Audioboom Group (LSE:BOOM) — Q1 2024 Trading Update

0:01 Good afternoon, and welcome to the AUDIOBOOM GROUP PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated in the right hand corner of your screen. Just simply type in your questions and press send. The company may have been in a position to answer every question it receives during the meeting itself. However, the company can review all the questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Stuart Last, CEO. Good afternoon to you, sir.

0:31 Thanks, Hi, everyone. It's great to be with you again. I hope you all had a chance to see our trading update for q one that we released this morning. Lots of questions were already kind of coming in about that. I'm pleased to be able to tell you more today. As Alessandro said, get those questions in. Try and get through as many as we can towards the end of the presentation. Already I have questions about YouTube, about AI, about the share price, about AIM. So we'll we'll get to all of those, towards the end of the session. You can, drop those questions, into the the dashboard now. But let's, let's forward and and and, start to tell you more about the business. Think first thing here before we get started is just to to say hi and introduce ourselves to anyone that may be new to AUDIOBOOM.

1:22 Many of you will already know Brad and and myself, but for those that that don't, I'm Stuart Lust. I'm CEO of AUDIOBOOM. I've been with the business around ten years, the last four as CEO based out here in New York. As you know, much of our business comes from the The US and I'm here with the team in in New York City. Before AUDIOBOOM, I worked at another podcast company in New York and previous to that worked at the BBC on their digital audio products. So I am, you know, ten, twelve years deep in in podcasting and still continue to be super excited about the future of podcasting and about the future of AUDIOBOOM. It's just fantastic to lead this really great business and and the team at AUDIOBOOM forward.

2:10 Thanks, Joe. Hi, everyone. I'm Brad Clark, CFO here at AUDIOBOOM based in London. Just through six years here at the company, having started in March 2018. Chartered accountant, fifteen years of experience within media related companies in their finance departments, companies including Brave Bison, BUS UK, Grant Thornton. I'll be back a little later on to take you through revenue, cash, and OpEx within the within the business. Back to you, Stuart. Thanks, Brad. So we'll kick off today by looking at the podcast market and our business model and just giving you some updates on what's happening in the space right now. Then we'll dive a little deeper on that Q1 update and what's driving that performance. And then the final section before we get to those questions will just be about the future and what we're focused on and what we are currently working on. So I think just to kick things off, let's talk and update a little about the podcast market.

3:11 Podcast market continues to thrive. We all know that that last year was a tough year, in the advertising, space, but the podcast industry that is predominantly, fueled by by advertising revenue continues to grow strongly and has a quadrupling

3:30 impact over the next seven years. So between now and 2030, the total addressable market is expected to quadruple going from 4,000,000,000 of global revenue up to 16,000,000,000 of global revenue by 2030. So, you know, structural growth happening, the industry building 22% compounded growth over that time. Really what's driving that structural growth is audience and listening growth and the number of new listeners that are coming into podcasting and also the amount of listening that those that the audience is doing. So these stats here at the bottom are taken from the Edison Research

4:12 US study. So it's studying everything, all listening and all consumption of audio that's happening in The US. Really what you're seeing here on the chart on the left hand side is the number of podcast listeners has grown significantly over the last four years. So from 2019 to 2023, the number of podcast listeners in The US grew by 47%. And then the amount of time that those people spent listening has also grown significantly. So the amount of time listening has grown from six hours a week to nine hours a week in that same time span. So compounded, the effect of both of those upticks meant that total podcast consumption in that last four years has grown by more than a 120% with more than one billion hours of podcast content consumed in The US every single week. And obviously where audience and people come, the money starts to follow. And AUDIOBOOM is one of those companies that are figuring out how to continue to monetize podcasting and monetize podcasting in a more effective way. So we are perfectly positioned to start to take advantage and to take the opportunity that is ahead of us as this industry quadruples over the next six years.

5:26 And our model is AUDIOBOOM that will take the make the most of that opportunity is based around connecting audience, advertisers, and creators. So there's three parts to this marketplace that are essential for establishing value in podcasting. Our platform does this at scale and very, very efficiently. We work with creators and we take their content and on one side we connect it to audience through our distribution and we distribute with one click out to Spotify and YouTube and Apple Podcasts and many other listening destinations. And we also connect that content with brands and advertisers and linking those three things up allows us and allows our creator partners to extract real value from podcasting. Without AUDIOBOOM in the middle of doing this through technology, doing this at scale for our creators, there really is no value. You you break one side of this connection and there's very little value there. So the AUDIOBOOM business model is based around the connecting of these three very important areas and it works. And we've proven that this model works and over the last seven years, we've consistently delivered revenue growth, 1200% revenue growth since 2017.

6:42 That's 44.1% compounded average growth rate over that period. So we continue to step things forward on the revenue growth side of things. And you can see the opportunity here, right? If the industry grows 22% CAGR over the next six years, we can see what that opportunity looks like for for AUDIOBOOM over that time even if we just maintain our share of market. So, the model works. It's consistently worked in in the past. We believe in that model and as podcasting continues to grow, as that structural growth continues in podcasting, we think there's a fantastic opportunity ahead for the business.

7:28 So, we'll move into looking at the AUDIOBOOM trading update that was released this morning for Q1 of twenty twenty four and I think that the headline and the key thing that I want to get across is we are exactly where we thought we would be at this stage of the year and exactly where we need to be as well to deliver on our 2024 goals. And what that means and what you saw this morning is $17,100,000 of revenue in Q1, and that's continued growth following our return to growth mode in the final quarter of last year. So we are continuing to grow after that ad market downturn across the second part of twenty two and early twenty twenty three. AUDIOBOOM is back. We're growing again.

8:15 And that growth rate was 11%, so 17,100,000, up 11% on a year ago. The the q four growth rate was 5%, so we are starting to accelerate that that growth rate, and we expect that growth rate to continue to accelerate across this year, as as as we build up. Also, we know that q one is is always the low point for revenue. There's a lot of seasonality in the ad market. So we know that q one is always the low point for for revenue. So we continue expect to kind of continue to accelerate that growth rate across the year. But yeah, that revenue number is exactly where we need it to be for 2024. We had $100,000 of adjusted EBITDA profit in Q1 twenty twenty four.

9:02 So again, that's the second successive quarter of adjusted EBITDA profit after we move back into a profitable place at the end of last year. Now I think the one thing that does gear and drive forward is this EBITDA number. As you know and as Brad will talk you through later in the presentation, we have a very kind of fixed cost base. We have a cost base. Our operating costs just haven't really changed over the past few years because of all of our automation that we build in, because of the, you know, efficient technology that we have in the business. That cost base stays pretty flat. So as we grow the revenue number across upcoming quarters, we do expect a gearing effect on that adjusted EBITDA number across 2024.

9:50 And then cash, we ended the quarter on $3,100,000 of cash. That's down slightly from the 3,700,000 at the end of last year. Now that was fully expected. We expected that cash burn to happen. Again, the seasonality here means that we were paying content creators for their q four revenue, which is higher. We also have some seasonality in in in some of our other payments around commissions and and and staff bonuses incentivization staff there too. So fully expected just to drop slightly on on that cash number. I think one key point is that we continue to have a $1,800,000 overdraft facility available to us on top of that cash number. So we have around $5,000,000 of cash available to us. We've never used that overdraft. That remains undrawn. So we're in a place that we're comfortable with on the cash side of the business.

10:49 I think the next few slides we'll look in more detail at our three KPIs that we release every quarter. These really do show off the business and they really show what is driving that financial performance. So we'll start with brand count. This is a KPI that highlights the number of advertisers that we have working with us on a monthly basis. And you'll see on the chart on the left hand side, we've just continued to see good growth on that brand count number over the past three years. You see a slight dip at the top there from the 8,400 in Q4 of last year down to 8,100 in this most recent quarter. Again, that's just seasonality. We know that Q4 is by far the strongest demand part of the year. But when you look at it on an annual basis, the brand count increased by 23% in this most recent quarter versus Q1 of last year. Brands continue to put money into podcasting.

11:44 Showcase, our ad tech product, really does allow brands, particularly over this last year when the ad market has been weaker, Showcase really does allow them an easy access route into podcasts and they can do it efficiently with low levels of spend. We get them inside the platform, inside AUDIOBOOM, and then we really show off exactly what we can do for those brands. So that brand count number continues to grow. As I've talked about before, we've really launched a new initiative last year to widen our customer base, to widen the number and really not the number but type of brands that we work with at AUDIOBOOM. So podcasting had traditionally been built on performance brands. These are smaller direct to consumer brands. They're disruptors in their fields and brands that, you know, you can see here on this chart, Simply Safe BetterHelp, HelloFresh.

12:35 Those are those performance or direct response brands, and they have always been a majority part of the audio boom and the wider podcast industry business, but they are more vulnerable to those macroeconomic headwinds. They are smaller brands. They are less robust. And certainly over that that past eighteen months, we we we did see them being impacted more by by global economics. So mid last year, we launched a new unit within AUDIOBOOM to grow our position and to grow our customer base with what we call awareness brands. So these are generally much bigger global blue chip brands. They're more robust. They are advertising to consumers based around growing awareness of their products rather than needing direct sales attached to their advertising.

13:29 And they're handled often by the big big advertising agencies, the historic holding companies. And to this point, to recently, it's been a very small part of the AUDIOBOOM business and a small part of podcasting in general has been driven by these awareness brands. So we launched a brand unit in the middle of last year and we're seeing some really good success from that awareness brand unit. We're now doing business with eight of the top 15 agencies

13:58 in The US for digital advertising. Now, you know, there are lot of barriers to entry here. We have to get inside these big agencies and show off what AUDIOBOOM can do and test the platform with their brands and we're making very good progress there. I'm really pleased that we're welcoming two very experienced new executives to AUDIOBOOM. Molly Harvey and Sean Wilson, they both joined the company today, so fantastic timing to have them on board. Sean Wilson, formerly of Spotify and Sony is coming out as vice president of UK sales. And Molly Harvey, a very experienced sales executive in The US, most previously at SiriusXM, will join us as vice president of brand sales based out of the Midwest here in The US. So those two, alongside Danny Farman who joined us at the end of last year, really focus on getting further into those agencies, doing more work with the brands, and that will open up a much wider and more robust customer base for us as we go forward.

15:08 The second KPI that we report on every quarter is downloads. Downloads is really a kind of a proxy for consumption of podcast content and it allows us to not just show you the trends in our business and the growth of our network, but also to compare our business against competitive podcast networks as well. So I'll talk you through the numbers there and we'll look at that in little more detail. The monthly download number, the average monthly download number in Q1 of twenty twenty four was 110,000,000, so in line with the last quarter of last year but down from the record number at the start of last year. And we'll go into a little more depth on that, but that's linked to a change on the Apple Podcast app that I'll talk to you about more in in just a moment.

15:57 Audio boom across this time has grown versus our competitors. So in this in this last quarter, we've moved up the, the podcast publisher rankings. We're now the fourth largest, podcast publisher, in The US, just behind Wondery, which is, effectively Amazon's, podcast arm, NPR which is the BBC of The US, and then SiriusXM which as you may know is just a giant radio and audio business here in The US. So really great achievement for us to move up to to fourth place. We now have our site set on third place. We've done that by signing new top tier podcasts to the network. We recently announced a group of new podcasts that are joining the AUDIOBOOM Creator Network. Those podcasts, we expect them to add somewhere around 4,000,000 monthly downloads now they are on the platform going forward.

16:53 So we'll continue to focus on the growth of that network and that's been a real driver to push us up those podcast publisher rankings. We also have a global presence in those rankings with the fourth largest publisher in Australia, the fourth largest in Canada, second in New Zealand. So a really strong global footprint. But here in The US based around this table here, that's where we're seeing some fantastic results. But as I've kind of shown you here, there has been a challenge over this last three to four months around that global download number and we have seen some erosion of those downloads down to a 110,000,000. And that is connected to a change that Apple have made in their podcast app when they released iOS 17 back in September.

17:43 And I'll give you the basics on that. I won't give you the full detail but effectively the Apple Podcast app was responsible for around 40 ish percent of all podcast consumption,

17:56 and they made a change that stopped the automatic downloading of episodes to a user's phone. And what that has meant is that well when episodes would previously have been just auto downloaded they would have counted as a download. Now the user if they want to go back and find archive episodes or restart listening to a show and get those new episodes they have to manually do that download and that has impacted that consumption metric, that downloads metric. When I last talked to you around three months ago, we talked a little about this and I think across the industry we were seeing somewhere around 10 to 15% erosion of that download number.

18:42 But that has progressed and across the industry that number now stands at average of 32% reduction. You'll see that on the chart on the top right here. So industry wide that change that Apple made has eroded that download number by around 32%. AUDIOBOOM, I'm pleased to say, has been much more resilient. You can see it here in the numbers on the right hand side in that change column. AUDIOBOOM is down 12% year on year versus that 32% average. So we've been much more resilient to those pressures than our competitors. You know, we've done that by signing new podcasts to the network. We are the, you know, a go to platform for podcasters, new shows, assigning to the AUDIOBOOM creator network and that has offset some of that download decrease whereas competitors have not been as successful as doing that.

19:37 And we also know that several of our competitors have taken, you know, revenue reductions linked to that decrease in consumption, but AUDIOBOOM, has been resilient to to that due to some of the initiatives that that we have in in the business. So, you know, while you're seeing that that that happen in the background and that erosion of downloads, I think the key message here is that we are way more resilient than our competitors. We've moved up the publisher rankings and we are less impacted by anyone else in the space. And I think what you're going to see is that a leveling out of that impact. IOS 17 has now been adopted by more than 78% of iPhone users generally it doesn't the new iOS releases are not adopted by many more than than that.

20:27 So you're not going to see too much further impact there because of iOS 17. But it's certainly been a challenge I think for everyone in the space and on AUDIOBOOM as well over the past few months. Final KPI is our eCPM, our effective CPM KPI. This measures how much value we extract from every 1,000 downloads across the network. And, you know, I think what you're you've seen over time over the past four years is us continuing to to to to be more productive, to be more efficient for us to extract more value out of the the downloads that are happening across AUDIOBOOM. This quarter, it was a record q one eCPM. We kind of look at this on a, you know, q one versus last q one basis because of that seasonality that we know of in in in the the ad market. You can see on the chart, right, we were at 59 in q four down to 52, but that's that's 52 was a record. The 59 is because of that high demand q four, season. So 52 is very much a record that we're proud of for Q1. We continue to extract more value from our network, up 27% on Q1 of last year, which is a strong improvement.

21:43 And the growth of that eCPM is directly linked to Showcase, our advertising marketplace that we launched a few years ago and has made fantastic progress ever since. Showcase is a very efficient marketplace. It's ad tech based. We push our supply billion plus impressions now through that marketplace from 8,000 podcasts. We connect that to the demand side, the buy side through advertising technology. We do that very efficiently. Record revenue from Showcase in q one, three point eight million up 21% on last year's Q1. So Showcase continues to grow, continues to be a bigger part of AUDIOBOOM's revenue and it's fantastic because it has that efficiency built into it as well. It allows us to optimize.

22:31 But I think one part that I really want to show off today and it speaks to that download number and how we have been resilient to that erosion of downloads is the inventory supply, what we are able to extract from those downloads. So this is a chart here that highlights the number of advertising impressions that we make available to to ad buyers on a monthly basis. A year ago, that number was 860,000,000. That number in March of this year was 1,100,000,000. So in a year, we've grown the number of available advertising impressions by 28%, while in the background, the number of downloads, the amount of consumption fell away. So that's a fantastic effort I think and that has really been key to us being more resilient than the wider industry against that iOS update.

23:27 We're now creating more than 10 available impressions per download versus 6.6 a year ago. So it's a really fantastic effort that comes from, you know, working with our partners to educate them about advertising, to restructure contracts around better advertising placements. A big piece of work which started last year and is continuing now. So we're extracting a lot of value, out of each, each download now. And that record 1,100,000,000, came in March, and that was a 10% jump on October where we went through that 1,000,000,000 milestone. So continued strong growth on the available advertising impressions number in order for us to grow that eCPM and keep that eCPM heading upwards. A number in the fifties is the healthy place for that eCPM to be.

24:23 When we're in the 50s, we know we're doing a good job and the ad market is supporting us. I do believe, you know, over the coming quarters, we can push that into the upper 50s and may even touch 60, think, in the coming quarters. But very happy with where our KPIs are and I think, you know, with the detail that I've given you around those KPIs, I think you can see exactly how that drives our performance in this most recent period. And I'll let Brad jump in now. He's going to go into some more detail on the finances. Thanks, Stuart. Hi, everyone again. Thanks for the questions that have been coming in. Keep those coming in. There's been a couple that I can address directly as we as we talk through the next couple of slides. Thanks, Daniel, for those questions on on on OpEx, EBITDA and cash. We'll we'll get to those as as we go through. But, yeah, let's start with, obviously, revenue. Just giving you a headline for q one. It's great to see the company follow-up on q four of last year with a second successive quarter where revenue generated was higher than the comparative quarter one year ago.

25:35 Obviously, we expect q one to be lower than q four due to seasonality of advertising spend. But as Stuart said earlier, we're exactly where we expect it to be at this point of 2024. Q1, there's really strong performance from Sonic Integrated Marketing, our podcast advertising agency subsidiary in the quarter. Showcase, again, very strong performance as we've, you know, reiterated that message over the last eighteen months or so. Revenue was up 21%. Both Sonic and Showcase recorded record first quarters, which is really encouraging. This contributed to March revenue of 6,700,000, being the largest revenue month recognized since May 2022. So as a reminder, q four twenty twenty three was the best quarter since the second quarter of twenty twenty two. It's really encouraging that March had a higher revenue number than any month last year, including the seasonally stronger months in in the fourth quarter.

26:35 Advertising markets were were challenging in 2023, but as Stuart said, you know, the operational work we've done and continue to do so enable us to recognize that continued increase in performance over the last couple of quarters, and that's gotta be viewed as a real positive about this company that despite any macro headwinds, we're still able to drive that increase in performance and deliver increasing revenue numbers when we can when we look back a year ago. The information we've put into the market over the last three months as well by our RF reach has also given those interests in the a greater insight than usual into the work going on to drive that increased performance, new show signings, increase in in ad ad inventory, investment into new hires, drive growth. So today's q one update is really very pleasing to be able to formalize some of the results of that work.

27:23 If we look at OpEx, it's very pleasing again to be able to report another quarter of well controlled OpEx at 2,700,000. That's comparable to OpEx incurred over the last couple of years. That's in line with the first quarter of last year. How do we do that? Well, in the first quarter of this year, staff costs have increased by 5% overall. When we look at q one versus q one, our commission costs for sales staff were higher because of the higher revenue number, and we also implemented cost of living salary increases starting January 1 as well. So that's part of the business, that cost bucket, that increased this year versus last year. We ended the quarter on 40 staff versus 39 a year ago. Headcount now is at 42 with the two new sales hires recently announced, but there's no major headcount changes planned for the rest of rest of this year.

28:16 If you look at us on an average revenue per employee basis, we're very, very competitive versus peers in the space as well. There's an increase there of 8% Q1 this year versus last 430 k versus 400 k. The increase in staff costs largely offset with a reduction in our technology costs, which reduced 9% year on year. That's the second biggest cost category that we incur on a monthly basis. That decrease is mainly due to the impact of the changes in iOS 17, as Stuart referred to, static and dynamic bandwidth costs, which we incur to serve advertising that actually reduced by 60 k. So yes, while we look at downline numbers having decreased year on year, remember as well from a cost perspective that has a positive impact on our OpEx. We're paying less for that because less down is incurred.

29:11 Always say this, but it's worth reiterating for our new viewers today: We remain an extremely lean business, prime for further growth, pride ourselves on automation and efficiency. We don't need to take on significant numbers of additional staff to grow further. I think that addresses your question, Daniel. We don't need to incur significant amounts of new OpEx to grow. What we would see is an increase in technology costs because you did assume with revenue growth, you'd be incurring more bandwidth and ad impression costs, but no real material increase to OpEx to drive that revenue growth, and that will have a gearing impact down onto EBITDA.

29:57 One other question that we've received today is on the adjusted EBITDA figures for last year. And obviously, we're talking to Q1 at the moment, but we've also released our 2023 results today as well. And that adjusted EBITDA figure for last year reduced from 1,500,000 adjusted EBITDA loss to a 400,000 adjusted EBITDA loss. The the reason for that is because we've completed our audit, gone through the review of last year, and we have classified a second contract as being onerous last year. So the the classification process that we have for those contracts is to separate the loss made from those contracts and the provision created from the rest of the business so that they're isolated.

30:44 The second contract recorded a million dollar loss in in last year. When So we separate that out from the rest of the business, that has reduced our adjusted EBITDA loss from 1.5 down to 0.4. So that's an improvement there on on on that metric. So hopefully, that addresses that question. Another question from Daniel was on onerous contracts. So just to give a bit more context on those, the we there were two two affected contracts were signed in the first part of twenty twenty two when ad market conditions were more buoyant. Terms agreed at that point forecasted higher ad rates and currently being achieved. So we've gone into 2024 with a $7,500,000 provision on our balance sheet to offset the anticipated losses going forward.

31:29 The loss provision created in 2023 mean that the future net losses will unwind against that provision on the balance sheet rather than go through the income statement, and that's a one off cost there. This comes with a caveat that provisions created are an estimate. Actual performance could be better or worse than estimated, but it's important for REITs of the accounts to to understand that 7,500,000 of the loss incurred last year is due to its creation of a provision which will be unwound in 2024 and 2025. If anyone has any further questions, feel free to email me and I can talk you through the accounting treatment on those. Happy to do that. Let's go to the next slide. And this one looks at our working capital cycle. So our cash balance reduced by nought 600,000 between the end of December and the end of March. That drop was expected.

32:27 In the first quarter, we settled all partner revenue share payments for the higher revenue quarter in q four. We settled non sales staff bonuses, and we also paid 100,000 of advances in the quarter. So we expect that our cash balance would reduce in the first quarter of this year, and I've said as much in our January investor meet session as well, so to highlight those expected cash requirements in the first quarter. If you look back at the last 0.75, our cash balance was relatively stable between q three of last year and q one of this year at around $3,000,000 The cash balance reduced through 2023 due to the reduced revenue recognized at market conditions and the fact we honored all contractual minimum guarantees during that period. So that reduced that cash balance during last year.

33:19 The invoicing and cash collection process we have here is first class. We collected 95% of revenue booked in the first quarter. That's in line, bang in line with our full year average of 94%. As of today, we've collected another 3,500,000 since the end of the quarter. Our debt of the day is 75, so that's 6 lower than the 81 we reported for the full year last year. So that that cycle still continues to work really very well. For advances, we paid £100,000 of advances in the first quarter of this year. We have another £1,300,000 of contractual advances required for the rest of the year, 1,400,000 in total for this year. That will be 900,000 less than the 2,300,000 we paid last year. So further evidence of the contract restructuring we're implementing to reduce cash required for podcast talent contracts.

34:13 As Stuart mentioned, we still have that £1,800,000 overdraft, which hasn't been drawn, and that's to assist our working capital if we need it. And as I said at the last update in January, in relation to our cash balance, the processes we have to support the working capital cycle are excellent. We've reduced our exposure on NGs through contract restructuring, and today, we've confirmed that restructuring has reduced our exposure by $5,000,000, which is good. What we need to do now is deliver on what we have promised regarding revenue with a focus obviously being on shows where we have a minimum guarantee. Delivery on the target set will ensure that cash reserves will will ultimately increase. So that gives you a bit of a flavor in terms of the areas of revenue, OpEx, cash. I think I've addressed a few questions which have come in during the session, but keep those coming in. We'll address any more at the end of this session.

35:05 But for now, back to you Stuart. Thank you Brad. So it's just in this final section we'll look ahead of us what we're focusing on in the rest of this year. So probably five minutes or so on this so this was really probably the last chance to get questions in so submit any questions that you have over the next few minutes and then we'll come to those soon. So I don't think anything too new here in this future focus section. You know, really have have recognized everything that we need to do to to continue to be resilient to the ad market downturn, to continue to be resilient to the to the Apple Podcast app changes.

35:52 And we know everything that we need to do here to to get to our our goals for the year. But I will I will talk you through them in some detail. You know, I think the first one being network growth. You know, we will continue to sign top tier shows. We have a a good new business pipeline. More and more independent shows, are looking to transition to to to stable networks. Brad touched on it just just then, but we continue to be very stable when it comes to to working with our creator partners, paying our creator partners versus a number of networks over the last year that have not been able to honor those agreements with creators. We can do that. We have done that and that means that we get brought new shows through the Hollywood talent agents who work with those shows. They bring us new opportunity.

36:41 We know that those Q1 signings that we announced a couple of weeks back will deliver significant numbers to our network every single month and we will sign more and more of those top tier shows, grow the network and you know we have our eyes firmly on third place on that publisher rankings. But alongside that network growth we really are focused on inventory creation from within that and that will be the second part that offsets that Apple change. You've seen today how we've moved from six ad slots per episode up to more than 10 over the the the past year. So we will continue to, you know, create more and more, ad inventory per download across that time. And as I said before, I I don't see too much further disruption through the, the Apple Podcast app changes because the majority of users now have adopted iOS 17.

37:35 We don't expect that to to go too much deeper. So I think the first part of our our focus going forward is to to grow that network through new signings and then new inventory creation from the podcast that we work with. Second part of focus is just our continued work around Showcase, that global automated ad marketplace that we have built out. The increased inventory levels that we're creating really does fuel Showcase. So we're pushing millions of available ad impressions into Showcase every single day, connecting them up with the buy side, with the demand side and advertisers are buying more and more of those impressions, in Showcase. It's also driven. Showcase is also driven by the work that our new team are doing around those bigger blue chip brands. So that's Molly and Sean who joined us today. They will be focused very much so on driving that customer base, expanding that customer base with the blue chip brands.

38:36 And then again, that that that advertising revenue flows through, flows through Showcase and and keeps building that part of our business. So Showcase, we we see a great future for. We've talked about it a lot, I think, over the the past two years, but we really do think really are confident in what Showcase will bring us over the coming years. We're in a good place with revenue. We talked, think, earlier that we, you know, in terms of our our q one revenue number, it's exactly where we wanted to be, exactly where we were expecting to be and the same can be said with our bookings number at this moment. So as of this point we have more than $55,000,000 of advertising revenue on the books. That's up from 11,000,000 in the January trading update, maybe slightly lower than that. I'll correct that number, but it's up significantly from the January trading update.

39:33 But it's at 55,000,000, which is again right where we need to be to reach our goals the year, 55,000,000 of bookings right now. But I think I said this three months ago when we did this, if you compare that to previous years at this point, we're actually, especially last year, we're actually in relative terms further ahead than that, right? Because last year between April and July as the ad market declined, saw a huge number of cancellations across the business. So last year's book number, which was around 50,000,000 actually went went backwards, for a while because of that that downturn in the ad market. Obviously we're not expecting that, this year. The ad market is more stable, and so in relatively relative terms we're further ahead, even further ahead than last year. So again that number is right where we want it to be.

40:28 And then I think the final point of continued focus, Brad touched on one or two of the points here, is our work with our creators, both in restructuring, and renewing partnership contracts with those creators and then the new contracts that we make with creators going forward. I think, again, three months ago, we talked about us getting to the point where we had reduced our minimum guarantee obligations by around $2,000,000. We've had great traction in this first quarter and we're now reducing that number by around $5,000,000 versus last year. So, you know, the more of a decrease we can put on that minimum guarantee obligation, the more we derisk this business, particularly in weak advertising times.

41:18 And we know that that's a flow through to to the bottom line. So we continue to work to restructure and create more favorable deal terms for for AUDIOBOOM. And then the same on on on the revenue share side of of things, you know, during 2021 and 2022, this was very much, you know, a seller's market and those podcasts, were were signed, on less favorable terms to AUDIOBOOM. We now are correcting that with each renewal or each new signing that comes through where we're signing those shows on more favorable red revenue share terms. As we, as as we do that and that rolls forward, again, more more more cash will will flow through, the the business in that way too. So we're making good progress on the creative deals, and and and revenue, exactly where we want it to be for the year.

42:06 And that really does come together, gives us a lot of confidence around, achieving our goals for the year. So, you know, just to talk through it again, it's that network expansion, growing the creative network, adding that inventory, those ad slots per episode and getting extracting more value that goes through to that ECPM number, extracting more value from from each one of those downloads. Added to the work we're doing around showcase and growing showcase and expanding that out to more buyers, plus the the work of our our new team to bring in those blue chip customers, those, those major ad agencies getting inside of those to create new partnerships. Those things come together, gives us good confidence around our forecasted revenue number for the year. And then the work we're doing on those creative contracts, the improved revenue shares that we're putting to those and the restructuring that we're doing there, combined with that $5,000,000 decrease in minimum guarantee obligation, again, gives us confidence, you know, around our around our projections for EBITDA profit. We're very confident about our return to full year EBITDA profit. So I hope you can really see again how each of those items that we're focused on, they come together to give us confidence around the revenue and that that EBITDA number for the year and we continue, as I said, to to just be confident about achieving our goals.

43:33 So that's that's it for me. Give me a few minutes to look through some of the questions and we'll be right back to you with the q and a. Perfect, Stuart, Brad. Thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab, which is situated on the top right hand corner of your screen. But just for the company, take a few moments to review those questions that have been submitted today. I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. As you can see, we have received a number of questions throughout today's presentation. And, Stuart, Brad, if I could just hand back to you to read out the questions and give responses where it is appropriate to do so, and then I'll pick up from you both at the end. Thanks, Alessandra. Yeah. We have some some really good questions today, I think. So we'll we'll get through a bunch here.

44:18 First one says, your analyst has stated that improvements in the ad market would lead to upside for 2024. What is the state of the ad market currently? Yeah. I think I touched on it during the presentation, but to give you more information, I'd say right now, you know, it's stable. It's not strong, but it is stable. It's come up slightly since the bottom last summer was was was really the the bottom. It was it was very weak and it has come up from there and it's now more stable but still weaker compared to the the last five years. It's not getting worse right now, which is great after eighteen months of that happening. So we can we can work with that. We can plan for that.

45:03 Stability, I I think, is key. We have a new normal, I would say, in the advertising market. The pricing is stable. Demand is pretty stable month to month, but improvements are going to be slow and steady. So so yes, stability, it's not getting worse, but it will be some time I think before we can call it a healthy advertising advertising market. Next question is from Marius about YouTube. We've mentioned YouTube in two recent press releases. It's becoming a more popular platform. Can you tell you tell us more about that? Yeah. I mean, we've actually been monetizing YouTube for several several years now.

45:50 Many of the podcasts that we have exclusive advertising sales rights to, they also distribute a video version of the podcast. So when we sell an ad for that show, we're selling it across both the audio version and the video version, you know, monetizing the full distribution and the full audience that is connected to that content. If you ever watch a podcast on YouTube, you'll you'll probably see a note in the top corner of the screen, or the or the video element saying something like this video includes paid promotion. Well, that's our paid promotion. That's AUDIOBOOM selling that paid promotion and AUDIOBOOM already monetizing that YouTube part. But we are definitely focusing more on it because previously, shows just had a small YouTube element compared to the audio version. The YouTube, the visual version was really just a small extension of their audience. But YouTube really is gaining popularity when it comes to podcasting.

46:52 It's probably, I think, the just about the the second most popular consumption platform for for podcasting now, particularly with the younger element of of podcast audiences. And as that gains popularity, we believe that that audience, that YouTube part of the audience can actually be more valuable than the audio part. So that's increasing our focus. That YouTube element of the audience is just as engaged, but now we can get products and brands in front of the audience visually. So we can do product placements, we can do deeper brand integrations. Those hold more value. They are we we can sell them at higher pricing. They're more valuable to the brands and the advertisers, and we'll continue to to grow that element of the business. And I expect YouTube to to continue to be an even stronger part of the podcast audience going forward.

47:47 This question is is is coming a lot. I've seen it on on message boards kind of recently as well, but it's it says we've seen several several publicly traded companies delist in The UK recently because it hasn't valued them properly. Is that something AUDIOBOOM should do? I mean, I think we we spoke at previous presentations. We had questions about whether we should list in The US and we said, well, look, we're we're not doing that right now, but we've done the work behind the scenes to understand what that looks like and what that could be. We are aware of companies leaving AIM. It's a tough environment to raise money and others are doing it because they continue to feel undervalued. You know that we think we are grossly undervalued.

48:35 I think actually right now relative to our performance we are more undervalued than ever before which is very very frustrating. We don't see a direct correlation between the valuation of the business and the work that we're doing. I'm not sure how much longer we can wait and hope that our valuation picks up or tracks performance. It's been like this for years at this point. It's very frustrating. Know, at some point things do have to change when we're that frustrated. So yeah, thank you for the question. We kind of see it happening across the market. We're certainly not kind of blind to that. Next question is about AI. In the trading update, you talked about using AI for the first time.

49:23 What is the opportunity for AI in the business? It's a good question and we're kind of learning I think every day. It's very early days. Our first steps have been using AI to do two things. The first one is we've been using it to create advertising creative. So what we can do is we can plug in, you know, a short script for the ad. We throw that text in into the system and then the AI can create that thirty second audio ad with a range of voices and a range of of different treatments and productions within seconds. So super fast process. And then the second way we've been kind of experimenting with AI is to use it to translate content into Spanish. So we can take the English version of that podcast, we push that into the AI system, and in a matter of minutes, it will spit out a Spanish version of that content, very accurate, very professionally produced.

50:25 So I think to this point, the it's it's really yeah. The ad creation part is is really about efficiency. It enables us to to give brands and advertisers a wider group of options at lower cost to get the ads that they want. So it's about, there's a lot of efficiency built into that. And then on the translation side, it really I think that one's very interesting as it has the potential to open up new markets for distribution and monetization but at a very low cost. So, you know, previously the the resource needed to translate and produce episodes in other languages was very, very high. AI will allow us to to do that at a very low cost. So we're at the very, very early days, I would say, using AI to explore new markets for distribution and monetization.

51:19 Yeah. I think we're learning every day about how we can use AI in audio and really what the value proposition is. Two more questions here. Next one is, it says, recently you've announced technology launches like AdRip and Advet. What what's coming next? Yeah. Those those two products have done a fantastic job of empowering our creator partners to make more of their content, to make it more valuable, to grow their revenue through increased increased advertising and they've been very kind of creative focused tools and products. We don't we don't announce or give names to all of our tech developments, really only the ones that are creative facing or we feel are game changing products that no one else in the industry has like ad rep. No one has that. We are the only platform, the only network that enables our podcasters to do that. Ad rep is a real game changer, I think, in the space. But even though we're not necessarily announcing everything or giving everything every product a name, we are continuing to develop all the time. Much of what we develop is geared towards making this business highly efficient and automated so we can maintain that very low headcount that Brad mentioned earlier versus our our competitors, you know, for for businesses of a similar size to AUDIOBOOM, our competitors have many, many, many more people involved in them. As Brad said, we're we're at

52:50 42 and we really don't need to grow much further than that in the near term. So just as a couple of examples, I think, like right now we're building a new inventory management platform that will allow us to manage the 1,000,000,000 plus impressions that we have to sell each month. It allows us to to manage those impressions in a very efficient way, understand those impressions, how we can sell them, where we can sell them, how they're targeted, that that kind of, idea. So that's a piece of work we're doing right now. Another piece of work kind of just, just launched actually a few weeks ago, is a tool that speeds up how we report ad revenue pay and and pay ad revenue payments across 8,000 different podcasts. It was a piece of work that, you know, used to take our team more than a day. The first time we used this tool, it took less than an hour. So I think that's a really great example of how, we're building tools that are not just for creators, but also internal tools, that just make this business super efficient.

53:50 Right now, we're working on an automated distribution tool to YouTube. I spoke earlier about how YouTube is just becoming this very popular consumption point and so making sure that our podcast can be distributed there easier, and and in the easiest form is is very important right now. So we're building a tool that allows, you know, one click distribution from AUDIOBOOM out to, out to YouTube Music, the the listening app that they have, and that's that's what we're working on there now. So, yeah, lots of new tech development. AUDIOBOOM, some you'll hear about, some that that that you won't, it'll just be making this this business more and more efficient. And I think the last one we'll get to now, I think we had this question from Gavin and a couple of others as well actually.

54:44 It's about m and a. So this one says in the in the last presentation in January, you said that you expect m and a to restart in the podcast space in 2024. Do you have any more insight on that? Well, yeah, I think, you know, I think it's certainly happening. I know of at least at least six podcast companies that are up for sale right now. But I think the key there is that, it's being driven by the sell side. There are companies there that have have suffered due to recent economic conditions. So, you know, that's not a great place to to be in when m and a, I think, is is being driven by the sell side. You know, you either get you either sell or you get bought and those things are are very, very different and have very different outcomes. So right now, yeah, it's being driven by the sell side. At this point, I'm I'm not really seeing any major buyers, no huge players actively looking to buy podcast businesses right at this point.

55:40 But there's no doubt as companies like AUDIOBOOM start to report, you know, stronger financial performance across the year, that the the buy side will start to stir and maybe the the work that these businesses that are selling are doing will also stir the buy side a little. It will put podcast businesses back on the radar of big media, big tech organizations. And yeah, I still believe that, you know, the M and A window from the buy side will reopen later this year. And as I've always said, we're just fantastically placed to take any opportunity that that brings. You know, we are the biggest independent podcast company in The US, biggest pure play podcast company in The US in particular, but we do also have that global footprint.

56:33 Yeah, well positioned when it does reopen I think to take full advantage of that. Okay, so just a couple of minutes to go. So I'll throw it back to you, Alessandro. Thank you. Perfect Stuart. Brad, thank you very much for answering all those questions from investors. And of course, the company can review all the questions submitted today and we'll publish those responses out on the investor meet company platform. But just before redirecting investors to provide you with their feedback, which is particularly important to the company, Stuart, I was just wondering if you had any closing comments. Yeah. I just I mean, I think just to say thank you again for for joining us today. Thank you for continuing to to learn and and support this this business that that that we love. Know, headlines from today and the training update really are, we're exactly where we expected to be, exactly where we want to be, very confident in delivering our goals for the year. AUDIOBOOM is a great business, growing faster than our competitive set in an industry that will grow quickly over the next seven years. So perfectly placed to take full advantage of all of that opportunity.

57:41 And in terms of where we are from a valuation perspective, we feel we're grossly undervalued and now is a good, you know, a great opportunity relative to our financial position to to support a business that is that is continuing to to move forward very quickly and continues to to be undervalued. Perfect. Stuart, Brad, thank you once again for updating investors today. Could I please ask investors not to close this session as you now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This won't take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of AUDIOBOOM GROUP PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.