Q1 2023

• Net sales in the quarter amounted to SEK 331.3 M (298.3), which corresponds to net sales growth of 11% (51%)
• Organic net sales growth amounted to 6% (40%), compared to a very strong first quarter of 2022
• The gross margin for the quarter was 36% (36%)
• EBITDA for the quarter amounted to SEK -60.7 M (-67.8) and the EBITDA margin was -18% (-23%). The improvement in the EBITDA result means that Acast is following the plan to reach a positive EBITDA in 2024
• Operating loss amounted to SEK -78.0 M (-80.1)
• The period’s result was positively affected by currency translation effects and amounted to SEK -72.0 M (-73.2
• Cash flow from operating activities amounted to SEK -1.7 M (-87.6)
• Earnings per share for the period before and after dilution amounted to SEK -0.40 (-0.41)
• The number of listens amounted to 1,283 million (1,256), an increase of 2% compared to the same period as year, and Average Revenue Per Listen (ARPL) amounted to SEK 0.26 (0.24), a consequence of our strategy to increase revenues from existing content

Significant events in the first quarter of 2023

• Acast introduced a new method for ad delivery, Interchangeable Ad Slots, which increases the volume of sellable ad space of our platform Acast Marketplace. This innovative solution for automated ad delivery increases the ad inventory by more than 10 percent
• Acast published the “Big Fat Podcast Report 2023”, a study focused on the Nordic podcast market. The report highlights an increasing interest in listening to podcasts, but also the strength of podcasts as an advertising medium with a higher return on investment (ROAS) than other advertising channels
• In January Acast conducted an industry study which surveyed the knowledge and thoughts about programmatic advertising in podcasting among US marketers, indicating a high interest and demand from advertisers but also a need for further education in how programmatic advertising can benefit and support marketers in reaching their target audiences
• The Bill & Melinda Gates Foundation announced a new podcast series called, Make Me Care About, hosted by award–winning podcast host and New York Times bestselling author Jen Hatmaker. Produced by Magnificent Noise, Make Me Care About will be distributed by Acast across all podcast platforms and listening apps
• Acast initiated a partnership with Tonny Media, one of The Netherlands’ most significant independent podcast production companies, improving podcasting content in the region even further after the market launch at the end of last year

Comments from the CEO: Stable start to the year
Acast starts the year with improved results and continued growth. We see that interest in podcasts, as a highly valued channel for entertainment, learning and information, continues to increase among both listeners and advertisers worldwide. During the first quarter of the year, we have continued to develop our platform to create the best possible conditions for connecting advertisers, podcast creators and listeners. And it has not taken long to see the results of these efforts. We continue to work on balancing high internal efficiency and cost control with investing in further development of products and services. This leads to an improved EBITDA, and an EBITDA margin that has strengthened by five percentage points compared to the same period last year.

Improved results and continued growth
During the first quarter of 2023, Acast grew by 11 percent, of which 6 percent was organically. It is a stable development in light of an underlying advertising market that has weakened significantly compared to a year ago. At that time, the global advertising market was still on the rise and Acast delivered a very strong quarter in terms of growth.

Net sales in Europe amounted to SEK 217 million (189), an increase of 14 percent. We continue to increase our European presence through several interesting collaborations and partnerships, for example in the Netherlands through the production company Tonny Media. We also see good development in Other Markets with growth of 24 percent. North America is characterized by a continued weak advertising market and net sales decreased by 1 percent to SEK 83 million (84).

We see a continued positive trend in terms of programmatic advertising sales, our fastest-growing sales channel, which supports the scalability of our business model. During the quarter, Acast conducted a study that mapped American marketers’ knowledge and thoughts about programmatic advertising in podcasts. The study shows great interest and increased demand from advertisers, but also a need for further training in how programmatic advertising can benefit and support marketers in reaching their target groups.

The average revenue per listen (ARPL) was SEK 0.26 (0.24), an increase of 8 percent compared to the same quarter last year. The gross margin amounted to 36 percent (36) and strengthened compared to the fourth quarter of 2022. The sequential improvement in the gross margin is explained by the SaaS revenues that Podchaser is contributing.

Adjusted EBITDA for the quarter was -60.7 MSEK (-67.8), a profit improvement of 10.5 percent compared to the previous year. The adjusted EBITDA margin improved to -18 percent (-23). Our work to reach the goal of a positive EBITDA result in 2024 is ongoing and the development at the beginning of the year indicates that we are on the right track.

Increased focus on existing inventory
During the quarter, we reached two important milestones: the number of podcasts on our platform reached 100,000 and the number of unique listeners per month exceeded 100 million. With 100,000 podcasts linked to our platform, we have achieved a good level for both reach and scalability, which now gives us the opportunity to focus on increasing sales in existing advertising inventory.

Today, Acast has a solid and steadily-growing network of podcast creators who offer entertaining, interesting and educational content to listeners all over the world. We have created a value chain and a platform that connects advertisers with podcast creators and their listeners. The more creators who join, the more listeners and exciting customer contacts are created for an increasing number of advertisers.

Automation drives marketplace value
An important strategic priority for us at Acast is the ongoing work to streamline and automate our services and our platform, in order to continue to be relevant and create value for both advertisers and podcast creators.

During the quarter we introduced a new method of ad delivery, Interchangeable Ad Slots. Ad inventory was previously reserved for just one type of advertising message: a sponsorship (read by the host) or a pre-recorded ad (made by the advertiser). Interchangeable Ad Slots mean that Acast can automatically detect if a sponsorship has not been sold in a podcast and instantly override the setting to insert a pre-recorded ad in that open slot. This innovative automated ad delivery solution increases the advertising inventory of Acast Marketplace by more than 10 percent.

In late 2022, we introduced our own self-serve ad platform, where advertisers can activate their own podcast strategy and create ad campaigns themselves. The platform has received a very positive reception in the first quarter of 2023, where we have seen that both large and small advertisers have chosen to create their own advertising campaigns through our platform, without the usual manual work on our part. Although the platform has only been on the market for a few months, we are happy to share that more than 150 advertisers have already advertised via the platform and that nearly 40 percent of these have booked more than one advertising campaign.

Higher Ground choose Acast for increased independence and monetization potential
After the end of the period, we welcomed President Barack Obama and Mrs Michelle Obama’s Higher Ground to our network, which means that Acast will handle ad sales and content distribution for podcasts such as Michelle Obama: The Light Podcast, Renegades: Born in the USA (with Barack Obama and Bruce Springsteen) and The Michelle Obama Podcast; Tell Them, I Am. The partnership with Higher Ground is another example of how Acast, in collaboration with podcast creators, production companies, networks and advertisers, can offer unbeatable content to both advertisers and listeners worldwide.

It is with excitement and anticipation that I look forward to the coming year, despite the continued great macroeconomic uncertainty. In recent years, Acast has strengthened its position as a global market leader in podcasting and we are today well equipped to meet advertisers’ needs to maximize relevant media channels with high returns.

Ross Adams

Chief Executive Officer

Report presentation
CEO Ross Adams and CFO Emily Villatte will present the report in a webcast today 9 May at 10:00 CEST. The presentation will be held in English and there will be the opportunity to ask questions during the presentation.

Link to the presentation: https://ir.financialhearings.com/acast-q1-2023

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