Townsquare Media(US:TSQ)2025-11-10 14:00Financial Data and Key Metrics Changes - Total net revenue for Q3 2025 was $106.8 million, within the guidance range of $106.5-$108.5 million, reflecting a decline of 7.4% year-over-year [24] - Adjusted EBITDA for Q3 2025 was $22 million, also within the guidance range of $22-$23 million, representing a decline of 13.6% year-over-year [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 revenue decrease of 2.3% year-over-year in Q3 2025, but segment profit increased by 21% year-over-year [25][17] Market Data and Key Metrics Changes - Broadcast advertising net revenue, excluding political, declined by 8.1% year-over-year in Q3 2025 [26] - The company gained local and national broadcast market share despite overall declines in the industry [20] - The digital advertising market is facing significant headwinds due to declines in search engine traffic, impacting remnant inventory 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 in the U.S. [7] - The digital advertising segment is expected to continue as the primary growth driver, with a strong emphasis on programmatic advertising [10] - The company aims to maintain a high-yielding dividend while reducing debt and investing in digital growth [30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment but expressed confidence in the digital-first strategy and long-term growth potential [33] - The company expects continued strength in programmatic and direct sales, despite ongoing headwinds from declining search referral traffic [21] - Full-year revenue guidance was 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 loss of $5.5 million in Q3 2025 [26][28] - The company has reduced outstanding debt by $17 million since February 2025 [28] - The board approved a quarterly dividend of $0.20 per share, equating to an annualized payment of approximately $13 million [30] Q&A Session Summary Question: Stabilization of Core Advertising - Management noted that core advertising is experiencing a secular decline, but slight improvements are expected in Q4 2025 and into 2026, with projections of low to mid-single-digit declines [39][40] Question: Profit Margins and Cost Management - Management confirmed that there are opportunities for further cost reductions and efficiency improvements, particularly through AI solutions [41] Question: Government-Related Advertising Impact - Management indicated that there has been no positive impact from government-related advertising due to the shutdown, with some clients reporting canceled orders [42][43] Question: Townsquare Interactive's West Coast Expansion - Management expressed satisfaction with the progress of the Phoenix office and the performance of Townsquare Interactive, highlighting significant profit growth despite stagnant revenue [44][46] Question: Future Profitability Expectations for Interactive - Management expects Townsquare Interactive to maintain low to mid-30% profit margins over the next couple of years, with potential for expansion thereafter [49]