Audioboom Group (LSE:BOOM) — 2021 Q1 Trading Update

0:02 Good afternoon, ladies and gentlemen, and welcome to the AUDIOBOOM GROUP PLC investor presentation relating to the Q1 twenty twenty trading update. Throughout this presentation, investors will be in listen only mode. Question is encouraged and could be submitted any time via the q and a tab situated in the right hand corner of your screen. Simply type in your question and press send. The company may not be in a position to answer every question it receives during the presentation itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your investor me company dashboard, and you'll be notified once

0:33 they're ready for your review. I'd also like to remind you this presentation is being recorded. Before we begin, we'd like to submit the following poll. And I'd now like to hand you over to Stuart Lars, CEO and Brad Clark, CFO of AUDIOBOOM GROUP PLC. Good afternoon. Good afternoon, everyone. Good morning from from New York City. I'm I'm I'm here in New York. Brad's in The UK. Just really pleased, I think, that you could all join us to hear a little bit more about progress within AUDIOBOOM. I think we've we've got some fantastic news to to to to talk through a really strong q one for us. We'll take a look at everything that's driving that strong performance for us. We'll look at the company's strategy and talk a little bit more about where we're going over over the the next nine months of 2021 and and beyond.

1:20 And then at the end, we have lots of questions already coming through, lots of questions pre submitted, so looking forward to to answering a few of those those questions with you. We'll jump straight in. Usually, I think I I I like to talk a little bit about the position of the company and the the the company's strategy at the top here. But, you know, I I think today, we'll just dive right in on on our q one results that that you already have have seen, I think. But we're very proud of the progress within the company and a very strong quarter for AUDIOBOOM. So, you know, just to to to talk through those results, fantastic quarter for for for revenue, a record revenue of $9,500,000. That was up 49% on the year on q one twenty twenty.

2:09 And I wanna just kind of reiterate this point that that growth percentage, that 49% year on year growth was benchmarked by the only non COVID impacted, quarter of of of twenty twenty. So, you know, we really start to see the the the COVID impact in the second quarter, just because of the way our advertising contracts work. Our advertisers have thirty day out clauses in those contracts, which meant when COVID hit in the middle of March, they were not able to to to to come out of those contracts until April. So we saw no real impact in that first quarter of twenty twenty. And so to have 49% year on year growth, I think, against the non COVID impacted quarter, it is very, very strong. And if you kind of think about where we're going across the the rest of this year, you know, you're gonna start to see some some very high percentages there when we look back at those those soft q two and q threes of of last year. So expect to see some some some very good growth metrics, I think, when we when we compare against those COVID impacted quarters of last year. The other point I wanna make on that that that, strong revenue number is a sequential growth, the 12% growth against q four of twenty twenty, which was at 8,500,000.

3:31 So we added a million dollars, quarter to to quarter. And the key thing there is that usually we will see a softening of advertiser demand in the first quarter of each year. That's a seasonal impact that our business has, that the industry has, and and then the wider media ad supported business has. We did not see that this year. We've been able to kind of ride the growth of the industry, drive pricing, keep that demand high from advertisers, and and therefore, we've we've grown quarter on quarter, which I think is a a fantastic result. But the big one that we were really focused on and, you know, when I presented the story of AUDIOBOOM back at the start of this year, we really looked at making sure and being super super hyper focused on AUDIOBOOM being profitable in 2021.

4:23 And I'm really pleased to say that for for q one of twenty twenty one, we had our maiden adjusted EBITDA profitable quarter of of $30,000. It sets us up really well for for the year. So, you know, all in all, record quarterly performance, record revenue, fantastic growth story year to year and and quarter to quarter, and then to be profitable so early in the year. I think that just, just sets us up for for an incredible year ahead, something we're we're we're very pleased with at AUDIOBOOM. This next slide, I I really wanted to put in here because I just wanted to talk to you about the AUDIOBOOM's unique value proposition, and I think you'll see that coming through in the slides where I talked to you about what is driving performance and what will drive performance and and growth of this company.

5:14 And I think the the the key part of our value performance is this combination of platform and content. So in the early part of of AUDIOBOOM's existence, twenty fourteen to twenty eighteen years, the company was very focused on building out a platform. That's the the technology platform for the hosting and distribution of podcast content. It's the ad tech and the advertising marketplace which dynamically inserts advertising into content and connects with various programmatic ad exchanges and and networks globally. And then it's the premium sales platform and inventory management system that that sits on on top of that. Those parts of the platform are very, very scalable. So right now, we deliver around 8,000 podcast content channels through the platform.

6:00 The platform is scalable to the point where we could easily deliver a 100,000 podcast channels through that that that platform. And it's you know, it it doesn't require any further investment to to take it to that level of scale. So that platform is really driving the the business from beneath. And then on top of that, over the past two to three years, the second phase of AUDIOBOOM is really scaling the content that that sits on that platform and runs through that platform. So we have around 91,000,000 downloads per month running through that platform. We're reaching 25,000,000 unique users every single month through that platform. And, really, our our our focus and our future focus and future investment will be growing out that that that that content on top of the platform, and that comes in three main ways.

6:47 That's AUDIOBOOM's own productions, our original content, and and the and the productions that we work on in house. It's our partnerships with third party independent podcast producers, those top tier publishers, that have podcasts in, you know, the top 100 podcast charts on Apple and Spotify. And then thirdly, it's the work that we do with our hobbyist and enthusiast level podcast partners, those subscribers that pay us $10 or or $20 a month to use our platform and our tool sets. Smaller podcasts, but, again, part of the the growing content expansion business. So, very much, these two things work hand in hand. It's very unique to AUDIOBOOM. We really are one of the only, podcast businesses in the world that have both of those elements, the technology and platform element combined with the the content element. And you look at the the m and a activity in the space over the past two years from the likes of Spotify, Amazon, SiriusXM, iHeartMedia, that's all been focused around putting these two elements together, focused on acquiring content and focused on acquiring technology. AUDIOBOOM is very unique in that we have both of those parts in the business, and that has really been driving this, this strong performance, over the past eighteen months and will continue to do so going forward.

8:07 And when we look at that first quarter strong performance, there's, four or five key reasons that I wanted to to talk about as to as to why that performance has been so strong, and this really relates to that that content operation and that content expansion that that that I just talked to. You know, the first one here is just the incredible show retention that we have at AUDIOBOOM, very low churn. We grow those partnerships, work very organically with the hosts and the producers of those independent podcasts. And when we renew deals, we're renewing them for twenty four months or thirty six months. So these are long term partnerships. And just in that quarter, during q one, we have we we've renewed partnerships with shows that deliver more than $6,000,000 of annual revenue. So True Crime Obsessed and the obsessed net obsessed network, our partnership with Formula One to produce and monetize their shows, our partnership with with the Morning Toaster, and and and many others have been renewed. So very strong renewals that leads to good organic growth through their increases in audience over time. And and as I said, more than $6,000,000 of annual revenue renewed through those show retentions.

9:18 The second part that we've been very pleased with that, again, has has has driven much of that that growth in q one is the work we're doing around AUDIOBOOM originals and a slight shift in focus around AUDIOBOOM originals as well. So we released two big shows produced and coproduced in house by the AUDIOBOOM production teams. The first one is Relaxed with Colin Ballinger, the second Dark Air with with Terry Carnation, which is written and stars Reen Wilson from The US version of The Office. They are our our biggest two podcast hits to date, original content hits to date. And, really, that's come from a slight change of focus with with what we're doing with AUDIOBOOM originals. Here, we are now focused on working with bigger talent and leveraging that talent to drive audience.

10:04 So before, we we were creating more shows, but they were less impactful. Right now, we are focused on working with big talent, making each one of those launches more impactful, reaching new audience, and then, driving those shows, to commercially successful places. Obviously, the the third part of our of this and and and the the real driver of our growth, and our expansion around content is signing new premium level partnerships. Like I said, these are shows that appear in the top 100 of iTunes. They are professional level podcasts. And, again, just in the the last three months, we have signed some major shows both in The UK and The US that will form part of our premium network going forward. And then, of course, we're riding some very strong industry tailwinds. So if you look at the podcast industry, particularly here in The US, the organic audience growth has has been very fast over the past year. So in the last Edison Research infantile study, there was a 17% increase in the number of US adults consuming podcasts on a weekly basis.

11:10 Additionally, there was a 14% increase in the number of episodes that each one of those listeners was consuming. Those two numbers combined are driving the consumption of podcast. We've seen that within AUDIOBOOM, and we've seen a a very strong increase in the amount of consumption of our podcast. That leads to the creation of of more and more ad inventory for us to sell. We can sell at higher prices, and, again, we drive the performance of the network by riding those industry tailwinds. So that content growth, all of all of those items are growing our content footprint on top of our very scalable podcast platform. And I think one thing that that I'm really proud of and I I wanted to note here was our position within the industry as a result of that that that content and growth.

11:59 We have moved up in the Triton Digital Ranker to be the fourth largest podcast company in The US, on their ranker, by, by terms of unique weekly reach. And that's an incredible step for us as a small business. If you look at our competitive set, we are performing so strongly up. Stitcher is a company that's owned by SiriusXM, a multibillion dollar radio company. Entercom, another multibillion dollar radio company, Westwood One as well. Wondery were just acquired by Amazon for $300,000,000. NPR is the equivalent of of the BBC here in The US. So we are in amongst a very well funded and very well resourced competitive set, and we are outpacing the growth of these companies. We've moved up from sixth position in 2020 to fourth position in early twenty twenty one. We are we are increasing our market share, and like you said, we are we are outperforming the wider industry on pretty much every metric right now.

12:58 So audio BOOM is moving quickly. We have great momentum. I'm very happy to kind of take that into the next part of the year.

13:10 When I think about, what the platform delivers to AUDIOBOOM, we've talked about how, our focus on content growth has expanded the the the level of content and the level of advertising inventory that we have within the business. The platform is driving the demand, is driving the pricing, is driving revenue optimization, and that's why their platform is so important to the AUDIOBOOM business alongside the the content operation. So some key points, I think, from the first quarter, again, for driving that growth. Our premium advertising demand, that's that's the the the the top 200 shows in our network. It's those live reads or host reads that are embedded into the the fabric of the show. They're high value units. We've seen no traditional q one seasonal drop off. Like I mentioned before, we usually see a slowdown in in that advertising in the first quarter. We did not see that this year. And and when you look at the what that means in a more detailed way, our top 15 shows had a 97% fill rate across that quarter, which is an incredibly strong performance. So there is high demand from advertisers for those top performing shows and to be at 97% sellout for for the first quarter, was a was a very strong performance for us.

14:27 As a result of that demand and as of the the unique way we sell advertising for those premium shows, we've been able to drive up pricing as well. So our average unit rate, the average price to buy one unit in one advertising unit in one of our top, podcasts, has, has grown by 22% since last year. That's driven by organic audience growth. There's now more audience listening to each one of those shows, so we can charge more more money there. That's also demand, more customers and advertisers trying to buy that content. So we're doing a very good job of increasing the pricing across the entire network. And then thirdly, an integral and and and and growing an area of the of the platform that's growing in importance is our ad tech platform.

15:16 So while our top 200 shows in the first ninety days after an episode launches, we monetize through those high value embedded advertising units, the long tail of shows, the rest of the 8,000, plus those top tier shows once an episode gets to ninety days old, those are monetized in a different way through, advertising technology, dynamically inserting advertising into those pre roll, mid roll, and post roll advertising slots in a piece of content. Whether a piece of content is ninety days old or five years old, we can, we can push fresh ads and remonetize that that content. And I think until 2019, we'd seen relatively, flat performance from the the ad tech and the monetization from the ad tech. We've done a very good job of increasing that over the past two years, and and revenue from ad tech in q one was up 316% on the previous year. So we are up to optimizing the monetization of our podcasts, particularly around the archives and the the the long tail of our 8,000 shows that we work with. All in all, the the platform combined with that increase in the in the content operation has driven incredibly strong performance in the first quarter of the year.

16:36 And as a result, our analysts has has upgraded the market expectation for for AUDIOBOOM. So just to run you through those details, if you haven't seen them, our 2021 revenue expectation is now $37,500,000. That would be a 40% increase on on twenty twenty's revenue number. And, obviously, that was previously set at 35,400,000. So a step up to 37,500,000 is our revenue expectation for the year. Our adjusted EBITDA expectation is now $50,000, and that's versus a 1,700,000 loss last year in 2020. And for the first time, we've also introduced 2022 expectations as well. The 2022 revenue expectation currently sits at 45,000,000, and the adjusted EBITDA

17:25 expectation is a profit of $1,100,000. So we've welcomed the the upgrade of of that expectation by our analysts, and we look forward to to performing against that. And we're very confident that we will will hit those numbers. And for the next few slides, I will throw over to Brad who can run you through some of the the financials in a little more detail. Great. Thanks, Stuart. Thanks also to everyone for joining. I'm Brad, CFO, been with AUDIOBOOM for the last three years. What I wanted to do on on this slide is, you know, in in this announcement and previous announcements, we said that, you know, the company's got very good cost control. I wanted to display here what that actually means. We've displayed here our total OpEx base for the last two years, and you can see the average across that period is is $2,000,000.

18:17 And if you extended it back into 2018, you see that the 2018 average is $1,900,000. So we've been able to maintain that control on our on our cost base at 2,000,000 while we've driven that impressive top line revenue growth. So as Stuart said, forty nine percent year on year. If you go over two years, it's a 106%. In terms of the the breakdown of our of our OpEx, the the main area of cost within the business is salaries and commissions. Our our sales staff are incentivized through commission to drive that drive that top line revenue growth. Next biggest bucket of of cost is our technology cost, our hosting and bandwidth cost accounting for around 18%. Sorry. Salaries and commissions account for around 66% of our of our cost base. And then we've got the other other categories there. But I'm very proud of that fact that we've managed to, like I say, maintain that cost base relatively consistent over the last few years while we've driven that really impressive market leading top line revenue growth. And I I mentioned the major cost category that we have. I say major.

19:22 We've only actually got 35 staff within the business. So if you look from q one to, q one twenty nineteen to q one twenty twenty one, we've actually reduced that account by by 17%, albeit that's only a a six head reduction. But, you know, the the team within AUDIOBOOM, very, very focused. Everyone's, you know, got a specific role to help drive growth within within this business, and we, you know, fair very favorably when you look at our major competitor within within The UK and and Europe. Acast over three three hundred heads, over 10 times the the staff level of AUDIOBOOM. So, you know, we we we we, you know, very, very proud of that of that team to be able to keep that that performance going over the last couple of years.

20:08 Now if we if you've listened to the previous presentations, I I normally major on the the data collection side of the business. That continues to be the number one focus for our our three man finance team within AUDIOBOOM, and we've started the year well at collecting over $8,500,000 averaging 2,800,000 a month, which is up 600 k on the 2,200,000 average per per per month in in 2020. Now if you look at the graph on on the left hand side here, what I've displayed is that you can see receivables in orange, revenue blue, payables in gray, and we've mapped that over the last two years. And what you can see is the receivables have increased as we've gone through q four and q one, the company's largest largest quarters in terms of in terms of revenue. Now in terms of the actual analysis analysis of those receivables, the actual debtor days have decreased since the year end from 87 down to down to 71.

21:12 And as I said before, the the collection profile of the of the group is is really quite strong. So you'll note in in the trading update, cash decreased from end of December to the end of March by 1,100,000 from 3.3 down to 2.2. But it's important, and, when you look at the look at the company, in my view, is to look at the total asset value of the company, so cash and debtors. And if you look at the end of December and and the end of March, that figure is consistent at 9,500,000. So the impact of scaling a business and growing a business is that there are those shifts on the balance sheet from from cash to cash to debtors. It's also important to note that in the quarter, we paid naught 700,000 to a third party talent, podcast partners in recoupable advances. So that does impact the working capital of the business.

22:02 So in order to retain, attract, help fund podcast partners, we do offer as part of certain certain contracts, recoupable advances, and they are fully recoupable over the life of the deal. You reduce future payments by, by proportion of the advance. So that does impact, working capital within the business. So we've paid 700,000 of those advances in the first quarter. So that just gives us a little bit of an insight there in terms of the working capital of of the business. In terms of payables, they remain consistent between the end of December and the end of March, 4,300,000 at the end of March, 4.1 at the end of December. So, you know, we can see that clearly, you know, the the business is growing. But in terms of our processes in house, you know, we're we're excellent. I I view us as market leading in terms of the podcast sector, in terms of the actual collection profile, and processes that we have within the business.

22:58 Further note just in terms of the resources available available to the company. We've also got access to a further 3,300,000, of the SPV investments loan. We haven't drawn drawn down on that in in the first quarter, so that's still available to the company, should we should we require it. Okay. Back to you, Stuart. Thanks, Brad. I'm gonna show, show you all, I think, a few good looking charts here. Are all heading in the right direction when we look at our KPIs. And the first one is a new KPI. This is our global downloads data point. And we brought this in because it's more of an industry standard metric. It allows us to compare AUDIOBOOM's growth versus the growth of of our competitors.

23:47 It's measured by the Interactive Advertising Bureau's podcast measurement standard

23:52 and is verified by our measurement partner, Triton Digital. So this is a a very reliable stat. It's been something that we have been tracking since the start of last year, although we've only included it as a KPI from from this year forwards. And here, you'll see some fantastic growth from 64 63,000,000 downloads on average per month a year ago to 87,000,000 downloads per month on average in q one of twenty twenty. So that's 37% growth year on year. And I just wanna call out the March 2021 number, you know, of 91,600,000, another huge step forward. So this is showing the results of our focus on our content expansion strategy.

24:41 It it's coming to together very well. We're increasing and scaling up the the size of our content business. Our second KPI is our our our brand advertiser account. This is the number of advertisers that we work with directly through our premium sales network. So this doesn't include the the hundreds and and and thousands of advertisers that that come through our ad tech. These are the ones that we work these are the customers that we work with in a very one to one way, and they advertise on our biggest 200 podcasts buying those high value units. And I think the the the key points to to to focus on here are, if you look at q one of of twenty twenty, you'll see a dip, and that's that seasonal dip that I I've talked about, that drop off in the first quarter of the year. So we saw that last year, but this year, I'm very pleased that we maintained, exactly maintained actually the the the level of of brands that we work with from q four of last year into q one of twenty twenty one. So that's clearly a big driver of our performance in the first quarter of this year.

25:52 And then our third our third KPI, and this one this one's my favorite, and many of you may have heard me talk in in detail about this one before. This one is the one we call our ECPM, and it's it's effectively, it's a a measurement of the value that we are extracting from every 1,000 downloads of our ad supported content. So it's an optimization metric. It's how well we are monetizing that that that content. We've seen very good growth in in in this KPI. If this was to go back as far as the start of 2018, you would see a $13 number at the at the start of 2018. And and we most recently hit a record of of over $40 for for q one of of twenty twenty one. Again, here, you will see that dip, that COVID impact in q two and in q three of of last year before we we we got back on another good upward trajectory. So the key points here, I think, on this KPI are that there are is is a lot of headroom here for us to continue that that growth. So we're up to $40.

26:56 I think there is a a kind of a ceiling somewhere around a $150 mark on this KPI. And and let me break that down for you, the the reason why each podcast or each podcast episode generally has around four to five individual ad units in it. We sell on average each one of those units for around a $25 CPM. That's $25 per thousand downloads. So a full episode has around a 125 of value attached to it. If we were to sell every single podcast fully out, a 100% sellout rate, our eCPM would be in and around that $125 mark. So you can see we've made great progress here, but we still have a lot of opportunity to here to continue to optimize our sales function.

27:46 I showed you that stat earlier where 97% fill out rate against our top 15 shows. Obviously, that's gonna drive the CPM higher. But as we go further down our list of shows, the long tail of shows, again, the the optimization drops off a little bit. So we're very good at fully optimizing our top shows. We're working very hard now to to continue to optimize the entire group, drive this ECPM KPI even higher, and like you said, somewhere around a $125 is is the ceiling on this on this KPI. So just a reminder and just to talk through again, you know, AUDIOBOOM's growth strategy. I think it we we've what we've done a very good job of, in the past eighteen months is being very clear on how we will grow this business.

28:38 And it's all through through scaling that content on top of the the platform. And we do that in three ways. We do that through content acquisition, and that's the work we do with third party independent podcasters. We do that through making content. That's the work we do through AUDIOBOOM originals or through our production arms. So that shows like Dark Air, which we just released. Those are our that's our partnership with Formula One where we are producing that content for for the for the partner. So that's where we're making content. And Sonic Influencer Market Marketing, which is our business down in Austin, Texas, They are focused on accessing content. So what that platform does is allow allows us to access advertising inventory in podcasts that don't belong to the AUDIOBOOM network. Effectively, they can monetize podcast content, wherever that podcast is affiliated.

29:30 So they whichever network it belongs to or publisher it belongs to, Sonic Influencer Marketing can monetize that content by working with clients and brands to, to to to access that advertising inventory. So those three things together, that's that's growing our content operation, our content footprint, and is the the kind of the key between around the next four to five years growth within this business. And the last slide for me, I think, before we get to to questions, and and this is really, like, you know, what we're looking at across 2021 and and how set for continued growth we are. I think the the first point to make is that we have incredible revenue visibility within the business. So at this point, we are 90% booked to our original $35,400,000 revenue expectation and 85% booked to the upgraded 37 point $500,000 expectation.

30:30 So, again, that that having that visibility on the revenue fills us with a lot of confidence that we will will outperform the number that's in the market today. So we're all set to to to go through that across the year. Another point here in how we are underpinning that revenue performance is how we are selling the inventory on our top shows. So let me kinda give you a little bit of background. As the industry has professionalized over the past few years, we now go through an upfront process where we open up sales to our biggest customers in October and November of the year before. They can buy across our entire roster at slightly discounted prices. The good thing for us is we get money on the books.

31:17 And and for our smaller shows, that's fantastic because they we can see the support across our smaller shows for for the entire year. For our larger shows, we now hold back that inventory. We don't allow our cost our top customers to buy that inventory for q three and q four during that upfront discounted process. And that allows us to drive higher pricing on on our top shows in q three and q four. So we've got to that 90% of market forecast booking number, and we've only just opened up q three inventory on our bigger shows, and we won't open up q four inventory on our bigger shows, until June. So we know that there is, there's still a lot of inventory there to sell on some of our bigger shows, and, again, that gives us a lot of confidence that we will, go above and beyond those market expectations.

32:06 Another partnership, that we just announced was with MAP Media, in The UK. That partnership will monetize again our archives and our long tail through those, ad tech dynamically inserted advertising impressions while AUDIOBOOM's in house team concentrates on those premium units. Again, this is another partnership around optimization, and that partnership began on April 1. So the q one strong performance doesn't recognize any of the revenue that we will drive through our partnership with with Map Media. We'll see that start to see that revenue coming through in in q two and and beyond. And then similarly, we've we've just announced three global sales partnerships. For me, this is a very efficient way of of stepping into other global markets.

32:54 As you may know previously, we did have an operation on the ground in India. We we shut down that operation, last year. It was a very inefficient way of working in a very unique market. So I think as we as we grow, we will develop partnerships in in new territories that we want to expand into, and and that will be the the efficient way of of doing business there. The Australian Radio Network is our partner in Australia. We have worked with them in the past whereby they were able to monetize just a handful of our top podcast. The new partnership that we have with them that started on April 1 allows them to monetize the entire roster of 8,000 podcasts in Australia. So, again, that will be new revenue that is coming through that partnership that we won't have seen any of in in in q one. We'll see that from q two onwards.

33:43 Rogers Media partnership, we actually first announced in in the fall of in autumn of of last year. Again, that partnership is now coming through. And and Rogers Media in Canada, which is our fourth biggest market, Those campaigns are now being sold from April onwards. So, again, we will start to see revenue coming through that partnership across this year. And then Idea Brew Studios, which is a a efficient way of doing business in India. India is our fifth biggest market. IdeaBrew Studios will sell our inventory in India and also The Middle East, and that partnership launched on April fifty fifteenth. So, again, more new revenue coming through those optimization partnerships, across the year. So these items combined just a few of the reasons why we're very confident on on on on outperforming those market expectations.

34:32 And, you know, I think and I I hope you'll be pleased to see that we're we've set ourselves up for a really strong year in 2021, and we are we're growing in a in a very good way, and we're excited about what the the the next nine months will give us. That's fantastic. Stuart, Brad, thank you very much indeed for your presentation. Ladies and gentlemen, do please continue to submit your questions using the q and a tab situated in the right hand corner of your screen. Just while the company take a few moments to review those investor questions submitted already, I'd like to remind you the recording of the presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard on the Investor Meet company platform. I'd also like to remind you that your feedback is important to the company, and immediately after the presentation has ended, you'll be redirected for the opportunity to provide feedback in order that the company can better understand your views and expectations.

35:23 Stuart Bradley, I've had, obviously, a number of questions come in from investors, some of which you have covered off in the presentation itself, but perhaps I can pick up on these. The first one reads as follows. Can you explain a little about how you look to expand your podcast network and strategic partnerships?

35:39 And are there any new geographic regions you'd like to expand into? Yeah. I I think I touched on a a couple of those points in in the the presentation, but but there's there's definitely more detail I can give here. You know, our growth plan is fully focused on on building out that content operation. Those professional level creators are are in house content and then and those hobbyist and enthusiast level creators. Really, we can deliver value to all podcasts of any size. But when you when you focus on on that key revenue driver of of the professional tier, those top 200 shows that that we work with, those independent publishers, the majority of of of that growth and that new comes to our relationships with the main Hollywood talent agencies. So we've spent the last three to four years building very strong relationships at UTA, at WME, at CAA, and then a whole host of of other management companies and and talent representation.

36:34 And that that's that's delivering us greater opportunity, to partner with, with big podcasts than than ever before. So I would say today, if I was to look at our business development pipeline, we would have more than 10 individual proposals in with talent agents to to to sign and and to partner with existing podcasts. They all have strong built in audiences. They would all fit into our premium network of 200 top shows. They would all be delivering more than a $250,000 of revenue each year. So we have 10 proposals in on any given day to to work with new shows. Most of those are in The US. Increasingly, we are starting to to work with talent reps in in The UK too as that market develops, but but the majority of of that work is is is in The US. And as I kinda said before, think right now, we are mainly US and and UK focused when it comes to expanding on the content side. But those partnerships that I took just talked through in Australia and Canada and India, those are they're really focused on on sales in other territories. And that's, I think, the work that we'll do in other territories over the next two years, just that that that sales piece.

37:44 And I think, you know, one other key point is, you know, while we are doing this this great work with the the talent agencies to to to partner and to to bring in the big shows, our biggest show that we that we partner with today is a show that will deliver more than 3,000,000 of revenue this year, and that show started life as a subscription show. So this highlights the importance of the AUDIOBOOM tech platform as a as a as a as well as a funnel for business development. So that show joined us two years ago. They signed up to our subscription platform. They paid us $10 a month for the the first few months.

38:24 Internally, we have a a a bunch of of of flags that are set up to highlight shows where we're seeing audience growth. We saw a really strong audience growth with that show. We reached out to that show, made a personal connection with that show. When the audience got big enough, we moved them up into our our middle tier of of of advertising, those lower value ad tech based units. We worked with the show around best practice, how help them grow their audience. Again, once the audience got big enough, we moved them up into our premium tier and started to monetize through those high value host endorsements and and and live reads. So that show has gone from paying us $10 a month to work with us and to use our toolset to delivering $3,000,000 of of revenue this year. So, you know, on one hand, it's the fantastic work we do with with the talent agencies to to grow our content partnerships. And then on the other hand, our our tech platform will deliver that that that growth and and that funnel of new business.

39:23 Fantastic. Thank you, Stuart. Next one we've got here, reaches follows. Back in late twenty twenty, you noted that feedback from interested parties during the formal sale process highlighted the nascent stage of the company's original content and production operations. Can you compare where you are today versus this point last year just to give, some sort of comparison? Mhmm. Yeah. We've made good progress. Although and I think one thing I would say is that building an original content and production business just it's just not fast. So shows that we were developing last summer, July and August of last year, those shows that that were going into development there, Those have have only just been released. They've just gone out, like like Dark Air and and Relax in in in February. So there's definitely this lag between the the development phase and the investment into that content and and when you see the the results

40:13 of that content. And that lag, that delay could be up to to ten to twelve months as you run through that development and production process in order to have those high quality hits. I think what I am most impressed with and and kind of pleased with is that shift of focus that that I talked to you a little about a little bit earlier. So, you know, we've released fewer shows so far this year, but each one of them has made a a much bigger impact. So Relax was a show that that very quickly went to number one on The US Apple, like, Apple podcast chart. Dark Air will be the biggest commercial success for for any audio boom original. There's very strong revenue attached to that show. It was 90% sold out before episode one even launched.

41:00 And that is because of that focus on working with high profile talent. And that focus on leveraging that that high profile talent to drive the success of the show. So Colleen Ballinger, the the host of of Relax, she has 50,000,000 plus social media followers. She has a huge YouTube channel. When we launched that show, we were able to leverage that audience, drive it to the podcast, and and drive that show to number one on on the Apple chart. And then as a result, we have strong audience to to sell against, and it's made that show very successful.

41:33 Rainn Wilson, the the, you know, the guy that we worked with on Dark Air, you know, he's a huge star star of the NBC version of The Office. And as a result of of his high profile, we've delivered, and we've we've just kind of calculated this in the last two days, somewhere around $250,000 of of kind of free marketing effectively. He was being a guest on radio morning shows. He's been a guest on TV morning shows here in The US. He's appeared on five of the top 50 podcasts. And just last week, he was a guest on James Corden's CBS late night show in in The US as well. So people wanted him on as a guest. That high profile made him attractive.

42:18 He went on those shows. He talked about his new podcast. We built a lot of conversation around that show before the before the show launch. And like I said before, that will be a, you know, a big commercial success for us. So this is kind of shifting in focus to do less, but to make each one of those launches even more impactful than the last is something that I'm very happy about. That's great. Thank you, Stuart. And next question we got from, investor today is, reads, it follows great progress. Do you see the momentum you have continuing through the second half of twenty twenty one? I know you've covered this slightly on the, presentation already. Yeah. Yeah. I mean, the rest of 2021 is shaping up really, really well, and I talked about my confidence of of going above the market expectation.

43:04 But I think there's, there's there's even more things that that you can look at to to to get some confidence in in in where we're going. You know? And as always, content growth is is kind of the key here, and we've got lots to get excited about. If you you know, just going back to Dark Air, the AUDIOBOOM original that I talked about a moment ago, you know, that's a a big revenue driver. You won't see the impact of that revenue into until q two and q three results are announced because that show didn't launch until April 1. So new content dropping there that we're able to monetize very effective effectively. Back in January, we announced a partnership with a show called Fantasy Footballers. That's the biggest sports show in The US. That delivers more than 2,000,000 in in annual revenue.

43:51 But the key thing with this show is that it's very seasonal. So more than 80% of the inventory attached to that $2,000,000 in in annual revenue, more than 80% of that inventory happens in the second half of the year. It happens around the NFL season that starts in in late August. So, we've signed that deal, but you're not gonna see the impact and the revenue impact of that deal in until the second half of the year too. So just, you know, a couple of items there that that that we can be confident about will will will keep that growth going for AUDIOBOOM. And then as I said earlier, I I think, you know, at any one moment, we have more than 10 proposals in with talent agencies. We're very successful at turning those proposals into partnerships. You know, we are the the the the fourth biggest podcast business in The US.

44:39 People want to work with us. The the talent agencies recognize that we do a fantastic job of of of supporting their talent and their clients. So we will turn those proposals into partnerships. So we're adding new cons content all the time. There will be, you know, way more content to sell in q three and q four, than there was in q one, and you can just see the the continuation, I I think, of of of that progress. Great. Thank you, Shia. And we've had a couple of questions around, expectations, analyst expectations, but if I can just read this one out. Are the analysts upgraded market expectations too conservative given that you're already 85% of the way to the upgraded revenue for that? I think I think I I'm comfortable and and happy with where they are right now. We are still early in the year. You know, plans last year were were were hit by something that we didn't see coming in in in COVID. I think it's, you know, it's it's good to on on the conservative side this early in the year.

45:38 You know, we were in the second week of of April. So, you know, I I think I am comfortable there. I think I think the point I do wanna highlight though is just how AUDIOBOOM has changed over those past eighteen months. We now have this very clear growth strategy that the entire team, the board, our analysts are are are all very kind of aware of and focused on. So when we do talk to you about, legitimate when we do talk to you about growth opportunities, they are legitimate growth opportunities. Right? They're very, very real. And as a result, we now do deliver on our goals. And I think that's very important. I think that means that, you know, you can see that that that we we, you know, we do meet those expectations. We now have a, you know, a a history of the last eighteen months of of of achieving what we set out to do.

46:27 And so you can, you know, you can be confident in in what we're doing. And I do think, you know, we we are confident to go above and and beyond that that current, or that upgraded expectation. But let's let's just make sure we do. Let's get there. Let's make sure we do, and then let's talk about where those expectations go. That's great. Thanks, Jim. Next question we have here is around, your cost base. The cost base has been steady at circa sort of 2,000,000 per quarter. How much does this need to increase in the next two years to actually continue this pace of growth? Yeah. I think I you know, I I talked a little bit about the the unique value proposition of that platform that underpins all all of all of that content. And I think the first thing to say is that there's no real investment needed into that platform. It can host and and distribute the 8,000 shows that it does today, but it's fully scalable to a 100,000 without any real additional cost.

47:23 The other part is growing our partnerships with independent podcast doesn't really add to our cost, either. You know, we will keep that premium network around 200 shows, but each of the shows in that network will just be bigger and bigger and bigger than the year before. So not really paying money or increasing cost to service those top 200 content partnerships. The key area of investment for us is AUDIOBOOM Originals in the production business, and that does require investment in staffing, investment in in marketing, and growing audiences to to make AUDIOBOOM or or or or or or or or 15% of our of our revenue attached to to AUDIOBOOM originals in the coming coming years, I think.

48:14 You know, much of that focus has been, in The US to this point, but we will start to grow a content creation business, an original content business in The UK, later on this year. Reasons for that, there's a a big gap in the market we feel for a commercial content creator. The market is not too crowded. Audience acquisition costs are lower. Competition is lower. And then the other thing is there's a huge amount of, strong production talent, ex BBC program makers, that we can, utilize to build out that that UK, content creation. And it's very economical to hire in The UK too. So, producer in The US, costs around 75% more than in The UK. So hence, the reason we will focus some of of of of that original content growth in in The UK too.

49:10 So cost will increase because we do want to grow out the the original content part of the business and AUDIOBOOM originals, but it's mostly around the original content where that gross margin is significantly higher, around 40% versus the the company wide average 22. So, yes, there's increased cost, but it's gonna lead to to to revenue that has a higher margin attached to it. And, you know, I think what you're gonna see is because of of of that very good cost control, you will start to see that gearing effect come through, in over the next couple of years driving the e d EBITDA performance, you know, higher. So, yeah, there'll be some some increase in in in cost. It won't be dramatic, and it will drive a stronger performance for the business.

50:01 That's great. Thank you very much indeed. And we've had a couple of questions as well sort of around your your major shareholder, but let me just pick this one for you. What do you know of your major shareholders' feelings about the future path of the business? Yeah. I mean, I'd say that we are we're pleased right now that we, just have the space to focus on on growing the business through, through the the the strategy that that I talked to you about today. You know, again, I think for the the the first time in a long time over the the the past year or so, our shareholders fully understand what we're doing, why we're doing it, and what our opportunities are. They understand that that we're really now hitting our stride, that we have strong growth ahead of us, and we we have strong growth ahead of us independently in in in in the near term. So having that that that space has has been very powerful to us, and and and we're glad to have that.

50:59 You know, I feel that the business needs to be free of distractions for us to execute those plans. It hasn't been over the last few years, but it is now. And that's why I'm really excited to to kind of keep growing this company and to keep growing this company really as the the leading independent podcast business in the world. That's great. Thank you very much indeed, Stuart. I'm just conscious of time as we are coming up to to, towards the end of the session, and we have covered off a vast number of those questions that we've had through. I know there were some duplicates around certain subject areas. But if there are any further questions that are submitted, the company will review all the questions submitted today and publish responses where appropriate to do so. Stuart, perhaps then if I could just ask you just for a few final words just to wrap up before we we redirect investors to give you some feedback.

51:48 Sure. I mean, I think, firstly, just to to say thank you, to to everyone for joining us today. Thank you for the the support in the business. You know, we we appreciate the questions. We appreciate the the feedback. We're an exciting place for the company. Really great start to the year. We've got a lot of work ahead of us. You know, I just think this is an an exciting medium to be in, fantastic industry to to to be in with with really strong tailwinds. And, AUDIOBOOM is a business. You know, the fact that we just keep on outpacing the rest of the industry in terms of growth means that we have a fantastic future ahead of us. That's great. Thank you very much indeed, Stuart, and thank you, Brad, for updating investors today. Could I please ask investors not to close the session? You should be automatically redirected for the opportunity to provide your feedback. If you've accessed the meeting from our website, the feedback page will appear in front of you. If you've accessed via the link sent you in an email, you'll be simply asked just to log back in and provide your feedback. Only takes a few minutes and is greatly appreciated by the company.

52:49 On behalf of the management team of AUDIOBOOM GROUP PLC, we'd like to thank you for attending today's session. That concludes the the event.