iHeartMedia(US:IHRT)2023-05-02 19:13Financial Data and Key Metrics Changes - In Q1 2023, the company generated adjusted EBITDA of $93 million, slightly exceeding the guidance range of $80 million to $90 million [33] - Consolidated revenues for the quarter were down 3.8% year-over-year, better than the guidance of mid-single digits decline [33] - Free cash flow for the quarter was negative $133 million, which is typical for Q1 as it is the lowest revenue and adjusted EBITDA quarter of the year [18][33] Business Line Data and Key Metrics Changes - Digital Audio Group revenues were $223 million, up 4.3% year-over-year, with adjusted EBITDA of $54 million, up 3.1% year-over-year, and margins at 24.2% [7][41] - Multiplatform Group revenues were $529 million, down 7.4% year-over-year, with adjusted EBITDA of $87 million, down 35% year-over-year, and margins at 16.5% [9][16] - Audio & Media Services Group revenues were $61 million, up approximately 1% year-over-year, with adjusted EBITDA of $15 million, down from $16 million in the prior year [42] Market Data and Key Metrics Changes - In April, consolidated revenues were down approximately 5% year-over-year, indicating a slight improvement from Q1 [19][50] - The company noted that broadcast radio assets reach over 90% of Americans monthly, outperforming platforms like Facebook and Google in terms of audience reach [10] Company Strategy and Development Direction - The management team is focused on identifying revenue growth opportunities while managing expenses aggressively, with expectations of improved performance throughout 2023 and a strong 2024 [11][47] - The company is leveraging technology and data to enhance its broadcast radio offerings, making them more competitive with digital platforms [36][78] - The company aims to achieve a long-term net debt to adjusted EBITDA ratio of approximately four times, with proactive debt management strategies in place [17][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a gradual recovery of the advertising market, with expectations for improved adjusted EBITDA results throughout 2023 [3][47] - The company anticipates that the advertising environment will continue to improve, particularly as major advertisers begin to re-enter the market [81] - Management highlighted the importance of podcasting and digital audio as growth areas, with a significant portion of advertising dollars expected to shift towards these mediums [8][35] Other Important Information - The company expects full-year 2023 capital expenditures to be approximately $90 million, a reduction from previous guidance [20] - The company has no material maintenance covenants and no debt maturities until 2026, positioning it to be resilient in the current macro environment [17] Q&A Session Summary Question: Insights on April revenue trends and visibility for May - Management noted that April was down 5%, but they expect a slight improvement trend moving forward, particularly with national advertisers [50][51] Question: Commentary on advertising market trends across different segments - Management indicated that the advertising market is showing signs of recovery, with strength noted in categories like automotive [81][82] Question: Discussion on digital margins and overall performance - Management expects digital margins to return to 35% in the long term, with significant improvements anticipated from Q1 to Q2 [67][83] Question: Insights on podcast partnerships and market rationalization - Management highlighted that the podcasting market is stabilizing, with a focus on building sustainable businesses rather than chasing uneconomic deals [91][92] Question: Commentary on capital allocation and debt repurchases - Management is actively looking to improve the capital structure and reduce interest expenses, with a focus on generating free cash flow [113]