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LPTV NYSE AM· Loop Media Inc.
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LPTV NYSE AM· Loop Media Inc.
Earnings report Q4 2023

LPTV Reports Decrease in Advertising Revenue, but Increase in Legacy and Other Revenue in Latest Quarter

Segments of revenue

LPTV's revenue can be categorized into two segments: Advertising revenue and Legacy and other revenue. In the latest quarter, advertising revenue amounted to $9.39 billion, representing a decrease from $13.96 billion in the same period last year. On the other hand, legacy and other revenue reached $776 million, compared to $866 million in the previous year.

Strengths

Despite the decrease in advertising revenue, LPTV remains the principal on all advertising transactions, indicating its strong position in the market. The company's advertising sales team works across both the O&O Platform and the Partner Platform, selling ad impressions for both platforms to the same demand sources. LPTV's management has highlighted their focus on improving margins by changing the mix of premium content on the O&O Platform. They have negotiated new content licenses, which are expected to lower costs and drive viewership, leading to improved margins for non-music video channels in the coming fiscal year.

Challenges

The decrease in advertising revenue can be attributed to a change in revenue mix, with a smaller portion of the Partner Platform business in the latest quarter. While this change resulted in a lower gross margin, it also led to a higher operating margin. LPTV faces inventory risk in terms of advertising fill rates, which can impact its revenue.

Noteworthy

LPTV's legacy and other revenue accounted for 8% of total revenue in the latest quarter, showing an increase from 6% in the same period last year. This segment includes streaming services, subscription content services, and hardware delivery. Revenue from streaming services is insignificant, while revenue from subscription content services is recognized straight-line over the term of the service.

Summary

LPTV experienced a decrease in advertising revenue in the latest quarter, primarily due to a change in revenue mix. However, the company remains the principal on all advertising transactions and continues to focus on improving margins through content licensing agreements. On the positive side, LPTV saw an increase in legacy and other revenue, which accounted for 8% of total revenue. Overall, the company's performance in the latest quarter reflects both strengths and challenges, with a potential for improved margins in the future.

Source documents

Form 10-Q  filed on Feb 06, 2024
46 pages scanned

Reference data

Company financials Q4 revenue 10.2M
Analyst estimates Q4 EPS missed by -42.38%
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