PodcastOne, Inc. (PODC) Q1 FY2026 Earnings Call Transcript & Summary

Good morning, and welcome to PodcastOne's Q1 Fiscal 2026 Financial Results and Business Update. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Ryan Carhart, Chief Financial Officer. Please go ahead.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to PodcastOne Fiscal First Quarter 2026 Business Update and Financial Results Conference Call and Webcast. [Operator Instructions] On our call today is Kit Gray, President and Founder of PodcastOne; myself, Ryan Carhart, Chief Financial Officer. 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 PodcastOne'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 PodcastOne's Form 10-K for the year ended March 31, 2025, filed by the company with the SEC on July 2, 2025, and subsequent SEC filings made by the company. You will 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, Wednesday, August 13, 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 would like to highlight to investors that this call is being recorded. PodcastOne is making it available to investors and the media via webcast, and a replay will be available on PodcastOne's IR website in the Events section shortly following the conclusion of the call. Additionally, it is the property of the company and any redistribution, retransmission or rebroadcast of the 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 PodcastOne's President, Kit Gray.

Thank you, and welcome to our fiscal first quarter 2026 earnings call. As a reminder, we are not on a calendar reporting year and our fiscal year 2026 starts on April 1. Today, we will provide a brief overview of PodcastOne and the continuously growing podcast market and highlight our recent successes before passing on to Ryan for the financial results. Lastly, we will open it up for Q&A. We're excited to share the results of our fiscal first quarter of 2026, a quarter that marked a strong start to the year and highlighted our ability to scale revenue, deliver profitability and grow audience reach across PodcastOne's network. PodcastOne continues to distinguish itself as the leading pure-play podcasting platform in the public markets. Our vertically integrated model from console development and talent relations to distribution, analytics and monetization uniquely position us to drive long-term value for our creators, advertisers and shareholders. Podcasting has become one of the most trusted and engaged media formats with over 4 million podcasts registered worldwide as of 2025. The industry continues to grow with advertisers projected to invest over $2.4 billion in podcast advertising this year. PodcastOne is a sales network for over 500 of the largest advertisers to reach core demographics effectively and efficiently. According to a recent study from Sounds Profitable, podcast listeners are more likely to act on ads than TV or YouTube users. The new report finds that podcast listeners, particularly Podcast Primes, take more follow-up actions after hearing an ad than users of other ad-supported media, including YouTube, Instagram, television and streaming music. PodcastOne is positioned at the center of this growth, capitalizing on both the increasing audience demand and the effectiveness of podcast advertising as a high ROI media channel. PodcastOne has been ranked as a top 10 U.S. podcast publisher for the eighth consecutive month by Podtrac with a monthly unique U.S. audience of 5.4 million and 20.3 million U.S. downloads and streams as of July 2025. With our industry-leading platform, we empower podcasts to reach their full potential by providing comprehensive world-class support. Our 360-degree marketing capabilities drive growth and exposure, enabling talent to focus on what they do best, creating great content. This support includes access to studio space, marketing, production, editing, distribution and public relations. Additionally, our experienced direct sales team leverages long-standing relationships with advertisers and brands seeking to connect with the highly engaged audience of podcasts on our platform. Our platform is built to help podcast creators thrive, offering top-tier support at every stage of their journey. Operationally, Q1 was one of our most productive yet. We launched 14 new podcasts, bringing our total slate to 206 active shows. Newly added titles include LOVE MURDER, Detox Retox with Tom Schwartz from Bravo's’ Vanderpump Rules, A lot of you have been asking with Internet sensation, Hayden Cohen and Intrusive Thoughts with Olympic Figure Skater, Adam Rippon. The number continues to grow as we attract top-tier talent and capitalize on our reputation for creator-first support and monetization. We also reported a 218% surge in video views year-over-year across multiple platforms, including YouTube, Substack, Rumble, TikTok, Spotify and Apple+. As podcasting continues to evolve, PodcastOne has expanded its video production and distribution efforts to enhance how audiences experience its shows. By offering content in a more visually engaging and interactive format, the platform has seen a significant surge in video viewership across its own channels and third-party platforms. Popular titles such as Bitch Bible, Fool Coverage, Pop Apologists, Some More News, The Adam Carolla Show, and Your Welcome have experienced notable double-digit growth in video consumption over the past year, underscoring the growing demand for video-driven podcast content. Our network continues to drive value across multiple revenue channels, including branded content, our PodRoll marketplace, premium subscription offerings and top-of-the-line production services. We're also continuing to leverage our recent platform migration to Amazon's Art19 to improve targeting, scale and efficiency for our ad partners. Now before I go any further, I'd like to turn the call over to Ryan, our CFO, to walk through the financial results for the fiscal first quarter. Ryan?

Thank you, Kit. As Kit mentioned at the beginning of the call, I want to again remind listeners that our fiscal year starts on April 1. Revenue in the fiscal first quarter of 2026 was $15 million compared to $13.1 million in the same year ago quarter, a 14% increase. Operating loss in the fiscal first quarter of 2026 was $1.05 million compared to an operating loss of $1.4 million in the same year ago quarter. This was primarily driven by lower amortization. Net loss in the fiscal first quarter of 2026 was $1.05 million or $0.04 per basic and diluted share compared to a net loss of $1.4 million or $0.06 per basic and diluted share in the same year ago quarter. Adjusted EBITDA in the fiscal first quarter of 2026 was $0.6 million compared to adjusted EBITDA of negative $0.3 million in the same year ago quarter. The change in adjusted EBITDA was primarily driven by talent revenue share paid in the form of shares. We ended the fiscal first quarter with 0 debt on our balance sheet and $1.9 million in cash and cash equivalents as of June 30, 2025. As we look ahead, I'd like to also briefly touch on guidance. We expect revenues for the full year to be between $56 million and $60 million, representing an increase of at least 8% when compared to revenues of $52 million in fiscal 2025. We are also expecting adjusted EBITDA for the full year to be between positive $3 million and $5 million. Now I'd like to turn the call back to Kit for closing statements and questions from the audience.

Thank you, Ryan. As we move into the next quarter, we're excited to build on our momentum with several high-profile initiatives. This fall, we'll be on site at the highly anticipated Lady World's Festival, connecting with audiences and showcasing our network's roster of standout creators. We're also proud to support Jackie Schimmel's Dim the Lights Tour, bringing her unique voice and loyal fan base to stages across the country. PodcastOne has upgraded their order management system to Booster. This will help every aspect of operations with streamlining the sales process, providing data-driven insights, automating processes and increasing efficiency. Together, these efforts position us for continued growth, deeper audience engagement and expanded monetization opportunities in the months ahead. To close, I want to recognize the hard work of our team, our partners and our creators. PodcastOne is thriving because we stay focused on what matters most, compelling content, strategic monetization and trusted relationships with talent and advertisers. We're proud of our start to the year and excited about what's ahead. We remain committed to delivering strong growth and meaningful shareholder value. With that, we'll now open the line for questions. Operator?

[Operator Instructions] Our first question comes from Barry Sine from Litchfield Hills Research.

Nice to see that you were locked in now through 2027, but it's really great to see you, Sue also locked in contractually with the company through 2027. You mentioned in the press release, 200% growth in views. And I'm wondering how that translates into revenue. Do any of the current contracts that you have tied revenue to the number of views? Or would that mainly impact your ability to get higher rates for future advertising sales?

Okay. Yes. So yes, some of the current contracts that we have in place over the last year have taken into account the combination of both audio and video views or listens. What we do in most cases is add the two together when we calculate impression delivery for CPMs and spot rates. So really, the video view growth has helped us charge more per spot, if that makes sense. And that's just becoming a bigger and bigger part of what we're doing. We just were fortunate enough, Eli and our talent acquisition team was able to keep in great touch with Todd Chrisley and his team as they got out of being incarcerated and they've started up their podcast with us. And we've seen really good audio numbers, but we've also seen amazing video views. And he hadn't done his regular podcast in about four years. So he's just seeing the change there, and we're able to bring such a larger audience to advertisers now that he can reach. So this will be a big part of our future moving forward.

But it's not automatic. So if views go double next month versus this month, you don't automatically get double the revenue. It's just factored in when you renegotiate your rates. correct?

Yes, exactly, right? So it's on delivery and the advertisers that jump in early and believe in it get rewarded. And then the ones later on when they see these big numbers are having to pay the freight more immediately, if that makes sense.

Kit, I wanted to jump to M&A and get your sense of the current environment. I know you're acquisitive, both on individual talent as well as podcast platforms. And I don't think we've seen a platform acquisition in some time. What does the market look like now? Certainly on platforms, we saw a shake out about a year ago with some of the major providers. Have we gotten back to normalcy? Is it a buyer's market, a seller's market? What do you see on both talent and platforms?

Yes. The platform side of things are pretty much -- there's three or four major players, right? And those are -- they are all pretty much been scooped up by whether it's Amazon or Spotify or [ XM Sirius ] or whatnot. So there's a couple of other ones out there. I don't see that changing too much unless there's a bigger player that gets into the space that wants to acquire more tech. The reason why we left where we were and went to ART19 part of Amazon's services was basically, it really helped us with cost savings and efficiencies on our operations, but allowed us to have really good cash flow in the sense that we had a guarantee based on impressions and making available our inventory for them to sell. So that was a really good move for PodcastOne, and it's actually just getting better by the day. I don't see that world changing too much, but there's definitely some podcast networks out there and individual show groups that are extremely interesting on the M&A side of things, and we actively talk to a lot of them on a daily regular basis. There's also some really interesting tech out there. We've partnered with a lot of new companies moving off our old systems. We've got new website and development. We've got new back end that is specifically designed to the podcasting space and the evolution of including video impressions and how do we collect those numbers for delivery reports and so forth. So there's a lot of those companies out there that are really great. And I think there's opportunities to merge, acquire those type of companies too that have revenue and access to content as well. So we're actively looking at all of those all the time.

Is anything close why are we likely to see any press releases in the next 90 days or so?

I think there's a good opportunity for that. There's a couple of really big opportunities, but also some smaller ones that are also really good for the company, both on the operational side, cost efficiency side and revenue growth. So yes, I think you'll see something over the next 90 days.

Great. And my last question is about the guidance. So at the low end of the range, you talk about $55 million in revenue, $3 million in EBITDA, at the high end, $60 million in revenue, $5 million in EBITDA. What are the variables that would drive the low end and what would go right to drive the high end?

Yes -- sorry -- if we acquire a company that has some good revenues involved in it, it obviously depends on the timing within the year. But that's where you could see it on the higher end. And if we don't, then it would be on the lower end of that range. But you can see that we had a really good first quarter with top line revenue, and that should put us in a good position to at least hit those numbers. And who knows, maybe we get lucky and get a couple of deals on there and surpass that.

Our next question comes from Sean McGowan from ROTH Capital Partners.

My first question is on cost of sales as a percentage of revenue nudging up a bit. How much of that increase is due to greater use of stock-based compensation? And could you say that it's like more than 100% of the increase as a percentage? Like is -- are you able to actually reduce the cash pay as you switch over and use more SBC?

Yes. I don't have -- I mean, Ryan, maybe you can talk to the percentage. But yes, that's the plan, right, to use the stock rather than the cash for purchases for rev share payments and so forth. So Ryan, do you have any input on that?

Yes. I mean in terms of the percentage, it's just the way it's shaking out, right? I mean, Sean, you can see that trend coming out through the end of last year. The stock does help on the contribution, stock margin side of things, but we expect it to be where it's at right now, but we expect it to slightly start dipping up, and we keep pushing everything we can to improve that through negotiation with talent and all the things we normally talk about around that.

So what should we expect to see in that number, like cost of sales as a percent of revenue over the future? Is it going to kind of stay at this 90% level? Or could we see that come down?

Yes. I mean I think you could see it come down. You're thinking like percentage points, Barry -- sorry, Sean. But yes, I mean, we always work to improve it. So I think it will improve. You're talking going up from the 90% to 89%, 80%, 87% throughout the year. So we do expect some improvement.

Okay. That's helpful. And then I'm intrigued by this big increase in video, and I've been watching this happen in PodcastOne and just a couple of questions. What percentage or what portion of your shows lend themselves to being video?

Yes. It's a really big amount now. And it's almost, I would say, almost 100%. Now when we say video, maybe it's closer to 70% that are actual like video broadcast on YouTube. In some cases, like, for instance, the crime shows, right, where you're not really having an interview show, it's almost impossible to make a video of that unless it was actually like cold case files or something like that. But what we do is we put that out on YouTube just as an RSS feed where you'll have still imagery and you have your commercials in there, right, with the call to actions and stuff like that. So the discovery of podcasts on YouTube and the consumption habits, especially of 20- to 30-year-olds, it's extreme. So we even put just the audio out there if it's not video. But a lot of our big shows, Adam Carolla, Some More News, Kaitlyn Bristowe, all the Baby Mama No Drama, all the KL Lowry network, and those shows are all on video now and making substantial audience and revenues through that.

Yes. So I'm interested in how the consumer interacts with that kind of a format. I mean, I've seen some of these things where there -- you basically just looking at a couple of people standing around a microphone or sitting around a microphone. And I guess that's better than just listening. But I also know that a lot of people consume podcast not passively, but like while they're driving or background, while they're doing something else. So how does the consumer interact differently with a podcast that's got a video component?

Yes. It's so different. When I started the company, the cost of doing video because you not only have like the production side of it and talent used to TV and makeup and legal rights, all those type of things when you do video, it's changed. And really after COVID, people became more used to watching Zoom or FaceTime interviews, right, as programming that it became something that people were used to. So it's great for that and YouTube being part of Google and how big they are in terms of the search engine, it makes sense. We are putting a ton of YouTube short clips out there that drive engagement and drive excitement and then people go to the full episodes and go from there. But you can see the consumption on some of these shows is just massive.

But the consumer is actually sitting there watching two people talking? Or is it just playing in the background the way it would be if it was an audio only?

Yes. Look, I think it's probably both, right? I think if you're sitting at your desk and you want to put it up on YouTube and you have it while you're working on a spreadsheet, people do that. I am not that guy. I'm still old school, I guess, and I go to Apple podcast when I listen to my shows. But it really is into personal preference. But YouTube is the #1 consumption for podcasting now. It's -- so I think it's -- I have younger kids and everything is YouTube. They don't even watch TV anymore, right? And I think that younger generation is used to that.

And part of the reason I'm asking is that YouTube is also a great source for just music, which is audio only. So I guess it's hard to parse through how much of this is actually being watched versus listened to, maybe it doesn't matter as long as they're engaged. But how are ads done? I mean, how would an ad be different on a show that's got a video component? Would it just be an audio ad or the ads also trying to be visually engaging?

Yes. That's some of the neat things that we're seeing in the marketplace now because there's some companies out there that are efficiently using AI and so forth that are able to make video commercials with talent in a really cost-effective way. So we're able to go to some of our brand partnerships and rather than just having a title card where it says a break in the show that says, hey, you're free shipping on ProFlowers, use the code Atom, we now actually, in many cases, can do creative commercials there, drive CPMs there. In many cases, we have the talent actually film the reads beforehand and put them in the show. And when I say they're visually, right, with the flowers there or the Mack Weldon T-shirts so people can see it. Those are the type of things that are now going on, and it's pretty exciting in the space because we're able to drive some real results because we're able to make real commercials like pull on almost TV commercials for YouTube now.

Okay. And then my last question is Rob talked earlier on the LiveOne call about staff reductions. Is that something you're seeing at podcast? Or is that really other parts of LiveOne that we're seeing that?

We've made some changes. What I've always said is that there's going to be some operational efficiencies. A lot of the new tech that we've brought in has made life a little bit easier for our team where they're able to take on different projects or revenue-generating projects because of that. We've had some changes. I -- we don't go out typically and hire from outside. It's mostly, I'd like to groom from within, give people opportunities to prove themselves and go that way. So we've had some personnel changes, but really, our operational efficiencies come from changing our old platform and moving into the new one and using some of those companies that make life easier for us to do more.

We have no further questions. I'd like to turn it back to Kit Gray for closing remarks.

Okay. Thanks, everybody. I really appreciate your time today, and we're really excited about everything moving forward. We've got a lot of new programs, a lot of new companies that we're talking to and a lot of fun events. The LadyGang event down in Destin, Florida is about a month away. So please go if you're coming down to that, let me know, look me up. I'll be there. And we're really excited to have four of our podcasts down there as well and should be an exciting event. But we're really excited about the future. And if you guys need anything, please feel free to reach out at [email protected]. Thank you.

This concludes today's conference call. Thank you for your participation. You may now disconnect.