Even a 40% revenue increase in digital marketing services couldn’t save Cumulus Media from a challenging third quarter, which was discolored by declines in revenue and political ad dollars falling below expectations.
The company’s Q3 revenue decreased 1.8% to $203.6 million from $207.4 million in 2023, resulting in a $10.3 million net loss compared to a $2.7 million profit in Q3 2023.
Cumulus President and CEO Mary Berner stated that the company remains focused on controllable areas amid “market challenges,” noting that Cumulus continues to invest in its digital division, which saw revenue growth of nearly 40% in Q3. Berner also emphasized efforts to strengthen national and political ad spending and maximize operating cash flow.
While digital revenue grew by 7.5% to $40 million, broadcast radio revenue fell by 5% to $139 million, largely due to a 9% drop in spot revenue attributed to political ad displacement. Cumulus’s total political revenue was $4.4 million in Q3.
Looking forward, Cumulus’s Q4 revenue is pacing down slightly, with CFO Frank López-Balboa citing national ad weakness but some positive momentum in local spots and digital. López-Balboa explained that advertisers are waiting to see the economic landscape post-election, with many avoiding ad buys during peak political ad cycles due to clutter concerns.
Cumulus leadership is optimistic that improved interest rates could eventually benefit ad revenue, noting that a reduction in mortgage rates might boost ad spending in finance-related categories, though he cautioned that any impact could take time to materialize.
Berner acknowledged, “Looking forward, the advertising environment remains uncertain,” but highlighted Cumulus’s strategic assets, including a strong digital presence, a national platform, and sports and news/talk programming, as well as efficient expense management by Cumulus’s leadership. She stated, “As we continue to execute against our priorities, we see many paths for leveraging these assets to maximize the value they produce for our shareholders.”
The news was not well-received by Wall Street and Cumulus stock dipped beneath a dollar after the earnings call, closing at $.94 and putting the broadcaster in violation of Nasdaq’s minimum share price requirement.
