Townsquare Media(TSQ) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Townsquare Media's Q2 2025 results exceeded guidance, driven by digital growth, with the CEO emphasizing profitable growth and a new dividend announcement Q2 2025 Performance Overview Townsquare Media exceeded Q2 Adjusted EBITDA guidance, driven by strong digital growth, with digital segments becoming the primary engine for revenue and profit - Townsquare Media's Q2 2025 results met or exceeded previously issued guidance, with Adjusted EBITDA above expectations[2] | Metric | Q2 2025 (YoY Change) | Q2 2025 (YoY Change, Excl. Political) | | :-------------------------------- | :-------------------- | :------------------------------------ | | Net Revenue | -2.3% | -1.6% | | Adjusted EBITDA | +0.7% | +3.8% | | Net Income | +$50.9 million (to $2.0 million) | N/A | - Digital segments are the Company's growth engine, representing 55% of total net revenue and 56% of total Segment Profit in the first half of 2025[1][2] CEO Commentary CEO Bill Wilson highlighted robust local presence and digital solutions, driving strong Adjusted EBITDA and emphasizing digital as the key growth engine for profitable, sustainable growth and shareholder value - CEO Bill Wilson stated that Townsquare's robust local presence and holistic local and digital marketing solutions helped navigate revenue pressures and achieve guidance[2] - Digital is identified as Townsquare's key growth engine, driving profitable and sustainable growth, which is a key differentiator for the Company[2] - The business model delivers solid results and strong cash flow, which is being applied to organic investment and debt paydown, with a commitment to building shareholder value through growth, leverage reduction, and future dividends[2] Dividend Announcement The Board of Directors approved a quarterly cash dividend of $0.20 per share, payable in November 2025 | Metric | Value | | :-------------------- | :---- | | Quarterly Cash Dividend | $0.20 per share | | Payable Date | November 3, 2025 | | Record Date | October 27, 2025 | | Dividend Yield | Approximately 12% | Business Segments Townsquare Media operates through three primary reportable segments: Digital Advertising, Subscription Digital Marketing Solutions, and Broadcast Advertising Description of Reportable Segments Townsquare Media operates three reportable segments: Digital Advertising (Townsquare Ignite), Subscription Digital Marketing Solutions (Townsquare Interactive), and Broadcast Advertising, with other activities under 'Other' - The Company has three reportable operating segments: Digital Advertising (Townsquare Ignite), Subscription Digital Marketing Solutions (Townsquare Interactive), and Broadcast Advertising[4] - Digital Advertising includes digital advertising on programmatic platforms and owned/operated digital properties, utilizing first-party data[4] - Subscription Digital Marketing Solutions (Townsquare Interactive) provides subscription-based digital marketing services[4] - Broadcast Advertising covers local, regional, and national advertising via terrestrial radio, with 'Other' including live events[4] Financial Performance & Outlook This section reviews Q2 and year-to-date 2025 financial highlights, including revenue, net income, and Adjusted EBITDA, along with future guidance Q2 2025 Key Financial Highlights Q2 2025 saw a slight net revenue decrease but significant net income improvement, with digital segments growing and Broadcast Advertising declining | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :------------------------------------ | :-------- | :-------- | :----------- | | Net Revenue | -$2.8 million | N/A | -2.3% | | Net Revenue (Excl. Political) | -$1.9 million | N/A | -1.6% | | Net Income (Loss) | $2.0 million | -$48.9 million | +$50.9 million | | Adjusted EBITDA | +$0.2 million | N/A | +0.7% | | Adjusted EBITDA (Excl. Political) | +$1.0 million | N/A | +3.8% | | Total Digital Net Revenue | N/A | N/A | +2.1% | | Digital Advertising Net Revenue | N/A | N/A | +2.4% | | Subscription Digital Marketing Net Revenue | N/A | N/A | +1.4% | | Total Digital Segment Profit | N/A | N/A | +4.3% | | Broadcast Advertising Net Revenue | N/A | N/A | -9.2% | Year-to-Date 2025 Key Financial Highlights The first half of 2025 showed a modest net revenue decrease but significant net income improvement, with digital segments growing and Broadcast Advertising declining | Metric | H1 2025 (YoY Change) | H1 2025 (YoY Change, Excl. Political) | | :------------------------------------ | :------------------- | :------------------------------------ | | Net Revenue | -1.7% | -1.1% | | Net Income (Loss) | +$47.8 million (to $0.5 million) | N/A | | Adjusted EBITDA | +1.8% | N/A | | Total Digital Net Revenue | +4.1% | N/A | | Digital Advertising Net Revenue | +4.8% | N/A |\ | Subscription Digital Marketing Net Revenue | +2.8% | N/A | | Total Digital Segment Profit | +9.4% | N/A | | Broadcast Advertising Net Revenue | -9.2% | -8.0% | - The company entered into a five-year $490 million Credit Agreement and redeemed $467.4 million of outstanding 2026 Senior Secured Notes[11] - Repaid $12.9 million of the Senior Secured Credit Facility, including $10.0 million of the Revolver and $2.9 million of Term Loan[11] Financial Guidance (Q3 & Full Year 2025) Townsquare Media provided Q3 and full-year 2025 guidance, projecting net revenue and Adjusted EBITDA within specified ranges | Metric | Q3 2025 Guidance | Full Year 2025 Guidance | | :---------------- | :--------------------- | :---------------------- | | Net Revenue | $106.5 million - $108.5 million | $435 million - $440 million | | Adjusted EBITDA | $22.0 million - $23.0 million | $90 million - $94 million | Detailed Financial Review This section provides a detailed analysis of the company's financial performance for Q2 and the first half of 2025, covering revenue, net income, and Adjusted EBITDA Q2 2025 Financial Performance Q2 2025 experienced a slight total net revenue decline, offset by digital growth, with net income significantly improving due to reduced impairment charges and modest Adjusted EBITDA growth Net Revenue Analysis (Q2) Total net revenue decreased by 2.3% in Q2 2025, or 1.6% excluding political revenue, driven by Broadcast Advertising declines offset by digital and other revenue growth | Segment | Q2 2025 Net Revenue (in millions) | YoY Change (%) | | :-------------------------------- | :-------------------------------- | :------------- | | Total Net Revenue | $115.4 | -2.3% | | Total Net Revenue (Excl. Political) | $114.9 | -1.6% | | Broadcast Advertising | N/A | -9.2% | | Broadcast Advertising (Excl. Political) | $48.2 | -7.8% | | Digital Advertising | N/A | +2.4% | | Digital Advertising (Excl. Political) | $42.4 | +2.5% | | Subscription Digital Marketing Solutions | N/A | +1.4% | | Other | N/A | +19.9% | Net Income (Loss) Analysis (Q2) Q2 2025 net income significantly improved to $2.0 million from a $48.9 million net loss, primarily due to decreased non-cash impairment charges and increased gain on asset sales | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | | :-------------------- | :-------------------- | :-------------------- | :----------- |\ | Net Income (Loss) | $2.0 | -$48.9 | +$50.9 | | Adjusted Net Income | $3.6 | $2.3 | +55.9% | - The increase in net income was primarily driven by a $31.1 million decrease in non-cash impairment charges, a $5.9 million increase in gain on sale and retirement of assets, and a $4.5 million decrease in stock-based compensation[12] - Partially offset by a $3.4 million increase in interest expense[12] Adjusted EBITDA Analysis (Q2) Adjusted EBITDA increased modestly by 0.7% in Q2 2025, with a 3.8% growth excluding political revenue, indicating underlying operational strength | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | | :-------------------------------- | :-------------------- | :-------------------- | :----------- | | Adjusted EBITDA | $26.4 | $26.2 | +0.7% | | Adjusted EBITDA (Excl. Political) | $25.9 | $25.0 | +3.8% | Six Months Ended June 30, 2025 Financial Performance The first half of 2025 saw a slight net revenue decrease, primarily from Broadcast Advertising, offset by digital growth, with net income significantly improving and Adjusted EBITDA showing a positive trend Net Revenue Analysis (H1) Total net revenue for H1 2025 decreased by 1.7%, or 1.1% excluding political revenue, due to Broadcast Advertising declines partially offset by digital and other revenue growth | Segment | H1 2025 Net Revenue (in millions) | YoY Change (%) | | :-------------------------------- | :-------------------------------- | :------------- | | Total Net Revenue | $214.1 | -1.7% | | Total Net Revenue (Excl. Political) | $213.0 | -1.1% | | Broadcast Advertising | N/A | -9.2% | | Broadcast Advertising (Excl. Political) | $89.0 | -7.8% | | Digital Advertising | N/A | +4.8% | | Digital Advertising (Excl. Political) | $79.1 | +4.9% | | Subscription Digital Marketing Solutions | N/A | +2.8% | | Other | N/A | +11.5% | Net Income (Loss) Analysis (H1) H1 2025 net income improved to $0.5 million from a $47.3 million net loss, driven by reduced non-cash impairment charges and increased gain on asset sales | Metric | H1 2025 (in millions) | H1 2024 (in millions) | Change (YoY) | | :-------------------- | :-------------------- | :-------------------- | :----------- | | Net Income (Loss) | $0.5 | -$47.3 | +$47.8 | | Adjusted Net Income | $2.8 | $2.8 | 0.0% | - The increase in net income was due to a $32.8 million decrease in non-cash impairment charges, a $5.9 million increase in gain on sale and retirement of assets, and a $3.2 million decrease in stock-based compensation[16] - These positive impacts were partially offset by a $4.8 million decrease in other income (primarily a 2024 gain on acquisition of an investee), a $4.6 million increase in interest expense, and a $1.5 million loss on early repayment of 2026 Notes[16] Adjusted EBITDA Analysis (H1) Adjusted EBITDA for H1 2025 increased by 1.8%, with a 4.8% growth excluding political revenue, reflecting consistent operational performance | Metric | H1 2025 (in millions) | H1 2024 (in millions) | Change (YoY) | | :-------------------------------- | :-------------------- | :-------------------- | :----------- | | Adjusted EBITDA | $44.6 | $43.8 | +1.8% | | Adjusted EBITDA (Excl. Political) | $43.6 | $41.6 | +4.8% | Liquidity and Capital Structure This section details the company's liquidity position, including cash, debt, leverage ratios, and outstanding common stock as of June 30, 2025 Cash, Debt, and Leverage As of June 30, 2025, Townsquare Media held $3.2 million in cash, $467.1 million in debt, with gross and net leverage ratios of 4.62x and 4.58x respectively | Metric | As of June 30, 2025 (in millions) | | :-------------------------------- | :-------------------------------- | | Cash and Cash Equivalents | $3.2 | | Outstanding Indebtedness | $467.1 | | Gross Leverage (LTM Adjusted EBITDA) | 4.62x | | Net Leverage (LTM Adjusted EBITDA) | 4.58x | Outstanding Common Stock As of August 1, 2025, the company had 16,445,452 shares of common stock outstanding across Class A, B, and C, each with distinct voting rights | Security | Number Outstanding | | :----------------- | :----------------- | | Class A common stock | 15,130,156 | | Class B common stock | 815,296 | | Class C common stock | 500,000 | | Total | 16,445,452 | - Class A common stock carries one vote per share, Class B carries 10 votes per share, and Class C has no votes[20] Company Information This section provides details on the Q2 2025 conference call, an overview of Townsquare Media's business, and investor relations contact information Conference Call Details Townsquare Media hosted a conference call on August 6, 2025, to discuss Q2 2025 results and 2025 guidance, with replay options available - A conference call was held on Wednesday, August 6, 2025, at 8:00 a.m. Eastern Time[20] - A replay of the conference call is available through August 13, 2025, via dial-in and web-based archive[21] About Townsquare Media, Inc. Townsquare is a community-focused digital and broadcast media and marketing solutions company, operating outside top U.S. markets, leveraging digital advertising, subscription services, and local radio - Townsquare is a community-focused digital and broadcast media and digital marketing solutions company, primarily focused outside the top 50 U.S. markets[22] - Townsquare Ignite, the digital advertising division, uses proprietary programmatic advertising technology and a portfolio of over 400 local news/entertainment websites[22] - Townsquare Interactive, the subscription digital marketing services business, helps SMBs manage their digital presence with a SAAS platform, website design, SEO, and other digital services[22] - The company also operates a portfolio of local radio stations for advertising solutions and local content[22] Investor Relations Contact Investor relations contact information is provided for inquiries - Investor Relations contact: Claire Yenicay, (203) 900-5555, investors@townsquaremedia.com[28] Legal & Non-GAAP Disclosures This section outlines forward-looking statements and provides definitions and explanations for the non-GAAP financial measures used in the report Forward-Looking Statements The report contains forward-looking statements about future financial condition, operations, and business plans, subject to risks that could cause actual results to differ materially - The document includes forward-looking statements about financial condition, results of operations, plans, objectives, future performance, and business[23] - Actual events or results may differ materially due to factors such as general economic conditions, industry competition, technological changes, advertising cancellations, ability to develop digital technologies, dependence on key personnel, capital expenditure requirements, acquisitions, regulatory requirements, leverage, interest rates, and access to capital markets[23] - The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[24] Non-GAAP Financial Measures and Definitions The report uses non-GAAP measures like Adjusted EBITDA, Adjusted Net Income, and Net Leverage to provide additional insights into operating performance and financial health - Non-GAAP measures used include Adjusted EBITDA, Adjusted EBITDA (Excluding Political), Adjusted Net Income, Adjusted Net Income Per Share, and Net Leverage[25] - Adjusted EBITDA is defined as net income before income taxes, interest expense, debt-related gains/losses, transaction/realignment costs, D&A, stock-based compensation, impairments, asset sale gains/losses, and other expense/income[26] - These non-GAAP measures are used to facilitate company-to-company and year-over-year operating performance comparisons by excluding certain non-operating or variable items like political revenue and capital structure differences[27] Consolidated Financial Statements This section presents the consolidated balance sheets, statements of operations, cash flows, and segment-level performance for the company Consolidated Balance Sheets The consolidated balance sheets as of June 30, 2025, and December 31, 2024, show decreased total assets and liabilities, with a slight improvement in stockholders' deficit | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total Assets | $545,729 | $580,414 | | Total Liabilities | $572,821 | $608,856 | | Total Stockholders' Deficit | $(27,092) | $(28,442) | | Cash and Cash Equivalents | $3,183 | $32,990 | | Long-term debt, net | $427,971 | $465,756 | Consolidated Statements of Operations The consolidated statements of operations detail revenues and expenses for Q2 and H1 2025 and 2024, showing a shift from net loss to net income due to reduced impairment charges | Metric (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------- | :------ | :------ | :------ | :------ | | Net Revenue | $115,448 | $118,225 | $214,123 | $217,858 | | Operating Income (Loss) | $21,050 | $(21,370) | $28,183 | $(14,730) | | Net Income (Loss) | $2,009 | $(48,858) | $498 | $(47,305) | | Diluted Income (Loss) per Share | $0.09 | $(3.26) | $(0.03) | $(3.04) | - Impairment of intangible assets, investments, goodwill, and long-lived assets decreased significantly from $32,638 thousand in Q2 2024 to $1,500 thousand in Q2 2025, and from $34,256 thousand in H1 2024 to $1,500 thousand in H1 2025[32] - Net (gain) loss on sale and retirement of assets improved from a loss of $30 thousand in Q2 2024 to a gain of $5,866 thousand in Q2 2025[32] Consolidated Statements of Cash Flows Consolidated cash flows show decreased net cash from operating activities for H1 2025, reduced investing cash usage, and significant debt refinancing and repayments in financing activities | Metric (in thousands) | H1 2025 | H1 2024 | | :-------------------- | :------ | :------ | | Net Cash Provided by Operating Activities | $10,129 | $10,684 | | Net Cash Used in Investing Activities | $(1,906) | $(3,993) | | Net Cash Used in Financing Activities | $(37,707) | $(39,222) | | Net Decrease in Cash, Cash Equivalents and Restricted Cash | $(29,484) | $(32,531) | | Cash and Cash Equivalents, End of Period | $3,183 | $28,511 | - Financing activities included repayment and repurchases of $467,436 thousand of 2026 Notes and proceeds from a Term Loan of $446,400 thousand in H1 2025[34] - Cash payments for interest increased significantly to $29,340 thousand in H1 2025 from $18,244 thousand in H1 2024[36] Consolidated Statements of Operations by Segment Segment operations show Digital Advertising and Subscription Digital Marketing Solutions grew in revenue and profit for Q2 and H1 2025, while Broadcast Advertising declined, with digital segments increasing their share | Segment (Net Revenue in thousands) | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--------------------------------- | :------ | :------ | :------- | :------ | :------ | :------- | | Digital Advertising | $42,538 | $41,524 | 2.4% | $79,289 | $75,680 | 4.8% | | Subscription Digital Marketing Solutions | $18,767 | $18,515 | 1.4% | $37,789 | $36,768 | 2.8% | | Broadcast Advertising | $48,684 | $53,633 | (9.2)% | $89,999 | $99,088 | (9.2)% | | Other | $5,459 | $4,553 | 19.9% | $7,046 | $6,322 | 11.5% | | Total Net Revenue | $115,448 | $118,225 | (2.3)% | $214,123 | $217,858 | (1.7)% | | Segment (Segment Profit in thousands) | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :---------------------------------- | :------ | :------ | :------- | :------ | :------ | :------- | | Digital Advertising | $10,897 | $11,009 | (1.0)% | $18,797 | $18,065 | 4.1% | | Subscription Digital Marketing Solutions | $6,243 | $5,417 | 15.2% | $12,419 | $10,473 | 18.6% | | Broadcast Advertising | $14,677 | $16,021 | (8.4)% | $23,049 | $26,206 | (12.0)% | | Other | $802 | $266 | 201.5% | $1,213 | $707 | 71.6% | | Total Segment Profit | $32,619 | $32,713 | (0.3)% | $55,478 | $55,451 | 0.0% | Reconciliation of Non-GAAP Financial Measures This section reconciles GAAP net income (loss) to non-GAAP measures like Adjusted Net Income and Adjusted EBITDA for quarterly and year-to-date periods | Metric (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------- | :------ | :------ | :------ | :------ | | Net Income (Loss) | $2,009 | $(48,858) | $498 | $(47,305) | | Adjusted Net Income | $3,638 | $2,334 | $2,764 | $2,813 | | Adjusted Net Income Per Share (Diluted) | $0.22 | $0.14 | $0.17 | $0.16 | | Metric (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Adjusted EBITDA | $26,421 | $26,231 | $44,558 | $43,752 | | Adjusted EBITDA (Excluding Political) | $25,948 | $24,991 | $43,603 | $41,611 | | Adjusted EBITDA Less Interest, Capex and Taxes | $10,521 | $20,702 | $6,168 | $16,145 | | Metric (in thousands) | LTM Ended June 30, 2025 | | :-------------------- | :---------------------- | | Adjusted EBITDA | $101,191 |