Business Overview
LiveOne, Inc. (Nasdaq: LVO) is a creator-first, music, entertainment, and technology platform focused on delivering premium experiences and content worldwide through memberships and live and virtual events. The company has reported impressive financial results, with annual revenue reaching $118.44 million and annual operating cash flow of $6.85 million for the fiscal year ended March 31, 2024. However, the company also incurred an annual net loss of $11.97 million during the same period.LiveOne operates through several wholly-owned subsidiaries, including Slacker Radio, PodcastOne, PPVOne, CPS, LiveXLive, DayOne Music Publishing, Drumify, and Splitmind. The company's business model is centered around a "creator-first" approach, which aims to reward talent and enrich shareholders by focusing on building a loyal fan base and generating multiple revenue streams from the same content.
The company's Audio Group, which includes Slacker Radio and PodcastOne, has been a standout performer, contributing revenues of $130 million to $140 million and $20 million to $25 million of EBITDA, with over $17 million in positive cash flow for the fiscal year ending March 31, 2025. Slacker Radio has seen impressive growth, surpassing 3.5 million members, and the company has signed 24 new podcasts to long-term contracts in the latest quarter, with a pipeline of over 100 existing podcasts.
Diversified Revenue Streams
LiveOne's revenue is primarily derived from membership services (54% of Q3 FY2024 revenue) and advertising (46% of Q3 FY2024 revenue). The company's membership services revenue increased by 26% in Q3 FY2024 compared to the prior-year period, driven by growth in the company's largest OEM customer. Advertising revenue also grew by 25% in Q3 FY2024, primarily due to increased advertising at PodcastOne. Additional revenue streams include merchandising, sponsorship, and licensing, though these represent a smaller portion of the company's total revenue.The company's merchandising revenue, however, decreased by 21% in Q3 FY2024 compared to the prior-year period, due to a reduction in demand from both retail partners and the company's direct-to-consumer business. The company is addressing this by implementing cost-cutting measures and accelerating the launch of celebrity brands, with plans to launch between 8 to 12 new celebrity brands starting with Geremia and Russell Devon, which have already seen strong initial sales.
Expanding Partnerships and Acquisitions
LiveOne has been actively expanding its partnerships and exploring acquisition opportunities to drive growth. The company recently closed a $20 million-plus B2B deal with one of the largest streaming platforms in the world, a Fortune 500 company, and has extended its 10-year partnership with Tesla, ensuring increasing monthly revenues. The company also has a pipeline of over 42 potential B2B partnerships across 8 verticals, with the expectation that 2 to 4 of these will close this year.In the podcast space, LiveOne has been aggressively expanding its roster, adding 24 new podcasts to long-term contracts in the latest quarter and building a pipeline of over 100 existing podcasts. The company has also launched a new subsidiary, Pulp Studio 1, focused on the ownership of scripted IP, with plans to create or acquire existing podcasts and promote them within the company's community.
Liquidity
As of December 31, 2023, LiveOne had $6.5 million in cash and cash equivalents, including restricted cash. The company has a senior secured line of credit of $7.0 million, a Capchase Loan of $1.6 million, and an SBA loan balance of $0.1 million. While the company has a history of losses and a working capital deficiency, it is actively working to improve its financial position, including through cost-cutting measures and the expansion of its revenue streams.Guidance and Outlook
LiveOne has provided guidance for the fiscal year ending March 31, 2025, expecting its Audio Division to contribute revenues of $130 million to $140 million and $20 million to $25 million of EBITDA, with over $17 million in positive cash flow. The company has also raised its guidance for fiscal 2025 to $145 million to $155 million in consolidated revenues.