Urban One, Inc. Q3 FY2025 earnings call

• Business came in softer than projected across the board with core radio facing political headwinds but ex political down mid-single digits. - Adjusted full-year EBITDA guide from $60 million to $56 million to $58 million. - Completed a second round of cost saves in Q3 resulting in ~$3 million of annualized expense savings (in addition to $5 million earlier). - Radio operating expenses down 5%, Reach operating expenses up 8%, Digital operating expenses down 2.6%, Cable TV operating expenses down 2.4%. - Recorded ~$3.1 million of retroactive royalties in Q3 from August RMLC settlement with ASCAP and BMI, which was added back to adjusted EBITDA.

Radio Broadcasting: Revenue was $34.7 million, a decrease of 12.6% year-over-year. Excluding political, net radio revenues were down 8.1% year-over-year. Local ad sales were down 6.5% against a market down 10.1%, while national ad sales were down 29.1% against a market down 21.5%. Reach Media: Net revenue was $6.1 million in the third quarter, down 40% from the prior year. Adjusted EBITDA at Reach was a loss of approximately $200,000 for the quarter. Digital: Net revenues were down 30.6% in Q3 at $12.7 million. Adjusted EBITDA was approximately $0.8 million compared to $5.3 million last year. Cable Television: Recognized $39.8 million of revenue, a decrease of 7%. Cable TV advertising revenue was down by 5.4%, affiliate revenue down by 9.1%. TV One had 34.1 million Nielsen subs, CLEO TV had 33.5 million Nielsen subs.

• Adjusted full-year EBITDA guide from $60 million to $56 million to $58 million. - Feeling good about 2026 due to political year and strategic changes to address challenges, especially at Reach Media where they aim to be better prepared for advertiser changes and transitions.

• Core radio pacings facing big political headwinds. - Reach Media declined due to lower network audio market, national sales renewals, and drying up of DEI. - Soft client demand impacting Digital segment. - Cable TV affiliate revenue down due to subscriber churn.

Q: How are you guys thinking about 2026 and what demand looks like there and what listenership may be and kind of how the pieces of the puzzle are going to fit together then?

A: We feel good about 2026. Going into a political year and having changed operating strategy to address challenges, especially at Reach Media which had a tough year due to unexpected advertiser cancellations. Also, making changes in radio markets like in D.C. with new format targeting Hispanic community.

Q: Are you thinking of any kind of M&A activity or larger than usual kind of -- I know you guys swap radio stations here and there on a pretty regular basis. But are you thinking about anything more transformative in the future? And are you expecting to continue to execute on those debt buybacks?

A: Looking at dereg opportunities but no transformative deals currently working on. Continuing debt buybacks but keeping powder dry to see near-term opportunities, focusing on delevering through debt buybacks or delevering M&A activity.