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Revenue Grew 35% During Fourth Quarter At Acast.

Acast says it closed fourth quarter with growth, but it says there remains uncertainty in the ad market as the new year begins.

“2002 has been an interesting year for podcast industry and the world generally. It started off positively with the medium continuing to grow at lightning speed,” CEO Ross Adams said Wednesday during a presentation for investors. But he said the macroeconomic headwinds strengthened with the events like the war in Ukraine and inflation “wreaking havoc” on the global economy. "This impacted the industry too. Naturally brands started to be more prudent with their spending,” Adams said.

First quarter is traditionally a softer time of year for advertising, and CFO Emily Villatte said that Acast has “applied more pricing flexibility” to what it charges buyers during Q4 and into the new year. She said rate cuts have been more common in North America compared to Europe where pricing has been “more stable.”

Acast had $43.5 million in revenue during the fourth quarter, a 35% year-over-year gain. It says ad buys grew as did non advertising-related revenue. Earnings however slid as the company posted $4 million in losses related to about $1 million in restructuring costs and layoff-related expenses. The move was taken as part of Acast’s goal to reach profitability in 2024.

Acast says that its growth rate in North America was slower than in Europe during the fourth quarter. In Europe, revenue rose 38% compared to a 28% growth rate in the U.S., Canada and Mexico. Eight percent of the North American growth came from Acast’s acquisition of the podcast database Podchaser. But with the U.S. market growing, Villatte said Acast will continue to put more resources there. “You should continue to expect us to invest in the U.S. market,” she said.

For all of 2022, Acast says it had $133.2 million in total revenue, a 36% increase compared to 2021. And despite its effort to speed up profitability, its losses widened to $28 million – a 21% increase in red ink from the prior year.

“We have adjusted the operations to suit the new market conditions,” Adams said. He also said their adjusted earnings numbers showed that they have made a “step on the way” towards reaching profitability in 2024.

“The cost reductions that we announced at the end of the summer have now been completed and we entered 2023 with a stable foundation to continue developing the company,” Adams said. Acast had said it would dismiss 15% of its workforce, or about 70 people. “The path toward profitability for Acast lies in a focused effort on our internal efficiencies and cost controls combined with healthy growth created through investments and development of our advertising offering,” he said.

Acast’s programmatic sales continued to gain adoption during the end of the year, with automated buying accounting for 13% of Acast’s sales during 2022 compared to 10% a year ago.

“It’s clear the podcast medium still has massive room for growth,” Adams told investors. We expect growth comparatives to be tougher in the first half of the year and then easing into the second half of the year.” He said programmatic has been the fastest-growing channel and it has the potential to pick up quickly if there is an uptick in the podcast ad market.

At the end of the fourth quarter, the number of podcasts on Acast’s platform totaled 92,000 and the number of listens in the quarter was 1,327 billion, an increase of 22%. Adams said he is not too worried about the slower pace of new show creation.

“While we’re still seeing a slowdown of show creation, we’re still seeing the audience listening to podcasting massively increase,” he said.

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