LiveXLive Media (LIVX) Reports In-Line Q4 EPS, Revenues Miss; Offers FY21 Revenue Outlook

LiveXLive Media (NASDAQ: LIVX) reported Q4 EPS of ($0.15), in-line with the analyst estimate of ($0.15). Revenue for the quarter came in at $9.88 million versus the consensus estimate of $10.09 million.

Fourth Quarter 2020 Results Summary Discussion

• During Q4 2020, the Company posted revenue of $9.9 million versus $9.2 million in Q4 2019. The increase was largely due to the growth in subscription revenue. Q4 2020 paid subscribers increased 25%, or by a net 169,000 subscribers year-over-year, ending Q4 2020 with 849,000 paid subscribers as compared to 680,000 subscribers at March 31, 2019.
• LiveXLive streamed 14 live events during its Q4 2020, as compared to 5 in Q4 2019, significantly reducing the cost per event along with making incremental investments to drive long-term growth. These growth activities drove a net loss of $8.5 million, loss from operations of $7.9 million and Adjusted Operating Loss* of $2.2 million.
• Q4 2020 Operating Loss of $7.9 million was lower compared to a $8.5 million Operating Loss in Q4 2019. The $0.6 million improvement was driven by lower non-recurring and non-cash operating expenses of $0.9 million year-over-year, partially offset by slight increases in recurring costs of $0.3 million as a result of investments made to grow the business.
• Q4 2020 AOL* of $2.2 million was relatively flat when compared to Q4 2019 AOL* of $1.9 million, increasing slightly due to higher recurring operating costs as a result of investments in the business during the period. Q4 2020 AOL* was driven by Music Operations loss of $(1.1) million and Corporate loss of $(1.1) million.
• Capital expenditures for Q4 2020 totaled approximately $0.8 million, which were largely driven by capitalized software costs associated with development of our integrated music player and services in Q4 2020.
• At March 31, 2020, the Company had approximately $12.4 million in cash and cash equivalents, which includes restricted cash of $6.7 million, and $16.4 million in debt (inclusive of net $2.0 million of deferred debt issuance costs and $0.7 million in fair value embedded derivatives).

Recent and Q4 Fiscal 2020 Highlights

• Since April 1, 2020, LiveXLive livestreamed over 35 live music events and 1,200 artists across the LiveXLive platform, generating over 60 million live views. By comparison, 42 events were livestreamed in all of fiscal 2020, achieving over 69 million livestreams and 230 artist streams on LiveXLive's platform.
• Since April 1, 2020, paid sponsorship has more than tripled across the LiveXLive platform compared to any quarter in LiveXLive's history.
• Produced and curated Music Lives, a 48-hour live digital festival featuring over 100 artists that streamed April 17 - 19, 2020, with sponsorship from TikTok and Oculus Venues. The festival drove over 50 million livestream views and more than 5.0 billion video views of #musiclives. Following this success, Music Lives ON was established – a weekly series of live stream performances featuring established and emerging artists across multiple genres.
• Launched a new Pay-Per-View (PPV) offering in May 2020, enabling new forms of artist revenue including digital tickets, tipping, digital meet and greets, merchandise sales and sponsorship, generating over 8,000 tickets sold to date at an average price greater than $20 per ticket.
• Agreed to acquire PodcastOne, entering the rapidly growing podcast market, in exchange for 5.5 million shares of the Company's common stock valued at approximately $18 million at the announcement date. Founded by radio pioneer Norman Pattiz, PodcastOne produces and monetizes over 300 podcasts per week, had over 2 billion annual downloads across their platform and calendar year 2019 revenue of $27.5 million. The acquisition is expected to close in July 2020.
• Ended March 31, 2020 with 849,000 paid subscribers, representing growth of 25% year-over-year.
• Extended livestream partnership with iHeartRadio through 2022, including access to over 25 live streamed iHeartRadio events annually with iHeartMedia, including the iHeartRadio ALTer EGO, iHeartCountry Festival, iHeartRadio Wango Tango, Daytime Stage at the iHeartRadio Music Festival and iHeartRadio Fiesta Latina – which delivered over 90 live streamed artist performances reaching 16 million viewers in 2019 – and exclusive distribution in certain territories of the iconic iHeartRadio Music Festival and iHeartRadio Jingle Ball.
• Partnered with Sinclair Broadcast Company's streaming service, STIRR, to produce exclusive original content for a new music channel to launch in fiscal 2021.
• Partnered with Grammy Award-Winner Nelly and American singer-songwriter Jeremih to produce, market, distribute, and monetize original and exclusive content as part of new artist ambassador program.
• Released new unified audio-video Smart TV app experience on Apple TV, Roku and Samsung TV, with Amazon Fire to follow, driven by consumer demand and their reach of over 90 million households.
• Partnered with Baeble Music on a content, distribution and revenue share agreement to reach over 35 Platforms, including Apple TV, Android TV, Comcast X1, Roku, Samsung TV, XUMO, and XBox and increase revenue potential.
• Recognized by PC Magazine as the most complete streaming music service on the market in Q4 2020 and Q1 2021.
• Acquired React Presents in February 2020, a full-service, club, concert and festival promotion company, promoting over 250 live events per year including the Spring Awakening music festival in Chicago, Illinois.

LiveXLive Chairman and CEO, Rob Ellin, commented, "With the abrupt pause of live music concerts due to COVID-19, we have quickly and successfully positioned LiveXLive as the leader in music and entertainment across live streaming, pay-per-view events, podcast and vodcasts." Mr. Ellin continued, "We are now a full stack live streaming platform with the ability to monetize content in multiple ways and times. We intend to continue our strong organic growth path while being opportunistic regarding further acquisitions and have dramatically improved the economics of our business with a clear focus on profitability."

"Our Q4 results were on target, highlighted by strong subscriber growth and substantial improvement in operating leverage in the second half of fiscal 2020," said Michael Zemetra, CFO of LiveXLive. "The anticipated acquisition of PodcastOne is an important part of LiveXLive's evolution and is expected to open up significant monetization opportunities, revenue and cost synergies and provide a springboard to accelerate our business and expected profitability moving forward."

GUIDANCE:

LiveXLive Media sees FY2021 revenue of $61-67 million, versus the consensus of $63.21 million.

Full-year fiscal 2021 guidance is as follows (which assumes that the planned acquisition of PodcastOne closes during early Q2 fiscal 2021):

• Revenue of $61.0 - 67.0 million, representing a 65% increase YOY at the midpoint
• Annualized Contribution Margin* of 30% - 35% of revenue, an improvement of over 100% YOY
• Adjusted Operating Loss** of $2.5 - $5.0 million, representing a 70% improvement YOY at the midpoint
• Capital expenditures, which principally include internally capitalized labor costs supporting the growth of our music platform, in the range of $3.0 - $5.0 million
• Expectation to livestream over 100 music festivals and events, an increase of over 140% YOY

For earnings history and earnings-related data on LiveXLive Media (LIVX) click here.

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