LiveOne Reports Record First Six Months Fiscal 2023 Adjusted EBITDA* of $6.4 Million and Revenue of $46.8 Million

Separately, LiveOne announced today that its board of directors has authorized it to expand its previously announced stock repurchase program by up to an additional $2,000,000 worth of shares of its common stock to be repurchased from time to time. Since April 1, 2022, LiveOne has repurchased 2,000,000 shares under the program. The authorization to repurchase will expire on December 31, 2023.

LiveOne’s CEO and Chairman, Robert Ellin, commented, “The momentum in LiveOne’s audio business, which includes Slacker Radio and PodcastOne, continues to experience growth of paid members through partnerships, including Tesla, as well as an increase in advertising and sponsorships. We expect our audio business to collectively achieve revenue in excess of $80 million in Fiscal 2023 and generate more than $16 million in Adjusted EBITDA.”

Mr. Ellin continued, “Over the past year, we have successfully reduced costs and overhead by an expected $25 million on an annual basis while focusing on the operating performance of our audio division. A significant part of our strategy is a decision to forgo any live tentpole and pay-per-view events until Fiscal 2024, which has resulted in a lowering of expected Fiscal 2023 revenue to between $100 million and $110 million. These measures will allow us to utilize our capital and resources to strengthen our balance sheet, buyback stock and focus on the growth of our profitable businesses.”

The timing, price and actual number of shares planned to be repurchased under LiveOne’s expanded stock repurchase program will be at the discretion of its management and will depend on a variety of factors, including stock price, general business and market conditions, and alternative investment opportunities. The repurchase program will be executed consistent with LiveOne's capital allocation strategy, which will continue to prioritize growing LiveOne's business. The expanded repurchase program is planned to be implemented subject to LiveOne obtaining applicable approvals and consents.

Recent and Q2 Fiscal 2023 Highlights

Q2Fiscal 2023 and 2022 Results Summary (in $000’s, except per share; unaudited) 

Three Months Ended
September 30,

Six Months Ended
September 30,

2022

2021

2022

2021

Revenue

$

23,532

$

21,924

$

46,755

$

60,691

Operating income (loss)

$

(987

)

$

(9,667

)

$

(750

)

$

(19,626

)

Total other income (expense)

$

(2,393

)

$

(5,565

)

$

(1,285

)

$

(3,654

)

Net income (loss)

$

(3,409

)

$

(15,236

)

$

(2,061

)

$

(23,287

)

Adjusted EBITDA*

$

4,398

$

(2,071

)

$

6,368

$

(3,822

)

Net income (loss) per share basic and diluted

$

(0.04

)

$

(0.19

)

$

(0.02

)

$

(0.30

)

Q2Fiscal 2023 Results Summary Discussion

For Q2 Fiscal 2023, LiveOne posted revenue of $23.5 million versus $21.9 million in the same period in the prior year. The increase was largely due to increased membership revenue from continued paid membership growth. The audio division had record revenue of $21.1 million in Q2 Fiscal 2023 compared to $18.7 million in the same period in the prior year.

Q2 Fiscal 2023 Operating Loss was ($1.0) million compared to a ($9.7) million loss in Q1 Fiscal 2022. The $8.7 million decrease in Operating Loss was largely a result of improved Contribution Margins* along with reduced operating expenses.

Q2 Fiscal 2023 Adjusted EBITDA* was $4.4 million, as compared to Q2 Fiscal 2022 Adjusted EBITDA* of a ($2.1) million loss. Q2 Fiscal 2023 Adjusted EBITDA* was comprised of Audio Adjusted EBITDA* of $6.5 million, Other Operations Adjusted EBITDA* of ($0.8) million loss and Corporate Adjusted EBITDA* of a ($1.3) million loss. The Audio Adjusted EBITDA* of $6.5 million was driven by improved Contribution Margins* along with decreases in operating expenses.

Capital expenditures for Q2 Fiscal 2023 totaled approximately $0.5 million, which were driven by capitalized software costs associated with development of LiveOne’s integrated music player and pay-per-view services.

As LiveOne has strategically opted to delay any new live tentpole or pay-per-view events until its fiscal year ending March 31, 2024 (“Fiscal 2024”) and utilize its capital and resources to strengthen its balance sheet, buyback stock and focus on the growth of its profitable businesses, the company is updating its guidance for Fiscal 2023 consolidated revenue of between $100 million - $110 million and Fiscal 2023 Adjusted EBITDA* guidance to between $9 million - $11.5 million.

Conference Call and Webcast

LiveOne’s senior management will host a live conference call and audio webcast to provide a business update and discuss its operating and financial results beginning at 5:00 p.m. ET / 2:00 p.m. PT on Thursday, November 10, 2022.

Conference Call and Webcast

WHEN: Thursday, November 10th
TIME: 5:00 PM ET / 2:00 PM PT
DIAL-IN (Toll Free): 844-200-6205
DIAL IN NUMBER (Local): 646-904-5544
ACCESS CODE: 194246
REPLAY NUMBER: 866-813-9403 / ACCESS CODE: 741873

WEBCAST – Both the live webcast and a replay can be accessed on the Investor Relations section of LiveOne's website at Events | LiveOne.
The webcast can also be accessed at: https://events.q4inc.com/attendee/614063880

About LiveOne, Inc.

Headquartered in Los Angeles, California, LiveOne, Inc. (NASDAQ: LVO) (the "Company") is an award-winning, creator-first, music, entertainment and technology platform focused on delivering premium experiences and content worldwide through memberships and live and virtual events. The Company was awarded Best Live Moment by Digiday for its “Social Gloves” PPV Event, and has been a finalist for 8 more awards, including Best Live Event, Best Virtual Event, Best Overall Social Media Excellence, and Best Original Programming from Cynopsis and Digiday. As of November 9, 2022, the Company has accrued a paid and free ad-supported membership base of 2.6 million**, streamed over 2,900 artists, has a library of 30 million songs, 600 curated radio stations, over 300 podcasts/vodcasts, hundreds of pay-per-views, personalized merchandise, released music-related NFTs, and created a valuable connection between fans, brands, and bands. The Company's wholly-owned subsidiaries include Slacker Radio, React Presents, Gramophone Media, Palm Beach Records, Custom Personalization Solutions, LiveXLive, PPVOne and PodcastOne, which generates more than 2.48 billion downloads per year and 300+ episodes distributed per week across its stable of top-rated podcasts. LiveOne is available on iOS, Android, Roku, Apple TV, Amazon Fire, and through OTT, STIRR, and XUMO. For more information, visit www.liveone.com and follow us on Facebook, Instagram, TikTok, and Twitter at @liveone.

* About Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with the accounting principles generally accepted in the United States of America ("GAAP"), we present Contribution Margin (Loss) and Adjusted Earnings Before Interest Tax Depreciation and Amortization ("Adjusted EBITDA"), which are non-GAAP financial measures, as measures of our performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, or superior to, operating loss and or net income (loss) or any other performance measures derived in accordance with GAAP or as an alternative to net cash provided by operating activities or any other measures of our cash flows or liquidity.

We use Contribution Margin (Loss) and Adjusted EBITDA to evaluate the performance of our operating segment. We believe that information about these non-GAAP financial measures assists investors by allowing them to evaluate changes in the operating results of our business separate from non-operational factors that affect operating income (loss) and net income (loss), thus providing insights into both operations and the other factors that affect reported results. Adjusted EBITDA is not calculated or presented in accordance with GAAP. A limitation of the use of Adjusted EBITDA as a performance measure is that it does not reflect the periodic costs of certain amortizing assets used in generating revenue in our business. Accordingly, Adjusted EBITDA should be considered in addition to, and not as a substitute for operating income (loss), net income (loss), and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, Adjusted EBITDA as presented herein may not be comparable to similarly titled measures of other companies.

Contribution Margin (Loss) is defined as Revenue less Cost of Sales. Adjusted EBITDA is defined as earnings before interest, other (income) expense, income tax expense, depreciation and amortization and before (a) non-cash GAAP purchase accounting adjustments for certain deferred revenue and costs, (b) legal, accounting and other professional fees directly attributable to acquisition activity, (c) employee severance payments and third party professional fees directly attributable to acquisition or corporate realignment activities, (d) certain non-recurring expenses associated with legal settlements or reserves for legal settlements in the period that pertain to historical matters that existed at acquired companies prior to their purchase date and a one-time minimum guarantee to effectively terminate a live events distribution agreement post COVID-19, (e) depreciation and amortization (including goodwill impairment, if any), and (f) certain stock-based compensation expense. Management does not consider these costs to be indicative of our core operating results.

With respect to projected full year 2023 Adjusted EBITDA, a quantitative reconciliation is not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to purchase accounting adjustments, acquisition-related charges and legal settlement reserves excluded from Adjusted EBITDA. We expect that the variability of these items to have a potentially unpredictable, and potentially significant, impact on our future GAAP financial results.

For more information on these non-GAAP financial measures, please see the tables entitled “Reconciliation of Non-GAAP Measure to GAAP Measure” included at the end of this release.

Forward-Looking Statements

All statements other than statements of historical facts contained in this press release are "forward-looking statements," which may often, but not always, be identified by the use of such words as "may," "might," "will," "will likely result," "would," "should," "estimate," "plan," "project," "forecast," "intend," "expect," "anticipate," "believe," "seek," "continue," "target" or the negative of such terms or other similar expressions. These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from those expressed or implied by such statements, including: the Company's reliance on one key customer for a substantial percentage of its revenue; the Company's ability to consummate any proposed financing, acquisition, spin-out, special dividend, distribution or transaction, including the proposed special dividend and spin-out of PodcastOne or its pay-per-view business, the timing of the consummation of such proposed event, including the risks that a condition to consummation of such event would not be satisfied within the expected timeframe or at all, or that the consummation of any proposed financing, acquisition, spin-out, special dividend, distribution or transaction will not occur or whether any such event will enhance shareholder value; PodcastOne's ability to list on a national exchange; the Company's ability to continue as a going concern; the Company's ability to attract, maintain and increase the number of its users and paid members; the Company identifying, acquiring, securing and developing content; the Company's intent to repurchase shares of its common stock from time to time under its announced stock repurchase program and the timing, price, and quantity of repurchases, if any, under the program; the Company's ability to maintain compliance with certain financial and other covenants; the Company successfully implementing its growth strategy, including relating to its technology platforms and applications; management's relationships with industry stakeholders; the effects of the global Covid-19 pandemic; uncertain and unfavorable outcomes in legal proceedings; changes in economic conditions; competition; risks and uncertainties applicable to the businesses of the Company's subsidiaries; and other risks, uncertainties and factors including, but not limited to, those described in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2022, filed with the U.S. Securities and Exchange Commission (the "SEC") on June 29, 2022, Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2022, filed with the SEC on August 15, 2022, and in the Company's other filings and submissions with the SEC. These forward-looking statements speak only as of the date hereof, and the Company disclaims any obligations to update these statements, except as may be required by law. The Company intends that all forward-looking statements be subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.

** Included in the total number of members for the reported periods are certain members which are the subject of a contractual dispute. LiveOne is currently not recognizing revenue related to these members.

Financial Information

The tables below present financial results for the three and six months ended September 30, 2022 and 2021. 

LiveOne, Inc.

Consolidated Statements of Operations (Unaudited)

(In thousands, except share and per share amounts) 

Three Months Ended
September 30,

Six Months Ended
September 30,

2022

2021

2022

2021

Revenue:

$

23,532

$

21,924

$

46,755

$

60,691

Operating expenses:

Cost of sales

13,742

16,051

29,125

46,990

Sales and marketing

2,362

2,599

4,727

7,348

Product development

1,240

2,178

2,857

4,333

General and administrative

4,475

9,246

6,685

18,623

Amortization of intangible assets

2,700

1,517

4,111

3,023

Total operating expenses

24,519

31,591

47,505

80,317

Loss from operations

(987

)

(9,667

)

(750

)

(19,626

)

Other income (expense):

Interest expense, net

(2,576

)

(1,068

)

(3,573

)

(2,128

)

Loss on extinguishment of debt

-

(4,321

)

-

(4,321

)

Forgiveness of PPP loans

-

-

-

2,511

Other income (expense)

183

(176

)

2,288

284

Total other expense, net

(2,393

)

(5,565

)

(1,285

)

(3,654

)

Loss before provision for income taxes

(3,380

)

(15,232

)

(2,034

)

(23,280

)

Provision for income taxes

(29

)

(4

)

(27

)

(7

)

Net loss

$

(3,409

)

$

(15,236

)

$

(2,061

)

$

(23,287

)

Net loss per share – basic and diluted

$

(0.04

)

$

(0.19

)

$

(0.02

)

$

(0.30

)

Weighted average common shares – basic and diluted

84,709,971

78,351,655

84,189,970

77,670,598

LiveOne, Inc.

Consolidated Balance Sheets (Unaudited)

(In thousands)

September 30,

March 31,

2022

2022

Assets

Current Assets

Cash and cash equivalents

$

7,151

$

12,894

Restricted cash

240

260

Accounts receivable, net

12,958

13,687

Inventories

2,201

2,599

Prepaid expense and other current assets

1,869

1,868

Total Current Assets

25,419

31,308

Property and equipment, net

4,091

4,688

Goodwill

23,379

23,379

Intangible assets, net

12,622

16,720

Other assets

579

728

Total Assets

$

66,090

$

76,823

Liabilities and Stockholders’ Equity (Deficit)

Current Liabilities

Accounts payable and accrued liabilities

$

29,364

$

45,418

Accrued royalties

9,193

13,530

Notes payable, current portion

315

12

Bridge Loan

2,634

-

Deferred revenue

1,014

1,157

Derivative liabilities

2,274

-

Total Current Liabilities

44,794

60,117

Senior secured convertible notes, net

13,734

13,650

Unsecured convertible notes, net - related party

5,297

5,879

Senior secured revolving line of credit, net

7,000

6,965

Notes payable, net

148

148

Lease liabilities, noncurrent

320

468

Other long-term liabilities

4,609

174

Deferred income taxes

338

338

Total Liabilities

76,239

87,739

Commitments and Contingencies

Stockholders’ Equity (Deficit)

Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding

-

-

Common stock, $0.001 par value; 500,000,000 shares authorized; 87,559,322 and 82,546,189 shares issued and outstanding, respectively

88

83

Additional paid in capital

207,615

202,854

Treasury stock

(1,938

)

-

Accumulated deficit

(215,914

)

(213,853

)

Total stockholders’ equity (deficit)

(10,149

)

(10,916

)

Total Liabilities and Stockholders’ Equity (Deficit)

$

66,090

$

76,823

LiveOne, Inc.

Reconciliation of Non-GAAP Measure to GAAP Measure

Adjusted EBITDA* Reconciliation (Unaudited)

(In thousands) 

Net Income (Loss)

Depreciation
and
Amortization

Stock-Based
Compensation

Other Non-
Operating
and Non-
Recurring
Costs (1)

Other
(Income)
Expense (2)

(Benefit From)
Provision For
income
taxes

Adjusted
EBITDA*

Three Months Ended September 30, 2022

Operations - Audio

$

2,434

$

2,049

$

791

$

91

$

1,163

$

-

$

6,528

Operations - Other

(2,854

)

1,586,

80

2

364

-

(821

)

Corporate

(2,989

)

6

528

245

866

29

(1,309

)

Total

$

(3,409

)

$

2,641

$

1,399

$

338

$

2,393

$

29

$

4,398

Three Months Ended September 30, 2021

Operations - Audio

$

(996

)

$

2,173

$

754

$

63

$

583

$

-

$

2,577

Operations - Other

(2,255

)

233

430

46

135

-

(1,411

)

Corporate

(11,985

)

9

3,660

227

4,847

2

(3,237

)

Total

$

(8,051

)

$

2,379

$

4,844

$

336

$

5,565

$

5

$

(2,071

)

Net Income (Loss)

Depreciation
and
Amortization

Stock-Based
Compensation

Other Non-
Operating
and Non-
Recurring
Costs (1)

Other
(Income)
Expense (2)

(Benefit From)
Provision For
income
taxes

Adjusted
EBITDA*

Six Months Ended September 30, 2022

Operations - Audio

$

5,268

$

4,097

$

1,074

$

170

$

(784

)

$

-

$

9,826

Operations - Other

(3,457

)

1,858,

169

115

395

-

(920

)

Corporate

(3,872

)

12

941

(1,318

)

1,673

27

(2,538

)

Total

$

(2,061

)

$

5,967

$

2,184

$

(1,032

)

$

1,284

$

27

$

6,368

Six Months Ended September 30, 2021

Operations - Audio

$

(6,531

)

$

4,317

$

2,542

$

84

$

405

$

-

$

818

Operations - Other

375

460

786

262

(338

)

-

1,546

Corporate

(17,131

)

17

6,603

733

3,587

7

(6,185

)

Total

$

(23,287

)

$

4,794

$

9,931

$

1,079

$

3,654

$

7

$

(3,822

)

(1)

Other Non-Operating and Non-Recurring Costs include outside legal, accounting and other professional fees directly attributable to acquisition activity in the period, in addition to certain non-recurring expenses associated with legal settlements or reserves for legal settlements in the period that pertain to historical matters that existed at certain acquired companies prior to their purchase date and non-recurring employee severance payments and to a lesser extent, a one-time minimum guarantee to effectively terminate a live-event distribution agreement post COVID-19. 

(2)

Other (income) expense above primarily includes interest expense, net, forgiveness of PPP loans, and loss on extinguishment of debt. These are included in the statement of operations in other income (expense) and are an add back to net loss above in the reconciliation of Adjusted EBITDA* to loss. *

See the definitions of Contribution Margin and Adjusted EBITDA under “About Non-GAAP Financial Measures” within this release. 

LiveOne, Inc.

Reconciliation of Non-GAAP Measure to GAAP Measure

Contribution Margin* Reconciliation (Unaudited)

(In thousands) 

Three Months Ended
September 30,

2022

2021

Revenue:

$

23,532

$

21,924

Less:

Cost of sales

(13,742

)

(16,051

)

Amortization of developed technology

(1,151

)

(1,156

)

Gross Profit

8,639

4,717

Add back amortization of developed technology:

1,151

1,156

Contribution Margin*

$

9,790

$

5,873

*

See the definition of Contribution Margin under “About Non-GAAP Financial Measures” within this release.

View source version on businesswire.com:https://www.businesswire.com/news/home/20221110005770/en/

    CONTACT: LiveOne IR Contact:

310.601.2505

ir@liveone.comPress Contact:

LiveOne

aileen@liveone.com

             917.842.9653

KEYWORD: CALIFORNIA UNITED STATES NORTH AMERICA
    

INDUSTRY KEYWORD: PODCAST MUSIC TECHNOLOGY ONLINE MOBILE ENTERTAINMENT EVENTS/CONCERTS ENTERTAINMENT COMMUNICATIONS SOCIAL MEDIA SOFTWARE INTERNET
    

SOURCE: LiveOne, Inc.

Copyright Business Wire 2022.

PUB: 11/10/2022 11:30 AM/DISC: 11/10/2022 11:32 AM

http://www.businesswire.com/news/home/20221110005770/en