Townsquare Media, Inc. Reports Financial Results for the Quarter Ended March 31, 2025

Townsquare’s Financial Performance: Navigating Challenges and Opportunities

Townsquare, a community-focused digital and broadcast media company, has recently released its financial report for the first quarter of 2025. The report provides insights into the company’s performance, highlighting both challenges and opportunities in the current economic landscape.

Overview of Townsquare’s Business Segments

Townsquare operates three main business segments:

1. Digital Advertising: This segment, known as Townsquare Ignite, combines the company’s proprietary digital advertising platform and its network of owned and operated digital properties.

2. Subscription Digital Marketing Solutions: This segment encompasses Townsquare Interactive, the company’s subscription-based digital marketing solutions business for small and medium-sized businesses (SMBs).

3. Broadcast Advertising: This segment includes Townsquare’s portfolio of 342 local radio stations, primarily serving markets outside the top 50 in the United States.

The company also generates revenue from live events, such as concerts and festivals, which are reported in the “Other” category.

Financial Performance Highlights

Townsquare’s financial performance for the first quarter of 2025 was mixed, with some bright spots and challenges:

Revenue Trends

• Net revenue decreased by 1.0% year-over-year, primarily due to a 9.1% decline in Broadcast Advertising revenue, partially offset by increases in Digital Advertising (7.6%) and Subscription Digital Marketing Solutions (4.2%).
• Excluding political revenue, net revenue decreased by 0.5% year-over-year.

Profitability

• Operating income increased by 7.4%, driven by a decrease in non-cash impairment charges and lower direct operating expenses, partially offset by the decline in net revenue and higher stock-based compensation.
• Segment profit, which measures the profitability of each business unit, remained relatively flat, increasing by 0.5% year-over-year.

Segment Performance

• Digital Advertising segment profit increased by 12.0%, driven by the increase in revenue.
• Subscription Digital Marketing Solutions segment profit increased by 22.2%, primarily due to the increase in revenue and a decrease in compensation expenses.
• Broadcast Advertising segment profit decreased by 17.8%, mainly due to the decline in net revenue.

Macroeconomic Factors and Challenges

Townsquare’s financial performance has been impacted by the current economic environment, which includes high inflation, rising interest rates, and supply chain disruptions. These factors have led to:

• Advertising and subscription cancellations
• Declines in new advertising purchases by clients
• Declines in the addition of new digital marketing solutions subscribers
• Increases in operating expenses

To address these challenges, Townsquare has implemented precautionary measures, such as wage reduction efforts and controlling non-essential capital expenditures. The company is closely monitoring the economic conditions and their impact on its operations.

Liquidity and Capital Resources

Townsquare’s liquidity and capital resources position is as follows:

The company believes that its current cash on hand and cash flows from operations, investing, and financing activities will be sufficient to meet its working capital, capital expenditure, debt service, and other funding requirements for at least the next 12 months.

Townsquare’s outstanding indebtedness as of March 31, 2025, was $448.4 million, net of unamortized discount and deferred financing costs. The company’s debt service requirements over the next 12 months are expected to be approximately $55.8 million.

Dividend Payments and Share Repurchases

Townsquare has maintained a consistent dividend policy, with the following dividends paid or approved:

• $0.1975 per share paid on February 1, 2025
• $0.20 per share paid on May 1, 2025
• $0.20 per share approved for payment on August 1, 2025

The company also repurchased $1.4 million of its common stock during the first quarter of 2025 to cover employee tax withholdings on restricted stock that vested.

Outlook and Future Considerations

Townsquare’s management remains cautiously optimistic about the company’s future, acknowledging the ongoing economic challenges while highlighting the potential opportunities:

• The company’s diversified business model, with a mix of digital, subscription, and broadcast revenue streams, is seen as a strength that helps mitigate risks associated with advertising revenue dependency.
• Townsquare’s focus on markets outside the top 50 in the United States is viewed as a strategic advantage, as these markets may be less impacted by economic volatility compared to larger metropolitan areas.
• The company’s investments in digital technologies and data-driven advertising solutions are expected to drive growth in the Digital Advertising and Subscription Digital Marketing Solutions segments.
• Townsquare’s management is closely monitoring the economic conditions and is prepared to implement further cost-saving measures if necessary to maintain financial stability.

However, the company’s future performance is subject to various risks and uncertainties, including the continued impact of macroeconomic factors, changes in the competitive landscape, and the ability to successfully execute its growth strategies.

Conclusion

Townsquare’s financial performance in the first quarter of 2025 reflects the challenges posed by the current economic environment, with declines in Broadcast Advertising revenue partially offset by growth in its Digital Advertising and Subscription Digital Marketing Solutions segments. The company’s diversified business model and focus on markets outside the top 50 markets in the United States provide some resilience, but Townsquare’s management remains vigilant in monitoring the economic conditions and prepared to take necessary actions to maintain financial stability and drive long-term growth.