Hello and welcome to the Acast webcast with teleconference Q2 2022. Throughout the call, all participants will be in a listen-only mode, and afterwards there will be a question-and-answer session. Just to remind you, this conference call is being recorded. Today I'm pleased to present CEO Ross Adams and CFO Emily Villatte. Please go ahead with the meeting. Thanks very much. Hello and a warm welcome to Acast's Q2 22 earnings call. As always, it's great to have all of you here and a big extra welcome to any one of you who is watching this for the first time. My name is Ross Adams. I'm Acast CEO, and I'm joined today by our brilliant CFO and Deputy CEO, Emily Villatte. Okay, before we dive into the numbers, I think it's worth reminding you all about the fundamentals of our core Acast strategy, and especially for those of you that are new to this call. Podcasting is a very fragmented space, and it can be difficult to get your head around it, with who does what. The key thing to understand here is that Acast plays the central role globally in hosting, distributing, and monetizing content for podcast creators. Our vision is built around the creator and that thriving creator economy. Acast is effectively a two-sided marketplace and, you know, servicing the two main stakeholders. The first stakeholder group is the supply side, and these are the creators, the podcasters who are right at the center of everything we do. Today we represent 66,000 of them, and that number is growing all the time. On the other side, we have the demand side. Firstly, this comprises of 2,400 advertisers that ran campaigns on those podcasts with Acast in the past 12 months. That number is getting bigger every year. We'll look at our offering for advertisers in a little more detail later on in the presentation. Secondly, this is a newer growing trend. The demand side now also includes the monetization of podcasts directly from their listeners. For example, through the likes of subscriptions to premium or exclusive content. That support comes from some of the 87 million monthly unique listeners in our marketplace. Everything we do and everything we build is done to support both sides of this marketplace. It's our mission to enable podcasters of all sizes to find their valuable audience and to make money from their craft. That's why we make sure their content is distributed to absolutely anywhere an audience is able to listen and discover their show, all while ensuring they retain complete creative freedom and control. For brands, we offer creative advertising solutions that reach an immersed, targeted, passionate, and engaged audience of affluent listeners, driving maximum effectiveness and ROI for the advertiser while always respecting the unique relationship and bond a podcaster has with their listener. These things are key and unique to Acast. You know, we are a pure play podcasting infrastructure company and an app-independent marketplace. We are podcasting and nothing else, which means we have a singular focus on extracting maximum value from the podcasting economy for creators and advertisers alike. Okay, let's talk through the headline numbers. Acast delivered 39% net sales growth in Q2 or 28% organic growth, reflecting a general cooling of the ad market for podcasting. Our gross margin for the quarter was 30% and was impacted by one-off costs related to long-term podcaster contracts in the US. These costs arose as a result of the revised ad market outlook. Excluding those one-offs, the gross margin would have been 35%. Our adjusted EBITDA margin was -31%. This comes following a period of heavy organic and strategic investment, which of course culminated in the purchase of Podchaser. We are now past this heavy investment period and expect the EBITDA margin to improve from here on, albeit subject to the usual seasonal fluctuations, of course, to reach breakeven in 2024. As a result of the macroeconomic environment, we have updated our financial targets, which Emily will go through shortly. I'd like to firstly add some color on the podcasting advertising market. Firstly, it's clear that every company in every industry is still facing a level of uncertainty on a macro level, and this has led to a cooling of the advertising market globally. Podcasts have proven more resilient than the general ad market, and the podcasting market is expected to grow by around 15% in 2022 and still reflects a continued high level of activity compared to other media channels. Podcasting is still a media that has some way to go to be effectively and fully monetized. For us, there is ample runway to continue to grow and better utilize the inventory available, and the ad money will continue to grow over time given the effectiveness of the medium and the high ROI advertisers see from it. In terms of how we see the change in pace of growth impact the business, we have seen a relatively strong performance of host reads, whereas the growth pace of programmatic has slowed slightly in the last quarter. Acast is still growing at around two times the pace of the market at 39% net sales growth or 28% organic and is therefore taking market share. To recap, we continue to grow and take market share in a controlled manner with an adapted pace of investment and cost control. We find ourselves in a different macroeconomic context than last year, and we've adapted to that, and we will continue to do so. It is with that in mind that we have revised our financial targets, which Emily will go through now. Thank you so much, Ross. All right, so let's have a look at our updated financial targets, starting with the top line. In terms of a new financial target for organic net sales growth, we have set ourselves the task of achieving an average annual organic net sales growth of between 40 to 45% between 2020 and 2025, and this compares to the 60% we guided to at the time of the IPO. Now, that time period spans 2020 to 2025, and in light of the high organic growth that we had in 2020, you will recall we posted 74% organic, and in 2021 we posted 69% organic growth. If we translate our new financial targets into what we expect to see for the period 2022 to 2025, so this year, from this year onwards, the revised financial targets imply a 30% average organic net sales if we look at the period 2022 to 2025. Let me just repeat that. The current average annual organic net sales growth, that target of 40 to 45% between 2020 and 2025 implies a 30% average organic net sales growth between 2022 and 2025. All right, moving on to the gross margin. Previously, we guided to a 37% gross margin, and now we're providing a range of achieving an annual gross margin of between 35 to 38%, and this reflects the span in the gross margin that we can see in an ad market that is less buoyant like right now. It also reflects the potential for upside on the gross margin, supported by those lovely SaaS revenues that Podchaser are contributing moving forward. We're delighted to see that come through in years to come. In terms of EBITDA profitability, we are now bringing this forward in terms of achieving EBITDA profitability in 2024. Our prior guidance was to achieve EBITDA profitability between 2024 and 2026. We're bringing that breakeven and profitability target forward to 2024. In terms of the dividend policy, there's no change, and Acast does not intend to pay cash dividends in the foreseeable future. No doubt there'll be a question or two on this down the track, but before let's get back to our usual agenda and get some updates from across the business. Back to you, Ross. Thank you. Okay, so here's the big one. As you will no doubt have seen in the news, Acast has acquired Podchaser, the world's largest, most comprehensive and most authoritative podcast database. Here's Podchaser CEO, Bradley Davis, to tell you a little more. Hello, my name is Bradley Davis, and I'm the co-founder and CEO of Podchaser. Brief background on Podchaser's origin. Believe it or not, it started on a Reddit thread five years ago. My previous job was selling cardboard boxes and rags door to door to manufacturers. Super exciting. Because of that job, I was driving all day, every day and started falling in love with podcasts to pass the time. I felt like I had listened to every podcast in existence, which makes no sense. It's impossible, but that's how I felt. I went online, and I looked for some sort of discovery platform, something like IMDb, and I didn't find anything. I went on the podcast subreddit, and I asked the question, "Is there an IMDb for podcasts? If not, does anybody want to build it with me?" That's where I found our co-founder, Ben, all the way across the world in Melbourne, Australia, and we started building Podchaser. That was 5 years ago. Since then, we've grown into the world's most comprehensive podcast database. We now track over 4.5 million podcasts, 17 million credits, hundreds of thousands of ratings and reviews, sponsor data on the top 5,000 podcasts, and a ton more for what is over 1.7 billion data points, which we're very proud of. Our team now also spans the globe, and it went from 2 people on Reddit to about 50 people across 12 countries and 6 continents. Throughout this journey, we've stayed true to our values of supporting podcasts' open ecosystem by remaining completely platform-agnostic, partnering and working with everybody, and giving podcasters the tools they need to connect with new audiences, regardless of whether they're independent or with a big network. Joining Acast was a no-brainer for us. Our missions aligned perfectly, and as soon as we started talking to the team, we fell in love, and it was clear our values were in sync. Their similar commitment to nurturing and supercharging an open podcast industry is obvious. Combining our joint mission with Acast's scale allows us to just keep doing what we're doing. It accelerates our vision and our efforts to build discovery tools that help listeners, and creators, and advertisers get the most out of podcasting. I'm very confident that by combining forces, we'll deliver the industry's richest set of authoritative structured data for everybody and much, much more. We're very excited to get started. Thank you, Bradley. Bradley and his team have built an incredible database from scratch, and we're really looking forward to working together. For Acast, this acquisition strengthens our position as the world's largest independent podcast company, and Podchaser is an important asset in our mission to continue driving innovation within the open podcast ecosystem, where podcasts are freely available on all listening platforms. Podchaser will offer our podcasters enhanced discoverability, helping drive their growth and monetization goals. Our advertisers will benefit from superior performance metrics, enabling them to more efficiently reach their valuable audiences, with access to data points covering demographics, consumption reach, and favorability. Finally, Podchaser's SaaS-based structure collects and monetizes data, adding additional revenue and strengthening Acast's own business model. All in all, it's a move that we believe will set both companies up for long-term success. Throughout Q2, we've also focused on partnerships and collaboration agreements that strengthen our offering for creators. In many cases, we're the first podcast platform to partner with these companies, making us the clear go-to podcasting partner and giving podcasters even more reasons to choose Acast over our competitors. We've made it easier for new podcasters to create content by partnering with both Podcastle, which is an all-in-one solution for podcast production, and the internationally renowned audio interface manufacturer Focusrite. We signed a distribution deal with the social music streaming platform Resso in June. Resso is owned by ByteDance, the company behind TikTok, and Resso is a fast-growing community for listeners in Southeast Asia and also Latin America. Our integration will give Acast podcasters exposure to millions of potential new listeners and more of the global advertising market. We further strengthened potential revenue opportunities for our podcasters through a partnership with Spring, a social e-commerce platform for merchandise and other products. We also teamed up with Meta as its first podcast partner for the launch of its interoperable subscriber groups, allowing our podcasters to create exclusive Facebook groups for their Acast+ subscribers. Similarly, we partnered with a company called Laylo. Laylo is a messaging and CRM platform for creators to further empower our podcasters. Acast creators will get access to Laylo's suite of audience engagement tools. We also work closely with Apple to align on its Delegated Delivery tool, for which Acast will be a launch partner. The tool will empower Acast podcasters to upload, manage, and distribute premium content directly to listeners using Apple Podcasts Subscriptions. All of those partnerships helped us attract nearly 20,000 new creators to Acast in Q2, including some of the big names in podcasting globally. Those names include Three Shots of Tequila in the UK, and WTF with Marc Maron in the US, both of which have returned to the open ecosystem with Acast, having previously signed exclusives with other platforms. As Brendan McDonald, Producer of WTF with Marc Maron, said, "Teaming up with Acast gives us creative control to bring our fans more benefits than ever on our own terms. We can't wait to unlock fan favorite episodes and bring listeners new content on every podcast platform." As Marvin Abbey, Host of Three Shots of Tequila, said, "It's time to take Three Shots to the next level. With Acast, we're gonna be bigger, and we're gonna be on more platforms." That's really vindicating for us and for our business model, and it's great to see those shows making themselves available once again for all listeners on every listening platform. We also signed a deal with one of, well, if not the, world's biggest podcasts, The Daily from The New York Times, to monetize its listens in the UK. The Daily is the biggest show in existence globally when measured by listens, and yes, it even outranks that specific controversial interview podcast you may all be thinking about. As we've shown you before, if you measured Acast's reach and scale against key players in the US, you can see that we are neck and neck with Wondery in terms of US reach and in terms of global downloads. This data was taken from Podtrac, which is known as the podcast industry's most respected ranker. Of course, all of that strong performance on the supply side means great things for the demand side. Let's take a closer look at some of the innovations for advertisers and how they help us offer the industry's most innovative ad targeting opportunities. First up in Q2, we began rolling out our new conversational targeting capabilities. We're using AI to transcribe hundreds of thousands of podcast episodes to enable better, more granular targeting, all while respecting listener privacy. The uptake from advertisers so far has been incredibly promising and includes a number of big well-known brands. Until now, podcasts and their advertising space have mostly been tagged in relation to their genre, meaning two very different shows might be tagged and presented to potential advertisers in the same way just because they cover similar topics. With Conversational Targeting, advertisers are now able to target specific conversations within podcast episodes. That means they can align themselves with conversations that differ from the podcast genres or the episode's overarching theme. For example, a sports podcast might usually cover the latest results or transfer gossip, but in one particular episode, it turns out the hosts are discussing cooking and nutrition with a special guest. That presents, of course, a relevant opportunity, sponsorship opportunity for a food brand, and one that may not have previously been realized because the podcast as a whole was categorized under sports. That's just one element of Conversational Targeting, and throughout the year we'll be introducing new capabilities. Keyword Targeting is the next innovation on the horizon and will allow us to go even deeper and help advertisers to be even more granular in their targeting, offering the ability to target towards and away from any episodes where specific keywords are mentioned. On one hand, this brings innovation to new levels of hyper targeting, a brand being able to target every mention of itself across all podcast episodes as an example, or to advertise against competitor mentions. On the other hand, it gives greater reassurance in terms of brand safety, allowing brands to explicitly target away from episodes mentioning specific keywords. Keyword Targeting also offers the potential to think about ad inventory in a completely new way. An advertiser might choose to own the first mention of a specific keyword in future episode releases as an example. Besides from all of this rich first-party data, we continue to work with well-respected partners such as Nielsen to power third-party data audience segments, targeting audiences at a listener level. We have our curated collections. These are collections of podcasts with similar audience demographics packaged up together so that advertisers can reach more of the types of listeners they want to, but at scale, and there are over 40 of these. Of course, the acquisition of Podchaser further strengthens our advertiser offering at a show level. Podchaser provides trusted, transparent data for advertisers and marketing professionals to more efficiently find and reach engaged podcast audiences, adding to the competitiveness of our advertising products and creating value for our advertisers. Now on to numbers with Emily. Thank you, Ross. All right, let's start by looking at our listens. You heard Ross mention that show growth that we've seen in the quarter, adding nearly 20,000 shows. Getting to that over 66,000 new shows. That acquisition has underpinned our strong growth in the listens, which reached 41% in the quarter compared to same quarter last year. Average revenue per listen was largely flat on the same quarter last year at 0.26 SEK, but we see the potential for ARPU to increase over time. We see there on the right-hand side that listens were largely flat, Q2 on Q1, comparing those consecutive quarters, and that is a similar trend that we saw in the same two quarters last year. Still a really strong 41% growth in listens, which gives us that ample runway to continue to utilize our inventory in a better way moving forward as the ad market at one point in the future starts to catch up a little bit more. Looking at our net sales growth, we did grow by 39% despite advertiser sentiment in the quarter. All of our segments did contribute to the growth. We also had strong FX tailwinds and our organic growth for net sales was 28%. Of course, we see the usual seasonality patterns when it comes to quarter-over-quarter developments. Looking at our segments, North America remains our fastest growing segment. As you can see here in the middle, and as Ross mentioned earlier, it has been hit by those one-off costs that we incurred related to podcast contracts. More on those later on. If we start with Europe, we saw a solid 28% growth in Q2 2022 compared to same quarter last year. We also saw a neat scaling. Our contribution profits in Europe increased to SEK 35 million, and we expanded our contribution margin to 17%. That's just a nice piece of evidence that we are scaling well in Europe. In North America, we had 72% growth, heavily impacted by FX. Let's just make a note then and that Americas grown by 54% at organic rates of exchange. That's related to the US dollar compared to the SEK. In North America, we have made continuous investments, and that is why we're seeing that contribution profit move to a contribution loss in the quarter. Was also impacted by those 18 million SEK in one-off costs related to podcaster contracts, specifically in the U.S. Our other markets, this is mainly Australia, New Zealand, had solid growth of 48% and had a marginal reduction in contribution profit, sitting around the breakeven mark. Now to the gross margin. We did have a gross margin of 30% in the quarter impacted by one-offs. If you look at the right-hand side, you can see that we've had a very stable gross margin over the last 4 or 5 quarters, and that this quarter stands out at 30%. These 18 million SEK in one-off costs are related to a reassessment of podcaster contracts in the U.S. that run over longer period of time, and which are affected by a lower ad sales outlook. We exclude these one-offs, the underlying gross margin in the quarter was 35%. These one-offs are related to a revised ad market outlook. In terms of our operating expenses, we have continued to make investments in Q2. To Ross's point, this period of heavy investment is now over, and we are moving towards a more limited pace of investment growth moving forward. Looking at the numbers, our operating expenses grew from SEK 172 million, or SEK 143 million excluding last year's IPO-related costs, and they grew to SEK 206 million in this quarter. Geographically, the investments that we've made over this period of time have been mainly focused in North America. If we look at cost category, the investments have been focused on product development as well as sales and marketing. Moving on to EBITDA and adjusted EBITDA. Q2 2022 represents an inflection point for adjusted EBITDA and EBITDA margins. Let me just note that there's very little adjusted for in this quarter. We had around 300,000 SEK of costs related to the Podchaser acquisition, but there's very little difference between adjusted EBITDA margin and adjusted and EBITDA. The adjusted EBITDA margin in the quarter was negative 31%, which compares to the negative 21% we saw in the same quarter last year. Of course, the ad market sentiment, the reduced gross margin, and our selective investments have impacted the EBITDA results. Again, we repeat it, Q2 2022 represents a margin inflection point, and we should see our EBITDA margin improve from this point forward. Of course, we'll have the usual seasonality fluctuations that we see in any given year. From here on to 2024, we are on this path to breakeven and profitability. Looking at our operating cash flows, these were of course impacted by our losses. We also have had a small positive impact from working capital in Q2 of 2022, as we have improved our debtors collection, specifically in the UK. Hats off to that team. When we look at our individual quarters on the right-hand side of the slide, of course, these have been impacted by working capital fluctuations quarter-over-quarter. I should also flag that an adjustment has been made to our operating cash flows for Q1 2022 and Q4 of 2021 related to movements in exchange rates, and those details are in note 7 on financial report. No change to P&L, no change to balance sheet, no change to our cash position. To summarize this set of results, I think it feels really good to have come past this inflection point for our EBITDA margin and that we have turned the corner. Back to you, Ross. Thank you, Em. Okay, so let's take a look at some of our more recent and soon-to-come happenings at Acast. Our international expansion continues with moves into Italy and into Singapore. In Italy, we have undertaken a digital launch similar to how we have launched in Spain, supported by our central international team, which is part of how we launch in new markets in an efficient way. Singapore represents our first on-the-ground venture into the Asian market, and we've hired a key account director over there to support our growth strategy. There are a number of countries where podcast listening is exploding. Indonesia, as an example, has seen monthly listens grow nearly 350% in the past year. Coming soon is the next phase of our Conversational Targeting capabilities, which I spoke about earlier. The next update here will be keyword targeting, allowing advertisers to target towards and away from any episode where specific keywords are mentioned. Finally, more and more of our very high-profile podcasters are launching paid subscriptions through Acast+. Those names include Marc Maron, Richard Herring, and Shagged, Married, Annoyed. Their fans will be able to pay extra for things like bonus episodes and exclusive content, bringing them even more revenue and supporting their ad-driven payouts. June was our highest month ever for Acast+ revenue, and things are going from strength to strength. WTF with Marc Maron already has well over 1,000 Acast+ subscribers, while Shagged, Married, Annoyed had more than 400 signups in just the first 24 hours after launching. We're just getting started. Okay. On October 4 this year, we'll be holding a capital markets update, focusing on Acast's business strategy, financial management, and these updated financial targets. We're inviting all of our stakeholders to take part, and we'll be running a live stream. We'll of course come back with more information regarding timings as well as the registration link in due course. I'm also happy to announce that I will be taking that call from New York as I'm moving there with my family in the next few weeks. We have always operated Acast as a distributed management team between Stockholm, London, and New York, and we will continue that practice when I'm on site in the US. I'm of course also very happy to be working closely with our US market and product teams in supporting their growth moving forward. Hope to see you all on the fourth wherever you are dialing in from. That's it. Thank you for listening. We're now going to open up the floor for any questions you might have. Thank you, and if you do wish to ask a question, please press zero one on your telephone keypad now. Our first question comes from the line of Derek Laliberte from ABG. Please go ahead. Okay. Thank you, very much and good morning, Ross and Emily. I have a few questions here as it was a bit more to digest than usual. First off, I was wondering about these one-off costs affecting gross profit. If you could give some details on what this relates to exactly in the U.S., what this reassessment actually means and implies because I couldn't hear you properly there, Emily. Thank you. All right. In terms of the one-off costs that we have taken, they relate to a reassessment of podcaster contracts in the U.S., and these are contracts that run over a longer period of time, and they're affected by a lower ad sales market outlook. Excluding those one-off costs, SEK 18 million that we took in the quarter, the underlying gross margin for the quarter was 35%. We have been a little bit more forward-leaning in our podcaster contracts when it comes to our investments in North America and in the U.S., and you will note that the reassessment is related to those U.S. podcaster contracts. It's a little bit like any longer project, for example. You might see a similar impact in the building industry, IT industry, insurance industry, where you reassess your ability to make money and your obligations against a contract over a longer period of time. When you make that reassessment and have a different view of the contract as a whole, then you take either an upside or a charge in the current period. Does that make sense, Derek? Yeah. Yeah, I think I understand, but happy to follow up on that. Yeah, thank you. So, secondly here, I was wondering on your updated long-term targets, how should we view your sort of assumptions around the macro scenario going forward here? I mean, this 40 to 45% targeted growth rate, is that something you think you will be able to achieve amid a really prolonged weakness here, or is that more of a best guess scenario? How should we view it? Looking at that 40 to 45% average organic net sales growth rate, that relates to the period 2020 to 2025. Translating that into a forward-looking period, 22 to 2025, it implies an average organic net sales growth rate of around 30%, and that's given that we had really high growth in 2020 of 74% and in 2021 of 69%. Looking forward, the implied average net sales organic growth rate is 30% for the forward-looking period, and Acast does have a track record of doubling or tripling the market growth. This is based also on how we have fared in the past. I don't know if you wanna add any nuance to the ad market reflections there, Ross. Yeah. I think, you know, obviously we're seeing a softening of the ad market, and this has happened in, you know, different regions at different times. You know, we signaled this back in Q1, but we believe we've got a good view moving forward. You know, I think advertisers in this period continue to look at mediums that perform best in regard to ROI, and podcasting has out and out been that number one channel delivering ROI, which is why we've seen a great increase in host-read ads. I believe we've got a good view of what's going on in the macroeconomic environment right now. Okay. Sounds good. On related to this, on the advertiser behavior here, has anything changed or picked up over the last month here or so? Or is it hard to draw any conclusions here based on the summer months? Also, if you could comment on the U.S. sort of what type of macro impact you're seeing in that market specifically as the organic growth rate was a bit lower than the prior quarter. I mean, you know, yeah, I can take the first bit. Summer months are always, you know, relatively quiet anyway. I think, you know, as I mentioned before, you know, we spotted that, you know, Europe was softening in Q1. You know, Q2, we saw more around affecting the North America region. It has affected different regions at different times. Like I mentioned, we're comfortable in where we view the market at the moment. Em, if you wanna add anything to that. Yeah. I mean, we've had the visibility now on developments in North America. For many other companies in advertising in North America, May was a tough month, and the US has reflected on two quarters of the GDP growth. We expect that the prevailing market conditions to continue in the near term in the US, and that is how we view the market. We're still posting 54% growth in this market environment, so I'd say the podcasting is a wonderful place to be despite these macro turbulent times. It's really a medium that's holding up very well and relative to other channels. Okay. Great. That makes a lot of sense to me. Finally, from my side, I was wondering on this interesting Podchaser acquisition. Unfortunately, the segment with Bradley was cut off there. When do you expect to be able to sort of take meaningful advantage of having this data in-house? Can you say anything about what we should expect in terms of the impact on the ARPU, for example? I mean, we've only just completed obviously on Podchaser. You know, they've got a roadmap that they are following. We're already connected with Podchaser. We connected with them just under a year ago as well. We're already kind a working very closely with them anyway. I can't really say any more about, you know, how soon and how quickly and how deep we'll be integrating moving forward. We just are gonna spend the next few weeks with them and working through kind of the roadmap and where we sit within that. If I can add just a bit. Okay. On the runs on ARPU, Derek. I mean, the acquisition in itself will support ARPU. Any SaaS style revenue, so the wonderful Podchaser revenues that are coming through, even though they're not material in the overall scheme of things right now, over time, these SaaS revenues add valuable support to ARPU and gross margin, similar to how our Acast+ revenue behaves. So SaaS revenues, Acast+ revenues are on their own great supporters of gross margin and ARPU. Then of course, we're going to work with Podchaser to help our overall ad machine become even more efficient. That will drive the ARPU when it comes to the ad inventory that we sell in general. It'll have a two-pronged effect. Okay. Yeah. I think just from my side sort of interpret as that this would have sort of a pretty big impact on the overall ad machine as I mean it's still a fairly big acquisition for you. Also, the multiple is quite a bit higher than your own valuation multiple so to speak. It would be really interesting to follow that. Thanks for all the helpful comments. So that's all from me. Thanks, Derek. The next question comes from the line of Dennis Berggren from Carnegie. Please go ahead. Good morning, Ross and Emily. Good morning. Just following up on growth throughout the quarter, and if you perhaps could be a bit more granular, say for example, how June was developing compared to April. Also what does these readings mean in terms of expectations for the H2? Is the organic growth more likely to come down from here by an additional percentage point or do you expect it to sort of remain flat at the current level? Well. I mean, right now we are, as I said, we're expecting the market to prevail in the U.S. and continue to see this slowdown that we've seen. We do not see an improvement, at this point in time, in the U.S. in Q3, and that impacts the Americas as a whole, as the U.S. is the bulk of our Americas business. That's where we are right now. Got it. Then also to sort of put this in relation to the updated target, I mean, you're currently at 28% organic growth versus the implied target of 30% over the coming years. With these new goals in mind, how do you see growth trending until 2025? Well, 2025 is pretty far out. Current market projection from PwC for podcasting advertising lies at 15% overall for those periods, and we have a track record of 2x-ing the market, the growth pace in the past. We feel comfortable with our overall outlook for that period, but we won't comment on sort of the specifics on a quarter by quarter developments. It's a long time to 2025. Got it. Then also on costs, I think you were pretty clear on this being an inflection point. How should we sort of think about OPEX development during the H2? Perhaps more reasonable, are there any larger costs during the H1 that we won't see in the upcoming quarters? In the H1 of the year, we probably made the most important investment that you can make into our culture and the engagement of our staff, and that's a very important thing for us. We can't build the culture and trust between our teams on Zoom alone. I'm sure you've seen it on LinkedIn. We had a wonderful conference in England where we brought the company together in Q2 to share our mission, our values, and our journey moving forward. That is of course an event that is not recurring in Q3 or Q4. It's not a material number if you look at our cost line overall for the year, but it slightly increases our costs in Q2. We have some costs related to the Podchaser acquisition, but again, it's not going to be a material swing either way quarter on quarter. The big trend that sets the pace of our OPEX growth has been our recruitment and our investment in our product development and tech teams, as well as the geographical investments were made in markets predominantly in North America. As we slow that pace of investment, that will also come through in the cost line in the H2 of the year. That's also what underpins our ability to deliver this inflection point and improve on our EBITDA margin moving forward. Perfect. Very clear. On the sort of contract evaluations, how much of the minimum revenue guarantee contract is currently recognized in the balance sheet? Sort of what are the risks that we will see additional costs from similar revisions going forward? There's a small amount recognized in the balance sheet, and we've made an assessment about the performance of these contracts over their full contract period. We've been a little bit more forward-leaning in the U.S. in terms of our investment, in terms of our appetite to take on these contracts. That's what you've seen now that the ad market outlook in the U.S. and in the Americas has come down. We've made that reassessment. We've taken the costs in this quarter, and we feel good about performance moving forward. Very clear. Then finally from my side, you saw quite a significant increase in the number of shows, quarter-over-quarter. Is it anything in particular explaining this large increase this quarter? I mean, it's growing at a much quicker pace than listens. What does that imply in terms of sort of listening growth in the H2? Which I guess, I mean, you also have some solid contributions from large signings. Do you want to pick up on? I mean, I think. Yeah, I can pick up on that. I think, you know, it kind of highlights the combination of all the hard work we've put into our product, all the partnerships that we announced. You saw obviously a slide on that earlier, the huge amount of partnerships, which kind of makes us that creator's platform of choice. We're learning obviously a lot more about our marketing efforts as well. You know, attracting that many shows is no mean feat. We're very happy in how we're attracting shows, and that's not just in kind of a one core region, that's kind of globally as well. In terms of listens, you know, of course you have seasonality that kind of impacts listens anyway. No, we're focused on the growth we saw in shows is a very good sign as to kind of the Acast machine we're creating. Great. Thank you, guys. Thanks very much, Dennis. We have one more question from the line of Emily Johnson from Barclays. Please go ahead. Morning. I have three questions. Maybe go one by one. The first question was on gross margins. Looking at your new margin range suggests a bit more downside to your initial gross margin target of 37% despite the Podchaser acquisition. Is that stemming from a slightly different ad mix or different terms across geographies within that ad mix? You know, obviously referring to the U.S. this quarter. Okay. If we start with that one, Hiten's very good notes around the gross margin. What impacts the gross margin typically is our product mix. What types of ads do we sell? If we sell host-read ads, they typically come at a 70/30 split. Pre-recorded brand ads might come at a 50/50 split. Depending on the product mix, the gross margin seldom would go up or down. We also have an impact. It's a small impact, but let's mention it, regardless, and that is the streaming cost that we incur from listening on our platform. When listens grow very strongly and the ad market is sort of not growing at the same pace, we have less of an ability to spread those streaming charges across our portfolio. What supports a higher gross margin in a buoyant ad market is A, the fact that we are penetrating our podcast portfolio better into the middle and the heart and the tail of those podcasts, and typically they carry higher gross margin products. We also see that spread on the streaming costs across the portfolio. In short, a buoyant ad market supports the gross margin and gives it upside. Vice versa in a less buoyant ad market, you have those reverse effects, including reassessing podcast contracts and taking these one-off costs, which we have done. The 35 to 38% range that we have guided to reflects this difference and it reflects the ad market that we're in right now, which is putting a little bit more pressure on the gross margin. It also signals that we see upside over time, also supported by the Podchaser acquisition. Of course, those SaaS margins are a great contribution and support for the margin moving forward, and that is also why we dial up the range to 38% at the high end. My second question was you referred to your EBITDA inflection point and spoken about being past the biggest phase of investment. Can you just talk quickly about what investment you have done that you set out to do at the IPO and what is now being postponed, if anything? Should we expect a slightly slower rollout of new geographies or any changes to the depth of investment in existing geographies relative to a slightly lower overall growth number and EBITDA profitability being brought to the near end of that range? All right. I can pick up, and Ross, if you wanna add anything, feel free to jump in. Sure. Investments that we have made in the last 2 years and in the last year include, for example, getting our key markets to critical mass. What do we mean by that? We mean that, we've gotten to the point where we have the right level of presence, we have the right skills and the right team on site to take a market forward and able to scale that market to a greater degree than what we've seen in the past. We have a track record, for example, in the UK and some of our more established markets of getting to that inflection point in the sense of reaching critical mass and being able to scale profitably. We saw that this quarter in the numbers in Europe, for example. We expect that same path of scaling to continue in our broad markets across the globe that have now reached critical mass. We've also made investments in our product, our technology, and for example, the likes of Acast Plus and other really scalable products and processes that help our business scale globally. The products that we build are built for scale, they're built for a global rollout, and they support our scalable growth moving forward. Ross, do you wanna add any nuance on our investments or how we're thinking? Yeah. I was gonna talk about the expansion side of things. You know, we mentioned obviously that expansion was a key area for us to focus at IPO, and we've continued to do that. How we've approached expansion has been slightly different. Normally we do have feet on the ground from day one on both the sales and content side, but we've approached it now from a digital point of view and can scale very quickly in multiple countries without having to have investment in feet on the ground. There's certain timings when that makes sense, but for us, you know, we can still continue to expand in a digital sense. We've been more efficient in how we approach that. Another area of scaling and efficiency is where we've talked about this, and you can see it in the numbers in Q2, is the efficiency of our podcaster acquisition machine, the show growth that we've seen, and the listens growth that has come with it. That is wonderful and a great place to be in, but we also need to sort of balance our two-sided marketplace to allow those ad revenues to catch up to ensure that we utilize our inventory in the most effective way and see those upsides to gross margin and financial performance, and EBITDA margin flowing right down to the EBITDA margin moving forward. That's also investment that we can see already is coming through and paying off. Got it. Thanks. My final question was, when do you expect free cash flow breakeven relative to your EBITDA breakeven in 2024? More generally, how comfortable are you with your liquidity position post the Podchaser acquisition? We are very comfortable with our cash position post the Podchaser acquisition. We haven't guided on cash, but I would note that in general, our EBITDA result over time has been a reasonable proxy for cash flows. As there are no further questions, I'll hand it back to the speakers. Great stuff. Thank you very much. Thank you everyone for joining today. Please don't forget to follow us on investors.acast.com, on our blog, on our website. Don't forget, of course, this presentation will shortly be available as a podcast, so just search for Acast Financial Reporting wherever you get your podcasts. Have a great day.