It’s been a bumpy ride for many of the nation’s largest publicly traded radio broadcasting companies for the last four years, with full pre-COVID 19 advertising revenue recovery hampered by “macroeconomic challenges” as marketers continue to direct their dollars to digital and social media on a global level.
For Cumulus Media, the first three months of 2024 brought some relief: Its net loss declined to $14.15 million, from $21.47 million. But the company’s adjusted EBITDA also fell, as its revenue also slipped, coming in $300,000 shy of a consensus estimate based on the input of two analysts who track the audio content creation and distribution company which owns not only AMs and FMs but the Westwood One national radio group.
Net revenue fell as expected, coming in at $200,053,000; the consensus estimate was for revenue of $200,300,000. That’s down from $205.69 million.
At the same time, expenses were up, rising to $210.53 million from $204.66 million, largely due to restructuring costs and Q1 2023 asset sales of roughly $7 million.
Put it all together, and the net loss for Cumulus in Q1 was $14.15 million, compared to $21.47 million a year ago.
Adjusted EBITDA declined to $8.41 million from $10.33 million.
Total it all up, and Cumulus’s loss per share softened to -$0.85, from -$1.17. This easily beat the consensus EPS of -$1.32.
DIGITAL DEVINE, SPOT DECLINE
As is the story being told from Hanapepe, Hawaii, to Houlton, Maine, digital growth is what is keeping broadcast media from extreme financial distress.
In the case of Cumulus, digital revenue in Q1 improved by 7%, growing to $34.45 million from $32.09 million.
But, digital revenue totals still pale in comparison with those for broadcast radio revenue, which continues to show weakness. And, that’s the big takeaway for Cumulus in Q1. Spot revenue was down 7.3% year-over-year to $90.57 million, from $97.71 million, while Network revenue was off 2.3% to $49.16 million, from $50.3 million.
Combined broadcast radio revenue was down 5.6% to $139.74 million.
Speaking on the company’s Q1 2024 earnings call held early Friday morning, “the recovery in national advertising remains very choppy,” CEO Mary Berner lamented, noting high interest rate environmental concerns. Still, she is encouraged by the return of many, if not most, large clients in the Insurance category, which sat out most of 2023.
And, the “uncertain macro environment” and late bookings are making the current quarter difficult, while expense reductions is another key Q2 2024 forecast takeaway Berner shared on the earnings call. Thus, continued cloudiness for advertising will most likely be the item most scrutinized by shareholders, and its debtholders. Total company revenue is pacing down low-single digits, CFO Frank López-Balboa shared in his earnings call comments.
