Audioboom Group (LSE:BOOM) — Investor Update

0:01 Good afternoon, ladies and gentlemen, and welcome to the AUDIOBOOM GROUP PLC Investor Update. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Please simply type in your question and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the

0:31 following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. I would now like to hand you over to Stuart Last, CEO, and Brad Clark, CFO. Good afternoon to you both. Hi, everyone. I'm pleased to be joining you again. Joining you today from a very snowy and and very gloomy New York. I think that the good thing is that these audio boom results that we're about to talk you through A much sunnier and much happier, and the outlook is is is super bright for 2022 as well. So just really pleased to have you all here. Welcome to to our shareholders. Welcome to anyone that that's new to the business. We're gonna step things back and and and take a look at AUDIOBOOM in terms of our business operations and our position in the industry and and and give some good background information. We'll we'll then take a look at at the the twenty twenty one one results and finances in in a little more detail.

1:27 We'll go into 2022 and and and talk through our focus for for the year ahead, and and I think it's gonna be a a really exciting year. And then at the end, there's some time for some some questions. So submit any questions that you have. We'll try and get to as many as as possible. Things are always a little tight in in these sessions because we got a lot to tell you about, but we will fit in as many of those questions as possible.

1:53 You'll see in the trading update, I kinda described 2021 as as a transformative year for AUDIOBOOM, a year in which we redefined shareholder value. So we're coming into this in a in a very positive place. Last year was was just fantastic for for for the company, for our investors, for our shareholders, and the team at AUDIOBOOM have just done an incredible job to build this business. So we're we're super excited to tell you more.

2:18 Just by way of introductions for for those that are new to the to the to the business, I'm Stuart Lust. I'm CEO of of AUDIOBOOM, and I stepped up to the role of CEO two years ago. Previous to that, I launched AUDIOBOOM in The US back in in 2015 and was the chief operating officer ahead of that. I have a kind of a long history in in podcasting and and audio. I was an executive at a podcast business, podcast tech business called VoxNest here in New York City before launching AUDIOBOOM here. And previous to that, spent ten years in in audio and digital audio at the BBC in London. So go pretty kind of deep in podcasting, and just love the business that we have here at AUDIOBOOM, and I can't wait to do more. And I'll let Brad say hi and introduce himself.

3:12 Thanks, Stuart. Hi, everyone. Thanks, everyone, for joining this afternoon. I'm Brad, CFO here at AUDIOBOOM. I've been here since March 2018, so that's coming up for four years. Like Stuart, delighted to work here, very privileged to form a small part of this fantastic team who continue to break records in this very exciting, fast moving industry. Chartered accountant, you know, been in and around media companies for, what, fifteen fifteen years or so in terms of finances, so lots of experience there. But it really is this company and this role which, you know, genuinely excites me. I'm very pleased to form a part of it. So back to you, Stuart. Thank you, Brad. And I'm just gonna turn my camera off so we can focus a little bit on the slides here. As I said, first section, really gonna step this back and just look at the business model and the operations for for those of you that that are new to the company or or anyone that that wants a a recap.

4:07 And I think that the key thing here is is just to highlight the really important position that the AUDIOBOOM plays in in podcasting. We we power podcasting. We we sit between content, advertisers, and audience, the three key elements of of any media business. And our kind of key role here is to connect content with advertisers and then push it out to audience. So we sit in between content and advertisers. We take great content. We connect it up to the right brands, and then we we distribute to to audiences globally at massive scale. So we play an incredibly important role in the industry without being able to combine those three elements of of podcasting, then there would be no ability to monetize, no ability to grow this industry, and no ability for for for podcasting to become the fantastically engaged and and powerful medium that it is. So AUDIOBOOM is powering podcasting, and we're empowering the content creators that we work with to build their their podcast audiences and and to monetize their content.

5:18 At the heart of that connection that we create between advertisers' content and and listeners is our platform, the AUDIOBOOM platform. So I wanna kind of walk through that just a little bit. This is really driving those connections and that distribution and and and doing it at scale. So we've built out over the the past five or six years a very scalable technology platform. And that platform is the is the key reason why can we can create that connection between advertisers and content. At the heart of of the platform is a content management system that's allowing our podcast partners to upload their audio, to host their audio, to manage and to schedule the distribution of of that audio. It's one click distribution out to Spotify and Apple Podcasts and Google Podcasts and all of those listener interaction points.

6:11 And then it collects fantastic data and presents that back to the podcast producer to give real insight into audience and help them to improve their product. So that's the content management system that's at the heart of our platform. On top of that, we we've built out an advertising technology stack to to monetize that content. So it's an ad server. It's a yield up system that ensures we get the best pricing for all of our content. It's our recently launched ad rip inventory creation system, which is proprietary to AUDIOBOOM, doesn't exist anywhere else in the space, and that removes baked in host endorsement ads and replaces them with with new ads to continually monetize and remonetize content. And then it's our marketplace, which is our automated and programmatic advertising marketplace that launched in in November, and it's already impacting and having a strong impact on the success of the business after just a few months.

7:10 On top of that advertising tech stack, we've then built out an inventory management system that drives the entire process. It's based on Salesforce. It it delivers ad execution, automated billing, business intelligence around pricing, and and the ability for us to to really optimize that business. So that's the platform. We still iterate on it. We still develop it. We still innovate around that. But, essentially, that that platform is there. It's built, and it now powers a huge amount of content. So we have 8,000 podcast channels running through that platform. We reach a 116,000,000 plus downloads every single month, and we get to to to into the the ears of 32,000,000 plus unique listeners every single month. So we have some really good scale there. But that platform, as I've said before, is is is is much more scalable than that. So we could be running a 100,000 podcast channels through that platform.

8:06 We could be reaching a billion monthly downloads and a 100,000,000 unique listeners, and that platform can can handle it, and it can help monetize and and distribute, you know, a a huge volume. So the platform is super strong, and it really drives the the the core business through it. Then we we kind of look at how we we work with content and and and what our revenue model is. And the AUDIOBOOM revenue model is built around advertising, as as I've said before, and connecting content with the right advertisers. And and to do that, we we have to match up the right content with with the right types of brand and the right advertising model. On the left hand side here, you'll you see the types of content that we work with, and I break those down into three categories. At the top, it's it's AUDIOBOOM Studios. These are our own productions.

8:57 These are the shows that we we create in house or or we coproduce with with a partner. We have production teams in The US and in The UK. There's fewer of those shows, just around 25 of those those audio boom studio shows. But they are the most valuable shows to us. They come with the highest gross margin. We sell them at the highest advertising rates. Then beneath that is is our AUDIOBOOM creator network. This is a much wider group of of shows, around 8,000 podcasts, just under 8,000 podcasts. These are shows that that we don't create the content. The the creator is is making those podcasts independently, and we work with them to monetize and and to distribute their their content and their shows widely. And then the third kind of part of content is is what I call here the podcast landscape, and and these are podcasts that are not contracted to the AUDIOBOOM network. We don't have direct deals with those podcasts, but but through the advertising model we have have created, we can we can effectively still monetize any podcast that's in existence anywhere in the world, whether that be Podsaves America, whether that be Dax Shepard's armchair expert, whether that be my dad wrote to porno in The UK. It's it's it's pretty much any of the the major podcasts out there. We can we can seek value and and create value from from those podcasts as well as the ones that belong to the AUDIOBOOM network. And how we

10:27 do that is through our three advertising models. The first advertising model is a premium sales model. Premium sales are, you know, high value advertising units that are voiced by the host of the podcast. So the podcast host is voicing those adverts. They're endorsing the products. They're engaging with their listeners around those those those products, and it allows us to sell them at a very high advertising rates. And we can do that against AUDIOBOOM studio shows, and we can also do that against the the top tier of our AUDIOBOOM creator network as well. The second advertising model that we have is recently launched and and branded as Showcase. That's our global marketplace, and this is a a advertising product that is infinitely scalable. It's all about volume, much lower pricing in there.

11:19 But we can reach any podcast, and we can continually remonetize that episode. So whether an episode is listened to today or in ten years' time, the marketplace can continue to to monetize that with with fresh advertising. And, the marketplace runs across AUDIOBOOM studio shows, and it runs across the AUDIOBOOM creator network. And then the third piece in our in our advertising model is is sonic influencer marketing. Sonic influencer marketing can can can monetize content at AUDIOBOOM studios in our creator network, but importantly, can also monetize content outside of the AUDIOBOOM network. So SONNET works directly with the advertiser and represents the advertiser and therefore can can can go out and get beyond the AUDIOBOOM network to to place advertising for for that brand in in any podcast that that's available globally. So a a great content and advertising model, and this is a heart of of our success and and our revenue growth over the the past few years.

12:24 This slide, I think, breaks down the key revenue lines within the business, and and I I'll just talk you you through that to give you some background. Those key revenue lines being AUDIOBOOM Studios, the Creator Network, Showcase marketplace, and sonic influencer marketing. The top section is is highlighting the contribution to our group revenue, and then the the bottom section there is is the gross margin on each of those revenue lines. So you can see today that AUDIOBOOM Studios is a small part of our overall revenue, but that gives us a strong gross margin, and that's why it's important for us to continue to invest and build out AUDIOBOOM Studios and grow its contribution to group revenue. Our creator network is a key driver of revenue. 67% of our revenue comes from from the work we do with those independent creators and monetizing and distributing their content. Has a slimmer gross margin around 23%, and and that that margin is is slimmer just because of the competitiveness in the industry to sign and and work with and represent those shows and the kind of influence, I think, over the past couple of years of of the Hollywood talent agents who who represent the key talent and key key key creators within within that network. They can obviously obviously use that leverage to get the best deals for their talent, and we have seen a slimming of of that that gross margin on the creator network over over the past couple of years. But

13:55 23% is a good place to be, and we'll hold that gross margin there in coming years. Showcase, that has a, yeah, a slightly stronger gross margin. Obviously, that's that's hitting both AUDIOBOOM Studios and the creative network and is is 11% of our of our revenue contribution for for 2021. Now that's a key area of growth for us. As I said, it's extremely scalable part of the business, and we expect that that contribution to group revenue to grow significantly in in 2022 and beyond. And then sonic influencer marketing, fast area area of of revenue growth for us. It's gone from zero to 18% in just the the two or three years that it's been within the AUDIOBOOM GROUP, but comes with a a slimmer gross margin.

14:41 So works on a a 12% gross gross margin, but is a very important part of the business. So, hopefully, that slide just gives you a sense of those those key revenue lines and how important and and and how they make make up and and come together to build this audio business. And then I wanted to talk to you a little bit about the the life cycle of a podcast because I think it really highlights the the importance of having those various advertising models with with within the business. If you kind of take a look at this slide, what we're really showing here is that when an episode launches, the first window to to monetize that episode is around ninety days. So we will sell a high value premium host read advertising unit into that episode, and that will be kept in the episode for the for the first ninety days.

15:39 And we're charging somewhere around $30 for every thousand downloads of that of that episode during the the the first ninety days. We have four ad slots per episode on average. The host is voicing the those those advertise advertisements, and it's it's creates strong engagement with the listener and good conversions and sales for for the advertiser. So that's the product we sell in in the first ninety days of an episode's life. Then at ninety days where you see that red line, that's where our ad rip tool that we launched in July of last year really kind of comes into it into its own. That automates the removal of those premium ads after ninety days and replaces them with with ad markers that allows us to to to remonetize that that content. So as I said, it's an automated process.

16:32 It it it's creates a lot of manual removes a lot of the need to to manually edit content, which can be time consuming, takes a lot of resource. And, again, it allows us to do this at scale on behalf of of our our our content partners and our and our creators. After that ninety days, those ad markers are pushed into an episode, and we use dynamic ad insertion to remonetize that that content. So dynamic ad insertion is is automated advertising that gets pushed into the the episode in real time, fresh ads for every lesson. It allows us to to monetize at ninety days, but also allows us to to monetize that content even though even if it's heard ten years later. And we increased the number of ad slots in that episode.

17:19 The pricing is lower somewhere around $12 per thousand downloads, but the increase in the in the number of ad slots, the ads are generally shorter, maybe around thirty seconds rather than a minute. So we can increase the ad slots in each of those episodes and just continue to to drive revenue to to back catalog episodes. And I think in a in an earlier trading update, we talked about the the the level of consumption on AUDIOBOOM that is that first window or to the back catalog. Back catalog consumption is now just under 50% of of all consumption on AUDIOBOOM. So having the ability to to remonetize and to do that at scale and to do it in a very efficient automated way is is very important to this business. And to to be able to to do both parts of this is is is what, you know, a key a key differentiator between us and and our competitors in in podcasting.

18:15 So that's the business. Hopefully, that gives you some some some good back background on what we do and and and how we do it. Next, let's take a look at 2021 and and the performance and and the incredible year that that we delivered during during 2021. He these are just the the financial highlights, the the big numbers. And you'll know these by now, I think. First one here, $60,000,000 of revenue. That was a 125% annual growth. So an incredibly strong year of of growth for us. And just to highlight the q four revenue of 20,500,000 as well. So we stepped that revenue up every every single quarter, and and 60,000,000 of revenue was just a, you know, fantastic place to end the year.

19:01 Q1 here in the middle, $3,000,000 of adjusted EBITDA profit. We talked this time last year about the need to break even. We understood that where we needed to get this business to, and we went out and and we executed that. So that was a maiden maiden EBITDA profit for AUDIOBOOM. Just creating a a self sustainable business is was so important to us, and we achieved that. And we went beyond that, and and we delivered $3,000,000 there too. Also, just to highlight, that made a net profit also of 1,400,000. So fantastic to to to get to that point also. And the third key number here is that $3,000,000 of of cash. So, you know, key part of that really for me is that we are fully funded for the for the current growth trajectory. So, you know, we we don't expect to slow this thing down, and that cash just allows us to to keep building the business and to to to keep growing very strongly.

20:00 Two other kind of indicators of our performance level here on this slide. Right? It's not just about that. Those revenue numbers and the the profit numbers and the cash number that I showed you before, this puts that that performance in of 2021 in into some kind of context. The first chart on the left here is AUDIOBOOM's revenue growth versus the the industry growth. And every single year since 2017, we have outperformed that that industry growth. We did that again in in 2021 significantly. We we outperformed the industry by over industry growth by over a 100%. So we are very quickly here gaining market share and making AUDIOBOOM a bigger part of a podcast industry that is already growing strongly.

20:49 So that podcast industry is expected to hit 1,750,000,000 this year. And and in that last four or five years, we'll have increased AUDIOBOOM's market share from less than two percent to around 5%. So we are we're growing that market share out quickly, and we expect that to continue into 2022 as well where we will be looking to to outperform the the wider market. The chart on the right is is not about revenue, but it's about audience growth. And, obviously, audience growth is integral to to revenue growth here. AUDIOBOOM is now the fourth largest podcast publisher in The US per the the Triton digital podcast ranker. We started 2021 in sixth position and and and moved up to two positions across the year. We now reach almost 6,000,000 US listeners per week, which is a very strong number.

21:44 But if you look at the the annual change column there on the right hand side, we've moved faster and quicker than than any of our competitors. Competitors. So, again, we're just increasing our position in the space. We're punching above our weight when we look at our competitors. Stitcher Media is owned by SiriusXM. Odyssey Podcasts belongs to a billion dollar radio company here in The US. Wondery is is part of Amazon, Cumulus Media, another billion dollar radio corporation here in The US. So, you know, we are doing with this kind of pure play focus on podcasting and the automation we we built into the business and the business model we've created, we are growing quicker and faster than than than any of our competitors. So, again, by these measures, alongside the the financial parts, 2021 was just a fantastic year for the business.

22:36 And let's have a look at why we grew so quickly and and what the key drivers of that growth were in 2021. We've had this focus on content expansion, building bigger and stronger and more highly consumed content on top of that AUDIOBOOM platform over the past two years. And we did that again in in 2021. We we signed new partnerships and launched new content initiatives with some major podcasts, Dark History, Unfield, Red Handed, Mike Rowe, Fantasy Footballers. These are all shows that have strong built in audience levels that we were able to monetize on day one and to help them grow that audience and to charge that that premium pricing for. So the continued focus on on signing new content partnerships and growing the the content footprint within the business.

23:27 Second key driver is around pricing and and the the the levels that we've been able to charge for those premium ad units. The the numbers here are quite kind of staggering. The the the price that we are charging for an ad unit in our top 25 shows grew to $9,000 in in q four of last year versus

23:50 $3,600 a year earlier. So just incredibly strong pricing growth because of the performance of those ads within our podcast and the the demand to to access that that content. Now the key driver was the the the marketplace launch. Rev revenue from our ad tech just increased strongly across the year, three and a half times more revenue via the ad tech in December than in January of last year. So marketplace showcase marketplace really consolidated all of our revenue from from ad tech in in one place. ADREP built the amount of inventory that was hitting that marketplace, and it it led to some very strong growth across the year. And for December, we reached a million dollars in in monthly revenue from from ad tech for the very first time. So a successful piece of work there that's ongoing around marketplace and and that automated advertising part of the business.

24:54 And then finally, I think another key driver here was the work that we did to create monetization in some of our other key territories. We've been strongly focused on The US and and The UK over the past five years, but we've built up built up a level of of consumption in in some other territories, Australia, India, Canada, the next three largest regions for for listening for audio boom, but we were not monetizing them effectively. So at the start of 2021,

25:22 we signed new partnerships with Rogers Media in Canada, Australian Radio Network in Australia, and IdeaBrew Studios in India to to monetize the the listening that was happening in in those regions. And that led to an eight eight times increase in in revenue from those regions between January and December 2021. So, again, another kind of key driver of of of the revenue for for AUDIOBOOM leading to a successful 2021.

25:54 And this slide, I think, is is just kind of worth highlighting. I think you you know most of the detail behind this. You know the revenue growth. You know the the the EBITDA numbers, but you'll just see the the quarterly increase in in in revenue in the in the dark blue there is is creating a kind of a a pretty beautiful pattern alongside the EBITDA increase and the move from from being a loss making business across 2020 to to being a company that was in profit every quarter of the last year. So just a a fantastic looking chart to to to show you there, but not one I need to to go into too much detail about. And just to back up all of this this, you know, stellar performance, I think, from AUDIOBOOM is is just a look at those three key performance indicators that we we talk about during every trading update that we have. The first one being global downloads. I kind of said it before.

26:55 You know, the more consumption to content via

26:58 the AUDIOBOOM network there is, the more advertising inventory that we make available, the more chance there is to to to monetize it and to to drive revenue. And across the whole of 2021, we we we built built that download number up to to a record of a 116,000,000 in October of of last year, and the q four average was a 113,000,000 downloads a month. So we're really creating some some great scale within the network and and and running through that platform. Brand count is a real it really speaks to the the pricing that we're able to achieve. The more brands that that we work directly with, particularly around that premium advertising model that we have, the more demand is created, the more we can improve our pricing and and charge more for each of those ad units. And, again, seeing record numbers across q four. We worked with 409 advertisers directly in in November, many thousands more via the the marketplace, but four hundred and and nine directly in

28:01 November for that record quarterly average of 396. So we keep that brand count count growing and that that that customer count growing over the year. And then finally, ECPM is our kind of our optimize optimization metric, how much revenue we're able to extract from every 1,000 downloads across the platform. And, again, we hit new new records in in q four of $56 per thousand downloads. And, obviously, when the the global downloads number is is rising so quickly, we expect to see a a little flattening out of that of that eCPM because we we we continue to to to extract more even though the number of downloads are going up. So great to see it's still ticking up, but, obviously, not as fast as as it had been when when downloads were were a little flatter.

28:55 So three just great looking KPIs, all heading in the right direction. No sign of those trending in any other direction either as we we get into 2022. And I'll I'll throw it to Brad now to go into a little more detail on on some of the other financial pieces. Great. Thank you very much, Stuart. Hi again, everyone. Yes. Hopefully, what's coming across today is a great story of growth from this company, and it's really pleasing to be able to build on the growth story that we've outlined across the last few investor meet sessions over

29:32 the last eighteen months and through our RNSs, through the communications of the market as well. And the next couple of slides will build on the narratives that I've I've gone through previously on these sessions in relation to revenue costs and also our very efficient working capital cycle as well. But if you if you step back and you look at this company, know, the foundations were were laid for this company many many years ago before I joined, you know, with it with that technology stack being created, the monetization of podcast content being proved, our US office being opened, and our fantastic team being brought together. But over you know, particularly over my time during the company over the last four years, we've been extremely focused on building on those foundations to create that company which delivers on its promises. So be that to our content partners, to our customers, our staff, and also to investors as well. You know, we we are now a company that delivers value, in my view, to all of those groups. And in 2021, we not only delivered on those expectations, but we also exceeded them as well, which is which is what we're striving to do as as a company.

30:46 As we go through these numbers, obviously, these are unaudited financial numbers as we stand at the moment. We start our audit on the January 31, and we'll be aiming to release that annual report with those audited numbers towards the end of March.

31:02 But if we look at that first slide there in terms of revenue and cost analysis, obviously, we've seen that fantastic growth curve. There's that accelerating quarter on quarter revenue growth. We ended just above $60,000,000 in revenue, revenue that grew a 125% year on year, which was a 108% faster than that of the wider US podcast advertising market. Stuart's already highlighted those different revenue lines which we which we have in the company, and the majority of revenue is being, recognized in that premium level of level of advertising, that we that we specialize in. So just to reiterate some of the stats that Stuart said earlier, but also give you a bit more insight into the different revenue lines. 67% of our revenue comes from that creator network, where we exclusively represent, those partners for advertising sales. That line grew 127% year on year.

31:59 11% of revenue comes from the marketplace. That grew a fantastic 162

32:05 year on year. 4% from AUDIOBOOM Studios and the original content that's being produced, that grew a 119% year on year. And Sonic, which accounts for an 18% of gross revenue, that grew by 116% year on year. Even subscriptions as well, if you don't focus on here, that accounts for less than 1% of revenue. That grew by 9% year on year as well, which even though we didn't invest a single dollar in terms of promoting subscriptions, that still had a had a decent growth figure year on year as well. So, overall, we can see that that 125% year on year revenue increase, exceptional performance, but we've maintained that that that control and that focus on on the OpEx throughout the year as well. So that that increased 25% year on year from $8,000,000 in 2020 for the year to $10,000,000 in in 2021, so an average of $2,500,000 a quarter.

33:05 But we are very focused on maintaining that OpEx, keeping good control of what we're spending within the company. There's two main cost categories within an OpEx, salaries and commissions, which account for 67% of cost, and technology costs, which account for around 18% of total cost. Now, there were increases across those lines in the year, there's some quite straightforward reasons as to why they increased. So salaries and commissions increased by 27% year on year because commissions increased because we, you know, we correctly incentivize our our sales team to continue driving that that revenue line upwards. Also, technology costs increased by 29% year on year, simplistically, because there was more content that was downloaded in 2021 versus 2020.

33:56 Just touch on head count. We averaged 37 for the year, which was the same as 2020. We actually ended the year on 39 heads within the business, so it's a very, very lean and efficient team that we maintain throughout the year, and we'll maintain that going forwards as well. We we do have plans for a small number of additional heads coming into the business to help support and enhance our growth, but there's no plans for exponential growth in in headcount. We we will maintain that small and focused and fantastically efficient team within the business as well. As Stuart said earlier, the focus was to get to breakeven this year, and we we over delivered on that promise, delivering $3,000,000 of EBITDA and 1,400,000 of net profit, which is fantastic for the company. And then if we move on to working capital.

34:48 So when you've got revenue growth, which is absolutely significant, and you've also got a fairly limited cash balance within the business, you need to make sure your internal processes are on point and working well. Otherwise, you you're in trouble. But it's it's pleasing to report that we ended the year on $3,000,000 of cash. That increased by 1,800,000 from the third quarter. So we ended September on one point two million. We ended the year December 31 on $3,000,000 of cash. 2021 collections, we just scraped over $50,000,000, which is fantastic performance. That monthly average was 4,200,000 per month, and actually December was a new record at 6,800,000 in terms of collections.

35:38 If you look at the chart on that q four column, the particularly pleasing point for me is actually q four, That was the first time in the company's history where collections at 17,600,000 exceeded the payments at 16,100,000. So that's that's the first quarter that's happened. Obviously, that's the the major factor in in in terms of why our cash balance increased from q three to q four. So that's very pleasing from my perspective. Debtor days, we are going to report a debtor day figure of 90 four. It was 80 seven in 2020, so that's an 8% increase. But given there was a 125% increase in revenue, I'd accept an 8% increase in in the debt today figure up to 94.

36:26 Our payables days figure of 55 is actually 10 lower than 2020. So clearly, we're we're paying people well. Actually, with the leading podcast partners, we need to pay them on thirty day terms to remain competitive. So simplistically, if you look at collections taking on average a quarter to catch up with revenue recognized in terms of the previous quarter, we obviously have that timing delay in terms of payments and collections. And you can see that on the graph as well. So if you look at q two twenty twenty one, revenue recognized of £13,300,000 In q three of twenty twenty one, 13,400,000 was collected. In Q3 twenty one, 16,900,000 of revenue was recognised. In Q4 twenty one, 17,600,000 was collected. So we can clearly demonstrate there, you know, the ninety day debt a day figure takes a quarter to catch up in terms of collections, in terms of revenue recognised.

37:21 Minimal bad debt within the company. Bad debt write offs and provisions totaled a total of naught point naught 2% of revenue recognized in in in the year, so very immaterial. We can see the the the asset in the company really sat within trade debtors that increased by 9,100,000 year on year from 6.4 to 15,500,000 at the year end, and trade creditors only increased by 3,500,000 from 4.2 up to 7.7. In terms of working capital within the business as well, there is a pressure there with advances. So we do pay a small number of recoupable advances to to to attract and retain talent, and we paid $1,800,000 of those recoupable advances in the year. And we'll do so again throughout the forthcoming year or sort of 2022, and we'll particularly focus in in that first quarter. So that that's a that's a pressure on cash within the business.

38:19 But, you know, I've got a lot of confidence in in the processes that we have in in house to enable that relatively small cash number to sustain the growth that we have within the business. Hopefully that's given you a good overview, a bit more insight into revenue cost and working capital. And, you know, the growth story doesn't stop here. We're absolutely focused on continuing to to push that on as we as we go through the coming years. Back to you, Stuart. Thanks, Brad. Before we look at at the year ahead, just to say again, get some questions in. If you do have any questions, put put those down, and we'll try and get to as as many of those as possible. We got, like, five minutes or so left, I think, on just this final section, and then, hopefully, we can answer as many of those questions as as we we can at the end.

39:09 So, yeah, talking about future focus then, really, I think, you know, one of the key parts I I I wanted to to to really highlight for for 2022 is our focus and investment on building out showcase our global marketplace. Even further, I I talked about how that that launch of Showcase in November meant that we moved our our revenue from from via ad tech up to to three and a half times what we were seeing earlier in the year. The potential here, I think, is is is just incredibly strong for us. This because it runs fully through our advertising tech, the the scalability that that that we have from from this global marketplace could really help drive the the the the the business on significantly over the next few years. And that's a key area of investment for us. So just stepping it back, what exactly does the showcase do? Well, it's a it's a it's a marketplace. It connects buyers and sellers and what AUDIOBOOM is is is building.

40:17 And and what we've done very well is to, on one side, on the on the the buy side, to to consolidate, to create partnerships and consolidate all of those various monetization routes. And on the sell side, we are consolidating incredibly high levels of advertising inventory. We put those together within that marketplace, match them up through through the advertising tech. We get best prices and and high fill rates and drive revenue very quickly through through Showcase. So just to break that down even further, on the buy side, the advertiser side, the monetization side, our in house AUDIOBOOM teams can can sell into Showcase. Our Sonic team can sell into Showcase. Our international sales partners, ARN Rogers, Map Media in The UK, Ideabrew, they can all sell into Showcase.

41:09 We launched a self serve, buying portal that allows advertisers and and and and brands and agencies to build their campaigns, in in that portal and submit those advertising campaigns directly to our team, to confirm and and begin the execution process, on those. And then we have, a programmatic ecosystem that we've developed as well. Show you know, Showcase is available within more than 25 demand side platforms so that so that advertising buyers, wherever they are in the world, can access AUDIOBOOM inventory alongside all of the other inventory that that they are they are creating a campaign for. So an example of that, just to to to simplify it a little bit is is if a buyer who is representing, McDonald's is building out a campaign and they are building that campaign across, websites and digital, Audioboom's content will be available to to to buy against within the same software package, within the same system that that buyer is using to to build out the the the the the digital campaign or their TV campaign or their streaming campaign as well. So being in those those places is super important.

42:30 And, again, it's just creating that that vast scale and and and lots of different routes for for for the monetization. On the on the the sell side, on the the the supply side, we are and have been consolidating content and advertising inventory for for many years now, but but more than ever, we're pushing it through this marketplace. So that's, you know, that's the back catalog from those those top tier shows. We use ad rip to, like I said, to remove the, the the the premium advertising from there and to allow it to to be pushed into the marketplace to be resold over and over again, whether an episode is listened to today or in a ten years' time. We have 8,000 of our podcast channels connected to the to the marketplace to showcase so that for a podcaster, they simply click a button on the back end of AUDIOBOOM, and that content is exposed to all of these various sales channels.

43:27 And right now, we are making available within Showcase around 250,000,000 ad impressions each month. So we're we're looking at somewhere around 3,000,000,000 available advertising impressions being created within Showcase in in 2022. So that's that's just a huge number for for us. That's 3,000,000,000 available ad impressions within Showcase that will get exposed to all of those sales and and buying channels that that that we've created as well. So we see this as a, you know, a a big growth area for for the business. It allows us to continue to to to scale. It's very efficient. It's all delivered via via the ad tech, and we'll continue to invest to to build out more sales channels on on the on the buy side and and and more content on the the supply side as well. So that's a key area of focus for us in 2022.

44:22 And like I said, the goal there is for us to to to make to increase the contribution to to AUDIOBOOM's revenue via via showcase. And then the the other kind of key areas of of of focus for us, well, I think that top line kind of says it all that the goal for us is to is to outperform the wider industry growth yet again for the the sixth year in a in a a row. Wide industry growth is is projected to be 30%, and we think we'll go well beyond that. And you may have seen our analyst number takes us beyond that as well. So, yeah, we expect and and once again to to outperform the wide industry growth. What gets us there? Demand remains very high for not just podcast advertising, but AUDIOBOOM's podcast advertising unit. So going into this year, we already have $45,000,000 of advertising booked via the upfront process. That's the the the the advertising process that happens in October and November of the the preceding year where we go out and we we tell agencies and brands about what we're doing in in the following year and allow them to book early against the the entire year.

45:38 $45,000,000 already secured through the upfront advertising bookings process. So strong demand. Obviously, that strong demand then leads to high pricing. So I talked earlier about the fantastic growth of of of pricing for an ad unit in one of our top 25 shows, how it had gone from $3,600 in in late twenty twenty to $9,000 in q four of twenty twenty one. That was a big jump. But already, we're seeing pricing above that $9,000. So $11,340.40 dollars is the average average slot price for one of our top 20 shows that we've seen through that that upfront booking process for for 2022. So, you know, immediate 26% growth there during that upfront process on our top 25 shows. I talked about marketplace, and and Showcase is the name of that a lot during during this, but, yeah, just continued investment there into that advertising automatization and and the scaling out of of Showcase.

46:39 We continue to to focus on expanding our content footprint, working with the biggest and the best shows out there, and then launching new shows through AUDIOBOOM Studios. So AUDIOBOOM Studios has has new productions and co productions launching in the first part of twenty twenty two, big shows including National Park After Dark, Devil's in the Dark, Get in Your Pantry, all those are are lined up through AUDIOBOOM Studios ready to go. We continue to work with the and and build our relationships with those Hollywood talent agencies at WMA, UTA, and and CAA to partner with them and their clients to to launch shows and to to monetize and distribute the the the biggest names in podcasting. And then I think the final point and the final area of focus for me for 2022 is is continued international expansion we we we've seen, and I've highlighted what a a fantastic job we've done of monetizing content in Canada, in Australia, in India.

47:34 This year, we we look at those next three regions, New Zealand, Ireland, Europe, and and and focus on how we extract value from the the listening that that we we are able to achieve in in in in those regions too. So I think there's there's a lot to do here. There are there's clearly some fantastic data points here that that highlight where growth is going in in in 2022. Like I said, we'll expect to outperform the the market once again. I think as as Brad said earlier, the growth story hasn't ended yet. Q one is looking extremely strong for us against last year's q one. We're just in a a really good place as a as a business. You know, I've said it a few times over the past couple of years about us just getting started and just hitting our stride. We are we're kind of we've we've firmly hit our stride now, and it's just an exciting industry to be in and an exciting business to to be in.

48:30 You know, we we really appreciate your support. I hope you see the the path forward for this business and and and where we're going in the future. And, you know, hope we we continue to get that support from you guys. And I think that's probably Stuart. From us. Stuart, Brad. That's great. Thank you very much for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions using the q and a tab that's situated on the right hand corner of your screen. But just while the company take a few moments to review those questions submitted today, I would like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. Stuart, Brad, we received a number of presubmitted questions from investors ahead of today's event. And if I may, I wanted to start off the q and a session with these.

49:21 The first one reads as follows. You'd previously announced results would be released on January 19, but released them on the tenth. Is there any reason for this? Yeah. So in an earlier trading update, you're correct. We had had suggested that that January 19 would be the the date that we would we would release results. We we went early on on the tenth. And, you know, I think that the two main reasons for that were, you know, firstly, you know, if we have good news, the the why hold on to it? Let's get it out there and tell the world about it as as quickly as possible. And as you as you know, we have fantastic news, so we were really keen to to to put that out there, get it into the market, help everyone understand what what that means for the business.

50:07 And, you know, we've seen some strong share price growth off off off the back of those results. The second the second reason I actually think, you know, the the more important reason for for for for the long term speaks to the the level of of automation and processes that that we've built into the business. We now have the ability to to to close out a month, close out a quarter very, very quickly. I've talked about the platform that we have in a Salesforce based inventory management system that that that we've developed. Well, that, you know, allows Brad and and and his team to to do their jobs very quickly at the end of of every month. We have great intelligence around advertising bookings, the execution of those adverts to to ensure that that the the ad ran, and and and we can can charge for that ad. And it flows through the entire system right back to Brad's team and then beyond out to the advertising agencies ready for for for invoicing and and and billing too. So, yeah, you know, let's get great news out there, and and let's also focus on just the the the strong automation that we have within the business. It allows us to to do things quickly and and and get the messaging out early.

51:27 That's great. The second presubmitted question that we got from investors was, do you see m and a activity continuing in the space in 2022? And is there an opportunity for AUDIOBOOM here? Yeah. I think there was a couple other questions came in during the session. Similarly, one from from John c here, which is is also similar to to that. Yeah. I I do see m and a activity continuing in the sector. It's really been focused over the last couple of years from from three businesses, from from Spotify, from Amazon, also from SiriusXM. And then a little bit of m and a activity from the the radio companies in in The UK, Odyssey and and and iHeartMedia. But but those big three, Amazon, Spotify, and SiriusXM have have spent a considerable amount of money in in the space. I don't see it slowing down. I think there are more mega companies stepping into podcasting very quickly, and and and two of those being Google and YouTube and also Facebook. So this this year, Facebook have have launched the ability for for podcasts to be listened to in feeds and consumed in in in feeds, and they are doing a lot of work in the background to consolidate content with with with within Facebook. They're clearly making a play in audio.

52:54 And and and Google and YouTube have always had a good podcasting footprint. YouTube is a key distribution point for for podcasting, but it's been kind of somewhat ignored from the business. But but they are now focused on on podcasting too. So I think there's there's potentially more m and a coming because there are more huge organizations focused on on how how great podcasting can be for them and the benefits of of podcasting to to to their businesses. So, yes, m and a will continue. More opportunity out there. Is there an opportunity for AUDIOBOOM? I I I think absolutely. I mean, if you look at the the the Triton digital ranker that I showed you earlier in the in the presentation, AUDIOBOOM is the leading independent podcast business out there. No one has the no one else has the the scale and the structures and the the the the the volume that that we have. Certainly, no one else is is no one else on the on the independent side is is profitable.

54:04 You know, we are the only the only company of of of this size and and with this level of independence that is actually making money in podcasting right now. So we have to be attractive. We have to be a great option for someone that, is is looking to build a presence in podcasting. That's great. The third question that we got relates to dividends, and it reads, please can you confirm whether it's intended to pay a dividend this calendar year? I ask because the last six months, as the share price has increased rapidly, social media has speculated as to whether some of the profits will be returned to shareholders. Yeah. Again, similar sort of questions on the that came in during the presentation from from Graham e and and Noel c here has asked the same too. I think just, you know, a little too early to to talk about dividends at this point. Let let's just be super happy we we've reached that that breakeven point.

54:58 Let's build up those those cash reserves. Let's think about where we wanna invest that cash first for for stronger growth. You know, I think that should be our our our first point of focus as to how we use that that cash to to grow the business, make the business stronger. You know, we we understand shareholder, you know, excitement around the idea of a a dividend, but I think it's a little early in our in our life as a a profitable company to to be thinking about that at this point. That's great. The second to last question that we got here from investors was your analyst released an $83,000,000 as this year's revenue forecast. Is that too conservative?

55:45 I think it's a good place to start the year. Right? When you look at what that $83,000,000 means in context of the wider industry, it means that we are outperforming industry growth by over 30%. So when you look at it in in that context, AUDIOBOOM will do a fantastic job at 83,000,000 because we'll have significantly outperformed the wider industry. We'll have grown significant market share. We will have moved up the the the the the rankers in podcasting if we if we grow at that speed. So, you know, I think 83,000,000 is is a good place to to start the year. I mean, we're really, what, 15, nineteen days into into the year. So we wanna make sure that we we we achieve that market expectation.

56:37 It's been something that that Brad and I have been very focused on the last few years is to ensure that we deliver on the on the on on on the kind of the promises that are made. So let's make sure we we do that 83,000,000. What gets us beyond that? I think it's really the the the opportunity that we don't yet have visibility on. What we what we have visibility on makes us very, very confident on the $83,000,000 number. And when I talk about that, it's the visibility on the the the contracts that we have with our podcast partners, the visibility on the demand that's out there for for advertising in in our in our podcasts. What goes beyond the 83,000,000 is is some of the the the stuff that's not visible. So what new opportunities might come away across the year to partner with major podcasts, for example.

57:25 Those those kind of opportunities can take us, you know, well beyond that $83,000,000 number. But I think as a as a as a starting point for the year, you know, let let's see 83,000,000 as that initial target, and let's ensure we get there, and and we're very confident of doing that. Thank you. I know you've just touched on opportunities, and the last pre submitted question reads as follows. It says Spotify and Apple have both launched a podcast subscription platforms last year. How is that impacting the industry, and is it a threat or opportunity for AUDIOBOOM? Yeah. Jeff, I've seen the questions that Jeff has also asked about Spotify's open access platform, which is their sub sub subscription platform. And, yes, Spotify launched that earlier this year, and Apple launched something similar as well. That's the ability for podcasters and creators to to charge a subscription fee or a kind of a pay as you go fee to access content within the the those those platforms.

58:25 In the early stages of that, it doesn't seem to have created huge traction. It seems to get used mostly by digital media businesses like Vox Media, for example, to to to to offer their initial podcast products. And it also and where I think it will actually get used the most is via those very those podcasts with very kind of niche subject matter. So those those will be podcasts that have small audiences but extremely passionate audiences. So there's podcasts where the the the audience members really, really love content and and will pay to to access it, but the podcast doesn't have enough listenership to really make any money out of advertising.

59:14 That's that's where those will will get used the most. I don't see them as a threat to to our business. We are working with with with podcasts that have a huge built in audiences where that are used to to hearing ads, used to receiving the the product for free. And as as a podcaster, we are making them significant money through advertising. And so switching lanes and and and taking a risk of moving to any other model is is not something I believe any of them would would would be willing to to to do. So I don't see too much of a a threat there. In fact, I actually think there may be some opportunity there for AUDIOBOOM, particularly around the AUDIOBOOM studio shows to receive incremental revenue. So, you know, if we have if we're great at monetizing AUDIOBOOM studio shows in The US and The UK, maybe in in in South America or in Europe, we charge a subscription fee to to to to listen to that content. So those are the the kind of opportunities I think they are I think that that comes from that, some incremental revenue opportunity and and some, you know, some interesting new models around our own products and our own audio group studio shows.

1:00:30 Stuart, Brad, thank you for that. And, Stuart, I'm not sure if time permits for any further questions, but if there are any that come through from investors and you believe it would be appropriate to address, If I could hand back to you to respond to those. If not, obviously, we will make all questions available to you after the presentation has ended, and we'll publish all of those responses on the investment company platform. Yeah. I think we I think we've answered the, you know, a a good variety of of the ones that have come in both today and and and previously as well, but we'll take a look through and and answer any additional ones on the platform just to, you know, for for for time constraints right now. That's that's perfect. Yeah. If I could just hand back to you to read out those questions and give and give responses where it's appropriate to do so, and I'll pick up from you afterwards. Sorry. Sorry. I I wasn't probably wasn't clear. We because we're we've we've we've headed over the time limit now, we'll, we won't do any more of those questions live, but we'll try and answer some of those, after the presentation and then get them on the call for you. Sorry for that.

1:01:31 Yeah. So, Stuart, Brad, thank you for addressing all those questions that you can from investors today. And, of course, ladies and gentlemen, as you just heard, the company will review all questions submitted today, and we'll publish those responses on the investment company platform. Stuart, Brad, but just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Could I please ask you for a few closing comments? Thank you so much. Sure. Yeah. I think I think, firstly, I I wanna say thank you to to to our shareholders and and potential shareholders for continuous to support the business. I I also wanna thank the AUDIOBOOM team. As Brad said, it's a very small team of just, you know, thirty six, thirty seven people. We we we punch them all our way. We do an amazing job. We have a really talented team, so thank you to the AUDIOBOOM team. You know, I think I summed it up earlier.

1:02:17 You know, we we've hit our stride over the past two years. We're we're fully in our stride now. We have a lot of growth ahead of us. The growth story will continue into 2022. We're we're building out a fantastic model, a model that I believe is more intelligent and and stronger than than our competitors. We're gaining market share. We continue to build revenue. We have a, you know, a a super strong business here. So I'm excited about, what's coming in in the next few years, and I hope everyone else can be too. Sure, Brad. Thank you for that. That's brilliant. And thank you for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the ability to provide your feedback in order the management team can better understand your views and expectations.

1:03:03 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, and good afternoon to you all.