Audioboom Group (LSE:BOOM) — 2021 HY Trading Update

0:01 Good afternoon, ladies and gentlemen, and welcome to the AUDIOBOOM GROUP PLC twenty twenty one Half Year Trading Update Investor Presentation. Throughout this presentation, investors will be on listen only mode. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. These will be available via your investment company dashboard, and we'll send you an email to notify you when they're ready for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, we'd like to submit the following poll. And if you would give that to your kind attention, we would be most grateful. And I'd now like to hand over to Brad Clark, CFO and Stuart Lars, CEO from AUDIOBOOM. Good afternoon.

0:54 Hi, everyone. Good morning from from from New York, and having a a good afternoon over there. Really pleased that you could join us today to learn more about the company. Just really excited to tell you, much more about the business off the back of some fantastic, results that we announced just a couple of days ago. So, yeah, I appreciate your support, and and appreciate you you joining us today. Couple of items, I think, just to to mention upfront. Firstly, just on the questions, we received some really great questions ahead of the the presentation. We won't answer those at the end. We've we've woven those into the presentation, so we should get to each of those points and each of those questions throughout the presentation today. Secondly, as as Mark said, you can ask questions throughout the presentation. We'll we'll monitor those and and answer as many as as we can at the end of this.

1:47 But I guess, you know, to save you all from asking it, there's one thing that we are a little limited on today, a little limited on how we talk about that today. As you may be aware, an announcement was made on the July 19 from all active asset capital limited regarding a possible offer for AUDIOBOOM. AUDIOBOOM announced rejection of that possible offer this morning on the grounds of insufficient value, unattractive structure, and lack of strategic rationale. So as a result of that possible offer announcement by AAA, AUDIOBOOM is in an offer period under the takeover code. This places restrictions on on what we can and and we we can't say, particularly in relation to that offer and the future training of AUDIOBOOM. So today's presentation, I think, is gonna focus a little more on our results, our performance, and and the opportunity that we're creating in the business.

2:43 And, you know, I just ask I think that the questions that that you you do send over today are ones that that we can't focus on and and that we can't answer. So with those notices out of the way, I'm gonna turn my camera off because that will make the the the deck a little bigger on your screens, and then we will dive right into the presentation.

3:09 So I think my first few slides today are really designed for anyone that may be new to the business, anyone that that hasn't been with us over the the past few years, but also will just give you a little more detail about how we operate, what the business is is built around, and what our model is. This slide really looks at the value proposition of AUDIOBOOM, what makes us unique in the podcast space. And for me, the first part of that value proposition is this combination that we have of of platform and content. We spent the first few years of building AUDIOBOOM out by creating a platform, a very scalable platform that we can then layer content on top of to to monetize. And when I talk about that platform, it's pretty wide ranging. So it's a hosting and a distribution platform. It's the technology that allows podcasters to host their audio and then to distribute that out with one click out to Apple, out to Spotify, out to Google, out to Amazon Music. We just signed a deal with with Samsung to to push all of our podcasts into Samsung's mobile phone app.

4:15 I mean, it's that hosting and it's that distribution platform. The next layer to our platform build was really the ad tech. So it's the ability to serve, dynamic advertising into podcasts, the ability to connect to programmatic ad exchanges and ad networks globally. It's a yield up system that optimizes pricing. And as you may have seen last week, it's a new tool that we have called AdRip that is designed to grow the amount of inventory that we have to sell through through the ad tech and and through that marketplace. So that's another layer to our platform. And then on top of that, we have a premiums premium sales, in house sales unit, and and platform and an an inventory management system that just provides a lot of intelligence to the business, allows us to to optimize our revenue around the advertising sales. So that's our platform.

5:04 You know, it's still we still work hard on it. We still invest in it, and we are very innovative around that platform, building that out to to drive revenue for the for the business. And as I said, that platform is is extremely scalable. Right now, as of today, we run around 92,000,000 downloads every single month through that platform. We reach 26,000,000 unique users through that platform, and we house around 8,000 content channels. And as I've said before, I think that the scalability is kind of proven there. We can we can move this up to three, four 500,000,000 downloads per month, hundreds of unique users through that platform. So it's very efficient and it's very scalable. And these two things combined are are are pretty unique amongst our competitors.

5:53 The only businesses that are combining content and tech and platform in this way are those major acquirers like Spotify, Amazon, and iHeartMedia who are spending hundreds of millions of dollars to put these pieces together, to put tech together with content and together with sales. And AUDIOBOOM has that built in, and we've built that in from the start, and that's allowing us right now to grow much quicker than the wider industry and much quicker than than any of our competitors. The second part of our our value proposition is is really our content mix. And as I said, our our goal now, we have this great platform in place. Our focus now is building and expanding content on top of that platform in order to monetize it. So part two of our value proposition is is really that content mix and and how we are able to deliver value to podcasters, whether that be podcast productions that that we create in house ourselves or whether that be the independent podcasters that we work with, we can create value for those shows at any size and at any level within the space. So this is really a view on how we see content as as we look to expand it within the business.

7:09 And at the top, the very kind of pinnacle of what we do, that's our AUDIOBOOM originals. Those are shows that we either produce in house or we coproduce with a production partner. They come with high advertising rates and much higher gross margins than than than much of our business. So the gross margin there is is in and around 40% because we are creating that content in house, and we can flex the the those those budgets and and and really drive a a good strong margin on those originals. The second tier of of content is our is our work that we do at the premium and professional end of the podcast space with independent producers and independent networks. That's our premium network. It's around 250 premium shows. These are shows that deliver more than 50,000 downloads per episode. And at the very top end, these are shows that deliver 2,000,000 downloads per episode. Much of that opportunity to grow out that premium network and scale that premium network comes through our relationships and the work that we do with the talent agencies, the Hollywood talent agencies like UTA, like WME, like CAA.

8:19 We are we've we've proven over the past few years that we can deliver great value to their clients. They bring new show ideas, new opportunities for existing shows to work with us, and we partner with them to distribute and to monetize their their content. And, that's premium advertising. It's $40 CPMs. The advertiser advertising is embedded in the show for ninety days. It's really the voice of the host and the influence of the host that drives strong advertising performance for for for the advertisers there. The next content tier that we have is something that right now we kinda call our tier two network. This is a large group of mid level shows. They don't get into our premium network. They're not big enough to to kind of attract that premium advertising.

9:07 But through our ad tech, we can monetize them at scale and at large volume, albeit with with lower ad rates somewhere around that $12 CPM as a target when we when we advertise on these shows. Plus, we also include the back catalog of our premium shows in there too. So we are advertising them at tremendous scale. Just last month, we we sold more than a 108,000,000 impressions into that tier two network through our ad tech in our marketplace. So, again, really building on scale there. But that's the value we drive for for those those second tier podcasts. And then at the bottom of this pyramid, this is our creative network. These are the the smaller shows. These are the enthusiasts creator level shows.

9:57 They pay us either $10 or $20 a month to use our our tool set and our platform for distribution and and and to get that podcast out there to to fans. These are much smaller podcasts, but it's a it's a nice revenue stream for us, upfront revenue, and and it occurs, obviously, monthly also. So this, I think, again, is our is our another key part of our value proposition. Again, competitors and and our peers do not straddle the entire landscape of of content in the way that AUDIOBOOM does. Generally, there will be a focus on either in house production or working with premium podcasts or working only at that creator level as a as a hosting platform. AUDIOBOOM, due to that unique combination of of of platform, sales, and content, we're able to drive value for for any podcast of any size. And, again, another reason here why all AUDIOBOOM is is growing both in terms of consumption and also in terms of revenue much faster than than than our competitors.

11:05 Before we kind of get into the the the first half of the year results and break those down for you in more detail, I wanted to talk through two of the key ways that that we monetize and and and and drive revenue within AUDIOBOOM, both based around advertising. And I touched on on on on both on on the last slide there. But, really, the, you know, the first monetization model that we have, that's our premium model. This is how we monetize those top 250 shows plus AUDIOBOOM originals. It's a key part of AUDIOBOOM's revenue. It's a major area of focus to expand our business in in that area. And like I said, most of that opportunity to expand that business is is coming out of our relationships with those talent agencies.

11:50 Just this year, in 2021, we've launched, some major new shows into that premium network, Fantasy Footballers, which is the the the biggest, second biggest, I believe, actually, sports show in America, Dark History, which was a new BOOM original, and and and that's receiving 2,000,000 downloads per episode. That's a fantastic launch for us. Zane and Heath is a show that we announced just last week through a partnership with with UTA, a really strong US based podcast. Wafflin, a a UK show, launched with us back in May. Hacks on Tap features CNN's David Axelrod, a big news broadcaster here in The US. Curbsiders, Relax. All big shows that that form part of of that premium network.

12:38 And then, you know, renewing those those partnerships that we already have is is obviously a key part of continuing to to grow this business. So True Crime Obsessed, our second biggest podcast. We renewed that deal earlier in the year. We'll be working with those guys now for for the next three years and launching other network shows around the true crime obsessed brand. Our partnership with Formula One extended for two years just earlier on in in 2021, and then a group of other major renewals. So we continue to build and to strengthen that that premium network. And just, you know, I I think the one question that that I'm I'm keen to kinda answer is how we scale that that piece of work that we do. We limit we limit this network to 250 shows primarily because selling and and executing that premium advertising model is a heavy lift. We sell those ads in a very bespoke manner, and that's how we we get those 40 or $50 CPM ad rates for the premium network. But what that means is we have to be very careful about how we scale, and and how we do scale is basically through a a one in, one out policy. So every time we sign a major new show into that premium network, it comes in with a large audience and comes in towards the top of that premium network. We let another smaller show drift out of the bottom into one of our other monetization monetization channels. And that maintains that premium network

14:10 somewhere around the the the 250 shows. But what we're really doing there is we're adding audience and therefore adding revenue potential. At 250 shows, the monthly sellable ad units usually runs somewhere around 4,000 ad units, and that's because each one of those 250 shows averages four ad slots per episode, and it averages four four to five slots per episode, and it averages four episodes a month. You know? That's a a basic breakdown of it. So around 4,000 ad units. So as we maintain the size of that network, we still only have to sell 4,000 ad units each month, which we can do without having to expand the size of our team. But the audience now attached to each one of those ad units grows, and it continues to grow as as we maintain that one in, one out policy.

15:03 So you can see that in our in our average unit rate, our sold average unit rate over the last couple of years. For the first half of this year, we were selling each of those units. Those 4,000 units that we do sell somewhere just over $2,000 per unit. A year ago, that was only 1,500 per unit. So you can see that we're adding scale simply by replacing smaller shows with with with much larger shows into that that premium network. And, again, that is enabling us to to control our costs, but still to grow much faster than the in the wider industry. And, obviously, the growth there is also coming through demand for those bigger shows that we have. The the the bigger the show that we work with, the more demand for that inventory there is from the advertising community. So, yeah, in the first half of twenty twenty last year, our fill rate on those top 250 shows was 53%.

16:00 Now that's still very strong. And if you were to look at our top 10, our real revenue drivers, that fill rate would be over 90%. We can see a big jump into into first half of this year, 77% for our fill rate across the entire 250 shows. I think that's a phenomenal performance and really, again, speaks to that high revenue growth that we're seeing right now within 100. And then the second revenue model that I wanted to highlight was really the monetization that we see through advertising technology. And this is the the ability to insert and serve fresh new advertising each time an episode is downloaded. That's dynamic ad insertion, and it happens all through our our advertising technology.

16:50 And it's been a huge area of growth and focus for us over the past eighteen

16:55 months or so. So if you look at the performance of revenue through the ad tech, we've increased revenue more than 260% year on year through h one twenty twenty. And as a as a contribution to our overall revenue, ad tech revenue now makes up 9% of our total group revenue, up from just 5% last year. So we're making big strides forward with with revenue from that ad tech. As I said earlier, we served a 108,000,000 impressions in in June 2021. So strong growth around that ad tech. And that's what our recent launch of AdRip and our upcoming launch of our AUDIOBOOM marketplace is designed to further fuel. So ad rep, as a tool, launched in its first phase of, just just one week ago. Ad rep is designed to allow our premium podcasters who bake in and embed their premium advertising into their shows to automatically remove the advertising after ninety days, which is that first sales window, and then replace it with fresh dynamically inserted advertising.

18:06 And ad rip, if we were to have a 100% adoption of ad rep across the, across the platform, which is gonna happen through which will drive towards through, both a marketing campaign to our podcasters, but also by working AdRip into their daily workflow, we will see a huge increase in the number of monthly available impressions that there are to sell. So if you look at at AUDIOBOOM's monthly consumption of 92,000,000 downloads, around 50% of those are to back catalog content. That's content that's more than ninety days old. Previously, that content that is ninety days old or or more old hasn't been monetized very efficiently at all, and that's a problem across the the entire podcast space. We believe AdRip will enable us to more efficiently monetize and more optimally monetize that that that content by allowing us to place ad markers within all of those old episodes done at scale through this new tool, and we can massively increase the amount of inventory that we have to sell through the ad tech.

19:15 As that inventory increases, we need to do a lot of work to to then sell that inventory, and that's the AUDIOBOOM marketplace that we'll launch in in the second half of twenty twenty one. And that marketplace does a few things. First of all, it's a place where podcasters can can plug their content into and then have their content and their inventory exposed to multiple sales channels. So those multiple sales channels are are are in house sales through our our team working with advertisers and agencies directly. It's exposure to our various international partnerships that we have created over the past year. So that's Australian Radio Network in Australia, Map Media in The UK, Rogers Media in Canada, and Ideabrew Studios in India. Those are our second, third, and fourth, and fifth biggest markets for consumption in the world. Now we have partnerships in each of those to to sell into that AUDIOBOOM marketplace and can help to to to monetize more of that that catalog and and tier two inventory.

20:16 And then thirdly, that content would also get exposed to our programmatic connections. So we plug into programmatic marketplaces. Ads are served automatically. No work on on on our end. So it's the lowest level of advertising sales and advertising field that we have, but that all combines. Those multiple channels combined to create this marketplace. And then for advertisers, the marketplace is, you know, we'll we'll be able to offer better scale, better targeting parameters, more choice around how and and and where they advertise. They will be able to geo target their advertising in a much stronger way. They will be able to hit podcast genres with some really strong strong scale built into that. Scale has been a problem in the industry for a while, particularly around those blue chip big brand advertisers.

21:07 But with the added scale that we will now add through through the marketplace and ad rep, it will allow advertisers to to transact in a in a in a stronger way for them and and to really pick and choose how they advertise in in podcasting. So we believe ad rep creating the new inventory combined with that marketplace and and those additional sales channels will really drive revenue forward from a from an ad tech perspective. We're really excited about that that launch and that focus for the the second half of the year.

21:40 So I guess finally then onto onto the the incredible performance, I think, for for the first half of of twenty one, and I'll just break that down for you here. As you know, it was record revenue performance of $22,800,000. That's up 93% on the first half of of last year. And just to put that in in into perspective, the wider US podcast industry is only projected to grow around 60% year on year. So we are more than 50% outperforming the wider industry right now. We are, I believe, the fastest growing podcast company in in The US, and we have been now for for a number of years. This is the fourth year in a row that we've outperformed the the wider industry when it comes to revenue growth.

22:31 H one adjusted EBITDA profit was just over $200,000. So, again, we had our maiden profitable on an EBITDA basis quarter in q one. We saw some some kind of gearing effect in in in q two, and we're at 200,000 just over. So, again, breakeven was obviously the big goal for for this year for AUDIOBOOM. We are well on our way to to to doing that, and, you know, it just speaks and and Brad will talk a little more about it in a in a moment to the the fantastic cost cost control that we have within the business combined with that that growth in revenue. And then just to look at q two on its own, and you'll see the chart here that that breaks everything down down by quarter. Q two was just a huge step forward for us, $13,300,000 in revenue.

23:21 And so, you know, obviously, very strongly up on on last year, which was COVID affected, a 144% growth on on on the same period of last year. But for me, the the really important one here is that sequential growth, 39% growth from the first quarter. And, you know, we were very happy with with what we did in q one, but then to go almost 40% above that in the second quarter was a fantastic achievement. So, you know, really, I think spectacular results for me for both the second quarter and the the first half as a whole. And just towards the end of the presentation, I'll I'll set up the second half of the year, which I I think we have a fantastic opportunity just to continue that momentum and and and to take this even further.

24:07 And with that, I think I'll hand over to to Brad for a few slides to go a little deeper on the on the the finances of the business. Perfect. Thank you, Stuart. Hi, everyone. Thanks for joining us this afternoon. I'm Brad, CFO here at AUDIOBOOM. What we're gonna go through now is just take a little bit of a look over the the revenue, the cost within the business, and then the next slide, we're looking at the working capital cycle of the business and the balance sheet that we have and the strength of that balance sheet. And this really does build on last quarter's presentation, really, just to give you bring you right up to date in terms of where we are. So this this slide here, we've extended that view that Stuart was looking at on that on that previous slide. We can see we can see the revenue growth and OpEx by quarter since q one twenty nineteen, and we've recorded good quarter on quarter growth in 2019.

24:58 As Stuart mentioned, we took that dip in Q2 last year because of COVID. But for me, that actually proved the resilience of the company and the industry in Q2 of last year. And since that since that point, it's been sequential quarter on quarter growth quarter on quarter growth culminating in those great statistics of a 144% revenue growth year on year, q two this year versus q two last, and then 39% growth quarter on quarter from q one this year to q two, which really is which really is fantastic growth. The company places a very, very high emphasis on on cost control. And again, this graph really demonstrates that very, very well. We ensure that our resources are adequately deployed to achieve that maximum growth. And when Stuart talks about that scaling effect, we can clearly see it on this on this graph here by maintaining strict control over those costs while driving that that revenue growth higher.

25:54 In terms of the OpEx base that we run here, AUDIOBOOM, it's quite a simple p and l. You know, 65% of our cost is associated with with salaries and commissions. We incentivize our sales, our excellent sales staff to continue that that top line growth. So on our, you know, sales incentivization schemes, that's 65% of the of the cost. Around 20% of our cost is, we term as technology cost and that's that's hosting and and and bandwidth cost to host all of that great content that we have and distribute that out and just to keep that keep that platform running around 10% of of professional fees there in terms of the opex base for a quoted company, so we incur costs there as well. And over the last couple of years, the OpEx has been fairly stable at around $2,000,000 a quarter.

26:41 We held that close to that level. We have seen that tick up slightly in Q2 of this year, up to $2,500,000, and that's mainly the main reason for those increases are where there's a slightly higher hosting and bandwidth cost. We got more content on the on the platform, but also because we're paying higher commissions out to our great sales team to keep on continuing that growth. A small part of it, well as we've also increased the headcount from 35 up to 37. So still a very, very lean and focused team. Excellent team. Very focused on continuing to deliver that growth curve that we've recorded over the last couple of years. And if we look at the the working capital side and the and and the balance sheet, what we're what we're really seeing here is the impact of growth on our on our balance sheet, impact of growth in in the company. What we've actually seen is an increase in value of some of our assets as well. So let's just let's go through a few of those points.

27:43 Here at AUDIOBOOM, I believe we've got excellent market leading, in my view, internal processes. And we've also got good levels of automation within the business as well. We have to, specifically within finance, we've got a team of four. So we have to rely heavily on automation. And, you know, the what I'm gonna go through here just demonstrates how well that's performing for us currently. So we I've spoken about this on a number of presentations, I'm very proud of the fact that our cash collections process is excellent. We have that has to be so, because we have to maximize the available resources that we have. And in the first half of this year, we collected just over $19,000,000. That's an average of $3,200,000 a month. That's a million higher than last year's full year average. So we expect that because we're we are invoicing a higher volume of revenue.

28:36 So you'd expect that to increase. In terms of the graph there, you can see that receivables line in orange, that has been increasing. That's our that's our debtors. Again, you would expect that to increase because we're invoicing that that higher volume. When myself, Sean, James have you know, when we assess the debtors that we that we have within the business, there's the three key aspects that we're that we're looking at. Debtor days, the aging of our of our book, and also whether there's any write offs within the business. So just to go through these, those three key points we can see here, the debtor days have actually decreased since the end of q four. So down from 87 down to down to 79. And remember, that's on an increasing volume of revenue, so that's an impressive statistic on its own.

29:22 In terms of the aging, the aging of our debtors is focused specifically on naught to ninety days with very minimal debt over that ninety day figure, but really mainly concentrated on nought to 60. And also, as well, within the business, there's very, very low level of write offs, both in terms of an absolute value or as a percentage of revenue as well. So when we look at our total debtors, December versus June, they've actually increased by 3,500,000 up to 9.8 from 6.4. Trade creditors have actually only increased by 1,200,000. And the reason for that is that we we pay our leading podcast partners on on thirty day terms. With a debtor day of 79 at the end of June, you would expect to see that increase on our balance sheet.

30:09 But again, we always refer back to those three key points of our debtor days, ageing and write offs, to ensure that nothing is out of line in terms of what we expect. In terms of cash held by the business, we held $1,500,000 at the end of June. That did decrease by $1,800,000 from the end of December, where we held $3,300,000. One of the main reasons for that is that we paid in the first half of this year, we paid $1,500,000 in recoupable advances to attract and retain those certain leading leading podcast talent. And at the end of June, 1,100,000 of those advances were sat on the balance sheet. So again, we can see those assets transferring from cash over to different areas of the balance sheet being advances and also the overall debtor book as well. Just a reminder that the company does have access to a further $3,300,000 of that SPV Investments Limited loan facility. We didn't draw down on that in the first half of this year.

31:09 Last year, we drew down $700,000 and repaid that in November of last year. So just to confirm, no further drawdowns in the first half of this year and no uses of the content funding guarantee facility either in the first half of this year. But both of those tools are available to us as and when we need them. But specifically to the loan, that's something we try not to draw down on because it's an expensive facility at 8%. So we only draw down on that when we absolutely have to. And in the first half of this year, we didn't need to. So overall, what we're seeing there is a balance sheet that really reflects the impacts of growth we're recording across the business at the end of June. I view that as a strong balance sheet. We've got strong collections going through the group, strong processes. We can understand those debtor days. Remember, we're working in an advertising sector where agencies typically pay on ninety days, sometimes ninety days plus. So we understand where our debt today is. There's also minimal write offs in terms of debtors in the company and creditors are all being paid in line with their contractual terms. So everything is working as I'd expect it to, displaying those those signs of growth within within the business.

32:18 Back to you, Stuart, for some run through of the KPIs. Thank you, Brad. I guess just a reminder, if you do have any questions, you can you can ask those now. We have probably around fifteen minutes or so of the of the presentation left. So there's some time at the end to answer those. So if you do have any questions, put those in now. I'm gonna jump into our KPIs. We have three KPIs that we release every quarter to show progress in the business. And each one of those KPIs is really a

32:48 some insight into the core function of of the business, which is that advertising sales function and the the part I talked to earlier. The first one that that you'll see here is our global downloads number, and this was a new KPI that we brought in at the start of this year. And this is an industry standard data point, so it gets measured using the interactive advertising bureaus podcast measurement standard. It's verified by Triton Digital, who are a leader in in audio measurement. And as well as, you know, highlighting the strength in the AUDIOBOOM business, it's also great for comparing us against our competitors too because of that industry standard metric. And you'll see here just on on the chart that we've seen very strong growth across the the the past eighteen months, adding somewhere around 5,000,000 or so downloads every single month.

33:46 So that continues. We also saw a bit of an uptick in q two of twenty twenty because of COVID and the increase in in consumption that that led to, but we're seeing no slowdown in in that that increase on on the network. So, you know, ultimately, you know, more downloads equals, more inventory advertising inventory for us to sell, which gives us more opportunity to to continue to, to to grow our revenue. Second KPI is our brand advertising count. These are advertisers that we work directly with through our in house sales teams. So these are the premium advertisers, the advertisers that are spending good money in the podcast space.

34:32 And, again, good good traction here with setting a new record of 326 in in in the second quarter. You'll see the the dip here across across 2020 due to due to COVID. You know, advertisers stepped away from the medium, not as quickly as they stepped away from from other parts of of of the the media. Podcasting was was still pretty robust during COVID, but nonetheless, we did see less advertisers wanting to spend money, but we have rebounded pretty quickly here and set new records in in in the first part of of this year. And I think just to give you some color on those advertisers, I think this one's important. If you look at some of our, you know, our our advertisers in the the first part of this year, on one hand, we continue to do work with advertisers like BetterHelp as an example. Now they are a online disruptor brand disrupting the the the industry that they operate in. Podcasting is a, you know, a

35:35 real core destination for these type of brands. It's performance marketing. They can measure how successful how successfully podcasting turns listeners into into customers through promotional codes or or attribution, and and and they continue to spend very heavily in the podcasting space. And then on the other hand, we have a company like Mini, for example, who are pretty new to podcasting but starting to understand the benefits of of being in podcasting. The scale is there now for them to to to be in podcasting, and we welcome, you know, more of those traditional brand advertisers, blue chip blue chip businesses into podcasting as the whole industry grows quicker and quicker.

36:26 And then for our third KPI, this is the one that I that I really love. This is our ECPM, which is our measure of of optimization, I guess, of of our content. So this is how well we monetize each 1,000 listens on on the network. Obviously, it's great to have that that global downloads number going up and up and up, but if we're not monetizing those as well as previously, then then it kind of means nothing. But this ECPM number has has grown super fast. And just between q one and q two, you'll see 25% growth on on that ECPM number. So not only were we increasing the volume of content that we have and the amount of inventory that we have available to sell, we are selling it more optimally than ever before. So that's higher fill rates, so we're selling more of it, and that's higher pricing.

37:19 So we are selling it at much higher prices, than ever before, and that's grown, growing that ECPM number pretty quickly. I think I've said it before. You may have heard me say this before. I think there is a, a ceiling on that ECPM number somewhere around the 125 to $150, and that would be a 100% sellout at the highest possible rates across the entire 8,000 or so podcasts that that that are on the AUDIOBOOM network. So we got plenty of headroom there, but we are moving quickly and growing the ECPM number very fast. And all of these great results, the the the increase in consumption, the the the the revenue results, they really are moving AUDIOBOOM along very quickly. I've talked about how we we're outperforming the wider industry by more than 50% when it comes to revenue growth year on year. Well, this is a look at the Triton Digital ranker, which is the biggest ranker of of podcast businesses in The US.

38:28 They also have rankers in Australia, Europe, and Latin America too. But in The US in particular, AUDIOBOOM has has has risen from sixth position to fourth position just over the past year. We are the fourth biggest podcast publisher in The US, which is an incredible feat, I think, when you look at the the businesses around us. You know, Stitcher at the top there is a is a company that's owned by Liberty Media and SiriusXM. So they have very strong backing, and they've also been around much longer than than AUDIOBOOM has. NPR is is the BBC of of America. Odyssey is the second biggest radio group, you know, a a multibillion dollar company in in The US. Obviously, Wandering backed by Amazon. Westwood One is the third biggest radio group in The US.

39:17 So we're really kinda punching above our weight here. And, it comes back to that value proposition that I showed you at at at the top, that combination of platform, tech, content, and and and the sales value that we can deliver for for podcasters has has really pushed us forward, and and we've seen that growth from from sixth position to to fourth position. And I think third position is with insights, and we're we're you know, we think we can get that in in in the coming months. And then just a note on the kind of continued strategy, and that strategy really is around expansion of of content using the platform. You know, the more content we bring in, the more we get to monetize and and and the faster we can grow. So our our expansion strategy is is focused on on content, and there's three pillars to to that expansion strategy.

40:06 It's acquiring content, it's making content, and it's accessing content. So when I talk about acquiring content, those are the partnerships that we create with the with with top tier or professional independent podcasts through UTA and WME and and CAA. We strike deals to to distribute their their content, to monetize their their content, and to market their content. It's a big area of audio group's revenue, and we'll continue to to acquire content through those relationships that we have. When when I talk about making content, that's our production arm. That's AudioBoom Originals, but it's also our in house productions and co productions such as our work with Formula One where we are producing the Formula One official podcasts That shows developed and produced by our team.

40:54 And we'll continue to invest in that area. We will launch a UK production arm in September of this year. Primarily, our production has been focused in The US to this point, but we will launch that production arm in the The UK in September with the first shows really coming out of that team in in early twenty twenty two. We think there's a great opportunity there in in The UK, which is much more underdeveloped than the The US industry. So we think there's a great opportunity there to be a leading commercial producer of podcasts in in in The UK. We obviously have the scale within our wider network to to market and to grow audience very quickly for for those shows, and we will build out that that podcast team and that production team over the coming months and years too. So that's making content.

41:47 Third part is is how we access content. So this is the work that we do via Sonic Influencer Marketing, which is our in house advertising agency based down in Austin, Texas. They operate again at that premium and professional end of of the podcast space, and they are able to access advertising inventory in podcasts that don't belong to the AUDIOBOOM network. So they work directly with the advertiser to go and place advertising within us with within podcasts on other networks so they can monetize podcasts on the Stitcher network, on the iHeartMedia network, on the AUDIOBOOM GROUP, on the Spotify network, and that gives us access to more than 50,000 other premium podcasts too. So Sonic are able to provide some some additional strong scale. Those three pillars come together to to kind of form our expansion expansion strategy all based around content.

42:50 And then final slide, I think, from us, which is really just setting up the the rest of this year and beyond. Obviously, we're we're in a great place. We've had a fantastic first half of the year, but we are set for continued growth. And and let me just break down kind of, you know, some of the very clear reasons why we we expect good things to to to to happen over the second part of this year. Just when it comes to that premium inventory, those high value ad units, we're gonna see a significant increase in the amount of that inventory that we get to sell during q three and q four. So as an example of that, the NFL season here in The US runs between August and and and December. Fantasy Football is one of our key signings. Almost all of the revenue attached to that show is is available to us across August to December. So, you know, not not too much revenue contribution from that show in the first half of the year. As I said, it is the second biggest US sports show, and and all of that that revenue is in the second half of the year. Dark History, one of our AUDIOBOOM originals, that launched in June. So, again, all of of that revenue potential is in the second half of this year, and that is a show that delivers more than 2,000,000 downloads per episode. So the the the the the rate for each ad unit is extremely strong, over $25,000 per ad unit. And, again, that's all available to us to sell in the second half of this year and beyond.

44:17 The new partnership with Zane and Heath, very similar, very strong, and very high advertising rates for each unit. That show launched with us in mid June, so most of that inventory, again, will will show up in in in the second half of the year. Our second biggest show, True Crime Obsessed, we we in our new partnership with them, in our three year partnership with them, they will deliver additional episodes every every fourth quarter. So 10 new additional episodes for us to monetize in in the fourth quarter of every year. So as I said, significant high value new inventory that that that will add to our performance in the the second half of the year. On top of that, the amount of inventory that we get to sell, we also push pricing much higher through our our sales strategy. So as the podcast industry professionalizes, more and more buying and selling of podcast advertising happens before the year starts in the upfront process. That happens in the October and November of of of the year before, and it allows the biggest spenders, the biggest advertisers in podcasting to commit to a full year of advertising but at discounted rates.

45:31 So it's a great way for us to get money on the books early on, but, obviously, it doesn't push pricing high. So this year, in particular, more than ever before, we've held back from selling our top shows in the up front's process, and we've held back that inventory to to sell near at the time to allow the demand to grow for those shows and therefore allows us to push pricing higher. So at the end of June, the last week of June, we opened up our q four inventory on, on our top 25 shows, and we are seeing already, great, uptake from advertisers, and a record pricing as well for those top 25 shows. So pricing will will also increase over the second half of the year. I've spoken a little bit about the ad rip tool that that launched last week, and that's gonna create great potential on on the back catalog and and and and will grow inventory significantly through the ad tech. And then finally, again, just to touch on that that point about the ad marketplace that will support all of this content work that launched in the second half of this year. We're already putting those pieces together behind the scenes through our international sales partnerships, through our programmatic connections, and our in house sales.

46:41 But that all comes together to create this marketplace to expose more of our content to to to various sales channels globally, and and it really, you know, helps to just back up all all of that work we do to to grow our content. So we're in a great place set for set for continued growth. You know, the team here, as Brad said earlier, it's a small team, you know, a quarter of the size of of of some of our peers. They they they they buy into the strategy. They understand what what what we're doing, and they deliver for the business every single day. So really proud of the team here at AUDIOBOOM. You know, really grateful to have a a a supportive group of of investors and shareholders.

47:27 So thank you for for joining us today, and I'll take a few seconds just to take a look at the questions that have come in and then come back and and see if I can answer any of those. Stuart, Brad, thank you very much indeed for your presentation and for updating investors this afternoon. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your to take a few moments to review investor questions submitted already. I'd like to remind you that the recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via your Investor Meet company dashboard, and we'll send you an e mail to notify you when that's ready for your review. I'd also like to remind you that your feedback is important to the company. And immediately after this presentation is ended, you'll be redirected for the opportunity to provide feedback in order that the company can better understand your views and expectations.

48:13 Stuart, Brad, I know I haven't given you a lot of time regarding the Q and A, but suffice to say, obviously, you highlighted at the beginning the remits within which you are able to answer questions. Perhaps if I could just hand back to you and firstly, perhaps thank the investors for the time that they've spent in sending in these questions. And we will review all questions submitted today as well. So perhaps if I could ask you to read out the question, give a response where it's appropriate to do so, and then I'll pick up from you at the end. Yeah. Thanks, Mark. I think, you know, just looking at the questions here, there are there are many that I'm not I I can't touch upon. As I said at the top, can't talk about the the potential, offer for from AAA. And as a result of of being in the offer period, can't talk too much about any forward looking forecasts or or projections. That is gonna, knock a a bunch of these questions out, but we will review them. And if if we can find a a better way to answer them, we we can do that afterwards.

49:09 Just picking up on one question here from Neil, who says, AdRip is proprietary software developed by BOOM. Can this be sold as a pay as you go to other podcast companies or similar types of industry, e. G, streaming films or or TV? You know, right now, don't think we we have we have plans to do that. It it is proprietary. We don't believe that any other podcast business has a tool like this, and we've received really some really fantastic press last week when we announced it to the industry because I think it was seen as as something new, something very innovative, and and something that that that nobody has really kind of thought too hard about before. So, no, we're we're definitely kind of aware of the uniqueness of it. Right now, it really is built into the AUDIOBOOM platform, so content would need to to sit within the AUDIOBOOM platform in order to utilize the tool. But what we really I think we really see it as is obviously a way to create a lot of new inventory from our existing shows and our existing back catalog, but also, really a way to, attract new podcast partners to to to AUDIOBOOM, of of various sizes.

50:26 Podcasters who are maybe of a of a smaller size, but don't have that ability to to swap out ads, on their current hosting platform that they use, I think we can definitely, go ahead and and and bring those those shows across. And, you know, really, just with our it allows us probably to be a little more aggressive as well when we are making offers and trying to create partnerships with some of the bigger shows out there, knowing that we have this new ability to monetize their back catalogs when previously, I think, we've been creating offers for for for those top tier shows based on that that first window opportunity and the sales that we can deliver into that first window opportunity. Now that we know, we're confident that we can we we can also monetize that back catalog, it will allow us to be a little more aggressive there around our offers and therefore, hopefully, just bring in more of those top tier professional level podcasts into into the company.

51:31 I think that's really kind of it on on on on the q and a. Like I said, a a lot of those I I couldn't get to. And, yeah, I think we'll we'll Sure. Yeah. Let let me just jump in just to just to give you the absolutely. And and and thank you once again to all those investors that have submitted questions. Sure. Brad, I know investor feedback is important, and I will shortly commence and redirect investors to provide you their with their thoughts and expectations. But I guess before doing so, perhaps I could ask you, Stuart, for a few closing comments, and then I'll redirect investors. Yeah. I like I think, again, thank you everyone for for for joining us. I think that we've done a really incredible job over the past eighteen months since since Brad and I really kind of took over the running of this business of of being very transparent of of of telling the story of AUDIOBOOM to giving you a lot of detail on how we operate, what our kind of business goals are, what our strategy is.

52:31 And I think more than more than ever, our investors and shareholders understand it and and really buy into it just like our our team within AUDIOBOOM does. So, you know, we're committed to continuing to to do this, and I hope, presentations like like this really help. I just you know, I feel that everyone here should be confident about the growth of AUDIOBOOM and where this company is going because we're in a good place, and we're really excited about the future. Stuart, Brad, thank you very much once again for updating investors. Could I please ask investors not to close this session as we will now automatically redirect you for the call Good B.

53:20 Morning morning, morning, to you, everyone. Stuart, in The U. S, and good afternoon to everyone in The UK. Good Thank you.