“It was a noisy quarter all around,” said Libsyn President and Chief Operating Officer Laurie Sims on Monday. And while it may have been quiet on the search for a new CEO – Libysn offered no update on the process to succeed Christopher Spencer who resigned in August – the company did talk about how there have been some silver linings to the COVID-19 pandemic, when its new podcast hosting platform could be widely released, and even hinted an advertising alliance could be in the works. Here are five takeaways from the quarter call with investors.
Highs And Lows of COVID Era
Even as revenue has grown, Sims said the pandemic hangs over everything. “The path to recovery from COVID-19 remains unclear,” she said. Sims said they have seenboth the good and bad. “Listening habits were disrupted, as commute times consumption fell. But podcast creation exploded.” During April, Libysn had the second-highest month of signs-up ever and a record month for episode creation. “In recent months we have seen a trend back towards normal podcast download levels, but it has not fully recovered,” she said. “While we have seen episode creation continue with new sign-ups on Libysn and Libsyn Pro.” She said the company now hosts more than 75,000 podcasts. And Libsyn’s churn rate was less than three percent during Q3.
Advertising Remains Challenged
Ad sales continues to be a weak spot for Libsyn, with advertising revenue down 22% during third quarter compared to a year agoand down 31% during the first three quarters of 2020. Sims said the pandemic and the economic uncertainty has softened sales. The company had been working on a new advertising platform, but she instead hinted that an ad rep deal or new advertising alliance could be in the works.
“The company is evaluating all strategic initiatives within the podcast ecosystem, and advertising is certainly one of those,” said Sims. “We have several initiatives under way for advertising that are being considered.”
The company reported Monday that its third quarter revenue grew five percent compared to a year ago with total revenue of $6.5 million during the quarter.
Libsyn 5 Rollout Coming In 2021
The rollout of Libsyn’s new podcast hosting platform, what it is calling Libsyn 5 has begun with a beta-test among a group of users. Sims said they are rolling the feedback and testing from those customers into the process. “The engagement and feedback have so far been very positive,” she said. But Sims was unable to say when it will be widely available beyond announcing it would come in 2021. “This is a critical undertaking to modernize the look and feel of the platform,” she said. “Changing the look and workflow for over 75,000 podcast producers that use our system requires an enormous effort and is no small feat.”
Libysn Isn’t Selling Pair Networks
Podcasting has become Libsyn’s core business, representing nearly two-thirds of company revenue during third quarter. The remaining 37% came from the internet hosting services Pair Networks business, which posted an eight percent year-to-year decrease in sales. “We have no plans to divest Pair,” said Sims. “While it represents a smaller portion of revenue contribution, it still does represent a good portion of that. And it generates cash to support the growth strategy.” Even though the two businesses operate independently, Sims said the podcast and web hosting businesses are complementary.
Nasdaq Listing On Horizon
Libsyn is currently traded on an Over The Counter (OTC) exchange. But the company is looking at making the leap at moving onto the higher-profile Nasdaq in the coming year. While that could bring additional investor interest in the company, CFO Richard Heyse said Libsyn will need to take several steps first to meet the Nasdaq requirements. They include additional internal financial controls. Heyse said they expect to begin taking the first steps needed during the first quarter of 2021. “And as that moves forward, we’ll start looking at the Nasdaq uplisting,” he said.