Cumulus Media(US:CMLS)2025-08-07 13:30Financial Data and Key Metrics Changes - Total revenue declined by 9.2%, slightly better than previous guidance, with a 5% decline excluding political impacts and comparisons to the Daily Wire and Dan Bongino [4][19] - EBITDA for the quarter was $22.4 million, with net income down approximately 20% [19][21] - Digital revenue increased by 20% year-over-year, with the Digital Marketing Services (DMS) business growing by 38% [19][10] Business Line Data and Key Metrics Changes - The DMS business now represents roughly 50% of total digital revenue, reflecting strong growth and performance [19] - Local digital marketing services business outperformed, growing at a rate nearly double that of radio peers and more than four times the expected growth rate of the digital ad market [8][10] - Broadcast advertising faced headwinds, particularly among national advertisers, with network revenue down 20% due to various factors including comparison issues and reduced inventory [12][21] Market Data and Key Metrics Changes - The overall market environment continued to pressure national spot and network revenue channels, with local spot showing slight improvement compared to national [11][32] - Key performing categories in spot included travel and financial, while pharma and insurance led in network [21] Company Strategy and Development Direction - The company is focusing on digital growth areas while continuing to reduce fixed costs, having achieved $175 million in fixed cost reductions over the past five years [5][15] - There is an emphasis on leveraging AI for business efficiencies and growth opportunities across all functions [5][16] - The company aims to surpass a $100 million run rate in DMS early next year, with increasing contribution margins expected [9] Management's Comments on Operating Environment and Future Outlook - Management noted that macro pressures are expected to persist in the short term, but they believe the company will continue to outperform peers in controllable areas [4][17] - The company ended the quarter with $97 million in cash, including a $55 million draw on its ABL revolver, providing significant flexibility [5][17] - Management expressed confidence in the core assets of the company and its ability to drive new areas of growth despite high leverage and market challenges [18] Other Important Information - The company has seen a positive culture survey with high employee engagement scores, indicating strong internal morale [18] - Non-core asset sales are expected to generate nearly $14 million by the end of the year [22] Q&A Session Summary Question: Is there an expectation for improvement in national advertising pacing? - Management indicated that while a lower interest rate environment should generally benefit advertising channels, there has not been a significant improvement in pacing at this time [25][26] Question: What is the impact of declining referral search engine traffic on digital marketing services? - Management noted that referral search is a small part of their digital business and they are not heavily dependent on it, focusing instead on geo-targeting and other strategies [28][29] Question: Are there any advertising categories showing signs of stabilization? - Management highlighted that professional services, home products, automotive, financial, and entertainment are key categories, with slight improvements in local spot versus national [31][32]