Earnings Call: Q3 2022

Oct 17, 2022

Good afternoon, ladies and gentlemen. Welcome to the Audioboom Group PLC investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time via the Q&A tab that is just situated on the right-hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all of the questions that are submitted today and publish responses where it is appropriate to do so. 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. Good afternoon, sir. Thanks, Jake. Hi, everyone. It is good to be back with you. Lots of familiar names on the list today and some new names as well. So, thank you for your support and for those of you that are new to the business, it is great to have you here. Hopefully, we can tell you a little bit more about Audioboom today and update you on everything we have been working hard on over the last quarter and also the last few years. We will start things off as we usually do, just by looking at the company, the business model. We will look at the various revenue lines in the business, how we operate, the part that we play in the podcast space. Then we will drill down a little onto the results and the financial results that we released this morning. Go a little deeper on the operations of the business. A little deeper from Brad on the finances, and then we will take a quick look forward before we get to answer some of your questions at the end. So, as Jake said, get those questions in now, and we will pick some of those as we go across the hour that we are with you. But let us get into it quickly. The first thing for anyone that is new to the business, we will introduce ourselves to you. My name is Stuart Last. I am the CEO of Audioboom. I have been the CEO now for the past 2 and a half years. Based here in New York City, which is where we drive 90% of the business out of the U.S. and have been working in and around podcasting now for the past probably 12 or 13 years at the BBC in London before I moved to a company called Voxnest in the U.S. I have been with Audioboom in various capacities for the last 8 years, as I said before, stepping up to be CEO 2 and a half years ago. Thanks, Stuart. Hi, everyone. I am Brad Clarke, CFO here at Audioboom. Been here since March 2018, so it will be 5 years in March next year. Chartered accountant, qualified with Grant Thornton. Worked with various media companies over the last 15 years or so. News UK for 5 years. Brave Bison, another AIM-quoted company for a couple of years before joining Audioboom. It has been a very rewarding role joining the company in 2018. Obviously, in a different position then. Loss making, losing cash. To see it now where it is now in terms of that growth, that profitability, being cash generative is very pleasing to see. We will get into a bit more of that detail later on in the presentation. Back to you, Stuart. Thanks, Brad. As I said, for those of you that are new to the company or those of you that may not have had an update recently, we will take a look now at the business model and the operations of the company. Audioboom powers podcasting. We sit in the middle of audience creators and advertisers. We bring the three very important parts of the industry together through our platform, and we create value for all elements of the industry. Sitting at the heart, we work directly with creators, those content creators, those podcasters producing content. We distribute out to audience wherever that audience is, whether it is on Spotify or YouTube or Apple Podcasts or Pandora, and many other listening points. Then we connect the creators with advertisers, brands that want to advertise on podcasts and connect with and get their brand out to audiences. Audioboom and the platform brings those three key elements together. Without us in the middle, there is very little value in the podcasting space because there is no way to connect those three elements together efficiently or at any type of scale. We really are the kind of the heartbeat of the podcasting space. When I talk to you about what the platform looks like on the next slide, you will see that this is, like I said, very efficient, very scalable, and we are building it very successfully in the space. We build this model on, I think, three core beliefs. First off, that podcasting is a creator medium. What I mean by that is that this is a medium that is very strong for independent creators. Very authentic creators that have great engagement with their audiences. We are seeing that first belief really coming true now. Over the last few years, big brands have stepped into podcasting, but many of them are now actually stepping away from podcasting because they do not have that authenticity. They do not connect with the audiences in the same way that independent creators are doing. We have recently seen companies like Spotify and CNN laying off their production staff because they have not got the traction that they wanted from their content creation arms. Therefore, Audioboom working directly with independent creators, we believe we are in the right place, and that is the future of podcasting. The second core belief that kind of pushes this model is that this is an advertising-funded medium. Again, we believe that is coming true now. The take-up of subscription modeling has been very low, and podcasting has never had those same problems that something like cable TV in the U.S. has had. It's always been free at the point of listening. The content is very strong through an ad-supported model. There really is very little need for a subscription model, and there's very much been a small take-up of subscription-based podcasting, and we don't see that as being something that will come through in the future. The third core belief is that this is a distributed media form. We want our content and the content from our creators to be on every single listening app that's out there. As I said before, whether it's Spotify, YouTube, Pandora, Apple Podcasts, Google Podcasts, iHeartMedia, there are many other listening destinations. We make sure that that content is everywhere our potential audience is. Again, this third of our core beliefs is also being proven out right now. We've seen recent studies that when podcasts have gone exclusive to one platform, they've lost anywhere up to 75% of their audience. Again, we believe getting that content out to the widest possible audience is in everyone's favor, and it's those three core beliefs that drive this model. We power podcasting for creators, advertisers, and audience. The Audioboom platform that sits at the heart of that model is very scalable, and it's been built over the past seven or eight years, and it really manages every part of the production and distribution process. At the very heart of that platform, we have a content management system. This is where the podcasters will upload their audio. They will manage the publishing process when that content is launched and how it distributes out to each of those listening destinations with simply one click. Then we are able to gather analytics from each of those listening destinations and consolidate those into an analytics dashboard for our podcasters so that they can understand their audience, they can see all of their listening data, and then our sales team can use that listening data to monetize that content very strongly. On top of that content management system, we've built out an advertising technology stack. That's an ad server that fires in the advertising. It's a yield op system that ensures that we get the very best pricing for each piece of that ad inventory in real time. We have something called AdRip, which creates additional inventory within back catalogs of content. Just last year, we launched Showcase, which is our advertising marketplace, and that advertising marketplace enables all of the inventory to be sucked into it and then for that to be monetized through many different sources globally. That's an advertising marketplace that sits with that advertising technology stack on top of our CMS. Finally, we have a Salesforce-based system called Lyrical. This is an inventory management system. It allows our team to execute the advertising. It automates the billing. It's business and sales intelligence, and again, adds to the level of automation that we have in the business. It keeps our headcount very low, enables the entire distribution and monetization part of the platform to work very smoothly. We're really seeing some true scale coming through this platform now. We have more than 8,000 podcast channels using the platform for publishing and distribution and monetization. We are seeing more than 130 million monthly downloads across the platform. The content is listened to by more than 34 million unique listeners every month. That platform, as I said, very efficient, doesn't take a lot of investment for the number of channels and downloads and unique listeners to grow over time. This slide is really looking at our content and revenue model. To break this down a little bit, the graph in the top half of this slide is really showing you how podcasting works. There are a few large podcasts at the very top end, which have a very large number of downloads, and then there is a very long tail of shows that have a much smaller number of downloads. Audioboom and the platform at Audioboom is able to work with all of those podcasts. At the very top end of the industry, we call it our premium network. That is the work we do with our biggest 200 shows, and they are driving a significant amount of the downloads that come through the platform. We then have Audioboom Studios, which is our in-house productions. It is a smaller number of shows, around 30 podcasts, but very much in the premium end of the podcast space. Then we have our creator network. That is our long tail. That is 8,000 podcasts, much smaller shows, but delivering some good volume across the entirety of that long tail. The way we then monetize is through three ad models. Our premium sales model, this is our in-house sales from our in-house teams in New York and London. They are selling directly to agencies and brands. They sell at a very high price point, and they are really selling those ads just on those top 200 podcasts in our premium network and then the Audioboom Studios shows as well. These are bespoke podcast sales, where the host delivers the ad natively to the podcast. It is a heavy lift to sell and execute those ads, but they are a very premium price point, upwards of $25 per 1,000 downloads. That is the premium sales model that we have within the business. The secondary ad model that we have in the business is called Showcase, that I mentioned on the previous slide, and that is an automated ad marketplace that is all delivered through advertising technology. Showcase can monetize shows of any size. It can monetize a show that has 1 million downloads per episode. It can equally monetize a show that has just 100 downloads per episode. We feed all of that content into Showcase, and then we open that up to advertisers to target advertising against demographics and locations and keywords within that content. Showcase, as you will see later on in this presentation, is a fast-growing part of the business, and a very successful part of the business too. Thirdly, we have Sonic. That is our team down in Austin, Texas. Sonic are also able to monetize across the entire span of our podcasts. Sonic works a little differently. It is a platform that is working directly for the brands and for the advertisers. So it enables those brands and advertisers to access podcast inventory, not just on Audioboom, but outside of the exclusive Audioboom network as well. But within Audioboom, it is monetizing those top 200 podcasts, Audioboom Studios podcasts, and also the long-tail creator network. This slide breaks down our various revenue lines within the business. At the top, you will see how each of those revenue lines contributes to our group revenue. Then at the bottom, you will see the gross margin on each one of those revenue lines. So if we take those in turn, Audioboom Studios, that is the shows that we produce ourselves through our production teams or the shows that we co-produce within Audioboom. And they have a strong gross margin at 30%, but it is a small part of our revenue. It is a growing part of our business. Just launched just over a year ago. As I said, we have around 30 shows that we are producing or co-producing out of Audioboom Studios. Our premium network, that is those top 200 shows. Big audiences, big revenue driver at 65% of our group revenue, but comes with a slimmer gross margin at 19%. And that gross margin has kind of hovered in and around the 20% mark now for the past few years. That is really impacted, and there is pressure on that gross margin from the competitive nature of the space. Us and our competitors are all trying to sign the biggest shows in podcasting, and we have to offer them favorable revenue share terms to attract them to our network. And that puts pressure on that gross margin. But it is holding in and around that 20% mark in any particular period. Then Showcase, our newly launched ad marketplace. This has moved very quickly for us, and we are really happy with the progress that we are seeing within Showcase. So very quickly, Showcase has become 14% of our group revenue from its kind of starting point last year and has the highest gross margin now within the business as well. So it is very efficient, and it is growing revenue very quickly, and we are super pleased with the progress that we are seeing at Showcase. Sonic also has been a fast-growing new addition to Audioboom. It has been with Audioboom now for the past three and a bit years. Has that slimmer gross margin because it is operating directly with the brand, and has to utilize that traditional ad agency gross margin or commission structure with the brand. But it has grown very quickly to be 18% of Audioboom's revenue this year so far. So I hope that gives you a good overview of the model, how we sit within the space and how we power podcasting, what the platform does, how we think about content and how we monetize that content, and also the various revenue lines and how they come together to form Audioboom. We will now take a look at performance. We will start off with the most recent set of results that we released this morning to the stock market. So I will walk you through those. Year-to-date revenue of $57.1 million. That is 44% annual growth over the same period last year. And I think one of the key points here is that we are moving, once again, significantly faster than the wider industry. The podcast space in the U.S. is projected to grow around 15% this year. And so we are, year-to-date, significantly ahead of the wider industry growth. Our EBITDA profit for the first 9 months of the year is $2.7 million, up 125% on the same period last year, which was $1.2 million. We are now at $2.7 million for this first 9 months of the year. Q3 revenue, down slightly on last year, $16.2 million. In a moment, we will obviously talk through market conditions and how they have impacted the business through Q3. It has been a challenging quarter, but we will go into detail a little more on those market conditions in a couple of slides' time. We continue to be profitable. $600,000 of EBITDA profit for the quarter. Again, slightly down on the same period, Q3 of last year due to those market conditions that we are working in. Again, continuing to be a profitable podcast company. There are very few of those out there right now. I want to kind of draw some attention here to that cash position that we have, $8 million of cash in the bank with a further £1.5 million or $1.7 million of untouched overdraft facility available to us. That $8 million of cash is the highest cash position we have ever reported as a company. We have been cash generative over the past quarter, adding $2.2 million to that cash balance since the end of June. We continue to be fully funded for the current growth plans. I think as we are working and operating in somewhat uncertain economic times, just having that big cash balance, the biggest cash balance that we have ever had in the business is going to be a very important point, and something that should give us confidence as we move forward. Let us talk, I think, about the way the market has changed since we last got together. I think 3 months ago, we gave you a bit of a heads-up that we were starting to see some change in the ad market due to global economic conditions. That has, as we expected, come together in Q3. We saw a very quick downturn in the ad market in July, and July is the low point in terms of advertiser demand and revenue from advertising. We saw small recoveries in August and September that were both stronger months in terms of revenue than July. We are continuing to see that recovery into Q4. Again, October is another small improvement, and obviously with the higher demand months around the holidays of November and December, we expect to see that recovery continue in Q4. This has mainly impacted the U.S. market. I think when you look at it is because of the inflation impact happening here first, and happening a little earlier than it did in the U.K. The U.K. operation is not really impacted at this point, although we perhaps expect to see some U.K. impact in Q1 or Q2 of next year, particularly when energy pricing has impacted consumers. Our premium ad model is the one that is most impacted. This is really because those brands that we work directly with in that premium ad model, they are direct-to-consumer brands. They are the first to be hit by higher inflation and a change in consumer confidence and consumer spending. They are also performance-driven brands. They are willing to spend money in podcasting when they can measure the performance of those ads and grow their businesses because those ads perform so well as consumer spending changes, spending habits change, and confidence goes down. Those direct-to-consumer and performance-driven brands have been pulling back their spending, and that has impacted that premium ad model that we have. Showcase remains largely unaffected, though. Our Showcase is working with larger blue-chip brands, and they are not as directly impacted or have not, to this point, been as directly impacted as those smaller performance-driven brands. So Showcase has continued to grow, and we have not seen too much of an impact there. One thing that you will see here is that the weaker ad market has led to a small number of missed creator minimum guarantees. To step that back a little bit, when we sign the larger shows within our network, we guarantee them minimum levels of revenue for their content. As we have seen lower revenue levels due to this weaker ad market, it has meant that we have missed a small number of those minimum guarantees. We obviously have to pay those minimum guarantees out in full, and that results in a direct hit to the gross margin and EBITDA. So you are seeing that slight reduction in gross margin, and lower EBITDA due to a small number of those creator minimum guarantees being missed during this tough market. PwC are projecting now that the industry grows around 15% this year. I think just that key point here, again, that I have mentioned before and will probably mention again before this presentation is over, we continue to go significantly ahead of this industry growth. So while it is tough times out there, and tough times in the advertising market, Audioboom is resilient versus our competitors, and we are continuing to grow. We are continuing to grow and we are continuing to grow much faster than our competitors in the podcasting space. I do want to talk. It is a tough market that I have just talked through. It has been challenging operating over the last three months, but I do want to talk about some of the key points here. I think one thing is how much we have really learnt from COVID. COVID was just two years ago, so this is the second time in three years that the business has been impacted by larger, uncontrollable forces, I think. So we learnt a lot from COVID, and it has been great to see that play out and make us more resilient during this economic downturn. I think the first point here is around Showcase. Showcase was really developed during and after COVID to diversify the revenue streams a little bit. So during COVID, we were very much focused on our premium ad model, which was impacted at that time, and Showcase was a way to diversify that revenue, to start working with those bigger blue-chip brands, who are perhaps less impacted by some of these economic conditions. Showcase, we've seen great revenue growth there, 75% revenue growth in Q3 versus Q3 of 2021, and 115% year-to-date growth on Showcase versus the same period last year. I'm really pleased to see Showcase having such a big impact on the business born, as I said, out of COVID. It now contributes more than 14% to group revenue versus 9% this time last year. It's growing fast and making a real impact on the business. Likewise, with the opportunity to sign big shows to the network. Again, something we understood during COVID was that there was an opportunity, while other competitors of ours are impacted harder by market conditions. There was an opportunity for us to go out and target big shows that we wanted to work with and sign those shows exclusively into the Audioboom network, and that's very much what we're focused on here. New shows just signed in the last 3 months into the top end of that creator network, "Lovers and Friends," "Mea Culpa," "Straight Up with Stassi," "Undisclosed." These are all large podcasts here in the U.S. mainly that have strong built-in audiences that can be monetized off the bat. They are now part of the Audioboom network, and we will instantly and continue to see revenue coming from those shows as we go across the last part of this year and into 2023. One point that I do want to talk about is, "Morbid," a large show that was part of the Audioboom network, until May. We had known for several months, before May that Morbid would be leaving the network. We have very strict financial goals around making offers to the bigger shows, to renew the contracts there. If we'd have chased that Morbid contract and had kept them in Audioboom, that would have left us losing tens of millions of dollars a year. We had to be very strict on what our top maximum offer was. As I said, Morbid left the network, and we'd had notice of that for several months. Morbid leaving while it impacted downloads across the network, it hasn't stopped growth within Audioboom. We've seen over this last period, network downloads across Audioboom up 33% from last year when you exclude Morbid from last year's numbers. Growth is continuing in terms of consumption and inventory, without Morbid. Even though losing Morbid has obviously impacted the top number, growth there is continuing strongly, and we'll see that on the chart on a later slide. Finally, in Q3, we've had some success here with Audioboom Studios, particularly in the U.K., but Q3 launches, including "Killers, Cults and Queens," "Glittering A Turd," "Superpower State of Mind," these have all made an impact on the U.K. podcast charts, and we're starting to see the commercial benefits of those shows as well as they add more episodes and add more inventory across the year. I talked a little already about Audioboom's performance versus the industry, but both of these charts really are highlighting that. Once again, Audioboom for the fifth year in a row, is growing faster than the wider industry, faster than our competitors. Our year-to-date growth of 44% significantly stronger than the projected industry growth of 15% this year. As I said, we are resilient, and we are performing well in this current market. Over that past five years of outperforming the industry, we have taken our market share from less than 2% to greater than 6% in that five years. Growing market share all the time, and our medium-term goal here is to get to that 10% market share point, and I do not think that is too many years away from getting to that 10% market share point. Key thing here is, despite impact from the market, we are growing faster than our competitors. The chart on the right is so pleasing to see. This is a ranker of the biggest podcast publishers in the U.S., and this is looking at the time period from July 2021 through to June of 2022. Audioboom is the fourth largest podcast publisher in the U.S., which is the world's biggest podcast market. When you look at the company we are keeping there, it is just a fantastic achievement. The only publishers above us are Spotify, SiriusXM, and iHeartMedia, three of the biggest broadcast companies in the world. Then we have NPR, which is the BBC of the U.S., and the New York Times immediately below us. I said this many times before, we continue to punch above our weight. We continue to be very smart about the way we do things, and to be the fourth-biggest publisher in the U.S. is just an incredible achievement. Versus our competitors, we are doing an incredible job here and performing very highly. Alongside of our financial results every quarter, we put out an update on our KPIs, and we have three corporate KPIs. The first one of those is global downloads. That is the amount of consumption that we are seeing across the platform on a quarterly basis. We are seeing year-on-year growth here, 9% year-on-year growth versus Q3 of 2021. But what you are seeing there on that green line, is the drop-off through losing Morbid in Q2. That 124 million dropping down to 108 million. That is the drop-off for Morbid. But when you remove Morbid, as I said before, take Morbid out of those stats from last year, that is the pink line. You are seeing the network as a whole continuing to grow very quickly across the past year. We know we have growth ahead of us on that KPI. We are already seeing in October around 5% growth over Q3, so we do expect that KPI to continue heading in the right direction. Brand count is the number of brands that we work directly with in our premium ad model. This one, you will see here that the dip being linked almost entirely to those market conditions. Q3 seeing a big drop off there, as I talked about earlier, brands being more nervous about spending money in the space. Again, just highlighting what I said earlier, seeing that recovery and higher demand in Q4 is showing us already in October that brand count will tick up as we go into Q4. Confident about a slow and steady return on that brand count KPI. Then eCPM is really our optimization metric. That's how much money we are able to extract from 1,000 downloads across the network. We are at $50 per 1,000 downloads across the network. We've been above that $50 number now for the past 18 to 24 months. While this is a little dip caused by those lower revenue numbers in Q3, again, we're seeing that going higher in Q4, so expect that eCPM number to be up again as we go into Q4. I think really the story here from the KPIs is you're seeing market conditions impact them in Q3, but the signs are good for recovery as we go into Q4 and 2023. With that, I'll throw to Brad, who can go a little deeper on some other parts. Great. Thank you very much, Stuart. Hi, everyone, again. The Audioboom growth story we've seen over the last few years continues this year. Today, I'll give you further insight into our revenue performance, EBITDA, operational costs, working capital cycle, just building on those themes and messages that I presented over the last few investor meet sessions. This one, first up, we can see our financial performance over the last five years as we've positioned ourselves among the leading companies in the podcast industry. Recognizing revenue growth, which is above the wider podcast industry, taking market share, transitioning the company from a loss-making position to profitability, and all with access to resources, which are a fraction of what our competitors can call upon. As a company, and as investors as well, when you're looking at the company, when you're looking at the podcast space, the company's competing in it. There are a couple of public companies which can get a decent amount of company-specific information and industry information, but the majority of companies will either be private or be part of larger organizations. So you're not really going to get a full picture of how they're performing. Audioboom is public, so we're up front and honest in terms of where we are and to be able to say that we're growing faster than the wider podcast market, to say that we're profitable when many of our competitors are loss-making, to say that we're cash generative, especially in this economic climate. Those are, in my opinion, three very good, strong messages to be able to communicate to investors. We know that 2022 will be another record-breaking year, for the full year on both revenue and EBITDA, as at the end of Q3, we had recorded 95% of our 2021 revenue total, and today we've confirmed that we've got $73 million of advertising revenue booked for 2022. So we're already over 20% up on last year, which is above that 15% growth figure that we've quoted, and Stuart's mentioned already from that PwC report from June of this year. Onto the next slide. We can see here a bit more detail in terms of the revenue and costs of the business. We've gone through some of the challenges that we faced in the third quarter, and it's encouraging that we've seen that recovery from July through August and September and into October as well. In terms of that growth across the revenue mix for the first three quarters of this year, we have recorded impressive growth statistics across our revenue mix. The premium network grown by 38%, 115% growth on marketplace and 40% growth in Sonic, and Sonic has just booked its record revenue quarter in the third quarter of this year. Lots of positives. We have said revenue has grown by 44%, we know that. OpEx increased at a slower rate of 21% for the first nine months of the year. The third quarter of this year was flat and level with the third quarter of last year at $2.6 million. Q3 OpEx was actually 16% lower than Q1 and Q2. What I am aiming to illustrate here is that there is continued cost control within the business, and there is actually a cost base that flexes with the revenue recognized within the business and the performance of the business as well. There are two major costs that really vary with the performance of the business. With revenue recognition, we incentivize our sales staff with sales commissions. Obviously, there is lower revenue recognition, so that cost decreases. Download costs as well. We have seen that in the third quarter there has been lower downloads, so therefore, there is a lower cost incurred there as well. This is not a business that is, for example, lumbered with stock. It does not have a high headcount. When those macroeconomic challenges do occur, we are well-placed to weather those because that cost base does, to an extent, flex as well. In terms of the mix of OpEx within the business, similar, same breakdown as before in terms of the major cost being salaries and sales staff commissions. That accounts for 65% of our OpEx base. There is an 18% year-on-year increase on that line for the first nine months of this year, from $4.8 million last year up to $5.7 million this year, and that is mainly due to our higher headcount within the business. We ended September on 45 heads. Slightly down on June, where there was 47 heads within the business, but up year on year from the 38 that we had at the end of September last year. I say this every quarter, we continue to be very lean, very efficient when compared to our competitors. There are no current plans to increase headcount significantly above where we are today. That is the major cost category within the business. Second major cost category is those technology costs, and hosting and downloads of that content is within that first nine months of the year. There was a 40% increase on technology costs, from $1.3 million to $1.8 million for the first nine months of this year. Obviously, cumulative downloads have increased year on year, so therefore we have incurred that higher cost as well. Overall, that point I am making there is that cost base does flex dependent on performance. In terms of a bit more detail on working capital and the cash within the business, we have had a couple of pre-submitted questions as well, so I will go through those in this section as well. As at the end of June, we are very pleased to be able to report, as we did in June, the highest cash balance that the company has ever reported at $8 million. It's a testament to the internal processes that we've built within the business to be able to continue to generate that cash. Cash increased by $2.2 million in the third quarter of this year, increased by $5 million since the end of December. Collections totaled almost $59 million for the first 9 months of the year, an average rate of $6.5 million a month. For the second successive quarter, cash collected actually outstripped revenue booked and payments made. Just a note on the payments made. There was one question pre-submitted on that one. The payments made column, that does include OpEx within the business. When you look at OpEx within the business, rough run rate of OpEx is around $1 million a month, just under $9 million OpEx for the first 9 months of this year. The other payments made relate to revenue share payments that we make to our partners. Those costs, if you look at our interim statement within cost of sales, those are the revenue share payments that we make to our podcast partners. The payments made, the gray column here, is OpEx plus those costs of sales. That was a question that we received, and so just a bit of explanation around that. Another pre-submitted question as well is around the cash that the company holds and the currency that the company holds. To answer this one, majority of cash held is in U.S. dollars. The company recognizes around 95% of its revenue in the U.S., so we're invoicing in U.S. dollars and we're receiving that cash in U.S. dollars. That's the majority of the cash held within the business. At the end of September, the company held around £900,000 in sterling, around $7 million in U.S. dollars, so that gets us to our $8 million held at the end of the quarter. There's a certain amount of natural hedging that occurs, because we are invoicing and receiving in the relevant currency. There's very limited transfer between dollars and sterling. We do have to do that, but very occasionally. There is a certain amount of natural hedging there. Hopefully that answers that question. In terms of, obviously, the weakening of the pound against the dollar, that's another question that we've received. The impact that we've seen on the P&L, I actually went through that in the interim statement, because of the structure of the company, where the main trade of the business is recognized within Audioboom Limited, our U.K. sterling-based entity, which is then consolidated up into Audioboom Group plc, which reports in dollars. We are seeing, because we are translating debtors into sterling on the balance sheet, to the end of September, there is over $1 million in FX gain within the company. That's below EBITDA. Around 3 years ago, we moved that FX below EBITDA, because obviously we can't control that, obviously, so we de-risk that from what we report to the market. That's below EBITDA. You'll see that on our last couple of annual reports as well. The reason why we recognize trade in our U.K. entity, we've got over $30 million of brought-forward tax losses, which we can utilize to offset future profits. Once those brought-forward losses are utilized in the future, we'll then recognize the revenue in the appropriate territory. Hopefully that gives an overview of the cash position, which is strong within the company. In terms of debtors, a good statistic here. The strong collections have continued through the third quarter. The debtor day figure at the end of Q3 was 52, which is 16 lower than the 68 reported in June, and 42 lower versus the 94 we reported at the end of December. How do we keep doing this? High quality, reliable invoice information distributed, structured debtor collection processes, good customer relationships, all enable this figure to decrease. That's despite the continuing increased revenue. Again, to reinforce that efficiency point in Audioboom, that's run by one person, Shaun. We've got two people, Jamie and James, within Sonic. That's reflective across the business in terms of that efficient team that we've got here at Audioboom. Last time I updated you on our new accounting system, NetSuite. That went live on 7/1. Now successfully closed three-month ends with it. It's working well, pleased to report. Our debtor chasing is automated. Our payment runs are much quicker, partly due to the fact that there's a healthy cash balance there. Now that's implemented, we're now moving on to using that to give us greater financial intelligence for finance and the wider business as well. Well done to the team for getting that in so smoothly, and that's another key system of the business now that along with Salesforce, allows us to really help the business to scale without adversely impacting it. To conclude on these financial slides, the working capital cycle continues to function well within the business. The company has more cash reserves than at any other point in its history, with a £1.5 million overdraft, which is undrawn. We have not touched that. The company has, as at the end of September, around $10 million of available capital to call upon. We're fully funded for that current growth trajectory. We've got a cost base that flexes in part to the revenue recognized and downloads which are recognized. We're profitable to date in 2022, cash generative, and we're well-positioned to be in as good a position as we can be to meet those macroeconomic challenges that we've seen in that third quarter. If you've got any other questions on the financials, please just email me directly, or shoot over a question today in this presentation. Back to you, Stuart. Thanks, Brad. Just one more slide from me coming up, so probably now is the last chance to get any questions in. I think we'll have around 10 minutes at the end to do some of those questions. Last slide from me, just as a little bit of a look ahead, really. I think the first point here is very important. We currently, as of today, have more than $73 million of advertising bookings in place for 2022. That is 21% higher than the entirety of last year's revenue. If we stopped everything today, we would still be growing well above market and industry rates. We have another kind of 10, 12 weeks ahead of us in our very high-demand season to take that $73 million number upwards. That's the bookings figure as of today. As I said before, Q4 is seeing a strengthening in advertising demand, and we're seeing that on a monthly basis. Those challenges remain, particularly in the premium part of our business, the direct-to-consumer sector of what we do. We do think that there are continued challenges ahead, albeit seeing some strengthening of demand in the next quarter. Said it a few times here, but we are set to continue to outperform the industry for the fifth year in the row, growing much faster than that 15% industry growth. Right now, we're really just focused on upfront season. Upfront is when we book ahead for the entirety of the next year. That begins in mid-October, and it's really going to be our first look at pricing levels and the confidence that advertisers have, the demand advertisers have for 2023. Usually, we are booking somewhere around 30% of our full-year revenue during that period from now until December 31st. We are very much focused on the upfronts season as we go ahead. I think in conclusion, challenging times, but Audioboom is resilient and continues to grow across those KPIs into Q4. We're seeing the market improving slightly into Q4, but we know there are some challenges ahead still. Stuart, Brad, if I may just jump back in there, and 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 right-hand corner of your screen. Just while the team take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your investor dashboard. Stuart, Brad, we did receive a number of pre-submitted questions ahead of today's event, as well as you can see in the Q&A tab, a number of questions that have been submitted throughout the presentation itself. Firstly, thank you to all of those on the call for taking the time to submit their questions. Brad, Stuart, if I could just hand back to you to run through the Q&A tab, just to respond to those questions where it is appropriate to do so, and then I will pick up from you at the end. Thank you. Okay. Thanks, Jake. I think this first one is probably in line with the most popular question today, so we will tackle that one first. The question is: The share price of Audioboom reached very high levels due to market rumor and speculation. Could you please once and for all address the rumors that surround the company this last year? Were there rejected bids of £12, £18, £28 from the likes of Spotify, Vivendi, and Amazon? If these bids were rejected, why were shareholders not advised? Okay. I think I addressed much of this during the last investor meets company call back, actually, the one before that, back in April, when these rumors were pretty strong, and I talked about it then. As I said at the time, the board had no direct contact with any of those companies that were just named or were named in the press. No offers were received. Of course, shareholders would be advised if a serious bid came in for the company. The only bid we have ever received at Audioboom was by AAA back in the summer of 2021. That was an offer of £12.50, which the board did advise shareholders on and rejected due to many factors. So, yeah, nothing, no real change on the information that I gave you back then. There was no board contact with any of those named parties that were named in the press, and of course, we will bring and update you on any serious bid for the company. Next question we will do is this one. Acast seem to have more celebrity podcasters than Audioboom. Why does it seem that these firms have more recognizable faces under their banner? Do they offer better terms for creators than Audioboom? Yeah, for background, Acast is one of our U.K. competitors, another publicly traded podcast company, actually. Another company that is around 70% down from their all-time high share price, actually. They are bigger than us in the U.K., and maybe that is why you are seeing more recognizable faces there. But I think what I will ask you to do is to not look at this from a U.K. perspective. The U.K. podcast market is actually not that big. Audioboom, just in the first nine months of this year, is bigger than the entire U.K. podcast market. So it is not a big market, although we do operate strongly in the U.K. market. Audioboom is a major player in the U.S. That is the world's biggest podcast market. As I showed you earlier, we are the fourth biggest publisher in that market. We have very recognizable names in the U.S., and those names do an incredible job of delivering revenue, and we do a great job of creating value for those major names. We have made creators more than $150 million over the past few years. I think you kind of need to view this from a global perspective. U.K. media names that Acast may have are actually not that big globally. They do not cross over into that lucrative U.S. market. That is the market that we are doing our work in, and we have a great footprint in the U.S. market. Question three that I have here. It seems that everyone is joining the podcast party with people across the world starting a new podcast. Is there a risk that all these millions of podcasts could actually be dilutive to your listener base, and more important, dilutive to your earnings? I think I kind of showed it on a chart earlier that podcasting is very top-heavy, so the top 1% of podcasts currently drive more than 90% of revenue. The Audioboom model really focused on that top 1% for some time. That was our premium ad model. We were very focused just on those biggest creators. There is a lot of opportunity, actually, in monetizing the long tail of creators, and that is why we developed Showcase. That is our automated ad marketplace. Showcase enables us to deliver advertising against shows of any size, anywhere in the world. We can bundle up shows, create bundles out of those shows and high volume out of those shows so that advertisers can target specific audiences, demographics, locations. I think the whole industry struggled to monetize that 99% of smaller shows until recently. Products like Showcase are designed to drive value from that volume. While there are more and more creators coming into podcasting, I think almost every day, we are developing products and developing tools that enable us to continue to extract value from podcasts of any size. I do not see it as something that will dilute our revenue at all. I actually see it as an opportunity, and I think one that we are already ahead of many of our competitors with because of our work to develop Showcase, and those ad tech tools. What forward bookings are there for 2023, and what are the indications for advertising spend, looking ahead to next year? I think I mentioned a few parts of this just in the presentation there, but there are two trusted projections for the podcast industry in 2023. One that I have already mentioned from PwC, and that measures the U.S. industry, and the other one is from the World Advertising Research Center, or WARC for short, and that looks at the global podcast industry. PwC is projecting U.S. growth around 12% next year. World Advertising Research Center, they are projecting global podcast growth around 8%. Audioboom's revenue is heavily weighted towards the U.S. part, but we do also have global revenue streams as well. The projection from those two companies is somewhere between 8% and 12% growth. Once again, as a reminder, we significantly outperform the wider market, by more than double, actually, on average. We are usually 100% or more ahead of the wider market for each of the past five years. I think that will be the focus again in 2023 to outperform those projected industry growth numbers significantly. As for bookings, I mentioned earlier that we were just getting into the upfront process for next year. It really starts in mid-October. During that process, we are really just offering preferred pricing to brands and advertisers who are able to book high volumes of ad inventory across the whole of next year. That is this upfront process that we are in currently. As I said before, we usually book around 30% of the following year's revenue during our upfront season. We are just getting started in that. We are just understanding the pricing and the demand in that. By the time I talk to you in January, and we do this again, I think we will have a really strong view on what 2023 is going to look like. Jake, I think with that, we have only got a couple of minutes left here, so I will throw back to you to wrap things up. Stuart, Brad, that is great. Thank you very much indeed for addressing all those questions that you can from investors this afternoon. Of course, we will give you back all the questions that were submitted today to review and then add any additional responses where it is appropriate to do so. Stuart, perhaps before redirecting those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that would be great. Sure. I think, firstly, thank you for your continued support. Audioboom is a strong company, and while the market conditions are changing and it has been a challenging time, the fundamentals of the business have not changed. The business model is still strong. We continue to be profitable. We continue to grow much faster than any of our competitors. So, to be exposed to a fast-growing medium like podcasting, Audioboom is a great company to be connected to. We are expecting the market to improve across Q4 and next year. We have learned a lot, as I said before, from COVID and how to make this business resilient and how to make this business really well-placed to really come back strongly once the market lets us. Stuart, that's great. Brad as well, thank you once again for taking the time to update investors today. Could I please ask investors not to close this session, as you will now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but I am sure it 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.