iHeartMedia Reports Improving Financials

 

iHeartMedia, Inc. Monday reported financial results for the quarter ended September 30, 2020.

➤Financial Highlights

• Quarterly and Monthly Revenue Comparisons Continue to Show Sequential Improvement Q3 Revenue up 53% sequentially, moving from down 47% YoY in Q2 to down 22% YoY in Q3. July, August & September down 27%, 21% and 18% YoY, respectively
• October revenue increased 2% YoY, benefitting from significant political advertising
• Digital Revenue Increased 17% YoY, Validating our Multi-Platform Growth Strategy
• YoY increase includes 74% YoY growth in Podcasting Business
• Digital Revenue excluding Podcasting grew 8% YoY

➤Third Quarter

• Revenue of $744 million, declined 22% YoY; increased 53% QoQ
• YoY performance by revenue stream:
• Broadcast revenue declined 29% from $573 million to $404 million; increased 66% QoQ
• Networks revenue declined 26% from $160 million to $119 million; increased 24% QoQ
• Digital revenue increased 17%, from $97 million to $113 million, led by a 74% increase in podcasting revenue; increased 21% QoQ
• Sponsorship and Events declined 48% from $56 million to $29 million; increased 95% QoQ
• Audio & Media Services increased 25% from $60 million to $75 million, driven by political advertising; increased 91% QoQ

➤Year-to-Date

• Revenue of $2,013 million, declined 24% YoY
• Digital revenue increased 13% YoY driven primarily by an 85% increase in podcasting revenue
• GAAP Operating loss of $1,850 million, driven primarily by non-cash impairment charges in Q1 and the impact of COVID-19
• Adjusted EBITDA declined to $273 million, compared to $695 million in the prior year period

“I am pleased that we have seen strong signs of recovery this quarter as we continue to address challenges resulting from the macroeconomic impact of COVID-19; in the third quarter, our revenue has substantially improved when compared to the second quarter and continues to improve sequentially month-over-month,” said Bob Pittman, Chairman and Chief Executive Officer of iHeartMedia, Inc. 

Bob Pittman

“As the number one audio company in America, we feel our results this quarter are strong validation of our multiplatform product and revenue strategy, our ongoing modernization efforts and the investments we have made in new areas, like podcasting, where we are the number one commercial podcast publisher and continue to grow our leadership position. Our relationship with our consumers has grown even stronger during this downturn, and we are seeing encouraging trends across the markets that indicate we are on a path toward normalcy and growth. We expect further improvement in both revenue and Adjusted EBITDA in the fourth quarter.”

“The early action we took during the pandemic to focus on cost management and maximize liquidity prepared us for a potential protracted recovery scenario, and the fact that we’ve been able to quickly return to meaningfully positive Adjusted EBITDA of $162 million in Q3 and free cash flow generation is proof of our strict cost controls, of our sequentially improving revenue trends, and most importantly, of the Company’s strong free cash flow characteristics,” said Rich Bressler, President, Chief Operating Officer and Chief Financial Officer of iHeartMedia, Inc. 

“We continue to focus on cost management and maximizing liquidity and we believe that we are poised to take full advantage as the economy continues to recover.”

On the iHeart Q3 call, CEO Bob Pittman saluted the company’s employees for their hard work across the COVID-19 pandemic — even as iHeartMedia last week went through its third “reduction in force” layoffs of 2020, a fact not reported by iHeart-owned Inside Radio at any point since January, according to Radio+TV Business Report.

Investors weren’t pleased with Q3 earnings. IHRT fell 4.5% to $9.75 in after-hours trading, eroding a healthy 15.1% gain on Monday fueled largely on news that Pfizer has successfully conducted a COVID-19 vaccine trial with 90% efficiency.