AUD - Earnings call transcript Q2 2021

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Operator

Good morning, and welcome to Audacy’s Second Quarter 2021 Earnings Release Conference Call. All participants will be in a listen-only mode. This conference is being recorded. I would now like to introduce your first speaker for today’s call, Mr. Richard Schmaeling, CFO and Executive Vice President. begin. may you Sir,

Richard Schmaeling

the Welcome is second will being the call shortly Rob. in number call. release. our be earnings This after at today’s of call recorded. conclusion link to you, or quarter noted Audacy’s conference available replay Thank A replay

this company materially company’s The statements. forward-looking these actual could differ may During those statements, upon projected based forward-looking uncertainties. are call, risks current company’s and the from in the expectations make which and involve results

cause could described that results to Factors factors of are concerning information annual actual differ materially Form in section Additional XX-K. Risk the report the company’s on

as such, in be law. may the As no required be time filings. SEC time except We assume to any uncertainties may and company’s update obligation by updated risks to from statements, forward-looking

reference measures we at forma our other of CEO. to non-GAAP call, Investors to President Field, such financials. website financial you over With this I’ll may and of We and the reconciliations certain turn refer During it that, to page David information. pro audacyinc.com for make

David Field

revenues you, time, XX% the as our the recovery highlights, And quarter joining organization progress important earnings Audacy second quarter over with future Starting continued and pandemic accelerated to the year. growth significantly to the grew and transformational thanks at I’m same financial the enhance very of Good everybody. pleased implement Thank Audacy’s call. successful prior to report at for from a morning, our changes we Rich. across and strong opportunities.

year. network over XX% a digital we XX% increase and advertising XX% in doubling At our prior radio a second prior by advertising increase in quarter, new a growth the time, increase posting advertising in generated the same led radio year. of was Our a over spot

sequential are the strong of in of in quarter midst progress QX. another We

provide by some July levels July We about will quarter from current on business XXXX. XX% XXXX additional our finished above expect over expectations and second quarter to year. revenues XX% third Rich conditions about and quarter. XX% third XXXX grow color prior for

next way opportunities seeded acquisitions growth bottom believe and to in ahead our pre-pandemic performance the are a look initiatives, through have we our accelerate our that the XXXX year, line And we growth of top we full are across on various well as call. we believe and we breadth earnings XXXX, with to on compete we noted calendar in As to expanded last ahead. recovery various our we positioned years businesses of EBITDA our and our back line

today just enhanced are years versus company were stronger of who a We we fundamentally and couple ago.

we network, scaled and sports. with dynamic including growing position the audio company spectrum that Our better partnerships and and that new re-introducing trends, are product content acquisitions our company Street of company, our built multi-platform audio headed. our reflects listeners the have the full Reflecting platform and entertainment and serve have of podcasting, Gaming broadcasting, reach and old customers. numerous greatly we important the growth and Studios, across and capitalize Audacy’s and an where the as we with brands leaving our of began audience development Pineapple of on we leading CadenceXX, a line enhanced streaming and name transformation, ourselves broader the digital, ability QL to advertising along with a total Today, rebranding Podcorn market, the behind quarter are music, Audacy, the better augment leadership our events, and a investments news

achievements. like our number with strides we made on events forward these additional in betting, share some along audio elevating sports quarter, important business. a and recent recent color resumption while highlights our digital to I’d developments the planning podcasting, the and of businesses of During radio

are a few aggregation writing including course is of indicator. we we First, the great are trailing at in reflecting earnings past late reports extent, are the Business by XXXX. written, and leading business. of of ways encouraged more over quarters, some a a the pace darker To sales the which the early indicator, XXXX of current days

X% the in During of business XXXX. third the more for we quarter month than for fourth same July, we wrote wrote periods and July

categories it also While that severely and future. that the month this by seen the pandemic. disrupted month, number just in is improvement the first positive one is in which for We’ve pandemic a occurred since harbinger a the is of were

recovery including number being the a shortages constrained largest by labor supply that our reported and the On have the our other customers, auto, hand, of chains impacted is widely disruptions in category.

resolve We expect the clients lift which wary in although, dormant the recovery. advertising, rising of in year, tide ramp infections their on impact up revenues generate later these meaningful as variant and remain themselves Delta the to should their we disruptions a potential of

We increases in by as revenues digital podcasting, digital primary our business, and marketing of encouraged are digital also posted second we strong the three solutions. all our audio in during quarter, acceleration areas digital including the

fact, year. exceeded with CadenceXX business in Studios. And we represented QX. previous parting And the Pineapple Industries digital to that of our of posting underlying recall of overall show the podcasting may strong to XXXX. upon ways despite QX at XX% a offerings. QX, had business performance first MAUs the revenues You in our Pushkin very in guidance That our sequentially down. Digital and digital growing both growth loss end XX% But in based our call last growth during year, our the Streaming XXXX at XX% year-over-year the digital and we a double that and two own dragged we revenues drivers. Street XX% new one our calendar jumped and with our our largest versus softer healthy noted are expectations various growth of lighter rebound we podcasting due our its contribution of our partners, half from QX podcasting in on Pushkin of expected

we driven A-list personalities end such stations programmers, At XXX our hours. Jake come. Audacy competitors of are Sofia exclusive these a growth RPMs were over versus increases ahead, who overall new in Chris Tiesto, led Audacy Martin, latest smart and TLH very up as up XX%. continue Our the platform. platforms by digital the speaker we launched to June, XX%. prior total Owen, listening up Streaming over XX% our excited even many number to algorithmically and audience were drive as RPMs of by on more X% our of unlike curated focus of and was digital stations, stars to podcast streaming on our And by top playlists year and are we up last Most year enhancement looking stronger Carson

digital pleased sign-on Coca-Cola, enhancement launch partners as are on Macy’s We also have to important our and Audacy this to platform. Geico our

business that us a we XXXX betting XX% as we at to $XXX expect continues also sports said of their exceed opportunities. games and a a MLB’s elements, across years, spread Our digital MLB few audio includes continue with rapid betting moves important We to very to Major million handful sports to League both making previously in pace. that our in official grow digital now is the number country. growing would grow use of betting audio. category deal revenue for the expect sports legalized as into live Audacy archived and to during and betting exclusive podcasting our a exclusive The bolster We quarter made partner. and announced partnership and audio We rights number the to including strategic a other of sports Baseball, a sales

our continue to platform. expand addition, betting In we

distributed multi-year which develop of a new across We podcast the select Audacy creators podcast the throughout announced Public partnership During the well jointly APM. will American a be addition, for prestigious future sports initiatives, And the at digital representative launched X, collaborative exclusive universally BetQL podcast July other on-demand launch the affiliates, and on country programming Media, we co-productions also the the Audacy development opportunities. programming. quarter will quarter on in our Marketplace strategic content betting featuring on and revenue live and agreement, was strong day sales radio It evening for as studios. we announced Under network with platform. as of the the

sports Dial monthly launch with HBO want Your in podcast podcasts our group, quarter position the new LA listeners a University, partnership acclaimed the with Audacy Linsky, according building And Me podcasting created and with Anthony, now discovery new the reach the One with one in Max of the second announced as narrated Podcorn, the launched our Carmelo in Jon as Also Elle leadership We an last and audio/video others. joint To numerous and Season projected new its strong additional podcasters to historian Click Shining partnership by podcasts week, X, Magazine HBO U.S. Podsauce, XX,XXX Pompeo dedicated launched announced highly Audio, with number the partner. a now and Tenderfoot, Audacy HBO Liberty include venture and Glass? closing of acquisition podcast of by Edison show audio. XX author podcasting marketplace new of Max City launch XXXXSports, One Prize-winning also show series XXth focusing four and among Monthly newest our week, hosted And In Infinite Other new season on What’s include titles. Tell on this to Capitalism sports Ellen note, documentary announcements had listeners. part Gangster in studio on we releases the We Over Max blockbuster expansion first XX, and last influencer a Fanning, major our Pulitzer platform. just we in In Macy’s is Meacham. Jr. podcast to Die on our our of existing podcast studio mention And I that Falwell Jerry Live

strategic Audible. whose XX new a important partner announced podcast of development WNYC, we obviously Our ESPN’s for Jody an cornerstone deal new official Apple studios with podcast producer properties. prior and us and include making will podcast credits be with their with related award-winning XX Avirgan, And partnership projects the MLB

Turning to events.

not our to in recover its resumption XXXX the workplaces year, it live The country’s continue Labor artists. XXXX has finally, and mobility we levels great returns the are and March be events shows ratings their number We latest radio next audience as portion this select back primary a to live after as back of of boost top Day. of greater to a back audiences, September announcing a further is the shows of while to reach month, with Nielsen population receive social levels. number And beginning a of radio XX% featuring accelerated to will data should be

ad that an by led – XX% in addition, it all In interesting radio again, is once XX% of of study, from a the in cars. audio share data to scale. now share supported U.S. in Edison has reaching the audio supported note in of public engaging Research the listening radio Share Ear the and This resilience American XXXX demonstrates strength listening spring of at ad broadcast

continue the by dynamic audio the Audacy we platforms, transform Audacy competitor progress and for recovery to of disruption and multi-platform a strong and content As as and all nature to radio stand strategic content. future. our meaningfully positioned quarter well leading media was enhance premium business is rapidly to our the organization. distinguished premium audio as benefit it of other of scaled and participate in accelerates build, some, virtually the company, with a our is exclusive well-positioned In pandemic emerging across across areas

talented our leadership. to continue content, while investing improvements new in data, and business model products, We drive technology, in

meaningfully enhanced strengths and are from our building pandemic and with our asset unique core on better mix. and We a as potential capabilities emerging positioned the growth stronger company

Rich. are to over turn excited lies with We I’ll And by ahead. that, it what

Richard Schmaeling

Thanks, everyone. David. morning, Good

in improvement $XXX.X For the quarter, net up revenues revenue a saw broad XX% and we’re our year-over-year. came second lines. at million We our total across

plus local national revenues, XX% up year-over-year. spot Our we’re

by revenues revenues XX%, Our and revenues up XX% net sponsorship up were XX%. our digital up were our were

to sequential to that up March. of growth advertisers Looking revenues And by by about add X,XXX driven encouraging XXX% over And number under of performance. revenues Sports strongly, of or recovering versus our format. at versus sports seasonality the we advertising is advertisers Normal of March. we March, by active spot XXX in typically by live Comparing our in improvement the month signs June increased June was in our XX%. see XX% would sports of on the continue by return year-over-year air month saw June revenue in up spot and advertising. betting

number a categories. of saw We also in a improvement advertising significant local key

by categories The XX%. XXX% back For and casual And in of March concerts example, March. category top up somewhere be to month These dine-in are over the up category, much and category related suffering as local increase. supply local amongst will suspect growth This from people was change in key times surprisingly three the We life. was go that June. dealers of people advertising to month other more the our XXXX. still category Not category versus of we a is seasonal increase see June that in than was normally normal by the don’t chain out require between David, get mentioned springing this driver automotive key issues. this

shows. a are to forward line But are more towards Looking start shows be it is step than live historically third and larger X% the back third of slate quarter, events business less our planning the with of a in we about and in excited reactivating this a contributed quarter quarter, one will business X%. normal we year it is our to revenues, and September. few somewhat start This fourth

revenues based will or For This our quarter, that by we revenues of first about sequentially, in XX% quarter. project to at come to XXXX XQ. expect year-over-year. to The the XX% XXXX net pacing, XX% on the up was by current $XXX GAAP in narrow points a in our XX% in guidance we versus X total the XQ third GAAP million GAAP implies versus

onetime quarter and expenses operating in adjusting $XXX.X excluding costs total non-cash the D&A. and items came million Our like second for unusual and out at

growth. rate or came less Our our up the revenue $XXX.X or by cash or prior versus XX% $XX.X million total million expenses of half operating at in than year increased

this our For of versus cash the year, base. half million operating down $XX or XXXX by pro our expenses forma XX.X% expense were first

third quarter. the by the at to EBITDA points Looking that expand quarter, compared we our will expect to margin second three four

our will expenses increase that upper expect We teens. year-over-year by cash

Turning to liquidity. our financial position and

pay our was million million new and fully as claim revolver. compliance times with with as June agreement. for a we facility to our points. funds a At of down year June a a XX, pricing additional refund facility, was expect for at fourth our first-lien Our Pro to Pro three times. used federal the from and basis second of as drew income our we April, have was up new million to compared $XXX July and is proceeds on receivables indebtedness our XX, June of closing on to the securitization the liquidity this of in end. year XX, tax XX to end credit X.X paper leverage X June liquidity a basis million, for reduce leverage receive times. forma entered DZ the our In of accordance and refund, this receivables first-lien million facilities, $XX $XXX forma quarter, we as was into filed to computed quarter. of and our during net to facility $XX $XXX covenant XX. We Bank is X.X agreement, new XXX repay upon non-recourse this plus liquidity the credit commercial our outstanding provide This our cost under facility Subsequent

expenditures and is initiatives. capital for support million. $XX.X our With the go year net guidance this $XX About totaled two-thirds we’ll remains your our million Operator? of Our to questions. now full spend in growth key of that, quarter

Operator

your with you. Please from question line conducting session. the Cahall a Wells Fargo. Instructions] is Steven question. proceed [Operator Thank from question-and-answer of first We’ll Our be

Steven Cahall

Thanks. I’ve got three.

conservatism auto, month at would baked just sequential you any delta year? quarter with So outlook into Maybe you’ve wondering maybe revenue of go gave? you the I’ll And seeing if kind that a improvement first variant for one time. that this you’re excluding say got third each

David Field

And sequential are quarter two – as we’re as from sequential noted a quarter we overall. to a three. is there we go about expecting we growth there XX% improvement So seeing

we seen not on. we’ve at far fair through impact delta variant, ways something So keep a it of any aware time. the our the from point this financial that Obviously, in eye we’re we’re is quarter

issue probably you of as it’s at think quarter course, look of never. fourth an never say margin, towards the more I So albeit we

Steven Cahall

took recovered of I lot then cost cost talked year the year. about know out of a or you you fixed to And Great. last next EBITDA business. being fully on long-term

investments on not be why just and staying year, to, of sort auto there that next should is like, that’s you of, above incremental some prior for again, So but or aware conservative the of we EBITDA back is revenue, levels? are

Richard Schmaeling

right. expect reasonably auto Well, beat XXXX look, previously $XXX happened at we’d million we will the we $XX hasn’t our below And we’re billion. expense $X.XX don’t forma got In for about dealers six XXXX, better, accelerating be months, preclude attached revenue on which occur, to had that you growth. a expense yes, depends recovery, Steve, basis, And categories of perspective, digital XXXX. that today, it we said there fully, pro disrupted if investments to on we significantly in more that the yet. full versus growth. million are the from thought we of that’s it our still year down we sure. like, are make rate about That variable And as through are that about That’s that continuing base recovery. to but that and first an recover And getting costs look revenues

including as cost base. part outlook the more third about more for guidance as So outlook we’ll guidance the about of call, mentioned the XXXX quarter on for last give our earnings we call, our

David Field

one XXXX. business digital has have the so more investments of business, of we And Steven, side cost that progress the on we’re the significant bolster what also to And me we our just in been that forward. as go opportunities making let our notwithstanding growth because our fact fact our And growing Rich looking optimistic said, that obviously, is, we’re and what add comment modeling just at a EBITDA where great revenues do radio levels of fully well land we just of without get revenues. And the to pretty back say things standpoint levels opportunity it’s from we’re rapidly, question we’re XXXX here headed, that year but where forward. to back to we to getting able begs there go the of to in as about next are is made XXXX

Steven Cahall

lastly, business the maybe can of advertising. those go-forward help and basis BetQL a and And is sports is sports agreement marketing betting, radio as Thanks. frame you’ve and of all ton the investments. FanDuel, pieces sports percentage then, us Maybe the content, betting? sports just of a you and combined with There on with between made what well kind sports as just just

So want the we speaking of that, Audacy. betting? What think about Thanks. to kind a pie piece of just is sports sports of it’s the pie of piece and broadly

David Field

Yes. – ahead. I if Rich, don’t go know we

You take it.

Richard Schmaeling

Then So look – sports that’s by do our our sports expect if of somewhat the the but, X revenues our revenues, highly of the and percentage a XX% over that cetera. we was revenues at line revenues BetQL, course. the in points you up format, revenues last of disrupted total sports supplemental format of which quarter, includes by associated and represented larger breakdown our second year, to and et supplemental disclosure total with time become that versus

the – that’s to line So be sports sports all our dedicated that assets. is for intent of

Steven Cahall

you. Great. Thank

Operator

Riley of question your Securities. from Instructions] Dan The the with [Operator proceed next Please is question. with line B. Day

Dan Day

obviously and here, morning Good were questions. kind cost kind XXXX got some Appreciate at reductions. fixed so think look EBITDA in you’ve Yes. taking of the margin XXXX, you low-XXs, When profile into the you of I guys. my I about

is think and to forward, be different. I digital going mix between broadcast going the radio obviously

guidepost of think and kind and put just all out XXXX it kind margin you where to in you shake of was some where profile can together So should XXXX? around provide the that relative

Richard Schmaeling

Yes.

to position, margin being which a, the So when we back was getting of starting EBITDA, the a of scenario as about XXXX that I’ll levels $XXX million, see we say think low-to-mid-XXs. EBITDA

EBITDA XXXX, we’re then where we think We to from margin XXXX, we’ll do there. in bit to our in that were perhaps back think time. So and – we build be we better, that a going little expand able get to over

Dan Day

Great, thanks. Appreciate it.

of podcasting seems lot to on Just of and looking small of digital sort for one programmatic broadly kind only really adoption podcasting a a of non-existent I’ve been digital audio be solutions audio. within at the portion today, more this. of basically

pieces the you Are the self-serve things they’re out, moving programmatically, of video, if they kind forward? and thinking that advertisers could that that driving is kind to had upside how digital you of opportunity of tech lines audio, the ad these frame like, haven’t do digital seeing what’s kind there thinking be just So that as built mobile start to of along these display, audio that should this growth? buying get for we for digital about your more

Richard Schmaeling

Yes.

buys. of podcasting So the are buys – the audience-based a lot

targeted they may bought but not So on programmatically, being they’re be buys audience. based

programmatic today. soccer component is not So intenders, cetera. revenues important an podcast streaming demographics, auto but et moms, of and And our

is We data supply. I will expect DSPs, much audio percentage to time think over significant be more leading inventory. do think OTA supply interest of We’d include to that that our like time. lot a there to an a access infused that from audio the over

significant And a to exposure we to few demand don’t underway OTA inventory the I think of a think, digital of a there expand But number buy that efforts we pools, today. advertisers inventory is buying OTA likely to have so, for our with bigger typically company. our we our inventory. streaming become And focused the with are over time. thing they’re and And opportunity a of on a in lot companion inventory think opportunity performance, see that’s much who we

Dan Day

luck. I’ll my of over. taking Thanks for Great. Appreciate Best guys. it it turn questions.

David Field

Thanks.

Operator

Thank from line next proceed the your with Please JPMorgan. with question you. Steiner [Operator Instructions] The Avi is question. of

Avi Steiner

good you and Thank morning.

second that and year if – I’d that driving opening Is the on love to back a your we there bit color a little I on this Pushkin, acquisitions through side the apologize go didn’t maybe I for in of there’s which that loss loss the more it if of maybe side quarter understand maybe touched is that’s expenses, to kind can, margin some as higher the minute. of drivers a to up of it expense of you’ve forward? want costs And some – more think the something with you. Just some what script, sports and Thank contributed something move get on where appreciate.

David Field

our growth XQ than in guidance. expense our Avi, better was

guidance million million, $XXX to we revenue $XXX XX% So of to had XX%. given up

range. So was expected what actually expenses of in of in about the said we’re at we kind we And increase our our that of It XX%. to right came growth. middle at XX% revenue

people I’m not didn’t the there’s And driven that if So we believe that’s sure, hear just but what if the us, by didn’t recovery said. or expense revenue. growth is being of

we business. is represent. costs There And marketing we that. services rapidly. podcasting growing that about costs with with That’s associated pretty we There’s rapidly. the associated have growing expense so variable – – quite significant is a digital talked variable podcasts There’s a

So you upper we to guidance. expense say that for we be it, XX% didn’t growth expense our if quarter, and be than we And expect year-over-year, the teens. about actually our our better did hear third to did revenues up

Avi Steiner

X% X% that – I hear miss for clarification. that? did thank that hear I to hear you or about expansion Did I that Did margin talked miss

David Field

That’s right. That’s right.

expect second was in so margin here the XX%. – We quarter our

our three build from third margin we greater. expect four expect to the there. in We be to to And quarter points

obviously it XQ, quarter which better. the seasonally So gets is of outlook largest the for year,

Avi Steiner

Is chip getting guys to about levels? think of you again, visibility I back, if better real a bounce in shortages you terms today, I dealer in see come quarter, you to do fourth inventories where appreciate over auto was that back second. could a for do the real kind auto I relative just apologize, there talk to any clarification. sit could the that to as but And this of you addressed, If maybe historical and turn visibility, signs of where improving. and listened

David Field

I talking think you we currently varies now. the working is that which with others just across a What little customers are by, imagine, you one largest off relationships, than manufacturer as we’re auto shape be groups largest dealer the tell in all I maintain of in markets, will air. course, of country. it close four bit some They about, two happen are of dealers. our our might anecdotally And to better

as normal I’d they’re that this us, year. course. the expect here is to We’re advertising fairly to telling us them, they say very with be businesses in sometime mentioned, close probably and and their back And with I par later for to

more we’re the But more you year. that more I’d a hearing fourth It’s than say are of outliers anecdotally. recovery On talking not. quarter often next QX

Richard Schmaeling

said, what to our suppressed. us with do And remarks it looks auto at that’s to multiple inventory of because to going larger that the it’s auto like to that us why think be want clearly, like through we of remain air. quite They’d bit in brands, levels driver the little to dealers are at XX% when they have just we to because said, are tell guys don’t more XXXX third Avi, least, in fairly to on expect key be to inventory. a color that normal. is And like demand recovery quarter, more the a to And David add dealer not we about, XX% talking our auto they

at toward the right latter now. now, they’re them. part than But what have inventory quiet they get And does levels, issues still resolved are year. this of is inventory less dramatically that So normal hopefully for significant right there

Avi Steiner

digital is other That on maybe platforms. dealer anecdotally And point. back. in the last a spend one on is because again, great more groups, auto just before out auto in comes traditional and view to when talking sheet, the more And what from balance maybe get you’re I on one the to broadcast channels it your or come hearing to spread back your

Richard Schmaeling

of to radio comes and Well, from them. that it very healthy – back think we’re I a is hearing think portion I what

are obviously continue to a auto we look said, portion digital their significant that Now and dealers global to are dealing of with to going advertising. as trends

needs that lineup as needs their As evolve, has across spectrum product to meet there our of advertising their well. to continued we’re

defecting to from And so a do we forward, also with I dollars at we’re And there’s of traditional being want radio. there where are just in But going what of those evolves, buys. think not remains really upside a composition well. again, other underrepresented as since It the hearing do can seeing think going of is mix looks media robust. opportunity that business disrupted going question level there’s those auto of any clip, underline lot dealers that pretty fast very forward. been again, as talk a with we the are we And audio some fall, has long even media to

Avi Steiner

be can Last on is Great. it. ultimately you for replacing to Rich, the on all just thank me commentary for you Thank And And ARR availability meant just additive the one time. give us you. that to facilities? the revolver or both the

David Field

Avi. Thanks

Richard Schmaeling

Yes.

million $XX is the receivable So additive. facility

So quarter, don’t had know, end cash. And the we million of $XXX at million. our of liquidity $XX $XX the I cash, of million was second –

We have revolver. outstanding $XXX something, in That’s our against $XX total. million XX million like

upon the revolver. drew so closing and $XX And million we paid we down our

from our it pro boosts so And XXX that to forma liquidity XXX.

cost capital. significant So liquidity, It’s non-recourse. XX a of lower than our boost cheaper to revolver. it’s it’s course, of bps And our

receivable capital agreement. So under indebtedness facility this credit is our debt – not debt

Avi Steiner

Thank very You answered for time. question. my much next you the

Richard Schmaeling

you. Thank

Operator

from your proceed Please is line Watts Aaron question. the question of with next Our Bank. with Deutsche

Aaron Watts

Thanks me guys. having on. Hi for

me. for two Just

margin in bumping margin around maybe quarter. commentary to that’s at second XX% in were fourth kind a XX% XX% bit in quarter, third just more margin the Rich, I’m make one, of to expansion like the little quarter, thinking correctly, First about sounds the you sure up to the

of XXXX kind pushes XXs any is context, faster driven getting to growth kind saying as be pulls type there Is like towards other just that where level and of of getting being your you’d from back your that revenue As to that of to you’re than expenses? you margins? think XXXX on by and end low about expansion where you head kind

Richard Schmaeling

Exactly.

year-over-year. as XX% about the were see And grew the growth, you So quarter, of - that third XX%. that to in gap we our quarter, up significant. second here in expenses be think not expect sorry, XX% up XX% And we revenue

as it low going spread at we of where in rep do to looking to until to not mid-XXs And we’ve business growth, for expect we’d at we we and discussed mid-XXs We’re that we And of over expect it see growth, driver lot being as to, work digital margin be. to revenue grow that load acquired profitability continue optimize but portfolio expense upper be past, there’s meaningful teens a the digital the XX% sustained that the back company, a the we EBITDA the of is margin. to in time CXX to that profitable rapidly. as on and as we get where from expansion will like particularly see more

in our Some course, our business fixed and base, expense semi digital variable. is of of

see color quarter do outlook for about XXXX, to the that time, expand. think EBITDA we over the do a to So more I our expect little in then give you’ll third continue margin

Aaron Watts

station your business of the opportunities Okay. thinking use facility, of enhanced That’s about you’re for already post see capital what you further even one things might can digital David, how just or boost your great. now, liquidity And AR versus just your us out then with in you terms there you’ve business? in update on purchased investments to inorganically,

David Field

Sure.

cash you to, running is capital to think continue and change. that free expenses we debt, And some said, alluded to to That first I our foremost growth. clearly our the as to and goal expenditures deploy to Rich in extent operating has and in are see accelerate our business that as that doesn’t see reducing well. you flow

to continuing apply and same us. desire the taking that’s and disciplined be line up, we’re where free balancing we’re and time, against about that. And continue multi-platform are debt that, excited flow towards and enhance bolster holistic At measured about We being again, prudent to to cash the reduction. our

winner that relatively and small time opportunity Podcorn we so is to a what podcasts for We’ll again, great meaningfully is – do the in continue we frothy for a we look opportunities, at future very influencer a think open marketplace, to very, purchases, in in is eyes we we great same been acquisitions done stage, us. a keep big measured If disciplines, size, we’ve leading is at the they’ve but there. select recently, market. found early have It’s you think where but a value going see very our fashion. the enhance at be can our

Aaron Watts

Thank Great. Okay. you.

Operator

your Huber question Craig [Operator with line Instructions] from of Huber Please Research. question. is proceed Next the with

Craig Huber

you. Thank Great.

you I maybe lows a you nearly off versus are Your quarter. just up in call overlapping spot Can earlier. revenue, conference this of apart the covered if double second apologize for national? ago the year as obviously break us local

Richard Schmaeling

“normal haven’t performing, We in better implied we than guidance And sequentially local national XXXX gap. our guidance. in the national to gap XXXX and the as local. somewhat more narrow versus XQ, XQ see that to is National by as our But measuring But Craig. fully given perform better from detail, implied a the local versus that to I’ll continues continues are starting XQ third is quarter seeing narrow we’re stick”. to pickup in say get

hopefully So that helps.

Craig Huber

we’re of the of advertising your company in revenue pandemic that economy, helpful. radio is update? with us in given of is on out about, or any there metrics is ad longer your on smaller issues updated Is traditional you ramifications there, and your the also the talking there And what what percent clients advertisers side? sort can the then on an the percent given That no the past. You’ve the give

Richard Schmaeling

was to in is month over on to the It’s lot account advertisers the March when March, Craig, you did June look the attrition of about increase in a heard business. because I month of it know do by of advertiser the XXX. now to hard seasonality don’t up was if Typical the there’s talk we thing that one compared The Yes. air June of normal terms at and from we of that the under number X,XXX.

and to of So we’ve seen expect that advertisers continue. in we air on increase XX% a a significant trends, about number very

we quarter of but of were than we worse debt were was hard bankruptcies we probably out we where business think of to our going the that of seen go be were saw seemingly in worried presently advertisers it last I it So going into number our talked back about – know, it’s call, disappear. to were surprised. about not XXXX, we a local worried have We if talked April during talking we experience, fourth year, lot it’s We bad and ending up.

seen advertisers lot have our go not of bankrupt. We local a

back get come a And to to that our We’re lot sales and better. them there’s lot a of on is signs talking all we seeing force air. of there’s – the these as continued good things think of a people

So if back. they’re going back, be to they’re not

Craig Huber

then second also that network here you thought And had you the One thinking Maybe Westwood the in And advertising a change at in rest brought I you earlier. good with talk the about how I inventory can about talk in-house. your obviously going network quarter. the out go advertising, obviously of quarter, mean, to that’s you the for year.

Richard Schmaeling

Yes. look, – think David. I sorry,

David Field

one can you and just it. can to comment Rich, I make then add Well,

think radio it’s the the significantly network net figure. talked network up a fact noting quarter. more, we our XX% Within the up was reflects about was I our That’s advertising that in category. worth audio but that whole that that

So to to some see do you of the that. we inventory expand you that third-party with providing upon diminished extent Rich, are amount partners. want

Richard Schmaeling

No.

– in that frankly, some new drive we’re products higher I and and a per network growth help help we’re inventory points couple of before inventory at going Craig, higher, continued strong we’ve spoils. cost that now, us sellout think So sell right us to doing see launched

inventory being there’s done optimize the to a So lot utilization.

runway demand pretty that as we’ll continue good returning sell pot, to don’t at strengthens, fuel more higher local for to we other see and demand in in categories. that is by national a a the inventory growth inventory So think adding do rate spot growth network. can frankly we I because

to today, sales going there’s kind strong we’re better substantively uses for network. accelerate in we’re at don’t expect see continued and higher pace that of and inventory I that So that this from given growth just the channels. other

Craig Huber

it’s $XX the end guess, net do you focus a the year? Where here. months million, at debt expect year in also given your the $XX of on then six started to the Rich, where And load first versus be million up debt the here, you I

Richard Schmaeling

Right.

get inside of the better be So expect a aspiration our – scenario net total do turns there to that levels than down end if of nicely as But down assume of to is And year, leverage total $XXX you from put of we to million that’s EBITDA it discussed in back getting back by we X.XX%, our And look, where is if XXXX. end of David several play out XXXX we’ll in pay leverage net base of Xx. debt if and out this currently. that XXXX scenario, XXXX true, that. you the we expect, be just over course our expect to we we will

continues a getting of think And inside as like and laser by Craig, to leverage you’re the next So, see are to I recovery not to our X on pretty fall down year. focused long inside getting this we thereafter going beam unfold our end X. so rapidly leverage

Craig Huber

obviously corporate mean, to number well. maybe up a talked that running expenses, the excluding $XX much? it’s Thank was on the year? you’ll of the you’ve one. forward items, as number? basis of – it about was is question, $XX I you. it running the one-time nitpick part quarter branding quarter, advertising go The million normalized that What’s expect your remaining And company lot was Rich, What so second here running that about extra should this last the we annualized just million. at Why an

Richard Schmaeling

that growing, is I’ll we But have are don’t this something maybe handy. I’ll a need think interesting and I we say for digital because about to central what’s Yes. that. is look presentation team.

costs, growth. the and significant market have is of part so-called team driver we operating digital our at corporate level. growing also that the And not digital there’s level. So housed resources of that’s most expense increasingly a They’re significant at market station but the

Craig Huber

Thank Appreciate wrestle offline. take I’ll very you much, the guys. that.

Richard Schmaeling

Craig. you, Thank

David Field

Craig. Thanks,

Operator

to I’ll remarks. turn the the session. reached David over closing for We’ve question-and-answer end of Field the you. Thank call

David Field

you joining the so call. you Thank thank Well, for much. everybody

We’re now. looking Everybody you to care. take forward Bye reporting back the to summer. after

Operator

conference. This today’s concludes

participation. lines your disconnect this you your Thank at may for You time.

Audacy (AUDAQ) 6 Aug 212021 Q2 Earnings call transcript