LiveOne, Inc. (LVO) Q1 2022 Earnings Report, Transcript and Summary

Good afternoon and welcome to the LiveXLive Media, Inc., Q1 Fiscal 2022 Financial Results and Business Update Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Mike Quartieri, Executive Vice President and Chief Financial Officer. Please go ahead.

Thank you, Danial. Good afternoon and welcome to LiveXLive Media’s business update and financial results conference call for the company's first quarter ended June 30, 2021. Presenting on today's call are Rob Ellin, CEO and Chairman; Dermot McCormack, President; and myself, Mike Quartieri, the company's Chief Financial Officer. I would like to remind you that some of the statements made on today's call are forward-looking and are based on current expectations, forecasts, and assumptions that involve various risks and uncertainties. These statements include, but are not limited to statements regarding the future performance of the company, including expected future financial results and expected future growth of the business. Actual results may differ materially from those discussed on this call for a variety of reasons. Please refer to the company's filings with the SEC for information about factors which could cause the company’s actual results to differ materially from these forward-looking statements, including those described in its Annual Report on Form 10-K for the year ended March 31, 2021 and subsequent SEC filings. You will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed today in the company’s earnings release, which is posted on its Investor Relations website at ir.livexlive.com, and the company encourages you to periodically visit its IR website for important content. The following discussion including responses to your questions contains time sensitive information reflects management's view as of the date of this call August 12th. And except as required by law the company does not undertake any obligation to update or revise this information after the date of this call. I like to highlight to investors that this call is being recorded. The company is making it available to investors and the media via webcast and a replay will be available on its website in the Investor Relations section shortly following the conclusion of the call. Additionally, it is the property of the company and any redistribution, retransmission or rebroadcast of the call or the webcast in any form without the company's expressed written consent is strictly prohibited. Now let me turn the call over to LiveXLive CEO, Rob Ellin.

Thank you, Mike. Good afternoon everyone and thank you for joining us today for fiscal 2022 first quarter business update. We continue to focus on the long-term objective of building and owning sustainable valuable franchises, IP and transformative technologies. Three years ago we took the company public to $7 million in revenues. I'm proud to say my team has delivered for the 13th straight quarter record revenues of $38.8 million by far the biggest quarter in history. Amazingly, we now have six TAMs each with multi-billion dollar upsides and are all growing together a perfect storm. We are building a brand recognition in using music subscription live events, live streams, OTT, merchandise both digital and hoard and podcasts to drive our flywheel. Today LiveXLive is grown and evolved into the leading talent-first platform focused on their super talents. Almost $39 million in revenues with none of our live events other than social ones, we had to push back our main event Spring Awakening due to COVID to October as well as our 40 to 50 live events and we're seeing telltale signs that this is starting to open up. As we're getting close to the end of COVID and the opening of events we were able to use our first live event to prove a flywheel. Our first in-person and global live screening pay per view event post-COVID-19 social gloves battle platforms cemented our flywheels a true zygotes of modern media fan interaction. Listen watch attend engage and transact. Social Gloves reached over 3.5 billion engagements and it continues to grow by the day. LiveXLive social media platforms garnered a triple digit year-over-year increase with total engagements over 671% and average engagement's post up 1493%. Social Gloves is a landmark 136,000 pay per views, that's equivalent to selling out Madison Square Garden six times. That's a tremendous feat for some of that. This in addition to the thousands of fans who attends Hard Rock Stadium. In addition Social Gloves drove a staggering 9,300 new paid subscribers for the night which represents a conversion rate of nearly 7% that bodes very well for us as live events return. We're very proud of the phenomenal music lineup featuring some of the biggest names in hip hop Lotto DJ Calvert, Fat Joe, Amigos, and a Lil Baby. Music is in our DNA bringing together these explosive performers with pop culture stars showcase slide as the Trailboy Blazer and producing and creating this new form of entertainment connecting sports, music, social media as well as NFTS. Proving our model showcase from selling merchandise in the stadium packaging NFTs pay per view live streaming. Having our podcast in town of the even and bringing our key franchises to life LiveXLive presents LiveZone, Music Lives and Self Made is all about us leveraging events to build long-term franchise. Partnerships grew with two-year, two multiyear multi-million dollar deals with Hard Rock International and NFT leader Sabbatino. The strategic partnership with Rock with Hard Rock International will provide us with a new platform to bring exclusive and original wide pop culture events together we can amplify and distribute these. The pay per view events to select an integrated resorts and Hard Rock Cafes properties nationwide. The new alliance will directly tap into LiveXLive’s Flywheel business. Again listen, watch, attend, engage and transact now with a global partner as Hard Rock. Our wholly owned subsidiary PodcastOne had over 2.38 billion podcast downloads in the trailing 12 months period ending June 30th and its franchise of exclusive shows has grown to more than 235 with 35 new podcasts now productions more than 300 podcast episodes per week. There’re a series of acquisitions both buy and bill. We have created improved our flywheel of wholly owned businesses that work together in complementary and synergistic fashion. In subscription radio, we have our Slacker radio, livestreaming, LiveXLive through our incredibly robust platform. LiveXLive events which we act entertaining podcasting with PodcastOne, merchandise to custom personalize solutions, and a growing roster of original content franchise that is distributed through LiveXLive 24-hour OTT channel that now reaches about 294 million people a month. As we describe, our audience can listen, watch, attend, engage, and transact. I’m pleased to report that the first quarter ended June 30, 2021, revenue increased 269% to a record $38.8 million, while consecutive quarter of record revenues 13th consecutive along with 175% increase in contribution margin which is a record $7.8 million. Given the momentum we see in nearly all of our business verticals, we are excited to increase our previous revenue guidance for the current fiscal year March 31 to between a $115 million and a $125 million and increase our - increased $5 million for a priorities guidance with adjusted operating income with our operations segment to between $6 million and $12 million. As of June 30, 2021 our cash and cash equivalents was the highest in the history of the company at $24.7 million. Over the past 12 months, we de-risk the business by diversifying our revenue streams with the launch of paper view the addition of substantial advertising sponsored revenue component as a result of acquisition of PodcastOne and the acquisition of e-commerce company CPS and our acquisition in the early 2020 is a live music event business react presents. In fact the past year, we have successfully diversified our revenue streams and reduced our concentration of subscription from 84% revenue to just 23% of our revenue in this quarter. We recently announced one of the most iconic live music event Spring Awakening Music Festival, which is the Midwest's largest all electronic music festival is scheduled to return in Chicago October 02 and 03. The festival will feature 70-plus artists across unique stages. The event is already officially sold out the first year of its general admission and its VIP and only limited quantities of tier 2 tickets are still available. We'll expand this Spring Awakening franchises to four events this year. LiveXLive Reacts Presents returned to live events currently includes a fully stocked lineup of over 100-plus live shows, featuring over 200 artists performing over the course of fiscal 2022. Through our distribution and partnerships, including our nine year partnership with Tesla Cars, we are able to grow our paid subscribers to 1.196 million, just under 1.2 million active monthly users. The acquisition of PodcastOne in July continues to be meaningful and accretive to LiveXLive. PodcastOne was ramped up as an IP development and production with its recent partnership with award winning top creator such as Patrick Wachsberger led Picture Perfect Federation, the producer of some of the biggest movies in the world, Dylan Howard's Empire Media Group, Barbara Schroeder, Melissa McCarty, Kelly McLear. PodcastOne continues to broaden its platform offerings with scripted and non-scripted content across multi-genres with an eye towards a package, resulting audio IP for television, film and streaming platforms. PodcastOne's entire network of podcast probably is one of the most exclusive streaming selections of podcast being made available for the first time. We had the Facebook app in the United States. Additionally we are planning to bring our podcast into the realm of live events, which celebrated social influencers and PodcastOne's talent Jordyn Jones. Since launching our pay per view platform in May 2020 LiveXLive has now generated $21 million in pay per view sponsorship merch sales. LiveXLive has produced over a hundred pay per view events and its recent announced K-pops Joy Ruckus Club 4, the largest global Asian Music Festival establishing LiveXLive as a premiere destination for K-pop. LiveXLive pay per views continues to drive new revenues sharing models for both artists and LiveXLive digital ticket sales and tipping digital meet and greets merchandise sales NFTs sponsorships enabling artists to go directly to consumers using LiveXLive platform. In our last call I spoke about a significant investment commitment to original programming content. I would now like to introduce my Partner and President of the company Dermot McCormack to provide few more details on original programming efforts.

Thank you, Rob. And I'd like to thank you for your continued leadership and congratulate the team on what has been establish for. I would say that this quarter we brought home the vision of - I joined live LiveXLive. We enhance our flywheel and we brought it to life with groundbreaking live events. You're building a portfolio of brands that all complement each other with synergies and originals not unlike what I saw in the early days of managing Viacom's digital portfolio. We are on a path to become a true media conglomerate, built for realities and the opportunities that exist in today's ever changing landscape. One of the things I'm most excited about is the evolution of our original content IP and production capabilities. We are doubling down on our own proprietary events and franchises specifically and in this quarter we invested $15.5 million in developing and implementing new IP and content which drove revenues in the current quarter and will contribute to future revenues. Over the past year we have launched shows that we believe have the chance to become valuable franchises going forward including Self Made a new online talent competition an area this month we launched a Self-Made podcast edition and audio competition to find the next big podcast star for PodcastOne. The competition will be driven by fans and PodcastOne's panel of judges as they listen to see who will take the top prize a podcasting contract with PodcastOne and a total package worth over $100,000 including promotion across the network. We've also launched the LockDown Awards. Our celebration of live music and coming this fall we have a new edition called the Breakout Awards. We've also brought the world of The Snubbys a tongue in cheek look at the artists actors and nominees and now that award shows from the Grammys to the Oscars hosted by the roast master himself Jeffrey Ross. We continue to grow our digital festival. Music lives with two iterations in the last 18 months and another installment coming in September live from Las Vegas. A live music series Music Lives On and Life I Like Presents continue to expand and have been a really big hit with advertisers. We are one of the few companies during COVID that broadcast and produced everything from a live music concert in an artist's basement to a game changing sports and music mega event at NFL Stadium. In my experience in my career it is rare in a media company that you get to invent a new format. But we really feel the social music and boxing event we produced in Miami last quarter was a watershed moment creatively. Everyone took notice. Last quarter those are watershed moment credibly everyone tuck notice we brought together influencers, music, sports and away not seen before and we feel we have set the stage to continue to lead the way in how this type of entertainment evolves. We have already announced the female version of the new format called Self Made Knockout a pay per view event that will feature a boxing AIPA headlined by women from social media, music, sports technology and fashion with the winners vying for over $1 million in prizes. We expect to be announcing a date and location for this event soon which we believe will be in the fourth quarter of the current calendar year. We have been excited to see how these pin fall pay per view events supercharge our flywheel from digital and physical ticket sales to sponsorship to subscriptions and merchandise sales. Stay tuned for more of these unique hybrid events to be added in the coming weeks and months. Of significant importance is the exclusive partnership we have with Tesla through that arrangement a LiveXLive subscription is preinstalled as the default radio service in every new Tesla car sold in America and LiveXLive is paid directly by Tesla for those subscriptions. The LiveXLive app is also preinstalled in 85 other automobiles as well as across major carriers Horizon Sprint and T-Mobile which allows slacker subscribers to listen in their cars and on their mobile devices. Previously mentioned that we see a significant opportunity to expand LiveXLive slacker radio subscription business into Europe and compete for the opportunity to become the default radio service for a number of European automakers. Our licensing dialog with music labels continues and we hope to have some news on that front before the end of the year. And finally tied to this unique and honorable original content we are extremely happy to see the combination of our advertising and sales forces close more $1 million deals than an any other time in our history as RFTs continue to grow in size. I would now like to hand it over to our CFO, Mike Quartieri, who will review our Q1 results.

Thanks, Dermot. Let me spend a few minutes to provide a brief overview of our fiscal 2022 Q1 results. Consolidated revenue was a record $38.8 million, up 269% year-over-year from $10.5 million in Q1 prior year. This increase in revenue is due to our successful acquisitions of PodcastOne and CPS, coupled with increases in pay per view and sponsorship revenue related to the Social Gloves pay per view event, as well as our revenue associated with the production of the event. We ended Q1 with 1.162 million paid subscribers. Please note that included in the total number as of June 30, are certain subscribers which are subject to a contractual dispute, of which we are currently not recognizing revenue. This is the first quarter since the dispute arose in Q2 last year that our subscription revenue is up on a year-over-year basis. The acquisitions of PodcastOne and CPS were accretive to our operating results, enhanced our working capital position and provided diversification to our revenue base. In Q1, our revenue was comprised of 23% subscription and 77% advertising, sponsorship, merchandising, pay per view, ticketing and events, compared to 84% subscription and 16% in sponsorship, licensing, advertising, and pay per view tickets over our prior year. Contribution margin in the quarter was a record $7.8 million, up 175% year-over-year from $2.8 million. The year-over-year improvement was driven by our live event and related sponsorship revenue and the additions of PodcastOne and CPS, which resulted in a $5.7 million increase year-over-year. This improvement was partially offset by a $700,000 charge for additional music royalty as a result of a multi-year audit by one of the labels. Adjusted operating loss in Q1 was $1.75 million, compared to $55,000 in prior year. Note, the prior year quarter includes the benefit of various cost saving measures totaling $1.3 million that were implemented by the company during the height of the COVID-19 pandemic, which were not in effect during this quarter. Adjusted operating income for our operations segment was $1.2 million, essentially flat year-over-year, as the benefit of the increased revenue from our live events and related sponsorship revenue was offset by the charge noted above related to the multi-year music royalty audit, adjusted operating losses related to CPS due to the seasonal nature of their business and the investments in content and marketing within PodcastOne and our live streaming business units, which totaled $2.2 million in the quarter. Adjusted operating loss for corporate was $2.9 million, an increase of $1.7 million, which is primarily attributable to the prior year’s austerity measures, higher personnel and other public company costs, given the expansion of the company's operations on a year-over-year and payroll taxes related to stock-based compensation. Even though we've passed the one year anniversary of PodcastOne acquisition and the six-month anniversary of the CPS acquisition, we continue to look for areas of efficiencies and consolidation. Back in March, we announced the completion of our integrations of PodcastOne, CPS and React, which we expected to generate over $3.4 million in annual savings. We have just implemented a series of additional measures that are expected to generate an additional $2.2 million in annual savings, bringing the total annual savings up to $5.6 million of which approximately $800,000 has been realized prior to June 30 with the remainder to flow through in future periods. Turning to the balance sheet we ended Q1 with cash of $24.7 million including restricted cash of $135,000 up from the $18.8 million we had a year ago. The year over year increase was largely driven by net cash proceeds from financing activities of $6.2 and $800 million - sorry $800,000 from net cash inflows from operations offset by investing activities of approximately $1.1 million during the quarter. Our net working capital deficit improved by $3.6 million during the quarter which was the result of the forgiveness of $2.5 million of PPP loans received in the prior year and continued efforts to improve working capital efficiency of the remaining $1.1 million. Our cash position as of August 11 was $18.6 million. Lastly in June we entered into a revolving line of credit facility with East West Bank with a borrowing capacity of up to $7 million and an interest rate of prime plus 0.5%. In connection with this credit facility the holders of the company's senior secured convertible notes agreed to extend the maturity date of their notes and subordinated their security interest in all the company's assets. And with that let me hand it back over to Rob.

Yes, so thank you guys and obviously a terrific quarter but one more to come and really the excitement that Dermot was articulating with the record labels. We extended our contracts with Sony Records. Our balance sheet now and the strength that it is - the labels it's now time to expand globally. It's now time to expand other car companies. We’re now in over 80 cars and it's time to do more white label type deals like Tesla. This is a really exciting time for the company. We're looking forward to our live events really starting to take off in October. And you see you know as I said over 100 live events, there's really you know a special time for us as we lost substantial revenues for almost 18 months now as we come back to adding that live music. So I want to thank everyone. I want to thank everyone for being supportive and sticking with this company through COVID. And I'm really proud of my team and my management and really everyone all the way down the line of what they've accomplished and what they built and to think we've gone from you know a $7 million company to now doing $38 million in a quarter is really exciting. So thank you everyone. Thank you everyone, I look forward to questions.

[Operator Instructions] The first question comes from Barry Sine of Spartan Capital Securities. Please go ahead.

Question on Social Gloves so presumably that drove the big surge in a lot of the big surge of revenue that we saw. If you can give us a little bit more breakdown on how that, that revenue occurred. And then I guess we'll see some of this in the Q later on. But what the costs are they go with an event like that. And the reason I ask you've just reiterated that you have the fall event I guess it would be called Self Made knockout? And then you also have Spring Awakening Equinox. If we look at Social Gloves we analyze that what you just reported with those upcoming events be comparable are we looking at two more major events coming later on in the fiscal year that would be similar to what you just reported.

Yes, so Spring Awakening has always been you know reacts, your trophy property, right. And does anywhere from $6 million to $10 million revenues, and we've just expanded it and brought back into the city of Chicago, right. So fully expect it there. And then we've already announced the second one. So the second one will be a female version of Social Gloves and so far we've seen the traction is absolutely spectacular, very similar reaction if not stronger reaction to the audience and the potential buyers of this. And then you know fully expect they're going to be many more social events like this, right. And boxing is only one component of it. What we built here is right we built here as we built a franchise. And as we go out now - will max actually own the IP. And this will be IP of LiveXLive. So we couldn’t be more excited about it, and we expect it to be extremely profitable. And a lot of the hard work was done in the first event.

And if you could help us understand, looking at the consolidated numbers how much of that was driven by Social Gloves, how what's the profitability in an event like that. And again the reason I ask is so I can have some basis to forecast the upcoming events that you have?

Yes, so we’re not breaking down the exact numbers, but I would say that you can kind of adopt, right, and Mike if you want to jump in here, yes we said it’s a 136,000 tickets, assume it’s around $50 of ticket, right, add some sponsorship, add some money from Hard Rock, and you could basically come to you know very close to the numbers and really start thinking about the success of this event likely success with the IP is going, going forward right. And how much of that hard work was done already in building the, first one because the production came up actually spectacular and yes so we're really excited for the next one. Do you want to add anything to that Mike?

Yes, I think one of the things just to kind of point on to - especially like this one you want to get back to the profitability of it and we want to make sure we're very careful of not commenting on any specific items. But one of the things we wanted to make sure that was very important to this is that it proved out the capabilities of our team and of our tech stack. So when Rob says this thing went off flawlessly if you can imagine 136,000 tickets being sold. The vast majority and I mean the very vast majority of those all took place probably within the last eight hours before that event took place with a good portion of that taking place within the last couple of hours. So the fact that we were able to handle that volume flawlessly is a testament to the team and also to the investment that we made in that tech stack as part of this event. And so therefore I think it's a little unfair to comment on profitability on this one item when we were using it to really prove out the capabilities of the team and the process itself.

Okay. And I guess there'll be a little more visibility when the Q comes out you'll do a little break out there as well.

There'll be some. Yes.

Okay all right. That's my question. I don't want to hug the call. Thank you.

The next question comes from Brian Kinstlinger from Alliance Global Partners. Please go ahead.

Clearly the revenue is fantastic with Social Gloves and I agree it was groundbreaking but I guess given the low gross margin and the adjusted EBITDA loss which I don't think I would have expected with $38 million of revenue? And what is, the lessons learnt that you can take away so that you become profitable when these events happen in the future and you put up these high water mark revenue numbers? And what did drive that gross margin to be maybe lower than it looks like the street would have thought?

Mike, you want to take that?

Yes well, let me kind of talk through kind of and maybe what I'll do is I'll talk a bit on a year-over-year basis and maybe look at it also quarter sequential, from just a consolidated overall operating income perspective. So for the year, just when we look back at this quarter, we overcame a couple of things. So one, you have the addition of CPS and PodcastOne, the combination of those results are about $1 million in negative operating loss. And that's really kind of geared towards the seasonal nature of their business with and - plus the investments that we've been making as we've commented before about $2.2 million in content and marketing on top of that, to really drive the back half of the year and into the future into fiscal 2023, when it comes to those units. CPS especially given it’s a retailer. There's a huge seasonal impact to their results. And so you expect operating loss in what would be this Q1 and Q2 with a huge profit margin to come through in Q3, which is the calendar year end which is the holiday sales period. In addition, we had the royalty audit, which hit us for about $700,000, which was completely unexpected. And we had to come over the year-over-year $1.3 million in austerity measures that we implemented last year, which was really primarily around 50% pay cuts taken by all employees. And those 50% pay cuts weren't in effect during this quarter. So there is some headwind versus year-over-year. And then we picked up some just as a result of the way the operations are from a CPS and PodcastOne perspective. But if you look at that, that really kind of get you back to what would have been in my eyes and I don't want to do performers in math for a whole lot of people to get in myself with a FD Reg issue. But you could get back to a more reasonable same-store model which would have gave you profitability well north of $3 plus million.

Okay and then my only follow-up is, the $2.2 million in content and marketing spend. Sounds like those are expenses that ran through the P&L in the first quarter. Are those recurring and you'll have $2 million plus of quarterly increased expenses or maybe what you would thought at the beginning of the year just how did that play out? Thank you.

I would tell you that, that's a slight increase quarter sequential in Q1. We had about $1.2 million of those expenses. And remember and this is no different than any other media company at this point in time. Viacom if you listen to their earnings same similar story with Comcast the world's start to reopen back up and people are investing back in content. And that's why we want to make sure that where they’re front in line to be able to maintain the growth of this company accordingly. And I think that's part of the reason for - around the whole content strategy is why we wanted to make sure that Dermot joined this call. So Dermot the person who's responsible for all of our content was able to give his perspectives on it.

And Mike - let me just jump in on the question - the questioner which is, from a background of working at places like the VMAs and huge tadpoles and corporations that drive year around business. When you do an inaugural event especially when no one in the world has ever done before nobody has ever even attempted this on a level we done a lot. And you asked what did we learnt, we learnt - as a production efficiencies and marketing. We will apply next and why we lead the way now is because we're the first ones to do those learnings. So this was a lot about learnings and we're going to apply them in key areas as we go forward.

Great thanks so much.

[Operator Instructions] The next question comes from [Jeremy Lieu] of D.A. Davidson. Please go ahead.

So I have one question and one follow-up. First question from your vantage point what percentage of festivals are expected to return to - having a live event in 2021 and 2022 versus 2019?

I mean we can't - we can't. It's a very tricky question obviously the variant is kicking back in right and is scary. AEG just came out with today that you must be vaccinated to go in. But the exciting part is in the United States is half the country's been vaccinated and this could be way higher soon right. So I don't think they’re going to shut them down. I think very few are going to get shut down. I think they're just going to put - implement rules in place that is going to protect people and make it a safer environment. And so we don't see a lot of telltale signs. In fact we're on the phone with leading government people on Chicago and they have no intentions of shutting the current events down in Chicago. And as you know Lollapalooza just happen which is the biggest event in Chicago. So we're pretty excited about it. There are going to be some costs that occur with COVID and as you know we pushed Spring Awakening to October. So you're going to have to be smart about it and you’re going to have to handle it in a unique way, but I couldn’t tell you exactly what percentage I don’t think many in the United States are going to get shutdown.

Okay thanks and then Rob you were early in understanding that consumer would rebundle the content rather than limit themselves to one to three [SPOD] services. So what are the implications of this rebundling for LiveXLive?

Well as you know we hired JPMorgan as our bankers to explore all options for the company. There has been a lot of people circling around right. We have a lot of interesting TAMs within this company. You have six of them that any one of them could be a potential candidate to be attempted to acquire the whole business, one of the divisions to spinout a division right. So I think we're right in the center of the storm. I think my team has just done a brilliant job of surviving and building right to where Live is coming back. And I just think Live is going to really enhance that the flywheel and give us the opportunity to prove just like sports did 30 years ago it's really not that we're that smart. We just - started this early and built it around curation right. When you build around curation and if you got - everyone had an opportunity to watch what we did. Social Gloves and watch what we've done at Rock in Rio for years. It's a best production in the world right. And when you're doing that everybody in content is looking for content. Our average cost for content is still under $20,000 an hour. Right at that cost per hour we’re really compelling partner as a - to distribute our content as you can see by our new Facebook deals right two of them. One Facebook to stream all of our pay per view events, number two for Facebook to take on our podcasts as they build their audio platform. So they announced our podcast across Samsung, but we had to keep growing at 294 million number right to many platforms around the globe.

Great, thanks for taking my questions.

Thank you.

It seems that there are no further questions. I'd like to turn the conference back over to Rob Ellin, CEO and Chairman for closing remarks.

Thank you everyone. Just as a closing remark my history when I started out [indiscernible] as you broke $100 million in revenues you started to get very different institutional holdings. You got a lot of interest around the company. We didn't plan to sell it right at that time and we sold it to Barry Diller as InterActiveCorp. The same thing with digital terminal with Intuit as you break $100 million in revenues. It's now trading at close to $8 billion valuation. Feel the same thing here. The momentum is growing. We have a world-class team we have world class management team. We have world class board of professionals that have built tens of billions of dollars of companies. This is the most exciting company I had ever been involved in. It's also the most fun company I've never been involved. I have great partners and great team here anyone saw yesterday Kris Wright who joined the Board was just named the head of all of Michael Jordan brands at Nike. We're going to keep bringing great people together. We're going to keep focused on talent first super fans. If we continue to grow that right in five years we'll be a 10 million plus subscribers and will have $1 billion plus in revenue. So thank you everyone and thank you for spending the time and appreciate everyone support.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.