Libsyn may be best known as a podcast hosting and analytics provider but in the coming months it plans to expand into monetization. The company says it is working toward the launch of a new advertising platform created specifically for podcasters. “This ad platform empowers podcasters to find the right advertisers for their audience and structure advertising products that work for their show,” said CEO Chris Spencer. “We believe what we are creating for podcasters has the potential to substantially disrupt our industry, providing podcasters new tools to grow their brand, build their audience and monetize their efforts.” On a conference call for investors Wednesday, Spencer said it will be good for Libsyn too, helping the company grow its revenue. The launch of a redesigned website next month will be part of that push into sales and marketing. “Podcasting continues to be a hot industry,” he said.
Libsyn is also looking to expand its business outside the U.S. The podcast hosting company says the 62,000 podcasts on its collective distribution network already reaches a total of 111 million unique monthly listeners worldwide and Spencer says they see an opportunity to grow that number. “We have seen tremendous growth and believe there is still a lot of runway ahead of us—not only within our current markets but by expanding to international podcasts,” Spencer said. “The global and niche markets have yet to be explored by Libsyn, and we believe they could add significantly to our market share.” He said their work with Swedish retailer Ikea is a good example of how they’re aiming for the international market. “Not only is their podcast in Swedish, but it also serves a niche audience by helping listeners fall asleep,” Spencer said. Libsyn is also focused on expanding its platform to target Spanish-language audiences and content creators.
Revenue Jumps 16% In Q1
The start of 2019 brought another quarter of double-digit growth for Libsyn. Its revenue increased 16% in the first quarter compared to a year ago to $3.33 million. The gains were driven by a 28% jump in revenue related to Libsyn’s hosting services, while its ad revenue ticked down by $128,000 during the quarter versus the prior year. The company tells investors that’s because some advertisers who spent money with Libsyn last year failed to return in 2019. It also says that Libsyn’s premium subscription revenue decreased.
In a quarterly filing with the Securities and Exchange Commission, Libsyn reports it had $12.5 million in the bank as of March 31. That was a $1.4 million increase compared to what it had three months earlier. The Pittsburgh-based company tells investor that’s “a reflection of the strength of the overall business through the first three months of 2019.”
Takeover Without A Premium
During the conference call the company also made its first public comments related to a push by one of its shareholders to install new management. Camac Partners, owners of a 6.3% stake in Libsyn, said “much-needed change” is needed, complaining about “outsized executive pay” and “poor” capital allocation. Last month Camac proposed a special meeting be held where an entirely new board could be installed by shareholders.
Spencer pushed back against the allegations, saying Liberated Syndication—the parent company of Libsyn—is “performing extremely well operationally and financially” and said the current board and management team is “properly incentivized to drive growth and create value for our shareholders.” He said Libsyn has already incorporated some of the ideas presented by Carmac when it structured its last round of equity grants in 2017 and said the private investment firm headed by Eric Shahinia was “generally complimentary” in conversations it had with management earlier this year about the company’s finances.
Spencer positioned Carmac’s move as an attempt to take control of the company without paying shareholders a premium to achieve that goal. “We believe this represents a significant threat to your investment and do not believe shareholders should support these efforts,” Spencer told investors. He urged shareholders to ignore Camac and “discard” any materials they might get from the firm.