iHeartMedia(IHRT) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Presents unaudited consolidated financial statements and management's discussion for Q2 and H1 2025 and 2024 ITEM 1. FINANCIAL STATEMENTS Unaudited consolidated financial statements, including balance sheets, income, equity, cash flows, and detailed notes Consolidated Balance Sheets Financial position as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and equity | (In thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------------------------------------------- | :-------------- | :------------------ | | Total Assets | $5,379,317 | $5,571,696 | | Total Current Liabilities | $899,077 | $870,280 | | Long-term debt | $5,063,792 | $5,048,968 | | Total Stockholders' Deficit | $(1,726,249) | $(1,371,780) | - Total Assets decreased by $192.38 million from December 31, 2024, to June 30, 2025[9] - Total Stockholders' Deficit increased by $354.469 million from December 31, 2024, to June 30, 2025[9] Consolidated Statements of Comprehensive Loss Revenues, operating income, and net loss for Q2 and H1 2025 and 2024 | (In thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $933,653 | $929,092 | $1,740,754 | $1,728,130 | | Operating income (loss) | $35,370 | $(909,667) | $9,936 | $(944,375) | | Net loss attributable to the Company | $(83,480) | $(981,658) | $(364,704) | $(1,000,166) | | Basic Net loss per common share | $(0.54) | $(6.50) | $(2.38) | $(6.65) | - Revenue for the three months ended June 30, 2025, increased by $4.561 million (0.5%) compared to the same period in 2024[11] - Operating income significantly improved from a loss of $(909.667) million in Q2 2024 to an income of $35.370 million in Q2 2025, primarily due to lower impairment charges[11] - Net loss attributable to the Company improved by $898.178 million for the three months ended June 30, 2025, compared to the same period in 2024[11] Consolidated Statements of Changes in Stockholders' Deficit Outlines changes in the company's equity, including accumulated deficit, for the periods ended June 30, 2025, and December 31, 2024 | (In thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :-------------- | :------------------ | | Accumulated Deficit | $(4,704,787) | $(4,340,083) | | Total Stockholders' Deficit | $(1,726,249) | $(1,371,780) | - Accumulated deficit increased by $364.704 million from December 31, 2024, to June 30, 2025, primarily due to net loss[14] - Total Stockholders' Deficit increased by $354.469 million from December 31, 2024, to June 30, 2025[14] Consolidated Statements of Cash Flows Reports cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Cash flows from operating activities | $(54,123) | $(32,548) | | Cash flows from investing activities | $(40,648) | $55,871 | | Cash flows from financing activities | $70,681 | $(4,816) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(23,648) | $18,362 | | Cash, cash equivalents and restricted cash at end of period | $235,932 | $364,744 | - Cash used for operating activities increased to $54.123 million in H1 2025 from $32.548 million in H1 2024[17] - Investing activities shifted from providing $55.871 million in H1 2024 to using $40.648 million in H1 2025, primarily due to the absence of the BMI investment sale[17] - Financing activities provided $70.681 million in H1 2025, a significant increase from using $4.816 million in H1 2024, driven by ABL facility borrowings[17] Notes to Consolidated Financial Statements Detailed explanations supporting financial statements, covering revenue, leases, debt, and segments NOTE 1 – BASIS OF PRESENTATION Reporting segments, accounting policies, and current economic environment - The Company operates with three reportable segments: Multiplatform Group, Digital Audio Group, and Audio & Media Services Group[20][27] - Economic conditions, including higher interest rates and inflation, continue to create a challenging macroeconomic environment impacting the Company's revenues and cash flows[21] Metric | Metric | June 30, 2025 (in thousands) | | :------------------------------------ | :--------------------------- | | Cash and cash equivalents | $235,932 | | ABL Facility outstanding borrowings | $100,000 | | ABL Facility available for borrowing | $290,800 | | Total available liquidity | $526,700 | NOTE 2 – REVENUE Revenue disaggregation by stream, trade/barter, and future contract revenue Revenue Stream Performance | Revenue Stream (in thousands) | Q2 2025 | Q2 2024 | YoY Change (%) | H1 2025 | H1 2024 | YoY Change (%) | | :---------------------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Broadcast Radio | $395,789 | $425,490 | (7.0)% | $736,525 | $784,828 | (6.2)% | | Networks | $107,813 | $106,591 | 1.1% | $207,276 | $208,642 | (0.7)% | | Sponsorship and Events | $36,485 | $39,121 | (6.7)% | $65,106 | $66,950 | (2.8)% | | Digital, excluding Podcast | $188,407 | $179,918 | 4.7% | $348,527 | $327,077 | 6.5% | | Podcast | $134,296 | $104,521 | 28.5% | $250,332 | $195,145 | 28.3% | | Audio & Media Services | $66,352 | $68,746 | (3.5)% | $124,319 | $136,538 | (8.8)% | | Consolidated Total Revenue | $933,653 | $929,092 | 0.5% | $1,740,754 | $1,728,130 | 0.7% | Trade and Barter Revenues and Expenses | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Trade and barter revenues | $75,995 | $69,277 | $125,360 | $110,582 | | Trade and barter expenses | $64,769 | $57,786 | $98,563 | $91,967 | - The Company expects to recognize $264.7 million of revenue in future periods from current contracts with customers that have an original expected duration greater than one year, mostly within the next five years[33] NOTE 3 – LEASES Lease accounting, ROU asset impairment, and cash flows for lease liabilities - The Company recognized non-cash impairment charges of $2.6 million and $5.4 million for the three and six months ended June 30, 2025, respectively, related to ROU assets due to changes in sublease assumptions for operating leases[37] Lease Liabilities Cash Flows | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------- | :----------------------------- | :----------------------------- | | Cash paid for amounts included in measurement of operating lease liabilities | $72,805 | $75,069 | | Lease liabilities arising from obtaining right-of-use assets | $12,241 | $13,022 | NOTE 4 – PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND GOODWILL Balances and amortization for fixed assets, intangibles, and goodwill Asset Balances | (In thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :-------------- | :------------------ | | Property, plant and equipment, net | $451,250 | $489,843 | | Indefinite-lived intangibles - licenses | $809,928 | $809,928 | | Other intangibles, net | $820,145 | $927,582 | | Goodwill | $1,105,507 | $1,105,156 | - Total amortization expense for definite-lived intangible assets was $53.7 million for Q2 2025 (down from $61.2 million in Q2 2024) and $107.4 million for H1 2025 (down from $123.1 million in H1 2024)[44] Estimated Amortization Expense | (In thousands) | Estimated Amortization Expense | | :------------- | :----------------------------- | | 2026 | $201,512 | | 2027 | $176,171 | | 2028 | $160,395 | | 2029 | $121,622 | | 2030 | $16,430 | NOTE 5 – LONG-TERM DEBT Debt structure, interest rates, market value, and covenant compliance Debt Structure | (In thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :-------------- | :------------------ | | Total Debt | $5,137,518 | $5,071,469 | | Less: Current portion | $73,726 | $22,501 | | Total long-term debt | $5,063,792 | $5,048,968 | | Weighted average interest rate | 9.2% | 9.4% | | Aggregate market value of debt | ~$3.7 billion | ~$4.1 billion | - The Company borrowed $100.0 million under the ABL Facility on May 22, 2025, for short-term liquidity management[47] - As of June 30, 2025, the Company was in compliance with all covenants related to its debt agreements[47] NOTE 6 – COMMITMENTS AND CONTINGENCIES Legal proceedings, probable costs, and FCC foreign ownership rules - The Company is involved in various legal proceedings, accruing estimates for probable costs where loss is probable and estimable[49] - The FCC issued a declaratory ruling on November 5, 2020, permitting the Company to be up to 100% foreign-owned, subject to certain conditions[51] NOTE 7 – INCOME TAXES Income tax benefit/expense and effective tax rates, impacted by valuation allowances Income Tax Benefit (Expense) and Effective Tax Rate | (In thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Income tax benefit (expense) | $(18,253) | $23,959 | $(153,612) | $44,621 | | Effective tax rate | (27.8)% | 2.4% | (72.7)% | 4.3% | - The effective tax rates were primarily impacted by a forecasted increase in valuation allowance against certain deferred tax assets, mainly due to disallowed interest expense carryforwards[52] - The 2024 effective tax rates were also impacted by impairment charges to non-deductible goodwill[52] NOTE 8 – STOCKHOLDERS' DEFICIT Share-based compensation, net loss per share, and unrecognized compensation costs Share-Based Compensation and Net Loss Per Share | (In thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | | Total Share Based Compensation Expense | $7,260 | $7,220 | $16,289 | $15,700 | | Basic Net loss per common share | $(0.54) | $(6.50) | $(2.38) | $(6.65) | | Diluted Net loss per common share | $(0.54) | $(6.50) | $(2.38) | $(6.65) | - As of June 30, 2025, there was $21.4 million of unrecognized compensation cost related to share-based compensation, expected to be recognized over approximately 1.8 years[56] - No Special Warrants were exercised for Class A or Class B common stock during the three or six months ended June 30, 2025[58][59] NOTE 9 – SEGMENT DATA Financial performance for Multiplatform, Digital Audio, and Audio & Media Services segments - Segment Adjusted EBITDA is the primary profitability metric used by the Chief Operating Decision Maker (CEO) for resource allocation and performance assessment[62][63] Q2 2025 Segment Performance | (In thousands) | Multiplatform Group (Q2 2025) | Digital Audio Group (Q2 2025) | Audio & Media Services Group (Q2 2025) | | :---------------------------- | :---------------------------- | :---------------------------- | :------------------------------------- | | Revenue | $544,598 | $323,856 | $67,736 | | Segment Adjusted EBITDA | $96,364 | $107,610 | $23,721 | | Segment Adjusted EBITDA margin | 17.7% | 33.2% | 35.0% | H1 2025 Segment Performance | (In thousands) | Multiplatform Group (H1 2025) | Digital Audio Group (H1 2025) | Audio & Media Services Group (H1 2025) | | :---------------------------- | :---------------------------- | :---------------------------- | :------------------------------------- | | Revenue | $1,017,576 | $601,143 | $127,059 | | Segment Adjusted EBITDA | $166,371 | $194,693 | $39,519 | | Segment Adjusted EBITDA margin | 16.3% | 32.4% | 31.1% | ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's perspective on financial condition, operations, segment results, and market risks Format of Presentation Segment reporting structure and key profitability metrics used by the CEO - The Company reports based on three segments: Multiplatform Group, Digital Audio Group, and Audio & Media Services Group[68][76] - Segment Adjusted EBITDA is the key profitability metric used by the Chief Operating Decision Maker (CEO) for resource allocation and performance assessment[69] Description of our Business Overview of business segments, their revenue sources, and primary expenses Multiplatform Group Revenue from radio advertising and events, with related variable expenses - Primary revenue source is selling local and national advertising time on radio stations, with contracts typically less than one year[72] - Revenue is also generated from network syndication, nationally recognized events, and other miscellaneous transactions[72] - Variable expenses primarily relate to programming and sales departments, including profit sharing fees and commissions[78] Digital Audio Group Revenue from podcast and digital advertising, highlighting market position and content costs - Primary revenue source is selling advertising on the podcast network, iHeartRadio mobile application, website, and station websites[79] - iHeartMedia is the number one podcast publisher in America, with reach across over 500 platforms[81] - Variable expenses primarily relate to content costs, including podcast profit sharing, third-party digital costs, and sales commissions[82] Audio & Media Services Group Revenue generation through media representation and broadcast software services - Revenue is generated by services to broadcast industry participants through Katz Media (media representation commissions) and RCS (broadcast software, media streaming, research services)[83] Economic Conditions Impact of macroeconomic factors and recent tax legislation on financial performance - Higher interest rates and inflation continue to create a challenging macroeconomic environment, impacting advertising revenue, cash flows, and cost of capital[84] - The U.S. government enacted the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, introducing significant changes to federal income tax, effective 2025, including restoration of 100% bonus depreciation and immediate expensing of R&D costs[85] - The Company expects significant reductions in cash taxes paid due to the OBBBA, but the full financial effect is still being assessed[86] Modernization Initiatives Anticipated operating expense savings from strategic initiatives implemented in 2024 - Operating expense savings initiatives implemented in 2024, including headcount reductions, are anticipated to result in approximately $150 million of net savings for full year 2025[87] Executive Summary Consolidated revenues for Q2 2025 increased slightly due to continued demand for digital advertising, partially offset by lower radio advertising spending. Operating income and net loss significantly improved compared to the prior year, primarily due to substantially lower non-cash impairment charges. Cash flows from operating activities decreased, while Adjusted EBITDA increased. Q2 2025 Financial Highlights | (In thousands) | Q2 2025 | Q2 2024 | YoY Change | | :-------------------------- | :------ | :------ | :--------- | | Consolidated Revenue | $933,653 | $929,092 | +0.5% | | Operating income (loss) | $35,370 | $(909,667) | +$945.0M | | Net loss | $(83,988) | $(981,989) | +$898.0M | | Cash provided by operating activities | $6,821 | $26,729 | -$19.9M | | Adjusted EBITDA | $156,127 | $150,207 | +$5.9M | | Free cash flow | $(13,176) | $5,557 | -$18.7M | - Digital Audio Group Revenue increased by $38.2 million (13.4%) and Segment Adjusted EBITDA increased by $15.7 million (17.1%) in Q2 2025[91] - Multiplatform Group Revenue decreased by $31.3 million (5.4%) and Segment Adjusted EBITDA decreased by $7.9 million (7.6%) in Q2 2025[91] Results of Operations Consolidated revenue saw a modest increase, driven by strong growth in Digital Audio (especially podcasting), which offset declines in Multiplatform Group (broadcast radio) and Audio & Media Services. Operating expenses increased due to higher variable content costs, while SG&A decreased due to modernization initiatives. Significant improvement in operating income and net loss was primarily due to substantially lower impairment charges in 2025 compared to 2024. Revenue Consolidated and segment-specific revenue trends, highlighting growth drivers and declines Consolidated and Segment Revenue | Revenue Stream (in thousands) | Q2 2025 | Q2 2024 | YoY Change (%) | H1 2025 | H1 2024 | YoY Change (%) | | :---------------------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Multiplatform Group | $544,598 | $575,907 | (5.4)% | $1,017,576 | $1,069,370 | (4.8)% | | Digital Audio Group | $323,856 | $285,614 | 13.4% | $601,143 | $524,582 | 14.6% | | Audio & Media Services | $67,736 | $70,082 | (3.3)% | $127,059 | $139,250 | (8.8)% | | Consolidated Total Revenue | $933,653 | $929,092 | 0.5% | $1,740,754 | $1,728,130 | 0.7% | - Digital Audio Group revenue growth was primarily driven by podcast advertising, which increased by 28.5% in Q2 2025 and 28.3% in H1 2025[92][93][94] - Audio & Media Services revenue decreased due to lower political revenues (2024 was a presidential election year) and nonrecurring contract termination fees in 2024[93][94] Direct Operating Expenses Changes in direct operating expenses, driven by variable content costs and employee compensation Consolidated Direct Operating Expenses | (In thousands) | Q2 2025 | Q2 2024 | YoY Change (%) | H1 2025 | H1 2024 | YoY Change (%) | | :---------------------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Consolidated Direct Operating Expenses | $391,194 | $382,049 | 2.4% | $747,520 | $723,409 | 3.3% | - The increase was primarily driven by higher variable content costs, including podcast profit share and third-party digital costs, partially offset by decreased employee compensation due to modernization initiatives[95] Selling, General and Administrative Expenses Decrease in SG&A expenses due to cost savings and lower sales commissions Consolidated SG&A Expenses | (In thousands) | Q2 2025 | Q2 2024 | YoY Change (%) | H1 2025 | H1 2024 | YoY Change (%) | | :------------------------------------ | :------ | :------ | :------------- | :------ | :------ | :------------- | | Consolidated SG&A Expenses | $413,082 | $431,614 | (4.3)% | $793,876 | $816,758 | (2.8)% | - The decrease was primarily due to lower costs from cost savings initiatives, including reduced employee compensation from modernization and lower sales commissions, partially offset by increased non-cash trade and barter expense and employee benefit expense[96] Depreciation and Amortization Decrease in D&A, primarily due to a lower fixed asset base Depreciation and Amortization | (In thousands) | Q2 2025 | Q2 2024 | YoY Change (%) | H1 2025 | H1 2024 | YoY Change (%) | | :-------------------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Depreciation and Amortization | $90,369 | $104,356 | (13.5)% | $182,270 | $209,518 | (13.0)% | - The decrease was primarily a result of a lower fixed asset base due to reduced capital expenditures[97] Impairment Charges Significant reduction in impairment charges in 2025 compared to the prior year Impairment Charges | (In thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------- | :------ | :------ | :------ | :------ | | Impairment Charges | $2,552 | $920,224 | $5,407 | $921,732 | - Impairment charges in 2025 were primarily related to changes in sublease assumptions for operating leases[98] - Impairment charges in 2024 were primarily to reduce the carrying values of indefinite-lived FCC licenses and goodwill[99] Interest Expense, net Increase in net interest expense due to higher contractual interest rates from debt exchange Interest Expense, net | (In thousands) | Q2 2025 | Q2 2024 | YoY Change (%) | H1 2025 | H1 2024 | YoY Change (%) | | :-------------------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Interest Expense, net | $100,894 | $95,577 | 5.6% | $201,280 | $191,092 | 5.3% | - The increase was primarily due to higher contractual interest rates resulting from the debt exchange transaction in Q4 2024[100] Gain (Loss) On Investments, Net Impact of investment gains and losses, including prior year's BMI sale Gain (Loss) on Investments, Net | (In thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Gain (Loss) on investments, net | $(901) | $(412) | $(19,495) | $91,582 | - H1 2024 included a $101.4 million gain from the sale of the investment in Broadcast Music, Inc. (BMI)[102] Income Tax Benefit (Expense) Income tax benefit/expense and effective tax rates, influenced by valuation allowances Income Tax Benefit (Expense) and Effective Tax Rate | (In thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Income tax benefit (expense) | $(18,253) | $23,959 | $(153,612) | $44,621 | | Effective tax rate | (27.8)% | 2.4% | (72.7)% | 4.3% | - Effective tax rates were primarily impacted by a forecasted increase in valuation allowance against deferred tax assets, related to disallowed interest expense carryforwards[103] Net Loss Attributable to the Company Significant improvement in net loss, primarily due to lower impairment charges Net Loss Attributable to the Company | (In thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | | Net loss attributable to the Company | $(83,480) | $(981,658) | $(364,704) | $(1,000,166) | - Net loss improved by $898.2 million in Q2 2025 and $635.5 million in H1 2025, primarily due to significantly lower non-cash impairment charges in 2025 compared to 2024[104][105] - The H1 2025 improvement was partially offset by the $101.4 million gain from the BMI sale in H1 2024[105] Multiplatform Group Results Revenue, operating expenses, and Adjusted EBITDA for the Multiplatform Group Multiplatform Group Performance | (In thousands) | Q2 2025 | Q2 2024 | YoY Change (%) | H1 2025 | H1 2024 | YoY Change (%) | | :-------------------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Revenue | $544,598 | $575,907 | (5.4)% | $1,017,576 | $1,069,370 | (4.8)% | | Operating expenses | $448,234 | $471,644 | (5.0)% | $851,205 | $887,925 | (4.1)% | | Segment Adjusted EBITDA | $96,364 | $104,263 | (7.6)% | $166,371 | $181,445 | (8.3)% | | Segment Adjusted EBITDA margin | 17.7% | 18.1% | | 16.3% | 17.0% | | - Revenue decreased primarily due to lower broadcast advertising, influenced by uncertain market conditions and lower political revenues in H1 2025[108][110] - Operating expenses decreased due to reduced employee compensation from modernization initiatives and lower sales commissions[109][111] Digital Audio Group Results Revenue, operating expenses, and Adjusted EBITDA for the Digital Audio Group Digital Audio Group Performance | (In thousands) | Q2 2025 | Q2 2024 | YoY Change (%) | H1 2025 | H1 2024 | YoY Change (%) | | :-------------------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Revenue | $323,856 | $285,614 | 13.4% | $601,143 | $524,582 | 14.6% | | Operating expenses | $216,246 | $193,744 | 11.6% | $406,450 | $364,585 | 11.5% | | Segment Adjusted EBITDA | $107,610 | $91,870 | 17.1% | $194,693 | $159,997 | 21.7% | | Segment Adjusted EBITDA margin | 33.2% | 32.2% | | 32.4% | 30.5% | | - Revenue growth was driven by a 28.5% increase in Podcast revenue in Q2 2025 and a 28.3% increase in H1 2025, reflecting continued advertiser demand[113][115] - Operating expenses increased primarily due to higher variable content costs, including podcast profit share and third-party digital costs, linked to increased revenues[114][116] Audio & Media Services Group Results Revenue, operating expenses, and Adjusted EBITDA for the Audio & Media Services Group Audio & Media Services Group Performance | (In thousands) | Q2 2025 | Q2 2024 | YoY Change (%) | H1 2025 | H1 2024 | YoY Change (%) | | :-------------------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Revenue | $67,736 | $70,082 | (3.3)% | $127,059 | $139,250 | (8.8)% | | Operating expenses | $44,015 | $46,233 | (4.8)% | $87,540 | $91,706 | (4.5)% | | Segment Adjusted EBITDA | $23,721 | $23,849 | (0.5)% | $39,519 | $47,544 | (16.9)% | | Segment Adjusted EBITDA margin | 35.0% | 34.0% | | 31.1% | 34.1% | | - Revenue decreased due to lower broadcast advertising, reduced political revenues (2024 was a presidential election year), and nonrecurring contract termination fees in H1 2024, partially offset by increased digital advertising demand[118][119] - Operating expenses decreased primarily due to reduced employee compensation costs from modernization initiatives[118][120] Reconciliation of Operating income (loss) to EBITDA and Adjusted EBITDA Provides a reconciliation of operating income (loss) to EBITDA and Adjusted EBITDA, detailing adjustments Operating Income (Loss) to Adjusted EBITDA Reconciliation | (In thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | | Operating income (loss) | $35,370 | $(909,667) | $9,936 | $(944,375) | | Depreciation and amortization | $90,369 | $104,356 | $182,270 | $209,518 | | Impairment charges | $2,552 | $920,224 | $5,407 | $921,732 | | Restructuring expenses | $19,490 | $27,558 | $45,068 | $51,161 | | Share-based compensation expense | $7,260 | $7,220 | $16,289 | $15,700 | | Adjusted EBITDA | $156,127 | $150,207 | $260,715 | $254,824 | Reconciliation of Net loss to EBITDA and Adjusted EBITDA Presents a reconciliation of net loss to EBITDA and Adjusted EBITDA, including various non-GAAP adjustments Net Loss to Adjusted EBITDA Reconciliation | (In thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | | Net loss | $(83,988) | $(981,989) | $(364,871) | $(1,000,097) | | Income tax (benefit) expense | $18,253 | $(23,959) | $153,612 | $(44,621) | | Interest expense, net | $100,894 | $95,577 | $201,280 | $191,092 | | Depreciation and amortization | $90,369 | $104,356 | $182,270 | $209,518 | | EBITDA | $125,528 | $(806,015) | $172,291 | $(644,108) | | Impairment charges | $2,552 | $920,224 | $5,407 | $921,732 | | Restructuring expenses | $19,490 | $27,558 | $45,068 | $51,161 | | Share-based compensation expense | $7,260 | $7,220 | $16,289 | $15,700 | | Adjusted EBITDA | $156,127 | $150,207 | $260,715 | $254,824 | - Adjusted EBITDA is defined as consolidated Operating income (loss) adjusted for restructuring expenses, share-based compensation, depreciation and amortization, impairment charges, and other operating expense[122] Reconciliation of Cash provided by (used for) operating activities to Free Cash Flow Reconciles cash flows from operating activities to Free Cash Flow, accounting for capital expenditures Cash Flow to Free Cash Flow Reconciliation | (In thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | | Cash provided by (used for) operating activities | $6,821 | $26,729 | $(54,123) | $(32,548) | | Purchases of property, plant and equipment | $(19,997) | $(21,172) | $(39,727) | $(42,754) | | Free cash flow | $(13,176) | $5,557 | $(93,850) | $(75,302) | - Free Cash Flow is defined as Cash provided by (used for) operating activities less capital expenditures[123] Share-Based Compensation Expense Share-based compensation expenses and unrecognized compensation costs for future periods Share-Based Compensation Expenses | (In thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | | Share-based compensation expenses | $7,260 | $7,220 | $16,289 | $15,700 | - As of June 30, 2025, $21.4 million of unrecognized compensation cost related to share-based arrangements is expected to be recognized over a weighted average period of approximately 1.8 years[126] LIQUIDITY AND CAPITAL RESOURCES The company's liquidity is supported by cash on hand and available ABL facility borrowings, totaling $526.7 million as of June 30, 2025. Cash used for operating activities increased, while investing activities shifted from providing to using cash, primarily due to the absence of a major asset sale seen in the prior year. Financing activities provided cash due to ABL facility borrowings. The company expects sufficient liquidity for the next twelve months despite market uncertainties and increased debt service payments. Cash Flows Summarizes cash flows from operating, investing, and financing activities for the six-month periods Cash Flow Summary | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Cash provided by (used for) Operating activities | $(54,123) | $(32,548) | | Cash provided by (used for) Investing activities | $(40,648) | $55,871 | | Cash provided by (used for) Financing activities | $70,681 | $(4,816) | | Free Cash Flow | $(93,850) | $(75,302) | Operating Activities Changes in cash used for operating activities, driven by timing of collections and payments - Cash used for operating activities increased to $54.1 million in H1 2025 from $32.5 million in H1 2024, primarily due to timing of receivable collections and payable payments, partially offset by interest payment timing[128] Investing Activities Cash flows from investing activities, including capital expenditures and asset sales - Cash used for investing activities was $40.6 million in H1 2025, primarily for $39.7 million in capital expenditures across segments (Multiplatform: $16.6 million, Digital Audio: $10.3 million, Audio & Media Services: $8.4 million, Corporate: $4.4 million)[129] - Cash provided by investing activities was $55.9 million in H1 2024, reflecting $101.4 million from the sale of BMI, partially offset by $42.8 million in capital expenditures[130] Financing Activities Cash flows from financing activities, primarily from ABL facility borrowings and debt payments - Cash provided by financing activities totaled $70.7 million in H1 2025, primarily due to $100.0 million borrowed under the ABL Facility, partially offset by term loan amortization and debt premium payments[131] - Cash used for financing activities totaled $4.8 million in H1 2024, primarily due to distributions to noncontrolling interest holders[132] Sources of Liquidity and Anticipated Cash Requirements Available liquidity, anticipated debt service, and management's outlook on funding needs Available Liquidity | Metric | June 30, 2025 (in millions) | | :------------------------------------ | :--------------------------- | | Cash and cash equivalents | $235.9 | | ABL Facility available for borrowing | $290.8 | | Total available liquidity | $526.7 | - The Company anticipates cash payments of approximately $238.4 million for debt service in the remainder of 2025, including interest, term loan amortization, and debt premium payments[135] - Management believes current liquidity is sufficient to fund operations, capital expenditures, and debt payments for at least the next twelve months[133][136] Summary Debt Capital Structure Presents the company's total and net debt, along with compliance with debt covenants Debt Capital Structure | (In thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :-------------- | :------------------ | | Total Debt | $5,137,518 | $5,071,469 | | Net Debt | $4,635,284 | $4,522,137 | - The ABL Facility contains a springing fixed charge coverage ratio, which was not effective as of June 30, 2025, as no triggering event occurred[138] - As of June 30, 2025, the Company was in compliance with all covenants related to its debt agreements[138] Supplemental Financial Information under Debt Agreements No material differences in financial information relevant to debt agreements - There are no material differences between iHeartMedia's consolidated financial information and that of Capital I and its consolidated restricted subsidiaries for the three and six months ended June 30, 2025[140] Commitments, Contingencies and Guarantees Legal proceedings, accrued costs, and future cash obligations from contracts - The Company is involved in various legal proceedings and accrues estimates for probable costs, acknowledging the inherent uncertainty of litigation[141] - Future cash obligations include long-term debt, non-cancelable operating lease agreements, employment and talent contracts, and music license fees[143] SEASONALITY Seasonal patterns of business and impact of election years on revenues - The Company's businesses typically experience their lowest financial performance in the first quarter of the calendar year[144] - Revenues are generally higher in congressional election years, especially presidential election years, impacting comparability between years[144] MARKET RISK Exposure to market risks, including interest rate fluctuations and inflation - The Company is exposed to market risks from changes in interest rates, foreign currency exchange rates, and inflation[145] Interest Rate Risk Impact of floating interest rates on debt and potential changes in interest expense - Approximately 46% of the Company's aggregate principal amount of long-term debt bore interest at floating rates as of June 30, 2025[146] - A 100 basis point change in floating interest rates would change interest expense by an estimated $11.3 million for the six months ended June 30, 2025[146] Inflation Effects of inflation on costs and the company's mitigation strategies - Inflation has affected costs for employee compensation, equipment, and third-party services, but the Company believes its impact will remain immaterial due to mitigation actions[148] Critical Accounting Estimates No significant changes to critical accounting policies and estimates - There have been no significant changes to critical accounting policies and estimates from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[149] CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS Warnings about forward-looking statements, inherent risks, and factors causing actual results to differ - The report contains forward-looking statements regarding future operating and financial performance, macroeconomic trends, anticipated tax benefits, modernization initiatives, and other strategic matters[150] - These statements involve risks and uncertainties, and actual future events and performance may differ materially from expectations[150] - Key risk factors include weak economic conditions, advertising revenue fluctuations, intense competition, dependence on talent, technological changes, substantial indebtedness, and regulatory requirements[151][152] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Refers to the 'Market Risk' section in Item 2 for disclosures on interest rate, foreign currency, and inflation risks - Required information on quantitative and qualitative disclosures about market risk is presented under the 'Market Risk' section within Item 2 of Part I[153] ITEM 4. CONTROLS AND PROCEDURES Management concluded disclosure controls were effective; no material changes in internal control over financial reporting Disclosure Controls and Procedures Acknowledges inherent limitations of disclosure controls, providing reasonable assurance - Management acknowledges that controls and procedures provide only reasonable assurance due to inherent limitations and resource constraints[154] Evaluation of Disclosure Controls and Procedures Effectiveness of disclosure controls and procedures at reasonable assurance level as of June 30, 2025 - The CEO and CFO concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[155] Changes in Internal Control over Financial Reporting No material changes in internal control over financial reporting during the quarter - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that materially affected or are reasonably likely to materially affect internal control over financial reporting[156] PART II – OTHER INFORMATION This section provides additional information including legal proceedings, risk factors, equity sales, and exhibits ITEM 1. LEGAL PROCEEDINGS Various legal proceedings in the ordinary course of business, with accrued estimates for probable costs - The Company is involved in a variety of legal proceedings in the ordinary course of business, including commercial/contract disputes, defamation, employment, intellectual property, real estate, governmental investigations, and tax disputes[159] - Estimates of probable costs for claims where loss is probable and estimable have been accrued, but future results could be materially affected by changes in assumptions or strategies[159] ITEM 1A. RISK FACTORS No material changes to risk factors from the Annual Report on Form 10-K for December 31, 2024 - There have been no material changes in the Company's risk factors from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024[160] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS No unregistered equity sales; repurchased shares for employee tax withholding - The Company did not issue or sell any shares of its common stock or any other equity securities pursuant to unregistered transactions during the three months ended June 30, 2025[161] Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :----------------------- | :------------------------------- | :--------------------------- | | April 1 through April 30 | 12,536 | $1.26 | | May 1 through May 31 | 461,142 | $1.25 | | June 1 through June 30 | 757 | $1.50 | | Total | 474,435 | $1.25 | - The repurchased shares were Class A common stock tendered by employees to satisfy tax withholding obligations related to restricted stock vesting[162] ITEM 3. DEFAULTS UPON SENIOR SECURITIES This item is not applicable for the reporting period - This item is not applicable[163] ITEM 4. MINE SAFETY DISCLOSURES This item is not applicable for the reporting period - This item is not applicable[164] ITEM 5. OTHER INFORMATION No other material information; no director or officer trading arrangement changes - No director or officer of the Company adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2025[167] ITEM 6. EXHIBITS Lists exhibits filed with Form 10-Q, including certificates and SOX certifications - The exhibits include the Fifth Amended and Restated Certificate of Incorporation, certifications pursuant to the Sarbanes-Oxley Act, and Inline XBRL documents[165] Signatures The report is signed by Michael B. McGuinness, Executive Vice President – Finance, Deputy Chief Financial Officer and Head of Investor Relations, as the Principal Accounting Officer and Authorized Officer - The report is signed by Michael B. McGuinness, Executive Vice President – Finance, Deputy Chief Financial Officer and Head of Investor Relations, as the Principal Accounting Officer and Authorized Officer[170]