Interim report January - September 2024

Third quarter 2024

• Net sales in the quarter amounted to SEK 475.4 m (424.5), which corresponds to net sales growth of 12% (32%). The growth was primarily driven by our North American and Other regions where net sales grew by 29% and 20%, respectively.
• The organic net sales growth was 14% (26%).
• Gross margin for the quarter amounted to 40% (35%).
• EBITDA for the quarter was SEK 16.2 m (-25.7), resulting in an EBITDA margin of 3% (-6%). The development reflects that Acast is on track to deliver positive EBITDA in 2024.
• Operating loss amounted to SEK -6.0 m (-43.6).
• Financial items amounted to SEK -19.6 m (68.8), mainly affected by unrealized exchange losses.
• The result for the period amounted to SEK -26.6 m (24.1).
• Cash flow from operating activities amounted to SEK -4.1 m (-19.3).
• Earnings per share for the period before and after dilution amounted to SEK -0.15 (0.13). 
• The number of listens was 1,094 million (1,280), a decrease of 15% compared to the same period last year. The decline is due to Apple’s iOS17 update that changed how podcast listens are measured.
• The Average Revenue Per Listen (ARPL) increased to SEK 0.43 (0.33), reflecting a yearly increase of 31%.

Business events in the third quarter of 2024

• In September, Acast announced that Podchaser’s Collections+ had enabled 24% more Acast creators to earn ad revenue in its first year of operation. Collections+ was launched to improve podcast targeting capabilities, thereby creating additional revenue opportunities for Acast creators. It has added over 4,000 shows to new sales verticals and more than doubled the number of verticals the average show appears in.

Comments from the CEO: Profitable growth
The third quarter saw solid financial performance, marked by increasing revenues and EBITDA profitability. This positive momentum - driven by continued strong performance in North America, expanding monetization and improving profitability across all our segments - underscores our commitment to profitable growth.

Growth propelled by North America
We delivered group net sales growth of 12% compared to last year, of which 14% was organic growth. This performance was primarily fueled by continued growth in North America, where we saw a 29% increase in the third quarter despite tough comparisons from the previous year. The development illustrates that our investments in the region are paying off, allowing us to gain market share. 

Europe experienced more moderate growth at 3%, reflecting varied market conditions across different countries. Our performance in the UK has been affected by a tougher market, whereas we continued to see strong performance in the Nordics and Continental Europe. With a 20% revenue increase year over year, our Other markets segment further fueled the group’s overall growth.

Expanding podcast monetization
Our monetization has seen significant improvement, as evidenced by the Average Revenue Per Listen (ARPL) that increased by 31% in the third quarter. The number of listens amounted to c 1.1bn, corresponding to a decline of 15% year over year, which is fully explained by the rollout of iOS17. As we forge ahead, we have an increased focus on the quality of our audience and monetizable listens as we continue building out our Marketplace. 

Our dedication to improving monetization is evident in the strong results from our recent investments. In September, we announced that Podchaser’s Collections+ - a feature launched to enhance advertisers’ targeting capabilities - had enabled 24% more Acast creators to earn ad revenue within its first year of operation. The launch has witnessed high adoption, with more than half of brand-produced audio advertising buys using Collections+ year-to-date. 

In the third quarter, we rolled out an additional ad marker, allowing podcasters to add a second midroll ad slot into their episodes, thereby improving their monetization potential through increased inventory. Acast is now able to offer more ad slots within its marketplace to advertisers. This increase in ad availability helps to offset the reduction in ad inventory caused by Apple’s iOS 17 update.

Another profitability milestone
The gross margin remained high in the third quarter at 40%, with positive development driven by a combination of favorable product mix and effective yield management. Our focus on cost discipline remains strong. These developments have enabled us to achieve EBITDA profitability of SEK 16 m in the third quarter, representing a 3% EBITDA margin.

Importantly, we see that all of our segments are contributing to the improved profitability, almost doubling the total contribution profit year-to-date whilst we have reduced our global costs. 

Our third quarter financial performance underscores our commitment to profitable growth. We are steadily improving our profitability while simultaneously continuing to make measured investments. This balanced approach is key to our sustainable success, and we remain committed to delivering full-year EBITDA profitability as a critical milestone in this journey.

Ross Adams
Chief Executive Officer

Report presentation
CEO Ross Adams and CFO Emily Villatte will present the report in a webcast today 5 November at 13:00 CET. 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-q3-report-2024

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