Radio’s 2023 Q3 earnings call season began on Friday morning with Cumulus Media. According to Cumulus Media President and CEO Mary Berner, the company’s Q3 figures are in line with internal projections, although the landscape remains challenging due to a disparity between local and national revenue streams.
The financial data revealed that Cumulus saw an 11% dip in net revenue, dropping to $207.42 million from $233.46 million. Net income also declined, landing at $2.72 million ($0.16 per diluted share) from the previous $8.54 million ($0.45). Despite the decreases, Cumulus managed to outperform market expectations, with earnings per share notably exceeding even the highest analyst estimate of $0.09.
Operating expenses showed a downward trend, contributing to the mitigation of revenue losses. Content costs were reduced to $76.74 million from $83.28 million while selling, general, and administrative expenses decreased to $91.83 million from $93.2 million. This translated to an operating income of $17.58 million, down from the earlier $28.42 million. Adjusted EBITDA for Q3 stood at $26.93 million, a decrease from $46.57 million. Total debt lessened to $675.76 million from $740.86 million.
As to the trouble between national and local, Berner indicated that while local revenue saw a 5% decline, there were some positive aspects, such as a 10% increase in the automotive sector. Additionally, retail advertising is showing signs of recovery, and national advertisers are indicating improved sentiments for 2024. Cumulus Media CFO Frank López-Balboa noted during the earnings call that the financial and insurance sectors were the worst-performing categories in Q3.
The company also benefited from the $10 million sale of WUFL in Detroit to Family Life Radio.
As for future prospects, Berner expressed “cautious optimism,” citing early indications of market recovery and potential political spending cycles. Analysts are also optimistic about the company’s financial health through the first half of 2024.
