Liveone, Inc. ((LVO)) has held its Q2 earnings call. Read on for the main highlights of the call.
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LiveOne, Inc.’s recent earnings call presented a mixed sentiment, reflecting both achievements and challenges. The company showcased significant strides in cost reduction, B2B partnerships, and podcast business growth. However, it also faced hurdles such as a decline in overall revenue, losses within its Slacker subsidiary, and pressure on gross margins due to stock-based compensation and changes in its relationship with Tesla.
Audio Division Revenue
LiveOne’s Audio division reported a revenue of $36.6 million, coupled with an adjusted EBITDA of $1.1 million. This performance highlights the division’s contribution to the company’s financial health amidst broader challenges.
Cost Reduction and Efficiency
The company made substantial progress in cost reduction by leveraging AI technologies, reducing its workforce from 350 to 95 employees, and cutting costs from $22 million to $6 million. These measures underscore LiveOne’s commitment to improving operational efficiency.
Expanded B2B Partnerships
LiveOne expanded its B2B partnerships significantly, with its deal with Amazon growing from $16.5 million to $20 million. Additionally, a Fortune 250 partner increased their annual contribution from $2 million to $26 million, showcasing the company’s success in strengthening its business relationships.
Podcast Business Growth
PodcastOne, a subsidiary of LiveOne, announced record-breaking quarterly revenues exceeding $15 million. The podcast business anticipates annual revenues between $56 million and $60 million, with an expected EBITDA of $4.5 million to $6 million, indicating robust growth in this segment.
New Subsidiary and Market Expansion
LiveOne launched a new subsidiary, LiveOne Africa, with plans to raise over $20 million. This move targets a rapidly growing market that is expected to surpass the U.S. in size, marking a strategic expansion for the company.
Future B2B Opportunities
The company is poised to announce additional B2B partnerships, with a pipeline of 72 potential deals. This indicates a strong focus on expanding its business-to-business operations to drive future growth.
Consolidated Revenue Decline
The consolidated revenue for the quarter was reported at $18.8 million, with a net loss of $5.7 million or $0.52 per diluted share. This decline highlights the financial challenges the company is currently navigating.
Slacker Subsidiary Loss
Slacker, a subsidiary of LiveOne, reported revenue of $3.1 million but faced an adjusted EBITDA loss of $0.4 million. This underscores the difficulties within this segment of the business.
Gross Margin Decline
The company’s gross margin experienced a decline, attributed to changes in its customer relationship with Tesla and the resulting reduction in volume. This shift has impacted the company’s financial performance.
Stock-Based Compensation Impact
Increased stock-based compensation within the cost of sales has further pressured gross margins and overall financial performance, presenting a challenge for the company.
Forward-Looking Guidance
Looking ahead, LiveOne aims for significant growth through strategic B2B partnerships and AI-driven marketing strategies. Despite a $50 million revenue loss from Tesla, the company remains resilient, with plans to convert a substantial portion of Tesla car users to paid subscribers. The podcast business is expected to continue its strong performance, and multiple B2B deals are anticipated before year-end.
In conclusion, LiveOne, Inc.’s earnings call reflected a company at a crossroads, balancing notable achievements with significant challenges. While cost reductions and partnerships are promising, revenue declines and subsidiary losses require strategic attention. The company’s forward-looking strategies suggest a focus on growth and adaptation in a changing market landscape.