Earnings Call: Q2 2021

Aug 18, 2021

Thank you. Welcome everyone. I think obviously we should start by introducing ourselves. Emily, did you want to introduce yourself first? Yeah, sure. Thank you, Ross. All right. So for the ones who don't know me, I'm Emily Bellab, the CFO of Acast. I came into this business some 2 years ago and have been working diligently to level up our finance processes and get to the point we are today. Prior to joining ACAS, I spent some 12 years in Binkorp FTSE 250 Business in Financial Services, mainly London, but also in Sydney and Stockholm. And I am based here in our HQ in Stockholm. Ross, over to you. Great, thanks Em. As you can see my name is Ross Adams and I'm the CEO of business I've been CEO now for just under 4 years. I've been with the company since its first inception 7 years ago. Little bit about my background, which is fairly relevant to the position I find myself in today. I spent my first 10 years working in commercial radio, learning how to cut my teeth on monetizing and commercializing audio. I was then lucky enough to join, a startup called Spotify at the very beginning and helped launch that business back in 2008. I was there for 7 years and then, I joined Acast and helped again set up and launch that business also. So over 20 years in pure experience. Right. And let's get this started. So, welcome to our 1st quarterly report and a massive thank you for everyone joining us. I think it's worth mentioning that we'll be releasing this earnings call as a podcast later today. So for those that do miss it, You can access what we're talking about there. And if you're listening today via a podcast, a big hello. We're can open up to questions. You should have received instructions on how to do that. If not, we'll go through that at the end. So it's very simple if you do want to ask questions. Any we don't cover, We will be endeavoring to answer those in writing afterwards. Before we dig into the numbers though, I wanted to again reiterate to you exactly what aacast is. It's so important that you understand exactly how the podcast ecosystem works and our position within the industry. Podcasting is very different from other mediums and so, as I said, it's important you all understand the position we operate within this audio ecosystem and so we don't get compared wrongly or confused with other models that also operate in this space. So buckle up, it's a slightly complicated one. But for those of you who've already seen these slides, apologies, but do sit tight for 8 or 10 minutes as I will be repeating myself from what I have already told you. The next slide in fact, which is this one is a video and, if we can hit Play please. What a bedding track that was. Okay. So, on to the next slide here. And essentially to understand exactly how podcasting and the ecosystem works. It's always good to use an analogy to help highlight that. So here you can see a very similar medium, which is, of course, the Internet. So we're showing WordPress here as a key example. So if you are a web page creator, you need somewhere to host and distribute your website. So you'd use a service like WordPress and via HTML, it sends it to all of the different web browsers out there. As an Internet user, you have complete choice as to where you want to surf the web and where you want to access that to websites. So, regardless of the web browser you use, it's available in every single one. Podcasting works in exactly the same way. So, Acast is a hosting and distribution and monetization platform. And the way the industry works is rather than delivering of our HTML, we deliver podcasts via something called RSS. Now RSS basically distributes to all of the different podcatchers out there. And believe it or not, there's over 250 different podcatchers. So as a podcast listener, you get to choose the app you want to listen to it on and therefore we need to make the content available on every single platform. Suaikar's position is one of an infrastructure position with a marketplace strategy at its core and it's key to understand that for a podcast to be a huge success it needs to be available to stream as mentioned on every platform the listener chooses. And this is what we mean when we talk about the open ecosystem available on all platforms. And we distribute content to absolutely all of them which means in turn, we can monetize every single listen on any single platform, allowing us to scale and grow very quickly. So that has put pure podcast apps, music streaming services, web based and embeddable players, as well as the likes of connected devices, like the likes of Alexa's, etcetera, and so much more. And to be able to monetize to the best ability, you need the cutting edge ad tech, You need tracking and distribution, everything digital advertisers expect. You need the best targeting and importantly, a marketplace that offers reach and scale as large brand advertisers continue to start to turn to the space for exactly that reason. And this is happening because of the unstoppable shift that's happening from radio listening to podcast listening and therefore radio spend to podcast spend. All of this we offer We are the global leaders and innovators at it and we have been for 7 years and will continue to be. Next slide. As you can see here we have a great track record to prove why we are the industry leaders. So multiple proof points to lean on since our inception in 2014. Obviously I've just explained who we are and about us but if you look at some of Our track record 31,000 shows, 3,400,000,000 listeners if you're looking at the last trailing 12 months, SEK804 1,000,000 in net sales when looking at the previous trailing 12 months too. And we are present in over 12 countries or 12s in that sentence with new market launches of course coming in the future. The rest you can read. We'll cover it in detail in the following slides. Next slide, stand, our vision, our mission and of course what we do, which I've just explained a lot about. We relentlessly strive to champion a fair and sustainable open ecosystem servicing and empowering the exploding audio economy. And it's our mission to put the creator at the heart of all we do, making sure we're innovating with the next gen tools and products to help drive podcaster growth and monetization better and more efficiently than anyone else. And we do this by being the global marketplace where creators and advertisers Connect. So thank you for sitting through that for those who saw those before thank you. Hopefully, those who didn't are a little more informed now of the podcast ecosystem. Okay, so now on to the juicy stuff. So how have we performed and fared in Q2 2021? Well, I'm pleased to share some of our results. But before I do, I just want to say a big shout out and thank you to the entire team at ACAS who helped deliver these results. I'm an incredibly proud CEO and a strong set of results like this makes my job, of course, a lot easier and I'm so grateful for that. So thank you to all ACasters out there. So let's start with a top line update of our Q2 activities, starting with the financial highlights. We're powering ahead with a strong Q2. As you can see here on the slides, We delivered 130% net sales growth, which is 134% organic growth when adjusting for currency effects. We've got a healthy gross margin at 37%, in line with the same quarter last year and in line with our financial targets. And we saw a significant improvement in our EBITDA margin from minus 45% in Q2 last year to minus 33% in Q2 this year and an adjusted EBITDA margin of minus 21% in Q2 2021. Adjustments of course have been made here primarily in relation to eliminating the one off IPO related costs and Emily We'll present the financials in detail shortly. In terms of the business highlights of the quarter, We saw our listens grow by 26 percent to reach 880,000,000 in Q2 2021 compared to 701,000,000 in Q2 last year and our ability to monetize our listens took a significant leap as our ARPUL or average revenue per listen, we'll be talking about that quite a lot, has increased by 86% to SEK0.26 in Q2 this year. We measure this metric not just for our benefit, but for that of our podcasters. As the better we get at monetizing listens, of course, the more money we can share and deliver to our creators. And we know it's imperative that our interests are aligned there. The podcast industry as a whole though did see an impact from a bug in the Apple Podcaster app commencing in Q2, which resulted in lower than usual listens. This is an industry wide issue that happened and you can read about it in all the trade press. Apple has corrected this issue during July, but due to the time it takes to push out these updates for the fix to take effect, then we expect to see an impact on Listens also during Q3. By Q4, this one off issue should have been reversed. And it's important to note though that regardless of this, this had no impact on over revenues as a result. We're very pleased with the progress of our aCast plus beta testing phase. I'm going to be telling you more in-depth about what aCast plus is. It's basically our subscription technology but I'll go into detail about that in a moment. The IPO was concluded in the quarter as you know and strengthened our balance sheet with over SEK1.2 billion. This will support our quest of course to build and support that open ecosystem I spoke about earlier for all the world's podcasters and to empower that burgeoning audio creator economy that we see exploding right now. We'll do this through organic and strategic growth initiatives. It also allows us to repay the quasi equity instrument to the European Investment Bank. And actually I also just want to add quickly that this clearly is a real testament to how far we've come as a business in 7 years and how robust our operations are that we can deliver an IPO whilst the business itself is still growing at triple digit speed. Hats off again to all you A Carters who made all that possible. So, during the quarter, we welcomed thousands of new shows to our network, taking the total number of shows to more than 31,000 at the end of Q2. There's clearly too many to go through, But here are just a few of those key signings out of the 1,000. And I'd like to highlight a few of them from different places in the world. In the US, we signed a great show from the largest online progressive news network and the creator of the flagship political show, The Young Turks, which joined Acast. Their new audio strategy also aims to attract and be inclusive of audiences with interest beyond news and politics. Jumping over to the UK, a highlight has been picked that the longest serving 2 members of the UK podcast community picked Acast at the start of the journey and even now 7 years on continue to keep resigning with us. Adam Buxton and Superbius Pip, massive thank you to you guys, absolute legends. In Sweden, one of our the most powerful influencer couples Joakim and Jona Lundell launched their new podcast with us this spring titled Jokka and Jona. They're on a mission to become Sweden's largest podcast, and we're very happy to support them in their journey. Of course, it's great to see how YouTubers are realizing the power of audio monetization and turning to Acast. Now moving down under, saw EquityMates Media, which is the number one finance and investing network for young Australians join Acast. It's the home of 5 of Australia's most popular podcasts and we're of course delighted to be working with them. And last but not least, Ireland's leading independent and trusted source of news and journalism, the Irish Times, also joined Acast. They tap into a weekly audience of 1,000,000 people across its digital content and print newspaper and is now investing in new formats such as podcasting to serve the changing needs of its readers. We welcome of course yet another premium publisher to the Acast fold. I could of course go on and mention more brilliant shows but we've run out of time. I've listed a handful here and every single market has signed multiple marketing shows. So in short, we're thrilled to have all these creators join us. So now on to aacast plus which is our subscription technology. And as I said earlier, I'm very pleased with the progress we have seen in the beta testing phase. In a second, I'm going to walk you through The video of how this actually works this example is actually from a fantastic podcast and partner Tommy, Hector and Lauretta based in Ireland with a massive show that only launched last September, gaining 7,000,000 listeners across 175 countries since its launch. The example shown here is listening to the free show on the Apple Podcaster app. During the show, at various points in a podcast, you're going to hear about their subscription service, explaining what it includes and what the price points are basically driving you to click. The listener will be driven to click the link placed in the description of the show. So regardless of what podcast app they're listening to the show on, They can just click in the description and up will pop a window, which is where we'll join the video in a second. Once they click, it will open up The option and details of how to subscribe as seen on screen. You can also do this on the web as well, but we're showing you a mobile example here. If you could start the product Video now, Emily, please. So as you can see on the screen here now that the listener will see, this is basically designed during using our technology within our c p CMS. You can have multiple options on what you offer here, multiple tiers. Once you've decided on the tier that you'd like to subscribe to, You join the Acast Paywall service clicking the likes of Apple Pay or Google Pay or whatever payments you want to use. So once You've paid. You then choose the listening app you'd like the paywall content to appear on and away you go. So in this example, it's going back to to Apple. The podcast feed you follow, the free feed on the Apple Podcasts app in here shown as an example, We'll usually just, of course, show the free, released shows. What it would do now is show the paywall content along side that and continue to update as they release more and more content automatically. You only need to join the ACAS payroll once. And every time you push play in the future our subscription technology checks you're a paying subscriber or not and then blocks or allows access accordingly. So no piracy occurs and we manage the billing and payment transactions for all the podcasters that use it. ACast Plus brings new monetization options to podcasts, including the ability to offer the likes of ad free streams, extended episodes, it could be bonus content and of course much much more to paying subscribers depending on what show you are launching. So far our beta partners that are using aacast Plus, which we launched back in March, are seeing an average revenue boost of 20% compared to their usual ad revenue, so it's a very additive product that helps drive new revenue streams for creators. And as a side note, we a press release went out yesterday. This Irish podcast that we showed here has actually seen an increase of 59% in monthly revenue, thanks to introducing subscription to their super fans. We've also seen that adding paid subscriptions is not impacting podcasters' ability to command advertising and sponsorship for their show. Instead, incremental ad revenue growth can partially be attributed to the increased awareness of their podcast. So due to their PR push around the instruction of new membership tiers, resulting in total listens to the public episodes also increasing. Now over to our wonderful CFO, Emily, for a more depth in-depth review of our finances. Thank you, Ross. Let's go back to the top line and start with our net sales growth. We've seen it in the past. It's 130% growth in Q2 'twenty one compared to Q2 2020 and 134 percent organic growth when adjusting for currency. We had no acquisition impact when looking at an organic So if we look at the right hand side and our growth figures on Previous quarters, you will see that we had 130, it was the highest growth in the last number of quarters that we're reporting there. The lowest growth was in Q2 2020 and I will remind everyone that we had a slight COVID impact during that quarter. For a short period of time that we count in weeks, not quarters, advertisers took a little bit of a breather in terms of podcast advertising investment and that had an impact on our growth in Q220. So it was an easier comp. Some of that, post advertising spend we got back in Q4 of last year. So I just want to highlight that, that when we get to that point of presenting our Q4 figures clearly will be keying off a more difficult comparative for the future. But all in all, that aside, one cannot argue that our net sales growth figure was a from the results in the quarter. Moving on to the gross margin. We had a healthy 37% gross margin in the quarter, which is largely in line with the result that we had in the same quarter last here. If we dig into a little bit of the minutiae, I would highlight that one thing Impacting our margin, if we go into the decimal points and the details, is that we had an ever so slight skewed towards selling sponsorships versus branded ads or brand ads And those products carry slightly lower margins than brand ads. So particularly in the UK, we've been very successful with this product. And it's that the function of the product mix that is having an ever so slightly impact on our gross margin in this Quarter. Again, you see the seasonality in gross profit. We always have Q4 as our strongest quarter in the year. So that is just something to keep in mind as we move forward. In terms of the EBITDA result and the EBITDA margin, as Ross highlighted, we've had a Stellar improvement in EBITDA margin going from negative €45,000,000 Q2 last year to minus €33,000,000 in this quarter. And much of the costs impacting the margin here are related to our IPO. So we can see that the losses at adjusted EBITDA Level have actually flattened out and we got to negative 21% adjusted EBITDA margin in the quarter. So clearly, we're not just Growing our top line, we're also scaling our operations and costs are growing at a significantly slower pace than our revenues and this is clearly part of our path to future profitability. I'll remind you that in our financial targets, Now this is a delightful slide. This is showing all of our market segments Europe, Americas and other markets. And here we illustrate the top line growth and their local profit contribution before allocation of global Overheads. So we'll start with Europe, 174% net sales growth compared to the same quarter last year. What I want to highlight here as well is that every single market is contributing and it's particularly encouraging to see that the likes of Sweden and the UK, Where we have quite a dominant market position, we are still contributing to this growth. It was an easier comp in Q2 last year as we saw more of that COVID effect in Europe than elsewhere. But setting that aside, it is undeniable that the net sales growth figures are strong and increasing profitability at the same time. In the Americas, we had 65% net sales growth but it was heavily impacted by Currency. So on an organic growth level, we reached 84% organic growth in this Segment, this is mainly driven by the successes that we're having in the US, but we're also seeing some fantastic progress starting to come through in Canada and Mexico which are also included in this segment. And then of course going from a negative 11 Percent, local profit contribution margin to a positive 11% is a great achievement and a testament to the scaling that is taking place. Having said that, we are investing heavily in the U. S. And in these new growth markets, Canada and Mexico, and we'll continue to do so to be able to make the most out of the small bus board of opportunity that we see in the Americas. Other markets are mainly our Australia, New Zealand business but also include an international sales team and again strong net sales growth and going from a small loss to a small profit but You know, they're in the black EpiPen counts. So a very good performance from everyone. When we look at our listens, we did see 26% listens growth compared to the same quarter last year and a significant improvement in our ability to monetize here measured as average revenue per less than ARPU. Now Ross spoke about the impact of the apple bug. So and I'll just reiterate that we saw that impact in Q2. We'll continue to see an impact in Q3 by Q4 that should be eliminated from the numbers. I don't have exact figures to share with you but that is something to keep in mind. Having said that though, we have in the past seen a dynamic whereby Our net sales growth is fueled both by our ability to attract new lessons to the but also our ability to improve monetization. And that is the dynamic that we foresee continuing into the future. Looking at our operating cash flows for the quarter, We did have an impact from our IPO costs in the quarter. So operating activities delivered negative €59,100,000 Cash flow impact and then a very small negative impact from working capital. If you look at Q2 2020 there was a slight COVID impact whereby we saw advertisers holding back money at the end of Q1 and some of that flow back in Q2, which is illustrated in that positive working capital impact. Now I've included this slide for the Q2 results as I just want to highlight the items affecting comparability and non recurring items. We did have our IPO costs Come through the P and L in Q2. So I wanted to highlight and make sure that that was clear as to the size and shape of those charges. You will likely also have noticed that we have a financial cost coming through related to the repayment of our quasi equity instrument that we've had with ENB. And whilst that presents at large cost through the P and L, Actually in the quarter it had a positive impact on equity, but all in all it has not had any significant impact on equity since the time which you're down on that loan. But there are accounting technicalities that impact how we have to present this in the P and L and in the balance sheet. I'll end on a happy note, the cash increase from the new share issue coming in at just over SEK1.2 billion as a result of the IPO. So, on that note, Ross, back to you. Thank you, Em. So, I thought it'd be worth us mentioning of course a few recent events and areas of focus that we think we should mention here. So onto this slide. So first up, you know, we announced a partnership with the renowned political publisher in the US called Crooked Media. For those of you who don't know who they are, Crooked Media was founded by 3 people, Jon Favreau, Jon Lovett and Tommy Theta. All of them served as staffers under Barack Obama, with Jon Favreau being Obama's head speechwriter from 2,005 to 2 1013. They produce a huge network of incredible shows, some of which are amongst the most popular US podcasts such as Pod Save America and Love It or Leave It but to name a few. Their roster of shows also has a mass following and listenership in international markets, which is where we come in. We welcome, of course, Crooked as a partnership specifically to help them monetize these international listens. Now they join other podcasts in our marketplace like the likes of TED Talks and PRX, we also represent from an international standpoint. It's worth noting though that on average, US produced English spoken content travels incredibly well to other markets with between roughly 15 and 30% of their overall listening being international and outside of the US. Similar international deals, of course, will remain an area of focus for Acast in the future. Next up is the British Podcast Awards which happened in London last month where we were a sponsor and of course a whole crew of Acast has attended in person which was a bit of a treat. There were 80 awards given out on the night and I'm pleased to say that Acast Podcasters were awarded some 40 out of 80 awards. 1 of the biggest awards the night, the Podcast Champion Award. I went to Fearne Cotton who is the host of a podcast called Happy Place for her efforts to open up the mental health conversation and her work in the wellness podcast space which she's not only created but truly defined with that MASA podcast and it's of course a recent signing of Straight is the dominant position we hold, maintain and are growing with such strong market share of the top commercial podcasts on offer in the UK. So, A big well done to the UK team. We have continued to roll our ACAS Plus onboarding lots of new beta partners in multiple markets week in week out with some continued learnings as we work towards that full release out of beta publicly later this year. We're very excited about, of course, how additive this can be, as I explained earlier, to that burgeoning crater economy offering that new monetization path alongside AdRevenue whilst being, of course, platform agnostic championing that open ecosystem. Podcast Movement took place 2 weeks ago in Nashville in the US, again in person, we have multiple team members attending as we one of the major official sponsors at the conference which was on 2 or 3 days. We held panels, dinners, and it was great, of course, to have a chance to meet new and existing partners. One thing that we'd like to to highlight in the US is that whilst the market is very fragmented, we've obtained a significant position as one of the top podcast networks when looking at our marketplace of listens or listener unique reach. While we're seeing new creators joining from all corners of the world 25 percent of our shows are based in the US. So if I equate that down to uniques that means that more than 14,000,000 Americans listen to podcasts powered by Acast every single month. In fact, if you compare those numbers with PodTrak's ranking of the top US podcast publishers, which is an industry ranking chart. Acast would be sitting pretty in 3rd place in the U. S. Chart and actually number 1 globally in terms of listens and unique reach. And this highlights the stellar progress we've made and continue to make in the US. And what a nice nugget for us to end on. So with h2 and h1 wrapped up, we're very much focused as you can imagine on the second half of the year. So now Em, I think it's time to hand over to our friends at Financial Hearings for the Q and A session and again I'm sure they'll be repeating how you can ask questions. Thank The first question comes from Derek Laliberte from ABG. Sir, please go ahead. Yes. Thank you very much and good morning to you. I was just trying to understand the components of this Exceptional growth that you are delivering or delivered in the Q2. You mentioned the Apple bug here Affecting listens, but not revenues. I mean, can you provide some indication of what actual lessons might have been like? And I'm also thinking that if you were to look at the actual lessons, the average revenue per listen It wouldn't have been as great as reported. So if there's any comment you could make on that, it would be very helpful. Thank you. I can pick up on the numbers there. So the reason why it's difficult to give an exact number is that the impact of this type of bug It's implemented over time as the virus is being disseminated across iOS and the Apple Podcaster app. Similarly, when it is fixed, it takes roughly about a month for everyone to update their devices so that it is eliminated. But as a guide, we were clear on that and the prospectus that just under 2 thirds Our listeners come from Apple Devices. And the whilst the impact As been reported at different levels in the industry, we could use 10% impact as a guide. But it is hard to know exactly when the full impact is coming in, how fast and then how fast it is moving out. But we mainly So this impact come through starting in June and we continue through July and so forth. So those are some just a little bit of high level guidance. I can't give you an exact figure. But as you know, since we don't have A 100% sell through rate, we have inventory to work with, we had absolutely zero impact on our revenues and every single campaign that came through our doors we were able to deliver on. That's very helpful. And When it comes to like the overall growth in lessons, could you comment anything of like How what share of the growth is coming from like the shows you already had signed a year ago? And what was the contribution like from the show signed over the last year, for example? I don't have the exact numbers, But it is a combination. So we're both seeing a growth in underlying listeners from the shows that are joining Our platform, they're becoming more and more successful. And at the same time, we're seeing new shows come in. Then of course, there will be some podcasters who Stop podcasting or step out from the platform, but that is a very, very small number. We have incredible Stickiness on our platform. So once people come on board, they tend to stay, which is a delight. But it is definitely a combination. Yeah, I think adding to that, Derek, good morning by the way. You know, I think one of our USPs has always been about growth. So That's not about just new shows that join us and new shows that launch, but it's existing shows that are with our network too and we're the experts at Growth, which is why we're attracting so many professional podcasters to our platform. And of course, as Em said there, podcasts can be seasonal. So you'll have some that are on, some that are off season, some that are always on for entire year. So it varies. Hopefully, that answers your question. Yes. Thanks. That's very clear. And just finally from my side, I was also wondering if you Could comment a bit on the growth in your 3 sort of different segments of Long tail podcasts, the big independents and professional publishers and so on, how those contributions have been? Thanks. I mean the biggest contribution as you know there is a big head of the sorry head of the snake in podcasting So the biggest shows have significant listenership. So clearly as we get these big US giants on board they will contribute in a significant way compared to the smaller shows in the long tail that come in. But those grow over time so we're really looking at nurturing them and helping them get to a bigger position where some might even be able to do podcasting as more of a focus compared to a hobby. And we really attract that type of podcaster, podcaster with ambition. So the listeners that come into our platform are, How shall I say? It's sort of high nutrition calories. They're really high quality lessons and really high quality podcasters and shows that are coming in regardless of whether they're smaller or larger. But the biggest contribution comes from the larger shows. The next question comes from Dennis Turing from Garnier. Sir, please go ahead. First of all, good morning and congrats on your first report as a public company. I would like to start by asking you about the development in your different geographies. Can you give an indication of how much of the sales increase that is attributable to the development in new markets in Europe Versus markets we already hold a leading position? Absolutely. So the dynamic in Europe, which I think is a Fantastic dynamic is that all of the markets are contributing. Now there's the investment markets are starting from a smaller base Clearly. But we've had significant growth from both UK and Sweden where we have this dominant market position. So what this tells me is that there is no such thing as a mature market in podcasting. Everyone is contributing. The dynamic in Europe that I'd also perhaps And if we're getting into some further nuance is that if we look back at the newer growth markets that we have invested in over the last two Two and a half years. We've put quite a lot of flags in Europe. You know, we have Ireland, we have Germany, we have France, We have Denmark and so forth. So we have planted quite a few new flags that everyone is Contributing with strong growth, but they're coming from a smaller base. So all markets are contributing to growth in Europe. In the Americas, the right now the US and you might have seen this you can go back to our annual report where we reference our The largest locations, UK, US and Sweden. So you will see in the Americas that the US is the lion's share of that revenue. So clearly the bulk of the growth in the Americas is coming from the U. S. But we are seeing some fantastic signs and momentum Coming from our newer joiners in Canada and Mexico, I think Mexico was The location that we opened up just before COVID hit in Q1, Q2 last year. So that was a great contribution before many went into lockdown. So everyone's contributing, but the larger locations, UK, US, We have contributed the most given that they in terms of nominal increase, given that they're starting from a higher nominal net sales figure. Does that make sense? Perfect. Yes, that's very helpful. And then I would also like to follow-up and I'm sorry to bore you with this apple pie questions. But Given that it takes about like 1 month that you see sort of these delayed effects, so to say, And given what you just said about the delayed effects from that bug, is it reasonable to expect that you would see a greater impact in Q3 given that it seems to be solved first like during the beginning of August? Yes, the impact will continue in Q3 at a listens level. But just like Q2, we are not anticipating any impact on revenues. So we will have to just ride this out and get to Q4 and that would be the point when we would be back at our sort of normal baseline in terms of lessons growth. And it's key to remember as well that we are obviously continuing to sign you know more and more podcasts every single day in all markets as well as growing organically and growing shows and show growth. Well, yes, perfect. And then also we also have seen some news that some podcasters seem to In publishing their podcast to Apple Podcasts following the new eyes update, is this something that has affected your business or your customers and if so how? It's not something that has been flagged as an issue outside. I know it's been reported in some trade press, but that's not an issue that's been reported widely on our side. Okay, perfect. And then finally from my side, can you just provide any more comments on the cost development during the quarter? You mentioned increased costs related to staffing and then obviously the IPO related NRIs. But is there anything else worth mentioning here? I think one thing to mention is that as our sales go up compared to Q1, for example, there is an element of cost growth related to variable pay. And so that is something that is a dynamic that we'll see in the quarters where we have stronger Net sales. So that is one element to mention. I'd also perhaps add a little bit of nuance around The comparative and Q2 last year. We did have A slight, I mean we're always investing and we're always recruiting and investing in the business. But in Q2 last year, given that there was some turbulence in the market and we had a slight For a few weeks in terms of advertising spend, we did have a very short period where we did not invest as heavily as we have in the past. So that is perhaps also what's coming through when you look at the growth compared to last year. Now we gained some momentum in terms of investing in the business towards at Q3 and Q4 of last year. But right now, we are exactly where we need to be and we are continuing to invest. But that pace of investment might and the profile of that this year might look a little bit different compared to last year, given that We had a slight advertising for the Q2 as a result of COVID. Okay, perfect. Thank you very much. Thank you. The next question comes from Emily Johnson from Barclays. Madam, please go ahead. Good morning. So I have three questions, if I may. The first one is, How are your plans to invest in the U. S. Market progressing? How much is Amazon's acquisition of Art 19 And Spotify's continued bullish comments impacted the competitive dynamics in the market, and therefore, your plans of How and where to invest in the U. S. To gain market share? My second question is, you mentioned that the primary proceeds Urease will be used for organic and strategic growth. Can you elaborate on what strategic means? Would you consider M and A? And if so, are there any specific areas that you're more interested in? For example, any specific geographies, Types of target like content versus tech versus other networks similar to Acast? And then my third question is that you mentioned The roll out of Acast Plus is progressing well. Can you just remind us of the economics behind that? What Percentage of subscription revenues to ACAS Keep versus content creators. Thank you. Sure. And then shall I take if you want to add in on the first one as well, but I think that was about investing in the US market. And you know of course As we mentioned in the prospectus and during the IPO round that that is a key area that we are you know looking to raise money to invest And we see that as a massive opportunity. You know, as you can see, so do the likes of Art 19 being bought by Amazon and obviously what Spotify doing amongst others. But for me, that's a clear validation, that this space is growing. And what you need to remember as well is that there are end platforms, you know, which I've just mentioned, the Amazons, the Spotify, etcetera, of this world, forms, you know, which I've just mentioned, the Amazons, the Spotifys, etcetera, of this world. And their key focus, of course, is on that listener and maintaining listenership within their app and their walled garden. And for us, our strategy is about distributing content to the likes of them. So it's a very, very additive partnership and a very symbiotic relationship. Of course, there are areas where we will compete, but for me, I see that as a pure validation signal an opportunity that there is opportunities to grow for all in this market. Em, do you want to add anything on I'll go back to the U. S. Investment question and growth. So just reiterating the notes from the previous question Around cost and investment, we are continuing to invest in the U. S. And when we invest, We get exactly what we're hoping from that investment. So we will continue to do so for the future. Really happy with that progress. If I jump to the next question around use of proceeds, We have planned that we would, utilize the, primary proceeds for 3 purposes: Organic growth, strategic growth and repayment of the EIB loan element. So the EIB loan element has now been paid back And we have a strategic and organic growth to pursue. In the prospectus, we signaled that we had carved out around 50% of the proceeds for strategic growth. And what we mean It's precisely to your point. We mean that M and A is very much on the cards. And whilst we, of course, can't comment on any Specifics, there are different ways to use M and A to Fast Track are growth either through looking at new geographies or to fast track taking a position in a new or existing geography. There's also a route around content, expanding our content catalog through reach, For example, there are some, not many, slightly similar businesses to ACAS, but It's very much something that we are looking at from different angles. I can't comment on any specifics, but M and A is definitely part of our strategic growth plans. The last comment was on ACOST plus I don't know if you want to comment Anything there, Ross? But right now, as we're in the beta phase, we are testing out different methods and different approaches to pricing. Right now our standard terms are 15% gross profit to us, 85 percent payaways. That's part of our the public standard terms that we have, but we're looking at this and and considering how to look at this moving forward. Having said that, ACOS plus is A product that is, that has high scalability. The reason we share more with our podcasters is, of course, They contribute a lot of value in this transaction. They're sharing their most, their most priced and intimate relationships with their listeners and they create bonus content and consider how to use ACOS Plus as part of their content strategy. So that is clearly why they get a higher share in terms of payaways, albeit for a lamp rating around that. But it's a more scalable product. So in terms of us incurring costs at the OpEx line, it's very minor as we roll this product out in the future and go for scale. Does that make sense, Emily? Yes, that makes sense. Sorry, could you just repeat the number you mentioned there? My mind cut out slightly. 15% currently. So we're looking at different methods and models for for finding the optimal roads. Superb that's all very clear. Thank you. Thanks Anne. Thank you. We don't have any further question by phone. Great. Well I think that probably takes us to the end of this financial hearing and I appreciate everyone for tuning in and also those again tuning in to the podcast. Thank you Em. Thank you everyone and we'll see you next time.