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Good morning, and thank you for standing by. Welcome to LiveOne's Fiscal Year 2027 First Quarter Ended June 30, 2026, Financial Results and Business Update Conference Call.

[Operator Instructions]

Presenting on today's call is Rob Ellin, CEO and Chairman of LiveOne; and Craig Christensen, Interim CFO 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 and 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 vary 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, 2026, 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, August 12, 2026. And except as required by law, the company does not undertake any obligation to update or revise this information after today's call.

I'd like to highlight to all participants that this call is being recorded. The company will make 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.

Thank you. Good afternoon, everyone, and thank you for joining us. This was one of the most important and strongest quarters in the history of LiveOne. We delivered $19.3 million in revenues and $18.6 million of audio revenues at a record $6.3 million of adjusted EBITDA. Our podcast delivered revenues of record revenues of $16.2 million (sic) [ $16.1 million ] and $1.6 million of adjusted EBITDA. But maybe just as importantly, we increased our cash position by $3.3 million increased our stockholders' equity by $7 million and eliminated $5 million of liabilities for the quarter.

We've now completed $7 million of our $12 million of stock repurchase program and fully are prepared to continue to grow that and buy more and more stock at these low prices. We also acquired 150,000 shares of PodcastOne and paid off all of the junior debt at PodcastOne. Our focus is simple: grow revenues, grow EBITDA, generate cash, strengthen the balance sheet and create shareholder value. And for the first time, I believe we see a very clear path to the next level of scale. Our B2B pipeline is stronger than it ever has been.

We now have partnership and opportunities with over $10 trillion worth of companies across the world. We have signed major retail agreements with a 4-year agreement with one of the biggest retailers in the world. We are very close to a second retailer. And for the first time ever, we have partnered with Netflix and their 700 million global members. Our relationships continue to grow across Apple, Amazon, Alphabet, AT&T, Samsung, LG, VIZIO and many of the most important and largest companies in the world.

We are also seeing very meaningful expansion with our existing partners, Amazon representing over $20 million. And Paramount has now passed and on its way to over $27 million in revenues. This continues to demonstrate the accelerating opportunity across our major global distribution partners. Based on the momentum we're seeing, we believe there is a clear path to over $250 million in revenues over the next 3 years. And importantly, this growth is happening against a dramatically leaner cost structure. We have cut our staff down from 350 people at a high to now around 80, and we are not just simply rebuilding revenues. We are building a much more profitable, scalable LiveOne with the potential for dramatically increasing EBITDA and cash flow.

Our M&A pipeline is the strongest it's ever been with over $400 million of potential deals in the pipeline. We are evaluating carefully acquisitions, mergers across our businesses while continuing to receive substantial inbound interest from strategic and financial buyers looking to acquire individual LiveOne subsidiaries, assets or potentially the entire company. That gives us tremendous optionality.

We can buy, merge, partner or monetize assets depending on which path creates the greatest value for our shareholders. PodcastOne is another critical part of our flywheel. We believe audio and video belong together. We are watching a transformative move in the industry as you see Netflix enter in a very strong way into podcasting and you see the likes of Fox buying up many podcast networks as well as OpenAI paying 13.5x revenues for a podcast network. This is the second round of acquisitions where there was over $10 billion of them in the first round, and I fully expect there'll be a larger scale acquisition mode, right, happening in the overall industry.

It's very strong belief that you're going to see every streaming network, including the Apples, the Amazons and the Alphabets of the world or the YouTubes of the world acquiring podcast networks. We've also now officially sold our podcast Varnamtown to a major streaming partner, and we're hoping for a green light on that in the very near future. This adds to our PodcastOne IP of podcasts that can turn into television or films and dramatically increases our opportunity of generating substantial cash flow from these.

AI adds another major layer across our audio and video content, data and intellectual properties. We have over 250,000 hours of video content, over 500,000 hours of audio content and growing. We see telltale signs that the LLMs are going to be buying up intellectual property content data at somewhere between $100 and $500 per hour on a nonexclusive basis.

The most important message I want investors to take away from this, LiveOne flywheel is robust, it is working and is accelerating. More partners create more distribution, more distribution creates bigger audiences, more audience creates more revenues and more content creates more IP. The more IP creates more opportunities across streaming, television, AI licensing, commerce and M&A.

And then there is the valuation. The industry companies are trading at about 3.7x revenues, while LiveOne is trading at about 65% of revenues. We believe this represents an extraordinary valuation disconnect. As we execute, grow revenues, expand EBITDA, generate cash and strengthen the balance sheet, we believe there is a significant opportunity to close that gap.

After more than 30 years of building media and technology companies to over $10 billion worth of companies, I believe this is the strongest and most powerful collection of assets and opportunities I've ever assembled. I've been through this journey with many companies where stock has had its difficult times and then rebounds in a very extraordinary way. We watched this with Digital Turbine dropping almost $40 million and then 5 years later, trading to a $12 billion valuation. I believe LiveOne has today more assets, more revenue streams and more ways to win.

Now it comes down to final execution. The flywheel is accelerating, and we see a very strong sign of hitting over $100 million in revenues in the very near future.

With that, I want to hand it off to Craig, our CFO, who's done an amazing job and look forward to finalizing our call at the end. Thank you, Craig.

Thanks, Rob. I'll spend a few minutes just providing a brief overview of the results for our first quarter. Consolidated revenue for the 3 months ended June 30, 2026, was $19.4 million with positive adjusted EBITDA of $4.3 million. Our Audio division posted revenue for Q1 of $18.6 million and adjusted EBITDA of $6.3 million. The biggest driver of adjusted EBITDA was our Slacker business with stock-for-service deals that covered certain past liabilities as well as credit for future services.

On a U.S. GAAP basis, for the first quarter, LiveOne posted a consolidated net loss of $3.1 million or negative $0.23 per basic and diluted share. This compares to net loss of $3.9 million or negative $0.40 per basic and diluted share in the same quarter last year. At the operating level, our PodcastOne business reported record revenue of $16.1 million and adjusted EBITDA of $1.6 million. Our Slacker business posted Q1 revenue of $2.5 million and adjusted EBITDA of $4.7 million. This was primarily driven by stock-for-service deals and the elimination of certain past liabilities.

So overall, we see strong momentum in the first half of fiscal '27, led by the continued growth of PodcastOne. And as Rob mentioned, we have several strategic opportunities gaining traction, which we believe can support the continued growth and create long-term value.

So Rob, I'll turn it back over to you.

And just to finalize, we are well in the process of our next M&A transaction. It's been a few years since we've completed one. But for anyone that knows me, they're usually super accretive, very much like PodcastOne. We acquired it doing $17 million in revenues and losing $5 million a year. It's now on a run rate to do well over $60 million this year as we finished off the quarter with almost what we started with 5 years ago when we acquired it and now is very strong EBITDA. We are going to continue to buy back stock aggressively down at these low valuations.

And as a team, I couldn't be more proud of what they've accomplished this quarter to eliminate this kind of liabilities, create this kind of EBITDA has really been special and really has, really special to see what our team has done, and we continue to look at ways to increase each of those. And again, we'll continue to buy back stock. So I want to thank everyone for joining. I thank our shareholders for the patience, and we look forward to a really exciting end of the year.

[Operator Instructions]

Your first question from the line of Brian Kinstlinger with Alliance Global Partners.

My questions will be around the B2B deals, and I'll get back in the queue. At what point do you expect AT&T to begin offering their plans to automotive manufacturers? Are there any manufacturers that AT&T is already offering LiveOne's content if you buy a car? And if so, which?

Yes. So we're under NDA on that, so we can't give names at this point. But the answer is yes and now. We'll have a, hopefully, a very substantial update on that in the next 30 to 45 days and are really excited about that partnership. And Brian, you probably know, historically, this company has done and really before I was involved in it, has done most of their revenues through carriers, starting with Verizon and T-Mobile and obviously, AT&T being the biggest is really exciting for us to have this opportunity to grow with them.

Great. Similar question on smart TVs. You've got 3 of the largest that you are -- who's integrating your content. Are all 3 now selling TVs that consumers can buy with your content? And if so, can you talk about any evidence of usage, success, subscriptions, anything like that?

Yes. This is just the beginning of the beginning, but the answer is yes. We're across all 3 of them. And the marketing strategies are just starting to come into place, and we'll have a lot more clarity on that in the next 60 to 90 days. But really exciting. I mean not only is it exciting just to have the TVs, but obviously, when you're talking about the likes of VIZIO, right, you also have potential to move into Walmart, right?

And when you're talking about Samsung, you have the opportunity of moving into Android. Again, Samsung was the biggest -- probably was the second largest partner in the history of the company with Slacker Radio and did hundreds of millions of dollars of revenues over almost 20-year period with them. So really exciting, not only just what you can do in automobiles, but getting inside of these large massive companies and building the relationships.

As you know, Brian, once you're in the door and you have contractual relationships, you can really expand to other areas of the business as well. So the distribution is well beyond just TVs that we see and really exciting to have these opportunities. And we've used very tiny numbers, as you know, something like 0.5% to 1% penetration and a conversion off of that. And just take all the numbers of each of these companies, combine them. And we just need a little tiny piece of that for the revenues to really ramp up. And we expect that fourth quarter, right, as we've said throughout the year. It takes time as you put these in.

People need to see them multiple times, right? They need to experience. They got to see the branding. They got to build a relationship with it. But we see, again, at a very tiny percentage conversion with these partners, just a massive opportunity.

I'm going to slip one more in, then I'll get back in the queue. You made a comment, Rob, that you have a B2B deal with one of the largest retailers in the world. You obviously are working with Amazon and everyone knows that. But is that something new? Is it one quick comment? I wasn't quite sure what to make of it? Or am I drawing maybe a blank on another announcement you had?

No. I mean we -- all I said is that it was a 4-year contract, right? We can't give names, as you know. And no different than we originally had our Paramount deal. We couldn't talk about the name for almost -- we didn't talk about it for almost 2 years, and now it's well over $27 million in revenues, right? This could be a massive, massive partnership. And shortly, we fully expect to be able to talk about it in detail.

Yes. And I mean to add to that, Brian, I think you're going to see us add a head of partnerships in the retail area. You'll probably see the same thing in the carrier area. So as we've now shrunk the team dramatically, you will see some add-on team members coming shortly, including the President of the company, right, as well as area heads and sales heads of B2B divisions of where we're growing, right, carriers, auto, retailers, et cetera.

Your next question is from the line of Barry Sine with Litchfield Hills Research.

I want to start off and continue on the topic of B2B partners. Rob, you mentioned Netflix at the beginning of the call. And obviously, that's a big partner. Are you at liberty to expand on what you're doing with them? And if I was a Netflix subscriber, what would I see from LiveOne? Would I just see podcast? Or is it also music?

No. You're just going to see podcast to start, right? But this is my humble opinion. I did a podcast on this. I think it was 3 months ago, and maybe for once I'll be right, right? I came out and said very clearly that I fully expect that every streaming network will move into audio, right? No different than cable and satellite did, right? There are still more channels on cable and satellite for music choice than there is anything else.

I fully expect that you're going to see the likes of Netflix, Warner, Paramount, Hulu, Disney, every one of these streaming networks are going to add audio to their platforms, where they add it as a distributor or they acquire them. And I see it as really intellectually smart for them to acquire them, right? You're seeing Netflix doing deals with iHeart. You saw Disney do a deal with iHeart, right? You see Sirius trying to buy iHeart. All this is coming in when you think about it, right, that audio streaming is charging the same price as Netflix is. Right, whether it's Spotify, Apple, they're basically almost the exact same price, except for the differences in audio, the music is already made, right? They don't have the risk of spending $10 billion to $20 billion producing content.

So as they try so hard every year to increase their ARPUs, it makes so much sense to me that a Netflix should have an audio network, right? And having an audio network will drive -- give them the ability to raise their ARPUs way more than they can raise in the dollar a year that they're doing today. And I think the same thing on the audio side.

So I think you're going to see a roll-up happening where you're going to see every streaming platform, including Apple, Amazon, who already have theirs, right? And YouTube, those have a music network, but they're going to go harder into podcasting and then you're going to see the other streaming platforms that are competing with them, right, are going to have to have an audio platform. It's going to be so important to them. And I think you'll see acquisitions happening in the space quickly.

Okay. And then my second question is around M&A specifically. You said you're close on the deal. And you've talked about criteria where you gave the deal being accretive. Where are you shopping? Are you shopping only in podcasting? I know Kit is always looking for perhaps to pick up companies.

No, no, no. We have -- yes. So we brought in Steve Lehman, right? Steve is Vice Chairman of LiveOne, and Steve's background is rolling up audio, right? He's done some video as well, but rolling up audio as a whole. So there's massive opportunities there. And there's a fractured market, right? You're either big or you're small and kind of left out there. We're looking at both, right? From the M&A side is we fully expect another acquisition that will be similar to Slacker and PodcastOne where we acquire it extremely cheaply, right? It fits into our flywheel and it picks up substantial EBITDA for us and is extremely accretive.

At the same time, we are looking at big chess moves that could be anything from a buy to a sell, right? The inbound calls are coming in on a regular basis. You guys are all watching as companies, again, podcast networks were bought up at like 5x to 15x revenues 5 years ago when the industry was a $600 million industry. Now it's a $25 billion industry and growing, right? As video has been added, it's going to continue to grow. And as that happens, I think you're going to see very aggressive moves in the media space. And you've started to see for the first time in 7 years, media stocks really moving, right?

Media stocks have had just a miserable, miserable 7 years. Now you see Starz stock has grown at 3x and iHeart stock was up -- it was up 6.5x, 7x. Now it's still up 5x. Same thing with Lionsgate. All of a sudden, you're waking up. And part of that is because people are realizing how valuable the data is. That data may not just be valuable to other content partners, it could be enormously valued to the AI models, right?

As you're figuring out human behavior, right, human movement, so on, you're going to need a substantial amount of content to keep feeding these LLMs and continue to feed them quickly. And they're not going to be able to get content from the majors, right? You just saw the settlement, right, that Anthropic just did, they paid a staggering $1.2 billion just to the book industry, right, for stealing some books. I imagine what's going to happen and how long it's going to take to settle the film, music, television, right, stuff that has been effectively taken whether intentionally or not by the AI models, right, that is now all blocked.

So I think we're going to have enormous value in the content we have, which content is data. And when you have data, it gives just huge value to these AI models.

And just to follow up on that, where are you in the process of monetizing for AI licensing? And have you looked at doing that via tokenization, which would make the content much easier to slice and dice and price and sell?

Here's what I would tell you what's really exciting is, as of this morning, my team just sent me a message, we're in discussions with 17 AI businesses and growing. All of them looking at somewhere between $100 and $500 an hour for content. So we're very smartly and very carefully working with our talent, right, because they're a partner in that, right? If it's Dr. Phil or it's Adam Carolla, it's any one of them, we're working with that content. And the same with our music content, which we own, we still have to work with our music partners, right, to monetize that. And we couldn't be more excited about the opportunity.

And just to give you color, I personally invested in the company just a couple of dollars, but I saw a friend of mine who started the company and literally, he's gotten $17 million of contracts upfront just to literally give content from security guards, cleaning people, people washing dishes, washing laundry. This is -- if you're going to build robotics and you're going to build AI, they're going to need a staggering amount of content to keep feeding the system to keep it alive, and we have real content, right?

So what I'm talking about is only for the practice models. Imagine it's worth $100 to $500 an hour from practice models, what is this content worth when it really goes to market where it is exclusive deals to someone. It could be multiples of that. So we see a great sign in that, and we fully expect to start to monetize it in the next quarter.

[Operator Instructions]

Your next question is from the line of Brian Kinstlinger with Alliance Global Partners.

A few follow-ups. The first one relates to Netflix. Are they paying annual fees for the content or based on usage?

We're not at liberty to give what the model is today. But you could read -- if you read the stories of Bill Simmons and you read the stories with Disney yesterday, you can get a little bit of an idea that some of it is going to be free and it's going to be AI driven, right, and traffic-driven and some of it is going to be paid for, right? It depends on which content it is. You can be sure that you're not going to see us give the likes of a major talent to them, right, without getting -- monetizing it.

And I can just tell you that our video content is probably now 30% of our revenues. I can't give you an exact number on it, but it was 0% when I bought this company, right? So video content is just exploding. There was a great CNBC interview this morning that literally walked through how much money is being monetized in video and what kind of revenues are being driven in video. And I just see great telltale signs that the TAM of our business is going to explode over the next 3 years.

Great. I have 2 numbers questions. The gross margin has drastically improved. Craig, you made some comments that I wasn't quite sure how to decipher. But when I back into the gross margin of non-PodcastOne, you're at 63% 3 quarters ago, you were in the 20s for several quarters. Is there any nonrecurring benefits in there? And if so, can you quantify them? Otherwise, is this sustainable?

Yes, Brian, you're right. There is some onetime pickups in Q1 in Slacker. As I mentioned in my remarks, that we had an elimination of some liabilities of about $1.5 million. So that gets you back to a more normal margin on a GAAP basis. But then on top of that, we had some stock-for-service deals, and that's what drove the adjusted EBITDA. So yes, there are onetime pickups there. We expect the margin to kind of sustain back to normal, unless we can continue to drive those stock-for-service deals.

Yes. Well, that was going to be my next question. We saw the share count jump significantly in the 3 months. Is that related to that stock comp? And how should we think about maybe stock comp and the share count for the remainder of the year?

I think we answered that. We've basically given that number, which was around $15 million, right, at $7.5 a share, right? We picked up some great partners with that, Brian, that we've announced, right, and they've announced, right, including a fund that now is part of BMI that owns 7%, 8% of the company now. So it's been great for us. Not only is it great from a balance sheet standpoint, right, but it also is great from having real long-term deals with the music industry, right, which we haven't had in the 8 years since we acquired it because of the payables that existed on the books previously.

So we'll continue to do some deals at $7.5 a share or better. And I fully expect that there'll be more of those as part of that $15 million over the next 60 to 90 days.

Your next question is from the line of Barry Sine with Litchfield Hills Research.

Just as a follow-up on that, on the music partners, the record labels. Now that you've kind of cleaned that up, you brought some in as shareholders as partners. In the past, Rob, you've talked about going global and many of your B2B partners like a Netflix do have global businesses. And I know you're not yet licensing music to them, just podcasts. But can you talk about the prospects for taking the music part of the business global and adding global licenses, so you're not just in North America?

I think the answer is the minute we have our first partner, that is a global partner that needs this across the board will be the minute we go sit down and start negotiating. And we're in a completely different position than we've been in the last 8 years, right? We've had these massive payables from the acquisition of Slacker in the beginning, right? Now that strengthened cleaned up and so many of the music partners, we signed just about every one of them now.

So we got a couple left to do over the next, as I said, 30 to 90 days. But if we can get that cleaned up, we will certainly be exploring that and looking at that opportunity. And also podcasting is exploding around the world, too, right? So there's a real opportunity with it globally as well to expand that.

And my last question, you threw out a number that's a pretty significant aspirational number of $250 million in revenue 3 years out. And I know that's not guidance, but could you flesh out that vision a little bit more? What does that look like in terms of balance between podcasting, between B2B deals? And then financially, what does that look like from an EBITDA standpoint? What's the vision on this company with that $250 million of revenue 3 years out?

I think we want to get to adjusted EBITDA like we're doing now, right? We've taken our cost structure down. As you know, if COVID didn't hit, we were on our way to $250 million 6 years ago, right? If Tesla didn't change the contract on us, we were on our way to $250 million a year ago, right, and 4 months ago.

So we're back on track now. We're highly confident, right? And when you talk about $10 trillion worth of companies that we're in partnerships with, we just got to keep growing them, right? Paramount could grow. It's growing from $2 million to over $27 million. Amazon is growing literally just starting off as a test is now growing to $20 million, right? We're now in a position with 10, 12, 14 partners that all have -- they're all multibillion- to trillion-dollar companies. We just got to execute, right? We got to execute. We got to deliver for them, and we got to continue to sign more and more of those partnerships. And then it's just the numbers game.

The bigger their distribution partners are, right, the more traffic we're going to get, the more revenues we're going to drive. When you go on to a Netflix as an example, right, you put a couple of shows on the start, you got 700 million subscribers right around the world, right? I can't tell you exactly what that number is going to be day 1, but there's going to be some numbers, right? And so that's just the beginning. When you control that, right, that environment, when we go to Netflix, no different than we're on YouTube or on Spotify, whatever advertising is played during that show, we get the revenues from.

Then there could be subscription revenues, right? Our subscription revenues all of a sudden have ramped up with one of our big podcasters, which starting to be a real number every month. And I just see that is just a big opportunity for us to grow. And I think Netflix is missing an audio network. I think Walmart is missing an audio network. I think Costco is missing an audio network. I think that Facebook is missing an audio network. I think Microsoft is missing an audio network. I think every carrier is missing one.

Everyone is coming back. AI is running the world. Everybody is scared. Everybody is infringing on each other's businesses, and it is so critical right now for people to own their own data. There is nothing that is used more than audio content, no matter what, more than video, there's always going to be audio, right? There's still going to be 2 hours a day in a car. There's going to be usage on mobile. It's hard to watch as much on a mobile device as you're going to listen on a mobile device. I think we're right in the sweet spot. And I think with Craig's help and a new President of the company, right, and a couple of more B2B people, $250 million is very achievable over the next 3 years.

There are no further questions at this time. I will now turn the call back to Rob Ellin for closing remarks.

Well I think I've said everything today, very humbly, right? We are humbled by where our stock is today. We're pretty shocked because media has had some life to it. It looked like the stock was going to run last quarter, had a little run up to $7 couldn't break those levels. But we're going to keep buying back stock. We're going to keep our foot on the pedal. We are going to continue to clean the balance sheet until we get rid of any of the outstanding issues that are out there, and we're going to continue to build massive real partnerships with billion- to trillion-dollar companies.

And again, I just want to thank everyone for their patience. We're right there next year. We'll be buying stock as soon as the restriction is off, as soon as we get legal restriction off, which is any day now, we'll continue to buy more stock. And I just couldn't be more proud of my team and what we got accomplished in this year, but just in this quarter, it is just amazing to see $7 million added net equity, $3 million of extra cash. This is just a telltale sign of where we're going, and we're going to continue to grow these things.

So thank you, everyone, and we look forward to talking to you soon with the next update.

This concludes today's call. Thank you for attending. You may now disconnect.

Good morning, and thank you for standing by. Welcome to LiveOne's Fiscal Fourth Quarter and Full Year Ended March 31, 2026 Financial Results and Business Update Conference Call. [Operator Instructions] Presenting on today's call is Rob Ellin, CEO and Chairman of LiveOne; and Craig Christensen, Interim CFO 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, 2026, 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, June 24, 2026. And except as required by law, the company does not undertake any obligation to update or revise this information after today's call.

I'd like to highlight to all participants that this call is being recorded. The company will make 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, and thank you for joining. This has been a transformational year for LiveOne. I want to start by applauding my team at LiveOne, at PodcastOne, at Slacker and our merch business. Each of those subsidiaries have fought through this year and battled and turned this around. LiveOne reported this morning $77 million in revenues. Our Audio business, $73.5 million and $6.1 million in EBITDA. This is hugely transformative to the company.

It's been a tough battle in 30-plus years of running public companies. We lost our major customer, Tesla, lost $65 million out of $75 million in revenues. We took punches from our debt holders, our banks, our investors in a brutal market. At one point, it felt like the Knicks game. And we're in my Knicks hat today as this was comeback time for LiveOne. But our teams rallied and did not quit.

As you look at our Podcast business, Kit Gray showed up as our Jalen Brunson. He took that business and has now grown it from the time I acquired it from $17 million. This year, we did $61 million with $6.3 million in EBITDA. When we acquired the business, it was losing $6.5 million a year. That's a $12 million swing in EBITDA. And as you look at this first quarter, we've just raised our guidance and raised our guidance to $78 million to $85 million, right, with $8 million to $10 million of EBITDA. And we're already doing close to $2 million of EBITDA for the quarter. So you're on an $8 million run rate off the slowest quarter.

At LiveOne, we survived our banks pulling out. We replaced them. We have now paid down all of our junior debt. We have now converted over $15 million of equity at $7.5 a share, and we have cleansed our balance sheet dramatically. Now is the time everyone has fought through this year to start to see this business turn and go back in the direction where we started. We traded for almost 5 years between $40 to $100 a share. We went through a tough period of time during COVID. We came out stronger than ever. We've gone through a tough period of time with Tesla, and we're coming out stronger than ever.

Our B2B lineup is growing dynamically across many verticals. As you look at the past announcements, these have just come out in this quarter, this current quarter, we've announced partnerships with VIZIO, which is part of Walmart. We've announced partnerships with Samsung. We've announced partnerships now with AT&T. AT&T, we will now reach over 70 million people and growing. And as you continue to add these to our current lineup of B2B deals, we also added LG to the lineup. If you take the combination of just those alone, it's hundreds of millions of monthly eyeballs. As you now look forward, we expect to announce our next major partnership with a retailer with over 50 million monthly subscribers. We've already talked about going through Phase 1 and the success of it and the success of the sign-ups that came at almost 46%, way higher than we could have dreamed.

When you look at the Tesla partnership, there are only 2 million cars. Consumers had to sign up for $10 a month and somehow we ran from when we acquired the company, we acquired Slacker Radio doing $200,000 a month to doing $65 million, $70 million a year and growing. We have now started to replace that. Part of that replacement came with a really exciting partnership with Amazon, now over $20 million, and then it was Paramount. When it first started, it started at Pluto TV. It started as a $2 million deal. It's now over $26 million. We continue to grow these. We see telltale signs that these partnerships will all look similar that if you just can convert 0.5% to 1% of their total audiences, we could be looking at hundreds of millions of dollars in the next 2 years and $1 billion over the next 5 years.

We couldn't be more excited about where the business is going, and we wanted to show the Street our hand, right? So we rallied back, and what did we do? We bought back a substantial amount of additional stock. We now said that we bought over $7 million stock in the free market and that we have $5 million additional to acquire. We also have bought a substantial amount of PodcastOne stock back. And if the company is going to continue to trade at these discounts, we're going to continue to acquire, we're going to continue to buy back as well as you will see me personally buying a sizable position back in the company. I bought as high as $60 a share, and I certainly will continue to buy down at these low levels.

With that, again, I want to thank my management team for successfully surviving a uniquely difficult period of time and for coming out of it stronger than ever. We feel like these B2B deals are starting to build momentum. We have over 100 in the pipeline right now, everything from hotels to airlines, things to streaming networks to audio companies, carriers, auto companies, and we see the telltale sign that these will continue to grow.

With that, I want to pass this over to Craig and give him an opportunity. Craig has joined us on an interim basis, but hopefully for the long term. He has done just an amazing job of harboring the ship and getting the 10-Qs and 10-Ks done and brings a very prolific background as CFO as well as real serious experience in M&A, doing over 20 acquisitions in his last company. So Craig, take over from here, and then I'll jump back in and finalize everything. Thank you.

All right. Thank you, Rob, and thanks for that intro. I'll just spend a few minutes here providing a brief overview of our results for the fourth quarter, and then I'll cover the full fiscal year. Some of these numbers Rob commented on, but the consolidated revenue for the fourth quarter was $18.9 million with positive adjusted EBITDA of $300,000. Our Audio division revenue for the fourth quarter was $18.3 million with adjusted EBITDA of $2.4 million. On a U.S. GAAP basis, consolidated net loss was $7.6 million or negative $0.65 per basic and diluted share in the fourth quarter of fiscal '26. Our PodcastOne subsidiary produced Q4 revenue of $15.7 million and adjusted EBITDA of $1.9 million. Our Slacker subsidiary produced Q4 revenue of $2.6 million and adjusted EBITDA of $600,000.

For the full year, our revenue for fiscal '26, as Rob mentioned, was $77.1 million, adjusted EBITDA of negative $900,000. Our Audio division produced full year revenue of $73.5 million and adjusted EBITDA of $6.1 million. So down at the operating level, Slacker reported full year revenue of $11.8 million and adjusted EBITDA of negative $200,000. Our PodcastOne subsidiary produced record full year revenue of $61.7 million and $6.3 million in adjusted EBITDA.

So as Rob mentioned, I mean, we're very pleased to report strong continued growth at our PodcastOne subsidiary. We expect that to continue throughout the year. We're advancing several strategic partnerships from our business development pipeline that we believe have potential to drive long-term growth and value creation. Now in fiscal '27, we believe the company is well positioned for transformational growth, new B2B partnerships and potential M&A transactions.

So Rob, that's all I got. Back over to you.

And I think you hit that great, Craig. And I think maybe the most important line there was just at Slacker, right, as revenues are down so far, yet we took all these costs out of it and have the adjusted EBITDA as positive. So you're going to see every subsidiary in this company with adjusted EBITDA positive. You're going to start to hear us talk about at the end of the year about our $225 million, $230 million NOL. And as those NOLs start kicking in and we start talking about earnings, it's a very different game for everybody.

With that, we've raised our guidance to $85 million to $95 million with $8 million to $10 million of EBITDA. That is a massive, massive turn here. We fully expect that if these B2B deals continue, that we'll be looking at increasing those guidances down the line. But we think it's a great starting point coming off where we were last year and a telltale sign of where the business is headed. Craig has mentioned the potential of acquisitions. If you read the press release, we said we expect a very accretive acquisition coming imminently. We are highly confident that this is now the time to add additional podcasters, additional revenues, additional traffic and additional talent to our platform.

With that, we finished #7 on Podtrac. So we're moving up, up the charts dynamically. We've been top 10 all year. And we see the really exciting times now that the company is really well positioned to complete those acquisitions. We have also, again, protected ourselves from the standpoint of we've had so many inbound calls on the company that we brought JPMorgan's bankers back in to make sure that we explore all options and protect ourselves in case a lowball bid comes in. And with that, we will continue to buy a substantial amount of stock starting next week. We will continue our buyback and show our confidence in why this company is so undervalued.

As you look at the industry, the industry -- I did an interview about 2.5, 3 weeks ago. I said, "You're going to watch a roll-up of this industry that's going to be very dynamic." We haven't seen that in media in almost 7 years. Everything from Roku being acquired at $22 billion. My close friend, Charlie Collier, really exciting to see that. You've seen Lionsgate stock more than double. You saw iHeart stock go up almost 7x. Media is back. People are waking up and realizing that it's not just media. Media is also data.

And as you look at data, we have a massive amount of data. We have 250,000 hours of video content, plus we have over 500,000 hours of audio content. And each of those are growing dynamically. And I think you're going to see some of the monetization across these AI platforms. They're going to desperately need more and more data. And as you watch that acquisition of Warner at $46 billion above where Netflix was willing to pay for it, a big part of that reason, I don't know why the world is not talking about it, is that you've watched David Ellison, whose father is Larry Ellison, who owns Oracle, for the first time in history, took $90 billion of debt and they say it's going to go up to $150 billion. And what is he going to need for a data business? What is he going to need for -- to keep building these AI models? He is going to need data. And a beautiful place to get that is from content. We're well positioned that our content could monetize in a very unique way across AI and fully expect to see some monetization coming from it almost imminently in the AI world.

So with that, I'm going to open it up to questions. And I want to thank everyone for joining and their patience with us and our patience with our team, and we will continue to fight hard. And again, we see this year as a really exciting transformational year for our company on the upside going forward. Thank you.

[Operator Instructions] Your first question comes from the line of Barry Sine with Litchfield Hills Research.

Welcome aboard, Craig. Rob, I want to start off asking you about the AT&T deal. Obviously, a huge new partner, and you've been talking about a carrier for some time, so you've delivered. I wanted to get a little bit more information. From the release, it sounds like they're going to sell a package to automobile manufacturers, OEMs. What's the status there? Have any been signed? And when might we see some revenue from this new relationship?

Yes. A lot of questions in that. What I would tell you is this -- is that historically, music subscription, the largest partners have always been carriers, right? And as you know, Barry, I owned KaZaA previously and did well over $100 million with carriers. And when I built Digital Turbine, almost all of our revenues came from 58 carriers around the world, right? This is a massive opportunity, right? This is now the opportunity every time you go in your car, all of a sudden, your LiveOne app will show up in the car, and you'll have an opportunity across AT&T Mobility to be able to sign up, be able to utilize and be able to drive.

So there's multiple different revenue streams come from this. One is the current user. Two is new users. And we are highly confident that, as you can see by the press release, not only did AT&T announce this themselves, but they put their symbol in, they put Cisco in as a partner, and they are highly confident that they are going to be a great strategic partner to help both businesses grow. And just like Tesla did, utilize music to sign up for their platform. So really exciting partnership, and there's 67 million to 70 million so far cars that are programmed for this and growing. They're basically taking the entire market in this.

So we're really excited about this partnership. And I think you're going to see more carrier relationships, and I think you're going to see deeper carrier relationships as the cycle is changing, right, and people are waking up that all these companies are infringing upon each other's businesses and AI is so critical to their survival. What is that about? That's about data. They don't own their own data. They've basically handed most of their data to Apple and Android for the last 10 years. As that changes and as that cycle changes, they're going to start fighting for that data. And I think we're well positioned to be able to take a piece of that. And I think this will be the first of potentially many carriers around the world.

Okay. And Rob, you mentioned AI, and you've talked about monetizing the content you have. I wanted to ask a couple of questions on that. I know either -- I understand the opportunity for licensing the PodcastOne content so the AIs can learn more to speak like real people. Are you also going to monetize the LiveOne catalog, things like music festivals or some of the interviews you've done? How many are you negotiating with? Have you signed any? And again, revenue timing when we might see some revenue from AI deals show up in the 10-Q or 10-K?

Yes. So you're being very careful in that, right? I would say it's imminent, right? With that, I would say that there are multiple parties coming very aggressively looking at this and looking at the space. You're reading about it on a daily basis. And Barry, you did some of your own research on this, and people are talking about $100 to $500 per hour, right, of content. That's just for the practice models, okay? All you have to know is if you went onto your AI models, if you went onto the LLMs and you went onto them 10 weeks ago and you wanted to change your face to James Bond or Mickey Mouse, you could do it very easily. Now you couldn't even come close.

What's happening, there are war rooms in every single law firm right now that the major media companies are fighting these AI companies. And you see lawsuits. CNN just filed one last week. There's going to be lawsuits everywhere, right? They're going to block everything they can until they can figure out what the model is. And these models, no different than Napster in the old days or when we dealt with KaZaA, you're going to deal with it. It took 17 years for YouTube to settle those. So what's going to happen is secondary content. And I don't mean secondary from the quality of it, secondary content that you have access to, right? So very differently with podcasters. Podcasters own their own content in conjunction with PodcastOne, right?

Whereas if you're on CBS, there's only a few people in history like Dr. Phil, who's on our platform or Oprah, actually own their own content. It was owned by CBS. So now you're going to have this wide open field that are 250,000-plus hours, and that's just what we've collected from the first 17 podcasters. We're digging into it. It's probably way higher. Our 500,000 of audio content, we have to look back 24 years to get it. And shockingly, our codes have what looks like very unique value. So we're exploring all options and have multiple bidders. We're looking for the right partners. We're making sure the contracts make sense, make sure we can protect our talent. Number one, we're always a talent-first platform, but I would expect that some revenues are going to come in imminently.

Okay. And my last question is on Tesla. The process of converting free customers into paying customers. And then on the free customers, the process of monetizing those with, I'm guessing, programmatic advertising insertions. Are you -- how are you doing in terms of revenue recovery from the Tesla relationship?

Yes, it's doing good. It's doing good. I mean, listen, this is a tough process. But at the same time, we've somehow miraculously, we're now up to 1.3 million Tesla users. The average user is using it, I think we just said 69 minutes a day. So if you have access to 69 minutes a day, and for any of you that have a Tesla car, you walk in the car, it's pretty magical, right? You walk in and you see the LiveOne button there. That didn't exist for the first 12 years of that contract, right? Before it was a squiggly orange button that you didn't really know what it was. If you listen to our host, you can hear Slacker Radio, you can hear LiveOne. But the reality is you didn't know who it was. You just knew it was a radio inside Tesla. Now you see that button and we're -- that button is there in perpetuity. I was literally just in an Uber the other day and you walk in and it's a brand-new car and there's the LiveOne button.

So I think we're going to convert. I think we're going to be very successful at it. We've done way better than we expected already. Now we are using AI tools, AI marketing tools, Meta and other things that we are going to very aggressively start to try to convert those subscribers. And we've done a nice job so far. As you can see, somehow our cash position went up, right, even though we've still been spending money paying off settlements around this whole loss of revenues. So it's really exciting to see.

We've also been able to, because of that, pay off all of our junior debt, part of our senior debt. So the balance sheet is literally the strongest it's been with some of the help of doing those conversions. So I think it's really exciting. I think we got to keep getting smarter on how we convert those people. I think we've got to get our prices higher, right? We have not raised them yet, even though everyone in the industry has raised them dramatically. So we have to figure out what that balance is between them. But I got to tell you, no one ever expected. We thought we'd get maybe 25% of the audience, and now we're back to well over 50% that we have a legitimate shot at starting to convert.

Okay. So I'll renew my subscription before you raise your prices.

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

First question starting off, when will the 10-K be published or issued?

Sean, it's Craig. We're aiming to get it out at the end of this week, but we have until Monday, which we don't plan to use, but we have until then, but it will be out this week.

Okay. Because a lot of questions around things that have changed subsequent to the quarter, that would be helpful to update a model. Can you give us a sense of like standing here today or kind of at the end of June, what is the share count now? And talk a little bit about what's out there that's convertible versus eliminated with some of the moves made more recently.

Say that one more time, Sean. You cut off at the end.

Sorry. About the share count as of today, taking into account a lot of the changes that you've made to the balance sheet in recent weeks. So like if we just take today forward, I know it's not going to be that for the first quarter, but like what's the share count today? And what's still on the balance sheet that's convertible?

I think most of that's convertible has been converted. I think we said today that 15 million total was almost completed, right? So you'll see another, I don't know, probably from last quarter, probably 1 million shares total in that range. But from those 1 million shares, these are in unique hands. These are the first time that we've signed long-term partnerships with many people in the industry, right, from BMI to Merlin. And with that, we've also added over 20 million songs to our portfolio, right? And adding those 20 million songs, as most of you know, most of my background has been building off of carriers around the world and mobile businesses, right? We've never been able to and have chosen not to because it wasn't worth it at the time to really expand overseas. This now gives us the opportunity that we now have a global presence that we can really start to as we do an AT&T deal. There's no reason I can't go back to the many carriers that we've worked with over the years to expand.

And as you know, I've been in Paris, London, Mexico 3 times, Japan, China and Switzerland, right, where many of the same partnerships that I did with Digital Turbine, that I did with my other companies for the last 30 years, right? We couldn't really partner with them before because it didn't make sense to expand overseas until we had the balance sheet cleaned up, especially from the standpoint of the record labels and the publishers. We're almost completely cleaned at this point. And I would say this is the best shape we've ever been in from a balance sheet standpoint.

Other questions on operating expenses. Since you've done a good job of cleaning a lot of that stuff up and as you had hinted in the past, using AI and other tools to get more productive. So that's encouraging. But like if you look at the operating expenses in the fourth quarter, should we expect things to kind of trend the same way? Or were there any expenses taken in the fourth quarter that you would consider nonrecurring?

Craig, do you want to take that?

Yes. Barry (sic) [ Sean ], I think the quarter is probably a good baseline to trend off of because you can see that throughout the year, the company did fantastic at trying to cut costs with the contraction. And a lot of those were permanent or salary base. So I think the G&A is stabilizing. The company is in a great position now, I think, on a meaningful B2B deal or an M&A transaction to scale. But there wasn't a lot of big one-time puts or takes in the quarter. So I think it's stabilizing and it's a good model.

Okay. That's helpful. And then my last question on OpEx is, as you've said repeatedly in the past, you plan to use more stock-based comp with the podcast talent, and we see that in the financial statements. But how much of that nonemployee stock-based comp is taken outside of G&A? Is any of that in cost of sales?

Yes, it does. It's in cost of sales. So when we pay the talent or talent takes stock, it's in cost of sales.

Okay. So could you say that most of that nonemployee stock-based comp is in cost of sales?

Yes.

Sean, I think you're going to see for the first time ever, right, the relationship with the talent is so strong that not only are they taking equity, but they're also becoming real participants in this. We think it's going to be very strong to have a 1,000 podcasters, 250 that are -- most of our revenues, but those podcasters behind the stock as well and behind the company, right, and really helping to drive the brand and the recognition. And we've just done -- Kit and the team have just done an exceptional job. We moved up to #7 on podcasts. And you're watching the second round of acquisitions happening in podcast right now.

OpenAI bought a podcast network at 13.6x revenues. Fox is buying everything they can get their hands on, right? They bought the Box network and so on. So you're seeing round 2 of those acquisitions. And it's not by surprise because it's no longer an audio business, right? I think when I first bought the company in 2020, I went on Adam Carolla on Fox News and said, this is not a podcast business. This is a vodcast business and a vodcast meaning that it's going to move to video. The industry has grown from $600 million, right, to $25 billion. It's going to $100 billion over the next 7 years, right? So you're just going to see massive growth coming out of this, and we're just so well positioned, and we want to make sure that our talent is a participant in the upside. We want them all rolling in the same direction.

You may have seen Adam Carolla. I put my brother on his show this morning. I'll be going on there in the next week or the week after. We want to -- as he goes on to Fox News, we want to be talking together as a force, right? We want to be talking as a team. And I just think we're in the strongest position with talent that we've ever been in the company, including cleaning up those balance sheets in the music side. The more we can clean up, the stronger the relationship is going to be with everyone.

[Operator Instructions] Your next question comes from the line of Brian Kinstlinger with Alliance Global Partners.

Nice to see all the new B2B announcements. You mentioned on one of the earlier responses that 1.3 million Tesla users you've got an average of 69 minutes. Can you quantify the number of conversions? Are you at 1% conversion? Are you at 5%, somewhere in between? And then maybe can you talk about where you bottomed for the total business at paid subscribers and where you are today?

Yes. It's a tricky one that I don't think I can answer exactly yet, Brian, because we still lose some of the old -- as cars go off the road, we lose some, right? So we lose some of those old subscribers at $3, and we gain them back at $5, right? So I don't have the exact number in front of me right now. We'll talk -- if you don't mind, we'll talk offline. I'll try to get you an exact number on it. But I can tell you that I think we said it's about 1% or 2%. We're starting to convert over the last couple of months. And we've had positive -- we've had overall positive numbers. Our ARPUs are going up, and we have had overall positive numbers in the last 2 months.

And just to the roughly total paid subscribers, I'm trying to back into it, is it around 200,000. Is that too many?

Do you have a number on that, Craig, in front of you?

I don't have an exact number, Rob, but I think that is a good estimate, Brian. It's kind of in that range.

Great. And then you've got a number of agreements in place that you've announced. Let's take VIZIO in February. I just know that date, but all of them have a time you announced them. How long before you think it takes before you see meaningful additions to that paid subscriber base? Is that months? Is that immediately? What is the average time frame you think a user converts?

Yes. I just looked at the numbers. So VIZIO was signed February 23, end of February. These typically are going to take 90 to 180 days before you start to really start to see revenue start to kick in. And just to give you an example, right, in Amazon, which is now $20 million, it took 11 months before they kicked in. There were some nice revenues, but really, the revenues kicked in after 11 months and then it really started to take off. Paramount was a better part of, it started off as a $2 million deal, now it's $26 million plus, right? That took the better part of 14 months for the real revenues to kick in. So each of these are going to -- they're going to start. They're going to -- as they get launched, as they start to grow, you start to get your feet under them, you start to understand what the consumer behavior is going to be, right? That consumer behavior changes every day, as you know, right, what else out there.

So we utilize our partners, right, to market it with us and to build with us. And the beauty of it is that we don't spend a nickel, not $1 marketing it, right? This is all utilizing. We're partnering with them because they have massive audiences, just like I did in Digital Turbine, just like I did in iWon, just like I did in Majesco. These are those B2B deals that they have the audience. They need the content. We're making a trade. No different than when cable and satellite, if ESPN or Disney came to cable and satellite, right, they were getting paid by them. I think that's the direction of where things are going. I think that's directionally where it's going to happen now. You're going to see the streaming platforms, right, digging in deeper and deeper.

You're seeing the streaming platforms going deep into podcast, right? You've just seen Netflix announced a deal with iHeart. iHeart stock went up 7x, right? You saw them do a deal with Spotify, right? They just bought a podcast for $100 million, does less revenues literally than one of our podcasts. They paid $100 million for it, right? So it's really exciting to see what's happening and that cycle is changing. And as long as we could keep signing these partners with massive audiences, getting them to market to their consumers, utilizing our -- just like Tesla did, utilizing our content to sign them up, we're going to be in great shape.

Awesome. And then as it relates to your 3 TV partners, I assume you're able to monitor traffic. So can you share maybe unique TVs that have watched or listened to your content? How many repeat users are there? And are each of those 3 OEMs marketing the paid subscription to these viewers? Is that how it's going to work?

Yes. So each deal is going to be a little bit different. We can't give you metrics yet. Those deals were all announced in end of March, right? So you're literally looking at hours since we've gotten started in those, right? We'll have way better metrics. I would say, probably September, October, November, in that range. We'll have way better metrics on where they're going and which partnerships are working better and which ones are delivering more subscribers and which ones are actually -- and which ones -- but not just that because sometimes they're doing a better job. You're signing free subscribers, but you're signing a big pool of them, but they're pushing them and you can end up with way more down the line.

So we're still in the beginning phases of those, right? And obviously, we have our next big one coming that we expect to be for sure this quarter, right? It's been delayed a little bit. We expect another gigantic one to be hitting any minute now.

And then for the TVs, are they preloaded the app on each of the 3 or just a few of them? Can you -- or did the users have to go find and download that app?

No, they're preloaded.

On all 3?

Yes, I think you can find -- I would say by now you can find. I don't know if it's every TV, but certainly the most recent TVs, which I don't think has really changed in the last 5 years. And I think you can find it if you go look. I've had multiple shareholders call me say they found it and they get excited about it. Just like when they see in Tesla. Our brand is getting a total refresh without spending a dime. Think about what it costs for Sirius to buy their way into cars and so on. We're getting ourselves into these places without spending a nickel on it, right? We're not paying them, right? We're hoping they're going to be paying us substantial money for our great content.

Great. I have two more. The first one is relates to AT&T. I know previously, Slacker Radio has been pre-installed on a number of different cars. why is this different and more advantageous with your integration to AT&T with these OEMs?

They're trying to capture, right, the inside of cars, right? So they're trying to capture that home screen, right? There really wasn't a home screen previously, right? The home screen didn't have much value. Now home screens are growing. And as you see, just my humble opinion, I mean, the robo cars are being launched right now. You're watching more and more of the Google cars out there, right? It's really fascinating. Every kid wants to take these cars. Nobody wants to drive -- the more -- the bigger the screen gets, the bigger the opportunity gets, right? That screen now. And when you go into a Tesla, we're one of 5 buttons that shows up when you get in the car. You could change it if you choose to and get rid of it. But when you go in that car, that button is sitting there day 1, right? That's where we want to be as many places as possible, we want to see our logo, our banner sitting there and somebody press the button and all of a sudden, they become a free or paid customer.

And so with AT&T, you're on that front page, whereas before with some OEMs, you weren't necessarily on that page. Is that right?

No, I would say it's totally different. No, I would say it differently with AT&T, they're doing what Tesla did, right? So remember with Tesla, right? This was an amazing run, right? But it took 12 years to get there. When I bought the company, we were doing $200,000 a month with them, right? But what they did was is they use the music to sign up their subscribers, right? So music is so sticky. Once you sign up, you're not going to get rid of it, right? So what we're hoping for here and the way that they're positioned is a 3-way partnership with us and Cisco and them, right? They're going to use the music to get the people to use their platform, right?

So that's how they're going to get them excited and ignited about it. It's a huge branding and huge advertising for us that would cost millions and millions, if not tens of millions for us to buy that space to get into that. And they're going to market us in every way, shape and form. They're going to come out and say, AT&T, they're going to the OEMs and going to those car companies and we're coming in with a music partner. We want to give you content right off the bat.

Okay. My last question, I think one of the previous questions was about G&A. I think in general, is what -- and OpEx because in the fourth quarter, it was slightly higher than each of the previous quarters. What is EBITDA guidance range if you included corporate overhead for this year?

Well, I would say corporate overhead is now down to, Craig, what about $3 million? $2.7 million to $3 million in that range. You could use about that range. We'll have a lot closer number. One of the things I have mentioned, which I fully expect to happen soon, that for the first time ever, we will be hiring for the first time in a long time, right? We've been cutting. But I am going to be stepping down as President and hiring a world-class President this quarter, right, who has built and exited a billion to multi-billion dollar public company. So there will be some additional overhead that will be added, but that will happen post this acquisition as we add this next acquisition in, right, which will be extremely accretive to revenues. And bottom line, you'll see almost simultaneously right around it, you'll see a new President of the company.

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

Thanks for the chance for a follow-up. Just kind of circling back on your comments on the expected ramp-up toward the end of the year of some of these deals, if they take 90 to 180 days. I take from that, that we should expect more -- a lot of this incoming revenue to be back-end loaded. What does that say about the expectations for operating expenses? Will they also kind of follow a similar trend? Or will they be more steady throughout the year?

I don't think our operating expenses are going to really change in that. I think the margins and bottom line will just get better. I mean we're trying to be uber conservative right? You and I had this conversation at 4:00 this morning, Sean. We're trying to be uber conservative about the guidance of where we're going, right? But we're highly confident that this will be extremely accretive to the business. And when you talk about the AI business, it's just money in the bank. When you talk -- there's no additional cost to that. We rev share it with our talent, right? But there's no additional cost, right? Our movies, television shows that are at the studios right now, we have one of them right now that over $5 million has been spent by a studio if they greenlight it, right? That could be millions to millions of dollars right, the first year to tens of millions over the next few years, there's no additional cost to it, right?

So we really built this dynamically now. We do not expect to grow the team very much. Maybe we'll add another B2B person to head up retail, a B2B person head up auto, right? And a new president of the company, that's really it. So I don't really see much additions to this team. We're pretty well suited right now. AI has really given us just a dynamic advantage to cut our costs dramatically. The cost of programming, the cost of coding, the cost of building apps, all of it has gone down so dramatically and the cost of human -- of having humans sitting in the seat of DJs and DJs and so on, right, we don't need that anymore. We don't need them. We need a very small group to do exactly what we were doing before and more.

There are no further questions registered. I will now hand back to Rob Ellin for final remarks.

I want to thank you, everyone. Great questions. I appreciate everybody spending the time, and I appreciate the support from everybody. And we really do believe this is going to be a spectacular year for the company. I'm a Knicks fan. I just watched one of the greatest comebacks ever. I feel like we've done a lot of the same things here. I don't know if we were down 29 going into the fourth quarter, but it's pretty close, right? When you lose your biggest customer and you lose that much revenues overnight, even though they gave us a great opportunity going forward, it takes a lot to recover from that and a lot to fix it. This team has just really sharpened their pencils fought through, battled through, cleaned up the balance sheet to the best it's ever been in the history of the company, right, paid down junior debt, paid down some senior debt and really positioned the company now to back to being a growth story and back to being in a position of really being a thought leader across audio as well as podcasting and really that pushes you into both audio and video.

And I think we're really well respected in the industry. Now we got to get that same respect to the Street in the interim. Until we get there, we're going to be buying back stock. And if that's what it takes, we just keep buying back stock. If we're going to trade at 1/3 of what the industry is trading at, we'll just keep buying back stock as much as we can. So thank you, everyone. I appreciate it. I appreciate your support, and I look forward to our next call coming soon.

Thank you. This concludes today's call. Thank you for attending. You may now disconnect.

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 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.