Earnings call transcript Q2 2023

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Operator

Greetings, and welcome to the Entravision Second Quarter 2023 Earnings Conference Call.

As a reminder this conference is being recorded.

It is now my pleasure to introduce your host Kimberly Esterkin with Investor Relations.

Thank you.

You may begin.

Kimberly Esterkin

operator. you, Thank and conference everyone, Entravision's quarter second Good welcome earnings call. XXXX afternoon, to

today Chief and Joining Young, Michael are me Christenson Officer; Jeff Officer. Chief Executive and Liberman, Operating President Chief Financial Chris Officer;

Corporation. impact a we uncertainties Please of measures contain statements expressed results. any uncertainties refer of of these Communications SEC has in will Any actual Communications Also, that call GAAP redistribution, to measures I conference risks of non-GAAP financial consent non-GAAP actual will rebroadcast that cause for subject retransmission Corporation forward-looking inform the company that Entravision's that you Entravision the this financial Before without call a strictly most The is this list comparable begin, call prohibited. or results today's this provided and form call the could to reconciliation could Entravision to are of risks and release. is must in This to press filings differ. written include property measures.

and SEC pro various forma of prepared filed include on the remarks figures is period. company's throughout the X-K. press noted contributions available the website all prior with release to the The on the acquisitions Form addition, year was In

to turn now the Christenson. will I call Michael over

Michael Christenson

thank Entravision's being each if for will Thank company. in during have looking for also Entravision part XQ I'm over any for questions, team CEO. But now, as and discuss a creation answer as I'll Chris, to business my as Today, did Chris questions Entravision you, Chris for difficult CEO Interim leading well Jeff here to the and for and be to great and honored earnings heroic you. its our and effort. your Kimberly. you to value results Entravision me. first and has of he CFO the I'm join I time segments, to call forward the excited and want on be here of growth that and opportunities job

Chris Young

board Mike. for under forward the words, Thanks our to kind your on growth success We're to continued leadership. have and look you excited and

overview million, and results. On had $XXX.X d of second Let's a an XX% begin of a our XX%. consolidated of we increase pacing's quarterly record our revenue previously year-over-year with an basis, plus ahead of disclosed quarter of

comparable business, offset Our digital segment were This $XXX.X drivers the of business which in acquisitions year-over-year. our with by saw face did main increase revenue to continued for crypto our various to revenue revenue advertising. which partially from of commercial the partnership was decrease sematics, the our period. not increase in XX%, which was up contribute quarter, headwinds XX%, million up audio a and The business, a fintech revenue programmatic to primarily digital and due XX% performance

pro-forma revenues to a On period. prior year basis, the compared improved XX% digital

Our respectively and declined segments TV audio year-over-year. revenue X% and X%

address, TV political to last and the face continued weakness tough as against and will Jeff revenue on the year's As both front see national copped strong comparisons performance. we audio segments

a fantastic done however, executing resilient job has Our as the local challenging business, TV despite fairly team remained conditions.

speak to turn now Jeff? further Jeff the call segments. television to over business audio our I'll and to

Jeff Liberman

Chris. you, Thank

X% was X% margins XX% XX%, X%, for decreased revenue revenue core million, for for national our Retransmission year-over-year. segment quarter spending. year was the continued which pressure television Let granular core increased core to up $X.X revenue and and million national basis, revenue due On in television flow compared the Cash a political more television $XX.X revenue period, Television in down me was revenue was a increased the local year-over-year. decline X% segment. quarter. start with to prior on quarter, advertising largely

back first half improvement in have and of While which Texas, advertising has the like we see for year, into all key Nevada, extended the may in front, we national primaries of July, the the which quarter in Colorado, on continue to California, XXXX. political see states softness Arizona, spending

decreased Now largely year-over-year, local a by as revenue to down for let's political driven revenue, declines X%, of lack political, national the revenue XXXX. exploding second shift audio. X%, with of well X%. ad Audio compared and the approximately as $XX.X revenue down totaled down basis, X% revenue quarter to national was revenue million and and core as On quarter total local

while are language current economic very Spanish performing our help the national being will based better our key political radio Fortunately, states and clients cautious discussed conditions, spending than on general has which the earlier, increase support sales. in been market, national may

call the discuss now further and will in financials detail. quarter quarter to the I Chris? turn second back third to pacing Chris

Chris Young

we let's pro-former a covered acquisitions, up expenses driven in year XX%. to Since of the our for the was million recent Thanks, in in increased revenue and quarter contribute digital Cost for not million, did already prior cost basis, period, each in segments, quarter. the the of to segment revenue the our $XXX.X move prior $XXX by which XX% revenues of period, revenue. in cost revenue factoring Jeff. On of year increase from totaled

due Operating $XX.X quarter prior to totaled several million the the million, in year period. increase up $XX.X This expenses was factors. from XX% in primarily

attributable in comparable contribute in last various First, to incremental which we million period not the to acquisitions, year. had results our approximately financial $X.X did expenses

we $X.X in million Second, our newly in were rent headquarters temporary Monica higher of Santa the until at space was renovated a than expense June. the prior year, moved we to end office our as

was timing year year. prior this annual there compensation being of QX Third, grant result $X.X million QX in to in increase the the the compared in stock-based non-cash RSU a as a of of

annual timing in of to expenses increased and prior driven quarter digital decline same of expenses both a a and were The revenue increase in pro-former compared with $XX the of with cost $XXX,XXX. And operating at Corporate million Consolidated XX% expenses million just the million an increased approximately year, mainly $X.X expenses of compared quarter fourth, spoke period. year operating was the On business the service is advertising down increases coupled XX% to result up $XX.X increase professional our XX% by which for primarily EBITDA broadcasting variable revenue associated total period. a I last in in for the $XX.X quarter, basis, year prior the expenses fees. to from that million in mentioned grant RSU totaled to. combination political corporate I of by revenue non-returning just the the

to to our quarter That Monica the expenditures $X.X totaled million same was mainly in compared defined quarter the as $X.X last $X.X of last rate for in with million the completed million. in the year. or flow in the XX% compared the same interest same compared cash a expense of quarter release $X.X million EBITDA million to quarter of earnings of $XX.X the due consolidated in build increase in year. is of cash last year conversion during to of quarter out Santa quarter. our Cash headquarters The capital new QX Free

million cash We the expect $XX year. total to full for CapEx roughly

were income last compared $X.XX share $X.X quarter, paid year. Cash for taxes in million $X.X a $X.XX year. the was per to for quarter the XXXX, positive the for quarter earnings of last million same negative Diluted paid to compared

$X.XX again In addition, of once directors quarterly we a our were approved dividend. that board pleased

million. cash was totaled Turning balance Total as $XXX.X debt to of sheet, marketable June securities our and million. $XXX.X XXth, XXXX,

end the and credit was quarter. total of securities, X.X as agreement defined times of X.X times. of in net leverage as our second total our Net leverage marketable Our total was the cash

Turning to the third XXXX. quarter pacings of our for

plus in plus Factoring over our acquisitions, As is on segment the XX%. segment prior of year. basis at pacing today, a revenue XX% from a pro-forma our pacing digital digital is

TV a segment minus minus far pacing Our quarter over XX%. XX% pacing excluding with the the the prior and advertising both thus at core prior year is period, TV year, political in

pacing segment the Lastly, political at thus prior the our over audio is pacing audio period, year core with prior a minus XX%. year in XX% both far minus excluding quarter,

revenue organic last plus a ways we total is year to XX%. from TV To of be at political spend focus with in increased while and year. looking footprint this half continues revenue remain to conclude, back to benefit XX%. the a continue an Entravision our total drive our positioned in, uncertain, All are increased currently audio pro-forma and pacing to expand seek On ad compared will conditions growth a and pacing basis, resilient, is ahead, at on plus our well to macro growth.

to for up your now employees our Operator? Entravision, and you for were company announce the Lastly, to again I'd during to we that the of Place all contribution I pleased like support our to We certification. appreciate time that this Entravision success. our open would once note earned questions. This and certification we'll afternoon. of Work dedication your to to culture, and like quarter the Great their to speaks continued call thank Thank strong

Operator

you. Thank

comes We first and a today Instructions] will gentlemen, ladies and now begin the session. ahead. from James [Operator answer investor. retail question our Dex, And, Please go question

James Dix

I welcome. but, Chris, before. welcome, everybody. Hi, here tell I've before. Mike, been you're you here

Michael Christenson

Hello, James.

James Dix

guess the just of looking are particular digital, as in on the advertising, basis internal you Yeah, your went what way into across it's from guess are as core you a you that and at side, year? the from? a the the at maybe advertisers radio expectations little on And you demand the like demand hearing at just little moment expectations, in the expected, looking versus on I what just terms see and versus third are I weaker stronger. the revenue TV quarter Is segment? you and look hearing than

Michael Christenson

a through mix. resilient commitments. economy feeling, than the on is now that the level is come to out that they're The that agencies recovery in to there. start problem signs really is The seeing half the and going national. agencies second sentiment in year. before the that the of Local's a making at National's they of worst for national start want of thinking budgets committing Local's mode, this we're start basis data but then are some waiting the in more hanging the it, longer-term

business QX, digital there. last plus produce outperform. be resilient. pretty up but been X% plus as look, have particularly XX% in a of the continues And We're from QX, QX more far bit the for digital has we over, the in kind part That's Meta, positive, to concerned, control of that a largest problem. as a platform, really up is and XX% from the Local still TV. national's They to in our year. demand plus continues in

clearly they're meta-platform continued with So growth. track on the for

James Dix

least then model, kind in the in despite terms your margin my Digital Okay, miss. great. relatively did line in And was to actually weakness, flow. broadcast, of expectations, terms just at cash of according of

thinking previously partners, especially the in commission changes given from So year, what margins about about rates in going back of said into on side particular the are the you digital half how things, of you've potentially?

Chris Young

should QX. radio the be kind should range But see south Probably us point, into be TV high X.X% QX. to digital, Yes, similar high kind back for to XX% the of X% range of back QX corporate the quarter is XX% for were we continue usually in along half something margins that to of of a for lines in to Seasonality-wise, year. before mid breakout digital. your at in expect

more continue as we of those margins expect digit, that So range, X-ish the the or provided be expect. in in kind the will revenue X and mid-single to seasonality

James Dix

just Okay, I then interest, else great. guess, the up would anything seeing popping of are primarily there's one last you but M&A of that be? digital, one. that's across, in been What what And if outlook terms

Jeff Liberman

as our this existing focused Mike past right least, in on and us think three been focus, growth. our strategy on rest organic quarter, for the on of working the We're the margins the focused now, term. portfolio. working has to we're And that has improve assets. on at be of focused near all I deals the well that'll James, as digesting

James Dix

much. great. Okay, very Thanks

Michael Christenson

Thanks, James.

Operator

Thank Singular you. question [Operator Marsh go Instructions] David comes ahead. from The Research. Please next at

David Marsh

Hey, questions, guys. thanks for taking

Michael Christenson

Dave. Hey

David Marsh

more? are to seeing. a the I market, I more you're hoping more the little what you're but for can you I bit Can political mean, around just talk us seeing see election, give little bit sit Just in, around XXth towards a you granularity so bit to I'm some in help ads we're so already guys starting far? know, little and start, what a you

Jeff Liberman

seeing second So, David, in more half little bit money, California, media in, that Colorado, nothing we we we are that going to some close not quarter, of but first which year operate count political, seeing key expect the the There the to not of are become third do properties we Arizona, in are states robust. much, primaries we're Nevada, in quarter, to in start very really a very if the do the of end feel fourth Texas, to quarter. that maybe the

Michael Christenson

because vote, us, that that for California of that so September in deal are got to expect big advertising a when front and message Election out initiatives that March to here that's come a and be or that's and should lot messaging, particular online. in you've California in get by the to in done of Day, start we mail deadline, October,

David Marsh

local And the as would a political correct? advertising stuff categorized product, more all be

Michael Christenson

it, market Usually, local National it that classify except comes individual because for is national where from in we any the race in in. agencies, we're usually

Jeff Liberman

the is the without of happy give in the national you the we're to future versus political, just But the breakout nuance. political what with

David Marsh

Okay, perhaps super yes. meaningful any really, just and and that those get are advertising sectors guys catalyst particular you actually are some Nationally, that yes, broadly, there the off any with in really and any bench? doing to are sluggish particular

Jeff Liberman

advertisers? talking you Are specific verticals about or

David Marsh

sorry. yes, verticals, industry Yes,

Chris Young

Automotive X%. really of surprise, that's number finally The legal service XX% care major whatnot, back back but that's for flip coming up one they've But the only and for the health business. represents one That's far around. They quick It about is McDonald's concerned. services the category of were a but on which It kind Retail of us, the flat, services of XX% our the TV. screen that's as was pulled was book. is insurance is likes and restaurants, a so TV. X%, up a down somewhat. up are Yes, is categories category. for as bit our

David Marsh

really that's helpful. Yes,

volume it on that of digital the question. could Just in that the there mean, a do lastly is bit? for mean, the the a pulling you? digital I guys specifically I for a margins game is do, mean, what anything can perspective on grow business lever just or is I all me, a you dollars just prior side, from you it follow to kind really

Jeff Liberman

what tailoring certain over we volume but is past been several business back doing the headcount it the Well, is platforms. game, a quarters in specific have

kind to So last the margins That of year the of quarters divisions. restructure work two the we the of to so we as headcount's to the into we down that. yes, over will our have extent half will continue likely around on XX be some in fourth as people largely, on work mid-single-digit as And efficiencies. be some headcount But work large going to the that will to continue going But back gear to those control, range. margins. revenue seasonality those the we'll margins business the our continue high the the have drive expectation it's and in quarter, that's part, is the the to kicks back the get, of into in of really kind

David Marsh

guys. Got it. helpful. That's really Thanks,

Michael Christenson

Thank you.

Operator

Thank you. Markets. NOBLE Kupinski comes go Please And Michael our Capital next with question from ahead. today

Michael Kupinski

TV possibly, your radio, in and the assets, do the focus, company but to about Thanks this and Thank know to this, make, might taking to you acquisitions, working areas a I congratulations. be forth? of opine on with questions. growth, changes early maybe forward particular you my Mike, what like you. you. terms I you for perception you would look how think little view of so do for

Jeff Liberman

point, What looking mentioned, three the past front portfolio I'd looking we're of organic adventure at through been on we're into growth few active the going and and four as this opportunities. say weeks businesses. over years, or acquisition the we've the at Chris all the for And is,

flow grow looking the organically. opportunities. every to revenue that's to out at find business those ways And grow cash now, priority and So free for figure we're

Michael Kupinski

assets? assume, look the I in radio TV would just you you would would concentrating And that on or could and be also acquisitions both at assume we digital

Jeff Liberman

our own leading to we're now, any kind we help in we're understand we're focused and acquisitions. decisions, formulate watch I portfolio. M&A the sectors really but We valuations of participant marketplace, activity on make where not We're any of watching, in transactions point. company. a the at own mean, are not all Right looking the looking our this at strategy specific own at our obviously

Michael Kupinski

and to kind go Meta of and Facebook about Got in any for some terms the want change was the thoughts that you we went some there already. to that and then was the and margins digital I those had them, are Can if that forth, of you. reflected relationships? the you in margins the margins, give if know just how discussions if in margins on Meta about digital those margins, digital or wondering talk or question side. so back seeing your I I us that? And Did of

Chris Young

Yes, Michael.

the are we Meta of X%. about the from So point was them informed our we margin business would XX% print, put by we really back expanding new pressure relationship were with months Meta that's dropping or but some not to speak commissions territories, discussions reflected the now. into few back specifically that our in to half certainly that July That right effective of to Xst, QX it so Meta To that, anything our will have don't be year. in note offset in with but a

Michael Kupinski

on And from of that kind cash opportunities flow you would I'm in we substantial growth margin Chris, anticipating those more they're offset new those I we have given expansion gave that see certain they you into the than that the opportunities presenting probably other those. in improvement? types mean, missed Would some words, terms insight potential that would of you? territories, be could of, the are market look, we

Jeff Liberman

but in to tell, but our but hope early the obviously is It's writing we yes, at don't goal. too is this point, have that that

Michael Kupinski

digital are I the you you on in you seems margins benchmark like prospect like that than answered segment. sustainable to wondering trying little be the for the the should kind margins trend the to of was question what sustainable of a toward? do then and what lower digital and that, bit the margins you a segment. be. and in What new digital Yes, digital and how the or know we're anticipate are focus want margins just what you in that think you It past going was the it XX% would I indicated if have know had about that you maybe drive margins segment, what might to

Jeff Liberman

Yes, given right have somewhere that this X% goal The now, X%. we're and I Meta think, XX% I think to year. with going between peel happened is goal what back to

that through to target. goal to then and we're that another efficiencies achieve once target and going get go through Let's we retool and volume, for

Michael Kupinski

free lot was that what given a course, Got you. thoughts be pretty are terms wondering balance at you that and then, the just the this that I looks just capital might your dividend, thoughts your significant capital And in but you've company, of got point, I of at of good. still flow cash is of cash from here? allocation what sheet announced know the allocation

Jeff Liberman

Invest at dividend, that growth committed company. We're focused the what obviously point, inside organic primary two that's the Those to and we're allocations. on. in

Michael Kupinski

at this Would be the share point? table repurchases up

Jeff Liberman

Yes.

Michael Kupinski

That all have. Okay. I is you. Thank

Michael Christenson

Mike. Thanks,

Operator

you. to Christenson And Thank I'd like conference turn closing session. concludes back this for over the our question-and-answer Michael the to remarks.

Michael Christenson

today you call earnings to on for sharing our Entravision. of look with your November. quarter progress We'll our you in third for joining us support and Thank forward

Operator

Thank attending you, sir. This We presentation. concludes for today's conference all you thank call. today's

disconnect a wonderful have and You lines may now your day.

Entravision Communications (EVC) 3 Aug 232023 Q2 Earnings call transcript