iHeartMedia, Inc. (Nasdaq: IHRT) today reported financial
results for the quarter ended June 30, 2024.
Financial Highlights:1
Q2 2024 Consolidated
Results
- Q2 Revenue of $929 million, up 1.0%; above guidance of
approximately flat
- Excluding Q2 Political Revenue, Q2 Revenue flat
- GAAP Operating loss of $910 million vs. $897 million in Q2
2023, including non-cash impairment charges of $920 million in Q2
2024 and $961 million in Q2 2023
- Consolidated Adjusted EBITDA of $150 million, within previously
disclosed guidance range of $140 million to $160 million, compared
to $191 million in Q2 2023
- Cash provided by operating activities of $27 million
- Free Cash Flow of $6 million
- Cash balance and total available liquidity2 of $365 million and
$791 million, respectively, as of June 30, 2024
Q2 2024 Digital Audio Group
Results
- Digital Audio Group Revenue of $286 million up 10%
- Podcast Revenue of $105 million up 8%
- Digital Revenue excluding Podcast of $181 million up 10%
- Segment Adjusted EBITDA of $92 million up 9%
- Digital Audio Group Adjusted EBITDA margin of 32.2%
Q2 2024 Multiplatform Group
Results
- Multiplatform Group Revenue of $576 million down 3%
- Excluding Multiplatform Group Q2 Political Revenue,
Multiplatform Group Q2 Revenue down 4%
- Segment Adjusted EBITDA of $104 million down 36%
- Multiplatform Group Adjusted EBITDA margin of 18.1%
Guidance
- Q3 Consolidated Revenue expected to increase in the mid-single
digits
- Full Year 2024 Consolidated Revenue expected to increase in the
mid-single digits
- Q3 Consolidated Adjusted EBITDA3 expected to be $200 million to
$220 million
- Full Year 2024 Consolidated Adjusted EBITDA3 expected to be
$760 million to $800 million
- Remain committed to long term target of approximately 4x Net
Debt to Adjusted EBITDA ("net leverage")3
Statement from Senior Management
“Our second quarter results mark the first quarter that our
consolidated revenues increased year-over-year since Q4 2022. We
continue to see strong momentum in our podcast business, our
Digital ex. Podcast business, and have seen sequential improvement
of our Multiplatform Group’s year-over-year revenue performance,”
said Bob Pittman, Chairman and CEO of iHeartMedia, Inc. “This
performance is built on iHeartMedia’s strong and unparalleled
audience and demonstrates the progress we are making in maximizing
the monetization of it.”
“We continue to see signs of improvement throughout our business
and the broader advertising marketplace, and our second quarter
2024 results were in line with, and in the cases of revenue,
slightly above guidance. Our high-growth Digital Audio Group
revenues were up 10% year over year, and represented 31% of our
company’s revenues, and our Multiplatform Group revenues exceeded
our previously provided guidance,” said Rich Bressler, President,
COO and CFO of iHeartMedia, Inc. “Our full year 2024 political
revenues are currently pacing approximately 20% higher than the
last presidential election cycle, which gives us confidence that
this will be a record political year for us, and we expect to see a
significant year-over-year improvement in our full year Adjusted
EBITDA performance.”
Consolidated Results of
Operations
Second Quarter 2024 Consolidated
Results
Our consolidated revenue increased $9.1 million, or 1.0%, during
the three months ended June 30, 2024 compared to the same period of
2023. Digital Audio revenue increased $24.8 million, or 9.5%,
driven primarily by continuing increases in demand for digital
advertising. Multiplatform revenue decreased $20.0 million, or
3.4%, primarily resulting from a decrease in broadcast advertising
in connection with continued uncertain market conditions, partially
offset by an increase in non-cash trade revenues and political
revenues as 2024 is a presidential election year. Audio & Media
Services revenue increased $4.3 million, or 6.5%, primarily as a
result of higher political revenue.
Consolidated direct operating expenses increased $27.0 million,
or 7.6%, during the three months ended June 30, 2024 compared to
the same period of 2023. The increase was primarily driven by
higher variable content costs, including higher profit sharing
expenses and third-party digital costs related to the increase in
digital revenues and an increase in music license fees, as well as
an increase in event costs related to the timing of the 2024
iHeartRadio Music Awards which was in the second quarter of 2024
and the first quarter of 2023.
Consolidated Selling, General & Administrative ("SG&A")
expenses increased $37.8 million, or 9.6%, during the three months
ended June 30, 2024 compared to the same period of 2023. The
increase was driven primarily by higher non-cash trade expense due
to the timing of the 2024 iHeartRadio Music Awards which was in the
second quarter of 2024 and the first quarter of 2023 and an
increase in costs incurred in connection with executing on our cost
savings initiatives, partially offset by lower bad debt expense and
lower bonus expense based on results.
Our consolidated GAAP Operating loss was $909.7 million compared
to $897.2 million in the second quarter of 2023, primarily due to
the increase in direct operating and SG&A expenses as discussed
above, partially offset by lower non-cash impairment charges of
$920.2 million recognized in the second quarter of 2024 compared to
the $960.6 million recognized in the prior year period. The
non-cash impairment charges primarily related to goodwill and FCC
license impairments in both periods.
Adjusted EBITDA decreased to $150.2 million compared to $191.2
million in the prior-year period.
Cash provided by operating activities was $26.7 million,
compared to $56.8 million in the prior-year period primarily due to
a decrease in revenue from our Multiplatform Group, partially
offset by an improvement in the timing of receivable collections.
Free Cash Flow was $5.6 million, compared to $34.0 million in the
prior year period.
Business Segments: Results of
Operations
Second Quarter 2024 Multiplatform Group
Results
(In thousands)
Three Months Ended
June 30,
%
Six Months Ended
June 30,
%
2024
2023
Change
2024
2023
Change
Revenue
$
575,907
$
595,944
(3.4
)%
$
1,069,370
$
1,124,957
(4.9
)%
Operating expenses1
471,644
433,542
8.8
%
887,925
875,503
1.4
%
Segment Adjusted EBITDA
$
104,263
$
162,402
(35.8
)%
$
181,445
$
249,454
(27.3
)%
Segment Adjusted EBITDA margin
18.1
%
27.3
%
17.0
%
22.2
%
1 Operating expenses consist of Direct
operating expenses and SG&A expenses, excluding Restructuring
expenses.
Revenue from our Multiplatform Group decreased $20.0 million, or
3.4% YoY, primarily due to a decrease in broadcast advertising in
connection with continued uncertain market conditions, partially
offset by an increase in non-cash trade revenue and political
revenues. Broadcast revenue declined $3.7 million, or 0.9% YoY,
driven by lower spot revenue, partially offset by an increase in
non-cash trade revenues and political advertising. Networks
declined $15.6 million, or 12.8% YoY due primarily to the impact of
non-returning advertisers. Revenue from Sponsorship and Events
increased by $0.9 million, or 2.4% YoY.
Operating expenses increased $38.1 million, or 8.8% YoY, driven
primarily by higher non-cash trade expense and live event costs due
to the timing of the 2024 iHeartRadio Music Awards which was in Q2
in 2024 and Q1 in 2023 and higher broadcast music license fees.
Segment Adjusted EBITDA Margin decreased YoY to 18.1% from
27.3%.
Second Quarter 2024 Digital Audio Group
Results
(In thousands)
Three Months Ended
June 30,
%
Six Months Ended
June 30,
%
2024
2023
Change
2024
2023
Change
Revenue
$
285,614
$
260,854
9.5
%
$
524,582
$
484,250
8.3
%
Operating expenses1
193,744
176,272
9.9
%
364,585
345,549
5.5
%
Segment Adjusted EBITDA
$
91,870
$
84,582
8.6
%
$
159,997
$
138,701
15.4
%
Segment Adjusted EBITDA margin
32.2
%
32.4
%
30.5
%
28.6
%
1 Operating expenses consist of Direct
operating expenses and SG&A expenses, excluding Restructuring
expenses.
Revenue from our Digital Audio Group increased $24.8 million, or
9.5% YoY, driven by Digital, excluding Podcast revenue, which grew
$16.9 million, or 10.3% YoY, to $181.1 million, driven by an
increase in demand for digital advertising, and Podcast revenue,
which increased $7.8 million, or 8.1% YoY, to $104.5 million,
driven primarily by increased demand for podcasting from
advertisers and higher non-cash trade revenue.
Operating expenses increased $17.5 million, or 9.9% YoY,
primarily driven by higher variable content costs, including higher
profit sharing agreements and third-party digital costs related to
the increase in revenues.
Segment Adjusted EBITDA Margin decreased YoY to 32.2% from
32.4%.
Second Quarter 2024 Audio & Media
Services Group Results
(In thousands)
Three Months Ended
June 30,
%
Six Months Ended
June 30,
%
2024
2023
Change
2024
2023
Change
Revenue
$
70,082
$
65,804
6.5
%
$
139,250
$
127,155
9.5
%
Operating expenses1
46,233
47,305
(2.3
)%
91,706
93,312
(1.7
)%
Segment Adjusted EBITDA
$
23,849
$
18,499
28.9
%
$
47,544
$
33,843
40.5
%
Segment Adjusted EBITDA margin
34.0
%
28.1
%
34.1
%
26.6
%
1 Operating expenses consist of Direct
operating expenses and SG&A expenses, excluding Restructuring
expenses.
Revenue from our Audio & Media Services Group increased $4.3
million, or 6.5% YoY, primarily due to higher political revenue as
2024 is a presidential election year.
Operating expenses decreased $1.1 million, or 2.3% YoY,
primarily as a result of a favorable shift in the sales mix toward
services and a decrease in employee compensation expense.
Segment Adjusted EBITDA Margin increased YoY to 34.0% from
28.1%.
GAAP and Non-GAAP Measures: Consolidated
(In thousands)
Three Months Ended
June 30,
Six Months Ended
June 30,
2024
2023
2024
2023
Revenue
$
929,092
$
920,014
$
1,728,130
$
1,731,253
Operating loss
(909,667
)
(897,194
)
$
(944,375
)
$
(946,056
)
Adjusted EBITDA1
150,207
191,181
$
254,824
$
284,605
Net loss
(981,989
)
(882,982
)
$
(1,000,097
)
$
(1,105,345
)
Cash provided by (used for) operating
activities2
26,729
56,772
$
(32,548
)
$
(37,211
)
Free cash flow1,2
5,557
33,999
$
(75,302
)
$
(99,149
)
______________________________
1
See the end of this press release for
reconciliations of (i) Adjusted EBITDA to Operating loss, (ii)
Adjusted EBITDA to Net loss, (iii) Free Cash Flow to Cash provided
by (used for) operating activities, (iv) revenue, excluding
political advertising revenue, to revenue, and (v) Net Debt to
Total Debt. See also the definitions of Adjusted EBITDA, Free Cash
Flow, Adjusted EBITDA margin, and Net Debt under the Supplemental
Disclosure Regarding Non-GAAP Financial Information section in this
release.
2
We made cash interest payments of $88.2
million in the three months ended June 30, 2024, compared to $93.7
million in the three months ended June 30, 2023.
Certain prior period amounts have been reclassified to conform
to the 2024 presentation of financial information throughout the
press release.
Liquidity and Financial
Position
As of June 30, 2024, we had $364.7 million of cash on our
balance sheet. For the six months ended June 30, 2024, cash used
for operating activities was $32.5 million, cash provided by
investing activities was $55.9 million and cash used for financing
activities was $4.8 million.
Capital expenditures for the six months ended June 30, 2024 were
$42.8 million compared to $61.9 million in the six months ended
June 30, 2023. Capital expenditures during the six months ended
June 30, 2024 decreased primarily due to lower spending on real
estate optimization initiatives.
As of June 30, 2024, the Company had $5,218.8 million of total
debt and $4,854.1 million of Net Debt. The terms of our capital
structure include no material maintenance covenants, and there are
no material debt maturities prior to May 2026.
Cash balance and total available liquidity4 were $364.7 million
and $791 million, respectively, as of June 30, 2024.
Revenue Streams
The tables below present the comparison of our historical
revenue streams (including political revenue) for the periods
presented:
(In thousands)
Three Months Ended
June 30,
%
Six Months Ended
June 30,
%
2024
2023
Change
2024
2023
Change
Broadcast Radio
$
425,490
$
429,152
(0.9
)%
$
784,828
$
812,390
(3.4
)%
Networks
106,591
122,168
(12.8
)%
208,642
230,122
(9.3
)%
Sponsorship and Events
39,121
38,210
2.4
%
66,950
70,797
(5.4
)%
Other
4,705
6,414
(26.6
)%
8,950
11,648
(23.2
)%
Multiplatform Group1
575,907
595,944
(3.4
)%
1,069,370
1,124,957
(4.9
)%
Digital ex. Podcast
181,093
164,147
10.3
%
329,437
310,732
6.0
%
Podcast
104,521
96,707
8.1
%
195,145
173,518
12.5
%
Digital Audio Group
285,614
260,854
9.5
%
524,582
484,250
8.3
%
Audio & Media Services
Group1
70,082
65,804
6.5
%
139,250
127,155
9.5
%
Eliminations
(2,511
)
(2,588
)
(5,072
)
(5,109
)
Revenue, total1
$
929,092
$
920,014
1.0
%
$
1,728,130
$
1,731,253
(0.2
)%
1
Excluding the impact of political revenue,
Revenue from the Multiplatform Group and Consolidated Revenue
decreased by 4.0% and 0.1% for the three months ended June 30, 2024
compared to the three months ended June 30, 2023, respectively.
Excluding the impact of political revenue, Revenue from Audio &
Media Services increased by 0.1% for the three months ended June
30, 2024 compared to the three months ended June 30, 2023. See the
end of this press release for a reconciliation of revenue,
excluding political advertising revenue, to revenue.
Conference Call iHeartMedia,
Inc. will host a conference call to discuss results and business
outlook on August 8, 2024, at 8:30 a.m. Eastern Time. The
conference call number is (888) 596-4144 (U.S. callers) and +1
(646) 968-2525 (International callers) and the passcode for both is
8885116. A live audio webcast of the conference call will also be
available on the Investors homepage of iHeartMedia's website
investors.iheartmedia.com. After the live conference call, a replay
will be available for a period of thirty days. The replay numbers
are (800) 770-2030 (U.S. callers) and +1 (609) 800-9909
(International callers) and the passcode for both is 8885116. An
archive of the webcast will be available beginning 24 hours after
the call for a period of thirty days.
About iHeartMedia, Inc.
iHeartMedia (Nasdaq: IHRT) is the number one audio company in
the United States, reaching nine out of 10 Americans every month.
It consists of three business groups.
With its quarter of a billion monthly listeners, the iHeartMedia
Multiplatform Group has a greater reach than any other media
company in the U.S. Its leadership position in audio extends across
multiple platforms, including more than 860 live broadcast stations
in over 160 markets nationwide; its National Sales organization;
and the Company’s live and virtual events business. It also
includes Premiere Networks, the industry’s largest Networks
business, with its Total Traffic and Weather Network (TTWN); and
BIN: Black Information Network, the first and only 24/7 national
and local all news audio service for the Black community.
iHeartMedia also leads the audio industry in analytics, targeting
and attribution for its marketing partners with its SmartAudio
suite of data targeting and attribution products using data from
its massive consumer base.
The iHeartMedia Digital Audio Group includes the Company’s
fast-growing podcasting business -- iHeartMedia is the number one
podcast publisher in downloads, unique listeners, revenue and
earnings -- as well as its industry-leading iHeartRadio digital
service, available across more than 500+ platforms and thousands of
devices; the Company’s digital sites, newsletters, digital services
and programs; its digital advertising technology companies; and its
audio industry-leading social media footprint.
The Company’s Audio & Media Services reportable segment
includes Katz Media Group, the nation’s largest media
representation company, and RCS, the world's leading provider of
broadcast and webcast software.
Certain statements herein constitute “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known
and unknown risks, uncertainties and other important factors which
may cause the actual results, performance or achievements of
iHeartMedia, Inc. and its subsidiaries to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. The words or phrases
“guidance,” “believe,” “expect,” “anticipate,” “estimates,”
“forecast” and similar words or expressions are intended to
identify such forward-looking statements. In addition, any
statements that refer to expectations or other characterizations of
future events or circumstances, such as statements about
positioning in uncertain economic environment and future economic
recovery, driving shareholder value, our anticipated growth and
year-over-year financial performance, our anticipated political
advertising revenues for 2024; our expected costs savings and other
capital and operating expense reduction initiatives, utilizing new
technologies and programmatic platforms, developing new consumer
and revenue opportunities; improving operational efficiency, future
advertising demand, trends in the advertising industry, including
on other media platforms; strategies and initiatives, and our
anticipated financial performance, including our outlook as to
third quarter and full year 2024 consolidated and operating segment
results, anticipated capital expenditures and other impacts on our
free cash flow, including our outlook as to third quarter and full
year 2024 consolidated and operating segment results, anticipated
capital expenditures and other impacts on our free cash flow,
liquidity, and net leverage are forward-looking statements. These
statements are not guarantees of future performance and are subject
to certain risks, uncertainties and other important factors, some
of which are beyond our control and are difficult to predict.
Various risks that could cause future results to differ from those
expressed by the forward-looking statements included in this press
release include, but are not limited to: risks related to weak or
uncertain global economic conditions and our dependence on
advertising revenues; competition, including increased competition
from alternative media platforms and technologies; dependence upon
our brand and the performance of on-air talent, program hosts and
management; fluctuations in operating costs; technological and
industry changes and innovations; shifts in population and other
demographics; risks related to our use of artificial intelligence,
impact of acquisitions, dispositions and other strategic
transactions; risks related to our indebtedness; legislative or
regulatory requirements; impact of legislation, ongoing
litigation or royalty audits on music licensing and royalties;
regulations and concerns regarding privacy and data protection and
breaches of information security measures; risks related to
scrutiny of environmental, social and governance matters, risks
related to our Class A common stock; and regulations impacting our
business and the ownership of our securities. Other unknown or
unpredictable factors also could have material adverse effects on
the Company’s future results, performance or achievements. In light
of these risks, uncertainties, assumptions and factors, the
forward-looking events discussed in this press release may not
occur. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date stated,
or if no date is stated, as of the date hereof. Additional risks
that could cause future results to differ from those expressed by
any forward-looking statement are described in the Company’s
reports filed with the U.S. Securities and Exchange Commission,
including in the section entitled “Part I, Item 1A. Risk Factors”
of iHeartMedia, Inc.’s Annual Reports on Form 10-K and “Part II,
Item 1A. Risk Factors” of iHeartMedia, Inc.’s Quarterly Reports on
Form 10-Q. The Company does not undertake any obligation to
publicly update or revise any forward-looking statements because of
new information, future events or otherwise.
APPENDIX
TABLE 1 - Comparison of operating
performance
(In thousands)
Three Months Ended
June 30,
%
Six Months Ended
June 30,
%
2024
2023
Change
2024
2023
Change
Revenue
$
929,092
$
920,014
1.0
%
$
1,728,130
$
1,731,253
(0.2
)%
Operating expenses:
Direct operating expenses (excludes
depreciation and amortization)
382,049
355,061
7.6
%
723,409
699,681
3.4
%
Selling, general and administrative
expenses (excludes depreciation and amortization)
431,614
393,773
9.6
%
816,758
796,574
2.5
%
Depreciation and amortization
104,356
108,065
209,518
216,577
Impairment charges
920,224
960,570
921,732
964,517
Other operating (income) expense, net
516
(261
)
1,088
(40
)
Operating loss
$
(909,667
)
$
(897,194
)
$
(944,375
)
$
(946,056
)
Depreciation and amortization
104,356
108,065
209,518
216,577
Impairment charges
920,224
960,570
921,732
964,517
Other operating (income) expense, net
516
(261
)
1,088
(40
)
Restructuring expenses
27,558
10,789
51,161
30,243
Share-based compensation expense
7,220
9,212
15,700
19,364
Adjusted EBITDA1
$
150,207
$
191,181
(21.4
)%
$
254,824
$
284,605
(10.5
)%
1See the end of this press release for
reconciliations of (i) Adjusted EBITDA to Operating loss, (ii)
Adjusted EBITDA to Net loss, (iii) Free Cash Flow to Cash provided
by (used for) operating activities, (iv) revenue, excluding
political advertising revenue, to revenue, and (v) Net Debt to
Total Debt. See also the definitions of Adjusted EBITDA, Free Cash
Flow, Adjusted EBITDA margin and Net Debt under the Supplemental
Disclosure section in this release.
TABLE 2 - Statements of
Operations
(In thousands)
Three Months Ended
June 30,
Six Months Ended
June 30,
2024
2023
2024
2023
Revenue
$
929,092
$
920,014
$
1,728,130
$
1,731,253
Operating expenses:
Direct operating expenses (excludes
depreciation and amortization)
382,049
355,061
723,409
699,681
Selling, general and administrative
expenses (excludes depreciation and amortization)
431,614
393,773
816,758
796,574
Depreciation and amortization
104,356
108,065
209,518
216,577
Impairment charges
920,224
960,570
921,732
964,517
Other operating (income) expense, net
516
(261
)
1,088
(40
)
Operating loss
(909,667
)
(897,194
)
(944,375
)
(946,056
)
Interest expense, net
95,577
98,693
191,092
194,150
Gain (loss) on investments, net
(412
)
(6,038
)
91,582
(12,543
)
Equity in loss of nonconsolidated
affiliates
(61
)
(44
)
(106
)
(4
)
Gain on extinguishment of debt
—
22,902
—
27,527
Other expense, net
(231
)
(272
)
(727
)
(371
)
Loss before income taxes
(1,005,948
)
(979,339
)
(1,044,718
)
(1,125,597
)
Income tax benefit
23,959
96,357
44,621
20,252
Net loss
(981,989
)
(882,982
)
(1,000,097
)
(1,105,345
)
Less amount attributable to noncontrolling
interest
(331
)
1,488
69
1,385
Net loss attributable to the Company
$
(981,658
)
$
(884,470
)
$
(1,000,166
)
$
(1,106,730
)
TABLE 3 - Selected Balance Sheet
Information
Selected balance sheet information for June 30, 2024 and
December 31, 2023:
(In millions)
June 30, 2024
December 31, 2023
Cash
$
364.7
$
346.4
Total Current Assets
1,422.3
1,506.9
Net Property, Plant and Equipment
511.3
558.9
Total Assets
5,769.2
6,952.6
Current Liabilities (excluding current
portion of long-term debt)
738.4
848.1
Long-term Debt (including current portion
of long-term debt)
5,218.8
5,215.2
Stockholders' Deficit
(1,374.6
)
(384.8
)
Supplemental Disclosure Regarding
Non-GAAP Financial Information
The following tables set forth the Company’s Adjusted EBITDA,
Adjusted EBITDA margin, revenues excluding political advertising
revenue, and Free Cash Flow for the three and six months ended June
30, 2024 and 2023, and Net Debt as of June 30, 2024. Adjusted
EBITDA is defined as consolidated Operating loss adjusted to
exclude restructuring expenses included within Direct operating
expenses and SG&A expenses, and share-based compensation
expenses included within SG&A expenses, as well as the
following line items presented in our Statements of Operations:
Depreciation and amortization, Impairment charges, and Other
operating (income) expense, net. Alternatively, Adjusted EBITDA is
calculated as Net loss, adjusted to exclude Income tax benefit,
Interest expense, net, Depreciation and amortization, (Gain) loss
on investments, net, Gain on extinguishment of debt, Other expense,
net, Equity in loss of nonconsolidated affiliates, Impairment
charges, Other operating (income) expense, net, Share-based
compensation expense, and restructuring expenses. Restructuring
expenses primarily include expenses incurred in connection with
cost-saving initiatives, as well as certain expenses, which, in the
view of management, are outside the ordinary course of business or
otherwise not representative of the Company's operations during a
normal business cycle. Adjusted EBITDA margin is calculated as
Adjusted EBITDA divided by Revenue.
The Company uses Adjusted EBITDA and Adjusted EBITDA margin,
among other measures, to evaluate the Company’s operating
performance. Adjusted EBITDA is among the primary measures used by
management for the planning and forecasting of future periods, as
well as for measuring performance for compensation of executives
and other members of management. We believe this measure is an
important indicator of the Company’s operational strength and
performance of its business because it provides a link between
operational performance and operating income. It is also a primary
measure used by management in evaluating companies as potential
acquisition targets.
The Company believes the presentation of these measures is
relevant and useful for investors because it allows investors to
view performance in a manner similar to the method used by the
Company’s management. The Company believes it helps improve
investors’ ability to understand the Company’s operating
performance and makes it easier to compare the Company’s results
with other companies that have different capital structures or tax
rates. In addition, the Company believes this measure is also among
the primary measures used externally by the Company’s investors,
analysts and peers in its industry for purposes of valuation and
comparing the operating performance of the Company to other
companies in its industry.
Since Adjusted EBITDA is not a measure calculated in accordance
with GAAP, it should not be considered in isolation of, or as a
substitute for, Operating loss as an indicator of operating
performance and may not be comparable to similarly titled measures
employed by other companies. Adjusted EBITDA is not necessarily a
measure of the Company’s ability to fund its cash needs. As it
excludes certain financial information compared with Operating
loss, the most directly comparable GAAP financial measure, users of
this financial information should consider the types of events and
transactions which are excluded.
We define Free Cash Flow as Cash provided by (used for)
operating activities less capital expenditures, which is disclosed
as Purchases of property, plant and equipment in the Company's
Consolidated Statements of Cash Flows. We use Free Cash Flow, among
other measures, to evaluate the Company’s liquidity and its ability
to generate cash flow. We believe that Free Cash Flow is meaningful
to investors because it provides them with a view of the Company's
liquidity after deducting capital expenditures, which are
considered to be a necessary component of ongoing operations. In
addition, we believe that Free Cash Flow helps improve investors'
ability to compare our liquidity with that of other companies.
Since Free Cash Flow is not a measure calculated in accordance
with GAAP, it should not be considered in isolation of, or as a
substitute for, Cash provided by (used for) operating activities
and may not be comparable to similarly titled measures employed by
other companies. Free Cash Flow is not necessarily a measure of our
ability to fund our cash needs.
The Company presents revenue, excluding the effects of political
revenue. Due to the cyclical nature of the electoral system and the
seasonality of the related political revenue, management believes
presenting revenue, excluding the effects of political revenue,
provides additional information to investors about the Company’s
revenue growth from period to period.
We define Net Debt as Total Debt less Cash and cash equivalents.
We define net leverage as Net Debt divided by Adjusted EBITDA. The
Company uses net leverage and Net Debt to evaluate the Company's
liquidity. We believe these measures are an important indicator of
the Company's ability to service its long-term debt
obligations.
Since these non-GAAP financial measures are not calculated in
accordance with GAAP, they should not be considered in isolation
of, or as a substitute for, the most directly comparable GAAP
financial measures as an indicator of operating performance or
liquidity.
As required by the SEC rules, the Company provides
reconciliations below to the most directly comparable measures
reported under GAAP, including (i) Adjusted EBITDA to Operating
loss, (ii) Adjusted EBITDA to Net loss, (iii) Free Cash Flow to
Cash provided by (used for) operating activities, (iv) revenue,
excluding political advertising revenue, to revenue, and (v) Net
Debt to Total Debt.
We have provided forecasted Consolidated Revenue and Adjusted
EBITDA guidance for the quarter ending September 30, 2024 and the
full year 2024 and long-term net leverage guidance, which reflects
targets for Adjusted EBITDA and net debt. Our Earnings Call on
August 8, 2024 may present additional guidance that includes
Adjusted EBITDA. A full reconciliation of the forecasted Adjusted
EBITDA, net debt and net leverage on a non-GAAP basis to the
respective most-directly comparable GAAP metrics cannot be provided
without unreasonable efforts due to the inherent difficulty in
forecasting and quantifying with reasonable accuracy significant
items required for the reconciliations, including gains or losses
on investments, extinguishment of debt, equity in nonconsolidated
affiliates, impairment charges, stock based compensation, and
restructuring as well as the Company's cash and cash equivalent
balance.
Reconciliation of Operating loss to Adjusted EBITDA
(In thousands)
Three Months Ended
June 30,
Six Months Ended
June 30,
Three Months Ended March
31,
2024
2023
2024
2023
2024
Operating loss
$
(909,667
)
$
(897,194
)
$
(944,375
)
$
(946,056
)
$
(34,708
)
Depreciation and amortization
104,356
108,065
209,518
216,577
105,162
Impairment charges
920,224
960,570
921,732
964,517
1,508
Other operating (income) expense, net
516
(261
)
1,088
(40
)
572
Restructuring expenses
27,558
10,789
51,161
30,243
23,603
Share-based compensation expense
7,220
9,212
15,700
19,364
8,480
Adjusted EBITDA
$
150,207
$
191,181
$
254,824
$
284,605
$
104,617
Reconciliation of Net loss to EBITDA and Adjusted
EBITDA
(In thousands)
Three Months Ended
June 30,
Six Months Ended
June 30,
Three Months Ended March
31,
2024
2023
2024
2023
2024
Net loss
$
(981,989
)
$
(882,982
)
$
(1,000,097
)
$
(1,105,345
)
$
(18,108
)
Income tax benefit
(23,959
)
(96,357
)
(44,621
)
(20,252
)
(20,662
)
Interest expense, net
95,577
98,693
191,092
194,150
95,515
Depreciation and amortization
104,356
108,065
209,518
216,577
105,162
EBITDA
$
(806,015
)
$
(772,581
)
$
(644,108
)
$
(714,870
)
$
161,907
(Gain) loss on investments, net
412
6,038
(91,582
)
12,543
(91,994
)
Gain on extinguishment of debt
—
(22,902
)
—
(27,527
)
—
Other expense, net
231
272
727
371
496
Equity in loss of nonconsolidated
affiliates
61
44
106
4
45
Impairment charges
920,224
960,570
921,732
964,517
1,508
Other operating (income) expense, net
516
(261
)
1,088
(40
)
572
Restructuring expenses
27,558
10,789
51,161
30,243
23,603
Share-based compensation expense
7,220
9,212
15,700
19,364
8,480
Adjusted EBITDA
$
150,207
$
191,181
$
254,824
$
284,605
$
104,617
Reconciliation of Cash provided by (used for) operating
activities to Free Cash Flow
(In thousands)
Three Months Ended
June 30,
Six Months Ended
June 30,
2024
2023
2024
2023
Cash provided by (used for) operating
activities
$
26,729
$
56,772
$
(32,548
)
$
(37,211
)
Purchases of property, plant and
equipment
(21,172
)
(22,773
)
(42,754
)
(61,938
)
Free cash flow
$
5,557
$
33,999
$
(75,302
)
$
(99,149
)
Reconciliation of Revenue to Revenue excluding Political
Advertising
(In thousands)
Three Months Ended
June 30,
%
Change
Six Months Ended
June 30,
%
Change
2024
2023
2024
2023
Consolidated revenue
$
929,092
$
920,014
1.0
%
$
1,728,130
$
1,731,253
(0.2
)%
Excluding: Political revenue
(14,907
)
(6,665
)
(26,534
)
(10,268
)
Consolidated revenue, excluding
political
$
914,185
$
913,349
0.1
%
$
1,701,596
$
1,720,985
(1.1
)%
Multiplatform Group revenue
$
575,907
$
595,944
(3.4
)%
$
1,069,370
$
1,124,957
(4.9
)%
Excluding: Political revenue
(8,025
)
(4,344
)
(15,688
)
(7,829
)
Multiplatform Group revenue, excluding
political
$
567,882
$
591,600
(4.0
)%
$
1,053,682
$
1,117,128
(5.7
)%
Digital Audio Group revenue
$
285,614
$
260,854
9.5
%
$
524,582
$
484,250
8.3
%
Excluding: Political revenue
(1,210
)
(846
)
(1,481
)
(1,346
)
Digital Audio Group revenue, excluding
political
$
284,404
$
260,008
9.4
%
$
523,101
$
482,904
8.3
%
Audio & Media Group Services
revenue
$
70,082
$
65,804
6.5
%
$
139,250
$
127,155
9.5
%
Excluding: Political revenue
(5,672
)
(1,475
)
(9,365
)
(1,093
)
Audio & Media Services Group revenue,
excluding political
$
64,410
$
64,329
0.1
%
$
129,885
$
126,062
3.0
%
Reconciliation of Total Debt to Net Debt
(In thousands)
June 30, 2024
Current portion of long-term debt
$
621
Long-term debt
5,218,194
Total debt
$
5,218,815
Less: Cash and cash equivalents
364,744
Net debt
$
4,854,071
Segment Results
The following tables present the Company's segment results for
the Company for the periods presented:
Segments
(In thousands)
Multiplatform Group
Digital Audio Group
Audio & Media Services
Group
Corporate and other reconciling
items
Eliminations
Consolidated
Three Months Ended June 30,
2024
Revenue
$
575,907
$
285,614
$
70,082
$
—
$
(2,511
)
$
929,092
Operating expenses(1)
471,644
193,744
46,233
69,775
(2,511
)
778,885
Adjusted EBITDA
$
104,263
$
91,870
$
23,849
$
(69,775
)
$
—
$
150,207
Adjusted EBITDA margin
18.1
%
32.2
%
34.0
%
16.2
%
Depreciation and amortization
(104,356
)
Impairment charges
(920,224
)
Other operating expense, net
(516
)
Restructuring expenses
(27,558
)
Share-based compensation expense
(7,220
)
Operating loss
$
(909,667
)
Operating margin
(97.9
)%
Segments
(In thousands)
Multiplatform Group
Digital Audio Group
Audio & Media Services
Group
Corporate and other reconciling
items
Eliminations
Consolidated
Three Months Ended June 30,
2023
Revenue
$
595,944
$
260,854
$
65,804
$
—
$
(2,588
)
$
920,014
Operating expenses(1)
433,542
176,272
47,305
74,302
(2,588
)
728,833
Adjusted EBITDA
$
162,402
$
84,582
$
18,499
$
(74,302
)
$
—
$
191,181
Adjusted EBITDA margin
27.3
%
32.4
%
28.1
%
20.8
%
Depreciation and amortization
(108,065
)
Impairment charges
(960,570
)
Other operating income, net
261
Restructuring expenses
(10,789
)
Share-based compensation expense
(9,212
)
Operating loss
$
(897,194
)
Operating margin
(97.5
)%
(1) Operating expenses consist of Direct
operating expenses and SG&A expenses, excluding Restructuring
expenses and share-based compensation expenses.
Segments
(In thousands)
Multiplatform Group
Digital Audio Group
Audio & Media Services
Group
Corporate and other reconciling
items
Eliminations
Consolidated
Six Months Ended June 30, 2024
Revenue
$
1,069,370
524,582
$
139,250
$
—
$
(5,072
)
$
1,728,130
Operating expenses(1)
887,925
364,585
91,706
134,162
(5,072
)
1,473,306
Adjusted EBITDA
$
181,445
$
159,997
$
47,544
$
(134,162
)
$
—
$
254,824
Adjusted EBITDA margin
17.0
%
30.5
%
34.1
%
14.7
%
Depreciation and amortization
(209,518
)
Impairment charges
(921,732
)
Other operating expense, net
(1,088
)
Restructuring expenses
(51,161
)
Share-based compensation expense
(15,700
)
Operating loss
$
(944,375
)
Operating margin
(54.6
)%
Segments
(In thousands)
Multiplatform Group
Digital Audio Group
Audio & Media Services
Group
Corporate and other reconciling
items
Eliminations
Consolidated
Six Months Ended June 30, 2023
Revenue
$
1,124,957
$
484,250
$
127,155
$
—
$
(5,109
)
$
1,731,253
Operating expenses(1)
875,503
345,549
93,312
137,393
(5,109
)
1,446,648
Adjusted EBITDA
$
249,454
$
138,701
$
33,843
$
(137,393
)
$
—
$
284,605
Adjusted EBITDA margin
22.2
%
28.6
%
26.6
%
16.4
%
Depreciation and amortization
(216,577
)
Impairment charges
(964,517
)
Other operating income, net
40
Restructuring expenses
(30,243
)
Share-based compensation expense
(19,364
)
Operating loss
$
(946,056
)
Operating margin
(54.6
)%
(1) Operating expenses consist of Direct
operating expenses and SG&A expenses, excluding Restructuring
expenses and share-based compensation expenses.
______________________________
1 Unless otherwise noted, all results are
based on year over year comparisons.
2 Total available liquidity is defined as
cash and cash equivalents plus available borrowings under our ABL
Facility. We use total available liquidity to evaluate our capacity
to access cash to meet obligations and fund operations.
3 A full reconciliation of forecasted
Adjusted EBITDA, net debt and net leverage on a non-GAAP basis to
the respective most-directly comparable GAAP metrics cannot be
provided without unreasonable efforts due to the inherent
difficulty in forecasting and quantifying with reasonable accuracy
significant items required for the reconciliations, including gains
or losses on investments, extinguishment of debt, equity in
nonconsolidated affiliates, impairment charges, stock based
compensation, and restructuring as well as the Company’s cash and
cash equivalents balance.
4 Total available liquidity is defined as
cash and cash equivalents plus available borrowings under our ABL
Facility. We use total available liquidity to evaluate our capacity
to access cash to meet obligations and fund operations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808585847/en/
Media Wendy Goldberg Chief
Communications Officer (212) 377-1105
wendygoldberg@iheartmedia.com
Investors Mike McGuinness EVP,
Deputy CFO, and Head of Investor Relations (212) 377-1336
mbm@iheartmedia.com
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