“Maintaining revenue forecast, while adjusting EBITDA guidance due to changed market conditions”
Quarter in review
- Revenue on a constant currency basis increased by 20 per cent to DKK 9.53M (Q2 2021: DKK 7.96M).
- Recognized revenue increased by 31 per cent to DKK 10.04M (Q2 2021: DKK 7.65M).
- Shift in traffic commission partnership caused a temporary negative revenue effect in Q2, which has been restored entering Q3.
- The gross profit on a constant currency basis increased by 14 per cent to DKK 6.55M (Q2 2021: DKK 5.73M) at a gross margin of 69 per cent (Q2 2021: 72 per cent).
- During the quarter the focus was on further solidifying the business, including cost reduction measures to streamline the organization.
- Consumer connections increased by 30 per cent to 538M (Q2 2021: 413M) and was positively impacted by the expected positive development in partner traffic.
- RPM increased by 1 per cent to DKK 5.70 (Q2 2021: DKK 5.62) impacted by the deal transfer as described above.
- Adjusted 2022 EBITDA guidance from negative DKK 22-32M, to negative DKK 32-42M due to changed market conditions. Revenue guidance for 2022 remains unchanged.
- Evaluating financing options related to debt and equity in the range of DKK 40-50M with expected conclusion in Q3 22.
First half year in review
- Recognized revenue increased by 41 per cent to DKK 21.27M (YTD 2021: DKK 15.06M).
- Revenue on a constant currency basis increased by 33 per cent to DKK 20.76M (YTD 2021: DKK 15.61M).
- The gross profit on a constant currency basis increased by 29 per cent to DKK 14.59M (YTD 2021: DKK 11.32M) at a gross margin of 70 per cent (YTD 2021: 72 per cent).
- Focus during the first half year was on completing the smartURL integration, implementing the Amazon Music agreement and further solidifying the business, including cost reduction measures to streamline the organization.
- Consumer connections increased by 33 per cent to 1,020M (YTD 2021: 767M) and was positively impacted by the expected positive development in partner traffic.
- RPM grew by 21% per cent to DKK 7.50 (YTD 2021: DKK 6.20) driven by the highest ever quarterly RPM in Q1 22.
Lars Ettrup, CEO and Co-founder, comments:
Our revenue performance during the first half year has overall been as expected and the underlying metrics, such as growth in consumer connections, show promising development. The change in Linkfire’s EBITDA guidance for this year is mainly an effect of withdrawing selected new business initiatives with an expected long-term return profile due to changing market conditions. We are proud to continue to deliver on our strategy with an even more streamlined and focused organization.
Furthermore, as we transitioned to a new major traffic commission agreement, we saw a delay in product implementation and roll-out, resulting in a temporary negative monetization effect on traffic commission in the quarter. Entering Q3, the revenue level has been restored and continues the expected positive revenue trajectory.
Financial guidance for 2022 (published in August, replaces guidance published in April)
For the financial year 2022, Linkfire expects its revenue to be in the range of DKK 50-60M, corresponding to a yearly growthof 48-78%, and its EBITDA to be in the range of negative DKK 32-42M (previously DKK 22-32M).
Having invested into growth initiatives with longer return profiles than the current market conditions allow, we have decided as a response to streamline the organization to focus on shorter-term value generating initiatives.
The result of this is the main reason for adjusting our EBITDA guidance. Reversely, the initiatives that remain are proven and have shown faster than expected return, providing confidence in our revenue guidance and allowing us to focus on fewer initiatives that will return upside faster.
In order to achieve our guidance, performance on the following key drivers is required:
• Continued strong RPM performance
• Traffic growth and expansion of the discovery network
• Continued product innovation and development
• Continued inflow of new subscription customers and ability to upsell to existing customers
In 2022, Linkfire expects continued investments into reaching its mid-term growth target in accordance with the announced growth strategy in the IPO prospectus. Possible deviations from the guided range depend on investments into new strategic opportunities supporting our announced growth strategy.
Webcast and report material
Linkfire hosts an interim report webcast for investors and media on August 25, 2022 at 10.00 AM CEST. The report is presented by Lars Ettrup, Co-founder & CEO and Tobias Demuth, CFO.
The presentation for the webcast can be downloaded 30 minutes before the webcast starts and a recording of the event will be available after the webcast. The Q&A session is moderated through a chat function, which can be accessed via the webcast link below.
Link to webcast: https://tv.streamfabriken.com/linkfire-q2-2022/
Link to report material: bio.to/LINKFI_IR
For further information, please contact:
Lars Ettrup, CEO, Linkfire
Telephone: +45 61 33 99 53
E-mail: investors@linkfire.com
Certified Adviser
Aktieinvest FK AB
Telephone: +46 739 49 62 50
E-mail: rutger.ahlerup@aktieinvest.se
About Linkfire – Empowering Entertainment Discovery Everywhere
Linkfire makes entertainment marketing easy. We optimize impact, drive streams, increase ticket sales and recommend audio content to billions of fans and listeners on a global scale. Our SaaS marketing platform transformed music marketing and we are now building a global recommendation network for audio entertainment discovery to connect even more fans and listeners to the content they love. Linkfire’s customers and partners include most artists on Billboard’s annual HOT 100, all major music labels, global audio and music streaming services, social media apps and media publishers.
In 2021, Linkfire enabled 1.6 billion consumer connections and the company’s revenue amounted to DKK 34.5M, an annual growth of 42 per cent. Co-founded in 2014 and headquartered in Copenhagen, Linkfire today employs a global workforce and also has offices in New York and Los Angeles. Linkfire’s share (LINKFI) is listed on Nasdaq’s First North Premier Growth Market in Stockholm. Learn more at www.linkfire.com or follow @Linkfire on LinkedIn and @getlinkfire on Twitter and Instagram.