• Adjusted EBITDA: $246 million, up 18.2% year-over-year.
• Consolidated Revenue: Up 4.8% year-over-year; excluding political impact, down 1.8%.
• Digital Audio Group Revenue: $339 million, up 6.7% year-over-year.
• Digital Audio Group Adjusted EBITDA: $119 million, up 2.1% year-over-year; margins at 35%.
• Podcast Revenue: Grew 5.7% year-over-year.
• Multi-platform Group Revenue: $684 million, flat year-over-year; excluding political impact, down 5%.
• Multi-platform Group Adjusted EBITDA: $150 million, up 5.9% year-over-year.
• Audio and Media Services Group Revenue: $98 million, up 44.7% year-over-year.
• Audio and Media Services Group Adjusted EBITDA: $49 million, up 136% year-over-year.
• Net Debt: Approximately $4.52 billion.
• Total Liquidity: $686 million, including $260 million in cash.
• Net Debt to Adjusted EBITDA Ratio: 6.4 times, expected to be 5.5 times by year-end.
• Free Cash Flow: Negative $24 million; adjusted for debt transaction expenses, $111 million.

• Warning! GuruFocus has detected 4 Warning Signs with IHRT.

Release Date: February 27, 2025

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

Positive Points

• iHeartMedia Inc (NASDAQ:IHRT) successfully completed a comprehensive exchange transaction, extending debt maturities by three years and reducing overall debt.
• The company achieved over $200 million in annual cost reductions, resulting in net savings of approximately $150 million.
• The Digital Audio Group generated record revenues of over $1.1 billion and adjusted EBITDA of approximately $380 million for the full year.
• iHeartMedia Inc (NASDAQ:IHRT) maintained its position as the number one podcast publisher in the US, with significant growth in podcast revenues.
• The company launched a redesigned iHeartRadio app, receiving positive feedback from listeners and enhancing user experience.

Negative Points

• Consolidated revenues were below guidance due to lower-than-expected political advertising revenue and a slowdown in non-political advertising.
• The company's free cash flow was negatively impacted by fees and expenses related to the debt transaction and modernization program.
• The Multi-platform Group's revenues were flat year-over-year, with a decline in revenues excluding political advertising.
• The Audio and Media Services Group's revenues, excluding political impact, were down 1.6% year-over-year.
• The company faces uncertainty in the advertising market due to potential tariffs, inflation, and higher interest rates, impacting future revenue projections.

Q & A Highlights

Q: Can you discuss how iHeartMedia plans to monetize broadcast listening, particularly with programmatic and AI? A: Robert Pittman, CEO, explained that programmatic is essential for iHeartMedia as it aligns with the digital-centric buying systems. The company is making progress in integrating its inventory into digital platforms, which will allow for automated and programmatic buying. This transition is expected to yield revenue growth, with significant impacts anticipated in the coming years. Richard Bressler, CFO, added that getting into platforms like DV360 and Yahoo is a crucial first step in this process.

Q: What is iHeartMedia's stance on video podcasting, and how does it impact the market outlook? A: Robert Pittman noted that while there is interest in video podcasting, the majority of podcast users prefer audio due to its convenience during activities like driving or cooking. Although some podcasts include video, the focus remains on audio content. The company is open to video if it proves profitable, but the primary driver is consumer preference. Richard Bressler highlighted the strong growth in podcasting revenue, with expectations for continued double-digit growth.

Q: How did the Los Angeles wildfires impact iHeartMedia's operations and market outlook? A: Robert Pittman acknowledged that the wildfires disrupted operations in LA, iHeartMedia's largest market, affecting both local and national sales teams. However, the situation is stabilizing, and the company expects a return to normalcy. He also noted that increased traffic due to more people returning to offices could benefit the company, as longer commutes typically boost radio listenership.

Q: Can you elaborate on the automated buying process and its contribution to advertising trends? A: Robert Pittman explained that automated buying is a gradual process involving data enhancements and programmatic advertising. The company is integrating broadcast radio options into digital platforms, which presents a significant opportunity. Richard Bressler added that while no significant contributions are expected this year, the potential for future growth is substantial.

Q: What are the expected drivers of growth in the podcasting business for iHeartMedia? A: Robert Pittman stated that growth drivers include expanding content, audience, and pricing, as well as increasing demand for podcasting as a must-buy medium. The company anticipates continued growth through these avenues. Regarding political advertising, Pittman noted the need for more data-driven approaches to capture future opportunities, especially in light of lessons learned from the recent election cycle.

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