Earnings call transcript: PodcastOne Q3 2025 misses EPS forecasts, stock dips

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Overview

The earnings call presents a positive outlook with 22% revenue growth and improved operating loss. The ART19 partnership offers a guaranteed revenue stream and cost efficiencies, enhancing predictability. Despite challenges like competitive pressures and content acquisition timing, the market demand for podcasting and new shows remains strong. The Q&A insights reinforce positive aspects, although management's vagueness on ART19's financial impact tempers enthusiasm slightly. Overall, the combination of growth, strategic partnerships, and market expansion suggests a positive stock price movement.

Key Financial Performance

Revenue $12,700,000 (up 22% from $10,400,000 year-over-year) due to increased advertising activity and new content.

Operating Loss $1,600,000 (improved from $2,600,000 year-over-year) primarily driven by lower non-cash compensation expense.

Net Loss $1,600,000 or $0.06 per share (improved from $2,600,000 or $0.11 per share year-over-year) due to reduced operating losses.

Adjusted EBITDA Negative $700,000 (worsened from negative $400,000 year-over-year) primarily due to timing of content acquisition costs.

Cash and Cash Equivalents $600,000 as of 12/31/2024, with no debt on the balance sheet.

Full Year Revenue Projection At least $51,000,000 (up at least 17% from $43,300,000 in fiscal 2024) due to strong revenue-generating deals.

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Operating Highlights

New Talent Acquisition: PodcastOne signed Stassi Schroeder to a multi-year seven-figure deal, integrating her into extensive promotional and marketing initiatives.

PodcastOne Pro Launch: Launched PodcastOne Pro alongside a new state-of-the-art podcast production studio in Beverly Hills, offering customizable services for brands.

New Show Launches: Added 64 new programs in 2024 and 10 new shows in the last quarter.

Partnership with A&E: Launched A&E's Ancient Aliens podcast, leveraging A&E's marketing power.

Partnership with Amazon's ART19: Transitioned to Amazon's ART19 for hosting, ensuring a minimum revenue guarantee of $15 million over three years.

Market Positioning: Ranked as a top 10 U.S. podcast publisher with 5.2 million unique U.S. audiences and 16.2 million downloads.

Operational Efficiencies: Transition to ART19 expected to reduce hosting costs and improve operational efficiency.

Revenue Growth: Revenue increased by 22% to $12.7 million in Q3 2025, with expectations of continued growth.

Strategic Partnerships: The partnership with Amazon's ART19 enhances monetization forecasting and competitive positioning.

M&A Potential: PodcastOne is actively evaluating M&A prospects to acquire top content networks and enhance its platform.

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Risk or Challenges

Forward-Looking Statements: The company acknowledges that forward-looking statements involve various risks and uncertainties that could cause actual results to differ materially from expectations.

Competitive Pressures: There is ongoing activity in the M&A space, with competitors like Red Sea Ventures partnering with major players like Fox, indicating a competitive landscape that remains active.

Regulatory Issues: The CFO mentioned potential changes in political climate that could affect advertising restrictions, which may impact revenue generation.

Supply Chain Challenges: The transition to Amazon's ART19 hosting service is expected to improve operational efficiency, but the company is still managing the timing of content acquisition costs.

Economic Factors: The company noted seasonality in advertising spend, with fluctuations expected during holiday periods, which could impact revenue.

Revenue Forecasting: The partnership with ART19 provides a minimum guarantee revenue stream of $15 million over three years, which enhances revenue predictability.

Operational Costs: The transition to ART19 is expected to reduce operational costs and improve efficiency, but there may be initial costs associated with the transition.

Market Demand: The podcasting market is growing, with increased advertiser interest, but competition for talent and content remains a challenge.

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Guidance & Outlook

Partnership with ART19: PodcastOne has formed a strategic partnership with Amazon's podcast hosting service, ART19, which is expected to enhance operational efficiency, provide advanced analytics, and create new revenue opportunities. PodcastOne will receive a minimum guarantee revenue stream of $15 million over three years from this partnership.

Launch of PodcastOne Pro: PodcastOne launched PodcastOne Pro, a customizable service offering for brands, which has already attracted major clients like Boost Mobile and Microsoft, contributing to high-margin growth.

Expansion of Talent Roster: PodcastOne continues to expand its talent roster, recently signing Stassi Schroeder to a multi-year, seven-figure deal, and plans to explore live show opportunities in 2025.

Emerging Revenue Streams: PodcastOne is diversifying its revenue streams beyond traditional advertising, including live shows, merchandise, and partnerships with brands.

Fiscal Year 2025 Revenue Guidance: PodcastOne expects revenues for the full fiscal year 2025 to be at least $51 million, representing an increase of at least 17% compared to $43.3 million in fiscal year 2024.

Adjusted EBITDA Projection: The company projects positive adjusted EBITDA for the full year of fiscal 2025, driven by strong revenue growth and operational efficiencies.

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Shareholder Return Plan

Minimum Guarantee Revenue Stream: PodcastOne will receive a minimum guarantee revenue stream of $15,000,000 over three years from the partnership with Amazon's ART19.

Revenue Growth Potential: As PodcastOne scales its network and impressions, the minimum guarantee increases, ensuring upside potential.

Equity-Based Revenue Share Deals: Equity-based revenue share deals with certain podcast talent are expected to start being effective in fiscal Q4.

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Key Q&A

Q:Can you talk about cost of sales reflecting content acquisition costs? What drives that? Is it simply the timing?

A:It's timing. We had a few revenue deals we were expecting in Q3 that kind of moved into Q4. We had the content cost or the minimum guarantee in Q3 that we had to expand some pay to our talent without that revenue coming into the same quarter.

Q:Where in the P&L would we see the financial benefits of working with ART19?

A:You'll see it with some cost efficiencies on our operational side of things. There'll be less cost for our team to run tech and do some stuff there. You'll see revenue growth on a consistent basis.

Q:How has the competitive landscape changed with the impact of podcasting during major events? Are you seeing competition increase or get more aggressive?

A:There's still activity in the M&A space. More people are listening and the medium is strengthening, leading to more dollars being spent into it.

Q:Can you tell us about the quarter's revenues? Was it ad activity driven? Was there some sort of seasonality?

A:You always are gonna see seasonality in terms of consumption, production, and ad spends. We had some good pickup in sales and some of our new shows did really well.

Q:When are we going to see the real financial impact of the transition to ART19?

A:You'll see it start to take place in the quarter that we're currently in.

Q:How does ART19 enhance your position versus Spotify and Apple?

A:It helps us because we're able to forecast three revenue generating channels rather than two, which should help us calculate the value of shows.

Q:What podcasts are really hot right now? What new podcasts have you added that you're really excited about?

A:We've added shows like Stasi and Vanderpump, which are doing really well. We're also focusing on female programming and true crime shows.

Q:What is the composition of revenue? Is it still traditional advertising sales?

A:Advertising is still going to be a big part of what we do, around 90-95%. We're diversifying with ART19 and PodcastOne Pro.

Q:Review of Unclear Management Responses

A:Management appeared to avoid giving a direct answer regarding the specific financial impact of ART19 on the P&L, as the response was somewhat vague and did not provide clear details on where exactly the benefits would be reflected.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

PODC Transcript

PodcastOne, Inc. (PODC) Q2 2026 Earnings Call Transcript

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The earnings call reveals significant improvements in financial metrics, including reduced operating and net losses, positive adjusted EBITDA, and no debt. Revenue growth in key areas like Pod Roll and partnerships with Amazon indicate strong business performance. Despite some lack of clarity in G&A expenses, management's optimistic guidance and strategic partnerships suggest a positive outlook. The Q&A session also highlighted strong direct sales and potential for high revenue guidance, contributing to a positive sentiment.

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The earnings report shows a mixed picture: strong revenue growth and positive adjusted EBITDA, but increased operating losses and net losses due to stock compensation. The Q&A highlights positive outcomes from the ART19 deal and stable advertiser interest but lacks specific growth acceleration plans. The company's strategic moves into the crypto space and favorable talent acquisition terms are promising but not immediate catalysts. Overall, the mixed financial performance and lack of clear guidance suggest a neutral short-term stock price movement.

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