Urban One, Inc. Q2 FY2025 earnings call

• Quarter was tough with industry headwinds. Tom Joyner cruise moved from Q2 to Q4, affecting revenue and profit timing. Revised full-year guidance from $75 million to $60 million. Plan to institute second round of cost cuts and rightsizing over next 30 days, effective by end of Q3. TV business doing better than budgeted. Radio and Digital businesses facing significant headwinds. Operating expenses excluding certain items decreased. Noncash credit from TV One award impacted EBITDA. Changed useful life of FCC licenses from indefinite to finite live intangible assets, recorded amortization expense.

Consolidated net revenue was approximately $91.6 million, down 22.2% year-over-year for the 3 months ended June 30, 2025. 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. 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. Digital segment: Revenues were down 27.1% in Q2 at $10.3 million. Cable Television segment: Recognized approximately $40.1 million of revenue during the quarter, a decrease of 7.5%.

• Revised full-year guidance from $75 million to $60 million. Plan to institute second round of cost cuts and rightsizing over next 30 days, effective by end of Q3, with impact likely seen in Q4.

• Industry headwinds. Tom Joyner cruise timing difference impact. Client attrition and lower average unit rates in Reach Media. Loss of exclusive third-party audio streaming deal affecting Digital segment. Cable TV subscriber churn and lower affiliate revenue. Decline in forecast cash flows and radio industry generally. Pullback in DEI dollars and AI impact on digital transformation.

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

A: It's a timing issue, related to programming savings timing and marketing campaign timing this year vs last year.

Q: After second round of cost cuts, granularity on how they'll flow through financials?

A: Not yet tabulated, not going to take it to $70 million, majority impact likely in 2026.

Q: Thinking about debt buybacks, planning to continue?

A: Priority is debt reduction and expense management, will see how it plays out, vast majority of cash focused on delevering.

Q: Sales and marketing expenses down year-over-year, new normal or reverse in second half?

A: Cost reduction largely related to revenue being down, sales not looking to take out bunch of costs, reorienting efforts in Radio business.

Q: National radio down 22% vs market down 11%, talk about it?

A: Struggling with big clients and agencies, combined with secular pressure, pullback in DEI dollars, and AI impact.

Q: On ABL, fully available? Covenants?

A: Fully available to be drawn, has maintenance covenant, fixed charge ratio covenant, in compliance.

Q: Thoughts on free cash flow for remainder of year and full year?

A: Projecting about $95 million cash balance at year-end, generating additional cash in back half