Ladies and gentlemen, thank you for standing by. My name is Desiree, and I will be your conference operator today. At this time, I would like to welcome everyone to the PodcastOne Inc. First Quarter Fiscal 2025 Financial Results and Business Update. 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 followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the Star one. I would now like to turn the conference over to Aaron Sullivan, Chief Financial Officer. You may begin. Thank you, and welcome to PodcastOne First Quarter Fiscal 2025 Business Update and Financial Results Conference Call and Webcast. Presenting on today's call are Kit Gray, President of PodcastOne; Rob Ellin, CEO and Chairman of LiveOne and Executive Chairman of PodcastOne; myself, Aaron Sullivan, CFO of LiveOne and PodcastOne. I'd 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 business, including the 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, including those described in PodcastOne's Form 10-K for the year ended March 31, 2024, filed by the company with the SEC on July 1, 2024, and subsequent SEC filings made by the company. 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, August 13, 2024. 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 in 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 express written consent, is strictly prohibited. I'll spend just a minute providing a very brief overview of our results for the first quarter of fiscal 2025, ended June 30. Consolidated revenue for the three-month period ended June 30, 2024, was a record $13.2 million, an increase of 24% from the prior year period. Consolidated Adjusted EBITDA for the Q1 fiscal 2024-2025 was a loss of $300,000, which is primarily driven by the timing of content acquisition costs. The company is debt-free, and LiveOne owns approximately 72% of PodcastOne. In the month of July 2024, the company had a U.S. unique monthly audience of approximately 5.5 million, and global downloads and streams of approximately 17.8 million. Now, I would like to turn the call over to PodcastOne's president, Kit Gray. Thank you very much, Aaron, and thank you everyone for your time today. I hope you're having a good one. As you can see from Aaron's earlier comments, we've had a very productive and positive quarter at PodcastOne. The core of our business is performing very well. We are acquiring sales representation and distribution rights of new shows at a great pace. We are growing our existing programs in terms of audience and monetization, and launching some very successful new programs. In the last 12 months, we've added 37 new podcasts, bringing a total of 187 shows. This year alone, our fiscal year, we've added nine new podcasts and sold our second major show to a top five streaming platform, further solidifying our position in podcasting and creating a slate of podcasts primed for TV and film adaptation. Our downloads are 6% higher than they were in fiscal year Q4, 2024. Our programmatic advertising continues to lead, and we're 18% higher than it was in fiscal year Q4, 2024, allowing us to monetize not only our current consumption of podcasts, but old episodes. So as new people find our shows, they can go back and listen, and we can monetize that consumption. Our hit shows are doing great. I've Had It! was nominated for 2 iHeart Podcast Awards, and Baby Mamas No Drama! won for the second year in a row, a Webby. So congrats to those 2 terrific properties. We value those relationships, and in fact, we have just recently signed them both to extension. We're very excited about this. They are core to our network and our future. We have new projects in line with them, and it's very exciting. We are also developing new revenue channels for our existing partners and company resources, and using our company resources that are already existing, which limits costs and has high margins and profitability. As I mentioned earlier, we're really growing our second window slate of programming for TV and film, but you'll also hear about us in the near future launching PodcastOne PRO, which is our production division that allows our expert producers and our network of 187 shows and millions of downloads on a monthly basis attract companies that wanna create their own podcasts. We offer our expertise, our credibility, and we help them build their shows. We actually have been doing this for quite some time, but we're ramping this part of our business up over the next 6-12 months. We just got an extended renewal from MotorTrend, their fourth. We've done deals with Microsoft and one of our leading advertising agencies, Oxford Road, and we just recently signed a deal where the CEO and founder of Lovesac will be doing a podcast to talk about his business and how he grew his business and continues to grow it throughout our network. We're very excited about this new division and putting more resources into that. We are also revamping some of our paywall projects. We have the Adam Carolla network that just relaunched their strategy, which includes new programming from Jay Mohr and Adam Carolla that will be exclusively behind the paywall. We are having a relationship with Apple on the A&E slate, and creating commercial-free programming and other offerings on the Cold Case Files, I Survived, and their other new hit show, Crime + Investigation. We're launching a soon-to-be Housewives paywall that you guys will learn more about in the next week or two. But that's very exciting and offers really new revenue channels for us with limited work on both the talent and our side, so we're excited about those. As always, our focus will be again to launch, grow, and acquire the representation of existing podcasts. We have a still very, very strong funnel of shows that we're considering to be a part of PodcastOne, and those new programs will be highlighted throughout the next year. We have many bigger deals too, with with some eight-figure B2B business deals, such as the one we mentioned earlier this year. We have probably four or five of those in the funnel, and this will help us not only with our business operations and growth on that side of things, but acquire new companies and get really on our path to being a $100 million company in the next few years. So as you can see, we're really excited about what we're doing at PodcastOne. Our core business is growing. We have great new revenue channels, and we're excited about the future. That being said, I'm gonna hand it over to our CEO, Rob Ellin, and he can take it from here. Thank you. Yeah. Thanks, Kit, and congratulations. I think you're hearing it in Kit's voice, and I think you're hearing it in the messaging of the numbers that are coming out. This B2B deal has been spectacular. We'll add, you know, $2 million a run-rate a month as this is ramping up. And as you can hear, you know, from Kit, there's four or five others that are very close. And if you can land a couple more of those, we're gonna be quickly talking about a $100 million+ podcast business. So very much like Slacker, we bought it doing $20 million in revenues, losing money. It's now doing, on a run-rate to do $85 million and very profitable. Kit's done a great job with his team, with Sue and Eli, to do the same here. They've taken it from $20 million in revenues. Since Kit became president, we're now on a run rate to do well over $50 million, and we'll shortly be talking about how this is moving towards $100 million. So, really exciting and really energized where the business is going. Kit didn't talk much, but you know, about the television side, but we've sold our second major podcast to television. This is hugely accretive to us, has no cost to us, and I can tell you that each of the networks will be in for well over $1 million right by the time they get it off the ground, and could be millions and millions of dollars to our company, and we've got about 10 projects in the works. We expect to have a slate of podcasts made for television, and it couldn't be more excited about where it's going. So, team's done a great job, and we'd like to open it up to any questions and any thoughts that you have. 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, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your question. Again, press star one to join the queue. Your first question comes from the line of Sean McGowan with Roth MKM. Your line is open. Morning, Kit. How are you? Hey, Sean. Good to hear from you, man. Thanks. I'm doing well. How about yourself? Good. Very good. Very good. The earth, the earthquake notwithstanding, but it's all good. Yeah. Crazy. Yeah, I bet you felt it even more than we did down here in Newport. It was something. Could you help us contextualize some of these new shows, like, you know, without giving numbers, just sort of maybe rank some of the new shows in terms of, you know, the descending order of revenue importance, just so we have a, you know, kind of a little sense of what the key ones are? Sure. You know, as the new shows come on, it's really exciting. You've got really the focus of the talent. You're really launching a heavy marketing campaign, introducing our huge fan base to these shows, and then their fans are testing it too, right? As they use their social media and their communities to dive in and test the show, see if they like it, hear what they have to say. You know, we've had some great press with some of the most recent shows, and they're having great success. So, you know, unfortunately, like, one show that we launched, The Campaign Managers, we had to put that on a little bit of a hiatus as David Plouffe actually got hired by Kamala Harris to be on her staff to seek out presidency. So, you know, it's you never really see that coming, but it's pretty neat, right? I mean, there's a show that we launched maybe three or four months ago that was growing really nicely, had some really good engagements and good press and, you know, and then David had to head off. So we're talking about doing some things that the campaign or Kamala's team will let us do. But it was interesting. Now, the other shows that we have launched that are really in our, you know, our sweet spot, I guess you'd say, the female acting shows, those are doing great. You know, so they're right off, they're really doing an excellent job. We've got advertisers testing them. The talent is working hard. We're doing, you know, every couple of weeks, we do calls with the talent to make sure, you know, they're motivated and staying on path. So, you know, it's part of the process, and it's not like you just start out and have 50, 100,000 listeners. It takes a little bit of time. But we are seeing some really, really good growth in those and, you know, so that's good news. I... You know, really, they're on path to what we thought they would do. We've had some really neat ones, too. Like, The Opportunist had some new episodes come out, and, you know, those are actually far exceeding what we had thought. So that's great news, and that's keeping that network of programs or seasons of programs doing really well, too. So yeah, we're in line. You know, we're doing great. Really, I think the key to seeing, you know, real significant growth is acquiring shows that have an audience, and then making sure the ones that we have that are successful continue to grow and evolve. I mentioned I've Had It, you know, we're actually in the process. We just signed on to an extension, and they're adding a political show. If you ever listen to that program, you'll know they're very politically motivated. So they're gonna actually have a political show that'll be running two or three times a week, which is really exciting for us, too. So you'll see more about that in the press. But yeah, there's a lot of cool things. We got another show that's about to start with two wrestlers/comedians, the Nemeth brothers. We have ownership in that show as well. So, you know, that's one that I think has a real chance to become, you know, kind of like the Pat McAfee before he got hired by ESPN of wrestling, right? And to bring the comedic side of things, aka, like, Pardon My Take of Barstool, that into wrestling world. So we're really excited about that and really excited about a lot of the conversations we have going on. Yeah, just to add to that, with The Opportunist, Sean, this is round three. This is after, you know, you've had Vigilante and Varnamtown. Opportunist, which we launched for almost nothing, literally almost no cost, is having great numbers again. I'm in deep conversations about a television show on it. And that's got three seasons of it, so there's multiple different potential opportunities there. And so we're hoping to see a third television show sold this year. Great segue into my next question. So as you talk about that, sort of second form monetization, can you remind us what the I know the upfront is, is a kind of de minimis, but what's, what would be the timing of when these things would actually come to fruition and, and to be seen by an audience? And, and related to that, what's the timing of, of any additional revenue to PodcastOne? I, I assume that comes in through PodcastOne and not, not through, you know, some other entity of LiveOne. Is that right? Correct. It comes through PodcastOne, and it's not a small amount. Right? You know, these can be, you know, right up front, money from anywhere from $250,000-$1 million, day one, and I think they're gonna go higher. When you think about scripts selling for $1 million, right? Here you have a script, but you also have proof that you have millions of downloads. So there could be very substantial money in it, and there was a terrific amount of money in the last one. So we think we'll start to see that. And the timing to get them off the ground could be anywhere from 90 days to 12 months. Depends how fast the studios are moving, what slate they're in, what time of year you sign them. So the goal is to have a slate of 12 of these, right? And keep moving these. And again, Camley, we never expected to sell 2 so quickly and be on to the third and potential fourth with Ransom as well. So we're really excited about it. Could be, could be, you know, substantial very significant money over the next couple of years. What's the timing then of the revenue recognition on that? You get, you get an upfront payment, but you probably don't book that right away as revenue, and then what happens when additional cash comes in? No, I think, we book it right away, right? Yeah, the upfront we can record right away, there's no further obligation. You know, it can get a little complicated. It's all tied to future performance, right? If the upfront is associated with future obligations, we spread it over time, but generally, there is no further obligation on an upfront. Okay. And then does, does that, kind of, sort of count as, against future royalties, that, that there could be a delay between then when you, when you, you know, that recognition and then when you could've recognized additional revenue once it gets earned out? Just, you know, remind me of what the accounting is. Not really. Not really. It's, you know, the upfront, the upfront money is to buy the rights to it. But it all depends, you know, these are all negotiations as to what the structure is, so every one of them is gonna look a little differently. But most of the upfront money is not gonna be counted against the royalty. That's to buy the rights to it, then they gotta go spend, you know, substantial money, right? Vigilante, they've already spent, the studio's already in for $1 million plus. Scripts and, you know, and redoing the scripts, and rewriting, and, you know, our options coming up again shortly, they're gonna have to write another check on it. All right, great. Well, congratulations on the progress. Thank you. Your next question comes from the line of Barry Sine with Litchfield Hills Research. Your line is open. Hey, good morning, folks. First of all- Hey, Barry, how you doing? Hey, in terms of additional monetization, you guys covered a lot on TV and film rights. You also have a live event, I know, coming up in October, and I guess you're planning more of those. Could you talk a little bit more about live events? I know there's one, and what else are you doing there, and might that be a more significant revenue driver going forward? Yeah, so we just did a live event in New York City with a show called The Gals on the Go. They went down to a new store opening and did a podcast there. They did some social media around it, and you know, it was a substantial six-figure deal for maybe an hour and a half of work for us. So it was tremendous. It didn't take into our already existing revenue. It was just an added show that they did, and that was, you know, that was awesome. I think we're looking at doing more of those when they come across our desk. We'll be-- you'll be seeing more of that. It's a big initiative of ours, part of the PodcastOne PRO that I mentioned earlier. That will be some of the things that we incorporate into those deals as well, where, you know, once the brands get their feet wet, they'll start to work with our talent to do live shows from stores and stuff like that. So, those type of opportunities are really, really neat for us. I think what you'll see with us over the next six months, especially with the I've Had It team, we might do some, you know, special debate podcasting that will be live. You know, so you'll be able to hear their take. They'll be able to do some live pay-per-view, meet-and-greet-type stuff coming up around the elections with their new show. That's part of the deal. So, you'll see more and more of that as we get into it. Our fans love that kind of stuff, so there's that. And then from a revenue standpoint, the top line was obviously very strong in the quarter. Was that all advertising? I assume there's some non-advertising revenue from some of these licensing deals that's starting to contribute to the top line. Yeah, some of it will be... You know, mostly, still advertising is our core business, but you'll see, you know, we've had some production deals as well. Like I said, the MotorTrend and those other deals that have added, they've added to our bottom line. Some of these live shows will be in it as well. And we're revamping our, you know, our paywall experience, like I mentioned. So that will also be included into our revenue when we move forward. Yeah, what you're also seeing is you're starting to see that $20 million-plus contract kick in, right? As that's ramping up, so that distribution will ramp up, and you'll start to see better margins later in the year on that. There's some costs going into it, and then eventually, it'll be way more profitable to us. But it's a great win for us in revenues, but even more importantly, how much traffic and audience there is. And in that traffic and audience you know, having these mass distribution deals and, you know, Kit, again, just repeating it, is, you know, very shortly gonna be announcing multiple deals like that. They're gonna give us distribution in other places, and we've done a brilliant job. The team has done a great job. We're in Spotify, Apple, Amazon, Samsung TVs, he's right across this big streaming platform. You're gonna see, you know, multiple, you know, B2B deals that have 10 million-3 billion in audience that wanna have podcasts on their network. Okay, and then turning to EBITDA. EBITDA was slightly negative in the quarter, and I know, Kit, you and I have discussed, you know, a goal to to get that positive and, and to grow that in line with what LiveOne is doing on a overall basis. It would seem to me there's some drivers that are gonna help drive that positive, which are the rights you've talked about, and then this $24 million contract. The other thing within EBITDA I want to confirm, and maybe this is for Aaron, is. It looks like there was an impairment charge that's not backed out of the EBITDA, and that's non-cash. So the real EBITDA loss, I would think, is a little bit less than what you've reported. So can you comment on EBITDA, please? Yeah. So that impairment charge was related to a show we acquired that we're no longer pursuing. And so that's that. Yeah, we're, look, we're very close to kind of Adjusted EBITDA break even. We've had some additional content acquisition costs that are hurting that number. And that's just simply kind of volume of new shows, right? So we expect those to be profitable in the, you know, in the near term, over the next kind of 12 months or so. So we expect to see that as we're adding those shows, Contribution Margin increases a little bit, and that'll flow right down to our Adjusted EBITDA line. Aaron, just to confirm, that impairment was not backed out, in the reconciliation you did on EBITDA, even though it's non-cash? Let me get back to you on that, Barry. It might be in the depreciation line. Okay, got it. Let me confirm. Okay. And then, Kit, can you kind of elaborate a bit more on the, you know, corporate strategies? I think I understand some of them that's gonna drive that EBITDA line positive. Yeah, sure, Barry. You know, basically, it's as we add shows and, you know, start up new shows, the costs are pretty insignificant in the... You know, we don't need to hire more salespeople or, really more producers currently, at the current pace that we're at. So when we add these shows, it will, it will mostly besides for like sales commission and some, you know, bandwidth costs and stuff like that, the margins will be great, right? So, that's where we need to just continue to harp on, you know, acquiring more shows, launching more shows. Again, because, you know, that baseline cost won't, won't, you know, expand, that much, right? So we continue doing that, and then doing, like what Rob said about the second window, using our content that we have and our access to talent to sell things like the Gals on the Go Live show, which isn't really adding to our costs and more work and stuff like that. It's just doing a little bit more to get a lot more in terms of revenue and better margins. You'll see, you know, making sure, you know, we have social media involved in it, just kind of to add more to what we have, where we're not actually doing more shows and more programming, but we're getting more stuff to sell, bigger deals. You'll see the same thing with the paywall and, again, with PodcastOne PRO, you know, we're charging, really good money for, you know, these clients to do podcasts and run promotion through our, our network of podcast fans, which is—there's no cost to that, really. We'll be able to just use existing producers and so forth. So, that's all gonna be high-margin-type stuff. So we're start to put more and more focus on to those type of things, and keeping our core business going, and it should see, you should see some great EBITDA next year or next quarter. Okay. We'll hold you to that. Thank you very much, gentlemen. Thanks, Barry. Again, if you would like to ask a question, press star, then the number one on your telephone keypad. And we have our next question, comes from the line of Leo Carpio with Joseph Gunnar & Co. Your line is open. Good morning, gentlemen. From Cape Cod. I wanted to dig in on to the advertising environment for podcasting. What have you been seeing in terms of the rates and the economic impact, and what's the potential impact of the upcoming 2024 presidential election on your ad line? Thanks. You know, we don't have as much of an impact, you know, really besides David taking that job, which we didn't, we didn't see coming. You know, which isn't necessarily the worst thing if that show comes back, depending on, you know, what happens to him, if he, he stays with Kamala or, or, you know, if Trump wins, however that works out. I think it gives him even more credibility in terms of having a good show. So, there's that. But besides that, we don't, we don't have a lot. I mean, what I think you're gonna see in podcasting is people will try to, you know... The campaigns will try to get advertising into a lot of the shows, but a lot of the talent won't let you know those types of advertisements be part of their programs, understanding that you know half of the people in the world like one side and half of the people like the other side, and it usually you know creates conflict. Such an intimate listening experience, so they don't really like having that in involved. What it will help is, you'll see, cable and print and online marketing spends will be, you know, pushed, and I believe that will fall or trickle down into podcasting, where you're gonna see, advertisers that still need to advertise and grow, that aren't gonna buy into the cluttered world of, you know, local media, print, all that type of stuff. And that should help us out in terms of advertising rates and dollars flowing into podcasting. Okay, and then turning to talent, how is the pipeline for new talent and potential acquisitions? Is it still the same 100-plus shows you're looking at, or has it changed? Yeah, you know, we win one, we lose one, another new one comes in, right? So it's, there's a constant influx of podcasts, either reaching out to us or we have a team that goes out and reaches to, directly to podcasts, to managers, to agents. We're in constant review of a lot of shows. We're also. We've got a bunch of M&A-type opportunities, so I think that's probably remaining pretty consistent and growing a little bit, I would say, in our list, if I were to guess. So yeah, still really strong on that front. A lot of shows that need some help, and we're there to take them on. So it's exciting, it's exciting to be, you know, us right now. Okay, and then last question. Looking back, like, two, three years ago versus today, the conversations in terms with podcast talent, is it a case where they're coming to you now, whereas two years ago or three years ago, you had to go and make the pitch to them? Is that the situation you're having now? Oh, you know, I think there's more agents involved in the process now, that are reaching out, just like we are reaching out to shows. What I think you're finding is that there's more shows that aren't getting the deals that they got the, the first or second time around. Those are changing. Maybe they're not getting as much, in terms of a minimum guarantee payment or, the right split. The big ones seem to still be getting those big deals. You know, you, you see the SmartLess and the Dax Shepard and, you know, the Call Her Daddy-type shows. Those are they're still seeing pretty significant deals even, you know, with Rogan and so forth. But, you know, these middle tiers are It's, it's competitive out there. I'm not gonna, I'm not gonna mislead you guys, but it's, there's a lot more conversations. There are a lot of people that are saying, "Hey, I want the right partner," understanding that they might get a bigger piece of a, or a smaller piece of a much larger pie rather than a big piece of a small pie. So, there's a lot of conversations going on. I... It's just always evolving. All right, thanks, and congrats on the quarter. Thank you. Appreciate it. There are no further questions at this time. Mr. Gray, I turn the call back over to you. Okay, thank you so much, everyone. I really appreciate it, and look forward to having another great quarter. I'm always available if you guys need to do a call or have some questions. Please feel free to reach out and listen to your podcasts on PodcastOne. Thank you very much. Bye. Ladies and gentlemen, this concludes today's conference call. You may now disconnect.