Insights Digest provides in-depth, data-driven insights into Africa’s music industry through reports, analytics, and market data.
Mdundo.com A/S, the African music service, has published its First Half-Year Report for the financial year 2025/26, marking a period of significant strategic realignment.
The company is shifting decisively from a broad-based model towards a more focused, subscription-led business, prioritising predictable revenue, paid user growth, and stringent financial discipline.
The first half saw total revenue of DKK 4.4 million, a decrease of 25.5% compared to H1 FY 2024/25. This decline is attributed to a substantial, deliberate reduction in low-margin advertising activities and lower direct sales, reflecting both a persistently challenging digital ad market in Africa and conscious strategic choices.
Despite the top-line contraction, the company’s profitability metrics showed marked improvement. EBITDA for the period was DKK -1.1 million, a 46.9% enhancement from the DKK -2.1 million loss in the same period last year.
This improvement was driven by organisation-wide cost reductions and a leaner operating model instituted after a comprehensive strategic review. The momentum accelerated in the second quarter, where EBITDA loss was contained to just DKK -300k.
Cash flow performance strengthened considerably. The net cash outflow for H1 was DKK -1.6 million, a 54.3% improvement from the DKK -3.5 million outflow a year prior. This demonstrates lower operational cash burn, a direct result of disciplined cost management and reduced investment levels. The company’s cash and cash equivalents stood at DKK 3.3 million at the end of the period.
A core element of the new strategy is the elevation of the subscription business as the primary revenue driver and key performance indicator. Mdundo has formally replaced Monthly Active Users (MAUs) with paying subscription transactions as its main non-financial metric, aligning internal and external reporting with direct value creation.
The scale of the subscription activity is evidenced by 9.9 million subscription payments processed in the last calendar quarter, originating from 906,000 unique customers. This volume highlights a significant base of paid interactions and points to substantial latent monetisation potential within the wider user base.
However, growth in subscription revenue year-on-year was hampered by billing instability and Average Revenue Per User (ARPU) pressure with certain telecommunications partners, who remain the dominant channel for collections.
The DSP acknowledges that progress on stabilising these telco billing relationships has been slower than expected, constraining near-term growth.
In response, the company is actively diversifying its payment ecosystem. New integrations for mobile money and digital wallets have been launched, although their financial contribution remains limited initially. The development of a product-market fit for diaspora subscriptions, a typically higher-value segment, is ongoing.
The advertising segment performed weakly, with revenue declining 57.1% year-on-year to DKK 0.6 million. The report cites a material reduction in the number of campaigns and a shift in client mix towards shorter-term, tactical activations instead of recurring brand partnerships. Increased competition for digital advertising spend across African markets further pressured the pipeline.
Concurrently, Mdundo has strategically prioritised its advertising inventory for promoting its own subscription products and new music gaming initiatives, which offer clearer and more direct monetisation pathways. This reflects a conscious de-prioritisation of advertising as a primary growth driver.
Product development efforts in H1 focused on enhancing engagement, conversion, and monetisation of existing traffic. The product team was bolstered by a senior hire to accelerate product-led growth initiatives.
Several updates were deployed to the company’s Progressive Web App (PWA), improving performance, navigation, and content discovery. The PWA was successfully launched in multiple new African countries, creating a scalable foundation for wider regional expansion ahead of a potential future native app release.
A notable innovation was the release of music-themed games integrated directly into the platform. These games have generated early user payments and increased engagement, validating gaming as a promising complementary monetisation format for the longer term. Game-related revenue reached approximately DKK 11,000 year-to-date.
Following the 2025 strategic review, Mdundo implemented structural organisational changes aimed at improving execution efficiency and long-term profitability. The restructuring particularly affected telecommunications partnership management and licensing operations.
Key commercial partnerships and licensing relationships have been centralised under the oversight of the CEO and COO. This move is designed to reduce organisational complexity, improve accountability, and lower operational costs. These changes are scheduled to be fully implemented by early March 2026.
The company estimates these structural changes will deliver a net EBITDA improvement of approximately DKK 120,000 in the current financial year. When fully executed, the annualised impact is projected to be approximately DKK 720,000, with a concomitant positive yearly cash flow impact of around DKK 1.2 million, assuming revenue remains stable.
In a parallel move to improve margins, Mdundo has updated its terms and conditions with rights holders who maintain accounts on its platform. The revised terms more accurately reflect the direct costs of operating the music service and are expected to improve the company’s gross margin by 5 percentage points in the second half of the financial year.
Mdundo reiterated its focus on improving billing stability, scaling paid entertainment formats like gaming, and maintaining rigorous control over costs and cash.
The company expresses confidence in achieving its updated full-year financial guidance. This includes an EBITDA forecast in the range of DKK -1.5 million to -2.5 million and an expectation to close the financial year with a cash balance between DKK 0.5 million and 1.5 million, as it progresses towards its stated goal of EBITDA-positive operations.
