Digital Revenue Increasingly Important To Cumulus Media

Cumulus Media’s focus on digital marketing services and successful debt reduction efforts have driven growth, even amidst revenue challenges. Let’s delve into the recent developments in Cumulus Media’s digital business and explore how online ad upselling has contributed to its growth.

Financial Highlights for Q1 2024:

• Total Revenue: Cumulus Media reported total revenue of $200 million, which represents a 2.7% decline year-over-year.
• EBITDA: The company achieved $8.4 million in EBITDA for the first quarter.
• Digital Marketing Services Revenue: This segment experienced robust growth, increasing by 25% during the quarter.
• Podcasting and Streaming Revenue: While not as significant, podcasting and streaming revenue saw a modest increase in the low single digits compared to the previous year.
• Political Revenue: Political revenue declined by 55% from 2020 due to less competitive presidential primaries.

Debt Reduction: Cumulus Media successfully reduced its outstanding debt by approximately $33 million. Interest Rates: The company secured attractive interest rates. Expenses: Operating expenses decreased by approximately $4 million year-over-year.

Positive Points:

• Refinancing Success: Cumulus Media refinanced its capital structure, extending maturities to 2029 and significantly reducing debt.
• Digital Growth: Digital marketing services revenue grew by 25%, demonstrating strong performance in the digital sector.
• Customer Conversion: The company improved its conversion of previously radio-only customers to digital marketing services buyers by 12%.
• Gross Merchandise Sales: Cumulus Media increased its total gross merchandise sales customers by over 25% in Q1.
• National Advertising Trends: Improvements were seen in national spot and network business trends, particularly in consumer packaged goods and insurance categories.

Challenges and Outlook:

• Overall Revenue Decline: Despite digital growth, the total company revenue declined by 2.7% year over year.
• Uneven Recovery: The recovery in national advertising remains uneven, with certain categories facing obstacles due to the interest rate environment.
• Local Spot Revenue: While improved from Q4 2023, local spot revenue still faces challenges in local markets.
• Q2 Pacing: Total company revenue is currently pacing down in the low single digits for Q2, indicating continued revenue challenges ahead.

Digital Business Breakdown: Cumulus Media’s digital businesses are roughly divided into thirds:

1. Direct Marketing Services: This segment has shown strong growth.
2. Podcasting: Continues to contribute to the digital portfolio.
3. Streaming: Also plays a role in the overall digital strategy.

The company’s commitment to digital innovation promises future growth.