Acast Net Sales Rise In Fourth Quarter As CEO Warns Of Ad Market 'Uncertainty'

Q4 Results

Podcast platform ACAST's net sales grew 35% year-over-year in fourth quarter 2022 to SEK 454.3 million, with operating loss increasing from SEK 39.5 million to SEK -58.6 million, with SEK 10.7 million of the latter from restructuring costs related to redundancies and SEK 1 million in costs related to the acquisition of PODCHASER. The company reported that the number of listens increased 22% to 1.327 billion.

CEO ROSS ADAMS said, "2022 will go down in history as a year when the focus in many industries shifted from hyper-growth to profitability and internal efficiency. We have seen a gradual change in the advertising market, where podcasts continue to stand out as one of the fastest growing media channels with promising future prospects. At ACAST, we have adjusted the operations to suit the new market conditions, which means that we can end the year with a stable development and good organic growth. The adjusted EBITDA of -31.1 MSEK is a strong improvement compared to the third quarter and thus a step on the way towards the goal of reaching positive EBITDA in 2024. The gradually increased uncertainty in the outside world during the year has affected the advertising market also towards the end of the year, however with some improvements in both EUROPE and NORTH AMERICA. During the quarter, we launched several new features that in different ways help advertisers and podcast creators to transact on our platform, an important part in our quest to develop the world’s most valuable marketplace for podcasts.

"During the last quarter of 2022, ACAST grew by 35 percent compared to the same quarter the previous year. Our position as one of the market leaders in ad sales and monetization for podcasts continues to strengthen. We are seeing many advertisers move from successfully testing a medium, that is new to them, to now capitalizing on this established, incredibly interesting channel by investing larger and larger advertising budgets into our podcasts. This is an important trend for the long-term positive development of podcasts as an advertising medium. At the same time, a weaker economy means that more advertisers are more cautious than before, which has a countervailing effect in the short term.

"Net sales in EUROPE amounted to 297 MSEK (215), an increase of 38 percent. The negative macroeconomic climate has affected the advertising market throughout 2022, but at ACAST we continued to expand into several new European markets. Growth in NORTH AMERICA amounted to 28 percent and in the rest of the world, 34 percent. The growth rate in both EUROPE and NORTH AMERICA improved compared to the third quarter of 2022. The average revenue per listen (ARPL) was 0.34 SEK (0.31), an increase of 11 percent compared to the same quarter last year. The gross margin amounted to 35 percent (36). Adjusted EBITDA for the quarter was -31.1 MSEK (-28.2), in line with the previous year and losses more than halved compared to the third quarter of the year. The adjusted EBITDA margin improved slightly to -7 percent (-8). We are now working further to create the conditions to reach the goal of a positive EBITDA result in 2024, and the development during the second half of 2022 shows that we are on the right track.

"ACAST’s route to profitability is through dedicated work on our internal efficiencies and cost control, combined with healthy growth generated by proactive product-led innovations that give rise to an increase in automated sales, and a continual evolution of our advertising offering. The cost reductions announced at the end of the summer are now complete and we enter 2023 with a solid foundation to continue developing ACAST as a global independent market leader in revenue creation for podcasts."

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