Onerous Contracts2 Jan 2026 15:21
Q. Does Audioboom have Onerous contracts expiring?
Yes — AudioBoom has had onerous contracts on its books, and these are in the process of expiring.
📌 What’s the situation with onerous contracts?
Onerous contracts in AudioBoom’s accounts stem from minimum-revenue-guarantee (MG) deals it signed with podcast partners during the peak of the advertising market in early 2022. If the ad revenue generated for those contracts falls short of the agreed minimum guarantees, AudioBoom must make up the shortfall, which can lead to losses that trigger an onerous contract provision under accounting rules. 
🗓 Contract expiries and provisions
Here’s how that has played out:
• Two specific partner contracts were identified as onerous due to lower-than-expected ad revenue relative to minimum guarantees. These were expected to run until:
• 31 January 2025
• 31 December 2025
(i.e., both contracts were due to expire during 2025) 
• In earlier financial statements, provisions were recognised because the company expected these contracts to generate net losses through to those expiry dates. 
• As of the 2024 financial year, AudioBoom’s accounts released most of the onerous contract provision, reducing it from around **US$7.5 m in 2023 to about US$3.4 m carried forward – reflecting that the loss-making period was largely running its course. 
📍 What this means for 2025–2026
• According to the half-year report for H1 2025, one of the onerous contracts expired on 31 January 2025 and the remaining onerous contract runs until 31 December 2025. 
• After December 2025, the company is expected to have exited its onerous contract exposure, meaning there should be no further losses or provisions from these contracts beyond that point.
• Management commentary (e.g., earnings calls) indicated that once this remaining onerous contract is fully unwound, cash flow and EBITDA should improve in 2026 as the business stops making minimum guarantee payments that outweigh generated revenue. 
📊 Bottom line
• Yes — AudioBoom had onerous contracts tied to minimum revenue guarantees in its podcast partner deals. 
• These onerous contracts were due to expire in 2025 (January and December). 
• By the end of 2025, these onerous contracts are expected to have lapsed, removing a key drag on profitability and cash flow going into 2026.
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