Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Storytel AB (STRYF, Financial) achieved a milestone by exceeding SEK1 billion in revenue for the first time in a single quarter.
- The total paid subscriber base grew by 11% year on year, reaching over 2.4 million average paying subscribers.
- The company's gross profit margin reached an all-time high of 46.4%, with significant improvements in the publishing segment.
- Storytel AB (STRYF) reported a strong cash flow generation, resulting in an almost debt-free financial position.
- The company is actively exploring AI technologies to enhance user experience and content creation, indicating a forward-thinking approach.
Negative Points
- The ARPA decreased by 4.5% due to changes in geographical and customer mix, which was expected but still a decline.
- There is uncertainty regarding the 2025 guidance due to an ongoing strategic review, leaving investors without clear future expectations.
- The competitive landscape remains challenging, particularly with new entrants like Spotify in the audiobook market.
- The gross margin improvements may not continue at the same pace, as most low-hanging fruits have already been picked.
- There is no immediate plan for a main market listing, which could limit potential investor interest and market visibility.
Q & A Highlights
Q: Why did Storytel not commit to a firm 2025 guidance at this stage, and should we expect growth in line with 2024?
A: Peter Messner, CFO, explained that the lack of firm guidance is due to an ongoing strategic review, which may influence investment decisions in certain markets. The company has committed internally to increase marketing investments where beneficial, and more details will be shared after the strategic review is completed in the spring.
Q: What are the drivers behind the gross margin improvements, and can we expect further gains in 2025?
A: Peter Messner, CFO, stated that the improvement is due to several initiatives, including leveraging their market strength and increasing internal content share. However, he cautioned that further significant improvements would require strategic decisions, as the low-hanging fruits have already been picked.
Q: Can you comment on the competitive dynamics in the Nordics and non-Nordic markets, and how has Spotify's audiobook offering affected Storytel?
A: Peter Messner, CFO, noted that competition remains strong but has not intensified unexpectedly. He mentioned that Spotify's entry into audiobooks has positively impacted market growth by converting more listeners, which benefits the overall audiobook category.
Q: What is driving strong performance in non-Nordic markets like Bulgaria and Poland?
A: Peter Messner, CFO, attributed the strong performance to effective marketing campaigns and business development. He highlighted the low audiobook penetration in these markets compared to the Nordics, providing significant growth opportunities.
Q: Is there room for price increases in continental Europe, and how does this affect Storytel's strategy?
A: Peter Messner, CFO, indicated that price adjustments are part of normal business operations and are reviewed periodically. While no specific plans were disclosed, he noted that pricing dynamics are influenced by competitive factors and market developments.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
