Townsquare Media CEO Bill Wilson opened the “digital-first” company’s Q2 2024 earnings call by touting numerous areas of, “Sequential improvement from Q1,” even in the face of a net loss of $48.9 million – which can largely be attributed to a singular caveat.
After being an area of intense focus in the first quarter, Q2 marked a return to revenue growth for Townsquare Interactive and a modest growth in Digital Advertising net revenue by 1%. Even with what CFO Stuart Rosenstein described as, “Lackluster primary spend,” Townsquare’s broadcast advertising revenue remained stable – $53.63 million compared to $53.72 million in 2023.
Digital again made up more than half (52%) of Townsquare’s net revenue in the first six months of the year.
Despite a 2.5% decline in net revenue by 2.5% year-over-year, financials remained well within the projections made earlier in the year. The company reported a net revenue of $118.23 million for Q2, slightly down from $121.23 million.
As for that $48.9 million net loss: a $32.64 million impairment charge against its broadcast licenses was the driving factor behind the increase from $2.7 million year-over-year. It’s important to note that impairment charges are non-cash accounting entries, reflecting adjustments from historical purchase prices and do not indicate current operating or cash flow performance. This impairment is influenced by broader industry factors and rising debt yields among the entire radio sector.
Wilson also recognized the company’s high cash flow generation, an asset they again used to repurchase senior secured notes to the tune of $14 million. S&P Global upgraded its rating on those senior secured notes from B to B+ in June. Another $22 million in cash was used to buy up equity, including more of its own shares held by Madison Square Garden. Townsquare’s cash reserves stood at $29 million by June 30.
Wrapping up his comments, Wilson expressed confidence in the, “Long, sustainable runway in front of us.” As many other companies in the industry begin down the digital path that Townsquare set out on years ago, he also acknowledged how he has been, “Approached by other broadcasters that view our digital offerings as best-in-class.” This isn’t just a boast – Wilson hinted that the company could soon provide a white label digital framework solution for others in broadcasting.
“Most importantly, due to our current cash position and our strong cash generation, we retain financial flexibility moving forward and we are confident in our ability to build shareholder value for our investors through long-term net revenue and cash flow growth, net leverage reduction, future dividend payments, and potential future share repurchases,” concluded Wilson.
