Believe Grew Revenue 30.9% in Q1, Expects Losses in Ukraine and Russia in 2022

Believe Grew Revenue 30.9% in Q1, Expects Losses in Ukraine and Russia in 2022

Partnerships, acquisitions and the booming global streaming business drove French digital music company Believe’s revenue up 30.9% to 162.5 million euros ($171 million) in the first quarter of 2022, the company announced Tuesday (May 3).

The quarter was dampened by the “current world situation,” however, Denis Ladegaillerie, founder and CEO, said in a statement in reference to the war in Ukraine. Ladegaillerie added that any repercussions “will be more important from Q2 onwards.” Most digital service providers stopped monetization in Russia, the company explained, and Believe expects its 2022 revenues from Russia and Ukraine, which accounted for about 50 million euros of revenue in 2021, to decline between 30% and 40% in 2022.

Asia-Pacific and Africa revenues grew 56.6% to 40.1 million euros ($42.2 million) and accounted for 24.7% of total revenues, up from 20.6% in the prior-year period. Some of those gains came from extended service agreements with Think Music, of which Believe acquired a majority stake in November, and VMAG signed in the fourth quarter of 2021. Germany’s share of total revenue declined from 18.7% to 15.8%, although income improved 10.8%. As a share of revenue, the other regions — France, Americas and the rest of Europe — were roughly even year over year.

Believe organizes itself into two units: premium solutions (artist and label services) and automated solutions (digital distribution). Premium solutions revenues were 151.1 million euros ($159 million) in Q1 2022, up 30.7% year over year, and were slowed by the war in Ukraine. Revenue from Believe’s automated solutions grew 33.6% to 11.4 million euros ($12 million) from the first quarter in 2021. Believe chalked up the improvement to new customers for its TuneCore digital distributor and a new discovery service on social platforms.

Looking forward, Believe expects organic growth to reach 25% after removing the expected decrease in its Russia and Ukraine business. That includes a 2% positive impact from service agreements with Play Two, Jo&Co, Think Music and VMAG. Adjusted EBITDA margin for 2022 is expected to be consistent with the 4% achieved in 2021.

Ladegaillerie and Xavier Dumont, Believe’s COO and CFO, will host a conference call on Wednesday 9 a.m. CET.

Believe was founded in 2005 by Ladegaillerie, Arnoud Chiaramonti and Nicolas Laclias and built a diverse business of services and content ownership in the proceeding years. It acquired U.S. digital distributor TuneCore in 2015 and German record labels Nuclear Blast and Groove Attack three years later. Believe went public on June 10, 2021 and trades on the Euronext Paris exchange. On Tuesday, its share price rose 0.09% to 11.34 euros — 41.8% below its 19.50-euro IPO price.

Believe Grew Revenue 30.9% in Q1, Expects Losses in Ukraine and Russia in 2022 Partnerships, acquisitions and the booming global streaming business drove French digital music company Believe’s revenue up 30.9% to 162.5 million euros ($171 million) in the first quarter of 2022, the company announced Tuesday (May 3). The quarter was dampened by the “current…