Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Acast AB (STU:0PN, Financial) reported a 12% revenue growth in Q3 2024, with organic growth at 14%, driven primarily by North America.
- The company achieved a record gross margin of 40%, a 5% increase from the previous year, due to a favorable product mix and efficient yield management.
- Acast AB (STU:0PN) generated an EBITDA profit of SEK 16 million, reflecting a 3% margin and a 9% point margin improvement year-on-year.
- The company has successfully expanded its podcast portfolio to over 135,000 podcasts, generating more than 1 billion listens per quarter.
- Acast AB (STU:0PN) continues to innovate with AI-driven ad targeting solutions, enhancing revenue opportunities for both advertisers and podcast creators.
Negative Points
- The total number of listens decreased by 15% year-on-year, attributed to the impact of iOS 17.
- The UK market experienced moderate growth due to tougher market conditions, affecting overall European performance.
- There was a noted weakness in CPMs during Q3, although sell-through rates increased.
- Operating cash flow was negative SEK 4 million in Q3, impacted by working capital changes.
- The company faces competitive pressures in the North American market, which could affect future gross margins.
Q & A Highlights
Q: Can you explain the yield management product you have and how that has impacted both sales and gross margin recently?
A: Effective yield management involves using our portfolio to drive ad and sponsor sales. We've leveraged recent product launches to sell sponsorships across shows of all sizes. This approach, including the use of Collections Plus, has helped us penetrate our portfolio more effectively, contributing to a record high gross margin.
Q: Can you talk about the trends for CPMs and sell-through rates and how they have developed over the year?
A: In Q3, we observed some weakness in CPMs, which led to an increase in sell-through rates despite the decline. This indicates that while CPMs have decreased slightly, our net sales growth remains strong.
Q: How are you planning OpEx ahead, and what have been the main learnings over the past two years?
A: Our OpEx has remained largely flat over the last 11 quarters, allowing us to make measured investments, particularly in North America. We plan to continue this approach, focusing on strategic investments where we see good traction.
Q: What type of M&A opportunities are you considering, given your strong balance sheet and cash flow approaching breakeven?
A: We maintain an active M&A pipeline and have a healthy balance sheet. Our past acquisitions, like Podchaser, have been successful, and we are open to considering further M&A opportunities.
Q: How does an increased shift of shows behind subscription paywalls affect you, and how do you continue to monetize formats of publishers you work with?
A: The shift to paywalls does not significantly affect us. The freemium model works well, and subscriptions can be part of podcasters' revenue mix. We continue to sign new content and work closely with publishers to monetize their formats effectively.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
