Entravision(US:EVC)2023-05-06 18:16Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2023 totaled $239 million, an increase of 21% year-over-year, exceeding previous guidance of 16% growth [8][10] - Consolidated EBITDA for the quarter was $13 million, a decrease of 28% year-over-year [4][26] - Free cash flow for Q1 was $3.9 million, representing a conversion rate of 30% of consolidated EBITDA [10][26] - Diluted earnings per share for Q1 2023 were $0.02, consistent with the same period last year [26] Business Line Data and Key Metrics Changes - Digital segment accounted for 82% of total revenue, with digital revenue reaching $196.5 million, up 28% year-over-year [9][11] - TV segment generated $30.3 million in revenue, down 2% year-over-year, with core television revenue increasing by 2% [19][20] - Audio segment revenue totaled approximately $12.2 million, a decline of 3% year-over-year [21] Market Data and Key Metrics Changes - Latin America business unit revenue grew 15% year-over-year, while Asia business revenue increased by 35% year-over-year [13] - Mobile user acquisition business grew 40% due to industry-focused strategies [13] - National advertising revenue has been cautious, particularly following the regional banking crisis [4][20] Company Strategy and Development Direction - The company is focused on expanding its digital marketing services and enhancing its offerings through acquisitions, particularly in Latin America and Asia [31] - The acquisition of Adsmurai aims to strengthen the company's client-centric solutions portfolio [15][16] - The company anticipates increased political advertising revenue in the second half of the year, particularly in key states [20][31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the year despite current macroeconomic challenges [29][31] - The company remains cautious about national advertising trends but expects improvement driven by political spending [20][31] - Local sales teams have shown resilience, achieving their targets despite broader market challenges [44][45] Other Important Information - The company entered a new $275 million credit facility, extending debt maturity to March 2028 [10][28] - Operating expenses increased by 20% year-over-year, primarily due to investments in Adsmurai and increased rent expenses [23][25] Q&A Session Summary Question: Was there anything special about the quarter with Facebook in Latin America? - Management noted that Facebook's turnaround contributed positively to revenue growth in Latin America [33] Question: What is the outlook for Smadex after a weak performance? - Management expects a better revenue trajectory in the second half of the year as they cycle through tough comparisons from the previous year [37] Question: How is the auto advertising category performing? - The TV segment saw a 12.5% increase in auto advertising in Q1, indicating positive trends [38] Question: What is the current M&A environment? - Management indicated that there are deals available, primarily in digital, but noted a disconnect in valuation expectations between buyers and sellers [39] Question: What is the company's leverage strategy regarding potential acquisitions? - The company aims to keep leverage below 3 times and is currently looking to fund acquisitions through existing cash balances [40] Question: How is the Spanish language TV advertising performing compared to the general market? - Local Spanish advertising is outperforming the market, while national advertising is lagging behind [49][51] Question: What is the profitability outlook for new markets like Mongolia and Ghana? - Mongolia is already profitable, while Ghana is expected to take about a year to reach profitability [67]