Release Date: July 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Acast AB (ACASF, Financial) reported a 24% increase in group sales, reaching SEK478 million for Q2 2024, with an organic growth rate of 22% after adjusting for currency changes.
- The company maintained a steady gross margin of 39%, reflecting a 3 percentage-point increase compared to the previous year.
- Acast AB (ACASF) achieved a significant improvement in EBITDA, with a loss of negative SEK11 million, corresponding to a negative 2% EBITDA margin, marking a 9 percentage-point improvement year-over-year.
- The company has a strong cash position, holding SEK712 million by the end of Q2 2024, indicating a robust financial standing.
- Acast AB (ACASF) continues to lead in integrated marketing campaigns, attracting multichannel creators and winning industry awards for its innovative work.
Negative Points
- Acast AB (ACASF) experienced a 15% decline in listens due to changes in measurement from the iOS 17 update.
- The company reported an EBITDA loss of negative SEK11 million, indicating that it is still not profitable.
- There was a slight softness in CPMs (cost per thousand impressions) in Q2 compared to Q1, impacting revenue growth.
- The macroeconomic climate in the UK posed challenges, affecting growth in that region compared to other European markets.
- Operating expenses increased by SEK21 million or 11%, driven by investments in North America, FX impacts, and costs related to share price movements.
Q & A Highlights
Q: Can you explain how you've managed to achieve growth despite softer CPMs in Q2?
A: Emily Villatte, CFO, explained that while CPMs were softer, the sell-through rate improved significantly. This was due to available inventory and strategic efforts to grow the top line. She also noted that Q3 would present tougher growth comps.
Q: What is the seasonality impact on costs, especially with increased sales and marketing efforts?
A: Emily Villatte, CFO, stated that while costs increased due to investments in the US and FX impacts, operating leverage remained strong. She mentioned that Q3 might see a slight reduction in costs due to staff holidays but no radical changes are expected.
Q: How does Acast's multichannel offering work, and what is the business model?
A: Ross Adams, CEO, explained that Acast's multichannel offering includes video and social media components, allowing content distribution across various platforms. The business model involves monetizing audiences through integrated campaigns across audio and video, catering to advertisers' growing demand for multichannel engagement.
Q: How much of North America's growth is due to market share gains versus market growth?
A: Emily Villatte, CFO, indicated that while precise market data is limited, Acast is likely gaining market share in North America. She expects North America to continue growing faster than the overall Acast group for the full year.
Q: What steps are being taken to increase the sell-through rate?
A: Ross Adams, CEO, highlighted a multifaceted approach, including attracting new brands, leveraging studies like the ROAS study with OMD, and increasing presence in key markets like the US. Trading deals with major agencies also contribute to improved sell-through rates.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
