Acast is once again celebrating a successful quarter, with particularly strong performance in North America contributing to an overall net sales growth of 10% since the previous quarter, according to the company’s latest interim report for Q3 2023, accompanied by further reductions in operating loss.
Overall, Acast has increased its net sales by 32% year on year, which amounts to SEK 424.5 (£31.6) million. According to Acast’s CEO Ross Adams, the increase in net sales growth is largely attributed to positive developments for the company in the North America region, where net sales grew to SEK 122 (£79.2) million this quarter, up by 55% year on year. This represents double the growth in Europe, and in ‘other markets’ - which includes the Middle East and Southeast Asia - which are both up by around 25%.
Acast has made a number of podcast investments in North America including launching new podcasts such as comedy series Phone a Friend with Jessi Cruikshank in January this year. Company growth was also attributed to new ad sales and distribution partnerships in Q3, including with premium podcast network Luminary and global media and entertainment company Warner Bros. Discovery.
“During the third quarter, we have succeeded in balancing growth with prudent cost control, positioning us on our established path to profitability with a significant improvement in EBITDA results,” said Adams. “We are delivering positive net sales growth, with North America leading the way. Our efforts to develop podcasts into an increasingly efficient advertising channel continues, and during the quarter, we introduced several initiatives that enhance our ability to further scale up revenues.”
In addition to signing new partnerships, Acast also launched a number of new products and solutions in Q3 2023, which include a Predictive Demographics tool, which uses AI to predict the age and gender of listeners for enhanced podcast advertising, under its podcast database Podchaser, as well as AdCollab, a new feature on its self-serve advertising platform which simplifies the process for buying host-read sponsorships.
Despite this, however, listenership for Acast went down by 3% year on year, from 1.3 billion to 1.28 billion. Adams attributed this to larger podcast advertising contracts being affected by Apple’s ongoing iOS 17 rollout, which changes how episodes are being downloaded on mobile phones and in return affects listener measurement.
In the long term, he said, this will make a positive change for the industry as it will give a more accurate reading of listener frequency and will lead to an increase in the average revenue per listen (ARPL) - which Acast has already seen this quarter with ARPL increasing by 36%.
Other improvements for Acast this quarter include a significant decrease in operating loss year on year, down by 57%. In Q3 2022, Acast faced challenges as the podcast advertising market was slowing down due to macroeconomic uncertainties, and announced that it was cutting down its staff by 15% in order to reduce costs.
According to the IAB UK’s Digital Ad Spend report, podcast investment in 2022 was up by 32% year on year, beating the overall UK digital ad industry’s growth of 11%, despite challenges that were faced in the advertising market. The IAB’s US Podcast Advertising Study also predicted that podcast advertising will continue to see profitability, with podcast advertising revenue set to more than double between 2022 and 2025, and grow to $4 billion.