The first quarterly update from Libsyn since its management team shakeup brought continued growth in revenue. 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. Most of that was driven by a 15% increase in its core podcast hosting business which presented 60% of the quarter’s revenue. Advertising continues to be a weak spot for Libsyn however, with ad revenue down 22% during third quarter compared to a year ago. The company also said its internet hosting services Pair Networks business, was down eight percent year-to-year.
Laurie Sims, President and Chief Operating Officer, said Libysn’s podcast hosting business was driven up by new signups on Libsyn4 and LibsynPro, an increase in episodes on the Libsyn platform throughout the quarter, along with an increase in podcast downloads. “We were able to take advantage of a significant surge in podcast creators following the onset of the COVID-19 pandemic and our high retention rates remain at historical levels,” she said. “While podcast consumption was affected due to shifting listener behaviors in the second quarter, we have seen that trend reverse over the last several months.”
Sims also said that they have being rolling out Libsyn5 to a group of beta-users in a series of three preview and testing phases. She said updated interface has “simple, but high functional design” that the company is betting will appeal to podcasters. “In 2021, we expect Libsyn5 to be a catalyst for accelerated growth, and plan to fully support the development of new features on the platform throughout the year to increase adoption by new and existing users,” said Sims in the quarterly revenue announcement.
In August Chris Spencer abruptly announced he was leaving the role of Chief Executive Officer, a role he had held since Libsyn was born in 2016. Spencer also left the company’s board. That led to Sims adding the Chief Operating Officer title, and she has been overseeing the company while the search for a new CEO continues.
In a related move, Libysn more than doubled its general expenses during the third quarter tied to the exit package paid to Spencer. As part of the lucrative arrangement that is paying Spencer through year-end, the company also agreed to buy back 1,353,795 shares held by Spencer at market price. As a result, Libsyn swung to a $2 million net loss during the quarter compared to posting a $200,000 profit a year ago.
Sims told investors that dip into the red is nothing to worry about. “Libsyn reported solid third quarter results despite the impact of unusual one-time charges related to management changes earlier this year,” she said.
Shares of Libsyn stock were trading down two percent in New York early Monday.