EVC - Earnings call 3 2023 | Entravision Communications Corporation

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Operator

Greetings, everyone, and welcome to the Entravision Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded.

It is now my pleasure to introduce your host, Kimberly Orlando, Investor Relations. Thank you.

You may begin.

Kimberly Orlando

operator. you, Thank and Conference everyone, Entravision's Quarter Third Good welcome Earnings Call. XXXX afternoon, to

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

a the impact we Please this contain statements is and uncertainties refer SEC consent will Entravision results. that to I form actual conference risks property actual cause for subject forward-looking inform that uncertainties is Entravision's retransmission that of of Communications strictly Corporation. call rebroadcast without you Before could call redistribution, this Any list Corporation that of Entravision begin, results written Communications call could to This are any of risks and prohibited. the must to filings differ. or expressed in

will press measures. most to measures has this The non-GAAP of today's include their reconciliation Also, financial in company release. these measures non-GAAP a provided financial comparable GAAP call

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

call now Young. Chris I turn over will the to

Christopher Young

all and I capital us then allocation priorities. quarter areas for thank afternoon. Jeff over this to and it turn Thanks, and performance, and Kim, Entravision's discuss will focus key you third our will cover joining financial we Mike to

a $XXX.X our had consolidated Let's begin million, we On below of year-over-year, with revenue an XX% slightly pacings previously plus basis, results. our overview record quarter up quarter of a disclosed third XX%. advertising of

with up solutions year-over-year. The revenue in million for commercial XX%, $XXX.X our to comparable saw quarter, which full contribute main partnerships increase business, not revenue and revenue which XX% period. our growth segment XX% various did up digital was the Our mobile drivers were revenue acquisitions, business the

the year-over-year. up period. pro revenues digital and compared our XX% to were programmatic businesses audio prior On improved Both modestly a digital year basis, forma

$XX.X approximately of million was flow X.X%. cash operating digital approximately margin with quarter, the During a

Africa. digital to Match Media, recently new Pinterest. the brands September, I'd our In powers the partnerships the drive with such operations in team as local South Match sales highlight diversify partner named that assist further group across Africa, Match ground OkCupid Next, experts able to and effectively on our we for of we growth. Through more ads customers to sales investments their deploy and was like to efficiently are Tinder, X more exclusive executed advertising to Entravision to

in advertisers in October, look end grow and with campaign quarter and and Latin digital East. of our entered management where Africa, these to Europe across Pinterest to to forward has been Southeast partnership not outreach in international various Subsequent continuing America, to Asia, We brands portfolio marquee the solutions. sales Middle Pinterest an ads countries offer we partnering with serving

Jeff over now I'll our discuss to business TV the call turn and Jeff? audio to segments.

Jeffery Liberman

you, Thank Chris.

performance with quarter, difficult period, start television faced me last in revenue as revenue of strong year's was due compared Television segment. primarily revenue million to in $X.X our we versus prior year down political million. comparisons Let declines XX% political to $XX.X the

saw on a in resilient job business environment. our advertising we our While as challenged TV spending, has great executing doing continued national local pressure a been remains team fairly

was X%, more year-over-year. Retransmission year-over-year. local increased national core flat was for million, XX% On revenue revenue granular television a and $X.X core decreased increased basis, quarter revenue core X%, which revenue the

was cash segment for our flow the TV XX% margin quarter. Operating for

media by last to propelled Tier in and the in growth was saw declines entertainment X year. growth same Unfortunately, this retail. Tier quarter by was We This the period XX% and the of growth X category offset auto in compared spending.

X primaries for XX. primary Texas, and Nevada has opens the in first of The the California, December primary all improvement in see on Arizona, to Colorado political this political in October, have persisted on into fourth the elections be advertising February softness expect and the states quarter. which like Nevada, While national spending window will front election there in Besides key we on quarter is XXXX.

to million included for revenue $XX.X third Audio of national the The XX% lower totaled to $X.X driven advertising and compared advertising revenue decreased Now political revenue XXXX, let's was quarter million. in shift as local approximately revenue by audio. year-over-year. and of quarter decline which the non-returning

and to sales political, XX%. conditions, as core increase, on down total the XX%, Based basis, national current said revenue support local revenue help will XX% excluding I which earlier, expect was efforts. our political a On down spending national with down economic revenue we

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

Christopher Young

Thanks, Jeff.

revenue Cost expenses. up totaled our of of year digital in revenue expenses reviewing XX%. X% was by factoring On period, segment begin the in up $XXX.X revenue prior year in of quarter million period the in prior prior million $XX.X totaled which XX% forma million, basis, cost and the by the the from did cost in to in year the not recent pro Let's $XX.X increased revenue. from $XXX.X quarter period. increase our Operating driven acquisitions, in a million, contribute

timing increased to This and increase associated grant year, result in being results higher this the driven segment of salary QX of expenses QX various noncash year compared by financial in in of our various year prior higher compensation the stock-based annual our as did period. including a in was contribute the advertising fully XXXX, digital to factors, the result expenses the prior higher revenue, digital acquisitions which with not RSU of in

same total period. increased as for year, quarter which increased year the basis, to in cash by grant prior RSU the to service to as forma X% $XX.X compared compared of professional CEO fees. timing On of an of the and quarter grant last a well mainly our is mentioned annual million result I $X.X just the RSU a in XX% expenses million Corporate to the expenses operating pro increases

the decline was non-returning million business broadcasting The mix. period. our by prior driven revenue $XX.X down the at primarily Consolidated adjusted for quarter, EBITDA totaled political from sales year million XX% and $XX in

million was the compared million interest a of the $XX.X quarter in $X of was expense same flow, of cash rate the earnings in last $X.X million quarter to prior year. cash to EBITDA or same our the XX% in Free adjusted Net year. million of the consolidated for in $X.X as release, quarter defined compared conversion quarter

Cash capital expenditures million. for QX totaled $X

taxes roughly paid the for cash expect $X million CapEx Cash last full to for the million We income quarter $X.X for compared total million paid to year. was year. $XX.X

quarter the in to Diluted compared XXXX $X.XX earnings same for per the $X.XX were third last share year. quarter

approved dividend. also Directors of quarterly $X.XX Board Our a

Cash as September was of totaled XXXX, securities $XXX.X balance our million. Total sheet. and XX, to debt marketable Turning $XXX.X million.

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

to approximately with quarter $XX.X As million we it's on was booked we the return political that will this for of was important that being million digital. current note turn year balance approximately that fourth a booked fourth XXXX, million revenue last year. on that on not radio of to in in $X.X the $XX.X $XXX,XXX our of TV pacings quarter of and

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

plus prior period, the a in advertising, excluding Our year political prior with core TV booked TV segment over is pacing XX% the pacing at X%. year, minus

revenue On audio total a over All year again, XX%. forma our political, core Lastly, prior quarter, year compared prior pacing minus both our at the pro pacing period, plus revenue a a is a pacing basis, segment plus audio, X%. our in, the is X%. currently total last at is at XX% at year excluding a with in minus pacing to

the concluding remarks. will Mike call I to turn now for over

Michael Christenson

Chris. Thanks,

will and year plans XXXX heard be Entravision. with Chris from hard momentum, Jeff, So building good working we're XXXX. finish of in a as very important for our the we're for you've and process to XXXX

for the priorities year be, political revenue. first, Our to maximize our will

elections, the a Senate have broadcast Latinos of We X the This XX the nearly of in in X presidential. audience, in XXXX for closest presidential our the XXXX U.S. in critical are Congress, We and large a TV XX race. and the is the states radio audience markets. X cover million

news to Las and Vegas weekend news Diego, in morning increase of Denver. we're San all and our our news local markets Second, capacity, adding investing in

then focused third, the mobile operating services, and Smadex solutions. we'll of digital Entravision on businesses, very improving be Entravision digital And performances our growth X

For for our plans dividend. is XXXX, capital allocation our important our most allocation

committed to dividend, businesses. will dividend. are the the covering be We in the reinvested balance Then our after

our AI manage adding machine of and to those capabilities applying businesses, analyze learning how We we capabilities particularly investments businesses. our to all Smadex, technology are and in making

year for Entravision. be will important XXXX Again, an

challenging a correlated are that spending, I likely geopolitical of ad think be important will remind and from businesses However, everyone and perspective. all it's with global an economic this to our year

we'll joining want to to that, today up your of us and And for with for So now questions. the support take open your we call you thank Entravision.

Operator

Instructions] today from Capital first NOBLE Markets. [Operator from Our Michael question Kupinski comes

Michael Kupinski

that I of But advertising, political give a pacing year. how political about -- is already level A you talk political? Florida, of XXXX? -- of about questions. of us the couple noticed time in spent kind is you some gave know fourth XX% then at thoughts much of can is or unusual advertising in which being presidential your terms your Political in of little the political this can bit you guidance what so. quarter? And But I that the down in

Jeffery Liberman

somewhere So expecting the political quarter. and of fourth $XXX,XXX we're Michael, between $XXX,XXX in

first remarks is window have some contested coming up a the in Christmas states said year, Nevada, that this that quarter race. we with in up And opens As which in my especially actually Eve primaries of next I are year. do key earlier, political on very very

right the up into break So election the of Thanksgiving spend primary move of state forward a after our see expecting to in probably we're the as Nevada. we ramp

Christopher Young

that's And up factored today, XXX% Michael, obviously as of since not pace we gave in. only

the running not of now, but that that are late some break campaign We reflective in might campaigns is quarter. stuff pace presidential

Jeffery Liberman

us. Yes. And as marketplace Biden spending already Biden Nevada -- the with has mentioned, in Chris

Michael Kupinski

you bit that progress wondering be? that talk a front? where was priority that you the markets bit that several to margins. I a anticipate But was about develop for improving on -- margins digital Got know about company. you you. your the I a And you past indicated little if have in business. little in the I you've digital metal know do the can margins And talk could

Christopher Young

pretty Sure. quarter. X% obviously, We from that way at was cash are we X.X%. feel second digital That's the fourth is coming quarter. in did in, north for we with get here comfortable number. still the the Right revenue going to XXXX. through budgets X.X% quarter, And flow we're now, gunning In for then the third in -- the of down [indiscernible] margin

that ramp going that's higher. So to to work goal But progress. obviously, to in is a be the continue

Michael Kupinski

then And might was us some you there give just you know the discussions you from some you. -- those opportunity the additional a and the if Facebook get thoughts likely you about bit that and markets be there, that Facebook had kind of little we might market finished in have, give from the some Got you're can talked indicated about then that those I to and others, if And and that markets that you. I Facebook of of when also if kind wondering that what changes you markets?

Christopher Young

Nothing in progress, market the still continues. now, work keep right as updated announce Yes. we'll to that of a as it's and

Michael Kupinski

that of core Got the real kind a of flavor give what key to some the side, a being largest core TV, us broadcast you. the the on you what's and Is some what's the of then component political -- of revenue? advertising. can driving outside you're just of auto driving the And

Christopher Young

back of for to the what manufacturers this our strike, So way the with to auto TV. share capitalize as the drove up the with auto quarter. looking -- U.S. noticed we're auto with unique That's in are the the stepping -- side, to on segment. situation. Even auto quarter, take strike, weakness the -- It's a they're was auto to in largest what on XX% for XX% market really a foreign in U.S.

Jeffery Liberman

also. also X, dealer in marketplaces. dealerships you Tier the associations and did in category X besides category see that's care and Tier also positive in our right? was So being a standpoint car health services bit the little from ask go local the we that Also, auto, up a did And

Michael Kupinski

a digital? position look Got point? a you. lot promise. side? broadcasters in lot last are. concentration there take the you Is I a in There's of And financial this the not thoughts still any distressed are the out of would terms -- question, Or that the to there's on is obviously Or you going then M&A in be like at there broadcasting

Michael Christenson

political focusing XXXX expand internal take about cover to money. The we the we improve and digital to today. the And is to want attention lot and a is that going and portfolio work time be going of we performance to operating of think our then own opportunity on have businesses. the

So we're then through from go and on XXXX get through where what We'll there. that's we focused for figure XXXX. there out --

Operator

Our next comes from Capital James Industry question Research. from Dix

James Dix

the line might in -- how the seeing the your just that is Just versus moment, the your variances I looking curious was looking I'm looking that? expectations? what X where at you be driving versus top segments, your to demand across in and for quarter how expectations? And you're then as is the what how fourth thought quarter versus mean,

Christopher Young

really the by in Yes. That's were Well, rep being business, with quarter. pretty We driven the sales pleased America. was that. Latin up XX% James,

down that's little pace bit far, a fourth. more so the at far low-teens in so come a looking for And quarter,

come both and got That's XX% in double a bit. digits. down range. mobile were that's the generally branding So you've Otherwise, little up growth

So [indiscernible], then our unit you've which XX%. was close to got up brand-new

So should parts. give behind some the you color digital that moving

James Dix

growth in and and I offer color that initiatives on think past, the digital spoken focus that. what things and like distinct can organic like from Great. timing that. My Any M&A side. you've as the was on of on about initiatives things And Okay. understanding then primarily types you're thinking you was about

Christopher Young

of is our energy said, is XXXX. So on all news We're in piece very our we capacity. right much in a our big as expanding of -- business It political. pretty now also our

of our we're morning adding several news weekend. markets in So and

businesses. I performance So again, as then digital that's improving of important. on focusing And said earlier, X the our core

James Dix

was political almost should calculating this just you, speaking we core about all assumption core political, be Chris. example, And calculating might that assuming that -- you're of it how should we year, you for for how for It all last it. the and be Okay. maybe incremental and... me for some thinking like that then now you be like look wasn't When of base to seems were making that's and growth the at

Christopher Young

core being with growth incremental. but go [indiscernible]. XXX% I'd political the

James Dix

years assessing in coming should for of with we pull out all So pacings? last up the the base

Christopher Young

I that's think Yes. right.

James Dix

or we you're And of Okay. for the much gauging that the to investments next obviously, return thinking be you're going bigger then making more I of about kind year. year, thinking as should potentially be mean, how incrementality to like about on to Any thoughts how get the when political?

Christopher Young

political have a core Well, markets have certainly, some the and that as just that we're that to crazy are of going much you time. in to because short jam result going can't is to a political such down is expectation going be amount

incremental. it's just again, this but -- being easier think XXX% to So about as

Michael Christenson

a same In doing and really Yes. the midterm too, we on versus the did our good the managing election, election. job upcoming all thing core focused political in we're

James Dix

just trying or to since just like countries and then either you're regions terms outliers growth? negatively global, what I your to have of -- you sense as internationally, to finally, been positively get And just guess, in Okay. some

Christopher Young

but Asia up down Europe Yes, got Xx, the side, the in and -- was And well, X%. America was I've to also it that was third XX%, of Digital Latin Middle XX%. XX%. up did Pakistan. close And in Jack up up that's then was was some then Africa XX%. in in the business East from business as was up digital on we U.S., our quarter,

James Dix

-- those be the look the something you of you mix should is are year? that similar? looking the change toward Or of for terms we in as much seeing of growth across And geographies Okay. the end

Christopher Young

Yes.

I down have look think QX, come into you in a regions versus bit I those little of all QX general. think QX as

to plus it particularly a Middle XX%. We So they I maybe and Meta, you out Am, of plus tune with clearly, and Am take Africa quarter. East, break the Meta down couple something they did the in a But points. of, for think, Am, were Lat Lat XX% Lat the

in still versus plus a did X it's the growth or the So they U.S. X

the in in still expect regions, Meta engine Facebook, that it's and So these still our continue. to is growth markets, -- we

Operator

Hutton. next from Mike comes EF Our from question Albanese

Michael Albanese

guess, Just a quick sector of dive kind I the want I level. to to ones. of couple back in,

guess You that, showing you're all you're care seeing maybe a underperforming? mean, think health that auto of kind weakness top maybe seeing variation mentioned I between the level, trends. I of standing flip or is have there and which just on or been even that that out us sectors what of I give auto sense is at and are services, side good the anything of [indiscernible] any

Christopher Young

Yes.

them not It's and So from leisure as as restaurants. also as performing -- are like [indiscernible] travel the the be. really retail would we to

So do conditions the with a lot that of those we're have in economic to currently.

Michael Albanese

it. Got

specifically Okay. And allocation, back to organic dive growth. reinvesting drive priorities, then more into XXXX just capital

news mentioned capacity. expanding You

You high in I to I terms mentioned sense just you how towards more mean, XXXX, of expecting AI. CapEx the you really intend use AI be of little that? year down just kind in give levels, then bit Maybe into right? historical expected, -- color more are And past add come next just to or you back of year a this needs And same maybe could guess? that or talk us a in historically as the

Christopher Young

in Yes. here the cover of in year AI million will CapEx, $XX And the the it CapEx did $XX I'll Angeles. I then from be where Los range, that because question, -- think... this normalized is million year move to more next we down

Michael Christenson

of Yes. learning of now businesses, and to we In products our advertisers. capabilities the -- are a of AI the part critical machine digital really, all deliver in that

those some to of all in businesses competitive establish be to differentiation. invest to competitive or have we So even

investment, areas it more to of is -- the using also we can having across So or that operate saying, doing our apply efficiently and the capabilities. what making other we're business, committed board, those smarter that's to can company

investment, company, So keep to up. now this like is we every critical area of need a and

Michael Albanese

just you operational I can you're implement just -- internally identified guess, you're of that kind improvements? AI with this believe where ways, I find if regarding guess something you looking technology and Yes. into efficiencies. Is and efficiencies you

Michael Christenson

-- We businesses. implementing are improving our and in are we tech

-- growth it more has quarter, and for the put us, and Smadex year been in be of a XXXX. and for at point, area an this it than mobile that we've investment definitely in behind It's in again solutions. probably underway more will our So last work important

that The going effort. our including a Entravision, in new -- as manage we how we that's application XXXX. broader we to something businesses, will to we're in can. to use it just places of have that capability, this do many broadcast that's we're be going if Again, That as

Michael Albanese

but -- chance Mike, you've been months, chance a think fluid it's And know Okay. learnings process, broadly, a I you sharing? for dive I I to or as surprises few guess got worth a then, really is to that of here the had just in kind just dive hood. you major any very under and here a

Michael Christenson

with and after quarter about now It's of we to getting finishing in businesses, more very optimistic the and what my accomplish company I'm people a excited I'm lot can great a opportunity. XXXX. know and the

my pluses into new case, time and you definitely any and And outweighed situation, the So the pluses opportunity. go minuses, about the have a excited there's I'm in minuses.

Operator

Research. Sakai next And Singular from Chris question comes from our

Joichi Sakai

the ad best? -- in talk Marsh. about which segments would Can perform for spending, for you I'm the of Yes, political X Dave

Christopher Young

that, other And for million a We'll budget. vis-a-vis the a and $XX should should a really hundred far of how for maybe it's said $XX we've And million It's we grams But budget. by process. do be an about but do internal got be budget see next $XX I've good year. digital, away. publicly, this TV political Yes. couple million. TV-driven of for TV of good we'll radio about

Joichi Sakai

can And Okay. there? then that potential acquisitions about you any Great. talk seeing you're out

Michael Christenson

to and going is organic growth our XXXX operations. XXXX. in Not improving about be

Joichi Sakai

and you it slowed. your revenue Can about talk digital

quarters? what expecting be you we talk of the why? about And should next can couple there So over

Christopher Young

really, harmonizing very and the been to just now the acquisitions years. we've my been and years. simple. growth the has right And Well, Plain over X working from driving the several on up we've X those come past that we're margins. or active acquisitions But acquisitive for with point, past

Operator

I'd we'll and any that, over back ladies turn gentlemen, be today's floor And for to closing with question-and-answer to ending the like Christenson remarks. Michael session.

Michael Christenson

joining look Just earnings to We further be today our support progress details March. our us fourth want sharing to will and thank with for of you quarter Entravision. your you all forward on on which in for call,

you. thank So

Operator

Ladies today's we'll and gentlemen, conclude with thank conference and We presentation. joining. call you for that,

your disconnect now lines. may You

Entravision Communications (EVC) 2 Nov 232023 Q3 Earnings call transcript