Townsquare Media, Inc. Q4 FY2025 earnings call

Management Statement and Operational Highlights: Executed digital first local media strategy, meeting net revenue and adjusted EBITDA guidance. Generated strong cash flow from operations. Completed refinancing extending maturity to 2030. Digital business accounted for 55% of total net revenue in 2025, up from 52% in 2024; programmatic digital advertising was a leading growth vehicle with 9% full-year growth. Town Square Interactive had highest profit margin in history and strong profit growth. Broadcast radio, though with revenue declines, maintained ~26% profit margin when excluding political.

Segment Performance: In 2025, digital advertising revenue increased 2% year over year. The programmatic digital advertising business, making up approximately 65% of digital advertising segment revenue in 2025, delivered 9% year-over-year growth. Direct sales of owned digital assets grew 9% in 2025 and is projected over 10% in Q1 2026. Town Square Interactive had net revenue decline 0.7% year-over-year in 2025 but achieved the highest segment profit margin in history and strong profit growth. Broadcast radio had net advertising revenue excluding political down 8% in 2025 year over year and 12.6% for the year, but segment profit margins were flat at ~26% when excluding political.

Guidance: Expect Q1 2026 digital advertising revenue growth to accelerate over Q4; full-year digital advertising expected high single-digit growth. Town Square Interactive Q1 2026 revenue expected decline ~8%, potential Q3 return to quarter-over-quarter revenue growth; profit margins to remain in line with 2025. 2026 net revenue expected between $420 million and $440 million; adjusted EBITDA expected between $87 million and $93 million.

Risks: AI negatively impacting remnant digital advertising revenue due to less excess inventory available. Deterioration in online audience trends leading to decline in remnant revenue. Broadcast industry macro headwinds affecting revenue.

Question and Answer: Q: Patrick Shaw asked about AI use by Town Square Interactive clients and media partnerships ramping up.

A: Town Square Interactive uses AI for efficiency, clients not self-serve; media partnerships had 6 partners in 2025, 11 now, expected growth.

Q: Michael Kapinski asked about broadcast advertising improvement, Interactive services expansion, media partnerships gating factors, and capital allocation.

A: Broadcast improving with geopolitical situation subsiding; Interactive diversified; media partnerships limited by sales training labor; capital allocation focused on de-leveraging and organic growth.