Acast has warned that the podcast advertising market is slowing, leading to reduced growth in its latest Q3 financial results.
“The third quarter has been marked by an increased concern and uncertainty regarding the macroeconomic development worldwide,” said Acast CEO Ross Adams, in comments made in the report. “History tells us that when a recession is close, the advertising market is generally affected early in the cycle, and indeed we have noted a gradually cooler market year to date.”
The company’s Q3 results revealed that Acast’s net sales grew by 21% at SEK322m (£26m) this quarter compared to last year but organic net sales only grew by 7%, which is lower than the last quarter. The company says that is due to the direct impact that the macroeconomic environment had on ad spending.
The company made an operating loss of SEK102m (£8.27m) which included SEK8m (£650k) from restructuring costs and SEK3m (£240k) min due to the company’s acquisition of podcast database Podchaser in July 2022.
As part of the results, Acast also confirmed that it will press ahead with previously announced plans to reduce its headcount by 15% and according to Adams, these cost reductions and reorganising for the new phase of the company are set to be done by end of this year.
“As Acast moves towards profitability, we have already had to make the hard decision to streamline our workforce in certain areas and markets,” said a spokesperson from Acast. “But Acast is still very much business as usual, and we continue to deliver more revenue for more podcasters, increase listenership across all markets, and develop industry-leading products to improve the podcast advertising experience for all."
“For several years, we have worked hard and invested heavily in building our technology platform to generate new revenue streams,” said Adams. “We are now in a position where we can reduce the cost base without compromising on quality vis-à-vis our customers and partners, and thus create profitable growth in line with the company’s updated financial goals.”
Acast has made a number of podcast investments to increase its revenue streams this past year that include the acquisition of podcast database Podchaser, signing an agreement with The New York Times to represent them in the UK, and partnering with podcast network Wondery to expand into Italy.
Bonus content and exclusive benefits has also been added to the site for paying subscribers to shows like WTF with Marc Maron and Sh**ged. Married. Annoyed. Meanwhile, the number of listens on Acast in Q3 amounted to 1,318 million, an increase of 48% compared to the same period previous year, and a positive indication of a continuing upward trend for the industry in general.