Acast

First quarter 2022 (Q1 2022)

• Strong net sales growth of 51% (74%) and quarterly net sales of SEK 298.3 million (197.4)
• Organic net sales growth of 40% (86%) when adjusting for FX
• Gross margin at a healthy 36% (36%)
• Adj. EBITDA margin reached -23% (-17%)
• Adj. EBITDA of SEK -67.8 million (-33.6)
• Operating loss of SEK -80.0 million (-44.4)
• Net loss for the period impacted by positive FX and amounting to SEK -73.2 million (-49.2)
• Cash flow from operating activities of SEK -64.0 million (1.1)
• Basic and diluted earnings per share for the period of SEK -0.41 (-0.37)
• Listens reached 1,256 million (872) and ARPL improved to SEK 0.24 (0.23)

Significant events in the first quarter of 2022

• Number of shows reached 47,000 during the quarter, as key podcasts such as Framgångspodden, Anna Faris is Unqualified and That Peter Crouch Podcast joined Acast
• Top UK show Sh**ged.Married. Annoyed renewed its contract with Acast for three years
• Acast+ is now available to any podcaster. Acast will earn c. 15% in net sales revenue from each subscriber contribution
• Acast has started a partnership with BuzzFeed, Inc. Acast will develop and launch six podcasts from BuzzFeed Studios, as well as monetize them through ads, sponsorships and paid subscriptions
• The Nominaction Comittee in Acast AB has proposed that John Harrobin and Samantha Skey be elected as new Board members at the AGM on May 17, 2022. John Harrobin is nominated to be elected Chairman of the Board

Comments from the CEO: We accelerate in North America as European advertisers take a measured approach

During the first quarter of the year, Acast continued to consolidate its position as the world’s leading company within the open podcast ecosystem. The number of shows connected to Acast grew from 40,000 to 47,000, while the number of listens increased by 44% compared to the same period last year. And, as we increase this portfolio of podcasts, we’re also growing the potential to generate advertising revenues — not least in North America, where sales increased by triple digits despite European advertisers taking a more measured approach at the start of the year

MORE CREATORS ARE CHOOSING ACAST

During the first few months of the year several podcasting giants have joined Acast. One of Sweden’s largest podcasts, Framgångspodden, joined in January. Shortly afterwards, we were able to announce that movie and podcast star Anna Faris has chosen Acast as the partner to help her grow and monetize her very popular show, Anna Faris is Unqualified. And, if that wasn’t enough, That Peter Crouch Podcast — one of the biggest football shows in the UK — also made Acast its home.

And in addition so many other creators, regardless of size, are continuing to choose Acast as a partner. We began 2022 hosting about 40,000 shows, but this number has already grown to 47,000 — emphasizing that Acast is a company on the right track.

UPSIDE ON FUTURE MONETIZATION, WITH CAUTION

As the number of podcasts increases, so does the number of people listening to them — and that means the podcast advertising market continues to grow and to take share of advertiser spend. But the proportion of advertising in podcasts is still generally very low compared to other media, highlighting the opportunity for upside in the future.

In podcasts, only around 5% of the content is advertising. In commercial radio, that figure is more like 15-20%, and for television it’s 20-25%. Even compared to other fully digital media, the proportion of advertising in podcasts is still relatively low — and that provides us with the opportunity to gradually increase advertising in podcasts, benefiting us and our creators in the future.

With that said, during the beginning of 2022, we’ve seen global changes emerge that we must consider. Russia’s invasion of Ukraine, for example, affects everyone — and Acast is no exception. Our exposure to Ukraine and Russia is limited both in terms of creators domiciled in each country and from an advertiser perspective. Our thoughts primarily go to the people who are directly affected by the war.

ADAPTING OUR PACE OF INVESTMENT

However, the macroeconomic situation has impacted market sentiment, and rising interest rates and inflation do affect us — mainly because advertisers err on the side of caution and may adjust their investments. We monitor developments closely and proactively adapt our investment decisions accordingly.

As a fast-growing company in a fast-growing industry, we will, however through deliberate investments, continue to accelerate in markets where we continue to see a large upside.

ACCELERATED GROWTH IN NORTH AMERICA

After our strong fourth quarter last year, we’ve had a solid start to the year in 2022. Globally, net sales growth in the first quarter reached 51% compared with the same period in 2021, and all markets continue to grow. We grew 35% in Europe and 47% in Other markets. In North America, we’re pleased to see that our investment there has resulted in sales growing by 107% compared with the first quarter of 2021.

During the quarter, we also targeted selective investments in both product development as well as sales and marketing. Our sales and marketing costs are affected by the fact that we have deepened our collaboration with our podcast creators, who act as ambassadors for our brand. Continued investments in product development with a focus on attracting podcast creators have led to an influx of podcasts to our platform and has contributed to our strong listens growth.

CLOSING THE APP ACCORDING TO PLAN

As previously communicated, Acast is closing down its listening app according to plan. The app was launched in 2014 at a time when there were very few ways for people to listen to podcasts. Closing the app also allows us to focus solely on our core mission: supporting podcasters to find their audience on all listening platforms globally, and enabling brands to advertise against those listens.

ACAST’S JOURNEY CONTINUES

Acast continues to work intensively to meet the increased demand creators and advertisers are showing in our various markets worldwide, promoting the open podcast ecosystem and its prominent position within the creator economy. We are staying close to the macroeconomic developments in general, and the advertising market in particular, and have a clear route to navigate through this changing environment.

We do all of this together, as a team, so I’d like to sign off by thanking all the fantastic Acast employees who are with me on this journey. Our work continues.

Ross Adams
Chief Executive Officer

Report presentation

CEO Ross Adams and CFO Emily Villatte will present the report in a conference call and webcast today 17 May at 10:00 CEST. The presentation will be held in English and will be concluded with a Q&A session.

Link to the presentation: https://tv.streamfabriken.com/acast-q1-report-2022

Telephone numbers for the conference call:
Sweden: +46 850558365
UK: +44 3333009263
USA: +1 6319131422
USA PIN: 91829137#

Link to report

The Interim Report is attached to this press release and available on https://investors.acast.com/