Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $650.7 million, down 5% year over year and 2% sequentially, primarily due to known NEMT contract attrition, lower build hours in PCS, and membership churn in monitoring [20][21] - Net loss for the quarter was $50.4 million, up from $22.3 million a year ago, mainly due to higher interest expense which rose to $38.8 million [21] - Adjusted net loss was $24.5 million or negative $1.71 per share, reflecting the exclusion of restructuring-related costs and amortization of intangibles [21] - Adjusted EBITDA was $32.6 million, essentially flat year over year but down sequentially, with key drivers including an $8 million impact from net NEMT contract development [21][22] Business Line Data and Key Metrics Changes - In NEMT, revenue was $449 million, representing 69% of total revenue, declining 6% year over year due to previously disclosed contract losses [22] - Average monthly members in NEMT declined 19% year over year and 20% sequentially, while utilization from the normalization of healthcare increased to 12% [22] - PCS contributed $181.8 million in revenue or 28% of total revenue, with revenue per hour rising 1.1% while service hours declined 2.1% due to expected seasonality [24] - Monitoring contributed $18.1 million in revenue, representing just 3% of total revenue but 16% of total adjusted EBITDA, with adjusted EBITDA at $5.2 million for a 29% segment margin [25] Market Data and Key Metrics Changes - The broader opportunity in the 2026 pipeline exceeds $500 million in potential contract value, with the company experiencing a loss of a regional contract totaling $15 million in annual revenue [6][7] - In Indiana, referral volume increased by more than 45% year over year, while new Southeastern markets delivered sequential growth [9] Company Strategy and Development Direction - The company aims to grow and retain core customer relationships, digitize and automate the Care Access platform, optimize the operating model for simplicity and scale, increase capital efficiency, and deliver high-impact client-centric supportive care [4][5] - The long-term vision is to become the digital infrastructure for supportive care, unifying fragmented benefits and delivering a coordinated member experience [19] Management's Comments on Operating Environment and Future Outlook - Management noted that the decline in revenue was expected and reflects prior year customer transitions and market dynamics that are largely behind the company [20] - The company is focused on executing against measurable initiatives and communicating progress through clear objective KPIs and milestones, without issuing formal guidance for 2025 [28] Other Important Information - The company launched a company-wide G&A reduction initiative targeting approximately $25 million in annualized savings [14] - The net contracts receivable rose to $109 million, up from $95 million in Q4, due to expected billing timing [26] Q&A Session Summary Question: How should cash flow generation be modeled for the rest of the year? - Management indicated that EBITDA is driving cash flow and expects meaningful improvement in cash flow generation as the year progresses, particularly due to contract restructuring and working capital improvements [31][38] Question: Why did contract receivables increase despite a decline in revenue? - The increase in accounts receivable was attributed to the contract mix and shared risk contracts that have not yet been converted [39][40] Question: Is there a positive cash flow possibility in Q3? - Management acknowledged that due to large debt payments in Q2 and Q4, positive cash flow from operations may not be achievable in those quarters, but they feel good about cash flow generation for the year overall [51][54] Question: Can you elaborate on the G&A savings? - The $25 million in G&A savings primarily comes from labor efficiencies within corporate and shared service areas as the company continues to streamline operations [57][59]

Financial Data and Key Metrics Changes - Total company GAAP revenue for Q1 2025 was $665 million, down 4% year over year, but met the high end of guidance [18] - Non-GAAP operating profit was $26 million, exceeding guidance and up 83% year over year, largely due to operational efficiencies [18] - Non-GAAP loss per share improved to $0.06 compared to the guided range of $0.07 to $0.09 [18] - Cash flow from operations was $13 million, and free cash flow was $4 million, showing significant improvement from the previous year [18] Business Line Data and Key Metrics Changes - Private Cloud revenue for Q1 was $250 million, in line with guidance, but down 7% year over year due to customers transitioning from older offerings [19] - Public Cloud revenue reached $416 million, surpassing guidance, but was down 2% year over year due to declines in infrastructure volumes and services [20] - Private Cloud bookings remained flat year over year, but would have grown 20% if not for the slippage of large deals into Q2 [7] - Public Cloud bookings grew 16% year over year, driven by strong performance in The Americas, which saw a 26% increase [12] Market Data and Key Metrics Changes - Federal contracts comprised only 1% of 2024 revenue, indicating minimal exposure to federal agency cost-cutting measures [6] - The company is seeing strong demand in regulated industries, particularly healthcare and energy, with significant new contracts secured [9][56] Company Strategy and Development Direction - The company is focused on driving digital transformation for customers through cloud and AI solutions, while also enhancing cyber resiliency [5] - A strategic partnership with Rubrik was announced to launch the Cyber Recovery Cloud, aimed at improving customer recovery capabilities post-cybersecurity breaches [6] - The company is expanding its offerings in private cloud, including new products like OpenStack Flex and UK Sovereign Secure, to meet compliance and security needs [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the macroeconomic environment, which may impact onboarding timelines and customer decision cycles [6] - Despite macro uncertainties, the company remains well-positioned to capitalize on long-term trends in public cloud, private cloud, and AI [6] - The company aims to maintain a sustainable business model that consistently delivers revenue, profit, and cash flow growth in 2025 [17] Other Important Information - The company has made significant progress in stabilizing private cloud revenue, with a focus on higher value, long-term contracts [8] - The company is pivoting towards managed services and high-margin offerings, moving away from low-margin infrastructure resale [44] Q&A Session Summary Question: Changes in customer behavior due to macroeconomic factors - Management noted that while there are some delays in onboarding contracts, overall bookings remain strong and customers are not delaying decisions on transformational projects [25][28] Question: Evolution of the sales pipeline and win rates - The sales pipeline has remained strong, with improved win rates and a focus on higher value, long-term contracts in both public and private cloud segments [30][34] Question: Trends in public cloud services and infrastructure resale - The company is seeing good wins in services, particularly in data services driven by AI, while infrastructure resale is expected to decline purposefully to maintain profitability [42][44] Question: Upfront CapEx payments from larger customers and regulated industries - There is continued interest from large customers in upfront CapEx payments for lower OpEx, and traction in regulated industries is strong, particularly in healthcare and energy [52][56]

Financial Data and Key Metrics Changes - Total revenue grew 24% year over year to $136 million [26] - Subscription revenue increased 31% year over year to $125 million [26] - Free cash flow reached a record $36 million, representing a 26% free cash flow margin [27] - Non-GAAP net income was $6.7 million, with non-GAAP earnings per share at $0.04 [29] - Total RPO grew 24% year over year to $1.1 billion [28] Business Line Data and Key Metrics Changes - License revenue decreased 40% year over year to $4 million due to customer SaaS conversions [26] - Professional services and other revenue was $8 million, slightly above expectations [26] - Sensible AI Forecast bookings grew over 50% year over year [17] - CPM Express product saw solid bookings growth of over 50% year over year in the commercial business [16] Market Data and Key Metrics Changes - International business revenue grew 40% year over year, representing more than 30% of total revenue [27] - More than 60% of business came from new customers, indicating strong market demand [27] Company Strategy and Development Direction - The company aims to be the operating system for modern finance, focusing on agility in financial operations [24] - Continued investment in finance AI portfolio and product innovations, including ESG reporting and planning solutions [16][17] - The strategy includes democratizing access to enterprise-level platforms through products like CPM Express [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic turbulence and emphasized the importance of system modernization [9][12] - The company reiterated its 2025 revenue growth guidance of 20% year over year, while slightly increasing profitability outlook [30] - Management acknowledged potential deal headwinds due to tightening budgets and ongoing customer conversions to SaaS impacting license revenue [30] Other Important Information - The company plans to participate in upcoming conferences to showcase its product innovations [5] - Organizational changes were made to enhance leadership for growth, with key functions reporting directly to the CEO [24] Q&A Session Summary Question: Clarification on demand issues and guidance - Management noted that while leading indicators are positive, they are being cautious due to macroeconomic uncertainties [38] Question: Insights on CPM Express product performance - Management confirmed that CPM Express is resonating well with customers, providing faster onboarding to the OneStream platform [44] Question: Revenue guidance and deployment assumptions - Management indicated that macroeconomic announcements have led to a cautious approach in revenue guidance, despite a strong sales pipeline [48][49] Question: Trends in end market bookings - Over 60% of business came from new customers, with a focus on legacy replacements driving bookings growth [52] Question: Federal spending outlook - Management expressed optimism about federal business, highlighting the need for modernization in legacy software [66] Question: Pricing and packaging changes - The new pricing strategy aims to simplify customer contracts and align with the value of new offerings [70] Question: Customer growth potential in 2025 - Management sees multiple growth vectors, including interest in AI and a focus on the commercial segment [105]

Financial Data and Key Metrics Changes - Total revenue grew 24% year over year to $136 million [22] - Subscription revenue increased 31% year over year to $125 million [22] - Free cash flow reached a record $36 million, representing a 26% free cash flow margin [23] - Non-GAAP net income was $6.7 million, with non-GAAP earnings per share at $0.04 [26] - Total RPO grew 24% year over year to $1.1 billion [25] Business Line Data and Key Metrics Changes - License revenue decreased 40% year over year to $4 million due to customer SaaS conversions [22] - Professional services and other revenue was $8 million, slightly above expectations [22] - Sensible AI Forecast bookings grew over 50% year over year [14] - CPM Express product saw solid bookings growth of over 50% year over year [13] Market Data and Key Metrics Changes - International business revenue grew 40% year over year, representing more than 30% of total revenue [23] - More than 60% of business came from new customers [23] - The company ended the quarter with 1,646 total customers, up 16% year over year [23] Company Strategy and Development Direction - The company aims to be the operating system for modern finance, focusing on agility in financial operations [20] - There is a strong emphasis on AI capabilities to enhance financial performance and forecasting accuracy [11][12] - The launch of ESG reporting and planning solutions aligns with the growing demand for sustainability reporting [14][89] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic turbulence and emphasized the importance of system modernization [6][9] - The company reiterated its 2025 revenue growth guidance of 20% year over year, while slightly increasing profitability outlook [28] - Management acknowledged potential deal headwinds due to tightening budgets and ongoing customer conversions to SaaS impacting license revenue [27] Other Important Information - The company plans to participate in upcoming conferences to showcase its product innovations [3] - Organizational changes were made to enhance innovation and growth functions [20] Q&A Session Summary Question: Clarification on demand issues and guidance - Management noted that leading indicators are positive, with the strongest sales pipeline ever, but prudence is warranted due to market uncertainty [34][36] Question: Insights on CPM Express product performance - Management confirmed that CPM Express is resonating well with customers, providing faster onboarding to the OneStream platform [40][42] Question: Revenue guidance and deployment assumptions - Management indicated that macroeconomic announcements have led to cautious guidance, despite a strong sales pipeline [46][47] Question: Trends in end market bookings - Over 60% of business came from new customers, with a focus on legacy replacements driving bookings growth [50][51] Question: Federal spending outlook - Management remains optimistic about federal business, viewing OneStream as a modernization play for legacy software [65] Question: Pricing and packaging changes - The new pricing strategy aims to simplify customer contracts and align with the value of new offerings [67][68] Question: Sensible AI forecast growth and impact - Management highlighted significant improvements in forecasting accuracy and reduced effort, leading to increased interest in the product [71][74] Question: International market performance - Management reported strong growth in international markets, attributing it to strategic foundational deals and investments [78][80] Question: Customer use cases and consumption-based pricing - Management noted that as customers adopt more use cases, it leads to material opportunities for ARR growth [83][85]

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Financial Data and Key Metrics Changes - The company reported revenue of $89.2 million for the second quarter, down from $101 million in the prior year period, primarily due to the conversion of certain VA and DoD programs to small business set-aside contracts [16][18] - EBITDA for the second quarter was $9.4 million compared to $10.2 million last year, reflecting a decrease due to lower overall revenue levels [18] - Operating cash generation was approximately $14.5 million during the quarter, leading to a year-to-date operating cash flow of $3 million, down from $10.3 million last year [19] Business Line Data and Key Metrics Changes - The company experienced a contraction of approximately $11.8 million in revenue due to small business set-aside conversions, which accounted for the total decrease in revenue [18] - Despite the revenue decline, key technology services revenue grew over first quarter results, indicating resilience in certain business lines [17] Market Data and Key Metrics Changes - The company has over $1 billion in contracts currently under review, with expected award decisions in the second half of the fiscal year [12] - The administration's focus on efficiency and cost-cutting is expected to create opportunities for the company, particularly in digital transformation and cybersecurity [13] Company Strategy and Development Direction - The company aims to leverage its advanced capabilities and new business pipeline to align with the current administration's goals and policies, focusing on efficiency and accountability [10][13] - The strategy includes moving up the margin scale in a large market by providing unique, comprehensive solutions that enhance federal program effectiveness [14][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the alignment of the company's capabilities with the administration's priorities, despite some uncertainty in government programs and budget cuts [10][11] - The company believes it is on sound financial footing and has a portfolio of high-value technology-enabled applications that remain in demand [21] Other Important Information - The company reduced its debt by $15.3 million during the quarter, ending with $151.7 million outstanding, and expects to continue this trend throughout the fiscal year [19][20] - The company is contracted to manage five CMOP locations through October 2025, providing visibility into future revenue contributions [20] Q&A Session Summary Question: What is the revenue run rate on CMOP contracts for the rest of the year? - Management expects the quarterly run rate to be around $23 to $25 million for the remaining locations, providing better visibility for the third and fourth quarters [28] Question: How is the company impacted by NIH's shutdown of the long-term women's health study? - Management confirmed that they were not involved in that study and believe the overall budgetary impact from the new administration will be neutral to slightly positive [30][31] Question: What is the status of the $76 million Navy award contract? - The contract is continuing to grow, with ongoing phases of work and no anticipated dips in performance [42][43] Question: Are the upcoming $1 billion awards related to IDIQs? - Yes, the company is seeing continued activity related to IDIQs, although the administrative process has caused some delays in contract awards [46][48]

Financial Data and Key Metrics Changes - The total operating revenue for the second quarter was $137 million, showing an improvement in trend from the first quarter despite the impact of a cyber incident [12] - The net loss for the quarter totaled $12 million, which included expenses associated with debt, even though payments were waived [22] - Free cash flow was minimal, but the company expects to be free cash flow positive in the second half of fiscal year 2025 due to significant changes in cost structure [22] Business Line Data and Key Metrics Changes - Total digital revenue grew 4% year over year on a same-store basis, with digital subscription revenue leading the way at a growth rate of 20% [9][13] - Amplified Digital agency revenue grew 9% year over year, contributing to the overall digital revenue growth [13] - The company executed approximately $40 million in annualized cost reductions in the second quarter, aimed at driving margin improvements [14] Market Data and Key Metrics Changes - Digital subscription revenue has grown 40% annually over the last three years, significantly outpacing the nearest industry competitor [8] - The company’s digital revenue has grown more than 17% annually since fiscal year 2021, translating to comparable annual growth in digital gross margin [12] Company Strategy and Development Direction - The company is committed to a digital transformation strategy, aiming for $450 million in digital revenue by 2028 [7] - The introduction of a suite of AI products is expected to accelerate digital revenue growth, with the first product, AI enablement, aimed at local businesses [10] - The focus remains on replacing print revenue with growing and profitable digital revenue to achieve long-term sustainability [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive sustainable growth and deliver long-term value to shareholders despite the challenges faced during the quarter [7] - The updated outlook reflects improved total digital revenue growth trends in the second half of the fiscal year, with expectations for year-over-year growth in adjusted EBITDA [19] Other Important Information - The cyber incident in February caused significant disruption, impacting operations and financial performance, but the company has since fully recovered [6][7] - The company has made considerable progress in paying down debt and remains committed to reducing debt going forward [16] Q&A Session Summary Question: Did the net loss of $12 million in the quarter include the interest deferral? When does the company expect to be free cash flow positive? - The net loss includes expenses associated with debt, even though payments were waived. The company expects to be free cash flow positive in the second half of fiscal year 2025 due to changes in cost structure and digital revenue outlook [22]

Financial Performance - Q2 FY2025 - Total operating revenue reached $137 million, a decrease of 6% year-over-year (YoY), or 5% on a same-store basis[14] - Total digital revenue amounted to $73 million, reflecting a 3% YoY increase[14] - Print revenue totaled $65 million, experiencing a 14% decline[14] - Adjusted EBITDA stood at $8 million[15] Digital Revenue Growth - Digital subscription revenue grew by 20% to $24 million[16] - Amplified Digital® agency revenue increased by 9% to $25 million[16] - Digital advertising revenue decreased by 2% to $44 million[16] - Lee expects the Three Pillar Digital Growth Strategy to drive more than $450 million of digital revenue by 2028[3] Cost Management and Debt Reduction - Total cash costs were $131 million, a 2% YoY decrease[15] - Approximately $40 million of annualized cost reductions were executed in the second quarter of FY25[21] - Debt was reduced by $123 million since refinancing in March 2020, bringing the total to $453 million in Q2 2025 from $576 million in Q2 2020[23, 25] Future Outlook - The company anticipates low-single-digit YoY growth in total digital revenue for the second half of FY25[26] - The company anticipates low-single-digit YoY growth in Adjusted EBITDA for the second half of FY25[26]

Financial Data and Key Metrics Changes - In Q1 2025, total revenue was approximately $2.2 billion, a decline of 4.4% year over year, driven by a 5.7% decrease in residential revenue [32] - Adjusted EBITDA for Q1 was $799 million, down 5.6% year over year, with a total gross margin expanding by 180 basis points to 68.8% [33][34] - Residential ARPU declined by 1.3% to $133.93, while broadband ARPU grew by 2.4% to $75.31 [35][36] Business Line Data and Key Metrics Changes - Broadband subscriber net losses improved to 37,000, with churn reaching the lowest levels in three years [4][6] - Fiber net additions reached an all-time high of 69,000, with over 600,000 fiber customers and 20% penetration of the fiber network [5] - Mobile line net additions were 49,000, surpassing 500,000 mobile lines [5] Market Data and Key Metrics Changes - The competitive landscape remains intense, particularly in the East with competition from Verizon and fixed wireless providers [46] - In the West, gross additions faced challenges due to elevated competition from fiber overbuilders, but churn improved year over year [30][51] Company Strategy and Development Direction - The company aims to unlock revenue opportunities, drive operational efficiency, and enhance network quality while aligning capital structure with long-term goals [7][9] - A focus on hyper-local strategies and tailored offers is being implemented to address customer affordability challenges and competitive intensity [8][12] - The company is enhancing its product offerings, including Whole Home WiFi and new video packages, to strengthen its competitive profile [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in stabilizing broadband subscriber trends and achieving approximately $3.4 billion of adjusted EBITDA in 2025 [7][26] - The company is proactively managing debt maturities and exploring options to support long-term sustainability [42][43] Other Important Information - The company has entered into agreements to sell certain tower assets for approximately $60 million and the i24 news business to NEXT Alt [9][10] - Significant investments in technology and automation are being made to enhance operational efficiency and customer experience [21][23] Q&A Session Summary Question: Competitive landscape for broadband business - Management noted intense competition from telcos and fixed wireless providers, with a focus on new income-constrained products to address customer needs [45][46] Question: Updates on low-end product and insurance statistics - The low-end product is being rolled out to 500,000 homes, with mobile device protection achieving 10% penetration in the mobile base [56][58] Question: Status of bondholder discussions - Management confirmed that discussions with bondholders concluded without an agreement, but they are proactively managing debt maturities [63][65] Question: Competitiveness of pricing and broadband bundles - Management highlighted progress in pricing strategies and the ability to compete locally, with a focus on new hyper-local playbooks and income-constrained products [70][72]

Company Overview - Townsquare is a community-focused digital and broadcast media and digital marketing solutions company, primarily operating outside the top 50 US markets[8, 12] - The company has transformed into a Digital First Local Media Company, with over 50% of profit and revenue from digital advertising divisions and subscription digital marketing solutions[12, 23] - Digital platforms have reached all-time record audience levels, with the digital audience being approximately 5 times the size of the terrestrial radio audience[12] Financial Performance - LTM (Last Twelve Months) as of March 31, 2025, net revenue was $450 million and adjusted EBITDA was $101 million[16] - Digital net revenue for LTM as of March 31, 2025, reached $237 million, contributing to 53% of net revenue and 51% of segment profit[18] - Digital subscription solutions (Townsquare Interactive) accounted for 17% of total revenue and 25% of adjusted EBITDA for LTM as of March 31, 2025[18] - The company announced a quarterly dividend of $020 per share, or $080 on an annualized basis, representing approximately a 12% dividend yield as of May 7, 2025[17] Digital Growth and Strategy - Digital revenue has grown at a compound annual growth rate (CAGR) of 13% year-over-year since 2016[51] - The company's owned and operated digital brands have grown their audience by over 50 times since 2011, reaching approximately 58 million monthly unique visitors[63] - Townsquare Interactive has a total addressable market of approximately 88 million target customers, representing a $32 billion market[72, 77]