iHM: Digital Paces 7% Net Revenue Increase

• iHM reported a third-quarter loss of $310.4 million, after reporting a profit in the same period a year earlier.
• On a per-share basis, the San Antonio-based company said it had a loss of $2.09. Earnings, adjusted for one-time gains and costs, came to 21 cents per share.
• The results met Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was also for earnings of 21 cents per share.
• The radio company posted revenue of $988.9 million in the period, which beat Street forecasts. Four analysts surveyed by Zacks expected $982.7 million.

iHeartMedia, Inc. Thursday reported financial results for the quarter ended September 30, 2022.  Financial Highlights:

Revenue Streams 3Q

Q3 2022 Consolidated ResultsQ3 

• Revenue of $989 million, up 7% YoY; at high end of guidance of up approximately 3%-7%
• GAAP Operating loss of $211 million vs. GAAP Operating income of $80 million in Q3 2021Includes FCC license non-cash impairment charge of $302 million driven by increase in interest rates
• Consolidated Adjusted EBITDA of $252 million increased 10% YoY; at high end of guidance of $240 million to $255 million
• Consolidated Adjusted EBITDA margin of 25.5%, up 70 bps from 24.8% in Q3 2021
• Cash Flows from operating activities of $103 million
• Free Cash Flow of $63 million; Free Cash Flow including $8 million of net proceeds from real estate sales was $70 million

Q3 2022 Digital Audio Group 

• Continues Strong GrowthDigital Audio Group Revenue of $254 million up 23% YoYPodcast Revenue of $91 million up 42% YoY
• Digital Revenue excluding Podcast of $163 million up 15% YoY
• Segment Adjusted EBITDA of $78 million increased 17% YoYDigital Audio Group Adjusted EBITDA margin of 30.8%

Q3 2022 Multiplatform Group Demonstrates Resilience

• Multiplatform Group Revenue of $660 million flat YoY
• Segment Adjusted EBITDA of $207 million decreased 1% YoYMultiplatform Group Adjusted EBITDA margin of 31.4%

Strong Free Cash Flow Generation, Proactive Capital Structure Improvement and Debt Paydown

• Free Cash Flow of $63 million; including $8 million of net proceeds from real estate sales, Free Cash Flow including net proceeds from real estate sales was $70 million
• Cash balance and total available liquidity1 of $295 million and $718 million, respectively, as of September 30, 2022
• Repurchased $75 million in principal balance of 8.375% Senior Unsecured Notes (at a discount to par) for $68 million in cash; expected to generate approximately $6 million of annualized interest savingsAs of September 30th combined Notes repurchases of $189 million at a discount to par of $173 million; expected to generate approximately $16 million of annualized interest savings

GuidanceQ4 Consolidated 

• Revenue expected to increase by approximately 2%-6% YoY
• October Consolidated Revenue up approximately 8% YoY impacted by strong political spend
• Q4 Consolidated Adjusted EBITDA expected to be $305 million to $325 million
• Expect to make significant progress in 2022 towards the previously announced Net Debt to Adjusted EBITDA ("net leverage") target of approximately 4x

Statement from Senior Management

“We’re pleased to report another quarter of solid operating results for iHeart, and our performance in the midst of the current climate of economic uncertainty is a strong indication of the successful transformation this company has undergone in which our high-growth digital revenues comprises 26% of total company revenues,” said Bob Pittman, Chairman and CEO of iHeartMedia, Inc. 

“Our Digital Audio Group continues to deliver industry-leading growth, and our Multiplatform Group has again demonstrated its resiliency during a difficult economic environment. We believe the strong positions of both of these groups with both consumers and advertisers give us the ability to both navigate through this period of economic uncertainty and position us for continued growth through the recovery and beyond.”

“This quarter our Adjusted EBITDA of $252 million, and our consolidated revenues, up approximately 7% year over year, were both at the high end of our guidance range – a solid performance despite the uncertain macroeconomic environment,” said Rich Bressler, President, Chief Operating Officer and Chief Financial Officer of iHeartMedia, Inc. 

“We also continue to keep profitability and Free Cash Flow Generation at the forefront, and despite this uncertain environment, our business has continued to achieve year over year growth in users, revenues, Adjusted EBITDA and Free Cash Flow.