Web Summit, the technology events business co-founded by Paddy Cosgrave, recorded a 92 per cent drop in its pretax profits in 2022, according to accounts just filed for the company.
Manders Terrace Ltd made a pretax profit of €326,489 in the period, down from €4.3 million the year before. Its net profit was €114,166, down from €3.8 million.
The fall in profits was the result of swelling costs as the company invested in its growth in the wake of the pandemic. Its revenue in 2022 soared 65 per cent to €52.5 million, a record for the business as it bounced back from two years in which it was unable to hold full-scale in-person events.
The Web Summit in Lisbon and the scaled-up Collision event in Toronto led to a 35 per cent post-Covid surge in gross profit to €30.8 million.
However, the cost of sales rocketed from almost €9 million in 2021 to €21.7 million in 2022, while administrative expenses expanded from €19.5 million to €31 million.
The biggest drivers of cost increases were identified by the company as marketing and production costs for Web Summit Lisbon and Collision, and a rise in headcount costs to support an event that was subsequently held in Rio de Janeiro in Brazil and one that will take place in Qatar later this month.
The cost of wages and salaries increased from €13.4 million to €22.3 million, although the average headcount fell from 246 people to 239, according to the accounts.
In a statement released alongside the accounts, Web Summit said its employee numbers had increased 15 per cent in 2022, reaching 283. The staff count in its Portuguese office tripled to 59, with this base now employing more than 100 staff. It also said it “invested significantly in pay increases for existing staff” after the pandemic.
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The five directors of the company, including Mr Cosgrave, shared remuneration of about €3.6 million in 2022, up from €2.2 million. The accounts note that a directors’ loan was issued on a short-term basis during the year on the company’s deposit interest rate and that this has since been repaid in full.
As of the end of 2022, Web Summit retained more than €19 million in cash reserves.
The accounts cover a period before last year’s controversy, which saw Mr Cosgrave step down from his role as chief executive. This followed a hostile reaction from many key tech sector participants in Web Summit to social media comments about Israel for which he later apologised.
He was succeeded in the position last October by Katherine Maher, who is due to leave the role to lead US media organisation NPR next month, although she will become chair of the board.
“While it is always gratifying to book record-breaking revenues, it is even more rewarding to see so much of these revenues being reinvested in global expansion and the future growth of the business,” Ms Maher said.
“We are very confident that the judicious investment of so much of those 2022 revenues in global growth will prove successful as we head towards what should be a record-breaking 2024. Web Summit was right to see that in a post-pandemic, hybrid-working world, getting together to make meaningful connections would be more important than it has ever been.”
The company expects to report double-digit revenue growth for 2023 and has “already shattered all our targets” for the inaugural event in Qatar, Ms Maher said.
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