iHM Is Betting The Farm On Technology

iHeartMedia, Inc. today reported financial results for the quarter ended September 30, 2024.

Debt Exchange Transactions and Cost Efficiency Actions

• The company entered into a transaction support agreement with a group of debt holders representing approximately 80% of the Company’s outstanding term loan and notes to exchange $4.1 billion of existing debt; extend maturities by three years; keep consolidated annual cash interest essentially flat; and provide debt reduction
• Announced cost programs expected to generate $150 million of annual cost savings in 2025. In addition, programs enacted earlier this year will generate another $50 million in 2025, for a total of $200 million of year over year savings in 2025. Offset by $50 million of cost increases for 2025, for a net benefit of $150 million

Q3 2024 Consolidated Results

• Q3 Revenue of $1,008 million, up 5.8%; within guidance of up mid-single digits
• Excluding Q3 Political Revenue, Q3 Revenue up 2.0%
• GAAP Operating income of $77 million vs. $69 million in Q3 2023
• Consolidated Adjusted EBITDA of $205 million, within previously disclosed guidance range of $200 million to $220 million, compared to $204 million in Q3 2023
• Cash provided by operating activities of $103 million
• Free Cash Flow of $73 million
• Cash balance and total available liquidity 2 of $432 million and $858 million, respectively, as of September 30, 2024

Q3 2024 Digital Audio Group Results

• Digital Audio Group Revenue of $301 million up 13%Podcast Revenue of $114 million up 11%
• Digital Revenue excluding Podcast of $187 million up 14%
• Segment Adjusted EBITDA of $100 million up 7%Digital Audio Group Adjusted EBITDA margin of 33.2%

Q3 2024 Multiplatform Group Results

• Multiplatform Group Revenue of $620 million down 1%Excluding Multiplatform Group Q3 Political Revenue, Multiplatform Group Q3 Revenue down 3%
• Segment Adjusted EBITDA of $130 million down 20%Multiplatform Group Adjusted EBITDA margin of 21.0%

“We’re pleased to report that our third quarter results were in line with our previously provided Adjusted EBITDA and Revenue guidance ranges,” said Bob Pittman, Chairman and CEO of iHeartMedia, Inc. 

Bob Pittman

“We continue to see evidence that this is a recovery year for advertising revenues, and the strong momentum in our podcast business, our digital ex-podcast business, and the sequential improvement of our Multiplatform Group’s year over year revenue performance reflect the power of our unparalleled reach, consumer relationships and range of assets.” 

Pittman continued, “Technology is the key to increasing our operating leverage because it allows us to speed up processes, streamline legacy systems, and enables us to take another significant step in our modernization journey. We have flattened our organization, eliminated redundancies and broken down silos, which will have a major impact on costs, expected to generate $200 million of annual savings in 2025 compared to 2024, and benefiting full year 2025 Adjusted EBITDA by $150 million on a year over year basis.”

 iHeartMedia has acknowleged recent lay-offs during the past week are designed to make significant moves to streamline their operations and manage costs. The restructuring and staff cuts are part of a broader cost-saving initiative aimed at generating $150 million in annual savings by 2025. Additionally, they expect another $50 million in savings from earlier cost reductions, although these will be offset by $50 million in cost increases for the same year.