of questions about expenses. Some were higher than I anticipated, while others were lower. Can you highlight anything unusual or one-time that might have influenced this? For example, sales and marketing expenses were significantly lower than I expected and lower than last year. Was there anything specific that caused this decrease, or should we anticipate this level moving forward? On the other hand, general and administrative expenses were actually higher. Was anything out of the ordinary contributing to that increase? Additionally, you've mentioned stock-based compensation. Should we expect to maintain that level, or was there anything particular this quarter that may not reflect what we should see in the future?

Ryan Carhart, CFO

Yes, Sean, thanks. Good question. For sales and marketing, what you're seeing this quarter is what we expect going forward. So very modest increase potentially for things we're doing here in Q3 when the volume picks up, it will go up a little bit, but sales and marketing is pretty indicative of what you're going to see going forward. G&A quarter-over-quarter is not a huge change. I think the change that you're seeing is additional stock compensation that comes through, right? So that's the one thing that's flowing through the G&A when that's a little bit higher as we have some new awards that are a little bit higher. So you'll see that come through, but it gets adjusted out through adjusted EBITDA. This last quarter was a little higher on the special fees side as well. And so you should see that part of it come down. So it will be a little higher because of the stock compensation, but lower in the future quarters because professional fees related to audits and all the things between on the professional side were a little higher during Q2.

Sean McGowan, Analyst

Can you tell us how much of the stock-based compensation was reflected in the G&A line?

Ryan Carhart, CFO

Let hold on one sec. Can I give you that break out in a bit.

Operator, Operator

The next question comes from the line of Leo Carpio with Joseph Gunnar.

Leo Carpio, Analyst

A couple of quick questions I had about the quarter. I just want to walk through them. First, can you talk about the competitive environment through the higher rankings? Are you now in a better position to recruit higher-tier talent? And how helpful is your stock as a currency in those negotiations?

Kit Gray, President

Yes, we've been quite competitive. Our growth in shows and content is evident. We currently have an extensive lineup of shows that we're pitching. In my view, we're regarded as a strong company where people not only come to work with us for a couple of years but to truly develop and expand their business. Recently, we had a show join us after researching which podcast network would be the best fit, and we emerged as the top choice. It's fantastic, and it seems that industry figures like Jordan Harbinger, Adam Carolla, The LadyGangs, Kaitlyn, A&E, and Stassi are transitioning from other networks and witnessing our success firsthand. We're not demanding more from them; instead, we're utilizing our resources, skilled staff, tech stack, and AI development to enhance their audience engagement and profitability with the same amount of content. This reputation is recognized not just in our individual shares but also with agents, making us very competitive. Being in the top 10 on Podtrac significantly boosts our position and growth. Our use of stock as a unique tool in negotiations sets us apart, fostering a collaborative environment where when one succeeds, we all do. This approach, which includes stock-based compensation, is genuinely exciting and gives us an advantage over our competitors. Overall, it's a favorable position for us.

Leo Carpio, Analyst

Okay. Could you share some details on the expanded Amazon partnership? I saw in the press release you went from about $60.5 million to a $20 million annual run rate. I mean, what are the expectations in terms from Amazon's perspective in terms of downloads, activity? Any details you can share?

Kit Gray, President

Sure. No problem. The design of that was as we grow the deal grows, right? So as we're able to hit different impression thresholds to offer Amazon's marketplace, they give us more of a minimum guarantee. So we have been able to hit some of those new thresholds in really short order. So that's really exciting for us. And that has to do with bringing on new programming, having our existing programming get more growth in terms of audio downloads and listenership, but also promoting backlog episodes and classic emphasis as people go back and listen to these great episodes, they have the ability to monetize it. So we've just seen tremendous growth there. And I think if you'd ask Amazon, they're seeing more demand on the podcasting platforms and different ways to reach advertisers using that qualitative audience, right? People really see the value and the strength in the podcast listeners. And so as we bring them more, they're able to get more sellout rates, higher CPMs and so forth. So it's been a great partnership so far, and we're talking to them almost daily on new things that we can do, and there's some exciting stuff coming up.

Leo Carpio, Analyst

Okay. And can you discuss the advertising environment? If I understand your business model, the holiday season is going to be a major driver of ad revenue for your podcast talent? And just seeing what's the early pulse check right now you're seeing?

Kit Gray, President

Sure. I was looking at our pacing reports to assess our performance this quarter. Our direct sales team, led by Sue McNamara and our 12 salespeople nationwide, has strong relationships with brands and integrations in our shows. This is separate from the Amazon and programmatic marketplaces that are also contributing to significant growth. We are experiencing an all-time high this quarter. Even though we are still working hard for every dollar, our direct sales performance looks very promising. This could mean fewer impressions available in the programmatic marketplaces and with ART19 Amazon, but we expect much higher CPMs. Our direct sales consistently yield the highest CPMs, followed by the ART19 Amazon deal and then the programmatic marketplace, each prioritized based on availability. The strong performance from our sales team is beneficial for the business. We are committed to exceeding expectations and ensuring that advertisers are pleased, which is our core strength. We are excited about the progress we have made so far.

Leo Carpio, Analyst

Okay. And then my last question is about the revenue guidance you raised. What needs to be in place for you to achieve the high end of the guidance, that is in the $59 million, $60 million range? Is it a function of more shows on the platform, better revenue, just more downloads?

Kit Gray, President

Yes, it's really keeping doing what we're doing, right? Keep getting more and more consumption of our programs, current programs, new programs coming on. Our sales teams continue to do a great job. And then the ART19 Amazon deal continuing to do what it's been doing. And if we keep going in that direction, we'll hit the high end of it. So I think we're doing everything that we can to be there. And as always, there are a couple of big deals that are there, whether it's content or ad deals that we need to close, and we'll see how those go. But I'm really excited about our opportunity at the high end of that at least.

Operator, Operator

I'm showing no further questions at this time. I would like to turn it back to Kit Gray for closing remarks.

Kit Gray, President

Sorry about that, I was on mute. But I just wanted to say thank you, everyone, for your time today, and keep an eye out for PodcastOne news and listen to our podcast. I hope everyone has a safe holiday season as we approach Thanksgiving and the rest of the holidays throughout the remainder of the year. Thank you so much, and have a great day.

Operator, Operator

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