Urban One, Inc. Q3 FY2025 earnings call

• Business was softer than projected across the board due to political headwinds affecting core radio pacings. Ex political, radio was 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 in the year). - Recognized $3.1 million of retroactive royalties in Q3 due to August RMLC settlement with ASCAP and BMI. - Radio operating expenses down 5%, Reach operating expenses up 8% (due to favorable bad debt reserve change in prior year), Digital operating expenses down 2.6%, Cable TV operating expenses down 2.4%.

Radio Broadcasting segment: 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. Reach Media segment: Net revenue was $6.1 million in Q3, down 40% from the prior year. Adjusted EBITDA at Reach was a loss of approximately $200,000 for the quarter. Digital segment: Net revenues were down 30.6% in Q3 at $12.7 million. Cable Television segment: 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%, and total day delivery declined by 29.4% but partially offset by increase in CTV and third-party platform revenue share. Radio Broadcasting contributed a significant portion of revenue, Reach Media had a sharp decline, Digital saw a notable drop, and Cable Television had mixed results with some declines but offsets in other areas.

• Adjusted full-year EBITDA guide for 2025 from $60 million to $56 million to $58 million. - Feel good about 2026 due to political year and changes in operating strategy to address challenges, especially at Reach Media and in radio markets like D.C. where format changes and new targeting were made. - Considering potential M&A opportunities in a dereg environment but being cautious about leverage and underwriting transactions.

• Core radio pacings facing big political headwinds. - Reach Media facing lower overall network audio market, lower national sales renewals, and drying up of DEI. - Digital segment affected by decreases in DEI money, back-to-school, political, and softer client demand. - Cable TV affiliate revenue down driven by subscriber churn. - August RMLC settlement led to retroactive royalty expense impact.

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: Feel good about 2026 due to political year and changes in operating strategy. Addressing Reach Media's challenges by being better prepared, making changes in radio markets like D.C. with format rearrangements and new targeting.

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?

A: Everyone in the industry is focused on dereg. Looking at opportunities but no large transformative deal currently working on, but will explore opportunities to rearrange debt shares.

Q: Are you expecting to continue to execute on those debt buybacks?

A: Decided to sit pat and build liquidity as end of year approaches, keep powder dry to see near-term opportunities, but focused on delevering through buybacks or M&A.