Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- iHeartMedia Inc (IHRT, Financial) reported Q2 2024 results in line with adjusted EBITDA and revenue guidance, showing sequential improvement in revenue growth.
- The digital audio group generated $286 million in revenue, up 10% year-over-year, with adjusted EBITDA margins improving to 32%.
- iHeartMedia Inc (IHRT) maintained its position as the number one podcast publisher in the US, with podcast revenues growing 8% year-over-year.
- The company expects podcast revenues to return to double-digit growth in the third and fourth quarters of 2024.
- iHeartMedia Inc (IHRT) is leveraging technology and programmatic platforms to enhance efficiency and drive long-term profitability.
Negative Points
- The multi-platform group's revenues were down 3% year-over-year, with adjusted EBITDA declining from $162 million to $104 million.
- Consolidated direct operating expenses increased by 7.6% due to higher variable content costs and event-related expenses.
- The company reported a GAAP operating loss of $909.7 million, impacted by a $920 million non-cash intangible impairment.
- Consolidated SG&A expenses rose by 9.6%, driven by higher non-cash marketing expenses and costs related to cost-saving initiatives.
- Free cash flow for the second quarter was $6 million, down from $34 million in the prior year quarter.
Q & A Highlights
Q: What was the reason for the podcast gains to be so depressed in the latest quarter relative to the rest of digital? And why are you confident that you can return to double-digit growth?
A: Richard Bressler, President, CFO, COO: We still had 8% revenue growth in podcasting. The lower growth was due to tough comparisons from last year, including one-time events like COVID vaccine-related content. We expect to return to double-digit growth in Q3 and Q4, as well as for the full year, driven by strong demand and strategic guidance.
Q: Can you discuss the evolution of the podcasting business in terms of content costs and ad demand? Where do you think we are in the maturity cycle for that business?
A: Robert Pittman, CEO: Podcasting is still in the early stages of monetization, although audience usage is growing. Advertisers are increasingly interested in podcasting, and the industry is moving towards more rational pricing. We focus on the publisher segment, which is more profitable, and expect significant growth in the U.S. podcasting market over the next few years.
Q: Are there any other options on the table for addressing debt maturities, aside from extending maturities or refinancing?
A: Robert Pittman, CEO: We are in active discussions with debt holders and are focused on improving our capital structure. While we can't discuss specifics, we are committed to working with the market to enhance our financial position.
Q: Can you talk about where else you can find cost savings and the opportunity in programmatic advertising?
A: Robert Pittman, CEO: Technology is a key driver of cost savings, and we continually assess how to restructure using new technologies. Our programmatic platform unifies our systems and allows us to participate in digital buying systems, providing significant benefits to advertisers and enhancing our reach.
Q: Could you elaborate on the trends driving growth in digital ex-podcast and the margin differential between podcast and digital businesses?
A: Robert Pittman, CEO: Our digital business, excluding podcasting, is diverse and includes high-margin streaming services. Podcasting, as a publisher, also has strong margins. We manage our product mix to maximize margins and are seeing growth from our investments in digital platforms.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
