LiveOne, Inc. (LVO) Bundle
Understanding LiveOne, Inc. (LVO) Revenue Streams
Understanding LiveOne, Inc.’s Revenue Streams
As of the second quarter of fiscal 2025, LiveOne, Inc. reported a consolidated revenue of $32.6 million, reflecting a year-over-year increase of 14% from $28.5 million in the same quarter of the prior year. For the year-to-date, the revenue totaled $65.7 million, up from $56.3 million in fiscal 2024, marking an increase of 16%.
Revenue Breakdown by Segments
The revenue contributions from different business segments are as follows:
| Business Segment | Q2 FY2025 Revenue ($M) | Q2 FY2024 Revenue ($M) | YTD FY2025 Revenue ($M) | YTD FY2024 Revenue ($M) | Year-over-Year Growth (%) |
|---|---|---|---|---|---|
| Audio Division | $31.7 | $26.9 | $63.3 | $52.4 | 21% |
| Media Division | $0.9 | $1.6 | $2.2 | $3.3 | -33% |
In Q2 FY2025, the Audio Division accounted for the majority of the revenue, achieving a 18% increase compared to Q2 FY2024. The Media Division, on the other hand, experienced a decline in revenue, with a 33% decrease year-over-year.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate can be summarized as follows:
| Period | Revenue ($M) | Previous Year Revenue ($M) | Growth Rate (%) |
|---|---|---|---|
| Q2 FY2025 | $32.6 | $28.5 | 14% |
| YTD FY2025 | $65.7 | $56.3 | 16% |
Analysis of Significant Changes in Revenue Streams
Significant changes in revenue streams include:
- Increased revenue in the Audio Division, primarily driven by a rise in paid memberships, which increased by 27% year-over-year, totaling approximately 4.0 million members as of September 30, 2024.
- Decline in revenue from the Media Division, which is attributed to reduced advertising revenues and fewer content partnerships.
- Overall operating losses decreased to ($1.4 million) in Q2 FY2025 from ($2.5 million) in Q2 FY2024, indicating improved operational efficiency despite revenue challenges in certain segments.
The company maintains its guidance for fiscal 2025, expecting consolidated revenue between $120 million and $135 million, with the Audio Division projected to generate $110 million to $120 million in revenue .
A Deep Dive into LiveOne, Inc. (LVO) Profitability
Profitability Metrics
In analyzing the profitability metrics for LiveOne, Inc. (LVO), we look at key financial figures for the three and six months ended September 30, 2024, compared to the same periods in 2023.
Gross Profit, Operating Profit, and Net Profit Margins
For the three months ended September 30, 2024, the revenue was $32.6 million, resulting in a gross profit of $7.4 million and a gross margin of approximately 22.7%. In comparison, for the same period in 2023, revenue was $28.5 million with a gross profit of $7.3 million.
The operating loss for Q2 FY2025 was ($1.4 million), improving from a loss of ($2.5 million) in Q2 FY2024. The net loss for the same period in FY2025 was ($2.3 million), compared to ($7.9 million) in FY2024.
Trends in Profitability Over Time
Examining the six-month period ending September 30, 2024, total revenue was $65.7 million, compared to $56.3 million in 2023. Gross profit for this period was $14.6 million, with a gross profit margin of approximately 22.2%, down from $15.1 million in 2023.
| Metric | Q2 FY2025 | Q2 FY2024 | YTD FY2025 | YTD FY2024 |
|---|---|---|---|---|
| Revenue | $32.6 million | $28.5 million | $65.7 million | $56.3 million |
| Gross Profit | $7.4 million | $7.3 million | $14.6 million | $15.1 million |
| Operating Loss | ($1.4 million) | ($2.5 million) | ($2.2 million) | ($2.8 million) |
| Net Loss | ($2.3 million) | ($7.9 million) | ($3.9 million) | ($8.4 million) |
Comparison of Profitability Ratios with Industry Averages
The gross margin of 22.7% for Q2 FY2025 positions the company below the industry average of approximately 30% for the entertainment and media sector. The improvement in operating loss suggests better cost management but highlights ongoing challenges in achieving profitability compared to industry benchmarks.
Analysis of Operational Efficiency
Cost of sales for Q2 FY2025 was $24.5 million, which is an increase from $20.5 million in Q2 FY2024. The company's focus on reducing operating expenses has led to a decrease in marketing costs, which fell to $1.5 million from $2.3 million in the previous year. This indicates a strategic shift towards improving operational efficiency.
Overall, the adjustments in operational costs and the improvement in gross margins, despite lower absolute gross profit, signal a potential upward trend in profitability metrics moving forward.
Debt vs. Equity: How LiveOne, Inc. (LVO) Finances Its Growth
Debt vs. Equity: How LiveOne, Inc. Finances Its Growth
Debt Levels: As of September 30, 2024, LiveOne, Inc. reported total liabilities of $61.4 million. This includes current liabilities of $51.3 million and long-term liabilities of $10.1 million. The company's current liabilities consist of accounts payable and accrued liabilities amounting to $29.6 million, accrued royalties of $13.4 million, and a senior secured line of credit of $7 million.
Debt-to-Equity Ratio: The debt-to-equity ratio for LiveOne, Inc. stands at approximately 9.31 as of September 30, 2024. This is calculated using total liabilities of $61.4 million against total equity of $6.6 million. In comparison, the industry average for entertainment companies typically ranges from 0.5 to 1.5, indicating that LiveOne operates with significantly higher leverage than its peers.
Recent Debt Issuances and Credit Ratings
LiveOne has engaged in a senior secured line of credit worth $7 million, which has remained unchanged since March 31, 2024. The company has not disclosed any recent credit ratings; however, it continues to explore strategic alternatives that may involve refinancing its existing debt.
Debt Financing vs. Equity Funding
LiveOne, Inc. has been increasingly relying on debt financing to support its growth initiatives. The company’s total debt as a percentage of its total capitalization is approximately 93.9%, reflecting a strong inclination towards debt over equity funding. As of September 30, 2024, the company has repurchased 4.4 million shares as part of its stock repurchase program, affirming its strategy to utilize equity for shareholder returns rather than as a primary funding mechanism.
| Financial Metric | Amount |
|---|---|
| Total Liabilities | $61.4 million |
| Current Liabilities | $51.3 million |
| Long-term Liabilities | $10.1 million |
| Debt-to-Equity Ratio | 9.31 |
| Senior Secured Line of Credit | $7 million |
| Equity | $6.6 million |
| Shares Repurchased | 4.4 million shares |
Overall, LiveOne's financial strategy reflects a focus on leveraging debt for growth while maintaining an equity repurchase program to enhance shareholder value.
Assessing LiveOne, Inc. (LVO) Liquidity
Assessing Liquidity and Solvency
Current and Quick Ratios
The current ratio for the company as of September 30, 2024, stands at 0.57, calculated from current assets of $28,975,000 and current liabilities of $51,272,000. The quick ratio, which excludes inventories, is approximately 0.54, with liquid assets totaling $27,300,000 (current assets minus inventories of $1,675,000) against the same current liabilities.
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, indicates a deficit of ($22,297,000) as of September 30, 2024. This represents a decline from the previous year, where working capital was ($22,507,000) as of March 31, 2024. The trend showcases a need for improved liquidity management.
Cash Flow Statements Overview
The cash flow statement for the period ending September 30, 2024, shows:
- Operating cash flow: $3,000,000
- Investing cash flow: ($600,000)
- Financing cash flow: $1,000,000
Overall, the net cash flow for the period was $3,400,000, indicating a positive cash position primarily driven by operational activities.
Potential Liquidity Concerns or Strengths
Despite an increase in cash and cash equivalents to $11,053,000 from $6,987,000 year-over-year, the significant current liabilities raise liquidity concerns. The company faces potential challenges in meeting short-term obligations, particularly with accounts payable and accrued liabilities totaling $29,575,000.
| Liquidity Metric | September 30, 2024 | March 31, 2024 |
|---|---|---|
| Current Assets | $28,975,000 | $24,335,000 |
| Current Liabilities | $51,272,000 | $46,842,000 |
| Current Ratio | 0.57 | 0.52 |
| Quick Ratio | 0.54 | 0.50 |
| Working Capital | ($22,297,000) | ($22,507,000) |
Overall, while the company has improved its cash position, the liquidity ratios reflect ongoing financial pressures, necessitating strategic measures to bolster its working capital and manage its liabilities effectively.
Is LiveOne, Inc. (LVO) Overvalued or Undervalued?
Valuation Analysis
The valuation of a company is often assessed using various financial ratios that provide insights into its market value relative to its earnings, book value, and cash flows. For the company in question, we will examine the Price-to-Earnings (P/E), Price-to-Book (P/B), and Enterprise Value-to-EBITDA (EV/EBITDA) ratios, along with stock price trends, dividend yields, and analyst consensus.
Price-to-Earnings (P/E) Ratio
As of the latest financial reports, the P/E ratio is calculated based on a net loss of $3,029,000 for the six months ended September 30, 2024, with a basic and diluted net loss per share of $0.04. The current stock price is approximately $1.50, leading to a negative P/E ratio, indicating that the company is currently not profitable.
Price-to-Book (P/B) Ratio
The book value per share is derived from the total stockholders’ equity of -$4,658,000 divided by the weighted average common shares outstanding, which is approximately 94,658,182. This results in a negative book value per share, reflecting a P/B ratio that is also negative, further indicating potential overvaluation.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value (EV) is calculated by taking the market capitalization, adding total debt, and subtracting cash and cash equivalents. With cash of $11,053,000 and total debt approximated at $7,690,000, the enterprise value is roughly $67,943,000. The Adjusted EBITDA for the six months ended September 30, 2024, is $5,788,000, leading to an EV/EBITDA ratio of approximately 11.73.
Stock Price Trends Over the Last 12 Months
Over the past year, the stock price has shown volatility. The stock traded at a low of approximately $0.90 and reached a high of about $2.50. As of the most recent trading session, the stock price is around $1.50, reflecting a decline of about 40% from its peak.
Dividend Yield and Payout Ratios
The company currently does not pay any dividends, resulting in a dividend yield of 0%. Consequently, the payout ratio is also 0%, as there are no earnings being distributed to shareholders.
Analyst Consensus on Stock Valuation
Analysts have mixed feelings about the stock. The consensus rating is currently a “Hold” based on the company's financial performance and market conditions. The average target price set by analysts is around $2.00, suggesting a potential upside of approximately 33% from the current price.
| Valuation Metric | Value |
|---|---|
| P/E Ratio | Negative |
| P/B Ratio | Negative |
| EV/EBITDA | 11.73 |
| Stock Price (Current) | $1.50 |
| 12-Month Low | $0.90 |
| 12-Month High | $2.50 |
| Dividend Yield | 0% |
| Payout Ratio | 0% |
| Analyst Consensus | Hold |
| Average Target Price | $2.00 |
Key Risks Facing LiveOne, Inc. (LVO)
Key Risks Facing LiveOne, Inc.
LiveOne, Inc. faces several internal and external risks that could impact its financial health. Below are the main categories of risk:
Industry Competition
The company operates in a highly competitive music and entertainment sector. Major competitors include Spotify, Apple Music, and other streaming platforms. As of September 30, 2024, LiveOne's revenue was $32.6 million, reflecting a 14% increase year-over-year. However, the competitive environment could pressure margins and market share.
Regulatory Changes
Changes in regulations affecting digital content distribution and music licensing can pose significant risks. The company must remain compliant with evolving legal standards, which could lead to increased operational costs.
Market Conditions
Economic downturns could adversely affect consumer spending on subscriptions and entertainment services. The company reported a net loss of $2.3 million for the three months ending September 30, 2024, highlighting vulnerability to market fluctuations.
Operational Risks
LiveOne's operational efficiency is crucial for profitability. The company reported operating expenses of $33.9 million for the second quarter of fiscal 2025, up from $31.0 million in the same period the previous year.
Financial Risks
The company has significant liabilities, with total liabilities amounting to $61.4 million as of September 30, 2024. This includes a senior secured line of credit of $7.0 million and accrued royalties of $13.4 million.
Strategic Risks
LiveOne is exploring strategic alternatives for enhancing shareholder value, which includes potential mergers or acquisitions. The success of these strategies is uncertain and may not yield the desired outcomes.
Mitigation Strategies
The company has implemented several mitigation strategies, including:
- Cost Management: Efforts to reduce operating expenses have been ongoing, with operating loss decreasing from $2.5 million in Q2 FY24 to $1.4 million in Q2 FY25.
- Diverse Revenue Streams: Expansion into new markets and services aims to reduce dependency on any single revenue source.
- Legal Compliance: Regular audits and legal reviews ensure adherence to regulatory requirements.
Financial Overview
| Metric | Q2 FY25 Amount | Q2 FY24 Amount | Change (%) |
|---|---|---|---|
| Revenue | $32.6 million | $28.5 million | 14% |
| Net Loss | $(2.3) million | $(7.9) million | 70% |
| Total Liabilities | $61.4 million | $57.3 million | 4% |
| Operating Expenses | $33.9 million | $31.0 million | 9% |
Future Growth Prospects for LiveOne, Inc. (LVO)
Future Growth Prospects for LiveOne, Inc.
Analysis of Key Growth Drivers
The company is focusing on several key growth drivers, including:
- Product Innovations: The development of new features and enhancements in its streaming services, particularly through its integrated music player, which saw capital expenditures of approximately $0.6 million in Q2 Fiscal 2024.
- Market Expansions: Growth in the Audio Division, which reported revenue of $31.7 million in Q2 Fiscal 2025, a 18% increase compared to the previous year.
- Acquisitions: Increased ownership in PodcastOne to 72%, acquiring 583,000 shares at an average price of $1.77.
Future Revenue Growth Projections and Earnings Estimates
The company maintains its fiscal year guidance for consolidated revenue between $120 million and $135 million, with Adjusted EBITDA projected between $8 million and $15 million.
For the Audio Division specifically, revenue is expected to be between $110 million and $120 million, with Adjusted EBITDA projected at $12 million to $20 million.
Strategic Initiatives or Partnerships that May Drive Future Growth
The company is exploring strategic alternatives to enhance shareholder value, which may include potential acquisitions or mergers. This could lead to increased market share and operational synergies.
Additionally, the partnership with Tesla is noteworthy, as it allows LiveOne to convert Tesla drivers into direct customers, enhancing its paid membership base of approximately 4 million.
Competitive Advantages that Position the Company for Growth
LiveOne benefits from several competitive advantages:
- Subscriber Base Growth: The number of paid members increased by 27% year-over-year, reaching 645,000 new members.
- Diverse Revenue Streams: The company's diversified offerings across music, podcasts, and live events help mitigate risks associated with reliance on a single revenue source.
| Metric | Q2 FY2025 | Q2 FY2024 | Change (%) |
|---|---|---|---|
| Consolidated Revenue | $32.6 million | $28.5 million | +14% |
| Audio Division Revenue | $31.7 million | $26.9 million | +18% |
| Adjusted EBITDA | $2.9 million | $2.8 million | +4% |
| Paid Members Growth | 645,000 | N/A | N/A |
| Ownership in PodcastOne | 72% | N/A | N/A |
Conclusion
LiveOne's strategic focus on product innovation, market expansion, and acquisitions positions it well for future growth, as it continues to enhance its offerings and broaden its subscriber base.
LiveOne, Inc. (LVO) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- LiveOne, Inc. (LVO) Financial Statements – Access the full quarterly financial statements for Q2 2025 to get an in-depth view of LiveOne, Inc. (LVO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View LiveOne, Inc. (LVO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.