Acast AB (publ)

Good morning and welcome to ACAST's earnings call for the Q1 2026 interim report. Joining us today are our CEO Greg Glenday and CFO Anders Haig. 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 by handing over to our CEO Greg Glenday. Greg, the floor is yours.

Thank you, LP. Welcome, and thank you all for joining us today. I'm here with Anders, our CFO, now four months in and fully hitting his stride. In my section, I'll cover our high-level performance and momentum, and then Anders will take you through the numbers. We have been very excited about the momentum our strategic approach is generating in the marketplace. We've been working on this vital infrastructure for more than a decade, and it is now paying off. At ACAST, we strive to be the best place for creators. Great creators bring very valuable audiences. Valuable audiences attract brand revenue. Once we have the brand revenue, that attracts and motivates creators and so on. You can see how this becomes a self-fulfilling flywheel with Acast at the center. We like to think of Acast as the engine room in the middle of this infrastructure. We have talented people around the world, we have industry-leading innovation and technology, and we have the best data around podcasting. All of that together powers this flywheel. We want to create an unencumbered relationship between creators and their audiences and advertisers. Creator choice, open ecosystem, no real editorial point of view. We let creators create. We focus on brand safety. Those are the principles underlying everything we do at ACAST. So when I say the best place for creators, I mean everything from premium publishers like TED, Le Monde, Perfect Day, or Slate, to huge independent shows, all the way down to a large number of niche shows with passionate, smaller followings. We don't have an editorial point of view that we force on them. We do advise our creator partners on best practices we've seen over the years, but we let them run their show, and we think that's really important. We deliver tools to create and monetize your show the way you want to. We believe in creator independence. We meet creators wherever they are to empower them, not control them. The result is every creator gets the same infrastructure and access to monetization options without losing what makes their show their own. Now, how does that translate to our advertisers? The big name still pulled the demand, that's vertical sales, where we do omni-channel, deep, authentic integrations with buyers and advertisers when they come to us looking for a household name show. But many times we say to them, you're not actually looking to buy that show, you're looking to borrow their audience. So that's the power of Acast. We can then take niche audiences and unlock scale. Our technology aggregates investable audience buys across hundreds of smaller shows that no other platform can monetize at this depth. For example, a dozen big shows may reach 5 million people. 500 niche Acast shows can reach the same 5 million people. So when we put those two things together, we can go vertically deep with a bunch of shows and then go much further horizontal to buy across the audiences. From the audience seat, both deliver a one-to-one relationship with the brand. We package both into one buy. That's what we mean when we say buy the audience, not just the show. Our sales motions cover the full spectrum from blue-chip omnichannel brand integrations to programmatic to self-serve automated. Acast has solutions that cover all kinds of advertiser needs, and that's amazing news for creators. Not long ago, the video conundrum was a dark storm on the horizon for the podcast industry. Today, video optionality is one of the most exciting work streams at Acast and within the podcast industry. Four in five global podcast consumers both listen and watch. Of those consumers, they fall along this logical continuum. Some listen more, some watch more, and the vast majority do both depending on the context. Everyone I know who loves podcasts, myself included, changes modality depending on the context. Sometimes I'm commuting on a train or exercising or doing chores or walking the dog or driving. That all leads to different listening habits. And it also depends on the context of the content. News or business versus pop culture or comedy or true crime. This is exactly what we mean by narrative influence. It's not audio. It's not video. It's a new mode, a consumer-creator relationship that lives across formats. Why we're built for this. Our newly established video partnerships, which I will touch on in just a minute, gives the creators an open choice ecosystem. We made that years ago on the audio side, and now we're doing the same in video. Speaking of creator choice, we've worked hard to ensure that this applies to video podcasting too. We're in a unique position in that we have solutions for all the current major platforms, Spotify, YouTube, and Apple. That made us the first fully platform-agnostic video and audio distribution monetization company in podcasting. Earlier this year, we were proud to be an inaugural launch partner for Apple's new video offering via HLS technology. Currently, we have around 90 shows live with video, and we have our first integrated advertiser campaign with Apple launching this quarter. On the Spotify front, they have a new distribution API that we are participating in between creators, publishers, and monetizing video on Spotify without switching hosts. YouTube, we have the UK's largest premium video podcast offering. Over 20 of the biggest shows in the UK are already live, and the US is rolling out this quarter. From an advertiser perspective, this gives you a single gateway to premium audio and scaled video across every platform. The strategic flywheel is omni-channel, earlier bookings, larger bookings, and a broad base. This is what global scale and pure focus actually looks like. We are a category of one, the world's largest pure play podcast company. Specialists, not generalists. Podcasting isn't an add-on for us. It's the entire business. We built Acast to be global, but we prioritize local expertise and execution. This illustrative example represents the competitors our local managing directors compete with on a daily basis. Of the 60 or so companies on this slide, only five are in more than two markets, and only two are in more than three markets. And over time, our business model has grown further and further from Spotify, which has made us much stronger partners with them. The creator benefit is one relationship with a worldwide audience plus revenue. Podcasting does not need a corporate suit to green light a show in every country. It's a meritocracy. A show from the UK can be big in the US or Australia if the audience says so. We have a show in the US whose second largest market happens to be Ireland, and we monetize the audience there as well. The advertiser benefit is a single point of entry to a fragmented global market for both brands and the big global advertising holding companies. All that to say, we are very confident in our position in the next phase of the podcast industry as it evolves. Our advantages took years to develop. global scale, local execution, platform agnostic distribution, creator control and choice, full spectrum sales motion from self-serve to blue chip omnichannel buys, proprietary data, and end-to-end technology trust across the industry. Network effects that strengthen every creator we add. These aren't separate USPs. These reinforce each other. That's what makes it hard to replicate. Our podcast roadmap approach is simple, but very hard to replicate. We simply listen to our constituents, creators, their audiences, and advertisers. Their desires, frustrations, and ideas become our roadmap. We're obsessed with building or acquiring the tools needed to remove friction to make this flywheel spin, throwing off more value to everyone involved. With that, let me move on to our Q1 highlights. Our momentum from Q4 carried straight into Q1. We delivered 20% net sales growth and 31% organic growth when adjusted for FX and M&A. This consistency is the result of deliberate execution, not an accident. North America was our primary growth engine, up 43% organic growth year over year, with meaningful contributions from Europe and other markets. And the milestone of the quarter, this was our first ever profitable Q1, with adjusted EBIT of 5 million SEC at a 1% margin, particularly notable given that Q1 is seasonally the softest quarter in advertising. Looking at key events for the quarter, I've already mentioned our expanded video podcast distribution with Apple Podcasts. We also signed an exclusive ad sales distribution partnership with Slate, one of the most respected names in audio journalism. This validates that the world's best creators choose Acast, and it expands our high-value content and editorial credibility in North America. We also added Perfect Day Media, with a strong niche portfolio here in Sweden. This leads our long-tail monetization engine, the deep, loyal communities that advertisers want. I'll now hand it over to Anders for a financial deep dive.

Thank you, Greg, and good morning, everyone. I'm now a few months into the role, and I have to say the business momentum you see in these numbers is real and consistent with what I experience every day inside the company. Let me walk you through the key financial metrics for Q1 2026. Listens came in at 1.121 billion, up 1%. But as we said consistently, our focus is not just on volume, but it's on quality and value per listen. Average revenue per listen, or ARPL, reached 0.58 SEC in Q1. And that's the highest Q1 ARPL we've ever recorded and represents a 19% growth year over year. This reflects our continued success in expanding monetizable inventory, improving sell-through, and commanding premium pricing through integrated, multi-format campaigns. Net sales reached 645 million SEC in Q1, up 20% year over year. Organic growth, adjusted for FX and M&A, was 31%, continuing our strong growth trajectory. Q1 is seasonally the softest quarter in our industry, so this result reflects particularly strong underlying demand from advertisers. Growth was driven primarily by North America, supported by solid contributions from Europe and other markets. Gross margin came in at 37%, delivering a gross profit increase of 20%, growing at the same rate as the top line. The Q1 margin was in line with Q1 2025 and was just like then affected by lower margin in North America. Looking at our segments, we saw positive contributions across all segments in the first quarter. Europe grew by 16% with 23% organic growth, supported by strong performance in the UK. While contribution profit in Europe increased, margins decreased slightly, partly impacted by the acquisition of Wake World Studios. In North America, our momentum remained very strong, serving as a primary driver of group growth. Revenue increased by 43% organically. However, this was offset by a negative currency impact on the reported top line, resulting in a reported growth of 26%. We also saw significant expansion in our contribution margin from increased operating leverage. Finally, other markets delivered 22% growth with 26% organic growth, and contribution margins also increased year over year. Overall, this regional mix shows that we have strong double-digit growth across all regions, while also scaling a cost base. At group level, adjusted EBIT came in at 5 million SEC, a 1% margin. This compares to a loss of 26 million SEC and minus 5% margin in Q1 2025, an increase of over 6 percentage points. And this is our first ever profitable Q1, a clear milestone and evidence that our operating model scales. On a last 12-month basis, our adjusted EBIT margin stands at 2%, continuing the steady upward trajectory we've been building throughout 2025. Operating cash flow for Q1 was 40 million SEC, including 12 million SEC in positive working capital movements. On a last 12-month basis, operating cash flow was 73 million SEK, reflecting the genuine cash generation that comes with sustainable profitability. And we closed the quarter with a robust cash position of 602 million SEK, giving us the financial flexibility to continue investing in our growth strategy. And I'll now hand back to Greg for closing remarks.

Thank you, Anders. Q1 was exactly what we set out to do. We delivered 31% organic growth in what is seasonally our softest quarter. We achieved our first ever profitable Q1 with adjusted EBIT positive and improving cash generation. The additions of Slate and Perfect Day Media reinforce our content leadership and our video distribution now spans Apple Podcasts, Spotify, and YouTube.

Thank you, Greg and Anders. We will now start the live Q&A. Please use the message box below and we will put them to Greg and Anders. And the first few questions come from Andreas at Carnegie, who has posted a number of questions. So the sales organization has expanded and also the costs. Are you happy with the size of the sales organization now? Or should we expect further expansion to handle the market growth?

Oh, great. I'll take that one. Yes and no. So I don't mean to be wishy washy, but. We were really excited that revenue outpaced cost, and we think that will continue. One of the things we track that we don't report on is sales efficiency. So the same way we think about average revenue per listen, we think about our salespeople and what they can handle. And as budgets get bigger, we're getting much more efficient on the sales side. I think we will invest where we need to call on new advertisers, but our tools and our sales motions really have led us to be much more efficient. So we think that's going to continue. So as revenue grows, we will invest in more people, but not at the same pace for sure.

Could you explain the various growth drivers per region? Given that Listens is more or less flat, price, ad loads and sell-through rate must be the drivers, but is it different in different regions?

I'll take that one too. Yeah, I think it is different in different regions, but the general themes have been, you know, our go-to-market, we have everything from, as I mentioned, on the automated side, we go from self-serve to programmatic. We have a hands-on direct response team and then a big Omni channel brand team. All of them are growing. It depends on the region and the advertiser as to, you know, where the demand comes from. But we also focus on average revenue per listen. So Because that's going up, we're getting much more efficient, and it's not just adding more ads and commercials to popular shows. It's being able to sell shows further into our long tail, selling audiences. This is essentially new inventory. It's inventory that's existed but was low demand, and we're now turning it into high demand. So we're very excited about that. And then, again, different regions, because we have different ways to go to market. Australia is a very sophisticated programmatic market. So we're leaning into that. In the U.S., we have access to big budget decision makers. So when we think about, you know, the U.S., we think more omnichannel and doing bigger, you know, seven and eight figure deals with advertisers. So depends on the country. But we have a solution for, you know, all different types of demand around the world.

Great. The gross margin is always weaker in Q1 and then improves for the rest of the year. Any reasons to see things differently in 2026? And can you explain why the industry has this pattern during the year?

Yes, I'll take that one. Thanks for the question, Andreas. So, I mean, it might seem pretty obvious, but I mean, margin is affected by country mix and product mix, you know, where some countries and products have higher margins and some lower. And, you know, North America has slightly lower margin due to higher competition. So as the market grows, it will have an increasing effect on group gross margins. As we also said during the call or the presentation, though, is, I mean, quarter one is the seasonally the softest quarter. And our cost of content also contains some element of fixed cost. And as a result, this will also have an effect on our gross margin then. So seasonally in Q1. So those are two of the factors impacting Q1 and what you can think about margin going forward.

You have a net cash position of 600 million SEK. Why is the finance income, excuse me, income not higher given the large net cash position?

That's another good question. And to be honest, I think so far our main focus has been on the business and to make sure that we are profitable and drive profitability. But going forward, of course, we'll be focusing on sort of all different lines of the P&L, improving all metrics.

the pace in activation of R&D looks to have increased. Can you explain the reason for this?

Yes, absolutely. So if you look at the video partnerships that we announced in Q1, our product and engineering teams with similar resource to last year handled the heaviest workload we've ever had at ACAST. We're really proud of the fact that we've kept pace with Spotify, YouTube, Apple, these are big organizations with really sophisticated engineering teams. And we were able to keep pace and build these products with them in Q1. So very proud of the pace of R&D. And we're excited about, again, changing the industry is not easy. And if we can do it in an efficient way, we're pretty excited about that.

And then we have a few questions from Derek at ABG. How sustainable is this Apple uplift? And what are the main drivers? Pricing mix, targeting, programmatic?

Oh, go ahead. Please.

I can start. Yeah. So, so, I mean. At the capital markets day in April last year, we did say that we believe our could double over time. So, you know, through average ad load and sell through rates. And we've gone from 0.44 sec in 2024 to 0.57 sec in 2025 and now 0.58 in quarter 1, 2026. So. the trajectory is where we want it to be. But maybe you want to add some color to that, Greg.

Yeah, I think, you know, the reason that we're excited about the ARPA growth is that, and I've mentioned this the last two quarters, we're not turning our backs on download and listens, but obviously the industry has gotten much more sophisticated. So I think, you know, 10 years of downloads and listens as kind of the proxy for podcasting, we just talked about HLS video and uploads, and there's all kinds of ways that our creators reach the audiences. So The idea that we're only focused on listens, that's going to change over time. We're going to have to find a way as an industry, we're working really closely with all the industry orgs, some of our competitors and partners. We have to get more sophisticated in how we think about these audiences. It's not just RSS listens, there'll be HLS, there'll be video. None of that is currently in our listens number. So our audience number that we report is just listens. So we think as that grows, it's something that we're watching, but listens is very directional. It's not a very sophisticated measure of audience.

Great. And any change in the mix between host reads and programmatic or pre-produced ads?

Yes. You know, we don't report on the mixes. Every country and every region is different. I mentioned that, you know, there are markets that are more sophisticated with programmatic. There are markets that, for instance, in the United States, one of the great things about our self-serve portal is that there are small ad agencies in Tennessee or Ohio that, you know, a company like ours maybe wouldn't send a salesperson to visit them. but we can activate them through our platform and our access to self-serve. So we think every market's different, we treat them differently, but we have four or five different sales motions that work depending on the demand in that market.

Great. And how would you describe demand visibility today versus a year ago? Are booking cycles getting longer?

Yes, absolutely. You know, one of the things I'm excited about is even three years ago, our company and podcasting had very little visibility out into the future. You didn't, you know, we were kind of, um, you know, booking quarter to quarter and, you know, there wouldn't be much second half revenue booked. And again, we don't, we don't give guidance, but we see big advertisers. Obviously they plan earlier, the more sophisticated the brand they've got their year plan. So we're able to tap in, especially being global at the holding companies. We can tap into that demand earlier. and start building programs that make a lot more sense with research and insights, the more time you have, the more sophisticated your campaigns can be, which obviously are going to be larger.

Great. And we have a question from Richard Kramer. How might a potential merger between iHeart and Sirius impact ACAST? Would there be an opportunity to work more directly with either of them?

Yes. In fact, I spent almost 20 years at iHeart. We have a lot of friends over there. We work really well with Sirius. We're sort of partners more than competitors with both of them. I think Sirius has done a really, really good job in the marketplace. They don't have any local radio station licenses, so two very different businesses. Neither one of them, podcasting is not the largest part of either one of those companies, but they both do a good job and we partner with them. So I'm excited to see. I think it's, you know, to see what happens in the marketplace. But we don't really comment on, you know, I'm not really sure what's going on, whether the rumors are true. But, you know, I think a satellite company with digital assets, local market radio, I could see why that would make sense. But again, I'm reading about it just like you are.

Great. We have a question from Bernt at Barclays. Can we expect a similar M&A contribution for the full year of 26E than we've seen in Q1?

Sure. I mean, I'll start, but Anders has the purse strings. The way we think about it, we've got our strategy and whatever's going to get us there quicker. If it's build it, we'll build it. If it's buy it, we'll buy it. If it's borrow it, we'll borrow it. So we're really agnostic into how we solve our problems and whatever's the best thing for ACAS and our shareholders is how we're going to approach it. So certainly, we talked about the cash we have on hand. And, you know, we want to make sure that we're using that efficiently and, you know, as a great ROI for the company.

Yeah, nothing to add, Greg.

Great. Roughly speaking, how are you thinking about steady state contribution margins in each region?

Yeah, I mean, if I start that one, then I mean, if we look at Sweden, for example, I mean, we have a very healthy margin level. They're given a strong market position and gross margin structure. In the UK, yeah, we're market leading and also, you know, good margins, although it's slightly different competitive dynamics than Sweden. So I think, I mean, the big opportunity margin wise is to bring sort of the North America and the rest of Europe up to sort of UK and Sweden levels going forward.

Thank you. We have a question from Peter. You are stating that North America is the key factor behind the lower gross margin in Q1, same as Q1 2025. Could you please give some insight on the dynamics in North America as we are seeing CBIT margin of 13% up from 4.1% Q1 2025? Yeah, thanks, Peter.

Good question. As you say, I mean, we also see very much evidence of our scalability also in North America, and that goes across the board. And contribution margin has increased thanks to that scalability, even though the gross margin was lower. So I think we continue to expect good scalability across the business, including North America. As Greg was talking about before, yes, we might want to invest in sales resources, but we should be able to grow revenue faster than we have to invest in OPEX.

Thank you. Peter has another question. Could you please share some of your plans for Wakewood Studios? How are you going to leverage the acquisition and make it profitable?

Sure, I'll start. We're really excited about the German market. We've been investing there. WakeWord gives us, you know, very similar playbook, obviously different language. When we bought Wonder Media at the end of 2024, you know, our goal was to assimilate them into our sales process beyond just the content that they create. And that worked so well for us that, again, they're an English language solution that, you know, when we found WakeWord, we said, oh, this is the same thing. This is a studio that can help us build bigger campaigns with brands across Germany. decision makers there, branded content, all of those things. So as we're building that, we're becoming much more efficient. And so we want to follow the same playbook we did with Wonder Media that became Acast Creative Studios. We are doing the same thing with Wake Word in Germany. And frankly, I feel like it's ahead of schedule. They've really hit the ground running and the assimilation has been very smooth.

Great. Another question from Bernd at Barclays. What percentage of your revenue today is programmatic and where do you think it can go over the midterm? Do you find that programmatic revenues tend to be incremental?

Yes, this has been, you know, I've been answering this question for 15 years across lots of different channels. But, you know, programmatic is fairly misunderstood in podcasting. I think a lot of people, especially smaller companies, think of it as It's either live reads and everything else is programmatic. For us, we think programmatic is a big chunk of what we do. I think it's especially programmatic guaranteed. We have large advertisers that actually work with our salespeople on campaigns. So it's a direct sale, but then they book it programmatically. So we think programmatic will continue to grow. I think it's an important part of the industry. We just want to make sure that it doesn't commoditize podcasting. I think one of the beautiful things about podcasting is how unique it is and how well it works for brands, but you have to be thoughtful about it. And I think sometimes programmatic can be a little bit too transactional. So we're really excited about things like Programmatic Guaranteed, our global partnership with Magnite last year. We did that for a reason. That's a long-term partnership. So I think it's growing. Whether it grows at the same pace, faster, slower, depends on the region, but it is one of the growth areas for us for sure on the revenue side.

Another question from Derek. Are there specific advertiser categories or verticals that stood out positively or negatively in Q1?

Yes, that's another thing we don't break out. But I can tell you, you know, as we start to crack a category, you know, advertisers are there are advertisers that lead from the front and then there are advertisers that are fast followers. So I think you'll see. Once we've cracked, you know, telecom, then you see competitors coming in. Pharmaceutical has been growing. We have, there's several categories, entertainment. I think obviously, you know, podcasters are tastemakers and, You know, entertainment is a word of mouth marketing segment. So the idea that entertainment, new movies, having them talk about it on a podcast has has been really, really good for the entertainment category. So I'm excited about automotive, pharmaceutical, insurance, finance. There's pretty much every category has increased curiosity and demand in podcasting. So, again, if a cast is a proxy for podcasting, we think we're in really good shape.

Another question from Bernd at Barclays. On listens, you said your focus is not just on volume, but on quality. Apart from less commercial content that you have discontinued, can you give us a sense of underlying growth for your core portfolio?

Sure. We have, you know, as we evaluate content, we have a couple of ways to do that. And we've got some proprietary analysis we do. But we essentially create a contextual scorecard for content that how sellable, how much demand is there? How brand safe is it? How much demand will it pull in, meaning how much will this piece of content make the phones ring for us rather than us having to proactively sell? So as we look at acquiring content, I think we've gotten really good at figuring out what makes sense for us and how we can monetize it and really de-risking that whole process of holding your breath and hoping that the content becomes valuable.

Great. And a question from Richard, will podcast, excuse me, will video podcast inventory cannibalize audio and what video, what might it do to CPMs and ad pricing?

So no, I don't think, I think it's very additive. The way we think about our creators, some of them will want video, some of them won't, some of them will want to push video, some of them need to push video. So we're really excited. This is just going to be a complete expansion of audience and inventory. So CPMs will be higher. The market will change. We love the idea of blended modes that an advertiser can do a campaign with us that is going to have audio or video in it, depending on what the consumer is doing. So this is a whole new era for the marketplace. And I think, again, we're locking arms with partners like Spotify and Apple and We literally are blazing this trail together in the industry. So we're really excited about it. Obviously, video has higher CPMs, audio slightly lower. But I think our CPMs have been creeping up because it's efficient and it works and we can prove that it works. So you get what you pay for. And we certainly don't want to be a race to the bottom. I don't think podcasting is commoditized and we're going to make sure it stays that way.

OK, great. Just check if we have any more questions. right i think that concludes the q a thank you to everyone who has listened in the next upcoming quarterly report is our q2 report which will be released on july the 23rd and you're of course welcome to join us for that presentation in the meantime you can follow us on investors.acast.com to sign up for our press releases our news and our financial reports follow us on our acas newsroom and of course listen to our results as a podcast thank you and goodbye