User Base and Engagement - As of December 31, 2022, Anghami has over 121 million registered users, 1.52 million paid subscribers, and 18.8 million active users, with more than 11.6 billion streams annually[213]. - The number of aggregate monthly subscribers increased from 595,980 in January 2019 to 1,521,472 in December 2022, reflecting consistent growth in the Premium user base[275]. - Active users increased from 18.2 million in 2021 to 18.8 million in 2022, despite economic challenges in Egypt and Lebanon[383]. - The Premium service offers unlimited online and offline high-quality streaming and download access, enhancing user experience and engagement[273]. - The churn rate for monthly paying subscribers decreased from 7.7% in January 2019 to 6.1% in December 2022, indicating improved subscriber retention[275]. Revenue and Financial Performance - The overall consolidated revenue for Anghami reached $48.5 million, an increase of $12.9 million or 36.6% compared to 2021[410]. - Revenue from subscriptions reached $27.1 million in 2022, a 5.4% increase from 2021, comprising 56% of total revenue[396][397]. - Advertisement revenue surged by 22.5% to $12.1 million in 2022, accounting for approximately 25% of total revenue[398]. - Revenue from live events was $9.4 million in 2022, marking a 100% increase as it was not present in 2021[396]. - Premium subscriptions generated 56% of total revenues in fiscal year 2022, while advertisement revenue contributed 25% and live events accounted for 19%[271]. Market Growth and Opportunities - The MENA region's recorded music revenue grew by 23.8% in 2022, with streaming accounting for 95.5% of music consumption, the highest rate globally[227]. - The music streaming market in the MENA region is projected to grow at a CAGR of 9.5%, from $1.5 billion in 2019 to $3.2 billion by 2027[228]. - Music streaming penetration in Saudi Arabia is only approximately 6% of the addressable market, indicating significant growth potential[253]. - The podcast segment is expected to grow significantly, with global podcast listeners projected to reach 504 million by 2024, presenting a growth opportunity for the company[296]. Content and Partnerships - Anghami's Arabic music catalog includes approximately 894,000 songs, with Arabic content accounting for 58% of total streams in 2022, indicating significant growth potential[235]. - Anghami has established strategic relationships with 42 telecommunications companies across the MENA region to enhance user acquisition and subscription conversion rates[215]. - Anghami has established partnerships with major music labels, including Universal Music Group, Sony Music Entertainment, and Warner Music Group, as well as thousands of independent labels[352]. - Anghami signed an exclusive agreement with Amr Diab, the largest Arab artist in MENA, to stream existing content and create new exclusive content over the next three years[237]. - The company created over 150 original Arabic songs since 2018, achieving a 59% ROI on production costs, highlighting a focus on local content[392]. Advertising and Marketing Strategies - Anghami's advertising solutions include audio ads, video ads, and display ads, with a new pricing scheme based on streams delivered rather than impressions, aimed at increasing advertising revenue[306][308]. - The company provides content promotion offerings, allowing brands to sponsor playlists and promote their music content for increased visibility[309]. - Anghami utilizes data analytics for digital marketing, optimizing campaign performance and budget allocation based on user behavior[314]. - The company capitalized 2.3% of engineering salaries related to product development in 2022, a decrease from 24% in 2021, reflecting a shift in focus on operational expenses[375]. Cost Structure and Financial Management - Licensing costs, which account for 47% of total revenue (excluding live events), are a major part of variable costs due to royalty payments to music labels[282]. - Total expenses increased by $12.7 million or 47.9% year-on-year, reaching $39.1 million for the year ended December 31, 2022[401]. - Content acquisition and royalty costs rose by $1.2 million or 7.6% due to the addition of Rotana's catalogue and a $10 million exclusivity deal with Amr Diab[402]. - Monthly variable technology costs averaged $316,293 in 2022, with a strategic focus on optimizing the platform's backend code for long-term efficiency[289]. Strategic Initiatives and Innovations - Anghami aims to leverage live events to create synergies between online and offline experiences, increasing user engagement and potential revenue[268]. - The partnership with Addmind to launch Anghami Lab generated revenue of $4,498,779 in 2022, establishing innovative entertainment venues in Saudi Arabia[266]. - Anghami's Radar feature allows users to identify and add songs playing around them to a special playlist, enhancing music discovery[297]. - The company plans to launch a new offering in May 2023 with innovative features to attract new users[262]. Organizational Changes and Workforce Management - The company downsized its workforce by 22% in 2022 as part of cost-cutting measures[345]. - Anghami's organizational structure includes multiple subsidiaries across the MENA region and the UK, with a focus on an asset-light business model[346][347].
Anghami (ANGH) - 2022 Q4 - Annual Report