Earnings Call: Q3 2021

Oct 14, 2021

Earnings release

Good afternoon, ladies and gentlemen, and welcome to the Audioboom Group plc investor presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time using the Q&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 can review all questions submitted today and publish responses where it is appropriate to do so. These will be available via your Investor Meet Company dashboard, and we will notify you when they are ready for your review. I would also like to remind you that this presentation is being recorded. Before we begin, we would like to submit the following poll, and if you would be so kind as to give that your attention, we and the company would be most grateful. I would now like to hand over, if I may, to Brad Clarke, CFO, and Stuart Last, CEO from Audioboom. Good afternoon. Thank you, Mark. Hi, everyone. Very pleased to be with you today. These past 3 months have gone pretty quickly, so lots to tell you about. So thank you for joining Brad and I today. Before I dive into the presentation, I just wanted to highlight a couple of things, actually. Firstly, I am joining you from one of our recording studios here in New York City. It is just really great to have all of our operations back up and running here in New York, in London, in Austin, Texas, fully back up and running. I think, as you can tell from the results, just firing on all cylinders. Secondly, a few days ago, it was my second anniversary as CEO of Audioboom. I am still really lucky to have the opportunity to lead this business, and I really hope that you are able to see the plans and the vision for the business that I have set out over the last 2 years coming together now as we just get stronger and stronger. So, just personally from me, I think, thank you for all of your support during that time. Let us dive into the presentation. Sorry, guys. Just finding the right slides for you here. So quick agenda first. I think first couple of slides, many of you will have seen before. But for anyone that is new to Audioboom, I think these first 2 slides will really help you understand how we operate, what the value proposition is. Then I will run you through the Q3 performance. Take a look at what has driven that success. Brad will go a little deeper on the finances. Then I will show you kind of what we are investing on in the future, and that future growth. We will take a look at our advertising marketplace, and a look at our production operation, which are the two areas that we are really focused on. As I say, kicking off with this slide that I think many of you will have seen before, it is really how Audioboom is set up. It is a look at our core value proposition, which is that combination of platform and content. We have spent the phase one of Audioboom just building out that scalable platform. That is a hosting and distribution tech platform. It is the advertising tech and the marketplace that sits on top of that, and it is the premium ad sales and the inventory management system that manages all of the revenue that flows through the business. We built out that platform. We are still adding to it, particularly on the ad tech side. That platform really underpins our content business, and it is fully scalable. Right now we have 100 million downloads running through that platform every single month. We reach 30 million unique users every single month. As I said before, the platform is scalable. We can run 1 billion downloads a month through that platform to 100 million unique users every single month once we get there. Having that at the heart of the business is very important to us. The second part is the content. I have been very kind of clear over that past 2 years that we are really focused on a content expansion strategy. Signing new shows, launching new shows, producing new shows. Building content on top to create that advertising inventory for us to go out and to monetize. We are very much scaling that up. You will see from our KPIs that we have seen strong growth on the download numbers. As I said, we are at 100 million monthly downloads. September was a record, 107 million downloads for September. We reached that 30 million plus unique users, and we have now more than 8,000 content channels using the platform, distributing that content, creating ad inventory, and then using the platform to monetize it. This is kind of part one of the value proposition of Audioboom, and it continues to drive the business forward. Part two is of the operational piece. Again, many of you will have seen this pyramid before, but this represents the content that we work with and really how we see that content expansion strategy kind of coming through. At the very top of the pyramid, that is Audioboom Studios. Those are the shows that we produce or we co-produce or we create ourselves in-house. The premium network is our top 250 shows. Those are real tier 1 podcasts, the top 1%. They are running high in the Apple and Spotify podcast charts. That is the professional level of the industry. We work with 250 professional level shows. Our creator network is that next tier. It is 3,000 mid-tier shows and 5,000 hobbyist or creator shows all using that platform to distribute and to put their content out there. The right-hand side of this is just a view on then how we monetize that content. Our premium advertising model is host endorsement and live reads. It is the host of the show delivering the messaging around the advertising. It is very premium. It comes with a $40 CPM, and we have 4,000 of those ad units to sell every single month. We scale by adding bigger and better shows into that premium network and Audioboom Studios. That advertising stays in those episodes for the first 90 days. The second tier of monetization is our marketplace. I will tell you more about that later. That is happening through the ad tech. It is dynamic ad insertion. Every time an episode is listened to, whether it is 5 years old or 10 years old or 2 weeks old, we are pushing into there a brand new targeted ad to continue to monetize that content. We have global sales partners, programmatic integrations. It comes with a lower CPM and a lower rate, but it can be done more at scale. It is more efficient, and it is a big area of growth for us right now. Then the final part of our monetization is through the subscriptions that the hobbyist end of our creator network pays us. So they are paying us $10 or $20 a month just to use the tool set to host their content, to distribute their content, to get all of the analytics in. So that is the real kind of look at how we operate our content business. As I said, unique again, really in the industry, to have all three levels of that content pyramid and the ability for shows to run through the pyramid, acts, if you like, as a funnel. So we have shows that join us in the creator network. They start off by paying us $10 or $20 a month to work with us. As their audience grows, we move them up into the premium network and monetize them more effectively. So hopefully that is some good background to the operational for those of you that are new to Audioboom. This next slide is really just focused on everything we have done in this past quarter and the year to date and just the exceptional performance that the team here at Audioboom have put together. Just a really incredible quarter, I think. So I will run you through it. Q3 2021 revenue, $16.9 million. That is up 161% on Q3 of last year, which was at $6.5 million. I think the important one for me is just that sequential growth, up 28% on Q2 of 2021. So, we looked at Q2 and thought it was a really great quarter for us, and then we have just built on top of that and added another $3.6 million there, which is fantastic. Total year-to-date revenue, $39.7 million. That is up 117% on the same period last year. So, it is not just a one-off to have that strong quarterly growth. We are seeing it on the year-to-date number as well, and we will continue that through into Q4. The adjusted EBITDA profit. Always nice to hit a kind of a milestone and a million dollars of EBITDA profit in the quarter is just fantastic. We are really starting to see some of that operational gearing now. If you look at the chart below, what you are going to see here is from the additional $3.6 million of revenue between Q2 and Q3, from that additional $3.6 million, we are now pushing 20% of that to the bottom line. So you are seeing that operational gearing. You are seeing some strong EBITDA profit numbers there, and again, something we are very focused on across the rest of this year and into 2022. Just a note that that EBITDA profit for the year to date stands at $1.2 million. So, great looking chart there. Just a fantastic performance in Q3 of 2021. I think when we talk about that performance, let's put it in some kind of context. This is Audioboom versus the wider podcast industry. Once again, for the fourth year in a row, we are outpacing and outperforming the wide industry. You may have seen us moving up the Triton Podcast Ranker that ranks the biggest publishers in podcasting. We have moved up to fourth place in that. But in terms of revenue growth, once again, we outperform the industry. We have outperformed them by more than 122% over the past four years. You look at 2021 individually, we are outperforming them by 95% in 2021. So, moving faster than the rest of the industry, gaining more market share. We are just in a really good place. At this point it has been a fantastic year so far. Let's focus, I think, on the reasons for that performance, particularly that strong Q3 performance. It all comes back to that content expansion strategy that I have talked about a lot. Also it comes back to that investment into the ad tech and the platform that I talked to you about before. First off, that premium network and the growth in the premium network. One of the shows that we signed earlier in this year is The Fantasy Footballers, the biggest sports podcast in the U.S. That's very seasonal in nature. So, in January to July, that show averages around 500,000 downloads per month. As soon as the NFL season hits, the show increases to a daily show, and sees around 8 million downloads per month. So an incredible amount of additional advertising inventory when we look at the four advertising spots per episode there. Effectively, it's creating 32 million advertising impressions every single month, which is huge for it throughout the NFL season. So that's a big driver of performance in Q3. We also launched some new big shows in Q3 as well. Dark History, Zane and Heath: Unfiltered, shows that we previously announced that we were going to be working with launched in Q3. Dark History is an Audioboom show that is listened to by more than 2 million people every single episode. So that's been a fantastic launch for us. Zane and Heath: Unfiltered, another very strong show, half a million listeners per episode as well. So we are launching big shows into that premium network and monetizing them very well. You will see how we are monetizing them and the growth in our pricing as well, and how we are being able to push that pricing higher. So average unit rate is effectively how much we can sell each ad slot for amongst our top 25 shows. That average unit rate is close to $6,000 for Q3, versus just over $3,000 in Q3 of last year. So not only are we creating more inventory, we are also selling that advertising inventory at a much higher price than we were a year ago. You do those two things together, you see great success. You create more inventory, you sell it at a much higher price point. Secondly, I wanted to focus a little bit on the success of the ad tech, particularly the launch of our AdRip tool that we just launched last time I spoke with you all. The AdRip tool is a proprietary piece of technology at Audioboom. What it does is it automates the removal of those host endorsements and those live reads that are baked into the content of the show in our top 250 premium podcasts. It automates the removal of that advertising after 90 days, and it replaces it with ad markers that we can use our ad tech to flight new ads against. So after 90 days, the baked-in ads come out. Then we start, for the rest of the life of that episode, so for the next 10 or 15 years, we are then able to flight the pre-produced, lower value advertising against it for the next 15 years to continue to monetize that content. That tool is starting to get great traction with our podcasters. In Q3, just the use of that tool alone created an additional 40 million available advertising impressions for us to monetize through our marketplace and our various sales channels. AdRip making an impact on the business already. We are also seeing great traction now from our international sales partners. Right at the start of this year, we signed new deals with Australian Radio Network in Australia, Rogers Media in Canada, MAPP Media in the U.K., and Ideabrew Studios in India. We are starting to see some great revenue contribution from those partners now. They contributed five times more revenue in September than they did back in January of 2021. Really picking up some good momentum from our international sales partners too. Those are some of the key points I think, and some of the key reasons for that success in Q3. I will throw over to Brad now. He will take a deeper look at a few of the financial items. Great. Thank you, Stuart. Hi, everyone. I am Brad, CFO here at Audioboom. I have been here for just over 3 and a half years, since March 2018. As Stuart said, lucky enough to be part of this superb team. We are continually breaking records in this really exciting growing space currently. Just happy to help present the continuing growth story that is Audioboom, one of the fastest growing stocks on AIM currently. The narrative which I will go through here, and the slides, if you tuned into the previous presentations in Q1 and H1, same slides, just a bit more data. Just continuing that narrative that we have gone through over the past couple of sessions. This first slide here in terms of the revenue and cost analysis is a good chart. The overarching theme here is accelerated, sustained quarter-on-quarter revenue growth since Q2 of 2020, which is almost double that of the wider U.S. podcast advertising market expected growth. Remember the IAB study, which says that the U.S. podcast advertising market will grow around 60% between 2020 and 2021. Our growth is significantly higher than that, 95% higher than that with our year-to-date growth of 117%. Really good chart there in terms of that top line revenue growth. Also as well, importantly for me, is that stable OPEX base that we have within the company. Just touching on that revenue in terms of the makeup of revenue that we have within the company. There's different revenue streams, and Stuart has alluded to some of that already. Around 68% of our revenue comes from that premium level of advertising, the host-endorsed form of advertising. Around 4% comes from original content from the Audioboom Studios. Around 9% comes from the marketplace, and around 19% comes from our podcast advertising agency, Sonic Influencer Marketing, who are also having a great year as well. Subscriptions, around 1%, less than 1% currently of revenue. In terms of the revenue mix, that gives the overview. There's different level of margins within that revenue mix as well in terms of the lion's share of revenue that comes from premium level of advertising. That comes in at around that 22%-23% mark. Original content is north of 40%. Sonic Influencer Marketing, lower margin, around 12%-13% currently. This really is exceptional performance by any measure. Actually, when you look at Q1, so Q1 2019 to Q1 2021, that's a revenue increase of 267% if you compare those two quarters, where OPEX has only increased by 37% from $1.9 million a quarter to $2.6 million. When Stuart said earlier about the scalability of what we've built here, that really does illustrate that point very well. The OPEX has been held at that very consistent level. There has been slight increases from Q3 2021 to Q2 2021, $100,000 difference there. The reason for that, a couple of reasons. Technology costs, and within that, the hosting and bandwidth costs. We pay for the amount of downloads that occur, and as downloads increase, that cost increases. Around $0.1 million of extra cost has gone into that within the quarter because there's a high level of downloads. Also in Q3 as well, we at Audioboom focus on specific events in terms of any sponsorship. In August, there was a Podcast Movement event in Austin, Texas over in the States, and we were the headline sponsor there, so there's additional costs associated with that in Q3. As we go forward, in terms of those costs that we're looking at, in terms of if you're looking at fixed and variable costs, fixed cost, professional cost, property costs, those are relatively fixed across the piece. Technology costs are variable that we'll see. I've said already, we're going to pay a higher cost for the downloads, but not incrementally higher. It doesn't track in line with revenue necessarily, but there will be higher costs as the download number increases. Marketing costs, I'd expect some increase in cost there because we've recently relaunched the Audioboom Studios. More content coming out requires promotion of that content, so there will be additional cost in that line. Within salaries and commissions as well, there will be additional heads going into the business, but a small number of heads into the business. We are at 38 now. We were at 37 at the half year. We have had Alexandra start in the production team in the U.K. We have got Neil starting on the 1st of November, plus a couple of additional heads to support that revenue growth. These are small increases in comparison to the revenue growth that we are driving currently. Overall, it is a relatively stable OpEx base that we see within the company, and it continues to drive that impressive top-line revenue performance. On to the next slide there with the working capital analysis. There are some interesting points in here to tell everyone about. The company has got excellent processes internally, mainly built around that Salesforce bespoke system. There was a good article recently about the company in relation to that, so have a read of that if you have not already. The company continues to perform excellently in relation to those cash collections, ensuring that the company maximizes its cash resources and makes the best use of its available resources and efficiently manages its balance sheet. When we look at that collection number of just under $33 million, I think, we go back to the point I made earlier about that small, efficient team within finance. Very small team. We have got Shaun, he looks after Audioboom, he is our Group FD of Audioboom. We have got James over in Sonic. We have got Tosin supporting them both. So that is a team of three. They have gone through almost $33 million of collections in the year. So that is really very good performance. To be able to do that, we need really good internal processes. We need to be able to rely on the data that we are generating, have good relationships with our customers. So all of those factors enable us to get through that volume of collections that we have done this year. So that is an average of $3.6 million a month, higher than last year. You would expect that because revenue growth is accelerating significantly. Out of that $32 million, just under $10 million was in August and September. August was our record at $5.5 million. September was $4.5 million in terms of collections. Debtor days, 88 at the end of September. That has increased since the end of the first half. That was 79. We have seen an increase in that, but I would expect that because of the increased revenue volume in that third quarter. Actually, the 88 is comparable with the 87 which we booked at the turn of the year. So just in spite of that revenue, significant increase in revenue volume, the debtor day still remains consistent. Cash held by the company did decrease from $1.5 million at the half year to $1.2 million at the end of September, but there are a number of reasons behind that. We are recording that EBITDA, that million dollars of EBITDA positive in adjusted EBITDA positive in the third quarter, but there is a timing impact that we need to consider here in terms of that balance sheet. In relation to the timing, we paid $300,000 of advances to attract and retain leading podcast talent in the quarter. That is $1.8 million to date for the year. That is a timing thing for us in terms of, we do have a small number of upfront advances, but they are recouped over the life of the deal, so you are making that initial payment, but you are recouping it over the 12 or 24 months, depending on what is in the contract. So an upfront cost, but you recoup that. There is $300,000 of advances in the third quarter. Also in terms of the process that we go through in terms of paying our podcast partners and collecting our debtors in terms of the timing of those. So we pay our leading podcast partners on 30-day terms to remain competitive, but our trade debtor, our debtor days is 88. At the end of September, we can clearly see that we have paid out our significant podcast partners in terms of their revenue share up to the end of August. By September, those payments have been made, but we have not yet collected those revenue bookings that we have made at that point. So I would expect that cash to start flowing through into the business as we go through the final quarter. We called out in the trading update just to give a bit more context in terms of that balance sheet, that $3 million has been collected since the start of October. 2.6 of that was actually collected in the first four working days, so that makes me believe that our customers were retaining their own cash to preserve their own balance sheets at the quarter end, and then releasing payment to us as soon as we got into October. I think looking forward as well, that is something we need to be mindful of in terms of when we get to December. That is a lot of people's fiscal year ends. The same thing could apply at that point in terms of customers withholding cash and then releasing that once we get into the new year. So when we release those year-end figures, that is something to be mindful of. But from my perspective, the debtor book is good. Continues to be very low, minimal level of debtor write-offs. The weighting is weighted 90 days minus instead of 90 days plus. It purely just is a timing impact now in terms of when that cash should start flowing through the business. If you recall, we posted a $7 million revenue figure in August, $5.6 million in September. So through Q4, we should start to see that cash coming through the business. But it may also start to come in in Q1 of next year. Remember, around 45%-50% of our billings go through the biggest podcast advertising agencies in the States, which are kind of the middleman between the actual brands they are working with and us. So there is a two-stage process there in terms of collections. Hopefully that gives you a bit more context around that balance sheet and the way I look at it. In terms of the company, as I say, $1.2 million of cash, the company still has access to that SPV loan facility. SPV Investments is an entity owned by our chairman and major shareholder, Candy Ventures. We drew $700,000 of that loan down in 2020, but since August of last year, we haven't touched it, and I don't want to because there is interest associated with it. It's there if we need it. We have very well managed that balance sheet through the first three quarters of the year, and we will continue to do so. Stuart, back to you. Just to say, the company's performing very well. The team's doing great. Thanks to everyone here for their support. Back to you, Stuart. Thank you, Brad. I'll just take a quick look at our three corporate KPIs. I think these are going to be pretty simple. They're all heading in the right direction, as you can imagine. We're seeing the right trends there, and obviously, that's playing into the revenue growth that the business is seeing. KPI one is our global downloads measurement, and this is an industry-standard data point. It's measured by and verified by Triton Digital. It uses the IAB's podcast measurement standard V2. So extremely good set of data here, and you can see the growth over the past two years that we've been measuring this. We're close to 100 million downloads on average across the network per month. As I said before, September on an individual monthly basis was a new record of 107.7 million downloads in that month. More downloads equals more advertising inventory equals more things to monetize. We do a really great job of monetizing that additional and greater advertising load. Second of our KPIs is our advertiser brand count. These are the advertisers that we work with directly through our in-house sales team. We work with thousands more through our various other sales channels, but directly with our in-house sales team. We're now working with 370 brands advertising on our 250 premium podcasts. Again, another kind of a big jump here, up almost 50% on Q3 of 2020. It's record quarterly performance. You saw the download growth and the advertising inventory growth. We need to work with more brands to then go and sell that advertising more efficiently. You'll see we've established relationships and good, strong working conditions with 370 brands now. Very happy with the way that KPI is growing. Then the final KPI, this is the optimization metric. This is how well we monetize that additional advertising inventory. If we added downloads and therefore added advertising inventory, but only sold it just as well as we were before, you would see a flat line here. The key is to add more inventory, as you know we're doing through the download metric, but also monetize it more efficiently as well. Another good solid step up here. We're now seeing $54.77 from every 1,000 downloads across the network. We are growing this one well, up 81% on Q3 of 2020. As I said before, this one is the one where we know there's a kind of a ceiling here, around $150. We have a long way to get there. But that $150 on the eCPM would represent every single one of our shows being completely sold out at the highest possible price that we could get for those advertising slots. So some good headroom there, and we will keep driving that eCPM number forward. This one is, like I said, it really is a view on how well we are optimizing the available advertising inventory. So let's look ahead. This is always the more exciting bit, I think, and the first thing I am going to show you is, and talk to you about, is our advertising marketplace. I mentioned that this is something that we would be launching in the final quarter of 2021, and we are getting close to that launch now. The advertising marketplace really is formalizing the work that we have been doing in ad tech over the past two years. What our marketplace does is it simply connects buyers and sellers of podcast advertising. So on one side, we are consolidating various sales channels and various advertising buyers, and on the other side, we are consolidating the supply, the content, and the advertising inventory. But really what is key to this advertising marketplace is the scale and the efficiency that is involved. So, as I said, on the buy side, we are consolidating multiple global sales channels in one place. So we have our in-house sales teams, we have our international partners in Australia and Canada and the U.K. and Southeast Asia. We have a self-serve e-commerce portal that will launch alongside the marketplace in Q4. This will allow buyers and advertisers to come directly to Audioboom to plan and create their advertising campaigns on the Audioboom website, and to effectively check out and to connect with our sales platform to create those campaigns directly with us. Then finally, the final sales channel that we are consolidating here is our programmatic solution. This is where the Audioboom technology connects into more than 25-plus demand-side platforms. Those DSPs are platforms that are used by the biggest ad agencies and buying teams globally to buy advertising all in one place. So at the same time, a buyer will be able to buy digital advertising for their brand across a variety of different websites. They can also buy podcast advertising on Audioboom at the same time through the same platform, meaning that they do not have to go outside of their regular workflow to access podcasting inventory. So I think we are doing a great job there of consolidating the demand side. We know we are really good at creating supply. So on the supply side this is a plug-and-play solution for podcasters. They come to Audioboom, and they can expose their content and their advertising inventory to all of these sales channels on the demand side. We have 8,000 podcast channels on the supply side. We have that back catalog created from AdRip on our premium network. Currently, that is making around 250 million available ad impressions at launch. All of that inventory is being exposed in that marketplace to the various buying and sales channels that we have created there too. So the Audioboom marketplace, big push for us. It will launch, as I said, in Q4. We will be out there talking to all of the buying community and the advertising community and pushing this new platform. I think it's going to do a fantastic job of outside of that premium piece that we work on, those premium ad units that we work on with our top 250 shows. This is really going to ramp up the second tier of podcast advertising within Audioboom. It's going to be very efficient. It's going to do things at scale. It's going to push pricing up over time as well. So very excited about the Audioboom marketplace that will launch very soon. The second area of investment for us right now alongside the ad tech continues to be in content creation. I just wanted to talk you through Audioboom Studios and how that works. Audioboom Studios relaunched just last week. Audioboom Studios is really the home of all of our content creation and all of our production services, whether that be the development of original content where we fully own and operate the IP. Whether that be branded content, where we're creating content for a partner. Whether that's a co-production where we're teaming up with a media company to produce podcasts with them. That's ad creative work. That's additional production services where we simply offer post-production or editing, or research for podcasts too. So all of that is now housed under the Audioboom Studios banner, and that runs across the U.S. Here in New York, we have studios, and we're producing content from here. Just last week, we launched our U.K. production arm. So the U.K. will get a lot of our focus. We already co-produce the official Formula One podcasts, F1: Beyond the Grid and F1 Nation, out of the U.K. We are in development right now with six new shows coming to the U.K. in 2022. We really feel that the U.K. has a great opportunity for us as a content producer. We think there's a gap in the market for a podcast-first commercial producer, one that can bring scale and experience to the market. So that's really our focus here. We think it's a very efficient market for audience growth. There's less competition for that valuable promotional real estate with Apple and Spotify that we have here in the U.S. So we think we'll be able to really leverage that and grow some very strong audience for our shows that we launch in the U.K. We'll be the only business in the U.K. that has the ability to use data to drive the editorial process. So we understand our U.K. audience better than anyone else because we have millions and millions of downloads running through our platform every single month from the U.K. We have a good understanding of audience and their needs and their likes and how they interact with content. So that will drive our editorial process in the U.K. too. As I said, we have six shows in development for the U.K. in 2022. Attached to those are some strong marketing budgets as well. So we're making a really big impact, or we hope to make a really big impact in the U.K. in 2022 with our production work. And then finally, I think before we get to questions, just to look ahead really, and to say that we are well set for this growth to continue. I think we have more inventory to sell in Q4 and beyond at higher prices than ever before. We continue to see the growth in that advertising inventory through the NFL season and the Premier League, which drive more consumption. We just announced the signing of two big new shows to the Audioboom Premium Network. A show with Mike Rowe here in the U.S. that does more than 2 million downloads per month and 500,000 downloads per episode, and that's a very established show. We think that will become a multimillion-dollar show for Audioboom. RedHanded, which is a true crime show out of the U.K., a big U.K. show, won the People's Choice Award at the British Podcast Awards just earlier this year. So that will really drive forward the U.K. business as well. So we're going to see increases in that premium advertising inventory that will continue our success. As I said before, it's not just about creating more content, it's about selling that content at a higher price. So already we're seeing some very strong growth in pricing for Q4. As I said earlier, our Q3 pricing for our average unit rate was just under $6,000. Into Q4, we're seeing that pricing for the average unit rate at just under $7,000. So a pretty solid step up quarter to quarter on the pricing that we're able to achieve on that premium advertising inventory. On top of that, AdRip continues to create more inventory for our second tier of monetization. We're launching that global marketplace in just a few weeks' time. So AdRip will do the job of creating the inventory. The global marketplace will do the job of filling it and selling that inventory better than ever before. So you can see exactly what we're doing on the premium network, although we do it manually, being replicated with the marketplace and the second-tier network as well. Except it's all automated with AdRip creating the inventory and the marketplace, and selling that inventory. So those four things are the real focus for the rest of this year and moving into next year. As I said, I think we're set for continued growth. I think we're set for continuing to take market share and to move quicker than our competitors. Just to summarize, I think Audioboom is just in a fantastic place right now. We need to keep this momentum going. We're setting ourselves up with the marketplace and our production. We're setting ourselves up well to keep that momentum running into 2022. Stuart, Brad, thank you very much indeed for updating investors this afternoon. Ladies and gentlemen, please do continue to submit your questions using the Q&A tab that is situated on the right-hand corner of your screen. Just while the company takes a few moments to review those questions 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 Meet Company dashboard, and we will notify you by email when they are ready for your review. I would also like to remind you that your feedback is important to the company as usual, and immediately after this presentation has ended, you will be redirected in order that you can provide your feedback so the company can better understand your views and expectations. Not really a long gap between a 45-minute presentation and me throwing questions at you, but if I may start with the first question that we have received, which reads as follows. Could you talk more about the work with Salesforce that was in the news piece earlier this week? Sure. Yeah. That news piece was about a product called LIRICAL that we have been creating with Salesforce over the past three or four years, and it is part of that platform strategy that I showed you on the very first slide today. It is part of the platform that is scalable and drives the business. LIRICAL is an internal inventory management system. It is a customer portal, and it is a kind of a business intelligence tool as well. So it was built to manage all of the live read booking process. As I said, we have 250 shows, and around 4,000 ad units every single month being managed out of that LIRICAL platform. It allows us to book advertising, to see what advertising inventory is still available to sell. It allows us to look at the pricing around the advertising inventory, and get very intelligent data out of it around the pricing and to drive that pricing forward. It is automated. It pushes any booked advertising out to the podcaster so they have a record of their advertising. They go in there whenever they are producing their show, and they see the notes that they have to deliver as part of their advertising execution. They fill in timestamps to tell us where the advertising ran in their podcast. Those timestamps get pushed back to the advertiser as proof that the advertising ran. It connects to our billing system, and makes Brad and his team's life a lot easier at the end of every month. It really does kind of operate and create a great flow for the whole of the advertising booking process that we run every single month. Phase 1, as I said, was really focused on managing the vast data and scale of the live read business, the premium business that we have. Phase 2, which is what we are working on with Salesforce right now, is for that LIRICAL product to support the marketplace. This is a whole different way of advertising, and it is a much vaster scale also. Phase 1 had 4,000 ad units in it every single month. Phase 2 around the marketplace needs to allow us to manage 250 million monthly impressions with all the geolocation data, the targeting data that comes with the ad tech. We are building that out right now, and we will continue to build that across 2022. It will support the marketplace, it will power the marketplace, and it will also power that self-serve ad buying portal that I mentioned earlier as well. When an advertiser comes to the Audioboom site to create a campaign, all of that data will flow out of the Salesforce product. It will be in real time so that we will be able to see what advertising is available on which shows, in which locations, and how we can target against audience there. It will allow the buyer to create that campaign and to ultimately check out and buy that campaign directly through that portal. That work with Salesforce has really changed the business. It has allowed us to scale the business significantly. It allows us to execute our advertising very efficiently. It allows our content partners, our podcast partners, to get all of the information they need to be professional and to carry out their advertising. Like I said, we have phase 2 ahead of us. We are designing something pretty big here, and we believe it is the most powerful piece of inventory management in the entire podcast industry right now. We are well ahead of the game there, and it drives every aspect of what we do. Thank you, Stuart. Just turning on to the next kind of theme of questions that we received, and we received a question from Chris as well during this call. Thank you, Chris, for your question. Your market expectation has been upgraded several times this year. Have the projections been too conservative? Hmm. Yeah. We initially were projecting at the end of last year, in the middle of COVID, and COVID was impacting the podcast industry pretty strongly this time last year. With hindsight, it is very easy, I think, to say that those projections have been conservative. It was a strange time when we were first looking at the year ahead back then. This year has been very unique. Demand and pricing came back extremely quickly from where we were at. Something we could not have predicted, I think. I have shown you how great the demand has been. I have shown you how good the pricing has been. It moved incredibly quickly. We have also seen the impact of new large shows that we have added to our network, that also have added significantly to the revenue opportunity. They add to that the moment they are booked. Without huge visibility on those signings, we kind of start to connect with the talent agencies just a month or so ahead of signing them. That opportunity comes to us, and we move very quickly to sign it and to start selling it. Not something that it is always possible, I think, to plan for. Generally, I think this is a problem, or not a problem, but maybe a good problem to have across the entire podcast space. Anyone that follows me on Twitter may have seen a piece that I tweeted a few days back from Bob Pittman, who is the CEO of iHeartMedia, probably the biggest podcast publisher in the world right now. He was saying exactly this, that every time this year they have tried to project their podcast business, and their podcast revenue, they have had to reevaluate within weeks because things have been moving so quickly. It is not just us that perhaps had that problem. iHeartMedia have that problem, others have that problem. In many ways it is a good problem to have. The industry, the demand, the pricing just is moving quicker than ever before. Thank you, Stuart. Turning to the next question, if I may. Could you tell us more about AAA's interest in the company, and why you did not agree to extend their time to make an offer? Sure. I think last time we kind of all met on Investor Meet Company, we were very limited about what we could and couldn't say about the AAA interest. As you know, AAA announced a potential offer for Audioboom back in July. We heard their plans for the business and putting the businesses together, and they were ambitious. They were exciting. We really liked what we heard, so we extended the window for an offer so they can make progress on those plans, and we gave them that initial 30-day additional extension to the window. We also kind of at the same time, I think we did make it very clear about what our concerns were that needed addressing. I think ultimately they didn't present us with any major progress before that deadline. So, once we'd requested further information, we were still considering whether or not to extend. They withdrew that approach, just before the deadline. So ultimately we didn't have to have a decision to take. They withdrew that approach. But we didn't hear enough, I don't think, either, about progress on those plans. I think ending the process was kind of good for both sides. For Audioboom, it's enabled us to tell you guys how great we're doing. It's enabled us to continue to remain focused on the growth without any distractions. The stock price has reacted positively. For AAA, it's kind of allowed them to focus on progressing the other parts of that plan. Look, we still We still like what they're planning. We still like those plans. We still think they're exciting. We still think they're ambitious. Of course, they can come back to us at any time privately if they're still interested in pursuing that route. So yeah, that's really what's happened over the last three months there. Thank you very much indeed. An earlier trading update showed that August had $7 million of revenue and half a million dollars of EBITDA profit, which was very strong. Given the Q3 results, does that mean that September was less successful? Yeah. August was an incredibly strong month, as I think I've shown you here, kind of driven by the NFL season, by the added inventory. I think one thing good to make clear here is that Audioboom uses a U.S. broadcast month schedule due to, as much as anything, the majority of our income being out of the U.S. and coming through those U.S. advertising agencies who also adhere to that schedule. What that broadcast calendar means is that each quarter has one 5-week month and two 4-week months. This year, August was a 5-week month, so effectively it's 25% extra revenue sitting in August over a 4-week month. Hence why that revenue is extremely strong there in August. I think the key part is that September, dropping back to a 4-week broadcast month schedule, on a weekly basis, September was stronger than August. We're still seeing that growth, even though on a monthly basis it would look lower because of the 5-week, 4-week cadence there. October, on a weekly basis, even stronger than September. Growth is just kind of continuing on that weekly basis. Because of that U.S. broadcast calendar, some months are skewed heavier than other months because they're 5-week broadcast months. Thank you, Stuart. Received a number of questions around listing, really. Your listing, particularly around the U.S. You've talked about Audioboom being valued differently if it was listed in the U.S. Are there any plans to do so? Yeah, I talked about that probably some time ago, I think when Audioboom share price wasn't in such a good place. Since then, I think Audioboom's value has increased significantly, and although I'd still consider it undervalued, the gap has closed somewhat. So maybe it's not as clear cut as before. I think over the last couple, 2, 3 months, much of our time has been spent at board level, at corporate level, kind of working through that AAA potential offer. There's been a lot of focus there from a corp dev standpoint. No, our advisors present us with options. We talk to them about options. From that perspective, the board are making sure that they are just fully briefed and have a good understanding of the opportunities and the options available to us. But I think right now, in the near term, I think we are most keen just to continue this great momentum that we have had on AIM over the past 12 months. Like I said, to summarize, I think we know the options. We talk to our advisors about the options. We have seen the value gap close over the last two months as the stock price has improved. Something we will definitely keep thinking about. But like I said, near term is just the focus on this momentum that we currently have. Thanks, Stuart. I guess a bit of a broader question, really. What is the outlook for the industry next year, and where do you see Audioboom within it? The outlook for the industry, I think is still good, although obviously the growth not as spectacular as in 2021. The market is projected to grow at around 30% in 2022, and that number comes from the Interactive Advertising Bureau that run an annual survey with the biggest podcast publishers and producers in the U.S., of which Audioboom does take part. So they are projecting growth next year at 30%. My goal, obviously, is to have Audioboom outpace that 30%, and that would be the fifth year in a row that we have outpaced the industry, that we have taken market share, and that is absolutely my goal for Audioboom. So the goal will be to beat the market growth of 30%. In terms of other trends, I think we are going to continue to see podcast talent emerge at the same rate as 2021. What I mean by that really is we are going to continue to see a lot of incoming opportunity to work with new shows and new talent to grow out that premium network at Audioboom. I do not see that slowing down. Monday was a holiday here in the U.S., but I had 12 emails from the Hollywood talent agencies approaching us with opportunity to work on podcasts that their clients, their talent are producing. So there is a continual supply of new opportunity and new growth coming that way. I think one industry trend that I hope you see that we are ahead of is the continual shift towards advertising tech for monetization. Obviously, we have our premium advertising model is not really based on our tech, it is based around the manual delivery of those baked-in host reads. But by growing our marketplace, our international partnerships, we will continue to develop those and we will stay at the forefront of that push or that trend to move to advertising tech. I would just say, I think, sales are already strong for 2022. Currently we have around $14 million booked for 2022 already in the annual up fronts process that we run in October and November each year. That is where agencies and advertisers can buy across the whole of the next year at slightly favorable prices to them. Demand is huge during that process this year. Just as an example, same time last year, we had around $3 million booked. This same point this year, we have around $14 million booked. So, much stronger demand. That surge in demand, that surge in pricing is continuing. So all is shaping up well, I think, for the industry and for Audioboom next year. As I said, just as a very simple goal, just to keep things simple. We know market growth is projected at 30% for the industry. Our goal will be to beat that. That is brilliant. Brad, Stuart, obviously I am pretty mindful of time as we are coming up to the hour, and I know that investor feedback has always been important to you and the company. Whilst I would like to thank all the investors for submitting the questions, obviously we will not be able to get through everything today. Before I redirect investors to give feedback, perhaps I could just hand back to you just for a few closing comments, and then, as I say, I will redirect them to give you their thoughts and expectations. Sure. I think, firstly, again, just to reiterate, we greatly appreciate the support here at Audioboom. We know we are building a fantastic company, a company that is very efficient, a company that is growing faster than the wider podcast space. We know podcasting is a very exciting place to be right now. Audioboom is a great opportunity to be involved in that. We are setting ourselves up through our platform and our advertising tech for continued scale growth. In 2021, we have delivered what we set out to do, which is to ensure that we are profitable. We are starting to see the operational gearing pushing more to the bottom line whilst revenue growth grows extremely strongly. So we are in a great place. We have a good focus on production and the work that we are doing around content creation into 2022. And yeah, we look forward to continuing to be successful, continuing to drive shareholder value. I just want to say, I think thank you to the entire Audioboom team for continuing to kind of buy into that strategy that we've set out over the past two years, and to execute and deliver against that. They really are a great team. A very small team compared to most of our competitors. We really do a fantastic job of creating this business. So thank you to those guys, and thank you again for joining us here today. Stuart, thank you very much indeed. Could I please ask investors not to close this session, as we'll now automatically redirect you for the opportunity to provide your feedback in order that the management team can better understand your views and expectations. This may take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of Audioboom Group plc, we'd like to thank you for attending today's presentation. That now concludes today's session. Good afternoon to you all.