Audioboom Group (LSE:BOOM) — Q3 Investor Update

0:02 Good afternoon, ladies and gentlemen, and welcome to the AUDIOBOOM PLC Investor Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Just please simply type in your question and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard and will notify you when they are ready for your review. I'd also like to remind you that this presentation is being

0:34 recorded. Before we begin, we would like to submit the following poll. And if you'd be so kind as to give that your attention, we and the company would be most grateful. And I'd now like to hand over, if I may, to Brad Clark, CFO and Stuart Last, CEO from AUDIOBOOM. Good afternoon. Thank you, Mark. Hi, everyone. Very pleased with to be with you today. These these past three months have gone pretty quickly, so lots to tell you about. So thank you for for joining, Brad and I. Today. Before I dive into the presentation, I just wanted to highlight a couple of things actually. Firstly, I'm joining you from one of our recording studios here in in New York City. It's just really great to have all of our operations back up and running here in New York, in London, in Austin, Texas, fully back up and running. And I think as you can tell from from the results, just firing on on all cylinders.

1:24 Secondly, a few days ago, it was my second anniversary as CEO of AUDIOBOOM. So, you know, I'm I'm still really lucky to have the opportunity to lead this business, and I really hope that that you're able to see the plans and and the vision for the business that I've set out over the last two years coming together now as as we just get stronger and stronger. So, you know, just personally for me, I think, thank you for for all of your support during that time. And and let's let's dive into to the presentation.

2:03 Sorry, guys. Just finding the right slides for you here. So quick agenda first, I think. First couple of slides, many of you will will have seen before. But for anyone that's new to AUDIOBOOM, I think these first two slides will really help you understand how we operate, what the value proposition is. Then I'll run you through the the q three performance, take a look at what's driven that success. Brad will go a little deeper on the finances, and then I'll show you kind of what we're investing on in the future and that future growth. We'll take a look at our advertising marketplace and and a look at our our production operation, which are the two areas that that we're really we're really focused on. But as I say, kicking off with this slide that I think many of you have seen before, it's really how AUDIOBOOM's set up. And it it is a look at our core value proposition, which is that combination of of platform and and content. So, you know, we we spent the the phase one of AUDIOBOOM just building out that scalable platform. So that's a hosting and distribution tech platform.

3:01 It's the advertising tech in the marketplace that sits on top of that, and it's the the premium ad sales and the inventory management system that that manages all of the revenue that flows through the business. So we we built out that platform. We're still adding to it, particularly on the ad tech side. But that platform really underpins our our content business, and it's fully scalable scalable. So right now, you know, we have a 100,000,000 downloads running through that platform every single month. We reach 30,000,000 unique users every single month. But as as I've said before, the platform is scalable. We can run a billion downloads a month through that platform to a 100,000,000 unique users every single month once we get there. So having that at the heart of of of the business is very important to us. And then the the second part is is the content, and I've been very kind of clear over that that past two years that we are really focused on a content expansion strategy.

3:56 So signing new shows, launching new shows, producing new shows, building content on top to create that advertising inventory for us to go out and and and to monetize. And and we are, you know, very much scaling that up. You'll see from our k KPIs that we've seen strong growth on the download numbers. As I said, we're a 100,000,000 monthly downloads. September was a record, a 107,000,000 downloads for for September. We reached that 30,000,000 plus unique users, and we have now more than 8,000 content channels using the platform, distributing that content, creating ad inventory, and then using the platform to to to monetize it. So this is kind of part one of the value proposition of AUDIOBOOM, and it continues to to drive the the business forward. Part two is of the the operational piece.

4:44 Again, many of you will have seen this this pyramid before, but this represents the the content that we work with and really how we how we see that content expansion strategy kind of coming through. So at the very top of the pyramid, that's AUDIOBOOM Studios. Those are the shows that we produce or we coproduce or we create ourselves in house. The Premium Network is our top 250 shows. Those are real tier one podcasts. The top 1%, they are running high in the Apple and and Spotify podcast charts. That's the professional level of the industry. We work with 250 professional level shows. And then our creator network is is is that next tier. It's 3,000 mid tier shows and 5,000 hobbyist or or creator shows all using that platform to to distribute and and to to to put their content out there. And the right hand side of this is is just a view on then how we monetize that content. So our premium advertising model is is host endorsement and and live reads. It's the host of the show delivering the messaging around the advertising. It's it's very premium. It comes with a a $40 CPM.

5:48 And we have 4,000 of those ad units to sell every single month, and and we scale by adding bigger and better shows into those that premium network and and AUDIOBOOM studios. And that advertising stays in in those episodes for the first ninety days. The second tier of monetization is is our marketplace. I'll tell you more about that that later. But that's happening through through the ad tech. It's dynamic ad insertion. Every time an episode is listened to, whether it's five years old or ten years old or two weeks old, we are pushing into there a brand new targeted ad to continually monetize that that content. We have global sales partners, programmatic integrations. It comes with a lower CPM and a lower lower rate, but it's it can be done more at scale. It's more efficient. It's a big area of growth for us right now.

6:34 And then the final part of our of our monetization is through the the subscriptions that the hobbyist end of our of our creator network pays us. They're paying us $10 or $20 a month just to use the toolset to to to host their content, to distribute their content, to get all of the the the analytics in. So that's a real kind of look at at at how we how we operate our content business. As I said, unique again, really in the industry to have all three levels of of that content pyramid. And the ability for shows to to to to to run through the pyramid acts, if you like, as a funnel. So we have shows that join us in the creator network. They start off by paying us 10 or $20 a month to to work with us. And as their audience grows, we move them up into the premium network and and and and monetize them them more effectively.

7:27 So, hopefully, that's some some good background to to to the operational for those of you that are new to AUDIOBOOM. This next slide is really just focused on on everything we've done in this this past quarter and and the year to date and just the exceptional performance that the team here at AUDIOBOOM have have have put together. Just a really incredible quarter, I think. So I'll run you through it. Q three twenty twenty one revenue, 16,900,000. So that's up a 161% on on q three of last year, which was at 6,500,000. I think the the important one for me is just that sequential growth, up 28% on on q two of twenty twenty one. So, you know, we looked at '20 q two and thought it was a a really great quarter for us. And then we've just built on top of that and and and added another, you know, another 3,600,000 there, which is which is fantastic.

8:20 Total year to date revenue, 39,700,000. That's up a 117% in the same period last year. So, you know, we see it's it's not just a one off to have that strong quarterly growth. We're seeing it on the year to date number as well, and we'll continue that through into into q four. The adjusted EBITDA profit, always nice to hit a a kind of a milestone and a million dollars of of EBITDA profit in the quarter is is just fantastic. We're really starting to see some of that that operational gearing now. So, you know, if you look at the the the chart below, what you're gonna see here is is from the additional 3,600,000 of revenue between q two and q three from that additional 3,600,000. We're now pushing 20% of that to the bottom line. So you're seeing that operational gearing.

9:06 You're seeing some strong EBITDA profit numbers there. And, again, something we're we're very focused on, you know, across the rest of this year and into 2022. And and just to kind of note that that EBITDA profit for the year to date stands at 1,200,000. So great looking chart there. You know, just a fantastic performance in in in q three of of twenty twenty one. And I think when we talk about that performance, let's put it in some kind of context. This is AUDIOBOOM versus the the wider podcast industry. And once again, for the fourth year in a row, we are outpacing and outperforming the the wide industry. So you may have seen us moving up the the Triton Podcast Ranker that that ranks the biggest publishers in podcasting. We've moved up to to to fourth place in that. But in terms of revenue growth, once again, we we kind of we outperformed the industry.

10:00 We've outperformed them by more than a 122% over the past four years, and and you look at 2021 individually, we're outperforming them by by 95% in in in 2021. So moving faster than the rest of the industry, gaining more market share. We're just in a really good place at this point. It's been a fantastic year so far.

10:24 And let's focus, I think, on on on the reasons for that performance, particularly that that that strong q three performance. And it all comes back to that that that content expansion strategy that I've talked about a lot. And, also, it comes back to that investment into the ad tech platform that I talked to you about before. You know, first off, that premium network and the growth in the premium network. One of the shows that we signed earlier in this year is Fantasy Footballers, the biggest sports podcast in in in The US. That's very seasonal in nature. So, you know, in in in January to July, that show averages around 500,000 downloads per month. As soon as the NFL season hits, the show increases to to to a daily show and sees around 8,000,000 downloads per month. So an incredible amount of additional advertising inventory when we look at the four advertising spots per per episode there. Effectively, it's creating 32,000,000 advertising impressions every single month, which is huge for the throughout the NFL season. So that's a a big driver of performance in q three. We also launched some some new big shows in q three as well. Dark History, Unfiltered with Zane and Heath shows that we we previously announced that we were gonna be working with launched in in q three. Dark History is an audio boom show that that is listened to by more than 2,000,000 people every single episode. So that's been a fantastic launch for us. Unfiltered with Zayn Heath, another

11:57 very strong show, half a million listeners per episode as well. So we're launching big shows into that premium network and monetizing them very well. And you'll see how we're monetizing them and and the growth in in our pricing as well, how we're being able to push that that pricing higher. So average unit rate is effectively how much we can sell each ad slot for amongst our top 25 shows. You know, that average unit rate is close to $6,000 for for q three versus just over $3,000 in q three of last year. So not only are we creating more inventory, we're also selling that advertising inventory at a much higher price than we were a a year ago. So you do those two things together, you see great success. You create more inventory, you sell it at a much higher price point. Then secondly, I wanted to to focus a little bit on the success of the ad tech, particularly the the launch of our ad rip tool that we just launched last time I I spoke with you with you all. The ad rip tool is a proprietary piece of technology at AUDIOBOOM.

12:58 What it does is it automates the removal of those host endorsements and those live reads that that are baked into the content of the show in our top 250 premium podcasts. It automates the removal of that advertising after ninety days, and it replaces it with ad markers that we can use our ad tech to fly new ads against. So after ninety days, the the baked in ads come out, then we start for the rest of the life of that episode. So for the next ten or fifteen years, we are then able to to flight the the the the pre produced lower value advertising against it for the next fifteen years to continue to to monetize that content. And that tool is starting to get great traction with our podcasters. In in q three, just the use of that tool alone created an additional 40,000,000 available advertising impressions for us to monetize through our through our marketplace and our various sales channels. So ad rep making an impact on the business already. And we're also seeing great traction now from our international sales partners. So right at the start of this year, we signed new deals with Australian Radio Network in Australia, Rogers Media in Canada, MAP Media in The UK, and IdeaBrew Studios in in India.

14:12 And we're starting to see some some great revenue contribution from those partners now. They they contributed five times more revenue in September than they they did back in in in January of of of twenty twenty one. So really picking up some some good momentum from our international sales partners too. Those are are some of the key points, I think, and and some of the the key reasons for that for for that success in in q three.

14:41 So I'll throw it over to Brad now. He'll take a deeper look at a few of the the financial items. Great. Thank you, Stuart. Hi, everyone. I'm Brad, CFO here at AUDIOBOOM. I've been here for over three and a half years since March 2018. Stuart said lucky enough to be part of this superb team. We're continually breaking records in this really exciting growing space currently. So just happy to help present the the continuing growth story that is AUDIOBOOM, one of the fastest growing stocks on on AIM currently. The narrative, which I'll go through here, and the slides, if you've tuned into the previous presentations in q one and h one, same slides, just a bit more data, but just continuing that narrative that we've we've gone through over the past couple of sessions.

15:28 This this first slide here in terms of the revenue and cost analysis is some it's a good chart. The overarching theme here is accelerated, sustained quarter on quarter revenue growth since q two of of twenty twenty, which is almost double that of the wider US podcast advertising market expected growth. Remember the the IAB study, which says that the the The US podcast advertising market will grow around 60% between 2020 and 2021. Our growth is significantly significantly higher than that, 95% higher than that with our with our year to date growth of a 117%. So really good chart there in terms of that top line revenue growth, but also as well, importantly for me, is that that that stable OpEx base that we have within the company.

16:17 But just touching on on that revenue in terms of the makeup of revenue that we have within the company, there's different revenue streams, and Stuart has alluded to some of that already. Around 68% of our revenue comes from that premium level of advertising, the the host endorsed form of form of advertising. Around 4% comes from original content from the AUDIOBOOM studios. Around nine percent comes from the from the marketplace, and around 19% comes from our podcast advertising agency, Sonic Influencer Marketing. We're also having a a great year as well. Subscriptions around 1%, less than 1% currently of revenue. So in terms of the the revenue mix, that gives the overview. There's different level of margins within that revenue mix as well in terms of, you know, the the lion's share of revenue that comes from premium level of advertising. That comes in at around that 22, 23% mark. Original content is north of 40%.

17:10 Sonic influencer marketing, lower margin, around 12 to 13% currently.

17:17 But this, you know, this this really is exceptional performance by by any measure. And, actually, when you look at q one to q one nineteen to q one twenty one, that's a that's a revenue increase of 267 if you compare those two quarters, where OpEx has only increased by by 37% from 1,900,000 a quarter to to 2.6. And when Stuart said earlier about the the scalability of what what we what we've built here, you know, that that really does this that really does illustrate that point very, very well. The OpEx has been held at that very, very consistent level. There has been slight increases from q from q three twenty one to to q two twenty one hundred thousand difference there. The reason for that, a couple of reasons, technology costs. And within that, there's host the the hosting and bandwidth costs. So we we pay for the amount of downloads that that occur. And as downloads increase, that cost increases. Around naught 100,000 of extra cost has gone in into that within within the quarter because there's a high level of high level of downloads.

18:21 And also in in q three as well, we are already being focused on specific events in terms of any sponsorship. So within in in August, there was a podcast movement event in in Austin, Texas over in The States, and we were the headline sponsor there. So there's additional costs associated with that in q three. But as we go forward, in terms of those those costs that we're looking at, in terms of, you know, if you're looking at fixed and fixed and variable costs, you know, fixed cost, professional costs, property costs, you know, those are relatively fixed across the piece. Technology costs, the variable that we'll see. I've I've said already, we're gonna pay a a higher cost for, you know, for the downloads, but not incrementally high. It doesn't track in line with with revenue necessarily, but there will be higher costs. The download number increases.

19:06 Marketing costs, I'd expect some increase in cost there because as I you know, we've recently relaunched launched the the AUDIOBOOM Studios. More content coming out requires promotion of of that content, so there'll be a, you know, additional cost in in that line. And, you know, within salaries and commissions as well, there's you know, there'll be additional heads going into the business, but a small small number of heads into the business. We're at 38 now. We're at 37 at the at the half year. We've had Alexandra start in the production team in The UK. We've got Neil starting on the November 1, plus, you know, a couple of ish additional heads to support that revenue growth. But these are small increases in comparison to the you know, the the revenue growth that we are that we are driving currently. So overall, it's a relatively stable opex base that we see within the company, and it continues to drive that impressive top line revenue performance.

20:02 So onto the next slide there with the with the working capital analysis. There's some interesting points in here to tell everyone about. You know, the the company has got excellent processes internally, mainly built around that that Salesforce bespoke system. There's a good article recently about the company in relation to that, so have a read of that if you haven't already. But the company continues to perform excellently in relation to that in relation to those cash collections, ensuring that the company maximises its cash resources and makes the best use of its available resources and efficiently manages its balance sheet. And when we look at that collection number of just under 33,000,000, I think we go back to the point I made earlier about that small efficient team within finance.

20:47 Very small team. We've got Sean, where he looks after AUDIOBOOM, who's our group FD of AUDIOBOOM. We've got James over in Sonic. We've got TOTIN supporting them both. So that's a team of three, and they have gone through almost $33,000,000 of collections in the year. So that's, you know, that's really very, very good performance. To be able to do that, we need really good internal processes. We need to be able to rely on the data that we are generating, have good relationships with our customers. So all of those all of those factors enable us to to to to get through that volume of collections that we have done this year. So that's an average of 3,600,000 a month, higher than last year. You'd expect that because revenue growth is is accelerating significantly. But out of that out of that 32,000,000, just under 10,000,000 was in August and September.

21:33 August was our record of $5,500,000. September was $4,500,000 in in terms of collections. Debtor days, 88 at the end of September. That's increased since the end since the end of the first half. That was 79. So we have seen an increase in that, but I'd expect that because of the increased revenue volume in that in that third quarter. Actually, the 88 is comparable with the 87 which we booked at the turn of the year. So just, you know, in spite of that revenue, significant increase in in revenue volume, the debt today still remains consistent. Cash held by the company did decrease from 1,500,000 at the half year to 1.2 at the end of September, but there are a number of reasons behind that. You know, we are recording that EBITDA, you know, that million dollars of EBITDA positive in adjusted EBITDA positive in in in the third quarter, but there's a timing impact that we, you know, we need to consider here in terms of that in terms of that balance sheet.

22:33 In in relation to the timing, we paid $300,000 of advances to to attract and retain leading leading podcast talent in the quarter. That's $1,800,000 to date for the year. That's a timing thing for us in terms of we do have a a small number of upfront advances, but they are recouped over the life of the deal. So you're making that initial payment, but you're recouping it over the over the twelve or twenty four months depending on what's in the in the contract. So an upfront cost, but you you recoup that. That's $300,000 of advances in the third quarter. And also in terms of the the process that we go through in terms of paying our podcast partners and collecting our debtors in terms of the timing of those. So we pay our leading podcast partners on on thirty day terms to remain competitive, but our trade debtor our debtor day is is 88. So at the end of September, we, you know, we can clearly see that we have paid out our significant podcast partners in terms of their revenue share up to the end of August. By September, those payments have been made. We have not yet collected those those revenue bookings that we've made at that point. So I'd expect that cash to start throwing through into the business as we go through the final quarter. We called out in the trading update just to give a bit more context in terms of that balance sheet that $3,000,000 was collected has been collected since the start of October. 2.6 of that was actually collected in the first four working days. So that makes me believe that our

24:03 customers were with, you know, retaining their own cash to preserve their own balance sheets at the quarter end and then releasing payment to us as soon as we got in got into October. I think looking forward as well, that's something we need to be mindful of in terms of when we get to December. That's, you know, a lot a lot of people's fiscal year ends. The same thing could apply at that point in terms of, you know, customers withholding cash and then releasing that once we get into the new year. So when we release those year end figures, that's something to be mindful of. But from my perspective there, the debtor book is good. Continues to be very low, minimal level of of data write offs. The waiting is weighted, you know, ninety days minus instead of ninety days plus. So it purely just is a timing impact now in terms of when that cash will start flowing through the business. And if you recall, we posted a $7,000,000 revenue figure in August, five and a half $5,600,000 in September. So so through q four, we should start to see that cash coming through the business, but it may also start to come in in q one of next year.

25:04 And remember, around forty forty five, 50% of our billings go through podcast the the biggest podcast advertising agencies in The States, which are kind of the middleman between the actual brands they're working with and us. So there's a two stage process there in terms of collections. So I feel like it gives you a bit more context around that balance sheet in the way the way I look at it. In terms of the in terms of the company, as I say, 1,200,000 of cash. The company still has access to that SPV loan facility. SPV Investments is an entity owned by our our chairman and major shareholder, Candy Ventures. So we drew $700,000 of that loan down in 2020, but since August of last year, we haven't touched it. And I don't want to because it could you know, we there there is interest associated with it, but it's there if we need it. But, you know, we have, you know, very well managed that that balance sheet through the first three quarters of the year, and we will continue to do so.

25:59 Okay, Stuart. Back to you, but just to say, you know, the the company's performing very, very well. Their team's doing great. And thanks to thanks to everyone here for their for their support. But back to you, Stuart. Thank you, Brad. I'll I'll I'll I'll just take a quick look at our three corporate KPIs. I think these are gonna be pretty simple. They're all heading in the right direction as as you can imagine. We're seeing the right trends there, and and, obviously, that's playing into the the the revenue growth that the business is seeing. But KPI one is our is our global downloads measurement, and this is it's an industry standard data point. It's measured by and and verified by Triton Digital. It uses the IAB's podcast measurement standard v v two. So, you know, extremely good set of data here, and and you can see that the the growth over the the past two years that that we've been measuring this. We're close to a 100,000,000 downloads on average across the network per month.

26:56 And as I said before, September on an individual monthly basis was a was a new record of a hundred and and seven point seven million downloads in in that month. So, you know, downloads equals you know, more downloads equals more advertising inventory equals more things to monetize, and we do a really great job of of monetizing that that additional and and and greater advertising load. Second of our of our KPIs is our advertiser brand count. So these are the the advertisers that we work with directly through our in house sales team. We work with thousands more through our various other sales channels, but directly with our in house sales team. We're now working with 370 brands advertising on our 250 premium podcast.

27:44 So and, again, another kind of a big jump here, almost 50% on q three of of twenty twenty. It's record quarterly performance. And, you know, you you saw the the the download growth and the advertising inventory growth. You know, we need to work with more brands to then go and sell that advertising more more efficiently. And you'll see we've we've established relationships and and and and and and and good strong working conditions with with 370 brands now. So very happy with the way that KPI is growing. And then the final KPI, this is the optimization metric. This is how well we monetize that that additional advertising in inventory. So, you know, if if if we added downloads and therefore added advertising inventory but only sold it just as well as we were before, you would see a a flat line here. So the the the key is to add more inventory as you know we're doing through the the download metric, but also monetize it more efficiently as well. So another good solid step up here. We're now seeing $54.77 from every 1,000 downloads across the network. So we are growing this one well, up 81% on on q three of of of twenty twenty.

29:07 I've said before, this one is the is the one where we know there's a kind of a ceiling here around a $150. You know, we have a long way to to to go to that get there, but that $150 on the eCPM would represent every single one of our shows being completely sold out at the highest possible price that that that we could get for for those advertising slots. So, you know, some good headroom there. We'll keep driving that that ECPM number forward. And this one is, you know, like I said, it really is a view on how well we are optimizing the available advertising inventory. So let's look ahead. This is always the the the the more exciting bit, I think. And and the first thing I'm gonna show you is and talk to you about is our advertising marketplace. And, you know, I I mentioned that this is is something that we would be launching in the final quarter of of twenty twenty one, and we're we're getting close to that launch now.

30:04 The advertising marketplace really is is is formalizing the work that we've been doing in ad tech over the past two years. What our marketplace does is it simply connects buyers and sellers of podcast advertising. So on one side, we are consolidating various sales channels and various advertising buyers, and on the other side, we are consolidating the supply, the the the content, and the advertising inventory. But really what what's key to this advertising marketplace is the scale and the efficiency that that's involved. So as I said, on the buy side, we're consolidating multiple global sales channels in in one place. So we have our in house sales teams. We have our international partners in Australia, in Canada, in The UK, and and and Southeast Asia.

30:54 We have a a self serve ecommerce portal that will launch alongside the marketplace in q four. So this will allow buyers and and advertisers to come directly to AUDIOBOOM to plan and create their advertising campaigns on the AUDIOBOOM website and to to effectively check out and to connect with our our sales platform to create those campaigns directly with us. And then finally, the other the the the final sales channel that we're consolidating here is our programmatic solution. So this is where the AUDIOBOOM technology connects into more than 25 plus demand side platforms. Those those DSPs are platforms that are used by the biggest ad agencies and buying teams globally to buy advertising all in one place. So, you know, at the same time, a buyer will be able to buy digital advertising for their brand across a variety of of different websites. They can also buy podcast advertising on AUDIOBOOM at the same time through the same platform, meaning that they don't have to go outside of their regular workflow to access podcasting inventory.

32:07 So I think we're doing a great a great job there of of consolidating the demand side. And we know we're really good at creating supply. So on the supply side, you know, this is a plug and play solution for podcasters. They come to AUDIOBOOM, and they can expose their content and their advertising inventory to all of these all all all of these sales channels on the on the demand side. We have 8,000 podcast channels on the supply side. We have that back catalog created from ad rip on our premium network. All in all, that's making around two currently, that's making around 250,000,000 available ad impressions at launch. And all of that inventory is being exposed in that marketplace to the various buying and sales channels that that that we've created there too. So the AUDIOBOOM marketplace, big push for us. It will launch, as I said, in in in q four. We'll be out there talking to all of the the buying community and the advertising community pushing this this new platform.

33:14 And I think, you know, it's it's gonna do a fantastic job of, you know, outside of that that premium piece that we work on, those premium ad units that we work on with our top 250 shows, this is really gonna ramp up the the the second tier of of of of podcast advertising within AUDIOBOOM. It's gonna, you know, it's gonna be very efficient. It's gonna do things at scale. It's gonna push pricing up over time as well. So very excited about the AUDIOBOOM marketplace that will launch very soon. And then the the second area of of of investment for us right now alongside the ad ad tech is continues to be in in in content creation. So just wanted to talk you through AUDIOBOOM Studios and how that works. AUDIOBOOM Studios relaunched just last week, And AUDIOBOOM Studios is really the home of all of our content creation and all of our production services, whether that be the development of original content that where we fully own and and operate the IP, whether that be branded content where we're creating content for a partner, whether that's a coproduction where we're teaming up with a media company to to produce podcasts with them.

34:28 That's ad creative work. That's additional production services where we simply offer post production or editing or or or research for for for podcast too. So all of that is now housed under the AUDIOBOOM Studios banner,

34:43 and that runs across The USA here in New York. We have studios. We're producing content from here. And just last week, we launched our UK production arm. So The UK will will get a lot of our focus. We already coproduce the the official Formula One podcasts back Beyond the Grid and and and f one nation out of The UK. And we are in development right now with six new shows coming to The UK in in 2022. We really feel that The UK, has a great opportunity for us as a as a content producer. We think there's a gap in the market for a podcast first commercial producer, one that can bring scale and experience to the market. So that's really, you know, our focus here. We think it's a very efficient market for audience growth. There's less competition for that valuable promotional real estate with Apple and and Spotify that that we have here in in The US. So we think we'll be able to really leverage that and and and and grow some very strong audience for for our shows that we launch in in The UK.

35:46 We'll be the only business in The UK that has the ability to use data to drive the editorial process. So, you know, we understand our our UK audience better than anyone else because we have millions and millions of downloads running through our platform every single month from The UK. We have a good understanding of audience and their their needs and their likes and and and how they interact with content. So that will drive our editorial process in in The UK too. And as I said, we have six shows in in in development for The UK in 2022, and attached to those are some strong marketing budgets as well. So we will you know, we're we're making a a really big impact, or we hope to make a really big impact in The UK in 2022 with our production work. And then finally, I think before we we we get to questions, just to to look ahead really and to say that we are well set for for this growth to continue.

36:42 I think we have more inventory to sell in q four and beyond at higher prices than than ever before. So, you know, we continue to see the growth in that advertising inventory through the NFL season and and the Premier League, which drive more consumption. We just announced the the signing of two big new shows to the AUDIOBOOM premium network, a show with with with Mike Rowe here in in The US that does more than two two million downloads per month and 500,000 downloads per episode. That's a very established show. We think, you know, that that will become a multimillion dollar show for for AUDIOBOOM. And Red Handed, is a true crime show out of The UK, a big UK show, won the People's Choice Award at The UK Podcast Awards just earlier this year. So that will really drive forward The UK business as well. So we're gonna see increases in that premium advertising inventory that will continue our success.

37:42 And then as I said before, it's not just about creating more content, it's about selling that content at a higher price. So already we're seeing a some very strong growth in in in pricing for q four. As I said earlier, our our q three pricing for our average unit rate was just under $6,000. In into q four, we're seeing that pricing for the average unit rate adjust under $7,000. So, you know, a pretty solid step up quarter to quarter on on on the pricing that we're able to achieve on that premium advertising inventory. On top of that, AdRip continues to to create more inventory for our our second tier of monetization, and we're launching that that that global marketplace in in just a few weeks time. So, you know, ADREIT will will do the job of creating the inventory. The global marketplace will do the job of of of filling and selling that inventory better than ever before. So you can see exactly what we're doing on the premium network, although we do it manually, being replicated with the the the the marketplace in the second tier network as well, except it's it's all automated with ad rip creating the inventory and the marketplace and and selling that that inventory. So those four things are are the real focus for for the rest of this year and and moving in in into next year. As I said, I think we're set for continued growth.

39:00 I think we are set for continuing to take market share and to move quicker than our than our competitors. And and, you know, just to summarize, I think AUDIOBOOM is just in a in a fantastic place right now. We need to keep this momentum going. We're setting ourselves up with the marketplace and our production arm. We're setting ourselves up well to to keep that momentum running into 2022. Stuart, Brad, thank you very much indeed for updating investors this afternoon. Ladies and gentlemen, please do continue to submit your questions using the q and a tab that's situated on the right hand corner of your screen. But just while the company take a few moments to review those questions submitted already, 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 investment company dashboard, and we'll notify you by email when they're ready for your review. I'd also like to remind you that your feedback is important to the company as usual. And immediately after this presentation has ended, you'll be redirected in order that you can provide your feedback so the company can better understand your views and expectations.

39:58 Not really a long gap between a a forty five minute presentation of me throwing questions at you. But if I may start with the first question that we received, which reads as follows. Could you talk more about the work with Salesforce that was in the news piece earlier this week? Sure. Yeah. That that that news piece was about about a product called Lyrical that we've been creating with Salesforce over the the past three or four years, and it's it's part of that that platform strategy that I showed you on the very first slide today. It it's it's part of the platform that is scalable and and and drives the business. Lyrical is an internal inventory management system. It's a it's a customer portal, and it's a a kind of a business intelligence tool as well. So it was built to to manage all of the live rebooking process.

40:47 So as I said, we have 250 shows and around 4,000 ad units every single month being managed out of that Lyrical platform. It allows us to to to to to book advertising, to see what advertising inventory is still available to sell. It allows us to to look at the pricing around the advertising inventory and get very intelligent data out of it around the pricing and to drive that pricing forward. It's it's automated. It pushes any booked advertising out to the podcaster so they have a record of of their advertising. They go in there whenever they're producing their show, and they see the notes that they have to deliver as part of their of of their advertising execution.

41:35 They fill in time stamps to to tell us where the advertising ran in their podcast. That those time stamps get pushed back to to the advertiser as proof that the advertising ran. It connects to our billing system and and makes Brad and his team's life a lot easier at the end of every month. It it really does kind of operate and and and create a great flow for the whole of the the advertising booking process that that we run every single month. And phase one, as I said, was was really focused on managing that that, you know, the vast data and and scale of the the the live read business, the premium business that we have. Phase two, which is is what we're working on with Salesforce right now, is for that lyrical product to support the marketplace. So this is a, you know, a whole different way of of advertising, and it's a much vaster scale also. So, you know, phase one had 4,000 ad units in it every single month. Phase two around the marketplace needs to allow us to manage 250,000,000 monthly impressions with all the geolocation data, the targeting data that that comes with the the the ad tech. So we're building that out right now, and we'll continue to build that across 2022.

42:48 It will support the marketplace. It will power the marketplace, and it will also power that self serve ad buying portal that I mentioned earlier as well. So when an advertiser comes to the AUDIOBOOM site to create a campaign, all of that data will flow out of the Salesforce product. It'll be in real time so that we will be able to see what what advertising is available on which shows in which locations and how we can target against audience there or allow the buyer to create that campaign and and and to to ultimately check out and and and buy that campaign directly through that portal. So that work with Salesforce has has has really changed the business. It's allowed us to scale the business significantly, allows us to execute our advertising very efficiently, allows our our content partners, our podcast partners to get all of the information they need to to be professional and to and and and to carry out their advertising.

43:44 And like I said, we have phase two ahead of us, and it it's you know, we're we're designing something pretty big here. And we we kinda believe it's the the most powerful piece of of inventory management in the entire, you know, podcast industry right now. So we're well ahead of the game there, and it drives every aspect of of what we do. Thank you, Stuart. Just turning on to the next kind of theme of questions that we received, and we received a question from Chris as well during this call. So thank you, Chris, for your question. But your market expectation has been upgraded several times this year. Have the projections been too conservative? Yeah. Yeah. You know, we we initially were projecting at the end of last year in in the middle of COVID, and COVID was impacting the the podcast industry pretty strongly this time time last year. So, you know, with hindsight, it's it's it's very easy, I think, to to say that those projections have have been conservative.

44:43 But, you know, it was it was a strange time when we were we were first looking at the year ahead back back then. This year has been very unique. Demanding and pricing came back extremely quickly extremely quickly from from where we were at. So something we we couldn't have predicted, I think. I've shown you how great the demand has been. I've shown you how good the pricing has been, and and it it moved incredibly quickly. We've also seen the impact of of new large shows that we've we've added to the to to our network that also have have added significantly to to the revenue opportunity, they they add to that the moment they're booked. But without huge visibility on those signings, you know, we we kind of start to connect with the talent agencies just a month or so ahead of signing them. So there's a a you know, that opportunity comes to us, we move very quickly to sign it and to start selling it. So not something that it's it's it's always possible, I think, to to plan for. And then, generally, I think this is a problem, or not a problem, but maybe a good problem to have across the the entire podcast space. Anyone that that follows me on Twitter may have seen a piece that that I tweeted a few days back from Bob Pittman, who's the the CEO of of iHeartMedia, probably the biggest pop podcast publisher in the world right now. And he was saying exactly this, that every time this year they've tried to project their podcast business and their podcast revenue, they've had to reevaluate within weeks because things have have have been moving so quickly. So

46:14 it's not just us that that that that that has perhaps had that problem. You know, iHeartMedia have that problem. Others have that problem. You know, it's in in many ways, it's a good problem to have. The the industry, the demand, the pricing just is is moving quicker than than ever before. Thank you, Sean. Turning to the next question, really, if I may. Could you tell us more about AAA's interest in the company and why you didn't agree to extend their time to make an offer? Sure. Sure. So I think last time we we kind of all met on on on investor meets, we are very limited about what we couldn't couldn't say about the the AAA interest. You know, as you know, AAA announced a potential offer for AUDIOBOOM back in July.

47:01 We heard their plans for for for the business and and putting the businesses together, and they were ambitious. They were exciting. We we really liked what we heard. So we extended the the window for an offer so they can make progress on on on those plans, and we gave them that initial thirty day additional extension to to the window. But we also kind of, at the same time, I think we did make it very clear about what our concerns were that that that that needed addressing. And, you know, I think, ultimately, they didn't present us with any major progress before that deadline. So, you know, once we'd requested further information, we were still considering whether or not to extend. They withdrew that approach just before the deadline. So, ultimately, we didn't have to have a have a decision to to take. They withdrew that that approach.

47:51 But, you know, we didn't hear enough, I don't think, either about progress on on those plans. And, you know, I I I think ending the process was was kind of good for both sides for AUDIOBOOM. It's enabled us to to to to tell you guys how great we're doing. It's enabled us to continue to remain focused on on the growth without any distractions. The stock price has has reacted positively. For AAA, it's kind of allowed them to to focus on on progressing the the other parts of that plan. And, look, we still we still like what they're planning. We still like those plans. We still think they're exciting. We still think they're ambitious. And, of course, they they can come back to us any time privately if if they're still interested in in pursuing that route. So so, yeah, that's that's kind of really the you know, what's happened over the last three months there.

48:38 Thank you very much indeed. An earlier trading update showed that August had $7,000,000 of revenue and $500,000 of EBITDA profit, which was very strong. But given the q three results, does that mean that September was less successful? Yeah. So August was it it was an incredibly strong month as I think I've shown you here, kind of driven by the NFL season, by the added inventory. But I think one thing to I I I it's good to make clear here is that AUDIOBOOM uses a US broadcast month schedule due to, know, as much as anything, the majority of our income being out of The US and coming through those US advertising agencies who who also adhere to to that schedule.

49:24 And what that that means is what that broadcast calendar means is that each quarter has one five week month and two four week months. So this year, August was a was a five week month. So effectively, it's it's 25% extra revenue sitting in August over over a four week month. And and and hence why that that, you know, that that that revenue is extremely strong there in in August. But I think the the key part is that that September dropping back to a four week broadcast month schedule on a weekly basis, September was stronger than August. So we're still seeing that that that growth even though on a on a monthly basis, it looks it would look lower because of the the five week, four week, cadence there. October on a weekly basis, even stronger than September. So growth is just kind of continuing on on that on that weekly basis. But because of that US broadcast calendar, some months are skewed heavier than than other months because they're five week broadcast months.

50:24 Thank you, Shud. Received a number of questions around listing, really. Your listing particularly around The US. You've talked about AUDIOBOOM being valued differently if it was listed in The US. Are there any plans to do so? Yeah. I've I've I've talked about that probably some time ago, I think, when, you know, when when the AUDIOBOOM AUDIOBOOM share price wasn't such in such a good place. But, you know, since then, I think AUDIOBOOM's value has increased significantly. And although, you know, I'd still consider it undervalued, the the gap has closed some somewhat. So maybe it's not as clear cut as before. I think, you know, over the last couple two, three months, you know, much of our our time has has been spent, you know, at at board level, at corporate level, kind of working through that that triple a potential offer. So there's been a lot of focus there from a from a corp dev standpoint.

51:23 You know, our our advisers present us with options. We talk to them about options. And so from that perspective, you know, the board are are making sure that that they are, you know, just fully briefed and have a good understanding of the opportunities and and the options available to us. But I think, you know, right now in the near term, I think we're most keen to just continue this great momentum that we had on AIM over the past twelve months. Like I said, to summarize, I think, you know, we know the options. We we talk to our advisers about the options. We've seen the the the value gap close over the last two months as as the stock price has improved. You know, we'll we'll we'll something we'll we'll definitely keep thinking about. But, yeah, like I said, near term is the is just the focus on on this momentum that we currently have.

52:10 Thanks, Stuart. I guess a bit of a broader question, really. What is the outlook for the industry next year, and where do you see audio boom within it? So the outlook for the industry, I think, is still good, although, obviously, not you know, the growth not as spectacular as as as in 2021. So the market is projected to grow at around 30% in in 2022, and that number comes from the Interactive Advertising Bureau that run a annual annual survey with the biggest podcast publishers and producers in the in The US of which AUDIOBOOM does take part. So they are projecting growth next year at 30%. You know, my goal, obviously, is to is to have AUDIOBOOM outpace that 30%, And that would be the fifth year in in in in a row that we've outpaced the industry, that we've taken market share, and and that's absolutely my goal for for for AUDIOBOOM. So the goal will be to to to beat the the market growth of of 30%.

53:12 In terms of other trends, you know, I think we're gonna continue to see podcast talent emerge at the same rate as 2021. So what I I mean by that really is we're gonna continue to see a lot of incoming opportunity to work with new shows and and new talent to grow out that that premium network. AUDIOBOOM, I don't see that slowing down. You know, Monday was a was a holiday here in in The US, but I had 12 emails from the talent the Hollywood talent agencies approaching us with opportunity to work on on podcast that their their clients, their talent are producing. So there's a continual supply of new opportunity and new growth coming that way. I think an in one industry trend that, you know, I hope you'll see that we're ahead of is is the continual shift towards advertising tech for for monetization.

54:05 Obviously, we have a a premium advertising model is is is not really based on ad tech. It's based around the manual delivery of those baked in host reads. But by growing our marketplace, our international partnerships, we'll continue to develop those, and we'll we'll stay at the forefront of of that of that that push or that trend to to move to to advertising tech. And I'd just say, I think, you know, sales are already strong for for for 2022. So, you know, currently, we have around $14,000,000 booked for for 2022 already in the in the annual upfronts process that we run-in in October and November each year. And that's where agencies and advertisers can buy across the the whole of the next year at, you know, at slightly favorable prices to them.

54:53 But and, you know, demand is is is huge during the process this year. Just as an example, same time last year, we had around $3,000,000 booked. This same point this year, we have around $14,000,000 booked. So much stronger demand that, you know, that surge in demand, that surge in pricing is is of continuing. So all is shaping up well, I think, for the industry and for AUDIOBOOM next year. As I said, you know, just as a as a a very simple goal, just to keep things simple, We know market growth is projected at 30% for the industry. Our goal will be to beat that. That's brilliant. Brad, Stuart, obviously, I'm pretty mindful of time as we're coming up to the hour, and I know that investor feedback has always been important to you and the company. And whilst I'd like to thank all the investors for submitting the questions, obviously, we won't be able to get through everything today.

55:42 Before I redirect investors to give feedback, perhaps I could just hand back to you just for a few closing comments. And then as I say, I'll redirect them to give you their thoughts and expectations. Sure. I I think, you know, firstly, again, just to reiterate, we we we greatly appreciate the the support here at AUDIOBOOM. We know we we're we're building a fantastic company, a company that's very efficient, a company that's growing faster than the wider podcast space. We know podcasting is a very exciting place to be right now, and and this is a an AUDIOBOOM is a a great opportunity to to be involved in in that. We are setting ourselves up through our platform and our advertising tech for continued scale growth. You know, 2021, we have delivered what we set out to do, which is to ensure that we are profitable.

56:31 We're starting to see the operational gearing pushing more to to to the bottom line whilst revenue growth grows grows extremely strongly. So we're in a great place. We have a good focus on on production and the work that we are doing around content creation into 2022. And and, yeah, we we we look forward to to continue to to be successful, continue to drive shareholder value. And, you know, I just wanna say, I think, thank you to to the entire AUDIOBOOM team for continuing to kind of buy into that strategy, that we've set out over the past two years, and to to execute and and deliver against that. They really are a great team. A very small team compared to most of our competitors. We really do kind of do a fantastic job of of of of creating this this business. So thank you to those guys, and and thank you again for for joining us here today.

57:22 Stuart, thank you very much indeed. Could I please ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order that the management team can better understand your views and expectations. This may take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of AUDIOBOOM PLC, we'd like to thank you for attending today's presentation. That now concludes today's session. Good afternoon to you all.