• Revenue: $203.6 million for Q3 2024.
• EBITDA: $24.1 million for Q3 2024.
• Digital Revenue: Accounts for 20% of total revenue, increased 8% year over year.
• Digital Marketing Services (DMS) Growth: Approximately 40% year over year.
• Customer Count Growth: Increased by 22% in digital business.
• Average Digital Order Size: Increased by 17% per customer.
• Political Revenue: $4.4 million in Q3 2024.
• Cost Reductions: $8 million year-to-date, on top of $120 million from 2019-2023.
• Cash: $52.2 million at the end of Q3 2024.
• Gross Debt: $642.1 million at the end of Q3 2024.
• Net Debt: $590 million, excluding $31 million principal debt reduction.
• CapEx: $15.9 million year-to-date, expected to be below $25 million for the full year.

• Warning! GuruFocus has detected 3 Warning Signs with CMLS.

Release Date: November 01, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Cumulus Media Inc (NASDAQ:CMLS) reported $203.6 million in revenue and $24.1 million in EBITDA for Q3 2024, aligning with analyst estimates.
• Digital revenue, which now constitutes 20% of total revenue, grew by 8% year over year, with digital marketing services increasing by nearly 40%.
• The company has successfully increased customer count by 22%, improved customer retention by 6%, and raised the average digital order size per customer by 17%.
• Cumulus Media Inc (NASDAQ:CMLS) has extended its debt maturities to 2029, providing financial flexibility and time to navigate economic challenges.
• The network business saw a 5% revenue increase, driven by strong demand for live sports products and exclusive audio relationships with the NFL.

Negative Points

• Overall advertising sentiment remains weak due to economic and interest rate concerns, impacting spending in key categories like automotive and financial services.
• Political spending was lower than expected in Q3 due to the change in the Democratic presidential candidate, affecting both sides' advertising budgets.
• Podcasting revenue experienced a modest decrease, primarily due to declining revenue from The Daily Wire podcast.
• Total company revenue is currently pacing down slightly for Q4, indicating ongoing challenges in the advertising environment.
• Despite cost reductions, the uncertain ad environment necessitates continued focus on managing expenses while investing in digital growth.

Q & A Highlights

Q: Can you elaborate on the additional services driving revenue growth in your marketing services? A: Mary Berner, President and CEO, explained that they have expanded their suite of campaign products to include integrated presence products such as listings, reputation management, website development, and SEO, allowing them to offer a comprehensive range of services.

Q: The political revenue booked seems softer than expected. Is there potential for upside, and how do you assess your political performance for the year? A: Francisco Lopez-Balboa, CFO, noted that the third quarter was slightly below expectations due to the Democratic presidential candidate change. However, they expect to meet their projections with potential additional revenue from possible runoffs.

Q: Are advertisers holding back due to the elections, and what are your expectations post-election? A: Mary Berner mentioned that advertisers are cautious due to economic uncertainty and the dominance of political ads. They expect spending to resume once the election concludes and the economic environment stabilizes.

Q: How is the network business performing, especially with the sports season underway? A: Francisco Lopez-Balboa highlighted that the network benefited from airing the summer games and NFL schedule adjustments. While Q3 was strong, Q4 might not be as robust due to these factors, but local spot pacing is stronger than Q3.

Q: How are interest rates affecting advertising spend, and what changes could alleviate this uncertainty? A: Francisco Lopez-Balboa explained that interest rates impact categories like financial products and mortgages. A significant rate reduction could boost advertising, but broader economic improvements, including lower inflation, are also crucial for positive sentiment.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.