Urban One(UONEK) - 2025 Q2 - Quarterly Results

Executive Summary This section provides a high-level overview of Urban One's Q2 2025 financial performance, key challenges, and strategic responses Q2 2025 Consolidated Financial Highlights Urban One, Inc. reported a significant decline in Q2 2025 financial performance, with net revenue down 22.2% and increased operating and net losses, alongside a sharp Adjusted EBITDA decline Q2 2025 Consolidated Financial Highlights (in millions) | Metric | Q2 2025 (approx.) | Q2 2024 (approx.) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | | Net Revenue | $91.6 | $117.7 | -22.2% | | Operating Loss | $(120.7) | $(60.4) | +99.8% | | Broadcast and Digital Operating Income | $25.7 | $34.2 | -25.0% | | Net Loss | $(77.9) | $(45.4) | +71.6% | | Net Loss per Share (basic) | $(1.74) | $(0.94) | +85.1% | | Adjusted EBITDA | $14.0 | $28.9 | -51.5% | CEO Commentary and Business Outlook The CEO attributed weak Q2 results to underperformance in Reach Media and Digital segments, reduced guidance, and outlined focuses on cost control, leverage, and debt repurchase - Second quarter results were impacted by weaker than expected performance in Reach Media and Digital segments, partly due to the timing of the annual Tom Joyner Fantastic Voyage (Q2 2024 revenue of $9.6 million, moving to Q4 2025)[2] - Reach Media experienced client attrition and lower CPMs, leading to a loss-making quarter for the segment[2] - Digital business faced lower advertising demand and reduced streaming CPMs[2] - Core radio advertising was down 11.8% (excluding digital), with double-digit declines in national radio advertising demand. Cable TV advertising was down 4.2% and affiliate revenue down 11.7% due to subscriber churn[2] - Full-year guidance for Adjusted EBITDA has been reduced to $60.0 million due to broad economic headwinds[2] - The company repurchased $64.0 million of its 2028 Notes at approximately 51.8% of par, reducing outstanding debt to $492.3 million[2] Consolidated Financial Performance This section details the company's overall financial results, highlighting significant declines in revenue and increased losses for the quarter and year-to-date Consolidated Statements of Operations The consolidated statements of operations show a significant deterioration in financial results for both the three and six months ended June 30, 2025, compared to the prior year Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | NET REVENUE | $91,631 | $117,744 | $183,866 | $222,154 | | Total operating expenses | $212,315 | $178,165 | $302,452 | $269,687 | | Operating loss | $(120,684) | $(60,421) | $(118,586) | $(47,533) | | Gain on retirement of debt | $30,297 | $7,425 | $41,884 | $15,299 | | Benefit from income taxes | $21,382 | $18,512 | $5,724 | $16,010 | | NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $(77,902) | $(45,431) | $(89,644) | $(37,938) | Segment Performance Analysis This section analyzes the financial performance of Urban One's operating segments, including reclassifications and detailed revenue and Adjusted EBITDA trends Segment Reclassification Effective January 1, 2025, Urban One reclassified its segments, moving CTV from Digital to Cable Television, and recast prior period information for consistency - The Company transferred the CTV offering from the Digital segment to the Cable Television segment, effective January 1, 2025, and reclassified prior period information accordingly[4] - Prior period segment information was also recast between Sales and marketing and General and administrative expenses to conform to the presentation used by the Chief Operating Decision Maker (CODM)[4] Segment Financial Performance (Three Months Ended June 30) For Q2 2025, most segments experienced revenue declines, with Reach Media and Digital becoming loss-making in Adjusted EBITDA, while Cable Television remained the strongest contributor Net Revenue by Segment (in thousands) | Segment | Q2 2025 Net Revenue | Q2 2024 Net Revenue | Change ($) | Change (%) | | :---------------- | :------------------ | :------------------ | :--------- | :--------- | | Radio Broadcasting | $36,693 | $41,999 | $(5,306) | -12.6% | | Reach Media | $5,315 | $18,929 | $(13,614) | -71.9% | | Digital | $10,254 | $14,072 | $(3,818) | -27.1% | | Cable Television | $40,070 | $43,312 | $(3,242) | -7.5% | Adjusted EBITDA by Segment (in thousands) | Segment | Q2 2025 Adjusted EBITDA | Q2 2024 Adjusted EBITDA | Change ($) | Change (%) | | :---------------- | :---------------------- | :---------------------- | :--------- | :--------- | | Radio Broadcasting | $6,938 | $9,495 | $(2,557) | -26.9% | | Reach Media | $(1,651) | $3,457 | $(5,108) | -147.8% | | Digital | $(146) | $2,714 | $(2,860) | -105.4% | | Cable Television | $18,056 | $16,022 | $2,034 | +12.7% | Segment Financial Performance (Six Months Ended June 30) For H1 2025, consolidated net revenue decreased by 17.2%, with Reach Media and Digital reporting negative Adjusted EBITDA, and Cable Television remaining the primary positive contributor Net Revenue by Segment (in thousands) | Segment | H1 2025 Net Revenue | H1 2024 Net Revenue | Change ($) | Change (%) | | :---------------- | :------------------ | :------------------ | :--------- | :--------- | | Radio Broadcasting | $69,303 | $78,350 | $(9,047) | -11.5% | | Reach Media | $11,168 | $27,401 | $(16,233) | -59.2% | | Digital | $20,466 | $26,260 | $(5,794) | -22.1% | | Cable Television | $84,263 | $91,317 | $(7,054) | -7.7% | Adjusted EBITDA by Segment (in thousands) | Segment | H1 2025 Adjusted EBITDA | H1 2024 Adjusted EBITDA | Change ($) | Change (%) | | :---------------- | :---------------------- | :---------------------- | :--------- | :--------- | | Radio Broadcasting | $9,786 | $15,129 | $(5,343) | -35.3% | | Reach Media | $(2,202) | $5,287 | $(7,489) | -141.6% | | Digital | $(88) | $5,061 | $(5,149) | -101.7% | | Cable Television | $36,648 | $35,323 | $1,325 | +3.8% | Revenue Analysis by Source This section provides a detailed breakdown of net revenue by source, highlighting declines across all major categories for both quarterly and year-to-date periods Net Revenue by Source (Three and Six Months Ended June 30) All major revenue streams declined for both the three and six months ended June 30, 2025, with event revenues and political advertising seeing the most significant percentage decreases Net Revenue by Source (Three Months Ended June 30, in thousands) | Revenue Source | 2025 | 2024 | $ Change | % Change | | :--------------- | :---------- | :---------- | :---------- | :--------- | | Radio advertising | $38,627 | $45,421 | $(6,794) | (15.0)% | | Political advertising | $254 | $2,152 | $(1,898) | (88.2)% | | Digital advertising | $10,241 | $13,714 | $(3,473) | (25.3)% | | Cable Television advertising | $22,977 | $23,985 | $(1,008) | (4.2)% | | Cable Television affiliate fees | $17,061 | $19,315 | $(2,254) | (11.7)% | | Event revenues & other | $2,471 | $13,157 | $(10,686) | (81.2)% | | Net revenue | $91,631 | $117,744| $(26,113) | (22.2)%| Net Revenue by Source (Six Months Ended June 30, in thousands) | Revenue Source | 2025 | 2024 | $ Change | % Change | | :--------------- | :---------- | :---------- | :---------- | :--------- | | Radio advertising | $74,844 | $86,761 | $(11,917) | (13.7)% | | Political advertising | $404 | $3,388 | $(2,984) | (88.1)% | | Digital advertising | $20,452 | $25,881 | $(5,429) | (21.0)% | | Cable Television advertising | $48,402 | $51,129 | $(2,727) | (5.3)% | | Cable Television affiliate fees | $35,778 | $40,103 | $(4,325) | (10.8)% | | Event revenues & other | $3,986 | $14,892 | $(10,906) | (73.2)% | | Net revenue (as reported) | $183,866| $222,154| $(38,288) | (17.2)%| Detailed Financial Review This section provides an in-depth analysis of various financial components, including operating expenses, impairment charges, interest, taxes, capital expenditures, and share repurchases Operating Expenses Analysis Operating expenses, excluding certain non-cash items, decreased by approximately $15.2 million for Q2 2025, primarily due to lower expenses across most segments and reduced third-party professional fees Operating Expenses (excluding D&A, stock-based comp, impairment, in millions) | Period | 2025 (approx.) | 2024 (approx.) | Change ($) | | :----- | :------------- | :------------- | :--------- | | Q2 | $78.1 | $93.3 | $(15.2) | Impairment of Goodwill and Intangible Assets Impairment losses significantly increased to $130.1 million in Q2 2025, primarily driven by a $121.3 million impairment of radio broadcasting licenses due to declining market revenues and a change in useful life Impairment of Goodwill and Intangible Assets (in millions) | Period | 2025 | 2024 | Change ($) | | :----- | :---- | :---- | :--------- | | Q2 | $130.1 | $80.8 | $49.3 | - The impairment loss in Q2 2025 included approximately $121.3 million for radio broadcasting licenses within the Radio Broadcasting segment[15] - The primary factors for impairment were continued decline of projected gross market revenues and operating profit margin, leading to a prospective change in useful life of radio broadcasting licenses from indefinite-lived to finite-lived assets, effective June 1, 2025[15] Depreciation and Amortization Depreciation and amortization expense increased by approximately $0.5 million in Q2 2025, mainly due to TV One Trade Name amortization and new amortization of radio broadcasting licenses Depreciation and Amortization Expense (in millions) | Period | 2025 | 2024 | Change ($) | | :----- | :---- | :---- | :--------- | | Q2 | $3.5 | $3.0 | $0.5 | Interest and Investment Income Interest and investment income decreased significantly in Q2 2025, primarily due to lower cash and cash equivalents balances compared to the prior year Interest and Investment Income (in millions) | Period | 2025 | 2024 | Change ($) | | :----- | :---- | :---- | :--------- | | Q2 | $0.6 | $1.8 | $(1.2) | Interest Expense and Debt Retirement Interest expense decreased by $2.7 million in Q2 2025, and the company repurchased $64.0 million of its 2028 Notes at a discount, generating a $30.3 million gain on debt retirement Interest Expense (in millions) | Period | 2025 | 2024 | Change ($) | | :----- | :---- | :---- | :--------- | | Q2 | $9.7 | $12.4 | $(2.7) | - The Company repurchased approximately $64.0 million of its 2028 Notes at a weighted average price of approximately 51.8% of par, generating a net gain on retirement of debt of approximately $30.3 million[18] Income Taxes Urban One recorded a $21.4 million benefit from income taxes in Q2 2025 on a pre-tax loss of $99.4 million, resulting in a 21.5% effective tax rate, including a discrete tax expense Benefit from Income Taxes (in millions) | Period | Pre-Tax Loss (approx.) | Benefit from Income Taxes (approx.) | Effective Tax Rate | | :----- | :--------------------- | :---------------------------------- | :----------------- | | Q2 2025 | $(99.4) | $21.4 | 21.5% | | Q2 2024 | $(63.6) | $18.5 | 29.1% | - The Q2 2025 effective tax rate includes $6.4 million of discrete tax expense related to the change of accounting estimate for radio broadcasting licenses, impacting the valuation allowance[19] Capital Expenditures Capital expenditures decreased by approximately $1.0 million in Q2 2025 compared to the same period in 2024 Capital Expenditures (in millions) | Period | 2025 | 2024 | Change ($) | | :----- | :---- | :---- | :--------- | | Q2 | $1.2 | $2.2 | $(1.0) | Share Repurchases Urban One repurchased shares of both Class A and Class D Common Stock in Q2 2025, though at a lower volume and value compared to Q2 2024 Share Repurchases (Three Months Ended June 30, in millions) | Class | Q2 2025 Shares | Q2 2025 Amount (approx.) | Q2 2025 Avg Price | Q2 2024 Shares | Q2 2024 Amount (approx.) | Q2 2024 Avg Price | | :---- | :------------- | :----------------------- | :---------------- | :------------- | :----------------------- | :---------------- | | Class A | 226,041 | $0.4 | $1.63 | 449,277 | $0.9 | $2.06 | | Class D | 200,549 | $0.1 | $0.59 | 113,283 | $0.2 | $1.57 | Balance Sheet and Leverage This section presents key balance sheet data and leverage information, showing decreases in assets, liabilities, and equity, alongside details of outstanding debt Selected Consolidated Balance Sheet Data As of June 30, 2025, Urban One's cash and cash equivalents, total assets, total debt, total liabilities, and total stockholders' equity all decreased compared to December 31, 2024 Selected Consolidated Balance Sheet Data (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------------- | :------------ | :---------------- | | Cash and cash equivalents and restricted cash | $86,217 | $137,574 | | Intangible assets, net | $345,524 | $490,024 | | Total assets | $729,227 | $944,790 | | Total debt | $488,396 | $579,069 | | Total liabilities | $644,468 | $765,857 | | Total stockholders' equity | $82,182 | $170,945 | Selected Leverage Data As of June 30, 2025, the company's primary debt instrument was 7.375% senior secured notes due February 2028, with a net outstanding balance of $488.4 million Selected Leverage Data (in thousands) | Debt Instrument | June 30, 2025 | Applicable Interest Rate | | :-------------------------------------------------------------------------------- | :------------ | :----------------------- | | 7.375% senior secured notes due February 2028, net of issuance costs (fixed rate) | $488,396 | 7.375% | Per Share Data and Non-GAAP Reconciliations This section provides per share data and reconciliations of non-GAAP financial measures, including Broadcast and Digital Operating Income and Adjusted EBITDA, to their most directly comparable GAAP measures Per Share Data Net loss attributable to common stockholders per share (basic and diluted) increased significantly for both the three and six months ended June 30, 2025, reflecting the overall decline in profitability Per Share Data (basic and diluted) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to common stockholders (basic) | $(1.74) | $(0.94) | $(2.00) | $(0.78) | | Net loss attributable to common stockholders (diluted) | $(1.74) | $(0.94) | $(2.00) | $(0.78) | Broadcast and Digital Operating Income Reconciliation Broadcast and digital operating income decreased by 25.0% for the three months and 26.5% for the six months ended June 30, 2025, primarily due to increased impairment charges and other adjustments Broadcast and Digital Operating Income (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :----- | :------ | :------ | :--------- | :--------- | | Q2 | $25,664 | $34,196 | $(8,532) | -25.0% | | H1 | $48,680 | $66,210 | $(17,530) | -26.5% | - Impairment of goodwill and intangible assets was a significant add-back, totaling $130.1 million for Q2 2025 and $136.5 million for H1 2025[7] Adjusted EBITDA Reconciliation Adjusted EBITDA declined by 51.5% for the three months and 47.6% for the six months ended June 30, 2025, reflecting the overall operational challenges and increased impairment charges Adjusted EBITDA (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :----- | :------ | :------ | :--------- | :--------- | | Q2 | $13,960 | $28,922 | $(14,962) | -51.7% | | H1 | $26,817 | $51,179 | $(24,362) | -47.6% | - Key adjustments include adding back impairment of goodwill and intangible assets ($130.1 million for Q2 2025, $136.5 million for H1 2025) and deducting gain on retirement of debt ($(30.3) million for Q2 2025, $(41.9) million for H1 2025)[7] Supplemental Segment Financial Statements This section provides detailed segment-level statements of operations, illustrating the individual financial performance and contributions of each segment to the company's overall results Segment Statements of Operations (Three Months Ended June 30, 2025) For Q2 2025, Radio Broadcasting, Reach Media, and Digital segments reported net losses, with Radio Broadcasting showing the largest loss due to significant impairment charges Net (Loss) Income Attributable to Common Stockholders by Segment (Q2 2025, in thousands) | Segment | Net (Loss) Income Attributable to Common Stockholders | | :---------------- | :---------------------------------------------------- | | Radio Broadcasting | $(91,975) | | Reach Media | $(1,772) | | Digital | $(3,711) | | Cable Television | $13,487 | - Radio Broadcasting segment incurred a $125.2 million impairment of goodwill and intangible assets, contributing significantly to its operating and net loss[23] Segment Statements of Operations (Three Months Ended June 30, 2024) In Q2 2024, Radio Broadcasting also reported a net loss, primarily due to impairment, while Reach Media, Digital, and Cable Television segments were profitable Net (Loss) Income Attributable to Common Stockholders by Segment (Q2 2024, in thousands) | Segment | Net (Loss) Income Attributable to Common Stockholders | | :---------------- | :---------------------------------------------------- | | Radio Broadcasting | $(55,211) | | Reach Media | $2,764 | | Digital | $2,928 | | Cable Television | $12,763 | - Radio Broadcasting segment recorded an $80.8 million impairment of goodwill and intangible assets[24] Segment Statements of Operations (Six Months Ended June 30, 2025) For H1 2025, Radio Broadcasting, Reach Media, and Digital segments all incurred net losses, with Radio Broadcasting's loss being the most substantial due to impairment Net (Loss) Income Attributable to Common Stockholders by Segment (H1 2025, in thousands) | Segment | Net (Loss) Income Attributable to Common Stockholders | | :---------------- | :---------------------------------------------------- | | Radio Broadcasting | $(95,713) | | Reach Media | $(2,513) | | Digital | $(3,736) | | Cable Television | $27,196 | - Radio Broadcasting segment reported $131.6 million in impairment of goodwill and intangible assets[25] Segment Statements of Operations (Six Months Ended June 30, 2024) In H1 2024, Radio Broadcasting reported a net loss, while Reach Media, Digital, and Cable Television segments were profitable, with Cable Television being the largest contributor to net income Net (Loss) Income Attributable to Common Stockholders by Segment (H1 2024, in thousands) | Segment | Net (Loss) Income Attributable to Common Stockholders | | :---------------- | :---------------------------------------------------- | | Radio Broadcasting | $(48,691) | | Reach Media | $3,984 | | Digital | $5,386 | | Cable Television | $27,282 | - Radio Broadcasting segment recorded $80.8 million in impairment of goodwill and intangible assets[26] Company Overview This section provides a concise description of Urban One, Inc.'s business, highlighting its diversified media operations targeting Black Americans and urban consumers Business Description Urban One, Inc. is the largest diversified media company primarily targeting Black Americans and urban consumers in the U.S. Its operations include TV One, 74 broadcast radio stations, syndicated programming through Reach Media, and digital platforms via iOne Digital - Urban One, Inc. is the largest diversified media company primarily targeting Black Americans and urban consumers in the United States[29] - The Company owns TV One, LLC, a television network serving over 35 million households[29] - As of June 30, 2025, it owned/operated 74 broadcast stations in 13 populous African-American markets[29] - It operates syndicated programming through Reach Media, Inc. and digital platforms (iOne Digital) serving the African American community[29] Notes and Definitions This section provides essential definitions for non-GAAP financial measures and details on weighted-average shares outstanding, crucial for understanding the financial report Non-GAAP Financial Measures Definitions This section provides definitions and explanations for non-GAAP financial measures used by Urban One, specifically 'Broadcast and digital operating income' and 'Adjusted EBITDA,' highlighting their purpose in evaluating core operating performance - Broadcast and digital operating income is a non-GAAP measure used by management to evaluate core operating segments, similar to 'station operating income' but reflecting Urban One's diverse business[30] - Adjusted EBITDA is a non-GAAP measure considered useful for evaluating operating performance and comparing businesses in the broadcasting industry, encompassing all four operating segments[30] - In 2024, the definition of Adjusted EBITDA was immaterially changed to add back the loss from ceased non-core operations, with historical periods recast[9] Weighted-Average Shares Outstanding The weighted-average shares outstanding (basic and diluted) decreased for both the three and six months ended June 30, 2025, compared to the prior year, indicating share repurchases Weighted-Average Shares Outstanding (basic) | Period | 2025 | 2024 | | :----- | :----------- | :----------- | | Q2 | 44,738,306 | 48,483,639 | | H1 | 44,768,280 | 48,434,513 | Weighted-Average Shares Outstanding (diluted) | Period | 2025 | 2024 | | :----- | :----------- | :----------- | | Q2 | 44,738,306 | 48,483,639 | | H1 | 44,768,280 | 48,434,513 | Conference Call Information This section provides details for the upcoming conference call to discuss Q2 2025 results, including access information for both the live event and subsequent replay Live Call Details Urban One, Inc. scheduled a conference call for August 13, 2025, at 10:00 a.m. EDT to discuss its Q2 2025 results, with specific dial-in details provided - Conference call to discuss Q2 2025 results scheduled for Wednesday, August 13, 2025, at 10:00 a.m. EDT[27] - U.S. callers: (+1) 888-596-4144; International callers: (+1) 646-968-2525; Access Code: 3660282[27] Replay Information A replay of the conference call will be available from August 13 to August 20, 2025, via phone and on Urban One's corporate website - Replay available from 2:00 p.m. EDT August 13, 2025, until 11:59 p.m. EDT August 20, 2025[28] - Replay access: U.S. callers (+1) 800-770-2030; International callers (+1) 609-800-9909; Replay Access Code: 3660282[28] - Live audio and replay also available on www.urban1.com for seven days[28] Legal Disclosures This section includes important legal disclaimers regarding forward-looking statements, emphasizing inherent risks and the company's policy on updating such information Cautionary Note Regarding Forward-Looking Statements The press release contains forward-looking statements subject to known and unknown risks and uncertainties that could cause actual results to differ materially - This press release includes forward-looking statements that represent management's current expectations and are subject to known and unknown risks, uncertainties, and other factors[11] - Actual results may differ materially from those expressed or implied by such statements, as described in Urban One's SEC filings[11] - Urban One does not undertake any duty to update any forward-looking statements[11]