Earnings Call: Q3 2023

Oct 16, 2023

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&A tab that is 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 will review all questions submitted today and publish responses where it is appropriate to do so, and these will be available via your Investor Meet Company dashboard. Before we begin, I would like to submit the following poll. I would now like to hand you over to the executive management team from Audioboom Group PLC. Stuart, Brad, good afternoon. Thanks, Jake. Welcome, everyone, to our Q3 update. Positive update today in terms of the future of this business. Audioboom is in a strong place moving forward, and we are pleased to present the business to you today. We will do this in a slightly different order to what many of you may be used to seeing. First of all, we will dive right in. We will take a look at the financial performance, the operational performance so far in 2023, and how we are building for the future and how we expect Q4 of this year to be in a very positive place. Of course, as you will have seen in today's trading update, we are really focused on that record revenue in 2024. After that, we will step back a little bit. We will recap the business model, talk about the company and the industry and the space that we are operating in for those of you that might be new to Audioboom and the podcast space. After that, we will take a look at the future focus areas that we are focused on building this business around and what we are expecting through 2024 and beyond. At the end, we will do that Q&A. So get any questions in that you have now. We have a few questions that were submitted ahead of time on the Investor Meet platform. We will answer those, and plenty of time, hopefully, at the end to answer a few more that you submit today. So we will get into things in just a second, but as a way of introduction for, again, any of you that are new to Audioboom, a quick intro from myself. I am Brad. I am Stuart Last. I am the CEO of Audioboom. I have been CEO for the past four years and have managed the company through a very strong period of growth and success. I have been at Audioboom, though, for 10 years, leading out the U.S. growth of the business since 2014 and 2015 and previously at the BBC, driving their digital audio and radio business when I was based back in London before coming here to New York. But very excited about the future, very positive about where this business is going, and very pleased to be leading the company forward. Thanks, Stuart. Hi, everyone. I'm Brad Clarke, CFO here at Audioboom. I have been here since March 2018, so coming up for six years. Chartered accountant with over 15 years of experience of financial roles at media organizations prior to Audioboom, at News UK, another AIM called Brave Bison. I'll be back a little bit later on to take you through some updates on revenue, OpEx, working capital, and cash. I will speak to you shortly. Thank you, Brad. All right. Let's jump into the performance and operational update. As I said, we'll get to that, the look at the model a little bit later. Many of you, I think, will have seen these numbers from today's trading update that looked at Q3 and our year-to-date performance. I'll walk you through those, and then we'll go a little deeper on some of the key points here. Year-to-date, through to the end of September, Audioboom delivered $45.8 million of revenue. As you'll see here, that's down on our position at this point last year, but up significantly on the previous year. That slide back in the year-to-date revenue is due to two key factors, two key factors that we've talked about a lot in these presentations over the past year. The first one is that advertising market weakness. In early 2022, we saw a deterioration of the ad market, and that ad market weakness has continued through 2023, and we think that ad market weakness has impacted our revenue by around 20% this year so far. The second key point in that drop in revenue is the loss of the "Morbid" podcast from the Audioboom network. That's a very large, very successful podcast that we worked with for a number of years, and that podcast contributed revenue last year until it left the network midway through the year, and that has obviously led to a drop in revenues also. "Morbid" is a top 5 podcast in the world, so a massive podcast with a huge audience and strong revenue attached to it while we were working with that show. Those are the two kind of key factor in that revenue drop, and we'll talk about the improvements that we're making to deliver maximum revenue going forward in just a moment. In terms of profitability, our adjusted EBITDA number year-to-date through the end of September is a loss of $1.7 million. So we've moved into a loss-making territory off the back of that ad market impact on revenue. EBITDA is being impacted by two key factor here. Firstly, the ad market impact. Lower revenue allows us to push through less to that EBITDA line, and that's been key in this first nine months. But the second point here as well is impacting negatively EBITDA, and that is partner minimum guarantee payments. As you know, to sign the top-tier podcasts in the world, we create a partnership package for them. Some of those involve a minimum guarantee. We have to pay that partner, that creator a minimum amount. When revenue is low and revenue is impacted by this weaker ad market, we have to still pay that creator their minimum guarantee, and we have continued to do that, unlike several of our competitors in the space who have been unable to continue to pay their talent. We have continued to invest and pay our minimum guarantee obligations, and that has a direct impact on that EBITDA line. Again, we will go into that in a little more detail, and I will show you how we move away from that minimum guarantee exposure over the next few months. One key point here, and Brad will go deeper on this one on an upcoming slide, but I think it is just worth saying that we have really great cost controls within this business. We are continuing to be a very lean company. Our year-to-date operational expenditure of $7.9 million is down 10% on the previous year. So we have a really good handle on that, despite all the inflationary pressures that are around right now. We continue to operate in a very lean, very controlled manner there, too. Last kind of key number here is the $3 million cash number, at the end of September. We have since collected more than $2 million since that. So we continue to collect well. We utilized $1 million of cash in Q3 for advanced payments to our top-tier podcasters as a contracted advanced payment, and those are then recoupable against their revenue over the course of their contract. So we have seen some cash burn there. A significant amount of that due to those up-front cash payments to podcasters, which is then recoupable. Just as a reminder, we do have access to another $1.8 million of cash, through an overdraft facility that we have had for the past few years and has continued to be untouched to this point. So, those are the numbers. I think we have had a challenging year at the company because of that ad market weakness and those minimum guarantee obligations that we are contracted to. But I think today is really about drawing a line in that and focusing on the future of this business, which is in a strong place because of the operational improvements that I am going to walk you through in just a moment. To go a little deeper on that revenue, this slide, I think helps you get a view on that. We have our three advertising products. Our Premium ad product, which is where the host of the podcast delivers the advertising in their voice, and they endorse the product. So a very Premium product. We have Showcase, which is our ad-tech-delivered advertising business, very efficient, very scalable, and is now delivering huge volume. Then we have our Sonic business, which is our creative agency business that works directly with brands around their advertising. So here you can see the progress of those revenue lines. Our Premium business now makes up much less of our overall revenue, 58% year to date in 2023, down from 71% last year. Showcase is the fastest growing part of our business. We will talk about that a lot more as we go through this presentation, but Showcase has grown 30% year-on-year and is a really strong part of our business, and we expect Showcase to continue to grow strongly going forward. Sonic now makes up 19% of our revenue, albeit with that smaller revenue share between Sonic and its brands. Just to go a little deeper on that revenue share, you can see the revenue shares here. Premium at 22%, Showcase at 41%, and Sonic at 15%. Combined and across the business, that gives us a group revenue share of 24%, and that is a vast improvement over last year at 20%. That is the kind of contracted on-paper revenue share at 24%. We will talk about how we have improved that a little later in the presentation. I think key point here, just to go back to the previous slide and the numbers on there, is that 24% revenue share, that is impacted by those minimum guarantee obligations. So we continue to have to pay those partners even if we are not delivering on the high enough revenue to take care of those minimum guarantee obligations, we still have to pay those. That reduces that revenue share down, effectively creating a gross margin of around 14% for this year. So that is the key impact on gross margin and then EBITDA is those minimum guarantee obligations that we continue to pay. I just wanted to talk to you really about the state of the advertising market and the state of the business. Not an exciting slide, this one, but some key points on here just to walk you through. I think the first one is that the ad market does remain challenging. We had very weak demand in early summer. Unexpected weak demand in early summer. We were seeing some pickup in the advertising space as we got through the spring, but certainly weak demand, with July as being a low point for revenue. We have since seen month-on-month revenue growth since July, so August was higher revenue than July. September higher than August, and October already ahead of September. So we are seeing good sequential revenue growth. July does appear to be very much the low point for revenue, and we are taking things forward from there. The operational improvements that I will talk to you about in just a moment will result in strong Q4 performance. As I said, October is already trending ahead of previous months for revenue. Q4, we will get back to year-over-year revenue growth as well. So currently we have $18 million of revenue booked for Q4. We have talked in our trading update today about going beyond $19 million. That will be back to year-to-year growth. Obviously, that will be sequential quarterly growth as well. I think the key point here is that will be the strongest revenue quarter since the ad market downturn. So the strongest revenue quarter in Q4 since early 2022. That will be, I think, for me, a clear sign that the operational improvements that we have put in place are starting to pay dividends and starting to get this business back in the right direction. Q4 and next year, 2024, we are very clear that we will get back to an adjusted EBITDA profit position. That's due to those revenue increases that I've talked about and also due to lower minimum guarantee impact that we'll focus on shortly. One item here, I think that I don't have too much detail on at this point, but we're starting the process right now, is the 2024 advertising up-front. This is where we work with the key advertising agencies to commit spend for next year. We're just starting that process now, but those advertising agencies are confident about the state of the advertising market. They are confident that the brands that they represent and run advertising campaigns for will have budget growth in 2024. We like the look of the ad market. We think there's going to be improvement there in 2024. I think just to reiterate here is that, again, we've maintained that guidance for 2024 at a record revenue level. We expect to get back to record revenue next year. $78.8 million is the number that we're focused on, and adjusted EBITDA profit of $1.3 million. To sum that up, weak advertising market through to summer. Strong revenue growth there and as our improvements come into play, and this is setting us up for a good Q4 and a record year in 2024. You've heard me mention it a bunch of times already, but those operational improvements, what are they? How will they affect the business? I will talk through those in the next few slides because I think they are very key to drawing that line that I mentioned of a challenging kind of past and a very positive and bright future for this company. The first of those improvements is our network growth. How quickly and how strongly we are building our content network at Audioboom because the bigger and stronger we build that content network, the more advertising inventory that we have available to sell. Even in an ad market that isn't strong, it allows us to take market share and it allows us to capture more of the advertising revenue that is available. You'll see here, we announced in the trading update record monthly downloads, just under 127 million downloads a month, and we expect continued growth into Q4 and to get that number around 130 million downloads per month. You'll see that the chart there, we've had strong growth over the past four years as we bring in new shows into that network and build the size of our network. We now reach more than 36 million unique listeners every single month. We have some real scale going through that network. That's proven here on the right-hand side, you'll see two rankers. That's the Edison Research ranker, which ranks the reach, the audience levels of podcast publishers in the U.S. On the far right-hand side here, you can see the Triton Digital podcast ranker, and that one is measuring volume, effectively, how many downloads each of those podcast networks is producing every single month. Audioboom has cemented its position as the fifth largest podcast publisher in the U.S., behind the likes of Spotify and iHeartMedia, Wondery, Amazon, giants of the audio space. We continue to be very proud of that work and continue to be focused on moving higher up that ranker as we build out that network. I think it's also just worth saying that we rank fourth in Australia, fourth in Canada, second in New Zealand. There's no U.K. ranker, but if we did, we'd be in second or third place in the U.K. as well. We have strong global scale, but really in that key U.S. market, we continue to build the size of our network and to be that large publisher with good influence in the U.S. Connected to that network growth, and I think one real key point here is how the growth of that network is leading to us to have more inventory to sell on a monthly basis. In October, we hit a big milestone. This is a huge number for the podcast space. In October, we are making available more than 1 billion monthly ad impressions across the network. Talking about huge scale and strong growth, we now are creating 1 billion ad impressions to sell versus 675 million a year ago. You can see the growth, you can see the growth in the size of the network, and then you can see the growth in the number of ad impressions that we are generating. We have been very focused over this last year of extracting more advertising inventory from each download that we have. We now extract seven available ad impressions from every single download. A year ago, that number was five. We are creating more to sell from the same number of downloads, but we're also lifting the number of downloads in the background too, and that has got us to that 1 billion number. We're doing that through signing new podcasts. These are just examples of some of the top tier shows that we've signed to the network just in Q3. These are all strong kind of top 200 podcasts in the U.S. and globally. We expect these shows to contribute more than 8 million monthly downloads to the network in 2024. We have a strong business pipeline in place as well. We've agreed terms with a handful of other podcasts. We're just in the contracting phase on those. The new shows that we have agreed terms on and will sign in Q4 will also deliver significant growth to that network in 2024. We're building the network. As I showed you earlier, just like we're doing that on more favorable terms to Audioboom, more equitable terms to Audioboom. Really what these two slides are about showing you is that, in the face of a weak advertising market, the improvements that we're making to the business will allow us to have more advertising inventory to sell and therefore more revenue opportunity as we move forward. The second of those operational improvements is about how we then sell all of that new advertising inventory. We recognized pretty early on in this weak advertising market that we needed to create more supply, and then we needed to do a better job of selling against that supply as well. What you'll see here on the left-hand side is the work we've done to increase our brand count. These are the number of advertisers that spend money with Audioboom on a monthly basis. The total brand count has increased by 40% over the last year. What that is showing is that brands continue to understand that podcasting is a good place for them to be, a good place for them to spend their money. But in this weak advertising market, they are spending less money. They have smaller budgets. They are committing lower budgets to the space, but they do want access to podcasting. So, that is a great platform to build off. Our Showcase marketplace has been a big part of building that platform of brands that we work with. Showcase is our advertising marketplace. It is a product that we launched around three years ago, and it has been a fast-moving part of the business, now contributes more than 20% of our revenue every single month. Effectively, what Showcase does is through our advertising technology stack that we have in the business, it connects buyers and sellers effectively of advertising inventory at massive scale, fully automated. So on the supply side at Showcase, we are putting around 675 million available ad impressions into Showcase from all of our podcasts, from our 8,000 podcasts and 130 million downloads. We push all of that into the marketplace, and then we are bringing in demand monetization opportunities. So that is a programmatic ecosystem that we have built for automated ad buying. We have international sales partners in Australia and Canada and New Zealand and India and other key territories for us. They can come into Showcase, and they can buy against our inventory in Showcase. Then obviously our internal teams can also sell into Showcase as well, can bring monetization into Showcase. That has led to 30% year-over-year revenue growth for this part of the business. So we think Showcase is a key area of focus for us. It is a key part of our business going forward, and it will lead to us optimizing how we monetize that increased supply of advertising inventory that we have. On that demand side, that one is key for me, just how we continue to bolster the monetization in Showcase. In Q3, we entered into a handful of new partnerships. DAX U.S. is a big U.S. audio brand. Amazon Ads in the U.K., Bold Collective, you will see them at the bottom there. These are all partnerships on the demand side. Those companies come in, they access our inventory that is in Showcase, and they bring brands in to buy against that inventory, leading to higher fill rates and higher demand on Showcase and increase the revenue coming in through that source. So Showcase is in a good place. That is one key factor in improving how we monetize that advertising inventory. The second key factor is really expanding our customer base, and this is something many of you will have heard me talking about over the last six months. While Showcase is growing, you can see this on the left-hand side, Showcase is growing in terms of the number of brands that advertise through Showcase. Our Premium product, those host endorsements, those high-priced advertising units where the host of the podcast is delivering the advertising message. The number of brands that are spending in that area has lowered since the ad market downturn. The key reason for that is that the majority of those brands that were utilizing the host endorsement and paying the Premium prices to do so, those are what we call performance brands. Those are brands that directly measure the ROI of each ad, and they build their businesses via the sales that they get from that advertising. So brands you can see here, like SimpliSafe, BetterHelp, HelloFresh, they're disruptor brands. They're direct-to-consumer brands. They advertise in podcasting. They like the host of the podcast delivering their messages. The audience trusts that host. The audience goes out and spends money on those products, and they can track the ROI. Now they've been hit harder by the macroeconomic conditions, and they have pulled back on their spending. It became very clear, I think early to me, that we needed to widen that customer base. We needed to start to attract blue-chip advertisers, those advertisers that are not advertising simply for immediate ROI. They are playing a longer game. They are building awareness of their brands. They are ensuring that when a customer wants to buy a new car, they first think of Ford Motor cars, for example, or when they need to buy new sportswear, they are first thinking of Nike. We want to attract those awareness brands. We're doing the work to get into the major agencies that work with those awareness brands to build partnerships there. Earlier on this year, we launched the unit at Audioboom, that will do this piece of work. We're making some good traction at this point. We're a few months in right now, and we are already now working with six of the top 15 agencies in the U.S. for digital advertising spend. You'll see some examples there at the bottom, but these are major advertising agencies. They work with blue-chip companies. This is about widening that customer base and doing work through these major agencies. It's a slow process, and there's some good initial traction there, and we'll continue to build this. I think 2024 will see some significant spend out of these agencies for 2023. We do certainly have money coming in from all of these sources, and we've made those initial contacts and we've made those initial test campaigns are coming through. I'm pretty pleased with how that's gone in the first six months of this year. I think widening that customer base and really making relationships and building the right relationships at those key advertising agencies, is a sign of maturation of this business. Also just a good first step in taking this into a new, stronger and bigger place for Audioboom. Just to recap, I've talked about the improvements that we've made to build our network and to build our supply of advertising inventory. I've also talked about how we then optimize the monetization of that supply. I think the third point is how we improve our work with talent so that this business becomes more profitable. There's two key points here that I want to make. The first one is around those contracted revenue shares. So how much Audioboom retains from every dollar of advertising spend. In 2019, 2020, 2021, there was a lot of pressure on that revenue share. Hollywood talent agents like WME, UTA, CAA, they were beginning to represent the top tier of podcast talent out there, and they were using their leverage to strike stronger deals for the talent. That put pressure on the revenue share. As you will see here on the chart on the left-hand side, our revenue share across the business dropped to 21%, 20% in that time. In a healthy ad market, of course, when we are meeting all of our minimum revenue guarantee obligations, that revenue share is a proxy for gross margin in this business. There was that pressure on the revenue share that I have talked about, but now we are beginning to make very clear improvements in that revenue share when we are making new signings to the network, when we are renewing with existing partners. I think the other key part is that we are now also being able to improve our revenue shares by offering deeper relationships with the talent. We are now offering them services like distribution, further distribution, production services, marketing services, all things that are unique to the Audioboom platform. We are now able to offer as part of that package to the podcaster. As part of that, we are able to negotiate a stronger revenue share. In 2023, that contracted revenue share is up to 24%, so you can see the work that we are doing already making an impact. In 2024, that contracted revenue share will be 25% or above. I think the quality of the creator deals that we are making is already improving, as you will see here. As revenue improves, that will have a strong impact on both the gross margin and also our bottom line. The second part of these improved creator deals is our exposure to minimum guarantees. As I said, we have a number of podcast partnerships with the real top tier of podcasters that have a minimum revenue guarantee. If revenue is low and we are not hitting those numbers, we still have to pay that minimum guarantee and that hurts gross margin, that hurts EBITDA performance, clearly. In that very buoyant podcast space, again in 2020, 2021 and 2022, there was a lot of pressure to create strong minimum guarantees to sign podcasts to the network. Since the advertising market has weakened, we have obviously been exposed to those minimum guarantees since then. Over the next few months, those minimum guarantees in those contracts that were signed at the height of the bubble will drop away. They will be renewed on more favorable terms to Audioboom, or they will churn completely out of the business. In the next few months, at the end of this quarter, we see a significant drop in our exposure to minimum guarantees. Across 2024, our exposure to those minimum guarantees will drop by around 75%. That impact that we have had this year on our EBITDA, that will drop by 70%-75%, I should say, over the next year. Then by January 2025, that minimum guarantee exposure will drop by 90%. Almost all of the pressure that we've had on our EBITDA number because of those minimum guarantee true-ups will fall away by the end of 2024 as we renew these contracts on more favorable terms. Those three items combined, the increased advertising inventory, and the strong scaling of the advertising inventory, the creation of better and stronger advertising products to optimize the revenue attached to that advertising inventory, and then the higher quality creator deals that we are making, that's standing us in great stead to go into a more positive place in Q4 to get back to year-on-year growth in Q4 in terms of revenue, and then to achieve record revenue, in 2024 and get back to EBITDA positivity. We'll break there, and Brad will pick up now, to give you a more in-depth view on the financials in the business. Great. Thank you, Stuart. We've got our usual couple of slides here, which looks at revenue and cost, and then we'll go onto our working capital and the cash update for the quarter. Firstly, on revenue, we can see here that a challenging Q3 quarter at $14 million. That is the lowest revenue quarter since the second quarter of 2021. However, our expectation is that we bounce back in Q4 of this year with a revenue quarter, which will be the highest since the second quarter of 2022, at the start of the downturn. At $19 million, that'll be 36% up on Q3 this year, and 3% up on Q4 last year. Importantly, a return to growth. As Stuart has said, $18 million is booked, $1 million to go before the end of the year to get through $19 million. Ad markets continue to be challenging, but to reinforce what Stuart said, the operational work we have done and continue to do will allow us to recognize that increase in performance, and that should be viewed as a positive when viewing this company, is that we're able to drive a significant increase in performance despite those softer macro conditions. Showcase does perform really strongly this year. It has done for the last 18 months or so, Q3 ending 30% up year on year. A more challenging quarter for Sonic at $2.3 million. However, 50% of that revenue was in September and it continues to grow into Q4, where it will record a record quarter because of the material amount of spend in relation to the NFL season, the fantasy sports games around it. As I've said continually through these investor presentations, our OpEx base continues to be very well controlled. At $2.4 million in Q3, that was our lowest OpEx quarter of the year, despite those wider inflationary pressures. We've done very well in the current climate to lower our OpEx cost by 10%, reducing it from $8.8 million for the first three quarters of last year to $7.9 million for the first three quarters of this year. Headcount, that stands at 38, and that's at the lowest level since October of 2021. Total year to date salaries and commissions of $4.5 million. That's $1.2 million or 21% lower than the prior year. Of that $1.2 million, $0.7 million is due to lower salary costs and $0.5 million is due to lower commission due to the lower revenue recognized this year. Technology costs, including costs incurred for bandwidth and ad impressions, which is a material cost for us within that cost bracket. That's 25% up on the prior year at 2.2 million year to date due to the higher volume of ad impressions and bandwidth this year. The cost incurred is 9% lower than it would have been through contract negotiations earlier on this year to lower the rates per gigabyte incurred. With that headcount of 38, we remain an extremely lean business primed for further growth, and we'll be able to recognize that growth in the final quarter this year and into next, following the improvements made this year to a greater wide impressions, increasing the number and quality of content partners we work with, reducing that minimum guarantee exposure which Stuart Last outlined just now. That's very important. Further optimization of these things will enable recognition of further growth next year. As and when there are further macro ad market improvements, that's obviously extremely difficult to forecast when those macro ad conditions will improve. We'll see that as an upside to our expectations and forecasts for the future. When that does happen, this company will continue to go from strength to strength because of that increased gearing effect on our top and bottom line, because the OpEx base that we have is as optimized as it possibly could be. In terms of working capital, the headline for the working capital is that cash has decreased by $2.3 million in the quarter to $3 million. Let's go through the reasons as to why that happened. Firstly, as it has done historically over quarter end, customers we believe did withhold cash over the quarter end to preserve their own cash reserves. At least half a million dollars should have been received in September and was indicated as such from a major customer, but that was withheld over the quarter end and was paid in the first week of October. So we have collected that, but just delayed on the receipt. Secondly, contracted to pay $1 million in up-front recoupable advances in August, which Stuart Last mentioned earlier. That's obviously had a direct impact on the cash out in the quarter. In addition, we made full payment of all creator minimum guarantees, including the onerous contract that was detailed in the half year report. Thirdly, July and August were softer revenue months, and that's impacted the cash held through softer collections in August and September. Many customers pay under 30 days now, especially in our subsidiary, Sonic. So it's relatively short turnaround in terms of the impact on cash. September collections of $3.5 million were lower than the year-to-date average of $5.3 million. On a year-to-date basis, we've collected $47.4 million, which is 104% to revenue booked versus our three-year average of 94%. So simplistically, outside of that delayed customer payment, we're approximately where we should be on collections and subsequently cash held. Year to date, bad debt write-offs and provisions in the P&L total approximately $60,000, which is 50% of the half year total due to good work on collecting previously provided for invoices. So that balance remains immaterial as it has done historically as well. For cash, we are simply seeing the impact of lower revenue in the quarter, plus the impact of servicing minimum guarantee true-ups this year. We since collected another $2.3 million from our customers in October, having collected another $300,000 today. That's an improvement on the $2 million that we went out with at 7:00 A.M. this morning. Debtor days continues to be very impressive, 67 days. As I say, many customers paying within 30 days. We'll start to see the impact of the return to revenue growth through cash collections from this point onwards as we go through Q4. As we've said, sequentially, revenues increased from August to September and then into October, collections for many customers being 30 days or less, we're going to start to see that cash coming through the business very shortly. We still have our recently renewed overdraft, which Stuart mentioned earlier, as and when we need it. What we need to happen now is our minimum guarantee exposure to reduce, which Stuart spoke to earlier. We'll start to have them from January 2024 onwards. We need the revenue projections to be met for that revenue growth to flow through the cash collected, and we need our collections process to remain on point as we go forward into next year. I'm confident in that process working because it's very efficient and has been for the last few years. Hopefully that's given you a good update of revenue, OpEx, cash in terms of where we stand at the moment. I'll be back for the Q&A at the end of today's session. Back to you, Stuart. Thank you, Brad. Hopefully that has given you some good insight into both performance year to date in 2023 and also really where we are focusing our operational focus on to move back into a positive place at the end of this year and into next year. If you need any more detail on anything we've spoken about in the last few slides, put a question in now. There's still time to get questions in, and we'll answer some of those towards the end of this. The next section, the next few slides are really about our business model. This is probably for anyone that's new to the business, doesn't fully know Audioboom and the space that we operate in. I'll walk you through that one and then we'll get back to looking at 2024, and beyond at Audioboom. I think this is a key one. Despite that ad market downturn, the podcast industry is growing fast and is expected to continue to grow pretty quickly. Revenue through podcasting, and that's advertising, as well as other forms of monetization, is expected to quadruple over the next seven years, moving from a $4 billion global revenue business, industry, I should say, to $16 billion in 2030. Strong growth is projected for the podcast space that we operate in. We are a leading independent podcast company. We're a pure play podcast platform, and we're well positioned to maximize our capture of that value over the next seven years. Our model is very simple. We have a technology platform that sits at the heart of audience, advertisers, and creators and connects all three of those. Without Audioboom sitting in the middle of that dynamic, there really is no value to capture. Audioboom connects creators and content with advertisers and distributes to audience. You need all three elements to come together to have that value. We do this at scale, and we do this in a very strong and significant way and very successful way over the past five or six years. Over that time, we have delivered very strong growth through that model. We've delivered average 65% revenue growth every single year since 2017. That model does work. As you've seen here, we are now enhancing and improving that model to take into account the weakened advertising market. We continue to focus on making that model work in podcasting, and we feel we have a very significant part to play in podcasting going forward. Three very kind of simple slides, I think, there on the Audioboom model. We're part of a fast-growing industry that's going to quadruple over the coming seven years. We play an important part in bringing creators, advertisers, and audience together at scale through the platform. The model works and has worked and will continue to work in the future as we amend and refine that in the face of a weaker advertising market. Just a handful of more slides before we get onto the Q&A section. These slides are really looking at where our focus is to build for the future. I've touched on many of these points as we've gone through the presentation, but I want to reiterate them because I really do believe that today there's a line being drawn here between a kind of a challenging period for the business because of the macro, and a very positive future for the business because of those improvements that we've been making here at Audioboom. First focus for us is to continue to grow that Audioboom Creator Network. We know that the signings that we made in Q3 will add more than 8 million monthly downloads to the network in 2024. It's the Q4 signings that will add on top of that as well. We have terms agreed with some top-tier podcasts, that hopefully we'll be able to announce in the coming weeks. That will add a further 5 million monthly downloads to the network in 2024, so we're creating really good scale within that network. We have the strongest ever new business pipeline. We are continuing to work every day with key talent agents at CAA, WME, and UTA. They bring us great opportunities to partner with their talent, with their creators. We're doing that on more favorable terms to Audioboom, and that's helping us to build the size and the scale of our creator network as we go forward. Point two here is really the extraction of that inventory from the downloads that we have. That will continue to scale very fast. I think this milestone of 1 billion advertising impressions in October is a real significant point for us. It's starting to get some real scale through the network. We are extracting more impressions per download than we ever have been. That's the real operational leverage that we have within this business to create more supply from each download. Next year, in Q4, in fact, and then again, next year, we do expect to see both record audience reach and also record download and inventory levels running through the platform. The size of the network will increase. The amount of inventory that we have to sell will increase because of that work we are doing. Showcase, we talked about the success of Showcase, and Brad touched on it too, that 30% year-on-year growth. We expect Showcase to grow above 20% again next year. We keep adding those demand-side partnerships, and we keep adding more inventory and more advertising supply into Showcase. We believe that Showcase will be an important part of the business growing more than 20% in 2024. Not only are we creating more inventory, we are monetizing that inventory more effectively going forward. We've talked about the expansion of that customer base. That is clearly a key part of our focus right now. We launched a new team earlier in the year to focus on building partnerships and relationships with those blue-chip customers, some of the ones I highlighted earlier, like Ford Motor, Nike, Procter & Gamble, these big advertisers who are less impacted by macroeconomic conditions. That work is ongoing. I'm really pleased just last week that Danny Farman joined Audioboom to lead our brand sales as a Vice President here in the U.S. He's previously of SiriusXM, a huge radio and audio business in the U.S. Danny will come in and lead some of those brand partnerships that we have. He will really drive that ad agency business going forward. As I highlighted earlier, just in the short space of time since launching this part of Audioboom, we're already working with six of the top 15 digital advertising agencies in the U.S. The work that Danny and the team will do there will develop that further and get us into more of those large advertising agencies and build campaigns through those relationships even faster in 2024. Revenue share improvements is a key one. We talked about it a little earlier and how we'd improve that revenue share that we have from around 20% last year to 24% this year through more favorable contracts, being able to provide more services like distribution and marketing and production so that we can hold onto a higher share of that advertising revenue in those talent contracts. We'll continue to do that, and we will see further improvement in that revenue share in 2024, getting that to 25% and above. The quality of our partnerships will improve significantly. Finally, as I mentioned before, through those renewals, through those re-signings, and through new signings of podcasts, we will reduce our exposure to those minimum guarantees that have impacted our profitability over this past 18 months. As I said before, across next year, those minimum guarantee true-ups that we have been making will fall away by around 75%, and then by the 1st of January 2025, just over a year away, they will fall away by 90% as we re-sign and renew contracts on more favorable terms to Audioboom. Less impact on that minimum guarantee. What does that mean? That means two things. I think that means first thing is in Q4 of this year we will get back to year-on-year revenue growth. Q4 will be at least $19 million of revenue. I detailed this here on this last slide. Just do not want to get ahead of myself here, but I just want to show you this last slide. All of these factors come together, the 20% network growth, the billion-plus monthly advertising impressions, the growth and the continued growth of Showcase, that work we are doing with those blue-chip customers, and then things like the seasonal demand that we get from the NFL and the holiday period. All of that comes together, and that delivers $19 million of Q4 revenue back to year-on-year revenue growth, sequential quarterly revenue growth. Of course, what we are really focused on at this point is 2024. Those things coming together, those improvements that we have made coming together, will deliver record revenue in 2024 for Audioboom of $78.8 million. On top of that revenue, then we add in those improved revenue shares that we have. We add in the decrease in the minimum guarantee exposure, and that improves the EBITDA numbers. We get back to EBITDA profit in Q4 2023, and then obviously that focus on full-year adjusted EBITDA profit in 2024 as a result of those improvements. To recap and to leave this today, I think we are kind of coming through and have had that challenging period for the business because of the ad market downturn. We recognized very early that we needed to put in a new strategy to improve the operations of the business in case the ad market did not improve. Those operational improvements are now coming through, and they will lead to a strong future for Audioboom. Thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab that is situated on the right-hand corner of your screen. 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&A, can be accessed via your investor dashboard. Brad, Stuart, as you did kindly mention at the start, we did receive a number of pre-submitted questions ahead of today's event, and as you can see there in the Q&A tab, we have also received a number of questions throughout your presentation this afternoon as well. Thank you to all of those on the call for taking the time to submit their questions. Stuart, Brad, if I may just hand back to you just to read out those questions and give your responses where it is appropriate to do so, then I will pick up from you at the end. Thank you. Okay. Thanks, Jake. I think first question here I will pick up from Jack C., who says, "How many podcast renewals do you have in the next year, and how significant are these?" I think we have a podcast network of 8,000 podcasts, so we are continuing and constantly renewing contracts with our podcasters. But really, I think the focus on this question is on the key ones there. Next year, I will pinpoint four key podcast renewals, and when I talk about those are shows that are worth more than $1 million in annual revenue. That would be a key renewal for us. So we have three of those pretty early on in 2024, in the first months of 2024, and then one that is around halfway through the year. We are already in negotiations with those three that renew in the first part of 2024, and we are in a positive place with those renewals. We do expect to renew the majority of those key renewals. We have a great track record in renewing partnerships with our key podcasts. So we do expect to move into 2024 either with two or three of those renewals already wrapped up and signed or at least a good way through a positive negotiation with those shows. Second question here. Well, two kind of similar questions. One came in from John Patani, and a similar one just came in in the Q&A. There is no name attached to it. But one says, "How is the advertising market right now?" And the other question says, "Are you being overly optimistic by calling July the bottom of the advertising market?" I think we did kind of cover much of this in the presentation, but certainly worth a few more thoughts. The market remains very weak when compared to 2021 and the first half of 2022. That July low point was because of some very unexpected, I think, early summer softness. Although there is more seasonality right now coming in Q4, which has good demand. I think July, yes, we are right to kind of call that the bottom. We are seeing small improvements since then, but really, we are not seeing major improvements at this point in the advertising market. We are really operating now as if the current state of the ad market is the new normal. What we have been focused on, I guess, for almost a year now, is improving that business model, is improving the operations and processes within the confines of that new normal. The ad market is weak. It is continuing at this level. I talked about all the strategy for improving the operations while the ad market is weak. I think that this work kind of means we can successfully move back to growth and profitability even within this current ad market. If the ad market does show improvement and does get better in the next year, then we have even further upside to the numbers that we are talking about in 2024. Key for me was to start to treat this ad market as the new normal, improve within that so that we are perfectly placed to both get back to growth, but also capture that upside if there is improvement. Thank you for those questions on the ad market. Brad, I will throw this one over to you. This one came in on the platform ahead of the presentation, but it says, "Can you give more details about the onerous contract that was announced in the last company update in July? Yeah, of course. As you say, we went through this in detail at the half year. If you want to see that detailed explanation, we have got a link to the July presentation on our PLC website. We have also got the half year report as well that was published. But in summary, the onerous contract provision that was created at the end of June was for one individual contract with a material minimum guarantee, that was signed when the podcast industry was very buoyant in the first part of 2022. The terms that were agreed at that point, were above the ad rates that can be commanded right now in this softer ad market, and the contract was incurring a loss. In line with accounting standards, a provision was prudently made for the future loss as at the end of June. That contract ends in July of 2025. From July 2023 to July 2025, any loss incurred on that specific contract will be unwound against the provision. We have included that below adjusted EBITDA in order to distinguish between this contract and the rest of the business. At the half year, a $7 million provision was created, and at the full year, as at the end of December, this will be approximately $5 million as losses incurred from July to December will unwind against that provision. As with any provision, we will perform an assessment for the reasonableness of it, by assessing a range of future growth scenarios on that contract, and we will provide a provision update once we have completed the audit next year. If anyone needs any more information on that or wants to go through it specifically, brad@audioboom.com. Please email me and we can go through it in detail then. Okay. Thank you, Brad. I think we have time for a couple more. These two are connected. The first one says, "Given the challenging year you have had, is the company fairly valued right now?" No, it's undervalued. The share price is at the same level as when this management team took over the business four years ago. At that time, the revenue was $11 million. We've increased revenue more than six times since then. We've reduced costs significantly. We have a clear strategy. We've increased our market share. We've executed on that strategy. While the recent period has been more challenging, I think this business is in a completely different place than it was four years ago when it had the same value. So it is undervalued today, right? I think the other thing that we're seeing now is there are more comps to make here. There are now two other podcast businesses that are publicly traded, Acast and PodcastOne. So much easier to kind of make that comparison. PodcastOne is on Nasdaq in the U.S. Acast is on Nasdaq Nordic. Both of those are trading somewhere around a 1.5x revenue multiple. While it's clear, I think in this market, public valuations are not strong for podcast businesses right now versus some of the M&A transactions of 2021 and 2020 where these transactions were happening at a 4x-6x revenue multiple. The public markets are valuing PodcastOne and Acast at a 1.5x revenue multiple. What is clear is that Audioboom is significantly undervalued against Acast and PodcastOne at our current valuation metric. So yeah, we are undervalued. We need to get back, obviously, to revenue growth, to EBITDA positivity again, and show why this company is so undervalued. But yes, today when you compare to where we were four years ago and we compare to competitor businesses, we are certainly undervalued. I think we got one minute left, so just this last question is somewhat linked. It says, "You have mentioned listing in the U.S., but we have not heard anything since. Is there any talk if this will still happen, and if so, when?" Yeah, we get this question almost every time we do these presentations about listing in the U.S., and so I have talked about it recently in here. But I do want to be clear that we have not stated that we are actively pursuing a U.S. listing. Rather, I've talked about that we are rightly doing our work to understand it, to understand the processes, the logistics of it, and to also understand the value proposition of a U.S. listing. If I go back to that last question, I think it's worth highlighting the PodcastOne Nasdaq listing since they listed in early September. Their market cap has dropped around 75%. So, as I said, they're still valued more positively than we are. But it does highlight, I think that it's not a given that a U.S. listing would deliver more value than AIM does right now in this market. So it's something we'll continue to evaluate, particularly, I think, in relation to the wider sentiment and the macroeconomic environment, because that is really going to dictate the value attached to that maneuver. I think we are pretty much out of time here. So, as Brad said, you can be in touch with any further questions you have, but I'll throw it back to you, Jake, to wrap up. Perfect. Stuart, Brad, thank you very much indeed for addressing all of those questions that came in from investors this afternoon. And of course, we'll be able to give you back any further questions that do come through 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, and we'll publish all those responses out on the platform. But Stuart, perhaps before really just looking to redirect those on the call to provide you their feedback, which I know is particularly important to yourself and the company, if I could please just ask you just for a few closing comments to wrap up with, that'd be great. Thanks, Jake. Yes, look, I think we recognize the challenging environment that we've been operating in. I think what I've tried to get across to you today, and I hope you'll understand, is that we have been very much focused in this time on improving the model of improving our operations so that even if this ad market doesn't improve, we are best placed to continue to grow and continue to go forward. The podcast space is going to quadruple in size over the next seven years. We're perfectly positioned to be a big part of that growth. We will get back to growth again in Q4. We will get back to EBITDA positivity again in Q4. And I think 2024 is going to be very bright for Audioboom in terms of record revenue and EBITDA, too. So, thank you for all of your support. I think during this challenging time, we've tried to be, I think as open and transparent as possible. And I think that goes along with the future statements that we're making here and our positivity around the future of this business. Stuart, that is great. Thank you once again for updating investors this afternoon. Could I please ask investors not to close this session, as you will now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but I am sure will 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. Good afternoon to you all.