New York, NY (Top40 Charts) LiveXLive Media, Inc. (Nasdaq: LIVX) ("LiveXLive" or the "
Company"), a global digital media company focused on live entertainment, today announced financial results for its first fiscal quarter ended June 30, 2019. LiveXLive posted record revenue of $9.5 million and a contribution margin* of $0.5 million in Q1 2020, respectively, as compared to revenue of $7.6 million and a contribution loss* of ($0.8) million in Q1 2019, respectively, driven by strong subscriber growth. The Company recorded a loss from operations of $10.3 million, and net loss of $11.0 million in Q1 2020, driven by positive $0.5 million in contribution margin* in Q1 2020 as a result of continued subscriber growth in the period, offset by 9 events livestreamed and 11 produced in the quarter, coupled with ongoing operating investments made in Q1 2020 to grow the Company, along with non-cash depreciation, amortization and stock compensation and non-recurring expenses in the period of $5.7 million. Excluding these non-cash and non-recurring expenses, Q1 2020 Adjusted Operating Loss ("AOL")* was $4.6 million, which was flat when compared to Q1 2019 AOL.
"LiveXLive is off to a strong start in fiscal 2020, highlighted by 25% revenue growth, a significant improvement in contribution margin and continued 50% growth in paid subscribers when compared to Q1 2019," said Robert Ellin, CEO and Chairman of LiveXLive. "We are streaming many of the most exciting music festivals in the world and have partnered with the biggest artists and promoters, resulting in record levels of viewership. LiveXLive has quickly established itself as the authentic thought leader in music globally and we have an incredibly exciting roadmap and business plan for the rest of the year and beyond."
In the first quarter of 2020, LiveXLive livestreamed 9 major festivals and events, and produced 2 additional events for a total of 11 livestreamed and produced events as of the end of the quarter. First quarter 2020 festival and event livestreams included EDC
Vegas (Las Vegas, NV), iHeartCountry Festival (Austin, TX), iHeartRadio Wango Tango (Carson, CA), and BTS, Madonna, Judah & the Lion, Vampire Weekend,
Thomas Rhett and The Raconteurs. In addition LiveXLive also produced the first weekend of the Montreux Jazz Festival (Lake Geneva, Switzerland) and Hangout
Music Festival (Gulf Shores, AL).
"We are pleased with our record KPIs, growth in paid subscribers and financial performance in the first quarter of fiscal 2020," said Michael Zemetra, CFO of LiveXLive. "With the closing of our $10.5 million common stock offering in July 2019, we have a strong foundation to accelerate our growth objectives during the remainder of fiscal 2020."
Recent and Q1 2019 Highlights
Q1 fiscal 2019 achieved over 22M livestreams, 92 artist streams on the Company's platform, and over 124 hours of live music content streamed; over 28M livestreams, 123 artists and 152 hours of live music content streamed during the first four months of fiscal 2020.
Ended Q1 fiscal 2020 with paid subscriber base growth of 50% year-over-year; paid subscribers over 740,000 as of today.
Launched next generation social live music and subscription platform combining Slacker's acclaimed audio with the world's premier live music events in May 2019.
Livestreamed our largest festival to date, EDC Vegas, which included distribution agreements with Sinclair Broadcasting Group's OTT channel, STIRR, and China's leading video platform, Tencent Video to livestream EDC Las
Vegas in certain territories throughout the world.
Entered into agreement with Perry Farrell to join the Company as global brand ambassador. In addition to evangelizing the LiveXLive platform and service, Farrell will expand upon his pop-up "I am the DJ" audio channel to curate a 24/7 "always on" experience and co-create original episodic content in partnership with LiveXLive. He will become the Company's second brand ambassador, joining hip-hop legend Nas.
Named Dermot McCormack as President of the Company. Prior to joining the Company, McCormack most recently served as AOL's Global President — Video and Studios group and as EVP of
Digital Media for Viacom's
Music Group, and is currently a board and founding member of SNKR Inc., a leading brand based around sneaker and youth culture, and a board member of Axonista, a leading European OTT player.
Completed a $10.5 million registered offering of the Company's common stock in July 2019, raising net proceeds of $9.5 million after offering fees and expenses. The Company plans to use these proceeds for repayment of its debentures, working capital and general corporate purposes, including without limitation future acquisitions, purchases of outstanding warrants and capital expenditures.
During Q1 2020, the Company posted revenue of $9.5 million versus $7.6 million in Q1 2019. The increase was due to the growth in subscription revenue. Q1 2020 paid subscribers increased 50%, or by a net 243,000 subscribers year-over-year from Q1 2019, ending Q1 2020 with 733,000 paid subscribers as compared to 490,000 subscribers at June 30, 2018.
LiveXLive streamed 9 and produced a total of 11 live events during its first fiscal quarter 2020, and made incremental investments to drive long-term growth. These growth activities drove a net loss of $11.0 million, loss from operations of $10.3 million and Adjusted Operating Loss* of $4.6 million.
Q1 2020 Operating Loss of $10.3 million was relatively flat as compared to a $10.1 million Operating Loss in Q1 2019. The $0.2 million increase was driven in part by higher operating expenses of $1.3 and non-recurring costs of $0.2 million, offset by a $1.3 million in improved contribution margin*. The $1.3 million increase in operating expenses was largely driven by higher sales and marketing expenses to support 9 livestream events versus 5 in Q1 2019 and higher product development costs to support new product initiatives, including the launch of LiveXLive's unified app in May 2019. The $1.3 million improvement in contribution margin* was driven by the growth in LiveXLive's subscription revenue and corresponding improvement in subscription contribution margin year over year.
Q1 2020 AOL* of $4.6 million, which was flat when compared to Q1 2019 AOL of $4.6 million, was driven by
Music Operations loss of $(3.1) million and Corporate loss of $(1.5) million.
Capital expenditures for Q1 2020 totaled approximately $0.7 million, which were largely driven by capitalized software costs associated with development of our integrated music player and services in Q1 2020.
The Company finished Q1 2020 with approximately $10.0 million in cash and cash equivalents and $16.6 million in debt (inclusive of net $1.3 million of deferred debt issuance costs and $0.4 million in fair value embedded derivatives).
* Refer to "About Non-GAAP Financial Measures" within this release for definitions of Adjusted Operating Loss and Contribution Margin (Loss).
Full-year fiscal 2020 guidance remains unchanged:
Revenue $50.0-65.0 million
Adjusted Operating Loss** $10-15 million
Capital expenditures in the range of $3-5 million
Expectation to livestream over 40 music festivals and events.
** With respect to projected full year 2020 Adjusted Operating Loss, a quantitative reconciliation is not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to purchase accounting adjustments, acquisition-related charges and legal settlement reserves excluded from Adjusted Operating Loss*. We expect that the variability of these items could have a potentially unpredictable, and potentially significant, impact on our future GAAP financial results.
Conference call and Webcast
LiveXLive will host a webcast to provide a business update and discuss its first quarter 2020 fiscal year results on Tuesday, August 6, 2019 at 8:30 a.m. EDT (5:30 a.m. PDT) DOMESTIC DIAL-IN: 844-746-0736 and INTERNATIONAL DIAL-IN: 412-317-0796. LiveXLive will make the webcast available on the Investor Relations section of its website at https://ir.livexlive.com/ir-home until August 13, 2019. To access the replay, dial 877-344-7529 or 412-317-0088. The replay passcode is: 10134002. An archived webcast of the conference call can be accessed on the Investor Relations section of LiveXLive's website at https://ir.livexlive.com/upcoming-events.
About LiveXLive Media, Inc.
Headquartered in West Hollywood, California, LiveXLive Media, Inc. (NASDAQ: LIVX) (the "
Company") is a global digital media company focused on live entertainment. The Company operates LiveXLive, the first 'live social music network', delivering premium livestreams, digital audio and on-demand music experiences from the world's top music festivals and concerts, including Rock in Rio, EDC Las Vegas, the Montreux Jazz Festival, and many more. LiveXLive also gives audiences access to premium original content, artist exclusives and industry interviews. For more information, visit us at www.livexlive.com and follow us on Facebook, Instagram and Twitter at @livexlive.
* About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with the accounting principles generally accepted in the United States of
America ("GAAP"), we present Contribution Margin (Loss) and Adjusted Operating Loss ("AOL"), which are non-GAAP financial measures, as measures of our performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, or superior to, operating loss and or net income (loss) or any other performance measures derived in accordance with GAAP or as an alternative to net cash provided by operating activities or any other measures of our cash flows or liquidity.
We use Contribution Margin (Loss) and AOL to evaluate the performance of our operating segment. We believe that information about these non-GAAP financial measures assists investors by allowing them to evaluate changes in the operating results of our business separate from non-operational factors that affect operating income (loss) and net income (loss), thus providing insights into both operations and the other factors that affect reported results. AOL is not calculated or presented in accordance with GAAP. A limitation of the use of AOL as a performance measure is that it does not reflect the periodic costs of certain amortizing assets used in generating revenue in our business. Accordingly, AOL should be considered in addition to, and not as a substitute for, operating income (loss), net income (loss), and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, AOL as presented herein may not be comparable to similarly titled measures of other companies.
Contribution Margin (Loss) is defined as revenue less Cost of Sales. AOL is defined as operating income (loss) before (a) non-cash GAAP purchase accounting adjustments for certain deferred revenue and costs, (b) legal, accounting and other professional fees directly attributable to acquisition activity, (c) employee severance payments and third party professional fees directly attributable to acquisition or corporate realignment activities, (d) certain non-recurring expenses associated with legal settlements or reserves for legal settlements in the period that pertain to historical matters that existed at acquired companies prior to their purchase date, and (e) depreciation and amortization (including goodwill impairment, if any), and certain stock-based compensation expense. Management does not consider these costs to be indicative of our core operating results.
With respect to projected full year 2020 AOL, a quantitative reconciliation is not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to purchase accounting adjustments, acquisition-related charges and legal settlement reserves excluded from AOL. We expect that the variability of these items to have a potentially unpredictable, and potentially significant, impact on our future GAAP financial results.
For more information on this non-GAAP financial measure, please see the table entitled "Reconciliation of Non-GAAP Measure to GAAP Measure" included at the end of this release.
