iHeartMedia Conference Summary Company Overview - iHeartMedia is the number one audio company in America, generating approximately $4 billion in annual advertising revenue [4][5] - Revenue composition: about $2.7-$2.8 billion from the multi-platform group (broadcast radio and network business) and about $1.2-$1.3 billion from the digital audio group (podcasting, streaming, websites) [4][5] - The company owns 850 radio stations and operates in 150 cities, reaching approximately 273 million people in the U.S. [4][5] Industry Insights - Broadcast radio listening has increased over the past 10-20 years, contrary to perceptions of decline in traditional media [6][8] - iHeartMedia's audience remains resilient compared to declining viewership in ad-supported television and print media [8][9] - The company believes in the monetization of consumer relationships and has a strategic advantage with a large sales force across the country [9][10] Revenue Challenges - Revenue shrinkage is attributed to economic challenges and advertising recession rather than a decline in listenership [10][11] - iHeartMedia expects the multi-platform group to return to low single-digit revenue growth due to audience resiliency and efficiency [14][20] Digital Transformation - iHeartMedia is implementing a digital programmatic initiative to allow advertisers to buy broadcast inventory similarly to digital ads, enhancing scalability and ease of purchase [16][17] - The total addressable market (TAM) for digital entertainment is estimated at $250-$300 billion, with iHeartMedia aiming to capture a share of this market [18][19] Podcasting Growth - Podcasting is the primary growth driver for iHeartMedia, with projected revenue of $550 million in 2025, up from $50 million in 2019, reflecting a 22% growth rate [21][23] - iHeartMedia is the largest podcast publisher in the U.S., surpassing the combined revenue of its closest competitors [22][23] - The company emphasizes the importance of promoting podcasts through its broadcast channels to maximize audience reach [24][25] Cost Management and Efficiency - iHeartMedia has implemented a $150 million cost reduction program for 2025 and an additional $50 million for 2026, focusing on efficiency across both multi-platform and digital groups [31][32] - The company has reduced its workforce from 13,000 to 8,500 and cut office space from 4 million sq ft to 2 million sq ft [36] Financial Position - iHeartMedia aims to reduce its leverage ratio to 3-3.5 times EBITDA, currently standing at approximately 5.5-6 times [37][38] Future Outlook - The company is optimistic about its digital transformation, with broadcast inventory now being sold programmatically and measured similarly to digital campaigns [40][41] - iHeartMedia anticipates a strong year in political advertising due to the upcoming election cycle [20][42] - The management is focused on creating value for stakeholders through innovative revenue streams and leveraging existing assets [27][42]

Group 1 - iHeartMedia has promoted Michael McGuinness to CFO, effective January 1, succeeding Richard Bressler, who will retain his roles as COO and president [8] - McGuinness's annual base salary will be $1.2 million, with a target bonus opportunity increased to 150% of his salary and a long-term incentive award valued at $1.5 million [6] - The company is on track to achieve net cost savings of $150 million by the end of the year, with an additional $50 million in annual savings targeted starting in 2026 [7] Group 2 - The appointment of McGuinness as CFO contrasts with a trend of companies merging CFO and COO roles, as seen with Salesforce and PayPal [3] - The combination of CFO and COO roles can depend on executive personalities and company culture, as noted by Scott Roe during a panel discussion [4] - McGuinness joined iHeartMedia in September 2019, previously holding positions at Hain Celestial Group and Monster [5]

Core Points - iHeartMedia has initiated its annual transition to holiday music, with over 95 stations nationwide broadcasting festive music 24/7 [1] - The iHeartRadio Holiday Special is returning this year, hosted by Mario Lopez, featuring interviews with various artists [1] Company Summary - iHeartMedia is expanding its holiday music offerings by flipping more than 95 stations to play a mix of contemporary holiday hits and classic Christmas songs [1] - The company continues to engage listeners with special programming, such as the iHeartRadio Holiday Special, enhancing its brand presence during the holiday season [1]

Group 1: Coty vs. Kering and Gucci - Coty has filed a lawsuit against Kering and Gucci over a beauty business licensing agreement set to expire in 2028, with Kering planning to transfer Gucci's beauty business to L'Oréal after the contract ends [1] - The lawsuit highlights a broader struggle among luxury brands for control and profit distribution in the beauty sector, with Gucci's beauty business being a critical asset for Coty [1] - Kering's decision to partner with L'Oréal may be aimed at leveraging L'Oréal's stronger beauty operations to enhance brand positioning and market influence [1] Group 2: TikTok and iHeartMedia Collaboration - TikTok and iHeartMedia have announced a multi-platform partnership to launch a TikTok podcast network featuring 25 new shows hosted by TikTok creators [2] - This collaboration signifies TikTok's strategic move into the audio space, aiming to extend its content creation capabilities and enhance user engagement through long-form audio content [2] - The partnership will involve the establishment of new co-branded podcast studios in major U.S. cities, including Los Angeles, New York, and Atlanta [2] Group 3: Burger King China Ownership Change - CPE Yuanfeng has acquired a controlling stake in Burger King China, injecting $350 million to support restaurant expansion, marketing, menu innovation, and operational improvements [3] - Following the transaction, CPE Yuanfeng will hold approximately 83% of Burger King China's equity, while the international group will retain about 17% [3] - This partnership aims to help Burger King catch up with competitors like McDonald's and KFC in the Chinese market by leveraging local investment and resources [3] Group 4: Douyin E-commerce Pricing Regulations - Douyin has clarified that rumors regarding penalties for selling Moutai below market prices are false, emphasizing a campaign against misleading low-price promotions [4] - The platform's initiative to combat false advertising in high-value goods like alcohol aims to purify the e-commerce ecosystem [4] - Balancing low-price competition with brand integrity remains a challenge for all e-commerce platforms moving forward [4]

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Core Insights - iHeartMedia reported revenue of $997.01 million for the quarter ended September 2025, reflecting a year-over-year decline of 1.1% but exceeding the Zacks Consensus Estimate by 1.65% [1] - The company's EPS for the quarter was $0.63, a significant improvement from -$0.16 in the same quarter last year, although it did not meet the consensus EPS estimate of $0 [1] - iHeartMedia's stock has seen a return of +78.8% over the past month, significantly outperforming the Zacks S&P 500 composite's +0.3% change, but currently holds a Zacks Rank 4 (Sell) indicating potential underperformance in the near term [3] Revenue Breakdown - Digital Audio Group revenue was reported at $341.69 million, surpassing the average estimate of $329.37 million from two analysts [4] - Audio and Media Services revenue reached $66.61 million, exceeding the average estimate of $64.67 million [4] - Multiplatform Group revenue totaled $591.21 million, slightly above the estimated $589.35 million [4] - Other revenue within the Multiplatform Group was $4.41 million, below the average estimate of $5.1 million [4] - Networks revenue in the Multiplatform Group was $114.27 million, slightly below the average estimate of $115.31 million [4] - Sponsorship and Events revenue in the Multiplatform Group was $45.5 million, falling short of the average estimate of $50.56 million [4] - Broadcast Radio revenue was reported at $427.02 million, exceeding the average estimate of $418.39 million [4]

Financial Data and Key Metrics Changes - In Q3 2025, the company generated an EBITDA of $205 million, slightly above the midpoint of the guidance range of $180-$220 million and flat compared to the prior year [4][15] - Consolidated revenue for the quarter was down 1.1% year-over-year, at the high end of the guidance of down low single digits [12][20] - Excluding political impacts, consolidated revenue was up 2.8% [12][20] - The company reported a GAAP operating loss of $116 million, including a $209 million impairment charge related to FCC licenses [15] Business Line Data and Key Metrics Changes - The Digital Audio Group generated revenue of $342 million, up 13.5% year-over-year, and adjusted EBITDA of $130 million, up 30.3% [4][16] - Podcast revenue within the Digital Audio Group was $140 million, growing 22.5% year-over-year [17] - Non-podcast digital revenue grew 8% year-over-year to $202 million [17] - The Multi-Platform Group's revenue was $591 million, down 4.6% year-over-year, with adjusted EBITDA of $119 million, down 8.3% [6][17] - The Audio and Media Services Group revenue was $67 million, down 26% year-over-year [18] Market Data and Key Metrics Changes - The largest advertising category gainers were healthcare, telecom, professional services, and retail, while political, financial services, food and beverage, and entertainment saw declines [12][13] - The company has diversified advertising revenue, with no category exceeding 5% of total advertising revenue [12] Company Strategy and Development Direction - The company aims to achieve full-year adjusted EBITDA margins in the mid-30s and is focused on maximizing operational efficiency through technology and cost management [5][10] - A new partnership with TikTok was announced, which will integrate TikTok creators into iHeart's ecosystem, enhancing monetization opportunities [6][22] - The company is investing in its proprietary audience database to improve targeting and measurement capabilities [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the advertising environment, noting positive discussions with advertisers despite potential uncertainties from a government shutdown [10][30] - The company expects to generate meaningful free cash flow in Q4 and anticipates a strong revenue cycle for political advertising in the upcoming election year [19][27] Other Important Information - The company is on track to generate $150 million in net savings for 2025, with an additional $50 million in savings expected to begin in 2026 [9][15] - The net debt at the end of the quarter was approximately $4.7 billion, with total liquidity of $510 million [20] Q&A Session Summary Question: Free cash flow and debt repayment strategy - Management acknowledged the negative free cash flow in Q3 but expects meaningful cash flow in Q4, with plans to repay the ABL facility [24][25] Question: Multi-Platform Group revenue trends - Management confirmed that Q3 revenue for the Multi-Platform Group met expectations and expressed confidence in future growth [26][27] Question: Programmatic initiatives and revenue impact - Management stated that agreements with major DSPs are in place, and programmatic initiatives are expected to grow similarly to podcasting revenue [33][34] Question: Podcasting growth sustainability - Management indicated that podcasting revenue growth remains strong, with local advertising contributing significantly [51][54] Question: Competitive advertising environment - Management noted that radio advertising is experiencing a renaissance, with studies showing its effectiveness in campaigns [59][60] Question: Sponsorship and events revenue outlook - Management clarified that the decline in sponsorship revenue is due to minor issues and expects stability moving forward [75][76]

Q3 2025 Financial Performance - Q3 Revenue was $997 million, a decrease of 1.1% year-over-year; excluding political revenue, revenue increased by 2.8%[10] - Consolidated Adjusted EBITDA was $205 million, flat compared to Q3 2024[10] - Digital Audio Group Revenue increased by 14% to $342 million, with Podcast Revenue up 22% to $140 million and Digital Revenue excluding Podcast up 8% to $202 million[10] - Multiplatform Group Revenue decreased by 5% to $591 million; excluding political revenue, Multiplatform Group Revenue decreased by 3%[10] Segment Performance - Digital Audio Group Adjusted EBITDA increased by 30% to $130 million, with a margin of 38.1%[10] - Multiplatform Group Adjusted EBITDA decreased by 8% to $119 million, with a margin of 20.2%[10] - Audio & Media Services Group Revenue decreased by 26% to $66.6 million[12] Q4 2025 Guidance and Savings Initiatives - Q4 Consolidated Revenue is expected to decline in the low-single digits, but excluding political impact, it's expected to increase in the mid-single digits[10] - Q4 Consolidated Adjusted EBITDA is expected to be approximately $200 million to $240 million[10] - The company is on track with its modernization program, expecting $150 million in net savings in 2025 and an additional $50 million in 2026, driven by technology and AI[36, 15] Debt and Liquidity - Cash balance and total available liquidity were $192 million and $510 million, respectively, as of September 30, 2025[10] - Net Debt was $4,673.8 million as of September 30, 2025[44]

Revenue Performance - Consolidated revenue for Q3 2025 was $997.0 million, a decrease of $11.1 million, or 1.1%, compared to $1,008.1 million in Q3 2024[111] - Multiplatform Group revenue decreased by $28.3 million, or 4.6%, with Segment Adjusted EBITDA down by $10.7 million, or 8.3%[111] - Digital Audio Group revenue increased by $40.7 million, or 13.5%, and Segment Adjusted EBITDA rose by $30.3 million, or 30.3%[111] - Audio & Media Services Group revenue decreased by $23.4 million, or 26.0%, with Segment Adjusted EBITDA down by $21.8 million, or 49.1%[111] - Consolidated revenue decreased by $11.1 million, or 1.1%, to $997.0 million for the three months ended September 30, 2025, compared to $1,008.1 million in the same period of 2024[113] - Digital Audio Group revenue increased by $40.7 million, or 13.5%, driven by higher demand for digital and podcast advertising[113] - Consolidated revenue increased by $1.5 million, or 0.1%, to $2,737.8 million for the nine months ended September 30, 2025, compared to the same period of 2024[114] - Digital Audio Group revenue increased by $117.2 million, or 14.2%, during the nine months ended September 30, 2025, driven by increased demand for digital advertising[114] - Revenue from the Multiplatform Group decreased by $28.3 million, or 4.6%, year-over-year for the three months ended September 30, 2025, primarily due to lower political revenues and broadcast advertising[130] Operating Loss and Net Loss - The operating loss for Q3 2025 was $116.3 million, a change of $193.0 million from an operating income of $76.7 million in Q3 2024, primarily due to non-cash impairment charges of $208.5 million related to FCC licenses[111] - Net loss increased to $65.8 million, up $24.4 million from $41.3 million in Q3 2024[111] - Net loss attributable to the Company increased by $25.0 million to $66.3 million for the three months ended September 30, 2025, primarily due to non-cash impairment charges[127] - The company reported a net loss of $65.8 million for the three months ended September 30, 2025, compared to a net loss of $41.3 million in the prior year[144] Cash Flow and Expenses - Cash flows used for operating activities were $9.5 million, a change from cash flows provided by operating activities of $102.8 million in Q3 2024[111] - Free cash flow was $(32.8) million, a decrease from $73.3 million in Q3 2024[111] - Consolidated direct operating expenses decreased by $10.6 million, or 2.6%, during the three months ended September 30, 2025, primarily due to lower employee compensation costs[115] - Consolidated SG&A expenses decreased by $4.4 million, or 1.1%, during the three months ended September 30, 2025, driven by cost savings initiatives[117] - Free cash flow for the three months ended September 30, 2025, was $(32.8) million, compared to $73.3 million in the prior year[146] - For the nine months ended September 30, 2025, cash used for operating activities was $63.7 million, compared to cash provided of $70.2 million in 2024, indicating a significant decline[151] - Cash used for investing activities was $57.9 million in the nine months ended September 30, 2025, primarily due to $63.0 million in capital expenditures[152] - Cash provided by financing activities totaled $53.9 million during the nine months ended September 30, 2025, mainly from a $100.0 million borrowing under the ABL Facility[154] Debt and Liquidity - As of September 30, 2025, total available liquidity was $509.8 million, consisting of $192.2 million in cash and cash equivalents and $317.5 million available for borrowing[156] - Total debt as of September 30, 2025, was $5,120.3 million, with net debt amounting to $4,673.8 million after accounting for cash and cash equivalents[161] - The company anticipates cash payments to service its debt of approximately $102.1 million for the remainder of 2025, reflecting increased interest rates[158] - The company acknowledges challenges from market uncertainty but believes it has sufficient liquidity to fund operations for at least the next twelve months[159] Impairment and Future Projections - Non-cash impairment charges of $208.5 million were recorded during the three months ended September 30, 2025, primarily to reduce the carrying values of indefinite-lived FCC licenses[120] - The company recorded a $208.5 million impairment of indefinite-lived intangible assets as of July 1, 2025, resulting in a carrying value of $601.4 million for FCC licenses[176][180] - Revenue growth assumptions include 2.0% over-the-air revenue growth and 3.0% digital revenue growth beyond the initial five-year period, with a terminal period growth rate of 1.0%[178] - The estimated fair value of the company's FCC licenses could decrease by $77.1 million due to a 100 bps decline in revenue growth rate assumptions[179] - Future cash flows are based on detailed multi-year forecasts reflecting the current advertising outlook, with projections extending beyond 2029[184] Market Risks and Strategic Opportunities - The company is exposed to market risks including fluctuations in advertising revenue and competition from alternative media platforms[188] - The company expects to pursue strategic opportunities such as acquisitions or disposals of certain businesses in the future[160] - The company acknowledges potential risks related to economic conditions, advertising expenditures, and regulatory requirements that could impact future performance[186]