Propelled by double-digit sales growth in North America, Acast said its third-quarter net sales grew 12% year-over-year, which included 14% organic growth. The catalyst was continued growth in the U.S., Canada and Mexico, where Acast saw a 29% increase in Q3, despite tough comparisons from the previous year.
The Swedish company, which provides hosting and monetization services for podcasters, says this development “illustrates that our investments in the region are paying off, allowing us to gain market share.”
Europe experienced more moderate growth at 3%, which senior management chalked up to varied market conditions across different countries. “Our performance in the UK has been affected by a tougher market, whereas we continued to see strong performance in the Nordics and Continental Europe,” Acast said in an earnings release. “With a 20% revenue increase year over year, our Other markets segment further fueled the group’s overall growth.”
Acast, which has more than 135,000 shows and 2,700 advertisers, reported profitability gains across all segments. Its gross profit margin remained high at 40% in the quarter, thanks to a combination of favorable product mix and effective yield management. The currency in Sweden is the krona, abbreviated as SEK, and Acast said it had SEK 16 million of earnings in the third quarter, representing a 3% EBITDA margin.
Expanding Podcast Monetization
Behind Acast’s Q3 growth story is a “significant improvement” in monetization. Average Revenue Per Listen (ARPL), a key performance metric, jumped 31% in Q3. However, the number of listens fell 15% to 1.1 billion, which it attributed to Apple’s rollout of iOS17. “As we forge ahead, we have an increased focus on the quality of our audience and monetizable listens as we continue building out our Marketplace,” the company said.
In June, Acast’s podcast intelligence subsidiary Podchaser launched an AI-powered tool enabling marketers to target podcast listeners using a collection of data inputs. Within three months, the tool – branded as Collections+ – had enabled 24% more Acast creators to earn ad revenue within its first year of operation. Now Acast reports “high adoption with more than half of brand-produced audio advertising buys using Collections+ year-to-date.”
In the third quarter, Acast rolled out an additional ad marker, allowing podcasters to add a second midroll ad slot into their episodes. The increase in ad availability has helped offset the reduction in ad inventory caused by Apple’s iOS 17 update.
“The third quarter saw solid financial performance, marked by increasing revenues and EBITDA profitability. This positive momentum — driven by continued strong performance in North America, expanding monetization and improving profitability across all our segments — underscores our commitment to profitable growth,” CEO Ross Adams said in a news release.
A veteran of UK radio, Adams joined Acast in 2014 after spending five years at Spotify, first working as its UK country manager, then rising to Chief Revenue Officer, and in October 2017, as CEO. He relocated to New York to lead Acast’s U.S. efforts in 2022.
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