Urban One (UONE) Q2 2024 earnings summary

Executive summary

• Net revenues for Q2 2024 were $117.7 million, down 9.2% year-over-year, with a net loss of $45.4 million compared to net income of $70.4 million in Q2 2023, driven by an $80.8 million impairment charge on radio broadcasting licenses across 9 markets.

• Adjusted EBITDA was $28.4 million, down 24.2% year-over-year from $37.5 million in Q2 2023.

• Broadcast and digital operating income fell 27.7% to $34.2 million.

• Cash and cash equivalents at quarter-end were $131.9 million, with no outstanding borrowings on the $50 million asset-backed credit facility.

• The company repurchased $110.5 million of its 2028 Notes at an average price of 85% of par, resulting in a $15.3 million gain on retirement of debt for the six months.

Financial highlights

• Net revenues declined by $11.9 million year-over-year, mainly due to lower cable TV and digital advertising revenues.

• Net loss per share was $(0.94) compared to $1.48 EPS in Q2 2023.

• Operating loss for Q2 2024 was $60.4 million, versus operating income of $9.7 million in Q2 2023.

• Interest expense decreased to $12.4 million from $14.0 million due to lower debt balances.

• Gain on retirement of debt was $15.3 million for H1 2024, including $7.4 million in Q2 from repurchasing $35.5 million of 2028 notes at 78% of par.

Outlook and guidance

• 2024 EBITDA guidance maintained at $110–$120 million, but expected to finish at the lower end due to cable TV softness.

• Q3 radio pacing down 6.9% same-station, but up 7% as reported; political ad revenue expected to be robust and benefit both radio and digital divisions.

• Digital segment expected to meet budget, with optimism for political ad dollars in H2.

• Cable TV business continues to face subscriber churn, but Q3 is seeing a bounce-back in ratings and delivery.

• Upside anticipated from new connected TV ad server launching in Q3.