Acast AB (publ)

Good morning and welcome to ACAS Earnings Call for the Year-End Report 2025. We have our CEO Greg Glenday and CFO Anders Hegg who will present ACAS results for the quarter. You are 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 would now like to start the presentation by handing over to our CEO, Greg Glende. Greg, the floor is yours.

Thank you so much, Lucy. Good morning, everyone. Greg Glende here. I am the CEO of ACAST, and it is a pleasure to be here with our new CFO, Anders Haig, who hit the ground running with us this January. I'll start with the high-level performance and the momentum we're seeing, and then Anders will dive into the numbers. For those of you new to the story, Acast is the unique powerhouse of podcasting. We power the business of storytelling at a time when brands are waking up to the value of narrative influencers in the market. We act as the central engine in a highly fragmented ecosystem, streamlining a market that has traditionally been hard to navigate. For creators, it's hard to be discovered. For advertisers, it's hard to buy. We solve both sides of that equation. We are absolutely obsessed with removing that friction, and we do so with tech and talent. We help creators find highly engaged audiences by distributing their content across every relevant channel, not just one. We are the world's largest pure play podcast company, powering the entire commercial ecosystem. Our geographic spread of listens and revenue is unmatched, giving creators worldwide access and advertisers a single point of entry to a global market. We combine best-in-class technology with local market boots on the ground. That's how we connect the right advertisers to the right audiences, thereby making sure they maximize their return on ad spend. We deliver this value at a massive scale, powered by a network of over 140,000 podcasts and a deep commitment to proprietary technology. We generate clear return on investment for more than 4,000 advertisers annually, a roster that grew by 20% last year alone. The ultimate proof is in the payouts. Since our inception, we have paid out more than $550 million. That's over half a billion dollars directly to our creators. We're very proud of that. Our business is built on a flywheel. More creators bring more scale. More scale brings more advertisers. More advertisers drive higher payouts. It's a self-reinforcing cycle that makes the natural home for podcasting Acast. By combining our top-tier creator network with our advanced infrastructure, we are uniquely positioned to deliver value at scale and lead the next chapter of this industry. We've established ourselves as the leading global powerhouse driving the business of podcasting. We are truly a category of one, building the world's largest pure play podcasting company, home to household names like Peter Crouch and Giggly Squad, alongside globally recognized brands like TED Audio Collective and publishers like Slate, The Economist and The Guardian. Our success is built on the true creator independence. We attract the world's best talent with exclusive partnerships because we empower them to turn influence into income without controlling their content. For advertisers, we don't just sell spot ads on big shows. We operate a smart marketplace delivering audiences to them. By combining big show influence with the deep loyalty of our niche creator communities, we deliver a level of engagement traditional media simply can't match. By acting as the cohesive force at the center of the fragmented market, we unlock the entire media landscape, allowing brands to buy a narrative influence at scale across audio, video, social, and beyond. This efficiency drives higher ROI for brands while spreading revenue across our entire creator base. So let's have a look at some of our highlights in the fourth quarter. We closed 2025 with Q4 and sustained momentum. Revenue grew 27% in the fourth quarter, and even more impressively, 31% of that was organic. Our expansion in North America continues to be a major growth engine, with revenue up 50% year over year. Most importantly, this growth is disciplined. As our revenue has scaled, our profitability is following suit. This quarter, we delivered an adjusted EBIT margin of 6%, proving the efficiency of our model. Now let's look at the full year 2025, where we reached yet another milestone with our first ever full year positive operating profit and cash flow. Revenue grew 29% with organic growth of 33%. North America for the full year was also the growth engine, with revenue up 60% year over year in North America. The adjusted EBITDA margin was 5%, and as I mentioned, we are delighted to present a positive EBIT margin for the full year. Anders will break down the numbers in just a moment. Looking at some positive highlights in the quarter, first, our move to the Nasdaq Stockholm main market in November, reflecting our maturity and the consistency of our growth. In France, we secured an exclusive partnership with Le Monde, the premier French-language news brand with nearly 2 million monthly listens across its podcasts. This is a validation of our presence in a key European market and proves we are the partner of choice for world-class content creators of all kinds. In December, we significantly deepened our footprint in Germany with the acquisition of Wakewood Studios and Podius. Germany is a high-potential market where we've seen incredible momentum. By acquiring Wakewood Studios, we've added a strong production house in Munich and Berlin to our stable. This latest milestone in the global rollout of what is now called ACAS Creative Studios, joining ACAS Creative Studios US, UK, Australia, and Sweden, now we have France and Germany as well. We are marrying WakeWords production expertise with ACAS global sales engine to deliver omnichannel campaigns, audio, video, social, and live for major brands. We also acquired Podius, their independent media planning platform. Podius is a powerful tool for German advertisers, making it easier than ever to discover and plan podcast campaigns. We're very excited about the synergies with our U.S. subsidiary, Podchaser. So the acquisition of WakeWord brings their existing podcast portfolio consisting of 50 titles generating more than 2 million monthly listens. We will leverage the expertise of both the WakeWord and Proteus teams to enable even more advertisers and agencies to access podcasting in a smart way. This acquisition is a clear investment in our German growth engine. While the immediate financial impact is minimal, the rationale is built on strategic long-term upside, where we effectively simplify the path for German agencies and advertisers to scale their podcast spend with ACAST. So, with that operational momentum as the backdrop, I'll hand it over to our new CFO, Anders, for a deeper dive into our financial performance.

Thank you very much, Greg, and good morning, everyone. Really nice to be here. So my name is Anders Hegg, and I've been on board since the 15th of January this year. So this is finishing week number four. But I have a long background in the food and the FMCG industry, having held positions at Scandi Standard, Arla Foods, and Unilever. And most recently, I had the CFO position at Foodfolk, which is equivalent to McDonald's in the Nordics. But enough about me, and let's start having a look at our listens and average revenue per listen in the quarter. And listens grew 5% year-on-year, exceeding $1.1 billion. But let's be clear. Our focus isn't just on volume. It's on quality. We are prioritizing commercially valuable listens that drive the most value for advertisers. And that strategy is paying off. Our average revenue per listen increased by 21% to record 0.66 seconds. which is an indicator of our ability to generate more value out of every single listen on the platform. This drove a 27% increase in reported revenue and 31% organic growth, reflecting that we maintain a solid business momentum into the seasonally strong fourth quarter. I'll break down our geographical performance in more detail shortly, but for now, the key takeaway is that we are seeing consistent performance across all segments, with North America remaining the primary driver of our group-level expansion. Turning to our agisales breakdown for the full year. A total license finished the year essentially flat at 1% growth. However, we significantly expanded our monetizable inventory, which grew by 26%. And this trend reflects what we have mentioned throughout the year, namely that we have more tools to grow rather than just pure volume and license. We've also seen a continued increase to the sell-through rate, up to 43%, reflecting the share of inventory we actually sell. This growth in both capacity and utilization is a clear indicator of our improving efficiency. On the pricing side, our average CPM increased to $15, partly as an effect of our work on integrated campaigns, where we bundle audio with video and social assets. This multi-format bias allows us to command a premium rate that reflects the high creative value we provide to brands. This resulted in 2.4 billion SEC in ad sales, up from 1.8 billion last year, contributing to a total revenue of 2.5 billion SEC, a full year growth of 29%. The key takeaway here is that we have multiple levers for growth. We are not dependent on list and volume alone. We can drive value through ad slot density, sell through efficiency and pricing. And we see continued upside across these drivers for both mid and the long term. Our gross margin remained healthy at 40% for the quarter, which translated into a 28% increase in gross profit. Excuse me. We saw no material changes to our product mix affecting this development. And as you can see in the chart on the right, our gross profit is following a steady upward trajectory in line with our revenue growth. Looking at our segments, we saw positive contributions across the board in the fourth quarter. Europe grew by 16%, supported by strong performance in continental Europe. In the UK, we saw robust organic performance. However, this was offset by a negative currency impact on the reported top line. And while contribution profit in Europe increased, margins remained flat year on year. In North America, our momentum remained very strong, serving as the primary driver of group growth. Revenue increased by 50% and we saw contribution profits continue to expand as we benefited from the operational leverage of a scaling revenue base. Finally, other markets delivered 21% growth with contribution margins holding stable year on year. And overall, this regional mix demonstrates that we are growing effectively in our established markets, while successfully scaling our presence in the US. Taking a broader look at our top three markets for the full year, 2025 marked a significant shift. As Greg already mentioned, the US has now become our largest market, contributing 32% of our total annual revenue. And in the U.S., we delivered 61% revenue growth for the year. And more importantly, this was accompanied by a substantial improvement in contribution profit, demonstrating that we are achieving meaningful scale in the region. The U.K. grew by 12%, reaching 775 million SEC. And we maintained our contribution margins there, reflecting the stability of our most established market. In Sweden, revenue increased by 14%, and this is a healthy result, especially coming off the back of a very strong growth in 2024. And while the contribution margin was slightly lower year over year, it remains at a very high level. So in summary, 2025 was a year of broad-based growth across our core markets, with the U.S. specifically delivering a step change in both top-line expansion and profitability. Looking at a group level for the fourth quarter, it's clear that our scaling revenue base is driving a continued expansion in profitability. In quarter four, we generated an adjusted EBIT of 41 million SEC, reflecting an adjusted EBIT margin reaching 6%, which doubled the 3% margin we reported in the same period last year. And for the full year 2025, we delivered a 1% positive adjusted EBIT margin and an adjusted EBTA margin of 5%. And this performance is in line with the top end of our prior guidance for 2025. Our improved profitability has been matched by increasing cash generation. And in the fourth quarter, we generated 67 million SEC in operating cash flow, bringing a full year total to 62 million SEK, which is also in line with our prior guidance set out for 2025. We concluded the year with a robust cash position of 589 million SEK. And with that, I'll hand the floor back to Greg for his concluding remarks.