We use Contribution Margin (Loss) and Adjusted EBITDA to evaluate the performance of our operating segments. We believe that information about these non-GAAP financial measures assists investors by allowing them to evaluate changes in the operating results of our business separate from non-operational factors that affect operating income (loss) and net income (loss), thus providing insights into both operations and the other factors that affect reported results. Adjusted EBITDA is not calculated or presented in accordance with GAAP. A limitation of the use of Adjusted
EBITDA as a performance measure is that it does not reflect the periodic costs of certain amortizing assets used in generating revenue in our business. Accordingly, Adjusted EBITDA should be considered in addition to, and not as a substitute for operating income (loss), net income (loss), and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, Adjusted EBITDA as presented herein may not be comparable to similarly titled measures of other companies. Contribution Margin (Loss)
is defined as Revenue less Cost of Sales before (a) Cost of Sales share-based compensation expense, (b) depreciation, and (c) amortization of developed technology. Adjusted EBITDA is defined as earnings before interest, other (income) expense, income tax expense, depreciation and amortization and before (a) non-cash GAAP purchase accounting adjustments for certain deferred revenue and costs, (b) legal, accounting and other professional fees directly attributable to acquisition activity, (c) employee severance payments and third party professional fees directly attributable to acquisition or corporate realignment activities, (d)
certain non-recurring expenses associated with legal settlements or reserves for legal settlements in the period that pertain to historical matters that existed at acquired companies prior to their purchase date and a one-time minimum guarantee to effectively terminate a live events distribution agreement post COVID-19, and (e) certain stock-based compensation expense. Management does not consider these costs to be indicative of our core operating results.
LiveOne, LVO, fiscal 2026, fiscal 2027 outlook, revenue, audio division, adjusted EBITDA, Contribution Margin (Loss), non-GAAP measures
So they’re up… but like is it real growth or just numbers stuff?
Non-GAAP measures always sound like a trick. They say they lift revenue but then bury it in all these adjustments and EBITDA like what even is the actual profit.
Wait I thought EBITDA was the same as cash in your pocket. Also they mentioned COVID-19 distribution agreement like that’s still affecting 2027?? Kinda feels like they’re blaming old stuff.
I don’t get it, Contribution Margin minus depreciation/amortization and then Adjusted EBITDA minus purchase accounting and legal fees… so basically they remove everything bad? If the outlook is higher in 2027 then why does it read like a warning label. LiveOne should just tell us plain earnings.