Audioboom Group PLC

LSE:BOOM

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Operator]

Good afternoon, ladies and gentlemen, and welcome to the Audioboom Group plc investor presentation. [Operator Instructions] The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and we'll publish those responses where it's appropriate to do so on the Investor Meet Company platform.

And before we begin, as usual, we would just like to submit the following poll. And if you could give that your kind attention. I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from Audioboom, Stuart.

[Stuart Last, executive]

Thanks, Jake. Good afternoon, everyone. Really great to be with you here again in the last 3 months has just flown by. So it's good to be back and good to be presenting Audioboom and it's first half of the year results to you today. I'm really pleased with today's results. I think that it shows that what we're seeing today is a sign of resilience to the ad market recession that came in 2022 and 2023. There are recovery from that, how the platform is stronger than ever before, how we are primed for faster growth across the rest of this year. So a really good set of results, I think, really pleased with everything that the small team at Audioboom has delivered and great to get into those with you today.

This will be the order of things. Me and Brad will say a quick hello in a moment. Most of you know us, but for those that don't, will introduce ourselves a little bit. Then we will take a look at those results, H1 results in a little bit more depth to go into some more detail on many of the operational points there, and Brad will do a deep dive on to the finances. We'll come back and we'll kind of look ahead of what the future looks like for Audioboom. And then have a question-and-answer session at the end. So as Jake said, get those questions in now, now is a good time to do that. We'll review those across this time and answer as many as we can at the end.

But yes, just to kick things off, as I said, many of you know me already, many of you talk to me off-line. Stuart Last, Chief Executive Officer of Audioboom. I've been leading this business for the past 4.5 years, I'm based in New York, which is where most of Audioboom's operations take place 95% of our revenue is out of the U.S.. So I'm based here with the Audioboom team, and I'm still continuing to be very excited, I think, about the future for Audioboom and the future for podcasting and Audioboom's position in podcasting over the next few years.

[Brad Clarke, executive]

Hi, everyone. I'm Brad Clarke, CFO here at Audioboom. I've been here since March 2018. So 6 and a bit years. Based in London, Chartered Accountant, focused on media organizations in my career today, Brave Bison News U.K., Grant Thornton and Audioboom. I will be back a little bit later on to go through a few of the financial bits of information. Back to you to Stuart, I'll speak to you later on.

[Stuart Last, executive]

Thanks, Brad. So just at the top, we'd like to just give you an overview, I think, of the podcast market and our business model, again, something that many of you know about. But there's continual changes. So just reviewing every 3 months is a good thing, and if anyone used to podcasting or new to Audioboom. This is just a great little overview for you.

So I think -- as I said this last time and not too much has changed here, but I think the key part for anyone thinking about investing in Audioboom is really understanding what the big opportunity here is. The podcast industry is growing fast. And the revenue from podcasting globally is set to quadruple by 2030. So $4 billion podcast industry globally was worth last year, we're set to get to $16 billion in 2030.

So I think tremendous opportunity in the space. and Audiobooms is one of only a few publicly traded podcast companies is a fantastic way to be exposed to this fast-growing medium. And it's really being driven, the growth of the medium really is being driven by audience. People love podcasting. I'm sure you all listen to podcast, I'm sure we've all begun to listen to podcast over the last 4, 5, 7, 10 years. And it's that love of podcasting that is driving this value opportunity.

So in the last 4 years, the number of podcast listeners, these are U.S. numbers, but it's somewhat reflected around the world. And the U.S. has been kind of the leader here in podcasting. So it's coming a little faster in the U.S. But podcast listeners have grown by 47% in the past 4 years.

And then I think -- just as importantly, the amount of time each of one of those listeners spend listening to podcast has grown by 50% over the past 4 years. So more people listening, all of those people are now listening for much longer before. And what that means is that the total as consumption is growing significantly. So from around 0.5 billion hours of consumption on a monthly basis in 2019 to over 1.2 billion in hours of podcast consumption in 2023.

So a 120% increase in podcast consumption. And that will lead to growth in the medium over the coming 6 years, and we'll see this industry grow very quickly and get to $16 billion by 2030. So that's the opportunity. And Audioboom plays a very key part in that podcasting industry. We are a platform business, and we do something that is very important for the space. We create value by [indiscernible] and connecting content and the content creators with audience and with advertisers. So those are 3 very key parts that drive value in any media, but in particular, in podcasting because it's an independent creator medium.

So podcasting is not driven necessarily by major broadcast companies, is driven by independent creators. They need a platform like Audioboom to connect their work and their content with the audience through our distribution methods and our marketing methods, gets their content out to all of the listening apps. So Spotify, YouTube, Pandora, Apple Podcasts, wherever listeners are consuming podcast, It's Audioboom that powers that distribution.

So we get that content out to the audience. And then we connect that content with advertisers. So we have sales teams in-house and external sales partners, and we have a marketplace that we are building out for Showcase. Those routes are connecting demand, advertising demand with that content, allowing the monetization to happen.

We do that very efficiently at scale through the Audioboom platform. And as I said, it's very scalable. So it doesn't need a lot more investment to grow this thing to 2, 3x size that it is today. So that's the part the Audioboom plays, a very key part in podcasting. And we've done that very successfully over the past 5 or 6 years. We have grown this business in terms of revenue from just $6 million in 2017. And we are focused on getting that number up to around $79 million. So 44% average growth over the last 6 years.

And I think you can see what the opportunity is here, right? We're in a good place today, but with the industry growing at 22% a year, between now and 2030, there's a huge opportunity to take this business forward and to be a key part of podcast it in 2030. This is a $260 million revenue opportunity that we're seeing on here, I think.

So great potential ahead of us, great opportunity ahead of us. Our platform work is scalable. It's delivered in the past. It will continue to deliver in the future. And podcasting, as I think you'll agree, it's just a fantastic medium, but it's good to be part of Audioboom, plays a great role in the industry.

So that's the industry and the model, a quick look at that. You can ask me any more questions on our model and what's happening in the podcast space, at the end to get those questions in now. I think the second part, we will go through our trading update that we released today and look at that in a little bit more detail.

So I think the key numbers. First few bullets on that trading based around revenue, profits and cash. And the key numbers here are $34.1 million of revenue in the first half of 2024. And like I said, I'm really pleased with that number. A few parts here to break down. I think firstly is that Q2 here was our third successive period of year-on-year revenue growth. So I think what as a sign for me is this resilience and this rebound from a very deep advertising market recession that began in early to mid-2022 and lasted throughout 2023. It really reduced demand in the advertising space. It was obviously all linked to global economics and the cost of living crisis that means advertisers step back from all media, not just podcasting, but podcast was deeply impacted.

And to come back from that and show growth in 3 successive period, I think, is a really good sign that, that ad market recession is behind us at this point and we can focus on further growth going forward. 7% growth in the first half of this year versus last year, in line with our competitors. So the interactive advertising [indiscernible] and podcast revenue study on an annual basis. And we are in line with the wider industry. And I think one key part here is that we do expect our growth to go beyond the 7%. So, we do expect to see our growth rate accelerate in Q3 and beyond.

So not only are we kind of in this place, in line with our competitors, but we are expecting to go beyond that in the coming periods. So yes, I'm pleased with the $34.1 million of revenue. We'll talk a little bit about some kind of limiting factors on that and some challenges coming up as a starting place for 2024. I think we're in a good spot there.

On the EBITDA front, $300,000 of adjusted EBITDA profit. Again, third successive quarter of being back in adjusted EBITDA positivity. So again, another great sign here. I think there's ad market challenges that reduce revenue, reduced -- took away our profitability. That's behind us now, and we continue to grow that EBITDA number. We expect that to accelerate in Q3 and Q4 again, as revenue revenue grows alongside that.

So we have a very fixed cost base in the business. Brad will talk more about that coming up. But that will just allow a gearing effect of higher revenue in the second half of this year to flow through, to accelerate it, EBITDA growth as well.

And then finally, the cash number. Obviously, we've operated this business for a number of years now on relatively low cash reserves, but that cash number remains stable, $3.5 million in the bank, at the half year, up slightly from the end of March, the last time we reported that. And we have a further $1.9 million available to us in overdraft facility, which we are yet to touch.

So we have cash needs for -- sorry, cash reserves for any current needs that we have. And the key numbers, I think. Again, any questions on those ones, let me know before the Q&A at the end.

As anyone who's followed Audioboom for a number of years, now will know, we released 3 KPIs with each of our quarterly updates. And those KPIs can often tell a story of the business and performance of the business. So I'll talk through each one of those in a little more detail over the next few slides.

The first KPI is what we call eCPM, and this is the amount of value, the monetary value that we extract from every 1,000 downloads on our platform, it's really a sign of how strong our monetization engine is, how well we are optimizing our advertising inventory. And as you see here on the chart on the left-hand side, we have grown that eCPM number since early 2020, very significantly. You see the drop off there that I've highlighted. That's the ad market recession. You see ad market recession kick in and really take effect in early 2023. And and you see the drop down in that value, and that value is affected when we can sell advertising and the pricing for those ads is reduced, so that ad market recession led to that.

And then you can see the bounce back over the last 3 quarters, we've actually kind of gone on to improve that eCPM number. So you can still see from there that we are past that ad market recession and very much looking forward to the future. And that number, the $60 number, $60.09 number from the last quarter is a record eCPM number for us. It's up 38% versus the same period last year. So the amount of value that we now extract from every 1,000 downloads is stronger than ever before.

So how did we get there? How did we do that? But I think our Showcase product is the kind of the key driver of this eCPM growth. Showcase is our secondary ad product. It's an ad tech-based marketplace that we have built over the past 4 years. And it's really been instrumental in allowing us to optimize our inventory and improve that eCPM number. You look at the data points here, and I think it really tells that story.

So Showcase has delivered itself 37% revenue growth since H1 of last year. It now makes Arbor contributes more than 27% of our entire group revenue, up from 21% last year and really up from 0 just a few years ago. So we've seen tremendous growth of that Showcase at product.

And within the Showcase, we've improved our pricing significantly since last year as well, a 40% price increase in Showcase since last year as well. So those 3 things combined equal that record eCPM number. And going forward, as our network starts to grow, it now means that every thousand new downloads in our network is more valuable to us than ever before.

So I'm really pleased with our eCPM number. It's just a sign that we continue to be more of a premium product than our competitors. And we start to really focus, I think, on quality within Showcase because of those pricing increases moving forward.

Our second KPI is our brand count number, how many customers we have, how many brands advertise across our network in Audioboom. Again, on the left-hand side here, you'll see that brand count number of the past 4 years, you'll see that growing very quickly from early 2021. That growth has been, again, driven by Showcase. Showcase is a very easy and efficient way for brands and advertisers to come in and to test Audioboom and to advertise with an Audioboom. So you've seen strong growth there over the past few years. And then what you've seen over the last year is something of a plateauing of that brand out number, it's been in and around the 8,000 mark over the past 4 or 5 quarters.

And that, again, comes from our focus, I think, on quality and not just quantity. So we launched almost a year ago now, our new brand awareness team. That team is an in-house team, and they are -- their assignment really is to go and establish relationships and create partnerships with big blue chip customers, who are robust, who have high budgets who are not affected by global economics in the same way that many traditional podcast advertisers are. And that team brought in these blue chip brands, they now advertise with us through Showcase and they've come into the network into this brand count number.

At the same time, our pricing has therefore gone up because we work with these bigger brands. And it's meant that we've churned weaker brands, smaller brands that cannot necessarily afford to buy advertising within our network. And they have churned out the bottom of this brand count number. So the brand count numbers remain very steady. But the brands within that customer set are stronger, more robust bigger spenders than we previously had. So that has led to that [ 40% ] increase in showcase pricing that I showed you before because we're bringing those blue-chip brands in and they execute their ad campaigns through Showcase. And it just means that we have a more robust customer base, a premium product of getting that focus on quality over the quantity is going to come through, I think, in everything that I show you today.

Our final KPI is our downloads metric. So this is the amount of consumption that happens through the Audioboom creator network, that create a network, how many downloads all of our shows generate how much consumption there is on a monthly basis. And we -- on the left-hand side here, you'll see the chart that highlights the last 4 years, strong growth, consistent growth over those last 4 years until Q4 of last year, and I've highlighted it again there on the left-hand side.

And that dip on our download number is due to a change that Apple made to their podcast app, their podcast listening app. Now Around 40% of total consumption comes or did come from that Apple Podcast listening app. In October of last year, Apple released a new operating system with iOS 17. And within that release was a change to how their podcast app downloaded content. And it meant that content was no longer automatically downloaded for users if they were not listening or interacting with a certain podcast channel for an amount of time.

And that has materially changed the way that downloading happens across the industry. It's had a downward impact on download numbers across the industry, around a 32% decrease in total downloads and that's from a pub news analysis that happened earlier this year. Audioboom's download number has decreased by around 23%. So we haven't -- the net effect as is has been -- for us, has not been as severe as our competitors. And you'll see that here on our -- on this ranker.

This is the Triton digital ranker over this last period, Audioroom has actually moved up that ranker despite our total number of downloads going down. We've moved up that ranker, we haven't been as impacted as many of our competitors. We've added new shows to our network, brought in new shows into that network to give us more downloads and more consumption and that meant that we have moved up that ranker and then closed the gap as well on fourth place, wonder who are above us.

So while on one hand, you're seeing that download number come down. You can see that within the industry, we are actually improving our position. And from a previous slide, you will know now that each one of those downloads is worth more than it ever has done. So again, it's the focus, not just on quantity of downloads, but the quality of each one of those downloads.

Now I didn't know, I think in the report that we estimate that our revenue could have been around $9 million higher for the first half of 2024, had that change from Apple, not come about. And we think we really highlight that to show what we have built and how we are operating is better than ever before, but there was an external -- a very frustrating external factor in play here that just limited us. I'd love to have been reporting you today, revenue above $40 million, but we had that limiting effect because of the change that was out of our control.

And we get to that $9 million number very simply, because revenue is a combination of the amount that you have -- of inventory that you have to sell, the demand for that inventory and the price of our inventory. And if the demand and the pricing is exactly where it is today because of that reduction on the downloads and the available inventory that we have to sell, I guess, that $9 million number.

So the monetization engine works really well. We were just limited on what we had available to sell during this first half of the year. But I want you guys to all really focus on this idea of quality over quantity. Again, we've continued to move up the ranker despite coming down in pure download numbers, but each one of those downloads now were more to us than ever before.

And I'll pass you over to Brad for a few slides now. Brad's going to go deeper on some of our finances.

[Brad Clarke, executive]

Thank you, Stuart. Hi, again, everyone. From the top, I just apologize my annoying cough today, if I go silent for a period, I'm just getting that under control. But just try and get through this that too much drama.

But in terms of revenue, it's great for the company reported. Its for the successive quarter of year-on-year revenue growth following that as market downturn that we saw in the second half of 2022 and through last year. Growth of 7% is in line of the IB revenue study forecast for the industry. Showcase clearly stand out performance in the first half of this year, 37% increase, which is a testament to the hard work of the team put in through this year.

And I think from an EBITDA perspective as well, the higher gross margin that we recognize on Showcase revenue, you can expect that to be a key area of focus for us over the coming months and years. And we started to see that in the first 6 months of this year as well, given that 37% growth in Showcase versus the 7% growth that we've seen in Sonic Integrated Marketing or podcast advertising agency subsidiary.

Now given where we were this time last year, any growth across the areas of revenue that we have in light of the challenges we face. Any revenue growth should be welcomed. But given the differences in gross margin generated, base circa 30% from Showcase versus 15% from Sonic is clear what an acceleration of growth from a Showcase can do to the bottom line performance of the business.

Once again, as I've repeatedly said, over the last couple of years, our X base continues to be very well controlled with Q2 being $2.8 million. There's minimal movement on that line over the last couple of years despite inflationary pressures. There doesn't need to be any major CapEx investment in this company in the coming years. We was -- run a very, very tight ship. And when our dollars do material to then we'll see that really positively impact the bottom line.

The cost structure that we have continues to be very simplistic, [indiscernible] of our cost base goes on salaries and commissions. Overall, in the first half of the year, staff costs increased by 11% to $3.4 million, due to [ $1.1 ] million of higher commission costs for sales staff. Also, we recognize that higher amount of revenue.

And also, staff salaries increased by [ $0.2 ] million due to cost of living salary increases from January 1 and also the additional heads that we've hired in the year. We ended June on 42 staff. That compares to 39 a year ago. As we announced earlier on this year, 2 new sales homes. Sean Mary, do you want to join the team to drive that revenue number higher. There's no major head count changes plan for the rest of this or next year.

The increase in staff costs and commission costs largely offset with a reduction as we said in the Q1 report a reduction in our technology costs, which reduced by 12% year-on-year, mainly due to the impact of iOS 17 of the bandwidth and ad impression costs, which we incur to serve advertising. They have reduced by around [ $130,000 ] in the first half of this year versus last. So when you see those brand numbers decreasing, obviously, that has put on the revenue that we can recognize. But from a cost perspective, obviously, has a positive impact within OpEx, I'd rather have the revenue, and there is a positive impact within OpEx.

Just noting a few of the questions that are coming on. I can address a couple of those now. There's one from Andrew there in terms of transition to greater EBITDA and when does that come? I think you can see that from this slide with that with stable X base that we've got. Once we start to see that revenue number increase, we'd expect that to flow through to EBITDA.

The other aspect is once our current tranche of MG contracts unwind as well, not the onerous ones, which I will refer to shortly. But the ones that are utilizing our gross margin to satisfy the contract. Once those unwind over the next 18 months or so, you'll start to see gross margin improved. And importantly, is why you see that EBITDA number increase. You have to go back a couple of years, 2021, 2022, reporting $60 million, $75 million of revenue and the EBITDA was over $3 million each of those years.

So, you can clearly see what we're trying to work towards here. Another update as well as on -- I have a question on this and also brought to address it is on the onerous contracts as well. So last year provided for future estimated losses of 2 partner contracts that were signed prior to the at-market downturn. Today is at the provision we made last year to the future losses of those 2 contracts has meant that there is no impact of the losses incurred in the first half of this year on the income statement for the first half.

So the net loss incurred of $2.6 million for those 2 contracts has been offset by the provision we created last year, hence, no impact on the income statement. And you'll be able to see that on the bottom line as well, which has much improved. So at the end of last year, we had a $7.5 million provision. That's now being reduced to $4.9 million.

Those 2 contracts will end in January and December of 2025. Each month that goes by our exposure is granting on win on those 2 contracts. So the team is doing a great job in terms of renewing and restructuring any MG-related contracts, we're utilizing some of our gross margin is by the contract. And as I said earlier, we expect our gross margin is not to improve 2025 through to 2026.

In terms of our net loss is why you see from today's update, that reduced from a net loss of $10.6 million for the first 6 month of last year to $1.3 million for the first 6 months of this year. Loss last year was mainly due to the provision and the net loss of those onerous contracts I referred to just now. What's pleasing this year is that the loss of $1.3 million, around $1 million of that is due to an accounting entry for the share options that we've issued to start in this and in recent years. So shortly much improved set results this time around versus this time last year, so lot to be positive about.

Let's go on to the next slide. So in terms of working capital update on this is that cash increased by $0.4 million to $3.5 million at the end of June this year. And that cash balance has been you can see here on the graph on the right-hand side, relatively stable over the last 12 months. The finance doing an incredible drug really to manage that cash with the headwinds we faced in the ad market, challenges that we've had with me guarantee contracts, and we fulfilled all of those contracts on at all contractual [indiscernible] guarantee payments during that time.

Collections continue to perform very well. $35 million in the first half of this year collected, $2.5 million up on the first half of last year, 103% of revenue books we've collected in the first 6 months of the year, and that's driven down a better day from [ 81% ] at the end of 2023 to [ 71% ] at the end of June. I expect that to start creeping up as we go through the second half of this year with our target to be maintaining that below [ 90%].

In terms of what's coming next? Well, our cash balance needs to facilitate a $1 million contractual advance in the third quarter of this year. So you'll see that in the cash numbers when we come into October, reporting Q3. That will take our advances for this year to $1.6 million. That's lower than the $2.3 million we spent on advances last year, and we expect 2025 to be lower again. So again, that's another bit of evidence for you in terms of the contract restructuring we're implementing to reduce cash required for podcast talent contracts.

We still have our [ $1.9 million ] overdraft to assess our working capital if required, that's undrawn, but that facility was renewed in May of this year through to May 2025. Hope you can see that we've outlined there, previously, we're heading in the right direction to continue to deliver revenue and EBITDA growth, just estimate the team and all what they're doing to generate that growth, have addressed a couple of questions as we've gone through. If there's anything else, please send those in, as we go through the session or so the contracted an email specific about the numbers that you've seen today. [indiscernible] if there's work. So back to you, Stuart.

[Stuart Last, executive]

6 Thank you, Brad. A couple more slides then from us before we can do some more Q&As. I think these next 2 really just talk about what we're focused on operationally, what we see kind of coming up across the rest of the year really. I think the first thing that we are always focused on is network growth, but more than ever before, knowing that we've had this Apple iOS impact has brought down the size of our network.

But we do continue to retain and bring new podcasters to the Audioboom creator network. In fact, I was talking about it, just the other day, we've done a tremendous job of retaining podcast talent. We did not lose one major. I want to say major, I think, really talking about top 100 shows. We didn't lose one major podcast over the past 12 months.

We've retained all of those relationships. We have signed those podcasters into multiyear deals. Podcasters love working with Audioboom, and we continue to retain all of those shows that we work with and sign new ones so you will have seen just a week ago, we announced a new slate of podcast joining the Audioboom network, those signings will add another 4 million plus monthly downloads to the network. We have a very good pipeline of business.

Out of our key relationships with the talent agents, the Hollywood talent agents, UTA, WME and CA, they bring us opportunity. We work with our clients and we build business together. So continue to expect do expect to see that network growing. And we don't really kind of see any material further impact of iOS.

Now it will continue to limit or kind of put that cap on revenue performance upside, right? We said $9 million in the first half versus what it would have been without iOS and then that will remain, but we do expect to to see no further real deepening of the decrease on the download number because of iOS.

And that does actually lead to a question that just came in about whether we see the Apple change continuing to hurt downloads. And I think that for more detail on that, I think that we were -- perhaps, I think as an industry, I think taking a little bit surprised by how long the lag has been. We really saw this reach the bottom, I think, in April, May.

So 6 months after the iOS release. And we see where that happens, right? It was released, then everyone needs to adopt the iOS and the listening habits have to change. People have to stop listening to podcasts. And then once they've stopping for a 5 episodes, then the automated downloads stop happening. So there was a really long lag time there. And that's why you can see those download numbers go down. But I think to the question here and to the point I've made on the slide, I think we do -- we have seen the bottom in Q2, and we're confident that we have seen the bottom in Q2 on those download numbers.

July downloads were 22, 23 days in, they're trending towards or to be ahead of any individual month from Q2 in terms of what the download number will be. So I feel like we did reach that bottoming Q2. July is ahead of that, and that's despite the July 4 holiday here. So downloads going back in the right direction, continuing to sign new shows to take them even further as we know each one of those downloads, there's no -- now more valuable to us than ever before.

So network growth, building back that network is a key part of our focus going forward. Showcase, as I've explained, I think, today is just doing exceptionally well, and we'll continue to build Showcase. Our pricing strategy in there is working for pricing growth just over the last year within Showcase. So that's down to those newer, bigger, robust reach of customers coming in there, being driven by our brand awareness team. As Brad mentioned, we've invested in that brand awareness team again earlier this year, and really seeing traction there.

Now we have ad campaigns coming through that team from the likes of progressive insurance, huge insurance company here in the U.S., eBay Airbnb, PepsiCo, there's a much bigger, more robust advertisers than the traditional traditional smaller disruptor brands that were in podcasting previously, So great work there from that blue-chip brand awareness team.

I just noted it here, but I'll mention it. We're now working with 10 of the biggest top 15 agencies in the U.S. So those blue chip brands often represented by top-tier advertising agencies that we are now working very closely with.

Our revenue for the year. I think one key point that you'll see in the update this morning was that we have on our books today at just over $65 million of revenue for the year. That is up $10 million from the Q1 trading update. So over the last 3 months, we've had $10 million to that bookings number.

Where today, that $65 million, that is equal to the entirety of last year's revenue. So we've restart today. Anything we add, anything we book from this point forward just translates to growth. So we're on that path to growth. We know we're growing this year. We expect growth to accelerate. And we do expect Q4, in particular, I think, to be very strong.

So -- so 2024, looking good as we move into the second half of year. Brad mentioned this a little bit, but we continue to restructure our creator contracts, making them more favorable to Audioboom, removing minimum guarantee obligations, which just makes everything less risky, more safer for the business.

How we still have to offer minimum guarantees to the biggest podcasters in the world to get them to come in and work with Audioboom in this competitive landscape, but we do that in a much kind of risk -- less risky way and a more kind of equitable way, I think, with those podcast partners. So we're able to work with them to offer them more of our services, more distribution, more marketing that allows us to just manage and be more conservative around those minimum guarantees that we are offering the biggest of creators out there.

I got a ton of questions on this, so I'll save it for the Q&A. But you'll have seen in the update today, we talked about how the Board is actively exploring why U.S. listing could look like for this business. We all, I think, recognize that this company is is somewhat undervalued. And it's the time is right to be slow out more formally. So we mentioned that today. We've got a few questions and we'll get to those in a moment. But -- that's really the focus for the company.

Like I said, this -- the engine that we have, the platform that we've built is stronger than ever before. We're coming through that advertising and we're almost through the advertising market recession, The company is ready to fly. I think Brad noted that when he was talking about that gearing effect on the EBITDA piece, we don't need to take on too many more costs to start as we scale up this business. So we will see that effect coming through.

Audioboom's in a great place, I think, and we're really excited about the future.

[Operator]

[Operator Instructions] I would just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A can all be accessed via your Investor dashboard.

Brad, Stuart, as you can see there, we have received a number of questions throughout your presentation this afternoon. And thank you to all of those on the call for taking the time to submit their questions. But guys, at this point, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so, and then I'll pick up from you at the end.

[Stuart Last, executive]

Yes. Thanks, Jay. So let's tackle that one first. I think I'll read you the first question, but there were a few others, I'll answer Andrew Pete's question as part of this as well, I think, and some more. But first question just as, you first mentioned a few months ago that you thought the business may be valued more fairly in America and today's release mentioned it too, when will this happen?

I put a period time line on this is difficult, but just to step it back. Look, I think you know my frustration in our valuation. I've talked about it on a number of these calls relative to transactions in the space, relative to our publicly traded peers, we are obviously, I think, fairly undervalued. And it's not really just purely from my point of view, a frustration in that number, that valuation number, it's what it limits us to do as a business, right?

One advantage of being publicly traded is the ability to use stock to make acquisitions, but that's really been impossible over these past 5 years. This is a platform business. We've talked about it today. The platform business is perfect for rolling up other companies, bring them on top and scaling this forward.

But every time we've identified a target and kind of try to move into a process. Our share price has made it pretty impossible to do because using shares as part of that transaction, it would be too dilutive. And then similarly, investing in seller region growth has been pretty impossible for us because, we've operated the company on a small cash balance for a number of years, raising money at these prices too dilutive. So hasn't been something that we can do. So very frustrating, I think, not just from a valuation perspective. But how it limits us operationally with a platform business.

So look, that's why time is right to more formally explore and investigate this operationally we are a U.S. business. As I said at the top, 95% of our revenue comes out of the U.S. I do believe the U.S. perhaps understands the media market and the media industry and the technology industry a little more. And so it will be a good place for us to be exposed.

As for when, I think that's complex. There's a lot to explore first. But I think that we are now more formally kind of taking consultation on that and how to approach it and the processes and the requirements behind it. So I think it is front of mind for the Board for sure.

I guess, linked to that, because we talked about valuations, a question here from Luka, which says, if you do believe that the company is undervalued, why have you and the rest of the Board, not bought shares?

I can't speak for anyone else on the Board. But for me, obviously, that comes down to personal finances. I think many of you will know that I have bought shares in and around this level in the past, but personally, that's not possible right now. But we all believe, I think that this is -- this is undervalued, and I would be buying if I had that ability right now, I think.

What else do we have here? [indiscernible] asked, are we seeing lower advertising demand in the U.S.? No, I think the advertising demand in the U.S. is stronger than it has been over the last 2 years, we worked through the ad market recession. Even though we've improved pricing in our Showcase model, the demand is still there to back it up.

So I think we'll continue to see good demand in the U.S. And I think this speaks to a question that came in here from Danny. G, which says how much will the U.S. election boost the business in the second half of the -- sorry, he didn't answer that question, but it is part of what he was talking about was that demand.

So yes, the U.S. election obviously coming up. Q4 is very seasonally strong for Audioboom anyway because of the NFL season and the holidays. But I think this year, we are expecting it to be our best ever quarter because of the additional ad demand around the election. We've done a really good job, I think, over the last 12 to 18 months of building out a slate of political programming. So we have shows like Politics Warroom, the BohaconTaP, those will undoubtedly see audience boost in the run-up to the election campaigns.

Podcasting, I think as a whole, we'll capture some of that political spend, but it isn't set up to do that in the way the U.S. TV and radio is. So I think what I mean by that is podcasting is a kind of independent creative medium. And so it's like highly attuned to the personality of the host and that puts limits and restrictions on where and how that political advertising can run.

It's not just a case of selling a political ad campaign and they're running it across the entire network. Which would be dangerous. What we actually have is quite a heavy lift process there. We have to match podcasters up to the messaging that sits right for them without harming their audience.

So it's a much heavier lift process, I think capturing those political dollars, but we will. And I think, overall, podcasting will leave some political dollars on the table, but that's probably the right thing to do in order protect and serve the medium overall. Though the effect of the election will be positive on our network. And I do think it will be a bumper for Q4. And going back to Sid's question, demand will be very high, I think, towards the end of the year.

I think that's all the the questions that I have here. So any more you can send them in, we can answer these offline towards the end. But hopefully, that got through a bunch of them before, we have to go.

[Operator]

Perfect. Stuart, Brad, that's great. Thank you very much indeed for addressing all of those questions that came in from investors this afternoon. Of course, we will give you back all of the questions that were submitted this afternoon. I just need to review to then add any additional responses, of course, where it's appropriate to do so. And we'll publish all those responses out on the platform.

But Stuart, perhaps before really just looking to redirect those on the call to provide you of their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments to wrap up with, that would be great.

[Stuart Last, executive]

Thanks, Jay. Yes. Look, I think today's results are really about like drawing a line in the sand around the ad market recession has limited our performance for the last couple of years. 3 straight periods of a return to revenue growth and EBITDA profit highlight that we have stepped beyond that. Now the business is built to grow quicker moving forward. So we expect accelerated revenue growth in the second part of this year. We expect gearing of the EBITDA number across the second part of the year.

And you've seen it there before, podcasting isn't going away. It's continuing to grow. We are a leader, biggest independent podcast business globally. We, as a publicly traded company, and the best way to be invested in the fastest-growing medium in the world. So we're in a great place to be.

And as I said, but still believe we are undervalued and there should be significant upside and opportunity going forward.

[Operator]

Stuart. That's great. And thank you once again for updating investors this afternoon. Could I please ask investors not to close this session, as you will now be automatically redirected for the opportunity to provide your feedback in order of the management team to better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company.

On behalf of the management team of Audioboom Group plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.