After several quarters of delayed earnings calls due to a shift in independent outside accounting firms, Urban One Inc. on Thursday joined six other broadcast media companies in delivering its Q2 2024 financial report. While the company’s Q4 and year-end 2023 and Q1 2024 report were tardy, the Q2 results come right on time.
How did the owner of radio stations, controlling interest partner in national media arm Reach Media, and two cable TV networks perform in the quarter? A dip at both Cleo and TV One, along with flat radio revenue, shifted the company to a net loss.
Indeed, Urban One in Q2 2024 registered a $45.1 million net loss, shifting from Q2 2023 net income of $71.2 million.
Overall net revenue in Q2 declined to $117.7 million, a 9.2% decrease from $129.7 million. The company reported an operating loss of around $60.4 million, contrasting sharply with an operating income of $9.7 million in the same period in 2023.
The broadcast and digital operating income saw a reduction — even with Connected TV and podcast growth — coming in around $34.2 million, down 27.7% from the previous year.
Put it all together, and the net loss attributable to common shareholders was $45.43 (-$0.94 per share), compared to net income of $70.37 million ($1.48 per share) in Q2 2023.
Nevertheless, shareholders seemed pleased with the results, as “UONE” was trading up 24 cents to $2.20 just before Noon on Thursday.
Cable TV revenues fell 26.7% year-over-year to $22.2 million, after finishing at $30.2 million in Q2 2023. Cable TV affiliate fees dropped by 12.9%.
Liggins, speaking on his company’s Q2 2024 earnings call, explained, “Our Cable TV business continues to suffer from subscriber churn and audience delivery shortfall, impacting both advertising and affiliate revenues, although we are seeing a bounce-back in ratings and delivery in Q3.”
Radio advertising revenue saw a minimal increase of 0.6%, moving to $45.4 million from from $45.1 million.
Liggins elaborated on the performance at its broadcast radio stations, stating, “On a same station basis, our radio division finished Q2 down 5.6% excluding political, and down 3.0% with political.”
And, taking a cue from other broadcast media companies sharing their quarterly financial results on Thursday, “sequential improvement” was the story for Urban One, with upward movement for national revenue compared to the first quarter. Unfortunately, this was offset by weaker local revenue.
Meanwhile, Liggins said Q3 core radio revenue is currently pacing down 6.9% on a same-station basis. That’s down 5.1% when including political.
Digital advertising also faced a substantial decline of 17.7%, dropping from $18.8 million in 2023 to $15.5 million in 2024.
As the election nears, overall political advertising was a healthy $2.1 million in Q2, compared to just $410,000 in the year-ago period.
For Liggins, he’s “optimistic for the remainder of the year,” and eyes a political benefit for radio and digital in the back half of 2024.
Adjusted EBITDA for the quarter was also down, moving to $28.4 million from $37.5 million.
Total operating expenses increased to $178.2 million from $120 million. Notable increases include a significant rise in the impairment of goodwill, intangible assets, and long-lived assets, which skyrocketed to $80.8 million from $22.1 million. This suggests a considerable revaluation of asset worth as fluctuating market dynamics affect valuations.
Urban One’s acquisition of Cox Media Group’s Houston cluster also added $2 million in operating expenses year-over-year.
As a result of these expenses, operating income turned to a loss of $60.4 million in 2024 from a gain of $9.7 million in Q2 2023. In response to these challenges, Urban One repurchased an additional $35.5 million of its 2028 notes during the quarter and ended the period with approximately $132.4 million in cash.
On the call, Liggins also offered insight into how Urban One will finish 2024, predicting the company will begin 2025 “at the lower end of our EBITDA guide.” The company is also forecasting its digital segment to reach its budget.
“Our TV business is really what’s hurting us,” he admitted.
— With editing and additional reporting by Adam R Jacobson
