Financial Data and Key Metrics Changes - Total net revenue for Q3 2025 was $106.8 million, a decline of 7.4% year-over-year, but within the guidance range of $106.5 million to $108.5 million [23] - Adjusted EBITDA for Q3 2025 was $22 million, down 13.6% year-over-year, also within the guidance range of $22 million to $23 million [24] - Adjusted EBITDA margins, excluding political revenue, improved slightly from 20% in Q3 2024 to 20.5% in Q3 2025 [24] Business Line Data and Key Metrics Changes - Digital revenue grew by 2% year-over-year in the first nine months of 2025, accounting for 55% of total net revenue [6] - Townsquare Ignite, the digital advertising segment, experienced a slight revenue decline of 1.6% year-over-year in Q3 2025 [24] - Townsquare Interactive, the subscription-based digital marketing solution, saw a profit increase of 21% year-over-year in Q3 2025, with profit margins at 33% [25][16] - Broadcast advertising net revenue, excluding political, declined by 8.1% year-over-year in Q3 2025 [26] Market Data and Key Metrics Changes - The company reported that 45 of the top 50 U.S. news websites experienced year-over-year declines in search traffic, impacting overall digital inventory [13] - Remnant inventory revenue declined by 50% year-over-year in Q3 2025, significantly affecting digital advertising revenue [14] Company Strategy and Development Direction - The company is focused on being a digital-first local media company, with plans to invest heavily in digital solutions and markets outside the top 50 U.S. cities [7] - The digital advertising segment is expected to continue as the primary growth driver, with a strong emphasis on programmatic advertising and direct sales [8][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant headwinds in the advertising environment due to macroeconomic factors and competition from AI-driven content [15] - The company expects Q4 2025 digital advertising revenue to be muted due to ongoing declines in search referral traffic [15] - Full-year revenue guidance for 2025 has been revised down due to unexpected declines in search engine traffic and political revenue [31] Other Important Information - The company generated $18 million in cash flow from operations in the first nine months of 2025, with a net leverage of 4.71 times [28][29] - The board approved a quarterly dividend of $0.20 per share, implying an annual payment of approximately $13 million [30] Q&A Session Summary Question: When will core advertising stabilize? - Management indicated slight improvement in Q4 2025, with expectations for stabilization in 2026, projecting low to mid-single-digit declines [41][42] Question: Is there room for margin cuts given high margins? - Management confirmed there are opportunities for further efficiency improvements through AI solutions, maintaining healthy profit margins despite revenue declines [44][45] Question: Impact of government-related advertising during the shutdown? - Management reported no positive impact from government shutdown-related advertising, noting cancellations and softness in national advertising [48][50] Question: Progress of the Phoenix office and Townsquare Interactive? - Management expressed satisfaction with the Phoenix office's performance and the overall growth in profit for Townsquare Interactive, expecting continued strong profit margins [52][54] Question: Long-term profitability expectations for Interactive? - Management expects to maintain low 30% margins over the next couple of years, with potential for expansion in 2027 and beyond [60][61] Question: Trends in Ignite's digital advertising? - Management noted that excluding remnant revenue, digital advertising increased by 5% in Q3 2025, with owned and operated platforms up 10% [64][66]