Loop Media Inc. reported a fourth-quarter earnings per share (EPS) of -$0.07, missing analysts' expectations of -$0.05. The company's revenue for the quarter was $3.7 million, falling short of the anticipated $5.46 million. Despite these results, Loop Media's stock rose 7.35% in after-hours trading, closing at $0.05, reflecting investor optimism about the company's strategic improvements and cost-cutting measures.
Key Takeaways
- Loop Media's EPS of -$0.07 missed expectations by $0.02.
- Revenue for Q4 2024 was $3.7 million, a 35% decline from the prior year.
- Stock price increased 7.35% post-earnings release.
- The company is focusing on achieving cash flow positivity.
- Significant cost reductions and operational improvements were reported.
Company Performance
Loop Media continues to face financial challenges, with a 30% drop in full-year revenue to $22.3 million from $31.6 million in 2023. However, the company has made strides in reducing its net loss to $24.5 million from $32.0 million the previous year. The focus on cost-cutting and operational efficiency has been a key strategy as the company navigates a challenging market environment.
Financial Highlights
- Revenue: $22.3 million for the full year, down 30% year-over-year.
- Q4 Revenue: $3.7 million, down 35% from the previous year.
- Gross Profit: $6 million, a 44% decrease from 2023.
- Gross Margin: 26.9%, down from 33.7% in 2023.
- Net Loss: Improved to $24.5 million from $32.0 million in 2023.
- Adjusted EBITDA Loss: $11.1 million, an improvement from a $15.7 million loss.
Earnings vs. Forecast
Loop Media's EPS of -$0.07 was below the forecasted -$0.05, representing a 40% miss. The revenue also fell short of expectations, coming in at $3.7 million against a forecast of $5.46 million. This marks a continued trend of earnings challenges, although the company has shown improvement in reducing its losses.
Market Reaction
Despite missing earnings expectations, Loop Media's stock rose 7.35% in after-hours trading. This positive movement suggests that investors are encouraged by the company's strategic focus on reducing costs and improving cash flow. The stock remains far below its 52-week high of $1.33 but shows signs of recovery from its low of $0.0203.
Company Outlook
Looking ahead, Loop Media is concentrating on achieving a cash flow positive position and continuing its cost optimization strategies. The company has raised an additional $5 million post-fiscal year-end and is working on securing a more favorable asset-based lending facility. These steps are part of its broader strategy to improve financial stability.
Executive Commentary
Interim CEO Justice Kao emphasized the importance of balancing growth with a strong bottom line, stating, "We learned that such growth had to be balanced with a strong bottom line." Interim CFO Ari Alden highlighted the company's progress in reducing cash burn, noting, "We have reduced our cash burn from operations lowering the level of revenue that is required to become flat or breakeven."
Q&A
The earnings call did not include a Q&A session, leaving some analyst questions about future revenue growth and market adoption of new technologies unanswered. This absence may have contributed to uncertainty among investors.
Risks and Challenges
- Continued revenue decline poses a challenge to achieving profitability.
- Market adoption of new CTV technologies may be slower than anticipated.
- Economic pressures could impact advertising spending in the out-of-home market.
- Competition from larger tech companies entering the CTV space.
- Dependence on securing favorable financing terms to support strategic initiatives.
Full transcript - Loop Media Inc (LPTV) Q4 2024:
Conference Call Moderator, Loop Media: Good afternoon, everyone, and thank you for participating in today's conference call to discuss Loop Media's Financial and Operating Results for the Full Year 20 24 and Q4 ended September 30, 2024. Joining us today are Loop's Interim CEO, Justice Kao and Interim CFO, Ari Alden. By now, everyone should have access to the full year 2024 and fiscal 4th quarter earnings press release, which the company issued earlier today at approximately 4:0:5 p. M. Eastern Time.
The release is also available in the Investor Relations section of Loop's website at www.loop.tv. In addition, this call will also be available for webcast replay on the company's website. Following management remarks, there will not be a Q and A session. Certain comments made on this conference call and webcast are considered forward looking statements under the Private Securities Litigation Reform Act of 1995. These forward looking statements are subject to certain known and unknown risks and uncertainties as well as assumptions that could cause actual results to differ materially from those reflected in these forward looking statements.
These forward looking statements are also subject to other risks and uncertainties that are described from time to time in the company's filings with the SEC. Do not place undue reliance on any forward looking statements, which are being made only as of the date of this call. Except as required by law, the company undertakes no obligation to revise or publicly release the results of any revision to any forward looking statements. The company's presentation also includes certain non GAAP financial measures, including adjusted EBITDA as supplemental measures of performance of our business. All non GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with the SEC rules.
You'll find reconciliation charts and other important information in the earnings press release and Form 8 ks furnished to the SEC. I would now like to turn the call over to Mr. Justice Kayeau. Please go ahead.
Justice Kao, Interim CEO, Loop Media: Thank you, and welcome, everyone, to our full year 2024 and fiscal Q4 earnings call. As I look back on the past fiscal year, it's no surprise that it was a transformative year filled with many significant changes for Loop Media. When I stepped up to the Interim CEO role in March, my primary focus was to work with the team and our Board of Directors to get our company to a cash flow positive position as quickly as possible in an effort to achieve success for the company and thus maximize shareholder returns, which is a key focus for us. It's important that I offer some context during today's call for moving forward. When we started Loop, revenue growth was the key metric as it is for many tech and media companies.
We learned, however, that such growth had to be balanced with a strong bottom line. And over the last 6 months, we undertook serious measures to try to make Loop more competitive and create efficiencies around our business, which has included reducing third party vendor costs, restructuring and eliminating unprofitable contracts with content providers and reducing our workforce. We have worked hard and continue to work diligently to regain the confidence of our investors and shareholders. And while our top line growth retracted, we are running a more streamlined business and are starting to move forward towards a stronger bottom line. For example, even with approximately 30% less revenue year over year, we achieved a 29% improvement in our adjusted EBITDA.
So even with less revenue, we believe the reduction and balancing out of expenses is moving us in the right direction. We have historically relied heavily on 3rd party affiliates in the distribution of our loop players. In our efforts to reduce expenses, we also looked carefully at these costs around our loop player distribution strategy and have shifted these efforts internally, which has contributed to our overall reduction in expenses. All tech companies must constantly consider and improve their software and technology and Loop is no different. Reducing the rate of growth in distribution in the latter part of fiscal 2024 has allowed us to review and address upgrades to our technology that are needed to improve the flow of advertisements to our Loop players and the number of advertisements that are served to us as well as to improve the functionality of our loop players for our business venue clients.
These important and exciting software upgrades are well underway and we expect to be rolling them out across our network in the coming weeks. Our goal is to increase the productivity of our proprietary loop players, which will lead to increased distribution, priority for the company going forward and which we hope will also lead to a stronger bottom line in the coming fiscal year. As my predecessor John Yerman has said before, Loop Media has been a pioneer in the streaming for business, BTV for out of home venues market. Pioneering requires patience and the ability to navigate inevitable obstacles like we have had to endure over the past year or more. Loop will continue to persevere as the advertising industry addresses this new category of CTV for out of home.
In encouraging momentum, we are seeing additional big players like Google (NASDAQ:GOOGL) in addition to other partners like Microsoft (NASDAQ:MSFT), who started the CTV Oh or out of home trend with us as previously announced last year, making progress in participating in this part of the out of home advertising industry. It takes time for industries to adapt, much like it did from cable TV to TV streaming in homes. Loop has not shied away from challenges in the past and it will not do so going forward. Before I hand it over to Ari, let me just close by saying that we are confident that the measures that we have taken over the last several months and continue to take will further move us in the right direction and can yield positive results to get the company to where we know it can be and beyond. With that, I will turn the call over to Ari Olgin, our Interim CFO to take you through our financial results.
Ari?
Ari Alden, Interim CFO, Loop Media: Thank you, Justice, and good afternoon, everyone. Before we dive into the details of Loop Media's financial results, I'd like to take a moment to introduce myself. My name is Ari Ogan and I am honored to serve as Loop Media's Interim Chief Financial Officer. Since joining Loop in 2022 as VP Controller, I have worked closely with our team to ensure transparency, accuracy and strategic insight in all financial matters. Prior to my role here, I built a career focused on financial leadership and innovation, serving in senior financial roles across industries ranging from media and technology to education and advertising.
Throughout my career, whether as a CPA at Ernst and Young, a Founder and CEO in the education sector or a leader in publicly traded companies like TIBSCO Software (ETR:SOWGn), I have prioritized creating value, fostering trust and ensuring a focus on strategic and prudent financial practices. I am committed to providing clear and accurate financial reporting. With Loop Media at a pivotal moment in its growth, I am excited for the opportunity to help guide the company towards sustained success and innovation. Now let's turn to the highlights of our fiscal year and our fiscal Q4 financial performance. Revenue.
In the 2024 fiscal year, revenue was $22,300,000 compared to $31,600,000 in fiscal 2023. In the fiscal Q4, revenue was $3,700,000 compared to $5,700,000 in the year ago period. Gross profit. In the 2024 fiscal year, gross profit was $6,000,000 compared to $10,700,000 in fiscal 2023. In the fiscal Q4 2024, gross profit was $1,000,000 compared to $1,600,000 for the same period in fiscal 2023.
Gross margin. In 2024 fiscal year, our gross margin rate was 26.9% compared to 33.7% in the 2023 fiscal year. In the fiscal Q4 of 2024, our gross margin rate was 27.6% compared to 27.5% in the prior year quarter. As Justice highlighted earlier, while our fiscal Q4 revenues declined by $2,000,000 or 35% compared to the same period last year, our gross margin rate actually improved. This modest improvement reflects the deliberate and focused cost optimization initiatives we have been implementing over the past few quarters, demonstrating our commitment to enhancing operational efficiency even in a challenging revenue environment.
QAUs. As of September 30, 2024, we had approximately 77,000 active LOOP players and partner screens across the LOOP platform, including 27,811 QAUs on our owned and operated platform, compared to 37,021 QAUs for the same period last year. This represents a 25% decrease compared to the Q4 of fiscal 2023. On the partner platform side, we ended the Q4 of fiscal 2024 with approximately 49,000 partner screens, reflecting an increase of about 7,000 partner screens or 17% compared to the Q4 of fiscal 2023. In the fiscal year 2024, total sales, general and administrative, SG and A expenses, excluding stock based compensation, depreciation and amortization, loss from disposal of long lived assets and restructuring costs were reduced to $20,600,000 down from $29,400,000 in fiscal 2023.
This significant reduction of $8,800,000 or 30 percent year over year reflects the impact of our strategic cost cutting measures, including significant reductions in headcount, marketing and professional administrative fees. In the Q4 of 2024, SG and A expenses decreased to $4,500,000 compared to $7,400,000 for the same period in fiscal 2023, representing a $2,900,000 or 39% decrease period on period. This improvement in expenses is due to the cost cutting measures the company has undertaken reflecting our commitment to achieving better operational efficiency. Looking ahead, we will continue to prioritize disciplined cost management as we align our expenses with our strategic objectives. Net loss.
In fiscal year 2024, our net loss improved to $24,500,000 or $0.33 per share compared to a net loss of $32,000,000 or $0.56 per share in fiscal 2023. In the fiscal Q4 of 2024, net loss decreased to $6,200,000 or $0.07 per share from $9,000,000 or $0.15 per share in the same period of 2023. Adjusted EBITDA for the 2024 fiscal year improved to a loss of $11,100,000 from a loss of $15,700,000 in fiscal 2023. In the fiscal Q4, adjusted EBITDA improved to a loss of $2,800,000 compared to $4,800,000 in the same period last year. These improvements in both net loss and adjusted EBITDA despite the challenges in revenue continue to highlight the effectiveness of our cost management strategies.
We have reduced our cash burn from operations lowering the level of revenue that is required to become flat or breakeven. Turning to our balance sheet. Cash and cash equivalents were $800,000 on September 30, 2024, compared to $3,100,000 on September 30, 2023. As of September 30, 2024, total net debt was $7,800,000 compared to $7,500,000 as of September 30, 2023. Additionally, subsequent to our fiscal year end, we raised an additional $5,000,000 paid off and closed out our accounts receivable facility with our previous lender and are actively working on securing a more favorable ABL facility in the near term.
Thank you for joining our call today. I'll turn it over to Justice Kao for his closing remarks.
Justice Kao, Interim CEO, Loop Media: Thank you, Ari. I would like to thank everyone for joining the call today and for your continued support of Loop Media. We remain confident about where the business is heading in fiscal 2025, and I want to wish everyone a very happy holiday season. This concludes our prepared remarks. Operator, back to you.
Conference Call Moderator, Loop Media: As indicated at the beginning of the call, there will be no questions following management's remarks. Thank you for joining our call today. This now concludes our conference. You may now disconnect. Have a pleasant day, everyone.
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