Urban One, Inc. Q2 FY2025 earnings call

• The company revised its full-year guidance from $75 million to $60 million due to headwinds. - The Tom Joyner cruise event was moved from Q2 2025 to Q4, affecting revenue timing. - Operating expenses, excluding certain items, decreased by 16.3% year-over-year, primarily due to the absence of the Reach cruise event and other expense reductions. - The company repurchased $64 million of its 2028 notes during the second quarter. - Focus on debt reduction and expense management, with plans to institute a second round of cost cuts by the end of Q3, effective in Q4.

Radio Broadcast segment: Net revenue was $36.7 million, a decrease of 12.6% year-over-year. Excluding political, net revenue was down 10.3% year-over-year. Local advertising sales were down 5.6% against the market that was down 11%, while national ad sales were down 23.6% against the market that was down 13.1%. Reach Media segment: Net revenue was $5.3 million in the second quarter, down 71.9% from the prior year, and adjusted EBITDA for Reach was a loss of $1.7 million for the quarter. The Tom Joyner cruise event, which generated $9.6 million in revenue in Q2 2024, was moved to Q4 2025, causing a revenue and profit timing difference. Digital segment: Revenues were down 27.1% in Q2 at $10.3 million, driven by the loss of an exclusive third-party audio streaming deal and lower direct/indirect sales. Adjusted EBITDA was a loss of $0.1 million compared to a profit of $2.7 million last year. Cable Television segment: Recognized approximately $40.1 million of revenue, a decrease of 7.5%. Cable TV advertising revenue was down 4.2%, affiliate revenue was down 11.7% due to subscriber churn, but offset by other factors like CTV and platform revenue share.

• Revised full-year earnings guidance from $75 million to $60 million. - Plan to institute a second round of cost cuts and rightsizing by the end of Q3, effective in Q4. - Expect the majority of the impact from the cost cuts to be seen in 2026.

• Secular pressure on cable television, broadcast radio, and national radio businesses. - Pullback in DEI dollars negatively affecting performance. - Impact of AI on digital transformation and marketing campaigns, which is putting pressure on the business.

Q: Looking at margins in the Cable TV segment, inferred if from first round of cost-cutting initiatives?

A: Jody Drewer said it's a timing issue, with savings on programming and timing of marketing campaigns.

Q: After second round of cost cuts, when will they flow through results?

A: Alfred C. Liggins said they started the process but haven't finished, not expecting it to take it to $70 million.

Q: Thoughts on debt buybacks as bonds are trading closer to 60%?

A: Alfred C. Liggins said focus continues on debt reduction and expense management, will see how it plays out but priority is delevering.

Q: Sales and marketing expenses down year-over-year, any unintended consequences on top line?

A: Alfred C. Liggins said cost reduction in that area is largely due to revenue being down, and reorienting efforts in Radio business to increase Digital revenue generation.

Q: National radio down 23.6% vs market down 13.1%, talk about it?

A: Peter D. Thompson said struggling with big clients and agencies, also pullback in DEI dollars and impact of AI.

Q: On ABL, is it fully available and covenants?

A: Peter D. Thompson said it's fully available to be drawn, has a maintenance covenant (fixed charge ratio) and is in compliance.