Entravision Communications Corporation Q3 FY2025 earnings call

• Media segment: Revenue declined 26% in 3Q '25 mainly due to lower political revenue and weaker national TV/radio advertiser revenue. Invested $8 million annualized in increasing local sales capacity and digital sales operations. Took steps in organizational design plan for Media segment, including reducing ~5% of workforce in back-office roles, abandoning leased facilities, and recording $3.2 million restructuring charges, expecting to reduce Media segment operating expense by ~$5 million annually.
• ATS segment: Revenue more than doubled in 3Q '25. Invested in engineering team for technology and AI capabilities, and sales organization/customer operations. Total operating expenses in ATS increased by 58% in 3Q '25 vs. 3Q '24, but operating profit was nearly $10 million. Sequential quarterly revenue growth from second to third quarter of 38% in Q3, but not expecting to repeat this level in fourth quarter, with fourth quarter revenue and earnings anticipated to be comparable to third quarter.

For the Media segment, revenue in 3Q '25 was $44.5 million, a 26% decline compared to 3Q '24, contributing approximately 37% to total revenue. It had an operating loss of $3.5 million in 3Q '25 vs. an operating profit of $11.7 million in 3Q '24. For the Advertising Technology & Services (ATS) segment, revenue in 3Q '25 was $76.1 million, a 104% increase compared to 3Q '24, contributing approximately 63% to total revenue. Operating profit for ATS was nearly $10 million in 3Q '25, significantly higher than in 3Q '24.

• Mark noted that they do not expect to repeat the 38% sequential quarterly revenue growth in fourth quarter and currently anticipate fourth quarter revenue and earnings to be comparable to third quarter.
• Media segment expects the organizational design plan to reduce operating expense by approximately $5 million on an annual basis.
• ATS segment expects costs to grow at a slower pace than revenue in the future as the business gets larger, showing operating leverage potential.

• Media segment faces risks from lower political revenue and weaker national TV/radio advertiser revenue. Uncertainty in advertiser spending due to factors like new administration and federal immigration enforcement actions.
• ATS segment may face risks related to sustaining high growth rates and managing increasing costs associated with technology and sales investments.

Q: Can you comment on the outlook for political revenue in 2026?

A: Sure. We're positioning for a strong political spending environment in 2026. The Latino vote is critical to congressional elections in six Southwestern states where we have TV and radio. There are key U.S. Senate and governors races, and we believe we have a unique channel to reach the Latino audience.

Q: What's the status of renewing the affiliation agreement with TelevisaUnivision?

A: Our affiliation agreement with TelevisaUnivision runs through December 31, 2026. We plan to renew it and are in discussions with them towards that goal.