Radio companies experienced varied outcomes in the third quarter as they attempted to develop digital businesses, reduce costs, and navigate a decline in broadcast advertising revenue due to consumer shifts towards newer entertainment platforms.
iHeartMedia reported consolidated revenue of $997 million, reflecting a slight decrease of 1.1%, which aligns with the company’s forecast of a low single-digit decline. Excluding the effects of political advertising from the previous year, revenue increased by 2.8%. CEO Bob Pittman stated during the earnings call on Monday (Nov. 10) that the advertising landscape is “pretty good” and that iHeartMedia is “not feeling anything” related to the U.S. government shutdown.
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iHeartMedia incurred an operating loss of $116 million due to a $209 million impairment charge associated with the value of its FCC licenses. When excluding the impact of this write-down and other extraordinary items, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), a standard profitability measure from ongoing operations, remained unchanged at $205 million.
The multi-platform division, which encompasses iHeartMedia’s broadcast and network businesses, generated revenue of $591 million, down 4.6% due to reduced political advertising and what the company termed “uncertain market conditions.” Adjusted EBITDA for this division was $119.2 million, reflecting an 8.3% decline from the previous year, despite lower employee compensation costs.
The digital audio group, which includes podcasts, achieved revenue of $342 million, representing a 14% increase, and adjusted EBITDA of $130.3 million, up by 30.3%. Podcast revenue specifically rose by 22% to $140 million.
Pittman expressed confidence in the multi-platform division’s potential for revenue growth based on trends among top advertisers and advertising agencies. He noted that there is positive momentum similar to what other ad-supported companies have reported: spending remains steady and discussions with advertisers are encouraging. Although iHeartMedia has not yet experienced any effects from the government shutdown, Pittman acknowledged it introduces an element of uncertainty.
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iHeartMedia remains committed to achieving $150 million in annual cost savings by 2025. Additionally, during the third quarter, the company initiated measures aimed at saving an extra $50 million in 2026, primarily from its multi-platform division, as stated by COO/CFO Rich Bressler.
Looking forward, iHeartMedia anticipates fourth-quarter revenue to decrease in the low single digits. Adjusted EBITDA is projected to be between $200 million and $240 million, down from $246 million in the same quarter last year due to political advertising related to the upcoming 2024 election year. The multi-platform division is also expected to decline in the low single digits while digital revenue is anticipated to grow in the high single digits; specifically, podcast revenue is expected to increase in the mid-teens.
Cumulus Media, ranked as the third-largest radio broadcaster by revenue in the country, reported an 11.5% drop in third-quarter revenue to $180.3 million. CEO Mary Berner attributed this decline to a “challenging” advertising environment while highlighting Cumulus’s initiatives to cut costs and leverage AI for improved efficiency. Broadcast revenue fell sharply by 17.2% to $115.0 million. Digital revenue decreased by 2.6% to $39.0 million but would have increased by 8.4% without losses from The Daily Wire and conservative commentator Dan Bongino, who transitioned from podcasting to become deputy director of the FBI. Consolidated adjusted EBITDA dropped to $16.7 million from $24.1 million year-over-year.
Townsquare Media encountered “numerous headwinds,” according to CEO Bill Wilson, yet managed to meet its previous guidance on revenue and adjusted EBITDA despite a revenue drop of 7.4% to $106.8 million; without political advertising included, this drop would have been only 4.5%. Adjusted EBITDA decreased by 13.5% to $3.4 million.
iHeartMedia shares declined by 6.0% to $4.29 on Tuesday (Nov. 11) following their earnings announcement on Monday afternoon; previously, shares had surged by 55.9% during the week ending Nov. 7 after reports indicated that iHeartMedia was negotiating with Netflix for podcast content distribution.
Cumulus Media shares jumped by 31% to $0.135 after releasing earnings on Oct. 30 but subsequently lost all those gains and more, closing at $0.10 on Tuesday (Nov. 11).
Townsquare Media shares fell by 11.3% to $5.42 on Monday following their quarterly earnings report but rebounded slightly with a rise of 0.6% to $5.45 on Tuesday.
