iHM 2Q Revenue Dips Almost 4 Percent

iHeartMedia, Inc. today reported financial results for the quarter ended June 30, 2023.

Q2 2023 Consolidated Results

• Q2 Revenue of $920 million, down 3.6%; slightly better than the guidance range of down mid-single digits
• Excluding Q2 Political Revenue, Q2 Revenue down 1.8%
• GAAP Operating loss of $897 million vs. GAAP Operating income of $83 million in Q2 2022, which includes $961 million of non-cash intangible impairment charges
• Non-cash intangible impairment charges were recorded in Q2 2023 primarily driven by the current debt and equity valuations in the marketplace
• Consolidated Adjusted EBITDA of $191 million, within guidance range of $180 million to $200 million, compared to $237 million in Q2 2022 and more than double Q1 2023 Adjusted EBITDA
• Cash Flows from operating activities of $57 million
• Free Cash Flow of $34 million, Free Cash Flow including net proceeds from real estate sales was $39 million

Q2 2023 Digital Audio Group Results

• Digital Audio Group Revenue of $261 million up 3%
• Podcast Revenue of $97 million up 13%
• Digital Revenue excluding Podcast of $164 million down 2%
• Segment Adjusted EBITDA of $85 million up 7%
• Digital Audio Group Adjusted EBITDA margin of 32.4%

Q2 2023 Multiplatform Group Results

• Multiplatform Group Revenue of $596 million down 6%
• Segment Adjusted EBITDA of $162 million down 17%
• Multiplatform Group Adjusted EBITDA margin of 27.3%

Continued Proactive Capital Structure Improvement Through Debt Paydown

• Cash balance and total available liquidity2 of $165 million and $585 million, respectively, as of June 30, 2023
• Repurchased $80 million in principal balance of 8.375% Senior Unsecured Notes (at a discount to par) for $57 million in cash; expected to generate approximately $7 million of annualized interest savings
• As of June 30, 2023, since Q2 2022 combined Notes repurchases of $430 million at a discount to par for $372 million cash; in aggregate expected to generate approximately $40 million of annualized interest savings
• Cumulative reduction of the outstanding principal balance of these Notes from $1.45 billion as of March 31, 2022 to approximately $1 billion as of June 30, 2023

Bob Pitman

“We are pleased to report that our second quarter 2023 results reflected Adjusted EBITDA slightly above the midpoint of the guidance range, and more than double the Adjusted EBITDA we generated in the first quarter, and our consolidated revenue were above the guidance range. The continued positive performance of our Digital Audio Group, led by our Podcasting business, and the significantly improved relative performance of our Multiplatform Group during this soft advertising period, are encouraging metrics for us, and we’re seeing indications of improving macroeconomic trends which we expect to have a positive impact for us in the second half of the year, with most of that impact in Q4,” said Bob Pittman, Chairman and CEO of iHeartMedia, Inc.

Second Quarter 2023 Consolidated Results

Our consolidated revenue decreased $34.0 million, or 3.6%, during the three months ended June 30, 2023 compared to the same period of 2022. Digital Audio revenue increased $8.3 million, or 3.3%, driven primarily by continuing increases in demand for podcast advertising. Multiplatform revenue decreased $37.4 million, or 5.9%, primarily resulting from a decrease in broadcast advertising due to a challenging macroeconomic environment, as well as a decline in political advertising. Audio & Media Services revenue decreased $5.3 million primarily due to a decrease in political revenue, partially offset by continued growth in digital revenues.

Consolidated direct operating expenses decreased $10.3 million, or 2.8%, during the three months ended June 30, 2023 compared to the same period of 2022. The decrease was primarily driven by lower digital performance royalty fees including the impact of expenses recorded in 2022 upon the settlement of amounts related to prior years, as well as lower employee compensation as a result of cost savings initiatives. The decrease was partially offset by higher variable content costs resulting from an increase in digital revenue, including third-party digital costs and production costs.

Adjusted EBITDA decreased to $191.2 million compared to $237.2 million in the prior-year period.

Cash provided by operating activities was $56.8 million, compared to $155.8 million in the prior-year period, and Free Cash Flow was $34.0 million, compared to $106.1 million in the prior-year period primarily due to a decrease in broadcast radio revenue due to a challenging macroeconomic environment, an increase in borrowing rates, and timing of payments.