Barry Sine

Barry Sine asked about the performance of the Dr. Phil podcast, including streams, downloads, and advertiser response. He also inquired about the impact of B2B deals, specifically those from LiveOne, on PodcastOne's current and future results, and how many of these deals include podcast content.

Answer

Kit Gray, President and Founder of PodcastOne, expressed excitement about the Dr. Phil relationship, noting strong performance for both the Dr. Phil Podcast and Mystery and Murder Podcast, with advertisers showing keen interest in broader offerings including TV distribution and social media. Regarding B2B deals, Mr. Gray highlighted the Amazon ART19 deal's positive impact on efficiencies, cost cutting, and diversified revenue channels, as well as the evolving relationship with Pluto TV. Robert Ellin, Executive Chairman of PodcastOne, added that LiveOne's B2B deals significantly expand PodcastOne's audience by integrating podcasts into partner apps, reaching over 50 million people.

Barry Sine with Litchfield Hills Research inquired about the initial performance of the Dr. Phil podcast, including streams, downloads, and advertiser response, as well as the current and prospective impact of B2B deals, specifically mentioning the Amazon R19 and Pluto TV partnerships, and new deals discussed by management.

Answer

Kit Gray (President and Founder, PodcastOne) stated that the Dr. Phil podcast is performing well, with Dr. Phil actively promoting it on other major podcasts. He noted strong advertiser interest, with presentations being developed for broader offerings including video, audio, and TV distribution. Robert Ellin (Executive Chairman, PodcastOne) and Kit Gray elaborated on B2B deals, highlighting the Amazon R19 deal's role in diversifying ad sales and providing minimum guarantees, and the evolving relationship with Pluto TV. Robert Ellin emphasized that LiveOne's B2B deals expand the audience for PodcastOne's content significantly.

Barry Sine from Litchfield Hills Research asked about how the significant growth in video views translates into revenue, the current M&A environment for both talent and platforms, and the key variables that would determine whether the company hits the low or high end of its annual guidance.

Answer

Co-Founder & President Kit Gray explained that video views are combined with audio listens to calculate impression delivery, which helps increase spot rates during negotiations. On M&A, Gray noted that while the platform market is consolidated, there are attractive acquisition opportunities among podcast networks and tech companies, suggesting a deal could be announced within 90 days. He clarified that the annual guidance range depends on the timing of potential acquisitions, with a successful deal pushing results toward the high end.

Inquired about popular content and the content pipeline, plans for live events, and the current and future revenue mix from emerging monetization streams versus traditional advertising.

Answer

Executives highlighted the success of female-led programming and true crime podcasts, mentioning the new "Ancient Aliens" show as an exciting addition. They confirmed involvement in live events like the LadyGang weekend and plan more. Advertising remains over 90% of revenue, but emerging streams like PodcastOne Pro (for brands) and merchandising are growing and expected to become more significant over the next 1-2 years.

Asked for a definition of 'brand partnerships', inquired about the most exciting growth drivers for 2025, and sought details on the M&A strategy, including target types and market opportunities.

Answer

The executive defined brand partnerships as deep, 360-degree integrations with brands that go beyond simple ad spots. He identified M&A as the most exciting growth driver, focusing on acquiring other podcast companies, networks, and tech platforms to leverage PodcastOne's existing infrastructure. He noted that many potential targets are for sale because they need the scale and infrastructure that PodcastOne can provide, creating synergistic opportunities.

Barry Sine of Litchfield Research asked for a definition of 'brand partnerships,' inquired about the most exciting growth drivers for 2025, and questioned whether M&A targets were individual podcasts or larger podcast companies.

Answer

Kit Gray, President, defined brand partnerships as deeper, direct-to-brand deals for 360-degree integrations, contrasting them with standard agency spot buys. He identified M&A as the most exciting growth driver, citing the expertise of new hire Steve Lehman in targeting other podcast networks, tech platforms, and production companies. Gray clarified that the M&A strategy focuses on acquiring these larger entities and clusters of podcasts, not just individual shows, to leverage PodcastOne's existing infrastructure for synergistic growth.

Barry Sine inquired about LiveOne's B2B business, specifically its customization capabilities with AI, the options provided to customers, and the potential competitive risks from other music streaming companies entering the B2B space. He also asked about the progress and potential for advertising revenue from Slacker's non-subscription, ad-supported customer base, including the impact of new partnerships like DAX.

Answer

Rob Ellin, CEO and Chairman of LiveOne, explained that LiveOne holds a unique competitive advantage in the B2B space due to its ability to white-label, offer lower pricing, and be more nimble than larger Digital Service Providers (DSPs). He highlighted the significant growth of existing B2B deals with partners like Amazon and a streaming company, emphasizing the changing market dynamics driven by AI and the convergence of various industries seeking engagement solutions. Regarding Slacker's ad-supported base, Mr. Ellin noted that free subscribers serve as a loss leader to drive advertising revenue (with DAX partnership increasing offerings by 30%) and convert users to paid subscriptions, citing Spotify's high conversion rates as a benchmark. He also mentioned the potential for B2B partners to integrate their own advertisers.

Barry Sine inquired about the customization of LiveOne's B2B business, the role of AI in streamlining operations, and the competitive landscape regarding other music streaming companies entering the B2B space. He also asked about the potential for advertising revenue from Slacker's ad-supported non-subscription customers and the progress of ramping up ad revenue.

Answer

Rob Ellin (CEO) highlighted LiveOne's competitive advantages in B2B, including white-labeling, low pricing, nimbleness, and existing partnerships with major DSPs. He emphasized the changing market dynamics driven by AI, streaming platforms entering audio, and cross-industry competition for consumer engagement. For Slacker, he discussed the partnership with DAX for programmatic advertising, the growth in inventory fill rates, and the strategy of converting free subscribers to paid, noting that B2B partners could also introduce their own advertisers.

Barry Sine of Litchfield Hills Research inquired about the annualized revenue from signed partnerships, the pro forma EBITDA impact of recent staff cuts, the progress of the Tesla subscriber conversion and ARPU, and details on the upcoming "Reality elliptic series" event.

Answer

CEO Rob Ellin confirmed a $50 million B2B revenue target for the audio business but could not provide EBITDA guidance, noting staff cuts were enabled by AI efficiencies. He stated Tesla conversions total 1.3 million users, with paying subscriber ARPU rising from $3 to over $5. The new reality event is modeled after the successful Social Gloves, with a large built-in audience and multiple monetization streams including NFTs and distribution rights, contributing to the company's "flywheel" strategy.

Barry Sine asked for the annualized revenue of current partnerships, the pro forma EBITDA impact of recent staff reductions, details on the Tesla subscriber conversion and ARPU, and visibility on the upcoming reality TV series, including its format and monetization strategy.

Answer

CEO Robert Ellin stated that while specific guidance isn't available, the company expects $50 million in B2B revenues, including from PodcastOne. He explained that staff cuts were enabled by AI efficiencies and that more savings are anticipated. For Tesla, 1.3 million users have converted to the new service, with paying subscriber ARPU increasing from $3 to over $5. The new reality series, Reality Elliptic Series, is modeled after Social Gloves with multiple revenue streams like NFTs and distribution rights, but with lower risk.

Barry Sine of Litchfield Hills Research inquired about the annualized revenue from current partnerships, the pro forma EBITDA impact of recent staff reductions, the status of the Tesla relationship including subscriber conversions and ARPU, and details on the upcoming 'Reality Elliptic Series' live event.

Answer

CEO Rob Ellin stated that while he couldn't provide a detailed breakdown, the company expects $50 million in B2B revenues. He explained that staff cuts were enabled by AI efficiencies but did not provide EBITDA guidance. Regarding Tesla, Ellin clarified that 1.3 million users have converted to the new service, and ARPU for paying subscribers has increased from $3 to over $5. He described the new reality event as a large-scale production similar to 'Social Gloves' with multiple monetization streams, including pay-per-view and NFTs.

Barry Sine sought more detail on the Tesla partnership, the B2B pipeline, and cross-selling opportunities. He asked about the extent of marketing access to Tesla's subscriber base, the methodology for forecasting conversions, and the current size of the B2B sales pipeline. Sine also inquired about the potential to cross-sell other LiveOne products, like celebrity brands, to newly acquired subscribers and which B2B verticals show the most promise.

Answer

CEO Rob Ellin confirmed that while under NDA, LiveOne is working cooperatively with Tesla on marketing, which has already resulted in new branding in vehicles. He emphasized that the new structure allows for direct upselling and cross-selling of podcasts, pay-per-view, and celebrity brands for the first time. Ellin stated the B2B pipeline is robust, justifying the growth of the B2B team to 11 people, and pointed to the success of an existing $24 million deal. He identified streaming partnerships, automotive, and retail as the most promising verticals.

The analyst inquired about the record number of new program implementations, the progress of the UCO-one cross-selling initiative, and the company's plans for its cash balance, particularly regarding M&A versus share buybacks.

Answer

The company clarified that the record implementations refer to 20 card issuing programs. The UCO-one initiative is showing early success with cross-selling deals. They plan to continue stock buybacks and are actively looking at M&A opportunities that meet their strict criteria, noting that more suitable deals are becoming available.

Barry Sine of Litchfield Hills Research inquired about the record number of new programs in implementation, the progress of the UCO-one cross-selling initiative, and the company's strategy for using its cash balance for M&A versus share buybacks.

Answer

CEO Louis Hoch clarified that the record number of implementations, totaling 20, was specific to the Card Issuing division. He noted early successes for the UCO-one initiative, including securing a large ACH deal from an existing card client. Regarding capital allocation, Hoch confirmed that USIO will continue its share buyback program and is seeing more M&A opportunities that fit its strict criteria: strategic value, favorable valuation, and the ability to be self-sustaining without distracting from organic growth.

Barry Sine of Spartan Capital Securities questioned executives on the Q1 out-of-period accounting adjustment, the timeline and confidence in the upcoming DHS CWMS 3.0 recompete, and the status and total value of task orders under the Spiral 4 contract.

Answer

CFO Robert George clarified that the accounting adjustment was a non-material timing correction with a slight impact on 2025's reported growth rate. Executive Jin Kang expressed high confidence in rewinning the CWMS contract, expected to be awarded in 2025, and noted that existing task orders prevent a revenue cliff. Kang also detailed that while the Spiral 4 contract has a $2.7B ceiling for all winners, WidePoint has secured three initial task orders and expects more activity as Spiral 3 orders expire.

Barry Sine of Litchfield Hills Research asked about the opportunity presented by the government's cost-saving initiatives (DOGE) and sought clarification on the 2025 financial guidance, particularly the meaning of maintaining its 'growth trajectory.'

Answer

Executive Jin Kang explained that WidePoint's cost-saving services are perfectly aligned with DOGE initiatives and that the company is actively trying to engage with officials to highlight potential savings, especially within Customs and Border Protection. Regarding guidance, Jin Kang and Executive Robert George clarified that their goal is positive EPS for 2025 and that 'growth trajectory' implies continued double-digit top-line growth. They confirmed that formal numerical guidance for revenue, EBITDA, and free cash flow will be provided with the Q1 2025 results.

Inquired about the business opportunities arising from the Department of Government Efficiency (DOGE) initiative, particularly with DHS and Border Control. Also sought clarification on the 2025 financial guidance, specifically the meaning of "maintain your growth trajectory" and whether numerical guidance would be provided.

Answer

The company sees itself as perfectly aligned with DOGE's cost-saving mission and is actively trying to engage with the initiative to offer its services, especially to DHS for managing devices at the border. Regarding guidance, management confirmed their goal for positive EPS in 2025 and stated they will provide more detailed numerical guidance (top line, EBITDA, free cash flow) with the Q1 call, expecting to continue their double-digit revenue growth trajectory, feeling confident due to their strong contract backlog.

Barry Sine of Spartan Capital Securities inquired about several key growth drivers and financial metrics. He sought clarification on the Cellular Wireless Managed Services (CWMS) 3.0 contract's potential value and timeline, the expiration and extension process for CWMS 2.0, and the impact of FedRAMP certification on the bid. Sine also asked about the SEWP VI contract vehicle, including award timing and WidePoint's role as a prime bidder. Further questions covered the status of task orders for the Navy Spiral 4 contract, the technical differentiation of the new MobileAnchor solution, the reasons for the recent decline in cash balance, the status of accounts receivable, and the current contract backlog figure.

Answer

Executive Jin Kang addressed the contract inquiries, stating the CWMS 3.0 contract could be a 10-year, $1.5 billion opportunity with an award expected by the end of 2025. He explained that the CWMS 2.0 contract ends in November 2025 but has mechanisms for extension, ensuring service continuity. Kang confirmed WidePoint is bidding as a prime on the $60 billion SEWP VI contract and noted that Spiral 4 is in the initial RFQ stages. Executive Jason Holloway detailed that the MobileAnchor technology is a game-changer, creating a secure digital credential directly on a mobile device, eliminating less secure methods. CFO Robert George explained the cash balance decline was due to temporary billing delays with new customer ramp-ups, which has increased DSOs and unbilled receivables but is expected to normalize. George also confirmed the backlog stands at $320 million, expected to be recognized over approximately two years.

Barry Sine asked for insight into the upcoming defense budget's implications for drone orders and the expected timeline from budget approval to revenue recognition for Unusual Machines. He also asked about the market impact of the T-Motor sanction.

Answer

CEO Allan Evans explained that the company gauges demand through its prime contractor customers rather than direct budget analysis. He projected a 6-8 week delay from budget passage to procurement, plus an additional quarter before POs translate into recognized revenue. Regarding T-Motor, Evans stated that concurrent government spending delays have created a temporary lull in motor demand, giving Unusual Machines a strategic window to prepare its factory to meet the large, anticipated demand once government contracts resume.