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Thank you for standing by. Welcome, everyone, to the LiveOne, Inc. Third Quarter Fiscal 2026 Financial Results and Business Update. [Operator Instructions] I would now like to turn the call over to Ryan Carhart, Chief Financial Officer. You may begin, sir.

Thank you. Good morning, and welcome to LiveOne's Business Update and Financial Results Conference Call for the company's fiscal third quarter ended December 31, 2025. Presenting on today's call with me is Rob Ellin, CEO and Chairman of LiveOne. I would like to remind you that some of the statements made on today's call are forward-looking and are based on current expectations, forecasts and assumptions that involve various risks and uncertainties. These statements include, but are not limited to, statements regarding the future performance of the company, including expected future financial results and expected future growth in the business. Actual results may differ materially from those discussed on this call for a variety of reasons. Please refer to the company's filings with the SEC for information about factors which could cause the company's actual results to differ materially from these forward-looking statements, including those described in its annual report on Form 10-K for the year ended March 31, 2025, and subsequent SEC filings. You'll find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed today in the company's earnings release, which is posted on its Investor Relations website. The company encourages you to periodically visit its Investor Relations website for important content. The following discussion, including responses to your questions, contains time-sensitive information and reflects management's view as of the date of this call, February 12, 2026. And except as required by law, the company does not undertake any obligation to update or revise this information after the date of the call. I'd like to highlight to investors that this call is being recorded. The company is making it available to investors and media via webcast, and a replay will be available on its website in the Investor Relations section shortly following the conclusion of the call. Additionally, it is the property of the company and any redistribution, transmission or rebroadcast of this call or the webcast in any form without the company's expressed written consent is strictly prohibited. Now I would like to turn the call over to LiveOne's CEO, Rob Ellin.

Good morning, everyone, and thank you for joining us. This quarter marks a clear inflection point for our company. We delivered over $58 million in revenues for the 9 months, including $20 million in Q3, most important, expanding our adjusted EBITDA and structurally transforming the business. Operating expenses reduced by over 52% year-over-year. Our organization was streamlined with the help of AI from 350 people to 88 team members. We strengthened our balance sheet, reduced our debt, expanded our capital flexibility. We've just paid off over $2.5 million of debt. These were permanent structural improvements designed to create a scalable margin expanding platform. Over the past several years, we navigated COVID shutdowns, the collapse in media and microcap valuations, the loss of key partnerships and a disruption in the automotive channel. Many companies in our sector did not survive. We did, and we are emerging leaner, more disciplined and positioned for the next major growth cycle. Our Audio Division generated $52.2 million in 9-month revenue and over $3.7 million in adjusted EBITDA, again, showcasing those cost savings and the use of AI to materially change the staffing of this company, including $18.6 million in revenue and $2.6 million of EBITDA in Q3 alone. Looking ahead, our preliminary fiscal guidance for the first time we are putting out $85 million to $95 million in revenues and $8 million to $10 million in adjusted EBITDA. We are scaling profitably and closing the earnings delivery gap as we move forward towards year-end. Very importantly to note, we have over $125 million in net operating loss carryforwards. As we move towards profitability at the end of the year, these NOLs represent significant long-term shareholder value and tax efficiencies as we grow earnings. Industry valuation dynamics are improving. We're trading at 60% of revenues. The industry is trading over 3x revenues. The private sector in both podcasting and audio as a whole is trading over 3.7x, and there are multiple transactions in the last 120 days at well above 5x revenues. Strategic buyers understand the value of recurring engagement, monetization leverage and behavioral data. As fundamentals have normalized, valuation frameworks are starting to adjust. Our B2B pipeline is now the largest in company history, up over 30% in the last 120 days with over 100 active enterprise opportunities with $1 billion to $1 trillion companies. We are expanding our partnerships across Amazon, Apple, Paramount, Pluto TV, Telly, DAX and Tesla. This year, we expect to launch 3 major Fortune 500 partnerships across a national retailer, a leading TV platform and a major carrier. Two of those partners alone have over 50 million monthly paying subscribers. These are scaled recurring enterprise relationships designed to materially expand margins and enterprise value. At the same time, we're executing a focused strategy to convert more than 1 million free and ad-supported subscribers, including our Tesla users into highly monetized tiers. That conversion opportunity alone represents meaningful incremental revenue and EBITDA. We are also seeing a sharp acceleration in inbound M&A opportunities. As the market stabilizes and valuations normalize, strategic combinations are becoming increasingly attractive. Inbound calls continue to increase dramatically. We are disciplined in evaluating opportunities and to look at all opportunities that will increase shareholder value dramatically. We continue to expand our original IP. We have now sold our fourth television series to a major streaming platform with 100% margin economics. The costs are already built in into rolling out our podcast. And when they sell to the streaming networks, we are immediately taking in cash flow earnings. Owning intellectual properties creates long-term asset value and high-margin revenue streams. We are focused on building and controlling premium content that can travel across audio, video, streaming and live formats. We now have over 15 original projects in the pipeline and growing. Live experience is also returning a major growth sector. Prior to COVID, live events represented 50% of our revenues. That market is reaccelerating. As you watch Ari Emanuel raise over $2 billion, you watch many partners in that space growing dramatically and capital being raised, our creator community, brand relationships and audience scale position us to dramatically expand live shows across podcast, music and live events. And we're increasingly focused on owning our own products, not distribution of content and products, but actually ownership with a database exceeding 65 million consumers and billions of impressions and downloads across our platforms, we have the ability to test, launch, scale proprietary products directly to our community. That level of owned audience and data provides a powerful testing engine and distribution channel, enabling us to drive our own product margins and recurring revenue streams. The structural shift is happening across all of the major media businesses. Netflix is entering the podcast business. TikTok is expanding aggressively into audio. Audio remains the stickiest behavior in media. No one turns off their music subscription, music listening generates powerful behavioral data. Time of day patterns, mood cycles, frequency and engagement depth. That data becomes fundamental in training materially for sophisticated AI models. AI is not a feature. It's an infrastructure. Our AI partnerships are growing and initiatives are focused on leveraging behavioral audio data, enhancing personalization, optimizing monetization, and powering enterprise engagement. That is why B2B demand is accelerating. That is why the pipeline is exploding. To fully capitalize on this opportunity, we are evolving our leadership structure. We have started the process and we will shortly announce a new President, an accomplished operating executive in again, who has built and scaled and sold billion-dollar public companies and brings deep public market expertise to our team. This leader will also assume day-to-day operational roles, allowing me to dedicate 100% of my time to B2B partnerships, M&A activity and accelerating, most important, our AI initiatives and pursuing strategic growth opportunities. It's a proactive decision aligned with scale and opportunity and the fact that the restructuring has now been complete and it is now time to really focus our energy on top line growth and bottom line EBITDA numbers. Finally, our capital allocation reflects our confidence. We believe our company is materially undervalued, trading at less than 1x revenues, well below the 3.7 industry trading today. Our NOLs of over $125 million and improving industry multiples. As a result, we are expanding our share repurchase program with approximately $6 million remaining under the authorization. We are investing in growth. We are investing in ourselves. We are no longer rebuilding, we are accelerating. Revenue is scaling, EBITDA is exploding. The earnings gap is closing. B2B partnerships are growing. AI initiatives are advancing. Live experiences are returning, own products are launching. M&A opportunities and increasing industry valuations are normalizing and capital is being returned through disciplined buybacks. We survived disruption, we rebuilt the foundation, and we're now positioned at the intersection of audio, enterprise distribution, behavioral data, AI, IT ownership and scalable monetization. The next chapter is disciplined margin expanding growth. I want to thank everyone for their support and appreciate your time today, and I look forward to any questions. At this point, I'm going to hand it off to Ryan Carhart, our CFO, who has done an exceptional job of delivering on these numbers. Thank you.

Thanks, Rob. I'll spend just a few minutes providing a very brief overview of our results for the fiscal third quarter ended December 31, 2025. Consolidated revenue for the 3-month period ended December 31, 2025, was $20.3 million. Our Audio Division posted revenue for Q3 of $18.6 million and adjusted EBITDA of $2.6 million. Consolidated adjusted EBITDA for the second quarter of fiscal year 2026 was a positive $1.6 million. On a U.S. GAAP basis, LiveOne posted a consolidated net loss of $4.1 million or $0.37 per diluted share in Q3 fiscal 2026. At the operating level, our PodcastOne subsidiary posted record revenue of $15.9 million and adjusted EBITDA of $2.8 million. Our Slacker subsidiary reported Q3 revenue of $2.8 million and adjusted EBITDA of negative $0.1 million. We are pleased to report continued record growth at PodcastOne subsidiary, which we expect to continue throughout the end of the year and into next year. Concurrently, we are advancing several strategic partnerships from our business development pipeline that we believe have the potential to drive long-term growth and value creation. As we look ahead to fiscal 2027, we believe the company is well positioned for transformational growth. Rob, I'll turn it back to you.

Yes. Thanks, Ryan. I think we covered almost everything, and I think it's an opportunity for us to open up the floor for any questions. Again, we have said that we will be launching 3 massive initiatives for the company before year-end. We are looking forward to the guidance that we just put out for next year, showing again substantial growth opportunities. And with that, I'll open it up to any questions and look forward to it.

[Operator Instructions] And your first question comes from the line of Barry Sine with Litchfield.

Two questions, if you don't mind. First, on the B2B business. It seems to me that no 2 deals are alike. Every single one seems to be customized. And it looks like you're doing that with AI because your staff is down pretty dramatically. I wonder if you could elaborate on that, talk a little bit about what you're doing in terms of customization, some of the options that you're giving customers. And then on a related note, the potential risk, one or the other music streaming companies comes into the B2B space.

I think it's -- to start with, it's very hard for any of them to come into the B2B space in the fashion that we have. right? Number one, and you know my background also well, Barry, it's been built off of B2B deals, right, whether it was iWon, whether it's Digital Turbine, it's Majesco, all of them have built off these massive distributors who already have an audience, right? We're not in the business of chasing an individual and spending $86 a sub, right? So number one is none of those -- there's only a few, right? In the United States, only like 7. In the world, there's probably 12 altogether of what's called DSPs. All of those are massive in size, okay? And when you look at the competition in the U.S., they're all our partners, right, iHeart, Sirius, Spotify, Apple, Amazon, YouTube, okay? The smallest valuation is $6 billion, then it goes to $1 trillion, right? So -- and none of them are going to give up their brand. None of them are going to be able to white label and be a white label solution. So the best way I can describe as these B2B deals are being launched, right, we publicly said that our Amazon deal has grown to over $20 million from originally starting very small. Same thing with our streaming partner, Fortune 250 company grew from $2 million, it's now well over $26 million and growing, right? You're going to see the same type of transactions happening with those B2B partners. And when you look at the structure of them, number one, the reason that we're able to do this is we're the lowest price. We're the Walmart of the music space. Number two is we're the most nimble. Because of the size of the company, we have the capability of servicing them in a very different way. And then very important is the ability that we have to be able to white label, right? None of those companies are going to give up their brands. And part of the excitement and energy in this is all those competitors are partners of ours. We're all great friends and great partners, right? We're a small company, but our content is provided and put on to their platforms and their content is on our platforms. So really exciting to be in this time where the cycle is changing. And for any of you that have been in any of my companies, I talk about these cycles, the cycle is changing so fast. And with the initiatives of AI and what's happening and how critical data is, all these companies are competing with each other head on. It's kind of amazing to watch whether it's a retailer, whether it's social media, whether it's a streaming network, they're all crossing over each other's business in such a dynamic way. To think that Netflix has just entered the podcast space, right? Why are they entering? I humbly believe that you're going to see this year, one of the streaming platforms buy a music platform or maybe each one of them. It makes so much logical sense for them to acquire one and maybe that's why iHeart stock is up 6x. Maybe that's why Spotify was up $80 this week, right? It's so fundamentally makes so much sense for a streaming platform to buy one of the audio platforms because they're fighting to raise their ARPUs, right, by $0.50 or $1 every 2 years. Well, if they added audio, they could add $3 to $10 a month without any additional cost upfront. You don't have to make a movie, you don't have to make a television show, you don't have to spend $1 billion. Now here's the Wild West that is happening. Because of AI, every retailer, right? Everyone's got to compete with Amazon. So Amazon has got to compete with Walmart and Costco and Best Buy and Shopify, right? They're all competing. And now you've got Facebook entering the retail market doing billions of dollars and TikTok entering. Social media is entering, retail is entering. Anyone that has an online presence has to figure out how to keep that consumer engaged. There's no one on this call that doesn't have at least one music subscription. There's no one on this call that probably spends more time in media than anything other music because you can take the music with you, right, go everywhere, whether it's audio or video, you can take it everywhere. And especially as they've added podcasting into it and especially as you add video into it. So I think we're uniquely positioned as a B2B partner that we could either be a strategic partner. We could -- there could be a strategic investment from a major partner here across all those different verticals I just articulated, right, and the ones we're already partners with and there could be an M&A activity of someone trying to buy us. All of those are very possible, especially with us currently trading at this huge discount.

And that's great. If I could ask one more question just on Slacker. It seems to me that you have a huge largely untapped opportunity to sell advertising into that base of nonsubscription customers ad-supported. How is that going? I don't know if Ryan can give us the advertising revenue for Slacker in the quarter. I know you've added some partners in AI to kind of ramp that up. How is that process going? And what is the potential for ad revenue from Slacker ad-supported customers?

I mean I'd be a little bit careful to separate just Slacker because we have a very robust advertising business, right, across audio with our podcasting. But specifically on our free subscribers, there's multiple reasons to have those free subscribers. Spotify claims that 60% of all of their free subscribers and the reason they have a free tier eventually convert to long-term subscription and paid subscription, right? I don't know whether it's over 3 months, 6 months, 12 months or over 3 years, but that's a staggering number. So when we see our base of over 1 million free subscribers, number one is we've added advertising. We partnered with DAX, the #1 programmatic advertising company in the world. We started with them only a couple of months ago. We've just raised our ARPUs by over 30%, right? And with that, it's just the beginning, right? It means that the inventory is getting filled, which means that people are listening, which is a great sign, and we'll continue to grow that. Now you do that as a loss leader for a couple of things. One is you drive revenues. Two is you're going to lose some subscribers, right, who are going to go away. But most important is you're going to convert subscribers into paid subscription. So we look at all of those. With that, because of the unique B2B deals that we're doing and because of the structure of these deals, you could also see your partners bringing their own advertisers into the fold that won't be about CPMs and CPAs, they'll be about a customer who's looking for those products and driving those products because of those relationships with that B2B partner.

Next question comes from the line of Brian Kinstlinger with Alliance Global Partners.

Way to get back to profit. You highlighted the big streaming services will not white label their music, which gives you a competitive advantage. What is the competitive landscape to provide content for these brands look like? And are the Spotifys of the world trying to partner with the same large brands to offer a non-white label solution to brands?

I mean there's a little bit of that, but it's very hard to do the same thing we're doing, right? Obviously, the music business has been built off the backs of carriers, right? And the carriers kind of lost their way and that they were in a robust market with low interest rates, right, where they're enjoying that low interest rate and it's okay for them. But the reality is as AI has exploded, everyone is waking up and saying, everybody is competing for every piece of the business. The crossover to think that Tesla, Elon Musk, Starlink could be competing with Verizon, T-Mobile and AT&T, right, is kind of scary, right? And that goes across almost everything as AI continues to expand. So I think what you're going to see is you're going to see a little bit of that where you may see some of the Spotify app, AT&T, Verizon, T-Mobile deals. But again, it's hard for them ever to white label or to be able to really offer them the same kind of offering that we give them with the flexibility or to service them in the same way because it's just not as meaningful, right? They've got a massive business, billions, billions of dollars, right? We got a small business. It's very important to us as we get those B2B deals to be able to service them and give their clients exactly what they need. Tailor the music, tailor the pricing, understand the needs of the exact consumer of each of those B2B partners and understand that AI data and what we can deliver with it. And so I think we're uniquely positioned. I don't think there's anybody else in the space that can do what we're doing right now. And I think that you're going to get some competition a little bit in carriers probably, but you're not going to really see it in the other verticals that we've talked about across streaming, social media, retailers. I don't think that, that's going to be a competitor because they want their own brands, right? We recently had a conversation with one of our B2B partners that we're launching and they were like we don't need you as a brand. We need you because of your service. You got 22 years of history, right? Remember, before we got here, that NOL was built by the likes of Columbia, Mission and Rho, who put in $180 million into Slacker Radio, right? So the infrastructure is built, right? It's all that -- all the labels, all the publishers, all the dynamics and all the payouts, right? You got to pay out 50 partners, right? It's a very complicated algorithm that if someone tried, in fact, Tesla tried it, and they realized afterwards, it's impossible. A, it's really hard to build and it costs hundreds of millions of dollars. The second is you got to deal with all these partners and be able to pay all of them. It's a very complicated algorithm. So I think we're uniquely positioned there as 1 of 10, right, really in the country and 1 of 12 in the world, right, who is doing this, that we're really uniquely positioned to be able to grab those B2B deals and have enough of them, right? We won't get every one of them. We only need a couple of them, right? A few more of these deals, you keep adding to Amazon and Paramount and Telly and Spotify and you add to these deals. These are all $10 million-plus deals. You keep growing those, and there's no reason you can't see this company doing $0.25 billion and getting back to that $25 million to $50 million of EBITDA over the next couple of years.

Great. And then can you share any more information on the B2B partnership with the 30 million-plus subscribers? Is that contract signed? What is the timing? What industry is this partner? And if it's not signed, what are the items that you need to get accomplished to get you over the finish line?

Yes. So what I said was, and I'm going to be very careful in my words, but I crystal clear said, these are being launched, right? And what I crystal clear is these are already signed, right? And what I said on the call today was there are multiple partners, right, in there who have over 50 million. So I've increased that number from $30 million to over $50 million, right? So -- and that's about as much detail as I can give. But what you can start to do is you can start to -- like we did with Tesla, right, shockingly, right, out of 2 million cars, we re-signed 1.2 million approximately between free and paid, right? If you use a number, that's crazy. That's a 60% staggering number, right? If you use a 1% number, even 0.5% number, right, that signs up from these partners. And like I said, there are 3 of them of very serious sized Fortune 500 companies, and there's 100 more in the pipeline. When we last talked, Brian, that 100 was -- I think we were 65 or 70. That pipeline is increasingly and is staggeringly increasing. And it's not because we're so smart. It's because we're the only ones who can truly do this right now. And like I said, you're seeing Netflix and TikTok entering the podcast space. You're seeing the likes of audio businesses, these podcast businesses are getting bought up at aggressive, aggressive, aggressive valuation. It's 3x revenues, 5x revenues. A deal that just got done on Friday at 7x revenues, right? Why is that? The data is so critical. These are right? These are super humans, superstars who have super fans. When you can get that data, the super fans, it's really hard for any that are using AI, you're watching, you try to put things into the model now and things you used to be able to do. I put a little joke in from my daughter's wedding the other day where I wanted to put a picture from Scarface with my son who happens to be a great-looking kid. It literally looks like I was going to make them look like. You cannot do that anymore. So they're starting to block that content because all lawsuits are starting. The beauty of this is because we have the licenses, we have the capability of having the biggest stars in the world, right, the biggest musicians go across the board. You want Bad Bunny, you want Drake, you want Post Malone. If you go to sports, right, LeBron James can only play for the Lakers. In music, they're playing for everybody. And they play for Spotify, they play for Apple and they play for us. We have all the same music that anybody else has. We have all the same content. We have 46 patents around it. We have $125 million NOL, and we have the flexibility to provide a unique service because of our middle tier that we can price lower than anybody else. And because of our infrastructure, which is getting smaller and smaller and more powerful, it's getting better, right? It's not like the more people we had, the better we are at this. We're actually getting better at it every day. We're getting stronger at it. We're able to deliver more music channels with way less cost. So we're really well positioned that if we can stay in the game long enough, there are going to be enough B2B partners. I say this humbly, right? Everyone who is in Digital Turbine with me anyone who knows what I did with iWon, anyone who knows what we did with Majesco, they're all built off of 1 to 5 of these B2B deals that you're leveraging someone who already has built that massive audience holding their hands, right, literally giving a full 360, right? We do anything they need to do to make sure that we service them. And if we can just land a few more of those, right, who would imagine that Amazon has already grown to 20 and Paramount is over 26 now, right? These are growing fast. These are massive partners that have 10 million to 3 billion eyeballs like Facebook and just think of every one of them who is missing a music subscription, a podcast piece, an audience like ours, right? We have billions of impressions, right? You think about network's history historically. If you listen to the all-in podcast and Ari Emmanuel, he said, right now, you're watching the new future. Syndications coming back. There's only a few streaming partners, right? And then there's these trillion dollar companies of Apple, Amazon and YouTube, right? And they're all starting to buy Seinfeld. They're all starting to buy The Office. They're paying South Park, billions of dollars. But what is going to be the biggest syndication as always, is going to be talking heads. Who was the biggest before? Oprah, Dr. Phil. We just signed Dr. Film to our network. The biggest talent we've ever had in the history of our platform, okay? We got to grow them. We've got to build them again, right? He's just coming back to podcasting from the television side of it. But this was a guy who was paid $50 million to $70 million by CBS. Those talking heads are desperately needed on these platforms. You just watched the Red Network. It's now bought -- Fox has now brought up the Red Network. With that, they just bought Tucker Carlson and Megyn Kelly. They continue every week, take those talking heads. The consolidation back to the reality of where the business was, whether it was audio and video, audio and video come together in neat package, just like CBS Radio and CBS Television, right? Those talking heads across audio and video are going to be the largest pay base, just like Howard Stern, just like Ryan Seacrest, just like Joe Rogan is today. We're right in that sweet spot. So I think we have a very unique advantage of the proposition that we're offering and the pricing that we're offering.

Great. My last question is with the 3 massive B2B partnerships that are signed, maybe help us with how these might ramp. I think I heard you gave guidance of $85 million to $95 million for next fiscal year, coming from plus or minus $78 million this year, what's contemplating the high end and low end?

Yes. I mean, again, we're trying to be super conservative in this because, again, we're running -- as you run the traps on these, right, if you have 2 partners over $50 million, right, and you have another partner with millions and millions, right, just take the $100 million. If you took 0.5% or 1% right on conversion, right? And you're going to have multiple different pricing tiers, just like every music subscription, just like LiveOne has been since the time I've acquired it and the 17 years before me, right? This company has had hundreds of millions of dollars of revenues from carriers. There have been hundreds of millions of dollars of revenues from the likes of Samsung way before I was involved in it, from Milk Studio, right? You're just going back to that cycle again right now. And as you ramp this up, take a super conservative model, take -- I just sat with one of your peers, right, in the industry and walked through it and I said, just take 0.5 to 1%, 1%, right? The 60% that we signed in free and paid from Tesla is staggering. We're all shocked, right? We thought it would be like 25% maximum. It's been 60%. But if you sign 1%, 0.5% to 1% of those numbers, you're going to rebuild way past where we were with Tesla. We lost $56 million of revenues. We're ramping back up and catching back up on those. We got a little bit of ways to go, but you can easily see this year and next year, this company heading towards well over $100 million on its way to $0.25 billion by just getting a little tiny percentage of these partnerships.

[Operator Instructions] And your next question comes from the line of Sean McGowan with ROTH Capital Partners.

You're able to hear me?

Yes, I can hear you. It's a little bit quiet, but I can hear you.

Okay. Will try to speak up. A couple of quick questions. So when will the 10-Qs be out for both LiveOne and Podcast?

Should be out tomorrow. Yes, Sean, they should be out tomorrow.

Tomorrow. Okay. Great. That's helpful. Shifting to costs, a big part of the story here is a massive positive inflection in EBITDA relative to revenue. So can you help us with how sustainable the various cost buckets are at these current levels that we're seeing really for both companies, but let's say, in the aggregate for LiveOne. Like do you think G&A at this level is what we should expect for the next several quarters on a quarterly basis?

Yes, Sean, thank you. Yes, I think you should absolutely model that forward, if not down. We continue to do everything we can to reduce that. It's an ongoing effort. So our expectation is that next quarter, the G&A should go down even further. But where we're at right now reflects something we're sitting on positive EBITDA. But yes, I would expect that to go down next quarter slightly, and we'll continue to fine-tune that as we go forward.

And same question for sales and marketing?

Yes, same. It's really a reflection of all of OpEx, Sean.

Okay. Well, some of the ones that get added back for EBITDA, I'm also interested in. So depreciation and amortization seems to be leveling up. Should we expect that to increase?

Nothing material. Really, the depreciation and amortization is going to be driven by [ cap software ]. So same as kind of what you're seeing right now is about what we expect. It could go up slightly over the next year as we continue to code out new products for our new partnerships. But for now, in the short term, I think you can roll that forward.

And stock-based comp is something that on the podcast side, I know they've been using more of stock for the talent, and we saw an increase there. It should -- but it also depends on grants and things like that. So what should we be expecting on stock-based comp over the next several quarters?

Yes. You should expect similar levels to this quarter going into next and then it potentially could increase depending on how it goes with getting our talent online with our equity plans. So kind of you can roll it forward and potentially expect some increase there.

Okay. And then I'm going to circle back a couple of questions that have been touched on, but I want to see if we can get a little bit more precise. So let's say, this 30 million subscriber deal, when -- what's the timing on when that -- when revenue from that deal would be expected to start to show up?

Do you want to take that, Ryan?

Yes, sure. Sean, I think right now, with one of them, we're on the cusp of launching something. It will be a test phase. So I think we're going to be pushing that through this quarter. We don't expect it to really ramp until the following year. We're not putting any numbers against that or anything right now, Sean. But I think you could start to see a little bit come in this quarter and then the following quarter, the ramp coming in -- maybe...

The $85 million to $95 million audio guidance, that does contemplate revenue from that deal, right?

Yes, the $85 million -- Rob mentioned this earlier, Sean, I mean, the $85 million to $95 million is a very, very conservative look forward. So we would consider that to be a baseline case, a very baseline case, and it would only go up from there.

Okay. Yes, I'm trying to get my arms around because it's easy to pencil out some numbers if you look at multiple deals that get to much higher numbers than that. So I'm just trying to figure out if there's any revenue from that particular B2B deal that is embedded in the $85 million to $95 million. If you're saying there's some, but it could be better, that's one answer. But if you say there's none in there for that, then that's a different answer. So I'm just trying to figure out, have you contemplated any revenue from that particular deal in that guidance?

Nickels and dimes, Sean.

Okay.

Okay? We're being -- as you can see, we're being very careful because this is happening as we speak, right? This is real time now, right? The first phase is done. The second phase is going, and the other ones are being launched shortly. But as we said, we expect all 3 of them to be out there publicly by year-end. So we're going to be very conservative, but we look forward to the fourth quarter and really talking about the highlights of where we think next year can be.

Okay. And then my last question is on -- is back on these Tesla users that have converted from the old model to the new. Right now, it's ad-supported. What kind of conversion are you seeing to paid so far? And are you expecting that to contribute more revenue? Are you expecting that number to grow the revenue from Tesla subscribers? Are you expecting that number to grow next fiscal year?

Absolutely. And what I would say now is to kind of highlight is we just paid off $2.5 million of debt. One of the beauties, right, of what happens with this is you get year-long subscriptions. So you get a chunk of money upfront. And so that should be very, very helpful, right, in building balance sheet, using to buy back stock, pay down debt. And we couldn't be more excited that we've paid off all of our junior debt and now part of our senior debt is starting to be paid. We couldn't be more excited to do that and to continue to strengthen the balance sheet. And I think you'll see a lot more excitement coming this quarter, right, around the additional cleanup of that balance sheet and strengthening of the balance sheet over the next literally 30 to 60 days.

I'm not showing any further questions in the queue. I would now like to turn it over to Mr. Ellin for closing remarks.

I think we've covered everything. I just want to thank everyone for your patience. Thank you for being supportive. We couldn't be more excited about the business. And I say this very humbly, I really think that right now, the current B2B deals and the ones imminently coming out put us in a position that this could be the biggest opportunity that I've been involved in my career. I am looking forward to stepping down as President right in the very near future and bringing in an operating President, which we've had previously and had great success with, right, pre-COVID, bringing in someone, again, adding to it and putting them next to me in a position that they have both public experience in building as well as selling public companies for $1 billion or better, just like I've done before. And done before in my other companies and really focusing my energy on M&A side. We have not done an acquisition in a substantial period of time, which is unique. We usually have one acquisition a year, and we haven't done one in a few years. This is now becoming an exciting time for that as well as on the other side of it is we have to really explore those strategic partners or potential buyers of a subsidiary or the whole company at some point and that the inbound calls are coming in. So I want to focus my energy on that. And then my key energy right now is I am so really fascinated and excited about what AI is doing for our company and doing for the industry. I want to focus the energy on that and on our B2B deals. And that crossover between them, I really believe that the data of music is so critical to building these data -- all of these AI models right, that music is going to be a very important component of that. And I think we're right in the center of the ring of that. And having the talent we have behind it is going to give us the ability to really expand those. So I'm going to spend a lot of energy on that. Now that the restructuring is completed, we're really going to focus on that $125 million NOL. As everyone knows, in Digital Turbine, when we started eating away at that NOL and started showing profits, which I expect at the end of this year, right, you're going to get GAAP earnings and you can have just a massive, massive run in the stock under GAAP earnings. So I'm laser-focused on that. And I think fully expect that you'll see an operating president here in the very near future with a big background at building and selling a multibillion-dollar public company.

Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.

Thank you for standing by. Welcome to LiveOne Q2 Fiscal 2026 Financial Results and Business Update Conference Call. [Operator Instructions] I would now like to turn the conference over to Ryan Carhart, Chief Financial Officer. You may begin.

Thank you. Good morning, and welcome to LiveOne's Business Update and Financial Results Conference Call for the company's fiscal second quarter ended September 30, 2025. Presenting on today's call with me is Rob Ellin, CEO and Chairman of LiveOne. I would like to remind you that some of the statements made on today's call are forward-looking and are based on current expectations, forecasts and assumptions that involve various risks and uncertainties. These statements include, but are not limited to, statements regarding the future performance of the company, including expected future financial results and expected future growth in the business. Actual results may differ materially from those discussed on this call for a variety of reasons. Please refer to the company's filings with the SEC for information about factors which could cause the company's actual results to differ materially from these forward-looking statements including those described in its annual report on Form 10-K for the year ended March 31, 2025, and subsequent SEC filings. You'll find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed today in the company's earnings release, which is posted on its Investor Relations website. The company encourages you to periodically visit its Investor Relations website for important content. The following discussion, including responses to your questions, contains time-sensitive information and reflects management's view as of the date of this call, November 12, 2025. And except as required by law, the company does not undertake any obligation to update or revise this information after the date of this call. I'd like to highlight to investors that this call is being recorded. The company is making it available to investors and the media via webcast. and a replay will be available on its website in the Investor Relations section shortly following the conclusion of the call. Additionally, it is the property of the company and any redistribution, transmission or rebroadcast of this call or the webcast in any form without the company's expressed written consent is strictly prohibited. Now I would like to turn the call over to LiveOne's CEO, Rob Ellin.

Thank you, Ryan, and welcome, everybody, and thank you for joining us. This has been a transformative 12 months for the company. As we came out of the loss of over $50 million of revenues with Tesla, we not only survived, but we thrived. As you look at the numbers today, the highlights are going to be is how this team and how this company has utilized technology and being a talent-first platform. to again prove that we can get back to EBITDA positive numbers, right? With that loss of $50 million in revenues, we're excited to tell you that we finished the quarter with $36 million -- a little over $36 million, $36.6 million in our Audio division with $1.1 million of adjusted EBITDA. How did we do that? The first thing we did is we leveraged technology. We embraced AI. We embraced the ability to use AI to be able to cut our staff and cut it from 350 people to 95. We have cut our costs down from $22 million down to $6 million. And with that, we now have aggressively moved on our B2B plan to move to partnerships that the history of this company has been built on like [ Tesla. ] And with that, I'm excited to say we closed our [indiscernible] deal, we have now expanded our partnership with Amazon from $16.5 million in a 3-year deal to over $20 million. That's all based on traffic and audience continue to grow massively. Our Fortune 250 partner increased from 2 million originally to 12 million to now $26 million plus a year run rate. Going back to Tesla, we converted over 60% of the total cars out there, which was 2 million. We now have almost 1.3 million cars of both paid and free. 1 million of those free cars are now being -- those cars have now re-signed back up, of where we finally now have data and information on those consumers and now the ability to try to convert those. And now using an AI marketing strategy, we are aggressively converting those and generating real cash every day and continue to grow that number of subscribers and see a really exciting opportunity now to convert to those million. If we can convert 10% of them, we'll add another 100,000 paid subscribers. If we can convert 20%, the numbers start to skyrocket. We have 72 additional B2B partnerships and fully expect to announce multiple additional ones before year-end. Utilizing AI, we have increased our ARPUs by 60%. We're starting to see a $5-plus ARPU versus the $3 that we had previously. Our podcast business. Our podcast business has grown. We bought the company doing $20 million in revenues, losing $5 million. We've just announced record-breaking revenues over $15 million for the quarter and announced that we expect to do $56 million to $60 million this year and $4.5 million to $6 million of EBITDA. That's a $6 million to $8 million swing from last year. We have aggressively taking our podcasts and now taking our [ True Crime ] podcast, which we have a slate of over 12, and we've now brought that to market to the streaming networks, and we've sold 3 podcasts to television now. What does that mean for the company? It means hundreds of thousands of dollars in option money day 1 and could be millions tens of millions of dollars in the very near future as those get greenlit. We've now sold the show to CVS Peacock to Paramount, and we fully expect to sell additional shows. We have our first giant upcoming live event. Our last major live event goes back to the days of COVID, which was called Social Gloves. That event did over $20 million and over $4 million of EBITDA. On December 11, we are going to launch Reality Olympics. The reality Olympics will be at LFC Stadium the BMO Stadium and we launched with YouTube committing over 1 billion impressions to the event. We just announced our launch of our subsidiary, LiveOne Africa, with a commitment from [ Virtuosity ] Music to raise over $20 million to a market that will be bigger than the U.S. market in the next couple of years. Our buyback continues. We continue to buy back both stocks. We've now bought back over $6 million of stock in LiveOne. We will continue to buy back stock. For everyone that remembers, we sold $10 million of stock at $7.5 only 3 months ago -- 2.5 months ago. We'll continue to buy that as well as you will see management and Board members doing the same. As we look at the future, we see the highlight films of these B2B deals providing a massive opportunity for the company. Current Amazon deal, we see it just continue to grow. It's a highlight film as the more podcasters, the more traffic we drive, the bigger those revenues are going to be. As we launch our next major project to over 30 million monthly paying subscribers, we will talk about this in great detail over the next couple of weeks and expect to launch this year. If you think about the Tesla numbers, we had 2 million subscribers, 2 million cars, right, and we've now converted 60% of them. If you have 30 million, if you just convert a couple of percentage, we're going to start to really generate very serious subscriber growth, ARPU growth as well as revenue growth. With that, I'm proud of my team. They have survived Tesla's loss of the revenues and come out of it stronger than ever. For those of you there, if you remember when COVID hit, we went from $38 million in revenues, we lost all of our live business and somehow the following year, we did well over $100 million in revenues. I see telltale signs that with the current B2B pipeline, the current B2B deals have already been announced, which are over $50 million in contractual deals, actually $52 million contractual deals as they continue to grow. I see telltale signs that this company is well on its way to again be well over $100 million. And with that, we will continue to buy back stock, and I want to thank everybody and appreciate everybody's support and open up the floor to Ryan to talk about the numbers.

September 30, 2025. Consolidated revenue for the 3-month period ended September 30, 2025, was $18.8 million. Our Audio division posted revenue for Q2 fiscal 2026 of $18.2 million and adjusted EBITDA of $0.7 million. Consolidated adjusted EBITDA for the second quarter of fiscal year 2026 was negative $1 million. On a U.S. GAAP basis, LiveOne posted a consolidated net loss of $5.7 million or $0.52 per diluted share in Q2 fiscal 2026. At the operating level, our PodcastOne subsidiary posted record revenue of $15.2 million and adjusted EBITDA of $1.1 million. Our Slacker subsidiary reported Q2 fiscal 2026 revenue of $3.1 million and an adjusted EBITDA loss of $0.4 million. We are pleased to report continued record growth from our PodcastOne subsidiary, which we anticipate will extend throughout the year. In parallel, we are advancing several transformative partnerships from our business development pipeline, creating significant opportunities for long-term growth and value creation in the near future. Rob, I turn it back to you.

Yes. Just to wrap it up, I think we've covered just about everything. But just to wrap it up, I can't be more excited about the B2B partnerships. The history of LiveOne as well as the 2 subsidiaries that generate the revenues from Slack to PodcastOne have had a history of B2B deals. And these B2B deals, there's a cycle that comes. And as you're watching the cycle, you're seeing in the industry that is exploding, right? The audio industry, iHeart stock is up 4x. Spotify stock is up 3x, almost $175 billion in value. Warren Buffett has been buying up Sirius Radio. There's so much math right now that shows that the partnerships that are being created that are being announced in podcasting and audio, right, across Netflix announcing they're going to the audio business, right? And Spotify going to the video business. You're going to see more and more of this happening in the industry. And my humble opinion is that you're going to see amazing strategic deals -- you're going to see investments in the space and you're going to see acquisitions in the space. And the acquisitions are happening at multiples of revenues, right? We're trading at 60% of revenues. The industry is trading at 3.5x revenues. And I think you're going to see just about every streaming partner. Anyone who is missing an audio platform is going to need an audio platform. When you think about the cost of content and how expensive it is for all these streaming networks, they can increase their ARPUs dramatically overnight by acquiring a music platform or investing in a music platform or white labeling a music platform. So with that, I'm going to open it up to questions. And again, thank you, everyone, for joining us and thank our team for just doing an amazing job of not only surviving, but coming out of this and thriving. And again, seeing those telltale signs where the revenues are going to start to ramp up dramatically in the very near future. Thank you.

[Operator Instructions] And your first question comes from Brian Kinstlinger with Alliance Global Partners.

Great. Last quarter, you discussed the soft launch at the beginning of August for a B2B partner with 30 million subscribers and said you'd share more information soon. Is there any details you can share about this?

I mean the success of the beginning launch was spectacular. I would say it was in line with the launch -- the relaunch with Tesla, right, and succeeding. And again, without giving you exact numbers, in Tesla, as you know, we've succeeded in bringing back 60% of those 2 million cars, right, which is kind of amazing that we didn't necessarily have all those cars and not all of those people are even using the service even if they paid through the connectivity package, right? I think you're seeing telltale signs of that as well with our next partner. And I think you're going to be able to highlight that as we enter year-end.

So is this deal part of the $50 million plus B2B revenue? And if so, when does it begin to ramp?

No. No. What we said is that's not part of the $52 million. This will be an additional, right? We have not put out guidance yet, but fully expect that somewhere around year-end, we're going to start to put out guidance. As we said, these deals are ramping up. They've ramped up faster than we expected, right, both at Amazon as well as the streaming partner. And we see a telltale sign that, that new partner will be very similar. So we'll be talking about our guidance somewhere probably before year-end, but certainly by year-end, we'll start to talk about it.

And I think the biggest question I think investors might have is when you provide this $52 million B2B revenue over the next 12 months, I think you said last quarter, and so I'm sure it's still the next 12 months. How much of that is incremental to the revenue you've just reported in the September quarter, which I assume includes Amazon and some of your other B2B partners?

Yes. I mean we can't give that, obviously, until we start to give guidance, right, which will happen again, as I said, before year-end. Our year-end is March 31, and we're getting close to it fast, right? It's moved fast to do that. And we'll start talking about that guidance. You've already seen us raise the guidance at PodcastOne, and I fully expect we'll start to talk about LiveOnes as well. That ramp-up will start to happen, as I said, towards the end of the fourth quarter, right, third a little bit, fourth quarter. So it's starting to ramp up. We're starting to feel the momentum coming, but we'll have a lot more clarity on that as we enter the fourth quarter of this year.

Two more questions. First, can you share the freemium versus paid subscribers for Slacker? And maybe if you can or can, can you talk about the conversion that you're seeing for Tesla, if at all?

Ryan, do you want to give a little bit of that? If we can...

Yes. I mean, Brian, just real quick, I mean premium versus paid, I mean, you're talking about premium versus plus. Is that kind of what you're thinking? Yes, premium versus plus. I mean I think.

You have subscribers that are freemium, especially in Tesla. And then you have paid subscribers. And so I'm curious what the total is maybe the split. And then I'm curious how conversions are going for those freemium.

Yes. So if you think of the combination of all of our paying subscribers, you're looking at a total of somewhere between 250,000, 275,000 in terms of the paid and then the free would be the rest that Rob talked about earlier on this call. So that's basically the breakup between the 2. And then Rob talked a bit about ARPU earlier as well. Brian, does that answer the question?

I'm curious how conversions are going. It's been a few months -- we've been hearing about the focus on that. So is it 1%? Is it 2%? Is it more or less?

Yes. We put out, I think it was a week or 2 ago, an earnings release on our new partnership with our AI-driven data partner that's going to help us really ramp up the conversions. So that was launched. It took a little longer than we thought to get that fully to market. So right now, we're out there testing and optimizing the algorithm. So I think you'll start seeing that come through second half of this quarter. And then we don't have full results yet as we're still kind of optimizing right now, but it will ramp up. We're expecting 5%, 10% increase is definitely within the ballpark. It could be higher. We're still in that optimizing phase where the algorithm is doing its work.

And we're going to lose some free subscribers in that process as well, right? We'll lose some free and we'll gain some paid. And one of the exciting things that you can be looking at just like last year. Last year, you saw a large increase in cash right around the end of the year, right, as you start to see 1-year subscriptions, a, we, but also the new ones converting. We're very aggressively out there trying to convert those now to continue to strengthen our balance sheet, buy back stock and put cash on our balance sheet.

Great. Last question, Ryan, I didn't hear anything. The gross margin for the first half is about 13% last year, almost twice that. Is that a pure function of scale with the falloff of the revenue? Or is there something more to that? And when might we think about beginning to see a recovery?

Yes. I think the difference this year versus last year has been the change in the customer relationship with Tesla, right, where the volume there lifted the margin because we were able to pull that off at slightly higher than what we do normally now. So I think that difference that you're seeing is really just the volume from Slacker changing, driving the overall down. And that's offset by increased margin at PodcastOne. So slightly offset that. But yes, that's the cost.

And the next question comes from the line of Sean McGowan with ROTH Capital.

Following up on Brian's question on cost of sales. So what portion of that increase as a percentage of revenue is stock-based comp? Is that a factor?

Yes. Stock comp is definitely higher in cost of sales than versus year-over-year, if you just do the comparison. So you'll see it's not out yet in the Q, but we'll fully disclose that so you can see it. But it kind of shifted categories. You're going to see more stock comp in the cost of sales line this quarter versus last quarter. a little bit lower just on the lower G&A that you're seeing year-over-year. And then last year, we had a little bit more in G&A. So you're going to see a decrease in stock comp and G&A this quarter year-over-year. I definitely notice a difference there. So less year-over-year, but still a chunk there.

Okay. And when will the Q be out, Ryan?

Filing date is Friday, hoping to get it out sooner. So we're hoping to file tomorrow.

Okay. So on G&A, I imagine stock-based comp plays a role in that, too. But is this level of G&A likely to be what we should expect to see? Or were there extraordinary factors driving that up?

Yes. Good question. So year-over-year, obviously, we're seeing definitely a lot of strong increases or decreases in the G&A. If you look at this quarter over last quarter, there was a couple of onetime things that flowed through. So we expect it to be lower next quarter than it was this quarter. So what you're seeing this quarter, you'll see an improvement next quarter and in Q4 and going forward. So even less than Q1.

Perfect. Ryan, if I can ask you to repeat something, right at the end of your prepared remarks, I think you made some comment about PodcastOne over the next 6 months or something like that. Would you mind repeating that? I just -- I couldn't quite track what you said.

Yes. All I'm saying is we expect continued growth of the PodcastOne subsidiary. That's it. We upped our guidance like Rob talked about. So yes, we just -- we expect it to continue to grow as it has been.

Right. Got it. It was the word growth, but I couldn't quite get.

I think, Sean, just to add to that, you've seen our 17th additional podcast announced just announced. And we're basically signing almost -- we signed 24 a year. As we said before, you're picking up 2 things. Number one is you're picking up revenues. Most of these are existing podcast so the space has really moved to. You watched Spotify and Amazon basically fire their entire teams. They keep their super big podcast, but they're all waking up to realize they're really distributors. They're not curators of content. And because we're a full 360 play, these podcasters need handholding. So we continue to add those as we add them, it's a self-fulfilling prophecy. One is you're going to add immediate revenues, but two is you're going to add that immediate traffic. And the more traffic we drive, the bigger the Amazon partnership is going to grow, I couldn't be more excited about where that's going and directionally, right, to think that it's only been a couple of months already from $16.5 million going to $20 million, but it looks like it can go way higher than that. And I've talked about landing an anchor tenant on the podcast network. if we land an anchor tenant, right, which has been one of the only things missing from that business. If you land an anchor tenant and you could add some very serious traffic, right? Those metrics just keep going up. And if they keep going up, you're going to pick up a lot of revenues. A lot, a lot of revenues are going to move up the charts in terms of what number you are on contracts and the overall industry and the respect from the industry is showing in a unique way.

Okay. If [indiscernible] is here, he's probably like what the **** man? I'm right here. So just kidding.

Adam is the best I spoke to them yesterday. It was a great partner, and we just continue to grow with them.

Okay. Last question for me. Kick did a great job yesterday of outlining the ways in which PodcastOne has used AI kind of across the platform across the whole enterprise, drive revenue, drive costs, drive efficiency, et cetera. In addition to what Kick talked about yesterday, could you describe some of the AI tools that are being deployed in the rest of the company, just so we have a fuller idea of that?

Yes. As you know, Sean, you know me a long time, all of my companies are media companies from a revenue standpoint but are always focused on next-generation technology. And we're right in the heart and the center of it. You're going to see more and more partnerships coming out of us in the AI space. But the team -- Brad and the team are at Slacker, under sees, right? You lose $50 million of revenues, you got to take costs down. They've just done an amazing job of embracing technology, both from a marketing standpoint, right, to convert subscribers to lock down -- to think that we lock down 60% of every Tesla car and got them even though a lot of them are free is just -- it's just an amazing thing, and that was utilizing AI. They've also utilized AI in that we used to need way more hosts, right? You can now create a music channel way quicker and you can combine the use of AI with the human -- with a human, right, as a DJ, DJ host. So we're able to cut those costs down. I think you're going to see a lot more of those initiatives happening as the revenues ramp back up, right, on the other side of the business. As those ramp back up, we'll continue to grow those. And we're looking at consistently looking at more and more ways to do it. And we've been able to cut our staff from 350 people to 95. Ryan has just done a great job of restructuring, fighting through this and really surviving a loss of $50 million of revenues. Most companies can't survive that. We've come out and now we're thriving.

Circling back for one second, I just got something else I want to ask. On the number of subscribers that you've converted, it is amazing. I never would have thought you get to that 60%. You kind of feel like you're at that limit now. I mean it was never going to be 100%. It's probably never going to be even 60 and you manage that. But I noticed that the number is about the same as it was at the end of August. So have we converted pretty much everybody we're going to convert?

From a free standpoint, yes, right? From a post standpoint, now we just started to put advertising in, right? So we partnered with DAC, the biggest ad agency to do that, doing programmatic advertising. And it does 3 things, Sean. Number one is it noise the hell out of people, right? All of a sudden, all of a sudden, you go from no ads to a ton of ads. right? My son was giving me a hard time because I had in my car because I want to hear actually what's happening in it. I want to make sure those ads are relevant, right, A, so the people that are going to stay for free are actually going to use it, right? That's a. And then b is I want to convert them, right? So we're now using Intuizi, right, which is an amazing AI marketing technology platform, right, that really is able to find in multiple different spaces, but first in the automotive space. Another goal is to convert those people. And just think about if we converted $100,000 of the 1 million, right, at an average ARPU of $60 a year, most of that's going to be paid upfront. We can generate a lot of cash right now, right? And that initiative has just started. We went from 0 advertising it was 3 months ago, Ryan, to today, we're like 90% advertising, 90% fulfillment, which it generates some revenues as well, right? It's a new revenue stream that will start to kick in, in the advertising side of it. But our real goal is -- and Spotify says they convert 60% of every -- the reason they have a free tier is 60% convert. I don't know what the time frame they convert. But if we can convert 10% of this, 20% of it, if somehow we convert 60%, obviously, the numbers are off the charts. But if we can convert 10% to 20%, we're going to generate a ton of cash upfront, and we're going to generate long-term revenues with those subscribers that are going to be beyond the advertising side.

I am showing no further questions at this time. I would like to turn it back to Robert Ellin for closing remarks.

I think we covered everything. I'm looking forward to our next call. I'm looking forward to the next major announcements of this company. As I said, there are 72 B2B deals in the works. This is what I've done in my career, has always been sort of the smaller company that's been able to partner with these massive distributors. There's so many of them now that are out there that as the cycle has changed, right? And you look at the cycle, everyone from Facebook to Microsoft to every streaming partner to auto companies, everybody is fighting for data again. And I think we're right in the sweet spot that LiveOne has the opportunity to be that strategic partner that we're nimble with the lowest price and we're willing to white label. I think you're going to see more and more of those B2B deals. And you see a couple more Amazons, you see a couple more streaming partners. You see a couple more retail partners. You can easily see this company in the next 5 years doing $1 billion of revenues and with 0 cost to marketing, right? We're not chasing an individual subscriber. We're chasing a pool of subscribers. So we're looking at leveraging this great content we have, this original programming we have and really leveraging it and positioning ourselves that we partner with anyone who has 10 million to 3 billion eyeballs like Facebook. And we partner with a lot of them, right? Both before I own this company and since we've owned it, we partner with the likes of everyone from TikTok to Facebook, right, to Amazon, to Paramount, right? We continue to do that, and we continue to grow with it. I see telltale signs that we're starting to build real momentum on those B2B deals. We land a couple more of these, and we're going to have another exciting run in like I said, I'm proud of our team. I'm proud we fought through this battle, and I see the future is extraordinarily bright right now for where the company is going. With that, thank you, everyone. I appreciate your time.

Thank you. And this now concludes today's conference call. Thank you all for attending. You may now disconnect.

Ladies and gentlemen, welcome to the LiveOne, Inc. Q4 Fiscal 2025 Financial Results and Business Update Webcast. [Operator Instructions] I will now turn the call over to Ryan Carhart, CFO. Ryan, you may begin.

Thank you. Good morning, and welcome to LiveOne's business update and financial results conference call for the company's fourth quarter and fiscal year ended March 31, 2025. Presenting on today's call with me is Rob Ellin, CEO and Chairman of LiveOne. I would like to remind you that some of the statements made on today's call are forward-looking and are based on current expectations, forecasts and assumptions that involve various risks and uncertainties. These statements include, but are not limited to, statements regarding the future performance of the company, including expected future financial results and expected future growth in the business. Actual results may differ materially from those discussed on this call for a variety of reasons. Please refer to the company's filings with the SEC for information about factors which could cause the company's actual results to differ materially from these forward- looking statements, including those described in its annual report on Form 10-K for the year ended March 31, 2024, and subsequent SEC filings. You'll find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed today in the company's earnings release, which is posted on its Investor Relations website. The company encourages you to periodically visit the Investor Relations website for important content. The following discussion, including responses to your questions, contains time- sensitive information and reflects management's view as of the date of this call, July 3, 2025. And except as required by law, the company does not undertake any obligation to update or revise this information after the date of the call. I'd like to highlight to investors that this call is being recorded. The company is making it available to investors and media via webcast, and a replay will be available on its website in the Investor Relations section shortly following the conclusion of this call. Additionally, it is the property of the company and any redistribution, transmission or rebroadcast of this call or the webcast in any form without the company's expressed written consent is strictly prohibited. Now I would like to turn the call over to LiveOne's CEO, Rob Ellin.

Good morning, everyone. This is Rob Ellin, CEO and Chairman of LiveOne. I want to thank you, everyone, for joining. This has been a pivotal year for the company. The company has been transformed in some of their deals with Tesla and has come out stronger than we even expected. We have delivered 100 -- first, I'm going to talk about the today's numbers, and I'm going to talk about the future and some of the really exciting moonshots that the company is now focused on. Our financial performance, we did over $112 million in revenues, $108 million on our audio business and delivered $18 million of EBITDA, $6 million above what we had guided the Street to almost only 2 months ago. Our podcast business did over $52 million, up from $38 million last year. This quarter alone was $14 million and an EBITDA of over $900,000. We just raised our guidance to $55 million to $60 million with $3.5 million to $5 million of EBITDA. Other highlights from our podcast business. We have now had 6 straight months of being a top 10 podcaster in the world. We have over a billion impressions across our network. We have 46 new podcasts in the last 24 months and passed 200-plus total with a robust pipeline of over 100 new podcasts in the pipeline today, and we are adding almost one a month. We also have 17 potential acquisitions in the podcast industry that we are looking at as we continue to roll up and consolidate the business. As you got to meet Ryan earlier, Ryan has done a brilliant job of stepping in as CFO and made some very transformative financial moves, including replacing East West Bank's $7.5 million credit line with JGB, a partner of ours for 4 years previously, has come back in with a credit facility of up to $27.5 million, giving us an opportunity of having on performance, the biggest cash position we'll ever have. We've eliminated over $10 million in short-term liabilities. We've cut 1/3 of our staff at Slacker Radio and over 70% of our [indiscernible] at CPS. With over $40 million in total cost, this is the reason that our EBITDA was able to outperform even our own guidance. Now I'm going to talk about the future. The future is pretty remarkable. Out of 2 million Tesla cars, we have now converted over 1.3 million. We now have over 1.5 million subscribers and ad-supported users. We've launched 2 massive partnerships with Amazon over $16.5 million and with a Fortune 50 company for over $25 million. We have 75 additional B2B deals in the pipeline. We're now at almost a $50 million run rate on those new partnerships across 5 new B2B deals. We're expecting to launch our biggest B2B partner potentially in the history of the company with almost 10x subscribers to Tesla, and that first phase will be launched in August. As we continue to look at the future of technology, as most of you know, my background is taking media companies and finding transformative technologies. I will be focusing almost all of my energy on AI and on Web3 crypto initiatives. On the AI side of it, we have been able to cut dramatic costs, including 1/3 of our costs at Slacker Radio by adding AI and be able to utilize hosting and be able to utilize marketing. With that marketing, we have just started our first campaign to start to advertise in conjunction with DAX, the largest programmatic advertiser in the world, and our fill rate on our Tesla users is over 50%. We are about to launch our second phase of that initiative to start converting, utilizing AI to convert those subscribers -- convert those users into subscribers. As we look at our Web3 crypto initiatives, the starting point was to build a renowned group of crypto experts with Steve McClurg joining our team who started the first ETF in the history of Web3. Steve Lehman on the Board of Coinbase and [indiscernible], one of the great analysts at Goldman Sachs who is starting Crypto Monday. We have just launched the first-ever podcast network focused on Web3 and crypto. We see a massive opportunity for us to acquire and start new initiatives in the podcast space with over 75 potential podcasters in the crypto space right now in our pipeline as well as using AI initiatives to create our own original IP and initiatives in this space. To show our confidence and our belief in how weak our stock has been and how undervalued it is, the company has just bought back over 350,000 shares of LiveOne and over a million shares of PODC. We will continue that buyback as we have over $6 million -- just under $6 million of additional room in our buyback and show our confidence in the company and explore all options to add to our holdings in both of those companies. As LiveOne continues to demonstrate our ability to be nimble, our ability to fight through difficult times, our ability to utilize technology to transform the industry. This is the most exciting time that we've seen in the history of the company and with a balance sheet to really be able to grow aggressively the business, we see this as an extremely exciting year going forward, and we look forward to talking to you at the end of the next quarter. So thank you, everyone, for joining, and we look forward to an update shortly. I'd like to hand it off to Ryan. Ryan is our new CFO, and as I stated, has just done an absolutely brilliant job of maneuvering replacing East West Bank under difficult circumstances and doubling our credit -- or more than doubling our credit facility, literally within weeks of finding out that East West Bank was pulling their line. So Ryan, with that, I'd like to hand it off to you, and thank you for your help.

Thanks, Rob. I'll spend just a few minutes providing a very brief overview of our results for the fourth quarter of fiscal 2025 and the fiscal year ended March 31, 2025. Beginning with our quarterly results. Consolidated revenue for the 3-month period ended March 31, 2025, was $19.3 million. Our Audio division posted revenue for Q4 of $18.2 million and adjusted EBITDA of $4.1 million. Consolidated adjusted EBITDA for the fourth quarter of fiscal year '25 was $1.1 million. On a U.S. GAAP basis, LiveOne posted a consolidated net loss of $10.9 million or $0.07 per diluted share in Q4 2025. Our full year fiscal 2025 results posted consolidated revenue of $114.4 million and adjusted EBITDA of $8.4 million. Our Audio division posted full year revenue of $108.9 million and adjusted EBITDA of $18.2 million. Additionally, I'm excited to announce, as Rob said -- noted that we completed our financing after year-end with our partners at JGB Capital, which replaced our East West Bank line of credit. This will help facilitate the growth of our business and position us for the future. We are excited about the potential of the opportunities in our business development pipeline and are poised to see growth forward with these opportunities. Further, our growth in the PodcastOne subsidiary is expected to continue, and we expect to see a tremendous year ahead for them. Rob, I'll turn it back to you.

And just to wrap up, and thank you, Ryan. Our B2B initiatives are really starting to move in place. As we said, over 5 B2B partnerships signed, over $50 million of revenues. Our largest potential opportunity to be launched in August. We will have partnerships this year with additional carriers, retailers, streaming networks, auto companies and really just focused our energy around those B2B deals and really those initiatives that can move the needle that will be tens of millions to hundreds of millions of dollars over a 5-year period. With that, our initiative to move into the Web3 space is moving fast and aggressively. You'll continue to see additional names in Web3 joining our platform as well as podcasters and Web3 crypto joining our platform. Our AI initiatives have allowed us to make substantial cuts in the business. We have over 500 music channels. We used to have over 120 hosts. We now have a handful of hosts that are able to host those. We also are very excited about our TV and film initiative. We sold our third television show, third podcast, moving to second windows to television as you start to see the dynamics of where podcasting is going and how much is moving to video. As we sell these to television, these are brand-new revenue streams that could be tens of millions of dollars with 0 additional cost to the business. So we're going to continue to buy back stock. We're going to continue to strengthen our balance sheet. We're going to continue to strengthen our B2B deals, and we look forward to a really exciting year. And I want to thank everyone for joining and open up for any questions.

[Operator Instructions] And your first question comes from the line of Sean McGowan from ROTH Capital Partners.

A couple of questions on some of the details that you talked about. Rob, when you say fill rate of over 50%, can you just clarify what exactly that means from a financial standpoint?

Yes. I mean I can't give too much details yet on the financial on what the revenues are going to be. You'll see that shortly because we haven't put out guidance, but we will at the end of next quarter. But what really means is really simply, Sean, is that 50% of that inventory is being filled now and it's well over 50%, but 50-plus percent of the inventory that previous was 0. Now that does 2 things, right? Number one is it drives revenues. But number two, it also is that is setting the stage, right? Spotify claims at 60% of their subscriber -- of their free supporters and the reason they have free, right, convert to paid eventually. One of those reasons is that some people don't like advertising. Some people do, right? So hopefully, we'll start to convert through that. And that will be the first phase of the next big AI initiative, which is going to be launched imminently, is to really press to convert as many as possible these to paid subscribers as well. And I think that 50% inventory will go to 75% very quickly. And as you know, our partner in that is DAX, which is the largest programmatic advertiser in the world.

So the 50% refers to the inventory of available advertising account.

Correct.

That's what I understand. Okay. And at the moment, right, you're still broadening the funnel and getting advertising driven. But at the moment, there are no -- not a significant number of paid subscribers. Is that the right way to interpret it?

No. I mean I wouldn't say that at all. I mean, we have added 1.5-plus million, right? We have well over 250,000 paid subscribers, right? Now it's going to be the time we're really going to be pressing to convert a sizable amount and hopefully, we can convert anywhere from 25% to 30% of them over the next year. If we do, it will be very, very substantial revenues to kick back in as you do that.

Okay. Thanks for clarifying that. Shifting gears for a second. So when you're talking about things like Web3 and crypto, are you talking primarily about podcast content? Or is it something else.

Yes. I mean I can't get into much more detail than that, as you know, Sean, right? But what I would say to you is, as Steve McClurg has joined and Steve's background is running on the first ETF and selling it to Coinbase, right? And Steve Lehman sits on the Board of Coinbase, right? We have very aggressively moved in this space and that there's only 3 megaphones to the Web3 crypto industry, which is Twitter, YouTube and podcasting. So the first phase of that is we've just announced our podcast network, where we will start to both create our own host and our own IP, right, using AI to create those. And second is we'll be acquiring, just like we do with the rest of our podcast, we were building a community of crypto podcasters in there. And then the opportunity, right, to do much more with Web3 is certainly there for us to expand. And when you have a community of our size and you have a billion impressions, there's certainly tremendous opportunity to expand that opportunity financially.

Okay. But just to be clear, like just because I'm a novice at this, you're not talking about getting directly into the crypto business with mining or trading or exchanges and -- you're talking about around content, right, and being a [indiscernible] for information.

Yes. So again, I can't -- yes, I can't answer much more. We're not going into the mining business for sure. But the tokenization business, right, as you're watching the Robinhood announcement and what the stock did right in tokenization. Tokenization of podcasters is really interesting, right? And there's just tremendous opportunities of where we can go with this and what we can leverage by being one of those megaphones. And when you have a billion impressions a month, right, and the kind of downloads we have, we just have a huge influence over it. And our demographic audience certainly fits in with the Web3 crypto audience in a very unique way.

Okay. Last question, and then I'll jump back in the queue. Ryan, when will the 10-K be filed?

Yes, it should be filed. We're hoping early next week. Everything is there. We're just waiting. The auditors have to just do some documentation to wrap it up. So it's in final form. We're just waiting for them to do that, and then we'll get it out to you early next week.

And our next question again from Sean McGowan from ROTH Capital Partners.

[indiscernible] jump in the queue quickly there. So Rob to the extent that you can, can you talk about any change in the types of deals, some new deals that you're working on versus what you talked about before, you've done a great job laying the table, setting the table for what areas you might be looking at new that you can add to that, anything different from what we talked about before?

Yes. I'm sorry, you're cutting out a little bit, Sean, but you're talking about the B2B deals?

Yes. You talked in the past about the kinds of verticals [Technical Difficulty] different from [Technical Difficulty] before.

Yes. This is the most exciting time maybe in the history of the company. Now probably since the original Tesla deal, which when it first thought it was only a couple of hundred thousand dollars, right? Tesla has 2 million subscribers. We'll be launching with a partner that has 10 times the amount of subscribers and we're in deep conversations as I've described before, where I totally expect the momentum is now building where after you land $25 million deal, $16.5 million deal with Amazon, the momentum is building in the direction, very much like I built Digital Turbine and I built my other companies, right? You're feeling that momentum that across carriers, across auto companies, across retailers, across streaming networks, cable, satellite, anyone with 10 million to 3 billion eyeballs like Facebook who has a need for a subscription product, which we're just watching everybody going in, right? You watch Walmart going to VIZIO, right? You're watching Amazon going to music and film and television. Everybody's businesses are now infringing and crossing over them. We're 1 of 10 DSPs left on earth, right? You just watch Napster sell for $200 million. They were doing 1/4 of our revenues, right? You watched [ Title ] sell a couple of years for $450 million. They then made a dime. So we're really well positioned here that both on the B2B side as well as a potential partner or potential buyer of one or both of the businesses, as we publicly stated, is very much, very much timely right now and that you're starting to see that momentum keep back up in the industry and huge interest around this.

Okay. And then my last question is, is there anything new on the discussions with [indiscernible] that relationship, I think it's changed [indiscernible].

No, I mean it's kind of a beautiful thing. I mean if you go in almost any Tesla car now and a lot of people have called me and it's really -- we're really proud of this, Sean. It's like we used to have a little red button, right? And we had a great subscriber number, right? We got paid $3 a month when the industry was moving up to $12 a month, right? And it was beautiful. You made some money out of it. But we really got no branding. We got no database. And now today is if you go in almost any Tesla car, you're going to see the LiveOne logo, so they're building brand value there. Think about your phone and seeing on your phone and if you saw LiveOne on the front of your phone every single time, what that means to you, right? I'm really proud of the fact that somehow we converted 1.3 million out of 2 million cars have converted, right? It's a staggering number. It's almost unheard of, especially when you got competition from Apple and Cirrus and so on. It shows the appreciation and respect for the product, right, and the brand. And then they're using it for an average of like 40 minutes, multiple times a day. So you can see that how much people really enjoyed, how much respect they have for the brand and why it fits with their needs. I think the next component of that is that we now have advertising there. We've never been able to talk to those consumers. Now we're talking to them. And then last but not least, and maybe the most important part is, we never control the database, right? Sean, you would be VIN number 1.25 million, right? Now it's Sean McGowan, who lives in Orange County or now in New York, right, your age, your credit card. So we're actually building a real relationship and real foundation for a database that could be worth a fortune. Like think about with that database of actually having 1.3 million wealthy Tesla owners as subscribers and knowing the demographics and knowing they're from. So it's really exciting. It's obviously -- it takes time to bring those revenues back up, right, and bring some of those profits back up. But from our standpoint of it is -- this is what we've always hoped for. We hope for the opportunity to be able to take those ARPUs up from $3, right, which are 12 years old. It'd be like owning a piece of real estate on the ocean and you're renting it for $3 a month, but you can never raise your rents, right? Now we own the real estate, we can raise the rent. So our ARPUs are up from $3 to $5. Now we got to really aggressively market. You're going to see it coming very, very aggressively. You're going to see us marketing to convert those people and then literally starting in the next couple of weeks.

And your next question comes from the line of Brian Kinstlinger from Alliance Global Partners.

Just one, I wanted to understand, if I heard you right in August, you hope to launch your largest B2B deal with a bigger subscriber base or bigger base of consumers than Tesla. Is that a signed deal already, something you're hoping to announce in the -- and when does revenue generate? And how does that ramp?

Yes. As we've said before, Brian, we've already signed other deals, right? This is an actual launch, right? Does that mean it will work? You never know, right? But we're highly confident. And I think Tesla is a profitable, is profit to literally showing right, how magnetic this technology is and what our platform does. But we'll be launching with a partner that has over 10x the amount of subscribers, right? You can start to guess numbers and figure it out, but we're not going to do that today. What we're going to do is we're going to very confidently right, do that just like we did with Tesla years ago. We have a high level of confidence that this will be -- potentially be our biggest partner in history and that we have an opportunity that proving the Tesla that this number of people converted again, shows the affection for our product. And I think that's why these B2B deals are starting to fall and get signed. So stay tuned. You're going to get lot more value.

A lot more signed and you hope to launch, is that right?

Correct.

And have you announced who that is? Or can you not announce who that is?

We cannot announce yet who it is, but you will see shortly.

[Operator Instructions] There are no further questions at this time. I will now turn the call over to Robert Allen for closing remarks. Robert?

Yes, thank you, everyone. I appreciate your time and I appreciate your support, and we look forward to a terrific year, and we look forward to talking to you again shortly about the next quarter.

This concludes today's call. You may now disconnect.