Audioboom Group (LSE:BOOM) — 2023 Trading Update

0:01 Good afternoon, ladies and gentlemen, and welcome to the AUDIOBOOM GROUP PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the Q and A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and we'll publish those responses where it's appropriate to do so on the investor meet company platform.

0:32 Before we begin, I would like to submit the following poll, which will just appear on your screens now. And if you could give that your kind attention, I'm sure the company would be most grateful. I And would now like to hand you over to CEO, Stuart Last. Stuart, good afternoon, sir. Thank you, Jake. Good afternoon. Good morning, actually, from a snowy New York City. I'm here in the the AUDIOBOOM US office, just a block or two from the Empire State Building. And it's really great to to be back with you all. Happy New Year. I hope that you have enjoyed our recent trading update that we put out on Monday, and I hope you agree that it was positive trading update with an exciting year ahead that we'll reflect on in this presentation over next hour. We'll jump right into it. We have a lot of new names, I think, on the attendee list today, so we'll kick off just by introducing ourselves and talking a little bit about our business model and the the podcast industry.

1:28 Then we'll we'll look back at at the most recent quarter and talk about our performance and our results that that that you know a little about and go into some more detail there. We'll look ahead to to 2024 and what our focus is for for the upcoming year, and then we'll end the presentation today with a q and a. So as Jake said at the top, get those questions in, and we will pick as as many as we can and get through as many as we can towards the end of the presentation. But as I said, just to kind of kick things off for

2:00 people that are new to the company, new investors, new shareholders, my name is Stuart Lars. I'm the CEO of AUDIOBOOM. I've been the CEO for the last few years, the last four years, but have been at AUDIOBOOM for around ten years now. Launched The US business, back in 2015. Before AUDIOBOOM, I was an executive at another podcast ad tech company, here in New York. And prior to coming to America, ran digital audio and and podcasting at Radio two and Radio one, part of the BBC in in The US. So many years deep in podcasting,

2:38 but I believe that, you know, podcasting has an incredible future ahead of it, and I'm pleased to be leading AUDIOBOOM into that future.

2:49 Hi, everyone. I'm Brad Clark, CFO here at AUDIOBOOM. Been here since March 2018, so I believe we have come up for, you six years. I have over fifteen years experience of working in various different media companies in various different financial roles based in London. And, yeah, looking forward to speaking to you a bit later on about various financial things that we focus on, on OpEx, working capital and cash within the section later. So I'll speak to you later on. Thank you, Brad. So as I said, yeah, we'll kick off with a look at the industry that we work in and the audio business model and the role we play within podcasting. I think the first thing here that I'm just really keen to highlight, particularly after 2022 and 2023, is the positivity around the industry and the growing industry that is there is structural growth happening in podcasting.

3:49 And you may not know that and you may not understand that if you've been reading headlines about the industry over the past year. Yes, the industry has been at the mercy of an ad market recession that's been happening and those macro economic headwinds. And you've probably been hearing about companies, big companies like Spotify, who have spent a lot of money in podcasting but haven't seen the returns on their investment. They've had to lay off staff. They have had to restructure their their podcast businesses. So a lot of negative headlines, I think, over the the the last year and a half. But that's not the reality of this industry. This industry is growing. Companies like AUDIOBOOM are pushing this this industry forward. The industry is set to grow, and and and it's set to quadruple, over the next seven years. So right now, the the the kind of total addressable market in podcasting is around 4,000,000,000 globally, and that's set to get to 16,000,000,000 by 2030.

4:47 So strong revenue growth within podcasting projected over the next seven years. And that's being driven by audience growth. People love podcasting. People are coming to podcasting very quickly, and it's becoming a key part of their their media consumption. So just to break that that down, in the last three years, the number of podcast listeners in The US has grown by 25%. I think more importantly, the amount of time that those podcast listeners spend listening to podcasting has doubled. So we have 25 more podcast listeners, and everyone is listening to to double the number of podcasts or double the amount of time spent listening to podcasts that they did three years ago. So that total consumption has increased by a 150% in three years. That's leading to brands and advertisers wanting to be in the space. And and that, turn, is leading to that that quadrupling of of podcast revenue over the next seven years. So a great industry to be part of, a very fast growing part of the media.

5:45 And let's move on from the negative headlines, I think, of the past year and a half. Podcasting is a good place. The structural growth continues. I think AUDIOBOOM is positioned to take maximum advantage of that structural growth over the coming years. And this is really highlighting the position that the AUDIOBOOM takes in in the the podcast industry. We are a creator led business. We're focused on bringing value to to creators, independent podcast producers. And what the AUDIOBOOM platform does is pull together three key elements that create value. So we connect through our platform at scale in a very, very efficient way. The creators and the content that they are making, we connect them with their audience, and then we connect them with advertisers. So bringing those three elements together really creates that that value.

6:35 We are, you know, the heartbeat of that creator sector of the podcast space. Without us bringing those three elements together, there really is no value. Creators can have a big audience, but if they can't find brands and advertisers to monetize that audience, then there is no value there. Creators can access advertising, but if they don't have a large audience, the value of the advertising is diminished. So by bringing those three key elements together, doing it at scale, doing it very efficiently and very well, audio brings a lot of value to the podcast space. And that model has, been proven out over the the the the recent years since 2017. That model has delivered very, very strong revenue growth, 65% average annual growth over over the years between 2017 and 2022.

7:27 So that model is is proven. We took the business from 6,000,000 of revenue to 75,000,000 of revenue in 2022, moved into a profitable space in in 2022. So that model works. It's a strong model. It will continue to to to be strong as we refine it and and and build it. And as I said here, the the model is is is proven and brings a lot of value to podcasting and we'll continue to do so in the future as we look to take market share and we're kind of primed to capture as much of that quadrupling of podcast revenue globally as we possibly can. So hopefully, that just gives anyone that that's new to the AUDIOBOOM business a quick overview of of what we do, where we're placed in the industry, and what opportunity there is, ahead of us. But I think very quickly, I wanna get into, a performance update to look back at the numbers that we provided on Monday in our q four, trading update to reflect on those a little bit to give you some more detail in into that performance.

8:30 And, you know, the I think the the the messaging that I was keen to to put across, and many of you will have seen that on on X, is that is that we're back we're back into a place of revenue growth, we're back into a place of EBITDA positivity for the quarter, and we're generating cash again. So the way we've done that is to improve the business, to push on through the weak advertising market over the last eighteen months, make those improvements, really drive the company forward, that will also set us up for a very strong 2024. But let's break down those numbers a little bit. Firstly, that revenue number. So in q four of of twenty twenty three, we delivered $19,200,000 of revenue. And as I said before, this was a a return to to revenue growth.

9:20 We were up 5% on q four twenty twenty two revenue. So that year on year quarterly growth was a 5% improvement on on 2022. And the big jump from from q three. Q three was really the the bottom of that advertising market, and and we grew revenue in q four by 37% over over that summer period in in 2023. And this was our strongest revenue quarter, for eighteen months since q two of twenty twenty two, so pre ad market recession. So improvements that we've made in the business are working combined with some improving sentiment in the market took us to that $19,200,000 of revenue in Q4. At the same time, Q4 delivered EBITDA profitability, dollars 200,000 of profitability in Q4, and that's from being in a loss making position earlier on in 2023.

10:16 So that higher revenue combined again with the operational improvements drives us into that position of profitability in q four. Now that, EBITDA is impacted as we know by, by the ad market impact on revenue, but as I said, revenue, has has delivered that that profitability again. And then, it's also, reduced by our minimum guarantee payments that we have to make to to podcasters on our platform, and we'll get into that a little bit later. But we're making improvements to those minimum guarantees. We're restructuring deals to to remove some of those obligations and that higher revenue and the removal of those minimum guarantee obligations is helping us to get back to that place of profitability. And then the final number here, 3,700,000 of cash, that's up 700,000 from our position at the 09/30/2023.

11:10 So during the quarter, we generated $700,000 of cash after burning cash earlier the year. That return cash generation is fantastic for this business. And I think as we always say here, we're in a good position going forward with that money in the bank, but we also have access to another $1,800,000 as a as an overdue facility, something that we've never needed to to touch, but it's there in in the background if if we need that. So we're well positioned in in terms of of cash. So for me, just a you know, it was a super pleasing trading update that we we we put out on Monday. It really was the result of, I think, some early recognition of the the the the weakening ad market and then the changes that we made to the business.

12:01 We'll go into some detail on in the coming slides, but really the recognition of that weakening ad market and then the changes that we made to get through that came together to deliver a very strong Q4 twenty twenty three.

12:17 This is a slide I show you sometimes but I think it's I don't show you this to you every quarter but I think it's a good one to show you today. This breaks down our three main revenue streams in the business but also highlights a couple of changes that are really taking place within, with with AUDIOBOOM. So the the top section here is highlighting the contribution of each of those revenue sources, to our overall group revenue. And then the bottom section is highlighting the, the revenue share, how much revenue AUDIOBOOM keeps of the gross monetization that we have. We revenue share with the content creators and then we keep a percentage. So the two kind of key changes I think I want to highlight here really is just the growth of Showcase.

13:04 We'll talk more about Showcase in detail as we go. Showcase is our marketplace, our ad tech driven advertising product. And that has been growing fast, and we've been building that product very quickly over the last two years. And that's moved from contributing around 15% of our revenue in 2022 to almost a quarter of our revenue last year, and we expect continued good good growth from from Showcase. As a result of that, we've seen our premium ad product, which is, traditionally the the highest contributor, dropped from around 71% to 55% over that time just because of that that growth of showcase and some growth in in Sonic as well. So the the balance of revenue is evening out across the business as as we build our other products out. The second change that I really wanted to highlight, and this is one of our our kind of key operational improvements here, is the revenue share that we have in in the business. So blending the revenue shares from the various revenue lines and sources that we have here, our group revenue share in 2023 was 24%, and that's a marked improvement from 20% in 2022.

14:21 We've gone from 20% in 2022 up to 24% last year. The more of that revenue that we retained, the stronger our revenue share, obviously, the more that flows through the p and l and puts us in a much stronger position. So we've done a great job within the business of, improving our contracts with with our creators on our podcasters, and restructuring those deals to improve that that that revenue share. And also, obviously, the growth of Showcase, which has a higher revenue share on on that showcase revenue source has has done that too. So a vast improvement there on the on the group revenue share as showcase becomes a bigger part of the AUDIOBOOM business.

15:08 The key drivers for that strong Q4 performance, well I just mentioned one of them there. It's the second point on here and that's Showcase record monthly revenue in November of 1,500,000. So we've really grown showcase from maybe less than a $100,000 a month, a couple of years ago, into a place where it's delivering $1,500,000 of of revenue per month. So very strong growth this year. Overall, Showcase grew 35% in terms of revenue in 2023 versus 2022, and we'll continue to grow Showcase. But that was a key driver of that q four strong performance. The second kind of key driver, first one on the list here, is the the growth of our inventory. You may have seen an RNS reach that we put out, in November, highlighting this key milestone of 1,000,000,000 advertising impressions in October. So in October, we created for sale that we could sell to our, brands and and advertising customers 1,000,000,000 advertising impressions. That's huge volume, huge scale. And the key to that generating that number, again, has been to to to create and expand how many advertising impressions we are able to to get from each episode or from each download. So in 2022, for every episode, maybe an episode isn't how long on average, we were able to create five ad slots for sale within that episode.

16:38 By working with our content creators and our partners, we've been able to increase that number very quickly to eight ad slots per download. So even if we are not adding new downloads, which obviously we did during the time, even if we were not to not add new downloads to the network in that time, we're generating way more available advertising impressions, eight versus five per episode, from that content. So a real, a real case of some some operational leverage there from, from the content that that that we operate. Third key driver was Sonic, our brand platform. Record monthly revenue in December, for for Sonic of $2,000,000.

17:24 So again, strong growth from 2023. You know, we really are delivering some some great ROI for the brands that work with the Sonic platform, highlights the the strength of of podcasting as a as a medium for for advertisers, and I think good sentiment, on the on the brand and advertiser side going into 2024 is worth noting. And then finally, the expansion of our customer base. So earlier on in the year, we launched a new unit, and I'll go into more detail on this later in the presentation, but we launched a new unit that was tasked with expanding that customer base going into the bigger advertising agencies in The US and The UK and creating new relationships with blue chip brands to bring those into podcasts. And they haven't been traditionally podcast advertisers, But now we are are in there and and creating those those relationships and those partnerships and bringing more customers into into podcasting and into AUDIOBOOM. And very quickly, we're we're seeing some, you know, some some good traction there. We are now working with eight of the top 15 advertising agencies in The US when it comes to digital spend. So these are major major advertising agencies that look after global blue chip clients. And we are seeing some good traction there as they said and money coming in from those ad agencies since launching that new unit in the middle of last year.

18:51 And that performance is is reflected again in our three KPIs that we put out each quarter and and really kind of highlight the the the change in the the growth in in the business. The first one of those KPIs is something we call ECPM. It's our effective CPM. That's, an optimization metric. It highlights how much money we make from every 1,000 downloads, across the platform. And we hit a new record number, for that eCPM in q four of of twenty twenty three, that record number of just under $59. And you can see the dip on that chart on the left hand side through that weaker advertising market over the the the past year. You see that number dip down to, you know, low forties. We were only able to to generate, you know, $40 per 1,000 downloads, and we've moved back to a position of strong

19:45 revenue generation there, $59 per 1,000 downloads in the final quarter. And again, Showcase being a key part of that, the marketplace and how that marketplace functions is highlighted on the right hand side here. Showcase really sits in the middle and connects supply and demand of our advertising inventory. It's advertising tech based. It does this efficiently at scale. It's it's very kind of low touch from the AUDIOBOOM side, and has seen 35% year over year growth. So we have very strong supply going into that marketplace, as I said before. You know, we we did a total of 1,000,000,000 available impressions in in October.

20:30 October, much of that supply, 600,000,000 or so of those impressions, were pushed into Showcase from our 8,000 podcasts on the platform. Once inside Showcase, all of that supply gets exposed to the demand side, that's advertisers and brands on the demand side. We connect up the brands with with the supply, and we monetize that way. So very strong growth of Showcase that has led and helped lead to that strong $59 record eCPM in q four of twenty twenty three. Our second KPI is our brand count. And here I can break down a little bit what I was talking about earlier around customer expansion. You'll see on the left hand side that brand count growth has been extraordinary over the past four years, going from 2,200 brands advertising with us four years ago, three years ago to over 8,000 in the most recent quarter and another record number of 8,400 per month in Q4 twenty twenty three.

21:35 And that's reflective of our growth as a platform, the amount of inventory that we have to sell, the partnerships that we are creating on the revenue side of the business, and the ease of access that those brands have because of that showcase marketplace. Very It's easy for them to come in and test podcasting and spend low levels of money to make sure that the podcasting works for their brand. But this KPI is not really just about the number of brands, it needs to be about the quality of brands. And this is something that we recognized very early on in the ad market recession. We we very early on recognized that the brands that we were working for, were working with, were very exposed to macroeconomic changes. So the types of brand that we were working with are what we call performance brands or direct response brands.

22:27 They are generally direct to consumer companies. They're disrupting the space that they work with. And what they're looking for from podcast advertising is very measurable return on investment. So you'll have heard ads for this type of advertiser. They generally come with a special code that the consumer can use when they are purchasing products from that company. That allows the company to see where that customer came from so they can see which podcasts are delivering performance for them. But they are very exposed as I said to those macroeconomics. So once inflation got high, once consumers stopped spending, these brands cut back their advertising very, very quickly. We recognized that, and we made a pretty quick move to launch and then build a new brand that was targeting awareness brands.

23:26 So the difference here is that the brands that a new unit is targeting, these awareness brands, they're not looking for that direct ROI. They're more established brands, bigger names. You can see them here Ford Motorcars, Nike, Pepsi. Those are examples of those bigger blue chip awareness brands. Their advertising strategy is very different. They're less impacted by those economic headwinds. And we had very few of those as as customers of AUDIOBOOM in in 2022. And our new unit is is building partnerships and bringing in money from those bigger blue chip brands now. So we made great traction now, as I said earlier, working with fifth with eight of the top 15, US digital advertising agencies, and starting to capture some of that revenue from, from those more established brands. And and that will help us not only widen our customer base and and increase our revenue, but it will protect us from, from future, weakness in the advertising market that we saw through those performance brands. Those performance brands will remain a a strong part of podcasting, but by widening out that customer base, it just puts us in a much less risky and stronger position going forward.

24:45 Our third KPI is our downloads count and this is a this, you know, represents the size of our network. The more downloads that we have within our network, generally, the the the bigger and stronger the shows are on the AUDIOBOOM network, the more inventory that we have to sell, the more monetization opportunity that we have. And this is an interesting number this quarter, and it's gonna take a little explaining from from from me to to kind of talk you through it. So you'll see on that chart on the left hand side, we've had strong download

25:16 growth over the the the past four four years, and kind of doubled the size of our network, in our monthly downloads between early twenty twenty, and the middle of of twenty twenty three, moving from 63,000,000 a month up to a 127,000,000 a month downloads, which was great progress and was was really built by bringing new top tier podcasts into the AUDIOBOOM network. What you've seen in q four is is a dip. So we've gone from a 127,000,000 a month in q three to a 110,000,000 a month in q four. And that on the surface may look like a a strange change because we've told you about new podcasts that we've brought to the network, major podcasts that bring audience with them and should grow that that downloads number.

26:02 But in September of of last year, Apple, released the new iOS iOS 17 and the podcast app within Apple that was responsible for around 50% of the industry's consumption, around 50% of consumption listeners comes through that that Apple Podcast app. That app changed the way that it downloads content. So previously, it would, auto download, back catalog content even if you were not listening to recent episodes from a podcast. It will continue to download back catalog episodes, unlistened episodes of that podcast to your device, and that would count as a download. In the new iOS 17, it stopped doing that. So it no longer downloads those archive or back catalog episodes.

26:50 And that is impacting our overall download number as you can see here. Now across the industry, and this is an industry wide, you know, impact, this is is not just something that is happening to AUDIOBOOM. Across the industry, we are seeing anywhere between 1012% interruption and impact to to download numbers because of that iOS update. And audio boom is is is not impacted to that level as much. If you look year on year, we've gone from around a 100 and a 110,000,000 a year ago, and we're still at a 110,000,000 now. So the overall growth of our network is really offsetting the, the the changes and the impact that, that the iOS update is making, and we'll keep you abreast of any further changes and any further impact of the iOS update as as we go forward. I think one thing that I'm keen to keen to express, and I was in the trading update, is that the iOS change and the and the the stopping of those back catalog episodes being downloaded doesn't impact our revenue.

28:02 So our premium advertising product is really focused around that first window, the first ninety days of consumption. And so the numbers that we can sell against for that premium advertising product are not impacted by the lack of back catalog downloading that that's coming there. So on on one hand, yes, you're gonna see this number, lower level, this downloads number at a lower level than you had previously, although that will come back up as we continue to add more shows into our network, but it's not gonna impact our our revenue significantly because the majority of our revenue is being attached to those front front catalog or first window episodes and and downloads. But that's a complex one. Please do drop me an email or or let me know if you want any further information on that. As I said, we'll keep you updated on it.

28:54 Despite that little drop off because of the iOS, update in in the numbers, we are still maintaining our position as the as a leading podcast publisher in The US when it comes to consumption and and and audience reach. And you'll see from the the two, podcast rankers on the right hand side here that we are in fourth or fifth position, when it comes to the largest podcast publishers in in in The US. So, again, something I'm I'm I'm most proud of when you look at the the list of names on the right hand side there above us. We're really, only behind these giants of of media and giants of tech in terms of Spotify, Sirius, iHeart, and Amazon. And so to be fifth there is a fantastic achievement. And I think think we should be very proud of of the growth that we've seen to our network and and our position there in those rankers.

29:51 And I will pass you over to Brad now for a few slides. Brad's going go a little deeper on our finances and I'll come back to you in a couple of moments. Great. Thanks, Stuart. So, yeah, let's go through a few few financings and give you a full year view of OpEx, working capital, cash. As Stuart said, it's great to see that return to revenue growth in the final quarter of this year. We delivered exactly on what we said we would do in that final quarter when we updated you last in October. So that's that's that's great to be able to report that Q4, best quarter since Q2 of twenty twenty two, since that market downturn started, and there's lots of positive revenue metrics delivered in that quarter.

30:39 There was actually a question earlier on the session asked by SA relating to how much higher q four revenue is versus q three. Well, we can see the answer here, SA, in terms of, you know, the the the growth in 2021 was 21%. 2022 was 15%, 37% growth as we've shown this year. So the average of those three years is 24%. It's higher this year because of that that softer q three that we had this year and our second highest q four ever behind 2021. So if that that answers your question there, but this slide deck will be online after the presentation, so you can take those quarterly figures from there. You know, on the revenue, see, you know, standout revenue stats like Showcase, you know, Showcase revenue increasing by 35% for Sonic, up 20% year on year, both Showcase and Sonic having record quarters in q four. So that sets us up sets us up well for for 2024 and all that operational work that Stuart's been talking to throughout the last last couple of sessions, you know, that that's really I view that. We all view that in the company as a a real positive. We're able to drive that significant increase in performance despite those softer conditions, macro conditions in 2023.

31:57 Important point on this slide: we always talk about the control over the OpEx space, but we've got three years' worth of data there in terms of the OpEx, and it doesn't really move materially. It's very, very well controlled, very well disciplined. This year, 2023, average OpEx per quarter of $2,600,000 a monthly average of $900,000 per month. And that average of 900,000, if you roll back the last couple of years, that's the average OpEx over the last three years, naught point 9,000,000. So, again, that's showing that control and discipline within that OpEx base. Despite those inflationary macro pressures, the OpEx this year was 1% lower than last year. So, when looking at this company, it's really important to to to consider that.

32:49 Once that top line revenue number starts to starts to push on again, we'll see that gearing effect go through to EBITDA because the OpEx base is, as I say, very well controlled and it's not forecast to increase overly significantly over the next couple of years.

33:08 How have we done that this year despite those inflationary pressures? Well, at the start of last year, in January, we took the difficult decision to reduce our headcount. The the average headcount this year is is 39 versus 45 in 2022, so we reduced our exposure on original productions and focus on what we do best, which is which is selling advertising. So that restructure was implemented at the start of the year. So we've recognized full year savings on that. But, again, at thirty nine, it's it's a very lean company in terms of headcount. The the reductions that we were able to implement, they were offset by increases significantly so on within technology costs. Technology costs are our second biggest cost expenditure behind behind salary and commissions.

34:01 The material increase within technology was the higher volume of ad impressions and bandwidth this year. We actually recognized a 24% increase on that specific cost. So that was around $3,000,000 for for this year, but that cost was actually 9% lower than it could have been if we hadn't renegotiated the cost for that contract. We actually saved around 200 k dollars for for that specific cost, which was which was good work from Lance and the team to renegotiate that. So, yeah, always say, and for the for the new viewers that are are joining us today, I said already, it's an extremely lean business, prime for further growth, pride ourselves in automation within in the company. We don't need to take on significant numbers of additional staff or increase our salary cost to to increase that top line performance, and we're focused, very focused on delivering the growth this year.

34:57 So, yeah, that should give you a good overview of the the OpEx within the company. On to working capital. Cash, the headline for the fourth quarter is that cash increased by $700,000 between end of September and the end of December, which was very, very pleasing given the pressure that's been on that cash number this year. Year on year, that cash number did decrease from 8.2 down to $3,700,000. Reasons for that are very straightforward in terms of the reduced revenue recognized this year: software ad market conditions, no morbid forecast, and the fact that we've honored all contractual minimum guarantees in the period. So that's put that downward pressure on that cash number, but it's obviously very pleasing to be able to increase that in in the fourth quarter.

35:45 Lots of work went into ensuring that we that we did that. Invoicing and cash collection process continues to be first class within the company. We actually collected 99% of revenue recognized in 2023. Our four year average is 94%. So we're starting to grow up a real good dataset now in terms of, you know, our our performance over the last few years, and so that should give confidence to invest in terms of that that side of the business as well. January started well as well. So click another 300 today, so it's 2,500,000 for the for the month, and we expect to collect significantly in the second half of this month as well. So that cycle just continues to go, which is which is great. And I I think as well on that on the collection side, the invoicing side, we actually only provided for around a $100,000 of potential bad debt provisions within the year. So that's less than you know, it's nil point 1% of revenue.

36:42 So, again, that should give everyone comfort. The processes that we have are very well entrenched, and it supported the business from a cash perspective very well during during this year. And, you know, once we start to see any kind of improvement in macro conditions, we'll see that flow through on the top line, but also into cash as well, which happened in 2022. As is usual now, we did have a couple of material customers appearing to hold back payment over the year end, and I do refer to that when we do these quarterly presentations. I refer to it because it's never consistently the same customer. If it's the same one, you could eliminate that from your analysis, but it does vary from quarter to quarter, so I do think that impacts the cash balance held, particularly referring to about the $05,000,000 payment we received in the first couple of days of this year.

37:38 Other information on cash in the year, we serviced $2,300,000 of advance payments in the year. That was $500,000 up on the prior year. As I said, we made full payment of all creator MGs as well, including the onerous contract, which we detailed at the at the at the half year and the last quarterly update. We've got approximately 1,600,000 for advances scheduled for this year 2024, so a reduction from 2.3. So further evidence of the improved contracts that we're signing, good evidence of our good profile and standing within the industry to get that number reduced. In terms of cash, last time around, we spoke about the softer July and August revenue months, which impacted collections through q three. Obviously, that increase in cash in the final quarter, we've seen the stronger revenue months of September through November improving that cash balance.

38:36 I shall also say when I talk to you next time in as part of the q one update, q one, there's there are forecasted material payments which we make in the first quarter, including advances, commissions for the final quarter and staff incentives. They're all settled in q one, plus also settling all of the revenue shares for q four as well. So we we need to be, and we will be on our game in terms of collections to to offset that pressure. Debtor days, that increased to 81 versus 68 last year. That's to be expected given the volume of revenue booked in the final quarter. Our target is always to get that below 90. And I've already said that our write offs and provisions were immaterial. So although an increase, we're still comfortable with that number internally, given the low level of any write offs in terms of debtors in the year.

39:28 We still have our overdraft available to us, 1,800,000 if we need it, good continuing endorsements from HSBC. And as we said now, as we go into this into 2024, we've detailed the reduction in MG exposure, which will reduce the any pressure on cash. But delivery of our revenue targets this year will ensure that cash reserves are maintained this year and then significantly, looking towards 2025, when that NPE pressure starts to unwind even further, those cash reserves start to increase again from that point onwards. So yes, I think that's covered all the main points there. I'll keep a look out for any other questions that come in. But back to Stuart and Matt for final few slides.

40:16 Thanks, Brad. So I guess last chance to get any questions in, so drop those questions in there. We'll answer those in about five minutes. But I think just before we get to that, really looking ahead, right, looking forward to 2024 and walking you through our focus for what is set to be a very positive year for the business. So this is what we're looking at. This is what we're focused on building within the business. The first one is is just that continued growth of the AUDIOBOOM creator network. You'll have seen recent announcement that some of the the signings, the show signings that we brought to the network in in q four would provide or add another 5,000,000 monthly downloads in in 2024. So we're really focused on, signing and partnering with real tier one, podcast creators, the the biggest and and and and best in the in the business. You'll have seen, one of those announcements was the was Matt and Shane's, secret podcast, starring, an incredible comedian called Shane Gillis. He's really the the star of the The US comedy scene right now, has a Netflix special, has a really strong following, a big audience.

41:25 It's just fantastic to to bring that show to to the AUDIOBOOM network. Our new business pipeline, where we sign those shows and work with the talent agents, Hollywood talent agents to bring those shows to AUDIOBOOM. That pipeline is as strong as it's ever been, but I think what we're seeing more than ever is opportunity to bring podcasts to AUDIOBOOM where they are looking to work with a more stable network or a more robust network. Obviously, you know, other AudioBoom's competitors, other AudioBoom competitors have been hit hard, I think, by the weak ad market of the last eighteen months. We've stayed strong within that. We've been resilient within that. Now the podcasts that we're working with those other networks are looking to to partner with with a more robust company. So we're getting a lot of of great opportunity there to to continue to build that AUDIOBOOM creator network.

42:19 The bigger that network gets, the more downloads we have, the more ad inventory we can create, the more monetization opportunity there is. Second point on here is the work that Sonic is doing on the brand platform. The the great news there is that they have stronger budget commitments from their clients, their brand clients, for 2024 than than they did last year. So, you know, I think that's coming about because The The US is expecting consumer spending to increase, inflation is down, there's strong sentiment around, around the economic situation, a soft landing is coming probably in The US, so brands are committing to podcasting again, and they are through Sonic and and and those budget commitments that we have there are kind of mirroring that improved sentiment in in the ad market as a whole.

43:14 That third point here, that new brand awareness unit that launched last year, we brought a fantastic guy called Danny Farman in from SiriusXM and he's really driving that unit forward. So we're going to continue to focus on brand awareness expansion, with more and more blue chip customers. We'll invest into that sales operation. We'll expand the partnerships to even more of the top 15 US advertising agencies. So that's a great area of focus for us. Touched on it before, but the market is improving. You know, it's been in a pretty troublesome place over the last eighteen months, but the ad market is is definitely improving. It's not roaring back, but it's improving. And we are seeing, good sentiment within the industry.

44:02 That has really fueled a positive kind of upfront booking season between October and December. We work with our biggest customers to to to create really really great campaigns for them across 2024. And this year, we as of now, we have more than 47,000,000 of revenue booked for for 2024, you know, with eleven months of the year to go. So that's a strong position to be in, and it really is a sign that brands and advertisers feeling good about podcasting, but are good about life in general, I think. I touched on it earlier, but we continue to improve those revenue shares that we have with our podcasters, our partners, new partnerships that are coming in. We are creating those deals on stronger and improved revenue shares for for AUDIOBOOM. The way we're able to do that is by ensuring that the other key services that AUDIOBOOM offers are part of those partnership agreements. So I think previously during the the the fast paced market of 2021, those those partnerships, those agreements were really based around the commercial aspect, purely a commercial aspect, and that led to those weaker revenue share for for AUDIOBOOM.

45:16 Now we are allowed to we're able, I think, to bring many more of our services to that partnership. So it's the distribution part of what we do, the ad tech part of what we do, the marketing part that we do, our production services businesses. We can bring that to the partnership, and that gives us, the ability to to work with an improved, stronger revenue share for AUDIOBOOM. And then the last point is something, again, I touched on earlier but didn't go into a great deal of detail on. Really, our EBITDA for 2023 was impacted significantly by our minimum guarantee obligations. We had to pay our content partners obligated, guaranteed revenue. Whether we made that through advertising sales or not, we still had to pay that. So we would true up that would hit our profit margin.

46:10 We are reducing those minimum guarantee exposures very, very quickly and through the restructuring and renewal of some of our top podcaster contracts, we take $2,000,000 away from from that minimum guarantee exposure from January 1 this this year. So 2,000,000 reduced from from January 1, and I'm expecting to successfully restructure and renew further deal deals and partnerships across the year that will result in another 500,000 coming off that that minimum guarantee exposure. So, you know, those improvements go straight to the bottom line and they will help us be profitable in 2024. So to sum up, think, last slide from me before we do some Q and As, This is really what 2024 looks like. You know, we're expecting strong network growth by signing top tier podcasts, and we have that very strong pipeline of new business coming to the AUDIOBOOM creator network.

47:12 We're expecting an ad market recovery. We know Showcase is is growing strongly. We continue to to build Showcase on marketplace. Adding into that, our new brand awareness unit is bringing in more and more blue chip customers and and creating strong partnerships, with those major ad agencies. And then the brand budget commitments to Sonic are strong too, so you add all of those key improvements and key positive areas together, and that's taking us to a place where we're forecasting record revenue for 2024 of just under $79,000,000. So that's driving the revenue, and then the improved revenue shares that we've pulled together and worked very hard to create, plus those decreases and removal of those minimum guarantee obligations, more than 2,500,000 in total by the end of the year minimum guarantee obligations.

48:07 Those two things come together to, you know, improve that bottom line and will will take us to a place where we are returning to to full year adjusted EBITDA profit. So a very positive year ahead, coming from those improvements that we've made to the to the business and then upside from from ad market recovery as well. So I'm really excited about 2024. I hope you are too. You know, the AUDIOBOOM team are are working very hard to to to make this a record year for the business. Back to you, Jake. Perfect. Stuart, Brad, thank you very much indeed for your presentation this afternoon. And just before moving to questions, ladies and gentlemen, please do continue to submit your questions by using the q and a tab that's situated on the top right hand corner of your screen.

48:57 But just while the team take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. Brad, Stuart, as you can see there in the q and a tab, we have received a number of questions throughout your presentation this afternoon. And thank you to all of those on the call for taking the time to submit their questions. And, Stuart, Brad, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so, and then I'll pick up from you at the end. Thank you. Thanks, Jake. First one, we've about ten minutes for this, so we'll we'll fly through as many as we can. First one is from SA and just picks up on a point I made a a second ago. It says, you stated that you have $47,000,000 of advertising bookings already in place for 2024.

49:45 Last year at this time, you had $44,000,000 booked. That doesn't look like a major increase on on where you were at in in 2023. Yes. Those numbers are are correct. 47,000,000 booked so far this year, and at the same time last year, we had 44,000,000 booked for 2023. But I don't think that really tells the entire story. What you have to remember is that last year, the advertising market deteriorated significantly between March and August with brands pulling millions of dollars, from their advertising budgets. Across AUDIOBOOM, we had around $7,000,000, of advertising cancellations happening across that period March March through to August as the ad market deteriorated.

50:35 So I don't think that the 47,000,000 this year to 44,000,000 last year comparison is not really apples to apples because the ad markets are in different places and we are definitely not expecting high level budget cancellations this time around. So in reality, we are much more than $3,000,000 ahead of last year. You could probably look at the numbers I just gave you and think we're somewhere around $10,000,000 ahead where we were at at the same point last year in reality because of that deteriorating ad market the middle of last year. I hope that kind of gives you some context and makes a bit of sense there. The next question simply just says, where will you invest in in growth this year?

51:27 I think our investments will will really be designed to just maximize the revenue we capture from our existing operation. We're not gonna be doing anything too different this year. You know, after the last eighteen months, 2024 really has to be about proving that this model works once again. So, you know, we won't be expanding into new business lines on on new projects. We'll be investing in in in really capturing as much value from our our existing operation as as we possibly can. So we'll invest in, our sales and and revenue operation in The US and UK. I think mostly around that brand awareness team and building out that part of the operation further so that we can accelerate that customer expansion and get into more of the major agencies and the blue chip brands and as I said, really optimize and capture that revenue from the model that we have built and improved.

52:28 I think I've answered some of this already, but it was also a question I saw I I actually got an email a week or so ago from an investor, so I'll this one. But it says, can you give us more of an understanding of the differences between premium advertising and and showcase? And I think it is super important to to understand both of them and how they they complement each other. I was actually listening to a podcast this morning that was, talking about the NFL and and Major League Baseball here in The US, and it talked about NFL being the, you know, the premium product built around high engagement but fewer events, whereas Major League Baseball that have a 180 games per season is really an inventory and a volume play. And our our two ad products are are are kind of very very similar. So we we kind of, you know, we do both the NFL model and and the Major League Baseball offer, but model. But the the first product that we have is our premium product. That's really high pricing. We charge $25 per 1,000 impressions, but we only sell that premium advertising on our top 200 shows.

53:28 And that's because of that high engagement that we're looking for. We need the ad to be voiced by the podcast host where they endorse the product. Their influencers, their audience responds to them by buying the product that they are endorsing. So it's really great ROI for the brand that is spending that high amount of money on the ad. As I said before, we only sell that ad on a ninety day window, so which means that the ad runs from the moment the episode is published for the first ninety days. So it's not impacted by the Apple iOS update. It's very exclusive. We only sell it in house from our in house sales team, so that helps to keep the the price high. So that's, you know, that's that that premium product. That's our NFL product.

54:13 Showcase is more of our inventory play, our volume play. It's an advertising marketplace. As I said before, it's automated through ad technology so we can do it at scale. We're matching supply and demand at massive scale. It's high inventory, it's 8,000 podcasts, you know, a 100,000,000 plus downloads or hundreds of millions of advertising impressions we're supplying into that marketplace every single month. And then on the other side of that marketplace, the demand is an ecosystem of advertising buyers that we've partnered with. So it's ad agencies, it's, sales partners that we have in international regions, it's ad networks. You know, a really great example of that demand side is exactly what the investors were asking me about last week Amazon. So Amazon runs an audio DSP, a demand side platform, where Amazon advertisers can get access to audio advertising inventory. So through Showcase, we can expose our supply, our inventory to that Amazon DSP and sell our inventory and sell ads to those Amazon advertisers through their DSP. So that's just one of the sources, Amazon.

55:31 There are many more. Google is one. There's a bunch of others. There's kind of tens of different DSPs on that side of things that we've we've partnered with. So, we were just exposing at scale, at volume, 8,000 shows all in in showcase. And then we can target for the advertisers. So the pricing in there, it depends on how we target to, different demographics, different audience locations, content keywords. So those two products, they work together very seamlessly. They do two very different jobs, and both will continue to grow over the coming years. This question is asking what our exposure level is to our biggest podcast. So obviously Brad mentioned it in his part of the presentation. We used to work with a show called Morbid.

56:22 It's a huge show. It's a top five in the world show. When we lost that show, that was that show was doing around 20% of our monthly revenue at the time. So big exposure to to one podcast. Great for our growth back then, but but obviously hurts when when and if a show moves on at that level. We are much less exposed now. So we've worked really hard. I think we focused a lot on reducing that exposure over the last few years. And to break that down for you, I think in in 2023, the top five shows that we worked with were responsible for 18% of the revenue, the top 10 were responsible 31% of the revenue, and the top 20 podcasts, responsible for 41% of the revenue. So so very, you know, a big reduction in in that in that exposure, very diversified, way more diversified than before. Our biggest show, is 5% of our of our revenue. So when you look at those numbers, I'm I'm kind of I'm pretty comfortable at this point with how diversified that revenue is.

57:31 And then the other key point I think to make there, it's not really just about those exposure levels, it's about the contracts that we have. And the top 10 shows have an average of 18 left on their contracts with us. So, you know, we are locked up with our major revenue providers for a good amount of time going forward eighteen months on average on those top revenue providers. So, yeah, just to summarize, we've worked hard to reduce that exposure, much more diversified plus we have strong contracts in place. We've got time perhaps for one more here which is another question that just came in during the presentation. It says you've been in fourth or fifth position on the podcast rankers for some time. Can you move up those rankers this year?

58:25 It's a challenge. Right? Because I think when the only publishers above us in those rankers are Spotify, iHeartMedia, SiriusXM, Amazon, and sometimes Odyssey as well, which is another billion dollar, you know, radio company here in The US. It it makes that task much harder. There are huge publishers that we really do compete toe to toe with, but they are very well funded, very well resourced, publishers. But I do think we can move up this year. I think we can certainly move up to third place in the Triton ranker get above AUDIOSAY. If we go back twelve months, our weekly unique audience in that ranker was three and a half million below Odyssey.

59:12 In the most recent ranker, we've closed that gap to just 400,000. So we've made up 3,000,000 in the past twelve months. And to me that looks like there's a great opportunity to move above them in the ranker. And moving above the rank in the ranker isn't just a marketing play. Runs deeper than that. It allows us to have more leverage with the talent agents to bring more partnerships to us and allows us to have more leverage in the ad industry too. We're at 11:00 here, 4PM your time. So we're gonna have to come to an end right about now. So thanks for your questions. They will be online. And Jake, I'll I'll pass back to you for a second. Perfect, Stuart. Thank you very much indeed for addressing all of those questions that that came in from Inves. Of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended just for you to review to then add any additional responses, of course, where it's appropriate to do so. But, Stuart, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments to wrap up with, that'd be great.

1:00:20 Yeah. Look. My my key message is is we're back. The improvements that we've made to this business, they they showed it in q four, and it was a great q four. But those improvements, you'll really see the impact of those in in 2024 as we head to a to to a record year. Plus, there's upside as the advertising market improves. So, you know, we're in a great place going into twenty twenty twenty four. 2024 will be a really strong year for us. And this is a great value stock right now. If, you know, if you want exposure to an industry that is is going to quadruple in the next few years, you know, with a company as as as strong as AUDIOBOOM, this is a great place for for you to be.

1:01:08 Stuart, that's great. And thank you once again for your time this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations? This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of AUDIOBOOM GROUP PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.