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.

Thank you. Thank you, Anders, and welcome again. So to wrap up, we concluded 2025 with powerful momentum, delivering 31% organic growth fueled by strong demand across every segment. North America continues to lead the way with an exceptional 50% increase. Within that, the U.S. has now become our largest revenue market, contributing 32% of our total annual revenue and a growth rate of 61% in the U.S. alone. Our acquisition of Wakewood Studios and Patius Platform give us the tools we need to scale effectively in Germany, a market where we are already seeing strong traction. Taking a step back, this year has been definitive proof of our model. We delivered a four-point percentage increase in our adjusted operating margin, a clear demonstration of our ability to scale efficiently and turn revenue growth into meaningful profitability. We entered 2026 with a proven framework. As global ad spend continues to shift toward podcasting, ACAST is uniquely positioned to capture that move. We have the global scale, the specialized expertise, and an integrated platform that works for both the world's biggest brands and its best creators. In fact, we aren't just poised to participate in this evolution. We're very proud of our leadership role in establishing how this market is evolving. Our strategy to give creators as much freedom to meet their audiences wherever they are, including newly unlocked video partnerships with major players like YouTube, Spotify, and more. In the depth of our network, we are truly, truly a class of one, the world's largest pure play podcast company. Thank you for your time. We're now happy to take your questions. Lucy?

Yes, so we will now open up for questions. So please use the message box below, and we will put them to Greg and Anders. So question number one comes from Andreas at DMB Carnegie. His question is, prices are improving quite significantly. Can you explain why this is and how we should think about prices going forward, given the various drivers?

Sure. Thank you, Andreas. Good question. I think the short answer is quality. I think the quality of our delivery from add-ops to the type of talent we have is directly reflected in the CPMs. Brands are more and more focused on outcomes, not just pricing. We're moving into a world where you get what you pay for and CPMs are earned. So we're very proud of that, especially as we do more omnichannel campaigns. It's not just a transactional race to the bottom with volume and scale. It's quality and outcomes. So we think anybody can charge anything they want on a rate card with a CPM, but it's another thing to earn it. What the advertisers pay for and what you want to achieve are two different things. So supply and demand, high quality, great ad operations and efficiency.

Great. Second question also comes from Andreas at DMB Carnegie. His question goes, you do not provide any guidance or outlook for 2026, but you have the long term targets. Should we assume a gradual path towards the 2028 targets or can there be a lumpy road? I know quarters may fluctuate, but I am more thinking about yearly performance.

Yeah, thanks for that question, Andreas. And I think, I mean, your assumption seems pretty reasonable. I mean, we will not provide specific guidance for individual years, but we expect to make continued progress in the years ahead in order to deliver on these targets. And yeah, I mean, our strategy is built to deliver high value to advertisers across all formats, ensuring that we're well positioned for the years ahead. So thanks for that question.

Great. We have another question from Andreas at D&B Carnegie. In the US, can you again explain the structure of that market? It is fragmented, but can you mention some competitors and how you make sure you can continue to grow and take market share over the coming years?

Great. Andreas was up early today. Thank you. Another good question. Yeah, we're very excited about the progress in the U.S. I think, you know, one of the things that's special about ACAST is we have dozens and dozens of competitors in each local market, but not one of them competes with us globally. So in the U.S., nobody has a really dominant market share, so it's become very competitive. What we've focused on is being the largest pure play. The U.S. competitive set, I think most of our big competitors have other businesses that are really important to them. They also do podcasting. We're the largest company that just focuses on this narrative influencer market. We think this is very bespoke. It's not a subset of radio. It's not a subset of satellite. So in the U.S., we have some really strong, great competitors, but they have other businesses. So, for example, if I have an hour to spend with a CMO at a big brand – We are going to talk about podcasting and narrative influence for that hour. We're not going to talk about local or national radio. We're not going to talk about satellite or music streaming. We are focused. So it's a very different market, and I think our specialization has really allowed us to accelerate in the U.S.

Great. We have another question from Andreas at DMB Carnegie. The question is, given the interest you highlight that advertisers are not just buying podcasts, but podcasting, how do you see this impacting the sell-through ratio over the coming years?

I actually think it takes pressure off of our sell-through rate because we have the longest tail, and I think it's something that we should be leaning into. As we think about advertisers want to do deep integrations, and we've moved upstream to talk earlier in the planning process with brands and high-level agency and Holco people. As we do that, they're looking for deep integrated campaigns with a handful of big shows, but then they also want to use long-tail audience buys to get higher scale. So we'll go vertically very deep with cross-platform omnichannel campaigns, and then we go horizontally to sell those audiences. So we're the only people that can do those two things, and we think they go hand-in-hand.

Wonderful. We have a question from Peter Drogarski. Could you please take us through what is happening in the market? I notice minimum revenue guarantee is substantially reduced year over year. Will it have a negative impact for sales in 2026?

Thanks for that question, Peter. And we don't comment on our separate minimum guarantee contracts. But the short answer is no.

Wonderful. We have another question from Peter Tregarsky. Looking at your costs and adjusting for extraordinary factors, I notice administration costs increased by SEK 20 million from Q3, and this has historically been fairly stable. Is the substantial increase related to costs for in the incentive programme and the changes you are taking for the incentive programmes for the future?

Yes, Peter. Thanks again for the question. I mean, it's partly related to the LTI program, but also related to consultancy cost. And we're also seeing a slight increase due to the increased number of staff. Great.

We have a question from Richard Kramer. How might regional mix and focus on quality titles allow ACAS to see further growth in CPMs in 2026 and beyond? And is there scope for brand partnerships to become a meaningful contributor to that revenue?

Sure. Thanks, Richard. So, yeah, I think, you know, the regional mix is great. And I think podcasting is one of the only mediums, if not the only one, that really is borderless. You can have great content in any market and it can travel. There are things that are evergreen. So we're really excited about our position being being global, that we don't have borders either. Like I said, we don't have the same competitor globally. in any more than two markets. So we're able to talk with global brands about an execution at the center that we then localize. So we think that's really exciting for us. The other thing about the long tail is, you know, to the listener, a niche community, generally podcasts are consumed as a one-to-one. You know, it's the content creator speaking directly to that audience. If I'm listening to a small podcast, it's still an intimate one-on-one event for me as the listener. It doesn't matter if it's a podcast that 10 million other people listen to or a small community of 1,000. So us being able to tie these smaller shows together and create a larger buy and making it frictionless for the advertiser is the holy grail of what we're trying to get to.

Wonderful. Thank you. We have another question from Richard Kramer. Do you have any advertiser which represents a 10% share of any of the regional markets?

You know, we don't make specific comments on advertiser and advertiser spend, but in general we have a healthy balance. Again, we work with more than 4,000 advertisers. The way we go to market, I think, is important for that. We didn't choose just one path. You know, I think we didn't take the easy way out. We've got a self-serve platform that's going really well. We have programmatic. So those are two very transactional platforms. Then we have direct response and performance, which is like the traditional way of buying podcasts in the U.S. And then, of course, I think we are the pioneers in omnichannel, in surrounding the audiences across lots of different formats. So high touch, there's a lot of creativity in an omnichannel campaign, but that allows you to charge. That's where we get sort of the larger, you know, seven-figure advertising partnerships that or on the transactional side where we can scale. So being able to deliver different things to different advertisers in the way they want to transact with us is really important. It's not the easy way, but I think it's a way that we've created a mode for ourselves.

Great. We have another question from Richard Kramer. Has Spotify's retreat from originals and exclusives opened up new potential clients for ACAST and can you provide some examples? What would you need to do to win representation of studios like Goldhanger in the UK?

Sure. And it's a two-part question, Richard, but I would say, you know, I can't comment on Spotify's strategy, but I can tell you that, you know, Spotify, as you saw earlier or in fourth quarter, we're a key partner for them in their video distribution. And Spotify is an important part of how we reach our audiences, right? They're a great end state partner. So... As we think about originals and exclusives, we're looking for the best audience and the best monetizable inventory. So we've got some proprietary ways of evaluating inventory. As I've said over and over, downloads and listens are really important metrics, but they're not very sophisticated. So being able to look at quality listens, quality inventory, and thinking about whether that's originals or content that other people are producing, that's great. People like GoalHanger. GoalHanger is wonderful content, and we're focused on, again, monetizable listens. We don't care where they come from. I think there's lots of creators like GoalHanger that have lots of scale for what they do, but not a global scale like we do. So we think there's lots of room to work with creators like GoalHanger across the world.

Wonderful. We now have a question from Bernd Planten. What are your 2026 targets for organic net sales growth and EBITDA margin?

Yeah, thanks for the question, Bernd. As we said before, we don't make specific guidance for 2026. But as you know, our target is to achieve 10% EBIT margin in 2028. And we expect gradual growth towards this target. And likewise for growth, we said that we expect a CAGR of 15% until 2028. So that's on the same lines. That's the aim for 2028.

Great. And we have another question from Bernd again. Given significantly tougher comps in 2026, how are you thinking about growth in North America this year?

Yes. So we think North America has tons of upside. There's a lot of global decision makers in New York, Chicago, Los Angeles, Detroit, Dallas. So we're really excited about the upside. We think because North America and the U.S. are so fragmented, we think it's an exciting time to be pioneers in podcasting in the U.S.

Great. We have another question from Ben. Both sell-through rate and ARPL have seen significant increases over the past two years. What can you do to continue increasing both?

Yeah, I think there's, I don't want to say an endless, but there's a high ceiling for both of those. We think we are just getting started. There's tons of green space to both spread revenue further into our long tail, so there's lots of inventory available in the long tail, and then as podcasting continues to grow. So we think it's going to be both organic and structural.

Great. And another question from Bent. Can you help us size the opportunity of multi-channel campaigns for you? Have you seen any impact from Spotify revamping their ad infrastructure?

Sure. Again, I'm not sure I understand how Spotify revamped their ad structure. I can't comment on them. But for us, again, getting upstream is a very logical thing to do for us. So if you think about any advertiser, any global Fortune 500 brand or Ad Age 100 brand, When they come to us, if they want to do transactions in audio, we're happy to do that. But that limits sort of what you can ask for. As you work upstream with advertisers, we're solving their brand problems. We're not solving a transactional pricing problem. We're solving a marketing problem for them. So that unlocks much, much, much larger budgets.

Great. And another question from Berndt. What can you do to reduce the impact of unrealized currency exchange losses, the impact of which has been outsized this year? Can you hedge?

Yeah, thanks, Berndt. That's a very good question. And I mean, we are working on our FX processes. And this is something that we'll focus on this year. So we need to come back on that.

Great. So that concludes, I think that's all we've got time for, and that concludes the Q&A today. I will now hand back over to you, Greg.

Great. Thank you so much for joining us today. We are Happy to have you all listening in. The next upcoming quarterly report is our Q1 report, which we release May 5th. You are welcome to join us for that presentation. In the meantime, you can follow us on investors.acast.com to sign up for press releases, news, and financial reports. Our ACAST newsroom is always available, or listen to our financial results as a podcast. Thank you so much, and goodbye.