Our quarterly investor newsletter featuring the latest news from ZOO and updates from across the global entertainment industry.
Click below to watch our recent interim results summary
INTERIM RESULTS
Strong profitable growth with good
cash conversion
In November, we released interim results for the six months ended 30 September 2022 (H1 FY23), a period in which we delivered a near doubling of revenue year-on-year, record profits and good cash conversion.
Revenues increased by 91% to $51.4 million (H1 FY22: $26.9 million) driven by strong growth in localisation and expansion of media services. 98% of growth was organic with the remaining $1.2m from the acquisition of Vista India in March.
Adjusted EBITDA more than tripled to $7.3m as we delivered $3.5m pre-tax profit; good cash conversion with an increased cash balance of almost $11m.
Significant expansion in operating margin from 1% to 7% as we deliver on our promise to leverage our overheads as we scale the business.
As the market continues to evolve, we have benefitted from high demand across all service lines – subtitling revenue doubled and dubbing revenue quadrupled on H1 FY22. We are well placed to deliver further revenue growth and margin improvement in FY23 and beyond.
In early October, we hosted a Capital Markets Day where we presented a deep-dive of the business to an audience of investors and equity analysts. Speakers from across ZOO elaborated on our strategy and operations, explained how we will continue to extend our competitive advantage through technology as well as looking at our international growth plans and market growth forecasts. The mini-presentations covered the following:
Stuart Green, CEO welcomed an audience of more than 50 attendees and kicked off the day with a ZOO primer
Dan Bunyan, Partner, Strategy, PwC gave an in-depth analysis on the outlook for the streaming market
Kier Booth, Head of Production shed light on the tech-enabled media workflows that differentiate ZOO’s production capabilities
Ewa Zawadzka, Head of Dubbing Operations highlighted the demand for dubbing that was reflected by the quadrupling of the service annouced in the recent results
Mazin Al-Jumaili, VP, Talent Management & Business Development demystified the media services line
Chris Oakley, CTO showed the opportunity for ZOO to extend its competitive advantage through our cloud software
Gordon Doran, CCO detailed the global growth initiative allowing ZOO’s clients to reach local audiences
Rajiv Ragunathan, MD outlined the opportunity for ZOO India, following the success of the Vista India acquisition in March
Phillip Bludell, CFO looked at the exciting potential for ZOO to take market share and unveiled new long-term targets
$100m was an ambitious medium-term target when we set it in September 2020 from a base of $30m – we are now expected to reach that next financial year, well ahead of schedule. In light of this, Phillip Blundell, CFO, set out new long-term aspirations in the context of the wider market evolution to 2030, supported by PwC‘s market analysis.
Expand market share from 4% to 14% of an expected $3 billion addressable market
Gordon Doran is President and Chief Commercial Officer at ZOO Digital, collaborating closely with some of the biggest names in entertainment to better understand their challenges and lead the ever-evolving solutions offered by our global teams.
We sat down with the localisation industry leader to discuss dream clients, the challenges facing media globalisation and what makes ZOO stand out from the crowd.
Launch of ad-funded streaming models to support market growth
This year, Over-the-Top (OTT) streamers, Disney+ and Netflix have announced the launch of ad-supported tiers to attract and retain subscribers. Netflix’s “Basic with Ads“ option includes an average of 4-5 minutes of commercials per hour lasting 15 or 30 seconds. Disney’s ad-supported tier has recently launched in the US and is expected to expand internationally in 2023.
The pivot to AVOD (advertising video on demand) and FAST (free ad-supported streaming television) is further evidence of the competiton being seen across the market and need for flexible pricing models, as reflected in the levels of content investment. In fact, PwC forecast that OTT investment in content will grow by 15% CAGR to 2025.
As one of few end-to-end vendors with the capacity to satisfy this demand on a global basis, ZOO is in a strong position to capture this growth. By working with all the major streaming platforms, we are largely insulated from their individual pricing models and are well positioned to benefit from rising content spend across the industry.
