PodcastOne, Inc. Q4 FY2025 earnings call

• Renewed several high-performing legacy shows like the Adam Carolla Show, etc. - Expanded partnership with A&E and History Channel by adding Ancient Aliens. - New original titles like Cate & Ty Break it Down and Detox Retox with Tom Schwartz. - Migrated to Amazon's ART19 platform, hitting minimum guarantee milestone. - PodcastOne Pro launched, contributing to revenue mix, with clients like Lovesac and MotorTrend. - Renovated Beverly Hills studio. - Drove value through brand integration, celebrity guests, and events. - Announced Lady World Tour for LadyGang.

In the fiscal fourth quarter of 2025, revenue increased 20% to $14.1 million compared to $11.7 million in the same quarter a year ago. Operating loss was $1.8 million vs. $1.2 million prior. Net loss was $1.8 million vs. $1 million. Adjusted EBITDA was positive $0.9 million vs. $0.3 million. For fiscal year 2025, revenue was $52.1 million vs. $43.3 million, operating loss was $6.4 million vs. $5 million, net loss was $6.4 million vs. $14.7 million, and adjusted EBITDA was negative $0.5 million vs. positive $0.5 million.

• Expect FY 2026 revenue between $55 million and $60 million. - Expect FY 2026 adjusted EBITDA between positive $3 million and $5 million. - Completed financing with JGB Capital to replace East West Bank line of credit, facilitating growth.

Q: A couple of things I wanted to ask about that you've talked about on previous calls, and I just want to see if things are kind of in line with what you'd expected. So stock-based comp up fairly meaningfully. Is this related to the initiatives that you have discussed in the past of making that a bigger component of compensation to the talent? And is this current level something we should expect? Or could it go up or down from here?

A: Sean, thanks for the question. Yes, the answer is that's definitely part of the reason why it's gone up. And yes, it's a really exciting opportunity for our talent, something that's unique that other networks and other companies aren't able to offer, part of the reason why we're on the NASDAQ and publicly traded. We're able to offer our partners in the content space, the ability to be a part of the bigger picture, being part of PodcastOne. So we talk to hundreds and hundreds of podcasts and podcast networks and companies and stock is always a part of that conversation and will be moving forward. But it's worked out quite nicely for our initiatives and talent acquisition so far. And I think everybody is pretty happy with it, and we'll continue to do more of it.

Q: And kind of a follow-up, maybe Ryan can chime in on this that it looks like the increase in stock-based comp was bigger in dollars than the increase in G&A. So was there a reduction in the kind of non-stock-based comp G&A? And what's going on there? And what can we expect in the future?

A: Yes. Thanks for the question. The stock comp was up, I think you nailed it. G&A was up as well. I think going forward, what you saw here at the end of this year is kind of what you can expect going forward. We're always looking for efficiencies, and we're going to continue to do that. But yes, on a run rate, the OpEx that we saw coming out of Q4 is going to get reduced a bit in Q1 and then the stock comp will stay where it's at.

Q: Regarding the ART19 deal, have you gotten the benefits so far that you expected? Or is there a lot more to come? And how is that whole thing going?

A: Yes. It's been great so far. There's a ton of operational efficiencies that we've talked about in cost savings with that deal. And as we implement some of the other more efficient, better services to replace what we had in the back setup with our previous partners is being implemented as we speak. So there'll be some great cost savings throughout the year moving forward. As far as revenue generation, it's been tremendous. I mentioned in my explanation, we hit the [ NGA ] in April, which is really exciting. May, I know we are -- we definitely hit it there, too. We're right on the cusp of the next level. And I think I've explained that this is a tiered deals. So as we grow, that deal grows, right? So we're seeing more demand on our inventory. And as our inventory grows, we're seeing great fill rates, higher CPMs. When you look at our other programmatic revenue, which is really the third tier, right? So it goes our sales group, direct sales team that you know all about. And then ART19 Amazon's platform and how they monetize the inventory and then the programmatic desks that we are tied to and continue to expand upon, you'll see that going lower, and that's by design because the others 2 are picking up. So yes, it's been great so far, and we're really excited about it moving forward.

Q: A couple of questions. First question is regarding the advertising environment. Given the uncertainty we're having in the economy, have you seen any shift in terms of advertisers' appetite for putting ads on your network?

A: No, we're having a good quarter. We are seeing higher CPMs, more advertisers jumping into the space, doing different things beyond just what we talked about, right? The revenue channels have diversified. So it's not just the ad spots and you're seeing higher growth on the programmatic side, the DAI side, the embedded side, live shows, social media, expansion into the campaigns, live events. So the side of our business is pretty good in the advertising world. That being said, the competition is tough. You've got a lot of these big players like iHeart and Spotify that package in radio stations and music streaming and they try to take market share on the advertising dollars out there. That's just the nature of the business. That being said, we do a heck of a job managing and working with our talent. Our talent is engaged. They are excited about doing great things for our advertisers, understanding that the competition is out there. So we've got to do great audio ads. We've got to do great video ads now and pick up our games. So we're able -- being the size of the company that we are, we're able to kind of move and strategically position ourselves with advertisers to be not only a great network of great content, but actually people that they can trust to do a great job for them and their advertisers. So everything seems pretty good. Good to hear from you, Leo, by the way.

Q: The follow-up question is regarding talent acquisition. What is the environment you see? Is there still good talent that's available? And can you negotiate favorable terms? Or just trying to get a sense in terms of how fast we can continue growing the shows on the platform.

A: Yes. Like we said, I think we added 10 shows. We've got a funnel of a lot of really exciting ones that should be announced within the next week, to be honest. The talent pool is out there. There's a lot of great shows out there that may not be getting the services that they want or need. We have a great reputation out there for servicing those partners, working with them to monetize their content, not only to add to what they're doing, but get higher CPMs, higher demand on their impressions, monetize the backlog, market their shows and help them grow. So we're in a good spot to just acquire more and more shows and grow. It's interesting. The time never stops, right? And a lot of the shows maybe that we lost a year ago for whatever reason, they're starting to come around now. So we're seeing the strengths and the weaknesses of other networks, and we're able to tell our story, and I'm hopeful that we can land some of those shows as well. The great thing is our current partners are adding to it, right? And we talk about A&E and now their History Channel and adding more shows there and the Killer Network with Kail Lowry adding more shows under their network. So the people that we are working with are continuing to grow and evolve, and that's helpful as well.

Q: On the Amazon deal you have, could you remind us what are the terms and what you need to fulfill to reach the minimum thresholds?

A: Sure. So basically, how it works is they are giving us a minimum guarantee on a monthly basis that is basically just adjusted on the impressions that we're able to give them to sell. So we track it throughout the month, almost on a daily basis just to see if we're hitting that goal. Right now, the first threshold, if I remember correctly, is 90 million impressions. The next threshold up would be 110 million impressions. So we are very, very close to that. I'm hopeful that even the June month that we'll get there. Once -- I believe in the contract says over 3 months, I think we got to keep it at that level, that next threshold for 3 months, and then we'll get a higher minimum guarantee. That being said, they have more inventory to sell and monetize. And as their demand goes up and Amazon continues to package podcasting with all their other advertising opportunities to their clients. We're seeing higher CPMs, higher sellout rates. So everything seems really good on that front. I believe it was a 3-year deal, but we're really happy with Andy and team over at the Art19 side of things and their fantastic group of people. I believe our shows are enjoying the experience as well. It was really a seamless transition on the production side. There's a lot of great information that we're able to provide to our shows on their audience and where they're at and fill rates. And our management team and our tech team here has done a really good job identifying new companies that we're working with. We mentioned Podroll, but there's other companies now looking at ways to even become more efficient and better in terms of optimizing our inventory. So we're starting to work with some of those, and that should be great for us on the whole picture.

Q: can you remind -- walk us through in terms of the rationale for entering into the crypto and creating the network aiming for that market?

A: Yes. I was actually talking to Steve this morning about this when -- and we're starting to do a bunch of calls with some really exciting people in the crypto space. And they leverage social media, blogs, podcast, YouTube channels. They're doing live shows now, virtual shows and really everything that we do, right? So we do that for our partners. And what we love about it and when you get on the call with these guys and you talk to them about it is their passion for the crypto space. And when you think about communities and passion and connection to host, I mean, that's really podcasting. So whether it's listening到 a crime show or Beverly Hills Household reality star, that fan base is the same. They're connected at that same level. They're very passionate about it. So when we look at the crypto space, it's an exciting one because your high qualitative, very connected, very passionate, loyal fan base. And if we can package a bunch of those together, cross-promote, do some of the things that I just talked about in terms of offering other revenue channels and services for them where they can even create more content, I think we're in a really exciting spot to not only create a really cool podcast, podcast network that drives revenue and value, but also offers just a great place for people to come to discover that content as they dive into the ever-growing crypto space.

Q: You touched on some of my questions already, but one sort of overarching question I have is that you grew 20% year-over-year in this quarter and you're #10, that's great. But like is the industry -- are you growing faster than the industry? Are you picking up share in measurable ways? And should we expect that growth to accelerate?

A: Yes. I think there's 2 levels of it. We want to grow and acquire new exciting content producers and new exciting communities, but we also want to make sure that we're really taking -- maximizing our opportunities with our current inventory and our current partnerships, right? So to become profitable and do what we need to do as a company, we need to make sure the producers of the content and all the content that they have are getting those premium CPMs, those high sellout rates, those diversified revenues. So it's really 2 things, right? We want to make sure we're doing that for our current partners and growing there. But as we acquire new shows, new content providers that we put them in the right spot for them to be successful where they can have higher CPMs, higher sell-out rates, we can make them more efficient to do more content for us and grow because that's really important when we look at the margins on our deals and minimum guarantees and rev splits and all that. So we look at it 2 ways. When you compare us to the industry, look, there are companies out there, competitors that don't care about losing money and throwing money at some big shows. We're not that company. We've talked about that in the past. We do a calculated look at what the demand is out there in the marketplace, where the CPMs are, where we can get good margins, how we can make the shows better, how they fit into our network, how they work with advertisers, all of these things before we just sign a bunch of shows, right? It's -- that would be a mistake that would let down some of those shows might even let down some of our current shows, and that's not the business that we're in. So we are growing, as you know, but it's really important for us to grow on a revenue basis as well.