Nextory is said to be considering an IPO for the company, although in the light of recent developments at Storytel and Legible, where stock investors have forced the companies to change direction in pursuit of short-term profits, Bitar may be having second thoughts.
When it comes to issuing press releases that tell us next to nothing while leaving us impressed with the numbers, Nextory CEO Shadi Bitar is in a league of his own.
Who, after all, could not fail to be impressed by the 69% subscriber boom in Q1 2022 and the promise of new market launches later this year?
But peep behind the headlines and there’s nothing in the press release to get excited about.
Which is not to say there’s nothing at Nextory to be excited about, and Nextory’s record for attracting new investment suggests that whatever Nextory’s real numbers are (the important stuff Bitar never shares in his press releases) they tick all the right boxes for investors.
So much so that Bitar is said to be considering an IPO for the company, although in the light of recent developments at Storytel and Legible, where stock investors have forced the companies to change direction in pursuit of short-term profits, Bitar may be having second thoughts.
A dedicated TNPS discussion on the topic of industry investors at a later date. Here to quickly address the two things we have been told in what, even by Nextory’s minimalist standards, was a very short press statement.
New markets in 2022? Well, we certainly look forward to that, but we are offered not so much as a hint as to where these might be, or if they will be acquisitions, entries into established markets or a venture into virgin territory.
On past performance they will not be virgin markets. Nextory prefers the low hanging fruit, and lets others prove the market’s worth, then steps in.
Acquisitions, as we’ll discuss below, are a new strategy for Nextory. In the past twelve months Nextory has spent an unknown but we can safely assume a not insubstantial sum on buying its way into two major markets. It’s a viable strategy if the extra cash is available.
But about that 69%…
It’s telling that Nextory did not release its Q4 2021 results, breaking a long run of public quarterly report summaries, and if we are honest we cannot be too impressed by the Q1 69% subscriber growth.
You see, while 69% growth sounds impressive compared to Q1 2021, which in turn was compared with Q1 2020, Q1 2022 is a very different ball game from 2021 and 2020.
Because as mentioned above, in late 2021 Nextory adopted a new tactic for expansion –acquisition.
Prior to this all Nextory’s growth had been organic – open in a new market (a proven market where others had set the pace, not a virgin market), and with a successful marketing push bring on board new subscribers, typically with high double-figure percentage results, although per many past TNPS discussions on this topic, percentages without baselines do not tell us much.
But in 2021 the Nextory acquisitions era began, first with the buy-out of Spain’s Nubico –
and then with the acquisition of Youboox in France.
In neither case did Bitar publicly share the number of subscribers brought to Nextory by these acquisitions, but in both instances we can be certain said numbers made a significant addition to the overall Nextory subscriber base.
The Nubico relaunch was in August 2021, so would have mildly impacted the Q3 results and been more visible with the Q4 results, but for reasons we can only speculate Bitar broke with tradition and did not release a Q4 results statement, begging the question might the Q4 results not have been as spectacular as Bitar had been hoping for?
The Youbook acquisition, while reported in October, only became an operational reality for Nextory in January 2022, meaning the Youboox subscribers will be factored into the Q1 2022 results. Yet still Nextory only reported 69% growth over Q1 2021.
I say “only” because in Q1 Nextory reported 61% growth and in Q2 58% growth with not an acquisition in sight.
By contrast Q3 came in with 68% growth helped by at least a partial contribution from the rebranded Nubico.
As above, Nextory kept uncharacteristically quiet about Q4, which ought to have been riding high with the full impact of the Nubico acquisition plus the usual organic growth from Nextory’s other markets.
In Q1 we’re back to the bragging show, with the 69% growth in subscribers headline, but not a mention of the fact that this will include the job-lot of subscribers from the newly acquired Youboox.
Without knowing the baseline, 69% tells us next to nothing as a marker for organic growth per the 2021 comparison, and loses a lot of its shine when we consider the Q1 2022 result includes extra subscribers from two major market acquisitions.