Acast AB: Q2: Sustained growth and improved EBITDA

Interim report January - June 2024

Second quarter 2024

• Net sales in the quarter amounted to SEK 477.9 m (386.3), which corresponds to net sales growth of 24% (22%). The growth was primarily driven by our North American and Europe regions where net sales grew by 26% and 25%, respectively.
• Organic net sales growth was 22% (15%).
• Gross margin for the quarter amounted to 39% (36%).
• EBITDA for the quarter was SEK -11.3 m (-41.7), resulting in EBITDA margin of -2% (-11%). The development reflects that Acast is on track to deliver positive EBITDA in 2024.
• Operating loss amounted to SEK -32.3 m (-59.3).
• The result for the period amounted to SEK -26.9 m (-14.2).
• Cash flow from operating activities amounted to SEK -1.3 m (-57.5).
• Earnings per share for the period before and after dilution amounted to SEK -0.15 (-0.08).
• The number of listens was 1,104 million (1,294), 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 (0.30), reflecting a yearly increase of 45%.

Significant events in the second quarter of 2024

• In April, Acast celebrated a decade as a market leader in the podcast industry. Since its inception in 2014, Acast has continued to expand its global footprint and today is home to over 125,000 podcasts, enabling advertisers to reach listeners in practically every country worldwide. Since launch, Acast has delivered 37 billion ads globally while also paying out more than $390 million directly to creators around the world.

Comments from the CEO: Sustained growth and improved EBITDA
Our sales development remained steady with a healthy pace in both North America and Europe during the second quarter. Supported by a solid gross margin, we took another stride towards achieving our goal of EBITDA profitability in full-year 2024.

Continued progress in North America
We continued to generate steady growth in the second quarter with group sales increasing by 24% compared to last year, of which 22% was organic growth. Importantly, we achieved a strong pace in both North America and Europe, growing at 26% and 25% in the quarter respectively. Just as in the prior quarter, our number of listens was negatively affected by the iOS17 rollout and declined by 15% in the second quarter. The average revenue per listen (ARPL) continued to increase and amounted to SEK 0.43, reflecting 45% growth year over year.

Improved EBITDA result
The gross margin amounted to 39%, reflecting a three percentage point increase compared to last year, thanks to positive effects from increased SaaS revenues and favorable product mix. Compared to the previous year, the gross profit grew by SEK 48 m, while our operating expenses increased by SEK 21 m. The cost increase is explained by our continued measured investments but were also affected by currency changes and a small impact from our incentive program following an increase in share price.

Thanks to the solid growth progression, maintained gross margin and continued cost control, we enabled further EBITDA improvements compared to the prior quarter. EBITDA amounted to SEK -11 m in the second quarter, corresponding to an EBITDA margin of -2%. The profitability improvements are broad-based and visible across our reporting segments.

Championing one of the most efficient media channels
In June, we conducted an econometric study of the Swedish advertising market with OMD. The findings revealed that every SEK 1 invested in podcast advertising returns SEK 4.9 in long-term sales (ROAS of 4.9x), outperforming traditional media's average ROAS of 3.7x. This study highlights that podcast advertising not only boosts brand building but also efficiently drives long-term sales, emphasizing its crucial role in broader media strategies.

Multichannel is gaining traction
Video and other social media channels are becoming increasingly vital in podcasting, boosting engagement, expanding reach, and enhancing monetization opportunities. We are glad that more multichannel creators are choosing Acast, including recent signings and renewals like Have A Word, ShxtsNGigs, The Fellas Studios, and Kayla Itsines to mention a few. Our success at the Campaign Audio Advertising Awards in June, where we won four categories for our multichannel work, further underscores our commitment to pioneering integrated marketing campaigns for podcasters and advertisers.

Another step closer to profitability
Improved profitability has also positively impacted our cash flow generation, with an operating cash flow of SEK -1.3 m in the quarter. Ultimately, the financial development in the second quarter represents another positive step towards becoming a profitable growth company and reaching our goal of delivering EBITDA profitability in 2024.

Ross Adams
Chief Executive Officer

Report presentation
CEO Ross Adams and CFO Emily Villatte will present the report in a webcast today 26 July at 10:00 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-q2-report-2024

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

For more information

Emily Villatte, CFO and Deputy CEO, Acast
Tel: [phone]
E-mail: [e-mail]

Ross Adams, CEO, Acast
E-mail: [e-mail]

Investor Relations:

Dennis Berggren
Tel: [phone]
E-mail: [e-mail]

About Acast

Since 2014, Acast has been creating the world's most valuable podcast marketplace, building the technology which connects podcast creators, advertisers and listeners. Its marketplace spans nearly 125,000 podcasts, 2,700 advertisers and c. 400 million monthly listens. Crucially, those listens are monetized wherever they happen - across any podcasting app or other listening platform.

The company operates worldwide and is headquartered in Stockholm, Sweden. Acast is listed on the Nasdaq First North Premier Growth Market (ACAST.ST). Certified Adviser is FNCA Sweden AB, [e-mail]

This information is information that Acast is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2024-07-26 07:00 CEST.