Earnings Call: H1 2022

Jul 18, 2022

The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all of the 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 by email once these are ready for your review. But before we begin, I would like to submit the following poll, and if you could give that your kind attention, I am sure the company would be most grateful. I would now like to hand you over to CEO, Stuart Last and CFO, Brad Clarke. Good afternoon. Thanks, Jake. Good afternoon, everyone. Good morning from New York City. Hope you are all well. Great to be with you again to talk through Audioboom's H1 results and Q2 results. It is another positive set of results and a strong performance that I am happy to be talking to you about today. As Jake said, make sure you send any questions in. We have a few questions that were sent in advance, and you can send those questions in as we go, and we will pick those at the end. First of all, though, we have a presentation to walk you through. We will take a look at the background of the company, the operations, and the business model of the company. Then we will look at the performance in the first half of this year. Then we will talk briefly about what is in store for the future and everything that we are focused on. So get those questions in now, and we will answer as many as we can at the end of the presentation. But before we jump in, for those of you that may be new to Audioboom and have not met myself or Brad yet, we will just do some quick introductions. I am Stuart Last, Chief Executive of Audioboom. I have been the CEO for the past 2 and a half years. Previously, I led Audioboom's U.S. operations after we launched the U.S. arm of the business back in 2015. Before Audioboom, I was running a business called Voxnest, the content side of the business. Voxnest, which is a podcast ad tech company. Going back a little further, I was based in London at the BBC, running the BBC's digital audio products and their radio products. So, I have been working in and around podcasting now for the past 12 or 13 years. Just happy and excited to be leading Audioboom. We have a great business here and a great future ahead. Hi, everyone. I'm Brad, CFO. I've been with the company since March 2018, so approaching 4 and a half years. Prior to Audioboom, I spent 15 or so years working with various different media companies in their finance functions. Great Bison before Audioboom, News UK, trained with Grant Thornton. The company that you see today and what we'll present today is significantly different to when I started in 2018. It's particularly pleasing to report what we did this morning. I've got a couple of slides later to give that bit more detail on the finances of the company and how I look at things, but that's a bit later on. Back to you, Stuart. Thank you, Brad. First of all, as I said, for anyone new to Audioboom, we'll take you through the business model and the operations. I wanted to show you this slide first. This is actually just the new website for Audioboom that we launched about 6 weeks ago. I just wanted to put this up here first because it really just shows off what Audioboom is and what we do. We power podcasting, and we do that for creators, and we do that for brands. Audioboom sits at the heart of a three-sided marketplace. We are connecting creators and great content with advertisers and brands, and then we're distributing them out to wide audiences. We work with the very best talent and the very best content creators, to make podcasts. We sell those podcasts out to brands that want to be connected to the very best content, and then we distribute all of that content out to Spotify, out to Pandora, Google Podcasts, Apple Podcasts, iHeartRadio, all the listening apps where podcasts are available. We're powering that distribution. Without Audioboom sitting at the heart of this industry, there's very little value. We need all three of those parts, advertisers, creators, and audience to be connected together. Audioboom does that. It does it very efficiently through its platform. It does it at a very good scale. We're able to deliver value to the creators. We're able to deliver value to the advertisers and bring those together to make podcasting successful. At the heart of Audioboom is the technology platform. The technology platform that enables us to create that connection between content creator and brand. This is just an overview of the Audioboom platform. At the bottom of that platform is our content management system. This is where the content creator is uploading their podcasts. They can manage the publication of those episodes in their dashboard. We distribute with one click out to Apple and out to Spotify and out to Pandora and iHeart for listening. Then we gather all of that data from the listening. No matter where that podcast was heard, we gather that data, we consolidate it in an analytics dashboard, and we surface that to the podcasters so they can make great editorial decisions about their content based on that data. We provide that data out to our sales and marketing teams so they can grow audience for those podcasts and then monetize very strongly the podcast because of that audience data that we are able to collect from all of those platforms. On top of that content management system, we have built an advertising tech stack. The advertising tech stack is an ad server that fires in ads in real time and allows you to provide fresh ads for every listen to a piece of content. It is a yield up system that gathers the best pricing available at that moment in time for advertising inventory. It is an inventory creation tool called AdRip that goes into back catalogs of content and creates more ad inventory. It is a marketplace where we connect buyers and sellers of podcast advertising, and create strong demand and strong supply, bring the two together and allow monetization to happen very efficiently in an automated fashion through that advertising tech stack. On top of that, we have a system called LIRICAL, that is a Salesforce-based system. It is an inventory management system. It allows us to execute the advertising, it automates the billing, it gives us business and sales intelligence around pricing, and open inventory and sold inventory, and allows us to optimize the monetization of that content. Those three parts of the tech stack together, like I said before, are very efficient, and we are really creating some great scale within there now. We have 8,000 plus podcast channels running through our platform. We reach more than 34 million unique listeners globally every single month, and that content is downloaded more than 130 million times each month also. Some really good scale starting to emerge through that platform, and that platform really drives the business of podcasting for us. This is a look at our content and our revenue model. On the left-hand side, you will see our content model that is broken down into three areas. As we see it, we have Audioboom Studios, which is a small group of shows, around 25 shows. Shows that we produce ourselves through our production teams at Audioboom based in the U.K. and the U.S. and that is content that we control, that we develop ourselves or that we co-produce with a partner. Audioboom is the official podcast partner of Formula 1. We co-produced the Formula 1 podcast, Beyond the Grid and F1 Nation with Formula 1 through Audioboom Studios. The Audioboom Creator Network is that next 8,000 shows. Those are shows that are created by independent creators and producers, and then they partner with us to monetize, to distribute, and to power that podcast for them. As I said, there are 8,000 shows running through that Creator Network, and that is a group of shows where at the top end, they are downloaded more than 1 million times per episode, and at the bottom end they are downloaded maybe a few hundred times per episode. As a network of content and distribution, it is a very powerful network that we have built through our creator, our work with creators. The final part to the content model is the wider podcast landscape. This is the entire global 3 million podcasts that are available in Spotify or on Apple Podcasts. Through one part of our advertising model, we are able to access advertising inventory within any of those podcasts globally and monetize a much wider footprint of content, giving us more options for advertisers and more scale. How we monetize that comes through our advertising model. We have three types of advertising within Audioboom. We have our premium sales model, so that is very high-value advertising units. They are delivered by the host of the podcast in the podcast voice. The podcast host is endorsing the product that they are advertising. It is very valuable because of the influence of the podcast host. The audience is engaged, they trust the podcast host, they listen to the ads that the podcast host is reading, and then they go and buy product off the back of that, and it is very measurable. We are selling those premium ad units across Audioboom Studios, and we are selling them across the top 250 shows within that Creator Network. The ad units sell at a very strong, very premium rate, between $25 and $40 per 1,000 listens. That is a CPM, and that is how we measure the value of the ads within that premium sales model. The secondary sales model is something called Showcase. That is our global marketplace. It is automated through our ad tech, and those ads can run across the entire 8,000 podcasts in our network. The ads are pre-recorded. They may sound a little bit more like a radio ad. They are pre-recorded in the voice of an announcer, and we can then dynamically insert through the ad technology across all 8,000 podcasts. We can target listeners by demographic or by location and territory, or by keywords. If the podcast is about Coca-Cola, we have the ability to target a Coca-Cola ad in and around that piece of content. We are able to do that at great scale, very efficient through the ad tech. But because of the wider group of podcasts that we are hitting there, the advertising rates are lower, often between around $8 and $20 in Showcase. But we make available around 4 billion advertising impressions through Showcase every single year. There is huge scale involved in Showcase, and that is a product we launched at the end of last year and has grown significantly since then. The third part of our advertising model comes through a business unit called Sonic Influencer Marketing based in Austin, Texas. Sonic works directly with brands who manage their advertising campaigns across the entire podcast landscape. Sonic will work with a brand or with a client. They will place those ads onto Audioboom studio shows. They will place those ads onto the Audioboom Creator Network, and they can also go and access advertising inventory in some of the biggest podcasts in the world directly also. Sonic allows us to open up access to that podcast landscape to monetize podcasts that are not exclusively part of the Audioboom network. Then this slide just breaks down how each of our divisions really contributes to group revenue, and then the gross margin from each of those units. Audioboom Studios, those shows that we produce ourselves or we co-produce with a partner, obviously is much smaller contribution to group revenue. It contributes just 3% of our group revenue, but has a much stronger gross margin at 31%. We are able to control production budget there and control the costs of creating that content. It comes with a higher gross margin for Audioboom Studios. That premium ad model on the Creator Network, the top 250 shows, that comes with a slimmer gross margin at 21%, because we are being competitive there to sign the biggest and best shows to Audioboom, and we revenue share with those podcasts. We have to offer them a strong revenue share in order for them to secure working with those shows. But obviously that drives a very strong amount of group revenue. 67% of group revenue is attached to that premium ad model, where we are partnering with the biggest and best 250 shows in our network to create good value there. Showcase, the automated ad product that delivers against 8,000 different podcasts. Good gross margin there, 29% gross margin. Again, we are working with smaller podcasts. We have the ability to create stronger revenue shares for Audioboom within Showcase. That is why the gross margin is stronger at 29%. Showcase is now delivering almost 12.5% of our group revenue. The product formally launched in Q4 of last year and has grown very quickly to be 12.4% of our revenue, and I expect it to continue to increase and to become a bigger part of what we do. It is very scalable because of the automation that is in there, and because of the amount of inventory that we are creating within that marketplace. Then finally, Sonic, a part of Audioboom that has now been up and running for three years, that is now contributing almost 17% to group revenue. That has grown very quickly over the past three years. Comes with a much slimmer gross margin. It has a slightly different business model when it is working directly with clients and works off of a more traditional ad agency commission model. But it is very efficient and has grown very quickly and is an important part of what Audioboom does. That is the business model, that is the operations. Next, we will look at the performance of the business in the first half of the year, and I am really pleased with the momentum that continued into H1 and through the second quarter of this year, and it has led to some more record results for the company. For Q2 of 2022, we saw $21.2 million of revenue. That is record quarterly revenue, up almost 60% on the same period of last year. Within Q2, we had $1.1 million of adjusted EBITDA profit. Again, significantly up on the same period last year as we start to see some of that gearing effect of the revenue growth. H1 was obviously another record for the business, $40.9 million of revenue during the first half of the year, and that is close to 80% growth on the first half of last year. A significant and very strong revenue growth in the first half of this year. $2 million of adjusted EBITDA for H1 also, and that's up almost 10 times the adjusted EBITDA of the same period last year. That's a really great cash number, $5.8 million of cash. That's the highest cash position ever reported by the company. We're fully funded for the current growth trajectory, and we have an additional £1.5 million, so around $1.8 million available to us through a new overdraft facility that we have at HSBC also. Record revenue numbers, very strong adjusted EBITDA numbers and a record cash position for the business also. It's just been a really great first half of the year and really pleased to be able to bring you this news today. When we take a look at what's got us here, two comparisons here for our performance versus the wider industry. I think it's really important to put our performance into context. Not only are they record numbers, but we are outperforming our competitors significantly. That first chart on the left-hand side here, this is our revenue growth versus the industry. You'll see here that every single year since 2017, we have outperformed our competitors, outperformed the wider industry. PwC in their Global Entertainment and Media Outlook report, have pegged this year's industry growth at 15%. Audioboom, as you've seen in the first half of the year, has grown close to 80%. Once again, we are significantly outperforming the wider industry here across 2022 so far. On the right-hand side, this is a chart that looks at audience growth in the U.S. Audioboom is now according to Triton Digital, the ranking service of podcasts, we are now the third-largest podcast publisher in the U.S. when it comes to audience size. We reach 6.7 million unique listeners every single week in the U.S., and we've grown strongly over the past year as well at 56% growth over the last year. We just moved up to third position on that Triton ranker. We will likely move down to fourth or fifth position over the coming months as one of our major shows, a show called "Morbid," leaves the network. That's something we've already been planning for and have known about now for more than six months. We will likely dip back down into kind of fourth or fifth position on that ranker, but that's to be expected. Like for like, our group of shows is growing strongly, and we will still see that U.S. weekly reach number grow again once we revert to fourth or fifth position on that Triton ranker. We're also big globally. We're second in New Zealand, third in Australia, fourth in Canada, and then we have that global footprint too. We continue to really kind of punch above our weight in that list of big media companies, in that Triton ranker. It's been a successful year of growth when it comes to audience for us also. Let's have a look at those key growth drivers for that strong performance in the first half of the year. Showcase, as I have already mentioned, has grown very quickly since the formal launch at the end of last year. When compared to the ad tech revenue as we were building it out at the start of last year, it is now 150% greater in terms of revenue than it was this time last year, contributing 12.5% to group revenue versus less than 9% a year ago. We have seen very strong growth on the Showcase automated ad marketplace side of the business, and we will continue to grow that going forward. We have added new demand-side partners into Showcase, and that has driven that strong revenue performance. We have partnered with NZME in New Zealand, Instreamatic and SoundStack in the U.S. They are all on the buy side of that marketplace. We expose our inventory to that marketplace, and then we have added buy-side partners who come in and they monetize that inventory on our behalf within that marketplace, and that has led to that strong Showcase revenue growth. We have renewed major revenue-driving shows in our Creator Network. That is continuing to solidify that foundation of the Creator Network. Casefile, No Such Thing as a Fish, Dark History, Mile Higher, Strange and Unexplained. A few more like Murder, Mystery & Makeup. All major shows for us, all kind of top 15 podcasts for Audioboom. We have renewed some of those major deals in the past six months that just again, like I said, provide that long-term foundation to the business. You will know, as I just said, that we have been planning for some time, and we have known about a show called Morbid leaving. Again, one of our top shows on the network, which will have an impact in terms of downloads on the business. But as I say, we have known about that for some time. That was not in our growth projections for the year because we have known that show is moving away from us. That is going to happen with Audioboom. We are a great kind of incubator for smaller shows. We work with them at an early stage. We recognize the talent and the potential of those creators. We help them grow, we help them build an audience, and occasionally they will leave us, as Morbid has done. But in the majority of cases, we have created such good, strong, deep partnerships with those podcasts that we are able to renew those shows and to continue working with them as partners for the long term. Just announced last week, we continue to sign the top talent to Audioboom. We announced that we had signed a show called Fair Game with Leah Remini, a U.S. actress. We signed and we are launching the Roman Atwood podcast. We are working with a show called The Herberts from the YouTubers that are launching a podcast, and we expect big things there. Also a show called Speak the Truth. All of these are kind of top, again, top 20 shows for Audioboom. They come directly into our Creator Network. We can monetize them with premium ad sales from day one, and that will help us to continue to build the size of that Creator Network and the size of our audience footprint. Then finally, Audioboom Studios. Since we set up our U.K. production operation at the end of last year, we've been focused on delivering new shows for the U.K. Devils in the Dark, the first of those U.K. productions that launched in Q1, and then The Criminal Makeup that launched in Q2. Both of those shows reached the top 15 of the Apple Podcast chart in the U.K., and we're really pleased with the success we're seeing from our new U.K. production unit as part of Audioboom Studios. Those have really been key to the success of H1 and that momentum continuing into the first half of this year. Last slide from me, I think for a few moments is just a look at our KPIs. You'll be familiar with these if you've followed the business for some time. We update these on a quarterly basis. The first one of these is global downloads. Downloads are a proxy for advertising inventory. The more downloads that we have, the more advertising inventory we make available for us to sell. We've seen 35% growth in that global downloads number over the past year. You're seeing a little dip there in Q2. As I said, one of our bigger shows, Morbid, is moving on. You will see a dip in those downloads before we head back up in the right direction across the second part of this year. Brand count is the number of brands that we work with directly on a premium basis. So shows that we are monetizing through with those high-value advertising units. We currently work with 376 brands directly. That's 15% growth versus last year. What you're seeing on the right-hand side of this chart, which we'll talk a little more about as we go deeper into the presentation, there's some questions on this at the end that I'll answer, is in Q1 of this year, you're seeing a little of that seasonal softness. Q4 is very strong, high-demand quarter for podcasting in and around holiday season. Q1, there's a small dip there because of the softness of the first quarter in the advertising market. In Q2, you're seeing that leveling out, and that is some signs of some softness in the ad market due to those global macroeconomic conditions. As I said, we'll talk more about that later on in the presentation. Third KPI for us is our eCPM metric. That's how much value we extract from 1,000 downloads across the network. That's an optimization metric. We've reached a new record with that eCPM metric. We now extract $57 of revenue from every 1,000 downloads across the platform. That's 12% growth year on year, and it's a record quarterly eCPM performance. I'll let Brad take over here. Great. Thank you, Stuart. Hi, everyone again. If you have tuned into the last few of these presentations, you will recognize the next few slides. I would like to just go a bit deeper on some of the financials, call out some additional statistics, which are not always on that front page of the RNS, but something that we always look at within finance and across the business as well. Just to give you a bit further insight into the type of things that we are looking at here at Audioboom. Obviously, that first slide displays well the significant revenue growth that has been recognized at Audioboom over the last couple of years. Q2 of this year was our record-breaking revenue quarter at just over $21 million, $700K up on Q4 of 2021. I always like to give a slightly different statistic in terms of that revenue growth in these quarterly presentations. This Q2 of this year represents 80% of the total revenue build in 2020. Sometimes you forget how quickly this company has grown. But throughout the first half of this year, being 79% up year-on-year is very good growth. And importantly, when we reference, as we did in this morning's report, and Stuart also called that growth figure out that PwC published a few weeks ago, stating that the U.S. podcast advertising market growth will be 15% this year. So we obviously compare very favorably there to that wider market growth. Adjusted EBITDA profit, good progression in the first two quarters of this year, Q2 being the second highest adjusted EBITDA quarter that we have reported. If you tuned into the last quarterly update that we did in April, I explained why Q4 EBITDA of $1.9 million was higher than Q1. Just a refresher on that, while we have not seen that sequential quarter-on-quarter growth, well, in H1 of this year, we have had higher salaries and commissions because of the higher revenue that we have recognized. We have taken on additional heads to support the growth within the year, so we are incurring more cost in the first half of this year versus Q4 of last year. In Q4 as well, we also reported a higher gross margin because we were able to release a proportion of music licensing accruals in the fourth quarter of last year that we did not need. And we also were able to release provisions against seasonal contracts with minimum guarantees as well in the fourth quarter of last year. So the inventory and advertised revenue for one particular deal was weighted towards the second half of the year. We built up the provision against the minimum guarantee throughout the year. We met the minimum guarantee and then released that to the P&L in the fourth quarter. Slightly distorting that fourth quarter EBITDA, but good to see that progression quarter-on-quarter through the first two quarters of this year. And let us not be shy about highlighting and reinforcing the point that this now is a profitable company. In the first half of this year, we were cash generative as well, which is fantastic to be able to report. I think when assessing this company's performance, it is great that we are delivering those desirable metrics, those growth metrics, growing faster than our competitors, taking market share, generating profits. And I think sometimes that last point, being profitable, is challenging for companies who are excelling at the first two points. When you are growing and taking market share, you will be investing for growth at the expense of delivering profit. This company, Audioboom, is delivering on all fronts, and it is in control of its own destiny as well. We should remember that when we go and look through these numbers. In terms of a bit more detail on revenue and costs, again, we can see that great growth curve on that top line. Revenue increased 59% Q2 this year versus Q2 last year. OpEx increased by 24%. We have gone through the year-to-date metrics. The contribution of different revenue lines, that remained fairly consistent with 2021, but there were some good growth statistics within that revenue mix as well. Stuart went through the contribution of different revenue lines earlier on as well. Just to reiterate some of those percentages, 67% of our revenue comes from that premium advertising on the Creator Network that we specialize and are experts in selling. That grew 85% year-on-year. 12.4% of revenue comes from the marketplace. That grew 154% year-on-year. Good growth from Sonic Influencer Marketing as well. That contributes 16.6% of that growth revenue number. That grew 59% year-on-year. I think there was a question earlier from, I think it was Adrian as well, which said that that slide actually added up to 99%. That did add up to 99%. That is because 1% of our revenue relates to subscription revenue. For those smaller podcasters, they can pay $10 or $20 a month to use the platform. That accounts for around 1% of our revenue. Yeah, that is why that slide added up to 99%, and that was on purpose. In terms of the OpEx, it is fairly consistent. It has been consistent over the last few years in terms of the breakdown of cost within OpEx. 20% of OpEx relates to what we term as technology costs, the cost to run the Audioboom platform, and the material cost within that relates to the hosting and download of content. Obviously, as downloads increase, the cost increases. There was a 51% year-on-year cost increase for the downloads. The downloads increased by 40% year-on-year from 179 million in the first half of last year to 250 million in the first half of this year. Simplistically, it costs more for more downloads, so that cost increases. The largest cost bracket relates to salaries and sales staff commissions. There was a 32% increase for the first half of this year. That is mainly due to a higher headcount. We have recruited across the business to support the growth that we are going through. New heads have gone into sales, ad ops, production into Sonic, finance as well. We report a headcount of 47 as at the end of June versus 37 last year at the end of June. At 47 heads, we continue to remain extremely lean, especially when you compare us to our competitors. We can clearly demonstrate from that slide that there is a good handle on OpEx, good cost control ongoing as you would expect. If you look at the variable costs going forward, that is a common question that we get asked, what will change as we look forward? Obviously, I've spoken about download cost varying, depending on the number of downloads that occur. Commissions are linked to revenue that's booked, and also promotional costs as well in relation to new Audioboom Studios launches. We have dedicated promotional budgets for any new launch. Obviously, that varies depending on when the show is actually launched. If we go to a couple of additional points as well that aren't actually on this slide. I've seen a few bit of commentary today and a few questions coming in as well during the session just to explain a bit of background on a couple of the charges that have gone through the face of the income statement today, just to give a bit of background on those. Firstly, there's a share-based payment charge of $2.3 million in the first half of this year. Being a public company, we utilize share options to incentivize and retain staff, with the aim of compensating them for the work they've done. Historically, we've awarded share options to staff who've been with the company for more than a year. In May of this year, 443,000 share options were granted to staff, 60,000 each to Stuart and myself, with the remainder split amongst those qualifying staff who've been with the company for more than a year. Obviously, these were awarded in May when the share price was higher than what it is today. They have an exercise price of 1555. When we decide to award share options, you also need to take a charge through the P&L for that. The options are run through a Black-Scholes calculator. The charge is spread out over three years to align that with a three-year vesting period. If anyone wants a separate session on this, please let me know. It can be complicated, so happy to talk anyone through it. But it's typical for a company to charge that below EBITDA because it's non-cash accounting entry, and doesn't directly impact the operations of the business. What it does do is it incentivizes staff to stay and work for the company in the belief that contributing to good company performance will lead to share price increases, and they can benefit from that along with shareholders. So that's a bit of background there on one of the charges there, which I've had a question on today. Second question on the FX. Obviously, over the last six months, we've seen the dollar go from around 1.3 to around 1.2. In terms of the structure of the company, all trade excluding Sonic goes through Audioboom Limited, which is a U.K.-registered sterling-based functional currency company. What we're doing in Audioboom is because the majority of trade is within Audioboom over in the U.S., we actually raise invoices in dollars, but hold those balances in sterling on the balance sheet as debtors. With the pound weakening against the dollar, the FX impact has led to a gain. If you look at our EBITDA box on the release today on the income statement, you'll see just over a million-dollar gain there in terms of those operational FX impacts. Secondly, the reserves within the company have to be translated as well. That's where we can see that $1.5 million FX loss in those translation of those reserves, neither of which impact the operations of the business, and hence why we move that FX impact of the P&L below EBITDA. We did that a few years ago to de-risk ourselves from any potential movements there. We'll keep the current structure in terms of the company as we go forward. The main reason why is because we've got $32 million of tax losses available within the company, and we'll use those to offset future profits as we go forward. Just a bit of commentary there on a few questions that I've received today. Time for my favorite slide, which is the working capital slide. It's really pleasing to be able to report that highest cash balance that the company has ever reported at $5.8 million. That's a testament to the internal processes that we have built here at Audioboom, which allow and support the business as it continues to grow. Cash increased by $2.8 million over the first six months of the year. Collections, just a touch over $40 million between January and June. That figure actually outstripped revenue booked and payments made in Q2 for the first time as well. I'm pleased to say that the first bullet point is already out of date. I've said there, this was written on Friday, so collections total $3.9 million. We've collected another 800K today, so that's $4.7 million for the month. Overall, the point is the processes that we have internally in terms of collections are working well, which contributed to that debtor day figure dropping by an impressive 26 days from 94 down to 68 at the half year. How have we done that? Well, it's high quality, reliable invoice information being distributed, structured debtor collection processes, good customer relationships. So we've enabled to decrease that debtor day collection figure despite continually increased revenue. So well done to Sean, Tosin, James and Jamie in the financings making that happen. Q1, we saw a higher payment figure than in Q2. That's because in Q1, we paid $1 million of recoupable advances. We also paid out the higher revenue shares in Q4 as well in that first quarter. Let's not forget these impressive results done with a very lean team of 47 people. The processes we've built, we've done them so they don't require a high headcount to power them. But it's very pleasing to say we're not standing still. On July 1st, we launched our new accounting system, NetSuite. That went live and replaced our previous system, Xero. That will enable us to even further implement automated processes into the business as well. So the aim is to improve those impressive statistics that we're reporting already. So data chasing will be automated, payment runs will be automated, and we're going to be able to get that financial intelligence as well out of that new system. So looking forward to that one bedding in. In conclusion, working capital and balance sheet of the company at the end of the first half are in good shape, fully funded for the current growth trajectory. Company's report its highest cash balance ever. In addition, it also has that £1.5 million multi-currency overdraft from HSBC. So in total has access to over $7.6 million of cash at the end of June. Also obviously moving to improve things further with the launch of a new accounting system to help support the business on its growth trajectory. Hopefully you found those slides interesting. A bit more details on the finances there. If you've got anything specific to ask, fire in a question either now or email me. Back to you, Stuart, for the last slide. Thanks, Brad. We'll look at 2022. Just one slide on this one before we get to your questions. Now's the chance, I guess, to ask any kind of final questions or do at the end here. But let's look ahead for the rest of 2022. As you'll know from the update that we put out this morning, we now have currently more than $68 million of advertising booked for 2022. Just to take you back, and it's actually on point 3 here, but PwC have projected that podcast revenue grows at 15% this year. If you look at that $68 million number, we're very close already to hitting that market projection of 15%. And we are 13% higher than the entirety of 2021 revenue already. Already good growth and a very strong set of bookings and good visibility on the rest of the year at $68 million booked today. That said, there's a question here that, so I'll go into a little more detail on this one in one of the questions. But there is a softening ad market, right? The macroeconomic conditions are impacting consumer spending. And so we are starting to see that in the pricing and the demand that's coming to us from advertisers in Q3. It was something that we called out in the interim report earlier. We are just working right now to understand what that looks like and how deep that is set to run. Audioboom, as I said before, is set to outperform the industry growth. Again, this will be the fifth year in a row that we outperform the wider industry when it comes to growth. 15% is the figure from PwC. We're very, very confident at this stage that we will go above and beyond that. We have key renewals, 3 or 4 more key renewals. And when I say renewing those partnerships, what makes it a key renewal? Probably a show that is in our top 25 creators in terms of audience size and revenue potential. So we have 3 more of those key renewals to work on across the second half of the year. One of those, I already have terms agreed on, and we're just negotiating on 2 of the others. We have new Audioboom Studios launches as well. So we're really focused, I think, at this point on delivering new inventory, whether that be the premium high-value host endorsement inventory or the wider, more scalable Showcase marketplace inventory. So we're really focused on growing out those inventory levels. Then we can continue to add to the demand side of Showcase. So adding in more demand-side partners to monetize the inventory that we place into Showcase as well. That will be international partnerships as well as programmatic connections to trading desks through the technology. Anything that we can do to add to the demand and the monetization of the inventory that hits Showcase. So yeah, those are the areas of focus. We think there may be some challenges ahead with the changing conditions that we're operating in. But we're confident, as I said, about getting to goal and to outpacing the industry and taking more market share and becoming a bigger player in podcasting. So thank you for looking at that presentation with us. I can now jump into some questions that are starting to come in. Stuart? Yes, Steve. Brad, 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's situated on the top right-hand corner of your screen. But just while the team take a few moments to review those questions that are 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 can see, we have received both a number of pre-submitted questions as well as a number of questions that have come in throughout today's presentation. Firstly, can I thank all the investors for submitting their questions. Stuart, Brad, if I could please just hand back to you just to run through that Q&A tab and where appropriate to do so, if you could please just read out the questions and give your response, and then I'll pick up from you at the end. Thank you. Thanks, Jake. I think this is just probably the perfect one to start with. The question is, how resilient are Audioboom to any downturn in consumer spending, which could impact advertising budgets? We might now be seeing pent-up consumer spending from savings during the lockdown years, but with increase in the cost of living in 2022, consumers will have less disposable income. As I've already said, we're starting to recognize that we are operating in a changing advertising market. I would say in particular, a changing advertising market in the U.S., where high inflation hit earlier, consumer spending habits have already changed, because of that high inflation. I expect a lag in the U.K. and to see changes there happening, more likely in Q4 or early next year once the impact of energy price rises kicks in. But we are certainly starting to see the effects of that macroeconomic downturn coming into play. Yes, I think brands will cut advertising budgets as consumer spending lowers. There will undoubtedly be headwinds. The WARC, which is the World Advertising Research Center, they have said that advertising in the U.S. this year will be around 20% lower than last year. So advertising as a whole across all sectors will be 20% lower in the U.S. this year. But as I've just told you, podcasting is projected to grow 15% this year. That means for me, just as it did in COVID two years ago, advertising budgets will take hits across other mediums. So, radio, TV, print, digital, outdoor, those mediums will more likely be part of that drop in advertising budgets. But I think podcasting, just as it did during COVID, will continue to grow and PwC says the same. It says that the industry will grow 15%. Why is that? Podcasting is a high performer for brands. As I said before, the host of the show are influencers. They are trusted by their listeners, and their listeners are very engaged. Listeners react to the ads that their favorite podcast hosts are delivering. They then go and buy those products. So the advertising works directly in podcasting. The other thing with podcasting really is how measurable it is. Podcast advertisers can work with us at Audioboom, to use a combination of ways to measure the success of that podcast advertising campaign. So that will be vanity URLs, promotional codes, and then attribution technology. It will really show off very precisely how successful that advertising campaign was on a particular show. So we can show off to advertisers, which shows perform well for them, and we expect those advertisers to continue to advertise in podcasts that are high performers that work really well as we optimize performance for those campaigns. So I think as I said in my interim report earlier today, there is some softness in the ad industry. We are going to see some changes and budget cut in that space. But podcasting will still grow even though other mediums may not grow. I think it will be set against this backdrop of change, but there will still be, and there will continue to be podcasting advertising growth. The second question we will do here is one we get asked a lot, similar to one we get asked a lot during these presentations. It says, "The last presentation talked about the options of being an attractive add to another company wanting to grow in the podcasting space, such as Amazon, Apple, or Spotify, or remaining independent and continuing to grow. Can you tell us about those different options?" As I said, we have talked about this in the last few presentations as it is a question that we do get asked often. I have always been clear that I wanted to build Audioboom as a business that could thrive independently, but also be an attractive proposition for a big company who are looking to fast-track a podcast element to its business. I believe that that is what we have done and that is what we are doing successfully. We are the leading independent podcast business. We are the third biggest podcast publisher right now in the U.S. So we have the scaling audience. We have fast-growing revenues. We are pretty much the only profitable podcast company of any size out there. Yes, I do think that at the right time, which may not be now, may not be in this current market, that we would be attractive. But we are also in a great position to continue to build this thing independently. We can continue to build value independently. All the M&A activity in the space so far has been really focused on creating a value chain that comes from technology, content, and monetization. We have built Audioboom around those three pillars. We have a tech platform. We have a strong content operation. We are the most efficient monetization engine in the space. We have all the parts that allow us to compete as an independent. Now we have some cash. Best cash position we have ever reported. Allows us to invest for growth, and it allows us to continue to be competitive as we build this independently. Third question I will do is a good one. It is how is Audioboom positioned compared to competitors? How does it grow its listeners, income per listener margins compared with competitors? There is not a huge amount of information available from our competitors. Only Acast as a podcast pure play, publicly traded. They are on Nasdaq First North. So we see some good comparative data from them. Others like Spotify or Wondery, their podcast operation is part of a bigger business. So we do not see too many specific data points that we can use to compare. But there are a few that we do know. One, if we go back to one of our three KPIs is our eCPM. That is how much value that we extract from 1,000 listens or downloads to the content. Our eCPM number is $57. That is very strong compared to a similar metric from Acast. Their similar data point puts them at around $31. So we are extracting close to double the value from the consumption as they are. Again, I think that speaks, as Brad said earlier, to our kind of expertise in that premium market, working with the very best shows out there and selling premium advertising units particularly in the U.S. and the U.K. We know we are very lean. Brad mentioned it a couple of times. Our headcount is in the 40s. Again, as a comparison to Acast, they are close to 400, we believe, in terms of staffing. So we are very lean there too. We know other podcast businesses in the top 10 of that Triton ranker that I showed you earlier have in excess of 200 or 300 team members. At 47 as we are today, we are extremely lean there. In terms of gross margin, we are weaker than Acast in terms of gross margin. Their margin is above 30% compared to ours in the low 20s. In part this is because we are very strong in the U.S. where they have little footprint here. In the U.S., the market is ultra-competitive. The talent agencies, WME, UTA, CAA, they have created stronger revenue shares for their clients, those top-tier shows that we work with which has lowered our margins. Whereas Acast are stronger in Europe and Asia. They are much less competitive markets so the creator revenue shares can be more favorable to them and hence the higher margin. It is a trade-off. We have a big footprint in the bigger market, but that comes with the lower gross margins there. I think other data points you can look at are those audience rankers. We already talked a bit about the Triton ranker, where we are third in the U.S. There is another ranker by a company called Podtrac. We do not take part in that one. If we did, we would also be the third biggest publisher on that ranker too. Hopefully those are some good comparison data points for you there. Next question. Chairman Mr. Tobin has been purchasing shares frequently at a share price much higher than the recent £8 to £10 per share value. Does he no longer see it as good value? If so, what has changed? Michael has been extremely supportive of the business. His investment decisions are very much his own. I would say that he has a very clear appreciation of what we are building at Audioboom, our business model, our performance, our operations. He has such a great understanding of that and then obviously of the future value that we are creating. He has been very supportive. As you may or may not know, directors are prohibited from trading shares in the business in the 30 days immediately before the interims or annual results. He has been unable to trade shares during that 30 days even if he wished to. That is the reason. I know there has been a few questions on this. That would be the reason why he has not been able to trade during that last 30 days. Like I said, he is incredibly supportive to the business and really fully understands that value that we are building here. I have a couple more questions hopefully I can fit in here. The first one is, great to see that key partnerships have been renewed for content providers. Are these three-year contracts? The majority of those key partnership renewals that we announced last week and also in the interims, shows like "Dark History" and "Murder, Mystery & Make-Up," "No Such Thing as a Fish," which is a big U.K. show, "Casefile," one of the biggest shows in the world out in Australia. The majority of those renewals are done on three-year contracts. Many of those top shows have already been working with us for several years. We have built really great relationships with the creators. In partnership with them, we kind of have this proven track record of creating really great value for them. They trust us as their monetization partner, their distribution partner. I am just really pleased that we now get to work with them through 2025. Having that visibility through 2025 on those key shows is so great for us. The most important aspect I think of growing is retaining key revenue to provide that very stable foundation. So those renewals are so important to us. Yeah, like I said, just really pleased that we get to work with these fantastic creators, some of the best talent in podcasting for the next three years. Then just, I think this will be the final one that we can get to, just similarly connected to the recent RNS of last week. This question, with the two new podcasts from Leah Remini and Roman Atwood, do you have forecasts for audience reach and downloads? How will this translate into advertising revenue? These shows are really great examples, actually, of the work that our business development teams are focused on in the U.K. and the U.S. On one side, they are working to attract existing podcasts, like Fair Game from Leah Remini to the network. These are top performing existing podcasts that have really strong built-in audiences that we can monetize from day one of the contract. Plus, they also have very strong back catalogs where we can use that proprietary inventory creation tool that I mentioned called AdRip to create even more value from that back catalog. So when we do these deals, we absolutely know audience reach, we absolutely know download numbers for the show. Our business intelligence platform that we have enables us to do that. Then we are able to make very accurate ad revenue projections for them as we enter into the contract. So I do not give out revenue numbers for individual shows generally, as I feel that it kind of provides our competitors with too much information. But I would say that Fair Game will become a top 10 show for Audioboom. So that is that one. Then on the other hand, our biz dev team is talent spotting. They are looking for the best creative talent to partner with to launch brand new podcasts, and Roman Atwood is a great example of that. He is an incredibly talented influencer, a YouTube personality, and his creativity very smoothly translates into podcasting. He has a strong following that we can convert into podcast listeners, and it is enabling us to build audience for the show very quickly. I am really excited about Roman's podcast. It is five episodes in at this point, and it is already being heard by more than half a million people each week. So it has been a success story for us already, and like I said, just goes to show the fantastic work that our business development team does. So I think that is where we need to wrap up. We have a minute to go. Hopefully, we have got through as many questions as we could, and it gives you a little more insight into the operations and the financial performance of the business. So thanks for joining us today. It has been another great period for the business. Really excited about what comes next. There will be a few challenges on the way, but I think we have a business model and operational structure and a great strategy that will kind of guide us forward, and we are confident about how the rest of the year will work. Stuart, that is great. Thank you very much indeed for taking the time to address all of those questions that came in from investors this afternoon. Ladies and gentlemen, the company will review all of the questions submitted today, and we will publish all those responses where it is appropriate to do so on the Investor Meet Company platform. 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 best 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, so good afternoon to you all.