BEASLEY BROADCAST GROUP INC Q1 FY2026 earnings call

• Core Long-Term Strategic Priorities

  • Stabilize and rebuild the core revenue base, with a focus on local direct advertising
  • Scale a higher-margin, more controllable digital business
  • Strengthen the balance sheet through disciplined deleveraging

• Capital Structure & Liquidity Progress

  • Completed sale of Fort Myers assets for ~$18 million in proceeds, following a prior $8 million asset sale in 2025
  • Executed a second lien restructuring on May 1, 2026, exchanging ~$184 million of existing notes for ~$98 million of new PIK notes, which reduces near-term interest burden and increases operational flexibility
  • Repurchased ~$16 million of first lien notes and established a new $35 million asset-based credit facility to support working capital and liquidity
  • Additional annualized cost reduction initiatives were implemented in early May 2026, including an early retirement program, generating ~$7 million in total annualized savings

• Operational & Go-To-Market Transformation

  • Moving from an inventory-based selling model to an outcome-based model focused on integrated bundled digital/audio solutions that align with client advertising ROI goals
  • Prioritizing higher-quality digital growth: focusing on owned-and-operated products, direct client relationships, and higher-margin solutions while exiting lower-margin revenue streams, with a long-term target of 35% digital revenue as a share of total enterprise revenue
  • Implemented a more disciplined operating framework including full CRM adoption, weekly revenue reviews, and standardized pipeline visibility to improve sales precision
  • Strengthening new business development by adding hunter-focused sales talent, leveraging AI for prospecting, and improving sales training and onboarding
  • Market-level performance is uneven: markets with high digital adoption (Tampa and Boston) are already delivering budget and market share growth, providing clear proof points for the company's turnaround strategy

Total net revenue for Q1 2026 was $46.2 million, a 13% year-over-year (YoY) decline.

1. Local Segment: Local revenue is the company's largest revenue contributor. Performance was mixed, with resilience in service-based categories offset by weakness in discretionary and agency-influenced spend. Markets with higher digital adoption and local direct mix showed greater stability than those with heavy national/agency exposure.
2. National Segment: Total national revenue was $5.1 million, down from $6.6 million YoY, reflecting ongoing pressure on national advertising budgets. Early signs of pacing stabilization have emerged, with political revenue totaling $108,000 in the quarter.
3. Digital Segment: Total digital revenue was $10.7 million, representing 25% of total company revenue, and grew 18% YoY on a same-station basis. Owned-and-operated (O&O) digital revenue grew 26% YoY, while lower-margin third-party programmatic revenue declined. O&O now accounts for 65% of total digital revenue, up from 49% in the prior year period. By category, consumer services grew 13.8% ($1.7 million) YoY, with additional strength in legal, healthcare, and combined home improvement/construction categories (up nearly $2 million). Offsetting these gains, entertainment declined $2 million, gaming declined $1.4 million, automotive declined ~$1 million, and restaurants, food, and retail categories also saw reduced spend. Total operating expenses were $42.6 million, total corporate expenses were $3.5 million, for total expenses of $45.7 million (down 7% YoY). Station Operating Income (SOI) was $418,000, down from $3.7 million YoY. Adjusted EBITDA was negative $375,000, down from positive $1.1 million YoY.

• Management expects Q2 2026 same-station revenue to decline in the mid-to-high single digits, reflecting ongoing macroeconomic pressure and the time required for implemented operational changes to deliver full revenue results
• The company expects the mix impact of digital growth and improved operating discipline will eventually translate to improved revenue stability and better profitability conversion, with leading indicators already moving in the right direction
• For full-year 2026, management's priorities are expanding EBITDA via revenue recovery, digital growth, and margin conversion; continuing to evaluate portfolio optimization opportunities (including potential asset sales); and maintaining disciplined capital allocation to support ongoing deleveraging

• Ongoing macroeconomic pressure is hurting advertising spend from key local and national categories, including automotive, restaurants, retail, and entertainment, driven by high consumer prices and broader economic uncertainty
• Current operating performance is uneven across the company's market portfolio, with multiple underperforming markets requiring targeted intervention to reach performance goals
• Near-term revenue and profitability remain under pressure from legacy revenue declines that have not yet been fully offset by digital growth
• Q1 2026 expenses came in higher than planned, driven by elevated selling expenses, promotional costs, bad debt, and increased software/contract services costs

No questions were received from call participants during this earnings call.