LiveOne, Inc. Q2 FY2026 earnings call

• The company survived the loss of over $50 million in revenues from Tesla and thrived. • Leveraged technology and AI to cut staff from 350 to 95 and reduce costs from $22 million to $6 million. • Expanded partnership with Amazon from $16.5 million over 3 years to over $20 million. • Converted over 60% of Tesla's 2 million cars, with 1 million free cars re-signed. • PodcastOne had record revenue and expects continued growth. • Upcoming live event 'Reality Olympics' with YouTube committing over 1 billion impressions. • Launched LiveOne Africa with a commitment to raise over $20 million. • Continues to buy back stock.

For the Q2 Fiscal 2026, the Audio division posted revenue of $36.6 million with adjusted EBITDA of $1.1 million. The PodcastOne subsidiary reported record revenue of $15.2 million and adjusted EBITDA of $1.1 million. The Slacker subsidiary had revenue of $3.1 million and an adjusted EBITDA loss of $0.4 million.

• Management expects to provide guidance before year-end, with B2B deals ramping up faster than expected. • PodcastOne's growth is anticipated to continue. • The new B2B partner deal is expected to be highlighted as year-end approaches.

• Uncertainties in forward-looking statements as actual results may differ from expectations. • Risks related to B2B partnerships and conversions not meeting targets. • Potential differences between projected and actual financial performance.

Q: Last quarter, you discussed the soft launch for a B2B partner with 30 million subscribers. Any details to share?

A: The success of the launch was spectacular, similar to the Tesla relaunch, with telltale signs of success as year-end approaches.

Q: Is this deal part of the $50 million plus B2B revenue and when does it ramp?

A: No, it's an additional deal, and guidance will be provided before year-end with ramping expected towards the end of the year.

Q: What portion of the increase in cost of sales as a percentage of revenue is stock-based comp?

A: Stock comp is higher in cost of sales year-over-year, with more stock comp in cost of sales this quarter versus last, and G&A expected to be lower next quarter.

Q: On the number of subscribers converted, have we converted pretty much everybody?

A: From a free standpoint, yes, but now using AI marketing technology to convert them, with expectations of 5-10% increase in conversions, and new revenue streams from advertising.