LiveOne(LVO) - 2025 Q3 - Quarterly Report

Revenue Performance - For the three months ended December 31, 2024, the company reported revenue of $29.4 million, a decrease from$31.2 million in the same period of 2023[169]. - Revenue decreased by $1.8 million, or 6$29.4 million for the three months ended December 31, 2024, compared to $31.2 million for the same period in 2023[187]. - Total revenue for the nine months ended December 31, 2024, was$95.1 million, an increase of $7.6 million, or 9$87.5 million for the same period in 2023[225]. - Revenue for the nine months ended December 31, 2024, was $95,117 thousand, an increase from$87,541 thousand in 2023, reflecting a growth of approximately 8.9%[268]. - Membership revenue increased by $4.8 million, or 8$52.6 million for the nine months ended December 31, 2024, driven by member growth with the largest OEM customer[226]. - Advertising revenue increased by $6.1 million, or 19$38.2 million for the nine months ended December 31, 2024, primarily due to growth at PodcastOne[227]. - Media Group revenue decreased by $1.6 million, or 40$2.4 million for the three months ended December 31, 2024, primarily due to a reduction in merchandising revenue[216]. Customer Concentration - The company's largest OEM customer accounted for 46% of consolidated revenue for the quarter ended December 31, 2024, down from 49% in 2023[182]. - The company reported total revenue from the OEM customer of $13.5 million for the three months ended December 31, 2024, down from$15.5 million in 2023[169]. - Membership services revenue fell by $2.6 million, or 15$14.3 million, primarily due to changes in terms with the largest OEM customer[188]. - Revenue decreased by $2.5 million, or 15$14.4 million for the three months ended December 31, 2024, primarily due to a change in revenue model with the largest OEM customer[211]. Operating Performance - Net loss attributed to LiveOne increased to $5.2 million for the three months ended December 31, 2024, compared to a net loss of$1.6 million for the same period in 2023[186]. - Operating loss decreased by $1.4 million, or 53$1.2 million for the Audio Group operations, reflecting improved revenue performance[208]. - Adjusted EBITDA decreased by $2.5 million, or 37$4.3 million for the three months ended December 31, 2024, compared to $6.8 million for the same period in 2023[213]. - Operating loss for the nine months ended December 31, 2024, was$7.3 million, compared to a loss of $3.5 million for the same period in 2023[223]. - The company incurred a net loss of$9.5 million for the nine months ended December 31, 2024, with cash provided by operating activities amounting to $10.6 million during the same period[270]. Expenses and Costs - Total operating expenses rose by$2.6 million, or 8%, to $34.6 million, with significant increases in impairment of intangible assets by$3.7 million[197]. - Sales and marketing expenses increased by $0.3 million, or 16$1.8 million, driven by higher employee costs[198]. - Product development expenses rose by $0.4 million, or 61$1.1 million, attributed to increased employee costs[199]. - Impairment of intangible assets surged to $3.8 million, a significant increase of 3210$0.1 million in the prior year[201]. - Total cost of sales increased by $8.9 million, or 14$71.9 million for the nine months ended December 31, 2024, compared to $63.0 million for the same period in 2023[231]. Strategic Initiatives - The company plans to expand internationally, incurring significant upfront expenses associated with growth opportunities in Europe, Asia Pacific, and Latin America[183]. - The company aims to convert OEM drivers to direct subscribers of the LiveOne app, which is expected to create a meaningful upside opportunity[171]. - The company announced a change in its relationship with its largest OEM customer, which may significantly impact liquidity and cash flows beyond December 31, 2024[272]. - The company is exploring options to extend or refinance its senior secured line of credit to improve liquidity[273]. - The company plans to raise up to$150 million through a universal shelf Registration Statement filed with the SEC, which is effective until February 17, 2025[280]. Financial Position - As of December 31, 2024, the company had a working capital deficiency of $18.1 million, raising substantial doubt about its ability to continue as a going concern[270]. - The company has a senior secured line of credit of$4.3 million and additional loans totaling $1 million as of December 31, 2024[269]. - The company has a minimum cash deposit requirement of$5 million with the Senior Lender as part of the 2025 Business Loan Agreement[275]. - As of December 31, 2024, the company was in compliance with the covenants under the Capchase Loan and the ABL Credit Facility[288].