As the first quarter draws to a close, Audioboom CEO Stuart Last is offering the industry’s first assessment of how business has been so far in 2021. In an update to investors, he said Audioboom has already booked advertising representing more than 80% of the revenue the company had projected for the full year. “The momentum we regained in the second half of last year has continued into 2021, and the traditional seasonal drop-off in first quarter advertising demand has not materialized,” said Last.
As a result of those positive trends, Audioboom says it expects to turn its first profit this year after posting a 2020 loss of $3.3 million in 2020 and a 2019 loss of $7.3 million. “Profitability is now in sight,” Last told investors, saying it illustrated they have created a self-sustainable business model. “2021 is set to be a breakthrough year for Audioboom as we move the business towards the milestone of a positive EBITDA position,” he added.
Audioboom earlier reported its 2020 revenue grew 20% compared to a year earlier, climbing to a better than expected $26.8 million. The gains were driven by an acceleration of business at year end with a 25% year-over-year revenue gain during the fourth quarter. The company said it had 311 brand advertisers during the year, up from 280 in 2019. That 11% growth rate came despite the pandemic’s impact on the global economy. It also said its programmatic ad network had $2.5 million in revenue last year, a 258% jump from 2019.
In its update, Audioboom also said it plans to move away from releasing a premium advertising impressions measurement this year. It measures the growth in supply of live read or host endorsement inventory. In 2020 that figure was up two percent. Instead, Audioboom will start releasing a global download metric. It says the change is to put the company in line with the industry standard metric, which will enable more accurate comparisons to be drawn with other podcast networks.
Growing revenue has meant that Audioboom has not needed to utilize the full $4 million financial line secured in February 2020 from Michael Tobin, the company's chairman, and Candy Ventures, its largest shareholder. At year end, Audioboom says it had only drawn $700,000 and that was repaid in November.
Last year was a pivotal one in Audioboom’s history. Eight months after it hired an outside financial advisor to examine “strategic options” for the company, including a potential sale, Audioboom said in October that despite having advanced talks with “several” interested parties, it has instead ended the process and will bring on new investment dollars from the public markets.
That effort has already delivered the company some new cash. It has sold $4.3 million worth of stock to a new investor, One Nine Two Pte Limited. Audioboom said it will use these funds to continue to invest in generating organic growth.
“Not only does this access to capital provide the headroom to fund Audioboom through to sustainable positive cash flow generation, the board is increasingly confident, in light of the strong start to the year, that it will reach that position during 2021,” said Tobin. “At this point the company will have successfully taken control of its own destiny,” he told investors.
Greater Focus On U.K. Market
Audioboom says in 2020 it controlled more than 9,000 podcast channels, delivering more than 85 million downloads each month to more than 25 million unique users.
Since Audioboom launched its production arm in 2018 with a studio complex in New York, the company has largely been focused on producing content for American audiences. Last said the young U.K. market has, until recently, “carried too much risk” for investing in content creation and audience acquisition. But the gap has narrowed.
“We believe the market and sales model is now of a size and strength to support investment in original content,” said Last. “The U.K. podcast market is uncrowded in comparison to the U.S., making discovery less challenging and audience acquisition through paid marketing more efficient.”