Beasley Broadcast(BBGI) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total net revenue for Q2 declined by 11.1% year over year on a same station basis, primarily due to weakness in agency business [10][19] - Operating expenses decreased by $4,600,000 or 9.3% year over year, reflecting cost containment measures [21] - Station operating income for the quarter was $8,200,000, with an SOI margin of 15.6% [22] Business Line Data and Key Metrics Changes - Digital revenue grew by 1.3% or 8.1% on a same station basis, accounting for 25% of total revenue [5][20] - The digital segment operating margin improved by 900 basis points quarter over quarter, from 17.8% to 26.8% [6] - Agency-related revenue declined significantly, with national agency revenue down 12.1% and local agency revenue down 24.7% year over year [16] Market Data and Key Metrics Changes - Local direct revenue increased by 1.7% year over year, now representing the majority of local sales mix [20] - Digital growth accelerated at 8.1% year over year on a same station basis and 22.5% quarter over quarter [20] - Ratings for the company's stations rose by 14% year over year in the critical adult 25-54 demographic [28] Company Strategy and Development Direction - The company is focused on advancing its digital roadmap, reducing structural costs, and improving capital position [5][4] - A strategic pivot towards a digitally native, local-first approach is underway, aiming to convert traditional agency clients into digital-first buyers [11][12] - Upcoming product launches, including Display Plus and a self-serve advertising platform, are designed to enhance client outcomes and reduce dependence on traditional sales channels [25][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing challenges in the agency business, emphasizing that the decline is structural rather than cyclical [15][16] - The company expects continued softness in national and local agency channels, with total revenue pacing down high single digits [26] - Confidence remains in the strategic direction, with early signs of traction in digital and direct revenue streams [20][24] Other Important Information - The company has implemented approximately $30,000,000 in annualized expense reductions over the past year [13][32] - Cash on hand at the end of Q2 was $13,700,000, with capital expenditures of $600,000 in the second quarter [23] Q&A Session Summary Question: Can you update us on where the cost savings plan stands? - The company has taken cost actions that will result in approximately $30,000,000 in annualized savings, with expectations for 2025 expenses to be in the low $20,000,000 range [32] Question: How are CPMs trending? - Digital CPMs are holding steady, while traditional over-the-air CPMs are trending down due to declines in agency business [34] Question: Did you see the opportunity for more asset sales? - The company remains open to asset sales or swaps if they make sense strategically [35]