Acast AB (publ)

Hello and welcome to ACOS Earnings Call for the interim report covering the period January to June 2025. Today, we have our CEO, Greg Glenday, and CFO, Emily Villat, who will present ACAST results for the quarter. You're welcome to submit questions throughout the presentation using the form next to the stream, and we will raise the questions during the Q&A held after the presentation. I'd now like to start the presentation by handing over to our recently appointed CEO, Greg Glenday. Greg, the floor is yours.

Thank you, Lizzie. Hi, everyone, and thank you for listening in. I am Greg Glenday, the chief executive officer at ACAST since June. I operate out of our New York office in the U.S., where I've been working the last couple of years. I've been a member of the ACAST senior executive team since 2023, and my role is chief business officer. And prior to that, I have extensive experience in leadership roles, media and entertainment, and advertising. including the CEO of Lightbox Out of Home, the Chief Revenue Officer at Shazam, the CRO at Undertone, and the President at iHeartMedia. The unifying theme in my career experience has always been around unlocking value where technology, content, advertising, and creative meet. And that's no different at ACAST. As Chief Business Officer the last couple of years, I've overseen both our content and sales operations globally, with a specific focus on the U.S. market. Today, I'll take you through our business highlights and performance for the second quarter before handing it over to Emily, who will cover our financial performance in more detail. I am honored to share my first quarterly reflections as CEO. For new investors or a reminder, ACAST is uniquely positioned as a top global creator network focused on empowering podcast creators and helping them reach their highly engaged audiences. This focus allows us to help advertisers maximize their return on ad spend by effectively matching them with our network of podcast creators and their valuable audiences. Thank you so much for having me. Simultaneously, we empower creators by maximizing their reach through distribution across all relevant channels and optimizing their monetization. This quarter, we proudly passed a significant milestone, having paid out over half a billion US dollars to our creators since our inception. That's $500 million paid by Acast to our podcasters since inception. This creates, obviously, a self-reinforcing loop that's very powerful. It lays the foundation for strong network effects. More creators with larger audiences strengthen our position with advertisers. Getting more advertisers means we can deliver more impactful campaigns, which enhances revenue generation for our creators and makes us a more attractive destination for new shows. I'm also incredibly excited about our future and the opportunity we have in front of us. I'm very confident in ACAS core strengths as differentiators. Our top tier creator network is one of a kind and our advanced technology platform is also one of a kind. We continue to enable us that continues to enable us to deliver immense value at scale for brands and advertisers driving our next chapter of success. So let's talk about the creators. At ACAST, we're building a one-of-a-kind global podcast network, fostering relationships with creators of all sizes and specialties. Our roster includes household names like Peter Crouch and Digley Squad, alongside established powerhouses such as TED Audio Collective and leading publishers like The Economist, The Guardian, The Athletic. These large creators and publishers are drawn to us because of our robust monetization capabilities, particularly our unique ability to monetize their content across borders due to our global reach. As an example, earlier this year, we signed Tony and Ryan, a very popular Australian podcast. One of the reasons they were such a perfect fit for ACAST was that we have the ability to monetize their large international reach. In fact, their U.S. listens alone would make them a meaningful show in the United States. And ACAST was positioned to sell those impressions from day one. So we're laser focused on driving advertiser ROI or return on ad spend through increased monetizable listens. It's not just about having an immense amount of listens, but commercially attractive listens. This is where both the breadth and the depth of our network differentiates us. Our network thrives on housing diverse niche communities, allowing us to precisely match advertisers with their ideal audiences. The real magic of a unique platform like ACAST, in addition to the larger shows I just mentioned, is the ability for us to also extend those ad campaigns into the longer tail of niche creators that unlocks a lot of value. Advertisers get to extend their reach to an aggregate audience that in many cases is even more engaged and loyal to their podcasters. And of course, this approach brings revenue to more and more creators in our network. So our advertising customers who combine those large integrated buys on specific shows with scaled horizontal audience buys across the long tail are seeing amazing results. This makes our advertising much more efficient and scalable, which means better returns for everyone involved. We're also seeing a trend of brands moving past simply being curious about podcasts. Now they're making our audiences a core part of their media strategies. So let's have a look at the highlights of second quarter 2025. Our strong growth momentum continued into second quarter, driving a 27% net sales increase with an impressive 32% organic growth. We're pleased to report no material shifts in advertiser buying behaviors, which allowed us to sustain robust performance. I'm particularly encouraged by the powerful momentum we're seeing in North America, which has been the primary growth engine again for us this quarter. In fact, for the first time ever, the United States was our largest revenue market for a quarter. While this quarter included some one-off costs related to leadership transition and our upcoming main market listing resulting in an EBITDA loss, it's important to highlight that our underlying profitability continues to improve. On the back of scaling revenues, our adjusted EBITDA margin improved by five percentage points year over year to reach 3% in the quarter. This development clearly demonstrates our strong growth and enhanced underlying profitability. Okay, so in May, we announced our first original production from Acast Creative Studios. As a reminder, Acast Creative Studios was formed through the merging of Acast's existing creative team with our acquisition of Wonder Media Network. This move immediately scaled our ability to create premium branded content. We now offer complete full service solutions from initial concept right through to production and delivery and distribution. Our first big win came quickly. It was a bespoke branded content series called Mind If We Talk, commissioned by BetterHelp, a major global podcast advertiser. They were looking to create their own high quality content and distribute it. This isn't just audio. We leveraged omni-channel assets, including video, social media, alongside a reach campaign across ACAST extensive network. It's a perfect example of a deal neither Acast nor Wonder Media would have likely secured alone. Wonder Media's world-class creative production combined with Acast's scale, technology, and distribution create a truly unique offering in the marketplace. It reflects how the acquisition of Wonder Media has enabled us to attract greater advertiser spend through larger bookings and broader campaigns. And this is not the only example in the quarter. In Q2, we received record-breaking individual bookings in two of our top three markets. The Wonder Media team, now ACAS Creative Studios, was also an enabler of the largest booking we received in the U.S. with another client. While I can't disclose the exact figure or advertiser, I can tell you that this specific booking in second quarter was 10 times larger than the average size order we received in 2024. We continue to see positive trends of buyers continuing to transact larger volumes as they allocate more of their ad spend, not only to podcasting, but specifically a greater share to Acast. And the beauty of that is the sales effort for these larger orders doesn't increase proportionally. It takes roughly the same amount of effort and resource to sell a $25,000 deal as it does a $2.5 million deal. This means we're significantly improving our sales efficiency, which directly boosts our profitability. So more on scalability. At the end of May, we rolled out our new AI-based media planner called Smart Recommendations. This is a tool that allows advertisers to find the right podcast audiences in seconds, simply by describing who they want to reach. It leverages AI models combined with the data and experience ACAST has gathered over a 10-year history, together with the more than 5 million data points from Podchaser, our very own podcast database. The objective is to optimize how podcast advertising is bought and sold by making campaign planning faster and more effective. Early testing with select customers showed that 80% of the ad buyers discovered new podcasts they had never considered before, which also shows there are clear benefits for our creators. This technology improves monetization for the niche content, as I discussed earlier. It brings clear benefits in terms of operational efficiency, reducing workload on internal sales teams, and making campaign planning more efficient and more effective. ACAST can encourage advertisers to spend more on podcast advertising. Smart Recommendations is available for advertisers to use on the ACAST platform and is also now used by our internal sales planning teams. So with that, I will hand it over to Emily to walk us through the financial developments in more detail. Emily, take it away.

Thank you, Greg, and good afternoon, everyone. And let me just say congratulations on your appointments. Now, let's start by having a look at our listens and the average revenue per listen. We have continued to see solid ARPL growth increasing by some 27% year on year to reach a record high of 0.55 SEKs in Q2, meaning that this is almost doubled compared to two years ago. Good progress there. And this development is really a result of our continued improvements to monetize our portfolio across shows, across the entire portfolio. Now, our listens are flat compared to the same period last year, but it is important to note that we have strategically focused on more commercial inventory, as Greg noted earlier. And this ultimately means that we have a stronger base of monetizable listens compared to a year ago. And this is partly reflected by having more inventory, which has actually increased by more than 25% compared to last year. We've also seen some CPMs increase during the quarter, which has also been helpful for our full development. I'll also note that our omnichannel efforts to monetize beyond RSS audio also contribute here as well. Now, as Greg pointed out, we've not seen any material shifts in advertiser buying behavior despite the global macro uncertainty and geopolitical instability. And we've continued to perform very well in this market. And our growth momentum has been maintained. We grew sales by 27% compared to Q2 last year. And the organic growth was an impressive 32% year on year when adjusting both for negative FX impact and the acquisition of Wander Media Network. Again, we continue to see growth mainly being driven by strong performance in North America. And I'll come back to that and add some more color shortly. Our gross profits grew by a strong 33% in the quarter, and our gross profit margin reached 40%. And this positive performance was driven by several factors. Favorable product mix, efficient yield management, and also better scaling against our ad tech and distribution costs. And I'll note here as well that despite significant growth that we've seen in North America, where we have highlighted that margins can be lower, These efforts helped us achieve this 40% gross margin level, which we're pleased with. And looking back at the historical development, you can see here on the slide that we've maintained a solid and positive trend of gross profit growth. So let's have a look at our performance by geographical segment. Europe, of course, delivered 9% revenue growth in the quarter, of which 12% was organic growth. And we've seen strong growth performance in continental Europe, similar to Q1, actually, whereas the performance in the UK in this quarter was a little bit softer. We continue to see improvements to the contribution profits in Europe, increasing by 23 percent compared to last year, with a strong contribution margin of 24 percent. Now, over to North America, which delivered a very strong net sales growth at 70% in the quarter and a stellar 77% organic growth. And this strong performance has, in fact, been driven by the team in the US, which for the first time ever was the largest individual market in Q2. So congratulations. Contribution profits have also followed, increasing to 25 million SEKs, reflecting a 10% contribution profit margin for the segment at a time where we have continued to allocate increased resources to the region as we see that our efforts are clearly paying off. In other markets, we saw a 12% reported growth and 20% organic growth, primarily driven by positive developments in Australia. And the contribution profit has marginally improved compared to last year as well. Now, holistically, there are, of course, some variations between our individual markets, but I am very pleased to report that all of our segments are growing top line with consistent improvements to contribution margins, all supporting the group's profitability improvements. I'm sure you've noticed that we have had larger costs than usual in the second quarter, and this was primarily due to 59 million SEKs in items affecting comparability. And these were mainly related to our leadership transition, as Greg mentioned, but they also included smaller costs tied to our future main market listing. So when we adjust for these significant items, our operating expenses increased by some 17% compared to last year, which I will note is the same level as in the first quarter. I'll also note that our product development costs include some 9 million SEKs of costs related to the departure of our CPO. And these costs have not been adjusted as part of items affecting comparability. So if we set the items affecting comparability to one side, which are in the admin cost line, and we also note the CPO departure related costs, which are in product development, you will see that the OPEX increase is mainly driven by higher sales and marketing costs. And these, of course, reflect our continued focus on the North American segment where we are seeing very strong returns. A reported EBITDA was affected by these previously mentioned costs, with EBITDA coming in at the negative 43 million SEKs. But the underlying profitability, however, continues to improve as we benefit from stronger revenue generation. And the adjusted EBITDA amount to a positive 16 million SEKs, reflecting a margin of 3%. And this corresponds to a 5 percentage point improvement compared to last year. And if we look at this on a last 12-month basis, we have generated adjusted EBITDA of 65 million SEKs, also corresponding to a 3% adjusted EBITDA margin. So to conclude, the positive trajectory of underlying profitability improvements continues. Our operating cash flows amounted to negative 53 million SEKs in the quarter, and these were heavily impacted by negative 85 million SEKs in working capital changes, mainly driven by higher accounts receivables. I do expect the working capital impact to unwind during the second half of the year. We maintain our target of positive operating cash flows for the full year of 2025. We've also had some negative FX impact on our cash, and we close the quarter with a cash position of 572 million SEKs, and we maintain a robust balance sheet. So with that, I would like to hand back over to Greg for a final wrap up before we open up for Q&A.

Thank you, Emily. So to summarize, our growth momentum extended in the second quarter with 32% organic growth. I'm very pleased to see that we've continued to deliver strong performance in North America and excited that this performance has elevated the U.S. to become our largest individual market in Q2. We continue to see buyers increasingly transacting larger volumes with us receiving new record bookings. I'm also very glad to see Wonder Media having an instant impact on our ability to secure larger deals with several very exciting examples this quarter. Our revenue growth has allowed us to continue delivering underlying profitability improvements with the adjusted EBITDA margin increasing to 3% this quarter, and we remain committed to keep delivering improved profitability. As you can tell, I'm truly excited about the future. We're the leading global creator network focused on podcasting with a top tier portfolio and a unique technology platform. We have an incredible opportunity to deliver value at scale for advertisers just as their interest is increasing. The podcast industry is evolving quickly and as the global leader, Acast is setting the pace. We're seeing brands move past simply being curious about podcasts. They're now making our audiences a core part of their media strategies. Marketers have a very tough job these days, and that makes it the perfect time for a platform like ours to deliver authentic audiences with measurable outcomes. We power the creators that are shaping the conversations around the world. So with that, I think it's time to open up for Q&A.

Thanks, Greg. We will now open up for questions. Please use the message box below and we will put them to Greg and Emily. So first question we have from Ramil Korea. Could you shed some light on how Wonder Media has progressed financially thus far? At the time of the acquisition, you indicated it would be profitable as opposed to the three million sec loss in Q2.

You are absolutely right, Ramil. When you look at the financial notes, you'll see that their WandaMedia standalone has posted a small loss in Q2. But Greg has also noted that some of these large bookings that we have made that are clear synergies that this acquisition is paying off, not all of those proceeds are falling into the isolated Wander Media P&L. They're falling on the US ACAST side of the P&L as well. And you've seen strong growth in the US where Wander Media has contributed to some of these record bookings. So with the size of these bookings, I am very comfortable that this holistically is a profitable acquisition.

Next question from Andreas at DNB Carnegie. Can you discuss how you see the various revenue growth drivers, number of listens, sell-through rates, prices, and ad load trends going forward?

Sure, I'll take that one. I'm really, really excited that we don't have one silver bullet driver. We have a diverse set of underlying drivers of the revenue growth. So everything from I mentioned the inventory profile, but we've started to really focus on the quality and the fabric of the inventory and not just raw lessons, how marketable, how sellable, what the demand will be in the marketplace. their brand safety, all of those things create a mosaic around the quality of the inventory. So we've been quietly focusing on this for quite a while, and it's certainly helped. So that's allowed us to have more sellable inventory in key markets. We've improved our ad operations, ad ops efficiency, and the way we have visibility into yield, which allowed us to raise CPM earlier. And then the growth itself is distributed across our transactional platforms like SelfServe and Programmatic, all the way to the bespoke big omnichannel campaigns. So we're really excited about the breadth of growth and that it's not just one thing.

Great. Another question from Andreas. The gross margin improved again in the quarter. Can you explain why and how we should see the gross margin trajectory ahead? Perhaps also some comments on regional differences.

Absolutely. Thank you for the question, Andreas. We are pleased with the gross margin that came in in Q2. And to your point, we have noted previously that in the US, which is a competitive creator market, the gross margins on some of those larger contracts might be a little bit lower than contracts in other parts of the globe. But despite the excellent growth that we've seen in North America, driven by the US, we have managed to reach this 40% gross margin level. And this positive performance was driven, as we mentioned before, by several factors, both the favorable product mix, efficient yield management played in as well, and also better scaling against our ad tech and distribution costs. So all of these elements were positive contributors to the GOS margin.

Another question from Andreas. On the CEO transition costs, can you explain how much of this is actual cash flow?

Of course. And, you know, let's just start by acknowledging that these are significant costs. But I'll break them down as much as I can. We won't go into specific details in different contexts. But let me break them down as follows. So in total, we had 59 million efficaces affecting comparability. 56 of these were related to the transition and 3 million related to costs incurred for a future relisting. And within the 56 million related to CEO transition, we did have the largest element of that item was related to cash-based compensation, both for Ross, our departing CEO, and the incoming CEO, Greg, as well. But then there was also a significant element related to non-cash costs. And this is an accounting treatment where we bring forward future costs related to LTI programs. But I'll note here as well that these LTI programs are, of course, subject to the usual performance hurdles of each program. So they may or may not materialize. and a final smaller cash-related item has got to do with advisor fees. But I think that's as much as I'll disclose in terms of those costs at this point.

Another question from Andreas. Can you explain the negative item in net working capital for the quarter and how you see that going forward, especially with regards to your target of being positive on operating cash flow for the year?

Absolutely. So there are no specific structural changes here, but I will note that our strong growth in North America plays in. If you look historically, you will also see that we've typically had some positive cash flow impacts in Q4. And I expect this working capital facing an impact that we had in Q2 to unwind during the second half of of the year, with the majority of that coming in Q4, actually.

Now we have a question from Rudolf Larsen. What does a new main market listing mean in practice? NASDAQ US?

It does not mean NASDAQ US, then we would be seeing much higher items affecting comparability. This is related to an upgrade of listing within the Stockholm market. So right now ACAST is on the first North Premier growth market and we have been preparing to upgrade our listing to the Nasdaq main market. And this is very much following our trajectory and story of a company going from hyper growth into profitable growth and evolving and maturing as a company.

And now we have a question from Richard Kramer. Do you think the 32% organic growth rate means you are taking market share, or do you think podcast ad growth rates have stepped up materially?

The answer is both. It truly is. I'm in the market every single day talking to partners and advertisers, so I see the new energy. Even at the Holdco's, I see they've got more advertisers and brands inquiring about asking us for research and information and giving us RFPs. So we know for a fact the market is growing. And obviously, if you see, not everybody breaks out podcasting, but you can see our big competitors in the U.S., it seems clear that we are taking market share.

Another question from Richard. What is limiting the operating leverage from these higher growth rates? Why wouldn't gross margins ramp more on higher volumes or are most of the costs variable payouts to creators?

You are correct that the absolute lion's share of cost of content or cost of sales between net sales and gross profits are related to the payouts that we give to creators. There is also a small element related to streaming costs and some ad tech fees. And those play in, but not as much as our payouts to creators. So when it comes to gross... The key elements that drive gross margin are A, the product mix. Are we selling ads on a higher margin or spawns where the creator takes a larger share? And then we get down to the contribution of the streaming costs. These might be smaller, but everything counts. And we are delighted with 40% gross margin that we have achieved that comes from the different sources which we have discussed previously.

And we have another question from Richard. When you talk about record bookings, what portion of your H2 2025 revenue is currently committed in agreed campaigns or agency allocations? And in terms of channel, how much is coming from agencies and how much direct buys?

Sure, I'll take this one. We don't comment on our forward pacing, but as you can tell, we have a lot of momentum And the large buys that we have that are coming in, those tend to be the omnichannel buys that are with big brand advertisers. Those tend to have more commitments that are non-cancellable. So all of our revenue that we have on the books for second half is committed the way most ad campaigns are committed. Some of them are stickier than others. Some of them are non-cancellable. If we put forth, for example, if we've had to build production resources into a campaign, it generally would be scarce, locked in and non-cancellable. As far as direct versus agency, I'll try and answer that without getting into too much nuance. We're increasing both. Through technology, using our self-serve platform in our marketplace, we see a lot of most of those advertisers are direct buys or very tiny agencies that we don't call on. So most of those, the high volume deals in our self-serve platform tend to be direct to the advertiser. But then the larger campaigns, the bigger they are when you start getting into some of the big omnichannel campaigns we're doing, They rarely are direct or agency. Many times the client is involved. So the brand is involved directly, which makes it very sticky, along with a fleet of their agencies from strategy to creative to media. So these partnerships become very sticky because we become part of that ecosystem. So, yeah, so both are growing nicely and in different ways.

A question from Peter. What is the breakdown of the 56 million sec in CEO transition costs? How much is sign on for Greg and parachute for Ross?

Thank you, Peter. I'll break this down as far as I can. So when we look at the 56 million SEKs related to the change of CEO, I'll break down the blocks in order of size. So the largest item relates to cash-related benefits for our departing CEO, Ross. The second largest item relates to non-cash items, which are bringing forward of accounting of LTI programs. The third element relates to cash related compensation for incoming CEO. And the final element relates to advisor fees. So that is the structure.

And a question from Burnt at Barclays. What explains your exceptional growth in North America? You grew 77% organically in the US while your competitor, Audioboom, grew 5%. Any reason why we should expect any change in trends into H2?

Well, we don't comment specifically on competitors, but I'm glad you pointed that out. I mentioned in the presentation several times how unique we are. I do think, you know, ACAST is not a company that just competes in the local market podcast marketplace. Many of the deals we're doing come from influencer budgets, from client budgets at a higher level. And I think that that's a it's a nuance that's really important. There's if you're just solving podcast problems for podcast briefs, that's a there's a ceiling on that revenue. But if you're solving larger, big brand brief problems for advertisers and you're using podcasting to do that, there's much more opportunity. So our strategy, I think, is different than anybody else that's focused on podcast specifically. So we're hopeful those trends continue.

And another question from Berndt. Wonder Media Network contributed 9.1 million SEC net sales in the quarter, i.e. less than 4% of North America. You also said in today's press release, acquisition of Wonder Media Network was a significant enabler in generating one of these large bookings. For the avoidance of doubt, when Wonder Media Network drives these large bookings, does that go into the nine million of Wonder Media Network net sales or is it treated as organic growth? If it is treated as organic, what goes into the nine million for Wonder Media?

You're absolutely right that the synergies that we're seeing here are not all. There's only actually a small part that is falling in to the Wonder Media Network P&L. the majority, the vast majority of those larger bookings are falling on the other side of the P&L and are treated as organic growth. Greg, you might have some nuance to add here.

Yeah, I would just say if, you know, When we began to assimilate Wonder Media in January, I very quickly realized that we had underestimated the synergies. And, you know, being a nimble company, we, you know, rather than stick with something smaller, we realized that together having Wonder Media as part of ACAST Creative Studios in supporting Wonder All of the briefs we were getting on the other side, the ACAS traditional business, the two together immediately added a lot of value. So I would say we just underestimated how quickly we could realize that synergy. So that's what we decided to lean into.

Another question from Burns. Your gross margins are at an all-time high despite the US now being the largest market. My understanding was that North America comes with lower gross margins. How should we think about gross margin development from here? And what is in your control, presumably scale benefits, and what isn't, presumably mix?

You're absolutely right that when it comes to product mix, we have very limited influence over this. It depends on how our buyers want to buy. Do they want to buy ads across an audience or online? are they focused on leveraging this individual voice of different podcast creators, which comes with a lower gross margin. As we scale and improve our sell-through rate and monetize our portfolio more effectively, we do get some scale benefit from scaling against our streaming costs and some of our ad tech fees. And also, what is a little bit within our control is effective yield management, which has continue to contribute so we are really happy with the 40% gross margin that we have achieved particularly in light of the stellar growth that we have seen in North America driven by US where some of the underlying margins on bigger contracts with creators can play in so we are we're really pleased with the performance achieved in the court but I won't sort of give a

give guidance on on how specifically we see gross margin in the coming quarters but we're very happy with where we've landed in this quarter another question from burnt buyers are increasingly transacting larger volumes to what extent is there a risk that you become reliant on a smaller number of larger bookings that may be pulled if macro uncertainty increases uh very low that that's um of all the things that keep me up at night that isn't one of them i think um

We've sort of done both. As buyers are increasing, it's not one or two clients that have decided to go all in. These are clients that their test budgets may be larger. Then those work and they continue adding to those schedules because the attribution and the measurement is working. So even the large buys are fairly diversified across categories. The other thing we've started to have success with is getting a large advertiser in a certain category and then being able to land and expand that category. If we can figure something out for a telco or a pharmaceutical, moving on to other advertisers in the same category, we've been very successful. I'm very happy with how diverse our large advertiser pool is. And then, of course, the beauty of our self-serve platform is we're surprised every day by advertisers that we never would have gotten to. So we're fairly pleased with the developments on both sides.

And we have two questions from Matt, which we'll take together. The number of sales employees is increasing sharply. Going forward, if revenue increases by 30% from this level, how much does the number of salespeople need to increase? And when is the sales force large enough to handle an unlimited volume of customers?

Thank you, Monsi. It is, of course, a great dream to be able to handle an unlimited volume of customers. But with the technological advancements, perhaps we're closer than we might think. But let me answer your question properly. So first, if we look at the increase in sales and marketing costs, this is not simply an increase in in headcount, if you look at it. And headcount, of course, adding a headcount in New York is a different cost base to adding headcount in Stockholm. So those things play in. But the increase in sales and marketing is not purely an increase in headcount. And when we look at scaling moving forward, and these are some of the themes that we picked up and discussed at our Capital Markets Day as well, there are some core elements that we have been focusing on and are executing on. So firstly, accessing larger, budgets and campaign sizes in the US. And as you can see from the results today, that is definitely a path that we're on and that is helping our scalability and sales efficiency, as Craig noted previously. But the other part of our sales efficiency journey is also around increasing the number of campaigns then we can ship through more automated sales channels. And here it has been wonderful that we have launched our smart recommendations engine and combining that with our self-serve platform, our internal sales tooling is definitely part of our overall scalability journey as well. Greg, do you have anything else that you want to add here perhaps?

Yeah, I think... As you see us in the marketplace, these larger deals, we already have escape velocity where a salesperson can do the same number of transactions, but that book of business can grow tenfold year by year. So I've done this before. I've seen that happen. We're also making, as Emily mentioned, other investments. In the U.S., we opened a beautiful studio and entertainment space in downtown New York where we have clients and podcasters come in. They're creating content there. We're having events there. So increasing our presence in the U.S. market. We know that we're prepared with our technology and the people we have. So we've definitely spent some money to tell the world that ACAST is here in the U.S. and that's been working. So So we have invested to drive that demand, but this won't be a like for like. The salespeople have a lot more bandwidth, especially as we're adding commas and zeros to these insertion orders.

Okay, we have a question here from Peter B. The number of listens is flat year on year. What is the percentage growth in podcast listening for the market at large, in your opinion?

So I know for, I believe that podcasting is hard to measure, but I believe that it's still growing at a, at a great clip. There's some research that just came out that, you know, 55 plus is the fastest growing podcast audience. We believe that especially in the U S there's maybe a third of, audio listeners have not even tried a podcast yet. So we think there's a lot of green space for the industry to grow. As I mentioned earlier, we focused on quality metrics. I think listens are important and we certainly, it's great to grow listens, but for us to be able to grow monetizable inventory at a very healthy clip, our average revenue per listen at a healthy clip, to me, those are two underlying operational metrics that are more important than Then maybe more general metrics like downloads or listens that focusing on matching quality. We know which categories, which demographics have demand. And that's the inventory that we've gone after.

OK, we have a question from Peter T. Could you please say something on the substantial increase in guarantees slash maximum obligations in Q2?

Thank you, Peter, for the question. I won't comment on our individual creator contracts, but you might have noticed that over the last three, four, six months, we have had a string of significant and notable creators join our portfolio. And that has been wonderful to see. At the same time, we have also had some larger creators step out of the portfolio. But when it comes to the development of these, I see them near term developing in a way that is very manageable when you look at these holistically as a percentage of the overall revenues that we generate. So we're in great shape when it comes to the performance of these contracts and how we are navigating this market.

And we have another question from Ramil. Sorry if you already addressed this, but just properly trying to understand the big one-off costs in the quarter. The only LTI programme in the money, as far as I can see, is the 2023 one. Was the compensation recognised solely related to that programme or to others as well?

You're absolutely right, Ramil, that currently there is one programme that is. in the money. But from an accounting perspective, the non-cash elements that are classified as IFRS 2 related costs, they need to be accounted for regardless of whether the program is in the money or not. So we need to roll up the costs right now for future IFRS 2 related compensation that is non-cash based. And unfortunately, if the future programs are not in the money, there will not be the equivalent credit through the P&L. I wish it were different, but the accountants and powers at B have deemed this the correct accounting treatment.

And we have another question from Ramil. Just trying to understand cash flow movements in Q2. If the majority of the one-off costs were cash-based, why are adjustments for non-cash items in the cash flow statement so high? 100 million SEC is more than two times that of Q1 and almost as big as 2024 adjustments entirely.

You're absolutely right. And what's playing in here is the FX movements. And in 2024, you will recall that we had some notable positive effects from FX. So during those quarters, they were reversed from cash flows as they were not cash impacting. Reverse in this year, we've had negative effects. impact from FX in our cash flow statements. So those two elements combined when looking at comparing Q2 of 2024 with Q2 of 2025 does indeed have an outsized impact when it comes to the FX, which is material. You're absolutely correct.

Okay. And we have another question from Ramil. Greg, a question for you, please. What do you think of the company's ability to show margin expansion beyond 2025?

Very bullish. I think my reputation has always been pound the top line as hard as possible, but have discipline and respect for the bottom line. So, you know, I think we are We've spent 10 years building scaffolding around the world, and I think we have a really, really good foundation to operate really efficiently in the way we just described. As we bring in all these global brands and global creators and match them up, we think that we are one of the only platforms that can do that. I'm really excited. So now we just have to go operate. I think we've spent time and money over the last few years building this, and I'm really excited to go to reap the rewards the next few years.

okay uh i have another question from richard kramer greg what are one or two initiatives ross started that you think you can have the highest impact to follow through on you mentioned the studio but what else stands out sure um you know ross

is one of the sort of godfathers of podcasting. And one of the things he does really well was look out into the future and sort of figure out what's around the corner. So I'm trying to keep that spirit alive. I think the one thing that Ross was really focused on was creators looking for diverse ways to reach their audiences. And He thought very deeply about video and live events and social and all the other ways besides audio RSS that creators reach their audiences. So I'm pretty excited. That's essentially the underpinnings of our omni-channel approach. Hey, every podcaster is created differently. Some of them rely on RSS and their show is audio first, but they're happy to do video occasionally. Others require more video. So we're getting really good at matching those different styles and approaches with what the advertiser might need. It's not one size fits all. So that was a lot of work that Ross had put in, a lot of thought, and we're continuing that strategy into 2026.

Great. I think that concludes the Q&A. So I'll now hand back over to you, Greg.

All right. Thank you. Thanks to everyone who has listened in. I really appreciate all the questions on a Friday afternoon in the summer. So I appreciate the engagement. The next upcoming report is our Q3 report, which will be released on 30th of October. And please join us for that presentation. In the meantime, you can follow us on investors.acast.com, sign up for press releases, news and financial reports, our ACAST blog, or listen to our financial results as a podcast. Thank you and have a great weekend.