Cumulus Media(US:CMLS)2023-02-25 18:50Financial Data and Key Metrics Changes - In Q4 2022, total revenue was approximately flat year-over-year, with digital revenue growth and political revenue offsetting continued weakness in national advertising [33] - For the full year 2022, revenue was $953.5 million, up 4% compared to 2021, with EBITDA finishing at $166 million, an increase of 23% from $135 million in 2021 [24][31] - Fixed costs were approximately $90 million lower than in 2019, contributing to EBITDA recovery [4][11] Business Line Data and Key Metrics Changes - Digital revenue grew by 12% for the full year, with digital marketing services up 16%, streaming up 12%, and podcasting up 11% [24] - Local advertising streams represented nearly 50% of total revenue in 2022, outperforming national advertising [14] - National podcast downloads grew to 1.5 billion from 1.2 billion in 2021, an increase of 26%, although revenue from this segment was affected by national advertiser demand [30] Market Data and Key Metrics Changes - National advertising demand has weakened significantly, impacting most ad categories, while local advertising has shown more resilience [5][14] - The automotive category is showing signs of recovery, with local orders firming up later each month than historically [16][52] Company Strategy and Development Direction - The company is focused on optimizing its radio portfolio and developing new digital businesses, which now generate over $150 million annually, representing more than 15% of total revenue [4][10] - There is a strong emphasis on managing expenses and reducing fixed costs to mitigate the impact of declining national revenue [22][39] - The company is exploring opportunities for asset monetization and potential M&A, leveraging its strong balance sheet and liquidity [48][71] Management's Comments on Operating Environment and Future Outlook - The management acknowledges the challenging advertising environment but expresses confidence in navigating through it, citing a strong financial position and past performance during downturns [28][31] - There is an expectation that as economic conditions improve, national advertising will recover, benefiting from the company's strong digital business [45][46] Other Important Information - The company has reduced net debt by approximately $650 million since June 2018, achieving a net leverage of 3.7x at year-end 2022 [11][35] - The company has returned over $31 million of capital to shareholders through stock repurchases, reducing share count by 12% during 2022 [11] Q&A Session Summary Question: What does the ad environment look like beyond Q1? - Management indicated it is too early to provide a clear outlook but noted some green shoots in the automotive sector and a generally weak national advertising environment [26][44] Question: Can you discuss potential cost reduction levers? - Management confirmed ongoing focus on fixed costs, with $90 million already reduced since 2019, and plans to continue finding efficiencies [39] Question: How is the company positioned regarding asset monetization and M&A? - Management emphasized a strong balance sheet and liquidity, allowing for strategic opportunities without immediate cash constraints [48][71] Question: What is the outlook for local advertising? - Local markets are holding up better than national, with some categories like automotive showing signs of recovery [50][52] Question: How does the company view the digital audio and programmatic space? - The company is actively working to sell digital inventory through programmatic channels and has seen significant growth in streaming, particularly with NFL rights [73]