Audioboom warns on profits as booming revenues bump up costs
Audioboom warned that losses would be worse than expected for the full year even though revenue will be better than forecasts as the spoken word on-demand platform expands in the US.
Audioboom Group
212.50p
16:55 24/09/24
FTSE AIM All-Share
742.80
17:14 24/09/24
Media
12,665.07
17:10 24/09/24
Revenue for 2016 is expected to exceed £1.3m, an increase of more than six fold compared to last year, and ahead of market expectations, but due to higher audience acquisition costs and recruitment fees as it expands across the Atlantic, the AIM-listed company said loss before interest, tax, depreciation and amortisation for the year were now expected be greater than market expectations.
On the plus side, the rate of growth accelerated from the first half to the second, with fourth quarter revenue of more than £630,000 and over £1.1m already booked for advertising campaigns in 2017.
By the 30 November year-end it had a cash balance of about £710,000.
Audioboom said it has taken steps to reduce costs through new ad-serving and bandwidth partnerships which are anticipated to save 40% of costs for 2017, while headcount costs in the UK were reduced by £465,000.
Unique file requests, which replaced the ‘listens' metric, surged 145% to 174m year on year, with UFRs hitting a record 145m in the fourth quarter, increasing 42% compared the third quarter.
Unique users almost doubled to 58.5m and, with 595 new content channels added during the fourth quarter, including NBC Universal, Spotify, Univision, Saavn and Deezer, advertising impressions jumped 118% to 128.6m in the quarter to generate an fivefold annual increase to 242m.
Chief executive Rob Proctor said: "The tremendous growth in all of our key performance indicators: monetisation, UFRs, ad impressions and content partners for the fourth quarter and the full year demonstrates that Audioboom has reached a crucial tipping point. At the start of the year, we informed investors 2016 would be the year that we proved our business model in the global audio market and we believe our revenue performance is evidence of that.
“We are really excited for our prospects in 2017; the key priority is again strong revenue growth, as we focus increasingly on our US operations. I believe that podcasting will be a $1bn industry in the next few years and Audioboom is ideally positioned to be a major player within it."
Shares in Audioboom were down 10.5% to 1.9p just past 1100 GMT.