Deezer (DEEZR) Q3 2024 TU earnings summary

Executive summary

• Q3 2024 revenue reached €134.0 million, up 11% year-over-year (13% at constant currency), driven by ARPU increases, strong partnership growth, and momentum in France.

• 9M 2024 revenue increased 13.6% year-over-year to €402.0 million, reflecting strong business momentum.

• Subscriber base optimization, including removal of 0.4 million inactive family accounts, improved profitability and margins without impacting revenue.

• Strategic partnerships expanded with TF1+, DAZN, Titan OS, WIM, and Mercado Libre; innovation continued with AI-generated playlists and exclusive fan experiences.

• Alexis Lanternier appointed CEO as of September 2024.

Financial highlights

• Q3 2024 total revenue: €134.0 million (+11.0% YoY); 9M 2024: €402.0 million (+13.6% YoY).

• Partnership segment revenue grew 21.3% YoY in Q3, now accounting for nearly one-third of total revenue.

• Direct segment Q3 revenue: €85.8 million (+4.1% YoY); France direct subscribers up 3.2%.

• Other revenues (mainly advertising and licensing) rose 63.8% YoY, driven by Zen licensing and new verticals.

• France Q3 revenue: €78.5 million (+9.4% YoY); Rest of World: €55.5 million (+13.3% YoY).

Outlook and guidance

• 2024 revenue growth target confirmed at 10% year-over-year, with strong position despite a tough Q4 2023 comparison.

• Adjusted EBITDA expected to be better than -€10 million in 2024, a significant improvement from -€29 million in 2023 and -€56 million in 2022.

• Positive free cash flow targeted for 2024, following positive generation in H1.

• On track for positive Adjusted EBITDA in 2025.