Q4 2023 iHeartMedia Inc Earnings Call

Operator: Welcome to the iHeartRadio Q4 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

2023 earnings conference call.

Lyons has been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during that time simply press star followed by the number one on your telephone keypad.

Operator: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1. As a reminder, today's call is being recorded. I will now hand today's call over to Mike McGuinness, Head of Investor Relations. Please go ahead, sir.

If you would like to withdraw your question Press Star one.

As a reminder, today's call is being recorded.

Oh now here today is call over to Mike Mcginnis instead of Investor Relations. Please go ahead Sir.

Michael B. McGuinness: Good morning, everyone, and thank you for taking the time to join us for our fourth quarter 2023 earnings call. Joining me for today's discussion are Bob Pittman, our Chairman and CEO, and Rich Bressler, our President, COO, and CFO. At the conclusion of our prepared remarks, management will take your questions.

Michael B. McGuinness: Good morning, everyone and thank you for taking the time to join US for a fourth corner 2023, Orange call. Joining me for today's discussion or Bob him in our chairman and CEO enrich bressler, our President's C. O O N CFO at the conclusion of our prepared remarks Mazard will take your car.

Michael B. McGuinness: In addition to our press release, we have an earnings presentation available on our website that you can use to follow along with our remarks. Please note that this call may include forward-looking statements regarding our financial performance and operating results. These statements are based on management's current expectations, and actual results could differ from what is stated as a result of certain factors identified during today's call and in the company's SEC files. Additionally, during this call, we will refer to certain non-GAAP financial measures. Reconciliations between GAAP and non-GAAP financial measures are included in our earnings release, earnings presentation, and our SEC filings, which are available in the investor relations section of our website. Now, I'll turn the call over to Bob. Thanks, Mike. And good morning, everyone.

Michael B. McGuinness: Questions. In addition to a press release, we even earnings presentation available on a website that you can use to follow along with all remarks. Please note that this call may include forward looking statements regarding our financial performance and operating results. These statements are based on management's current expectations and actual results could differ from what is stated as a result of certain.

Michael B. McGuinness: [noise] factors identified on today's call and and the company's SEC filings.

Michael B. McGuinness: Additionally, during this call we will refer to certain non-GAAP financial measures reconciliations between gap and non-GAAP financial measures are included in our earnings release earnings presentation and R. S. E C filings, which are available in the Investor Relations section of our web site and I will turn the call over to Bob Thanks, Mike and good.

Bob: Morning, everyone. We're pleased to report that our fourth quarter 20 twenty-three results were in line with our previously provided adjusted EBITDA and revenue guidance ranges before I take you through the fourth quarter highlight I want to share some thoughts on the year. We've just had [noise], while the advertising market place ended up being more uncertain than we had originally anticipated when we began the year [noise] we <unk>.

Bob Pittman: We're pleased to report that our fourth quarter 2023 results were in line with our previously provided Adjusted EBITDA and Revenue Guidance Range. Before I take you through the fourth quarter highlights, I want to share some thoughts on the year we've just had. While the advertising marketplace ended up being more uncertain than we had originally anticipated when we began the year, we navigated that ad environment and, at the same time, continued to make important strides in the initiatives that are critical to our longer-term success, including substantial progress in developing our proprietary technology platform to enhance our advertising business, which will unlock programmatic and automated trading revenue for our broadcast inventory. The application of AI to translate our podcast content, enabling cost-effective international expansion into non-English language markets and continuing to extend our audience leadership position beyond just AMFM and onto new devices and platforms.

Bob: Navigated that AD environment and at the same time [noise] continued to make important strides in the initiatives that are critical to our longer term success, including substantial progress in developing our proprietary technology platform to enhance our advertising business, [noise], which will unlock programmatic an automated trading revenue for a broadcast inventory the.

Bob: Nation of AI to translator podcasts contempt, enabling cost effective international expansion into non English language markets and continuing to extend our audience leadership position beyond just a M F M and onto new devices and platforms at the same time, we continue to look at our cost base and have built a cult.

Bob Pittman: At the same time, we continue to look at our cost base and have built a culture within the organization that is relentless in driving efficiencies, and, of course, we have a new. Now, let me take you through some of the key financial results of the quarter. In the fourth quarter, we generated adjusted EBITDA of $208 million. Within the guidance range we provided of $205 million to $215 million, our consolidated revenues for the quarter were down 5.2 percent compared to the prior year quarter, a little better than the guidance we provided of down in the high single digits. Excluding the impact of political, our consolidated revenues were flat.

Bob: <unk> within the organization [noise] that is relentless and driving efficiencies and of course, we have a new tool to use to fuel that which is a I know.

Now let me take you through some of the key financial results of the quarter and the fourth quarter, we generated adjusted EBITDA of 208 million [noise] within the guidance range. We provided of 205 million to 215 million are consolidated revenues for the quarter were down 5.2% compared to the prior year quarter [noise] a little.

Bob: Better than the guidance, we provided of down high single digits, excluding the impact the political Ah consolidated revenues were flat and we generated 142 million a free cash flow.

Bob Pittman: Turning now to our individual operating segments, the Digital Audio Group generated fourth-quarter revenues of $318 million, up 5.5% versus the prior year, and now represents approximately 30% of the company's total revenue. And for the full year, the Digital Audio Group generated over $1 billion in revenue. For the quarter, the Digital Audio Group generated adjusted EBITDA of $117 million, up 17.3% versus the prior year, and the Digital Audio Group's adjusted EBITDA margins were 37%, up from 33% in Q4 2022. This was the highest margin we've ever achieved in a quarter for the Digital Audio Group, and I would note that for the full year, this was the Digital Audio Group's best adjusted EBITDA and adjusted EBITDA margin as well, at approximately $350 million of adjusted EBITDA with a margin of 33%.

Bob: Turning now to our individual operating segments. The digital audio group generated fourth quarter revenues of 318 million up 5.5% versus prior year [noise] and now represents approximately 30% of the company's total revenue [noise] and for the full year [noise]. The digital audio group generated over $1 billion of revenue.

Bob: For the quarter the digital audio group generated adjusted EBITDA of 117 million up 17.3% versus prior year [noise] and the digital audio groups adjusted EBITDA margins were 37% [noise] up from 33% in queue for 20 twenty-two [noise]. This was the highest margin we've ever cheap than a quarter for the digital audio group [noise] and I would.

Note that for the full year. This was the digital audio groups best adjusted EBITDA and adjusted EBITDA margin as well [noise] at approximately 350 million of Justin EBITA [noise] with a margin of 33% within the digital audio group or podcast revenues grew 16.6% versus prior year [noise] pod casting continues to be the hottest new <unk>.

Bob Pittman: Within the Digital Audio Group, our podcast revenues grew 16.6% versus the prior year. Podcasting continues to be the hottest new consumer medium, and as we are the industry leader, it remains a strong growth engine for the company. Additionally, our financial discipline has paid off, as our podcasting EBITDA margins continue to be accretive to our total company EBITDA margin. In December, iHeart was once again ranked the number one podcast publisher in the U.S., with more monthly downloads than the next two largest podcast publishers combined, according to PodTrack.

Bob: Consumer medium and as we are the industry leader. It remains a strong growth engine for the company [noise]. Additionally, our financial discipline is paid off as our pod casting EBITDA margins continued to be accretive to our total company EBITDA margins.

Bob: In December I Heart was once again ranked the number one podcasts publisher in the U S. [noise] with more monthly downloads from the next two largest podcast publishers combined according to pod track [noise], our leadership position Empire casting is in part the result of the power of our broadcast radio assets, which we have used to build new lines of business for the company [noise] starting.

Bob Pittman: Our leadership position in podcasting is, in part, the result of the power of our broadcast radio assets, which we have used to build new lines of business for the company, starting out with the iHeartRadio app over 10 years ago, our marquee live events business, including the iHeartRadio Jingle Ball Tour, and most recently with podcasts. In addition to our industry-leading podcast business, we also have the number one streaming digital radio service, which has five times the listening of our closest competitor. We have the largest social footprint of any audio service by a factor of seven, and we operate 3,000 national and local websites that reach more than 120 million people in the United States each month, all of which represent additional opportunities for our advertising partners to interact with our highly engaged consumer base and provide additional revenue growth for the company. Turning now to the multi-platform group, which includes our broadcast radio, networks, and events businesses. In the fourth quarter, revenues were $684 million, down 6.7% versus the prior year and down 3.2%, excluding the impact of political advertising. Adjusted EBITDA was $142 million, down 38.5% versus the prior year.

Bob: <unk> out with the Iheartradio app over 10 years ago, or marquee live events business, including the Iheart radio Jingle Ball tour [noise] and most recently with pod casting.

Bob: In addition to our industry, leading Pi Cass business [noise]. We also have the number one streaming digital radio service, which has five times the listing of our closest competitor [noise], we have the largest social footprint of any audio service by a factor of seven [noise] and we operate 3000 national and local websites [noise] the reach more than 120 million people in the United.

Bob: Date, each month, [noise], all of which represent additional opportunities for our advertising partners [noise] to interact with our highly engaged consumer base and provide additional revenue growth for the company turning now to the Multiplatform group, which includes our broadcast radio networks and events businesses in the fourth quarter revenues were 684.

Bob: Million down 6.7% versus prior year, [noise] and down 3.2%, excluding the impact of political advertising adjusted EBITDA was 142 million [noise] down 38.5% versus prior year [noise] and as a reminder, [noise]. We're comparing this performance to queue for 20, twenty-two [noise], which benefited cygnet.

Bob Pittman: And as a reminder, we're comparing this performance to Q4 2022, which benefited significantly from the impact of record political advertising spend for a non-presidential election year. As we look to the year ahead, we see 2024 as a recovery year, and we expect a return to growth mode, which will benefit all of our assets, with a disproportionate adjusted EBITDA benefit to our multi-platform group and broadcast radio assets because of the higher operating leverage in that segment. We expect to see our multi-platform group performance improve quarter by quarter throughout the year. And of course, as 2024 is a presidential election year, we expect to see a material benefit from political advertising in the back half of the year as well. And looking at our digital audio group, we're excited about the growth of the overall digital audio TAM as well as our own growth within it. And now, I'll turn it over to Rich. Thank you, Bob.

Bob: Luckily from the impact of record political advertising spend [noise] for non presidential election year.

As we look to the year ahead, we see 2024 is a recover year [noise] and we expect a return to growth mode, [noise], which will benefit all of our assets with a disproportionate adjusted EBITDA benefit to our multiplatform group and broadcast radio assets [noise] because of the higher operating leverage in that segment, we expect to see our multiplatform group performance.

Bob: Improve quarter by quarter throughout the year [noise] and of course, there's 2020 fours a presidential election year [noise], we expect to see a material benefit from political advertising the back half of the year as well [noise] and looking at our digital audio group [noise]. We're excited about the growth of the overall digital audio Tam [noise] as well as our own growth within it and now I'll turn it over.

Bob: Rich. Thank you Bob as I take you through our results you'll notice that as Bob mentioned, our fourth quarter 2000 twenty-three results were along with our previously provided adjusted EBITDA and revenue guidance ranges.

Rich Bressler: As I take you through our results, you'll notice that, as Bob mentioned, our fourth quarter 2023 results were in line with our previously provided adjusted EBITDA and revenue guidance ranges. Our Q4 2023 Consolidated Revenues were down 5.2% year-over-year, a little better than the guidance we provided of down high single digits. Excluding the impact of political, our consolidated revenues were flat. Our consolidated direct operating expenses increased by 0.4% for the quarter.

Bob: R Q4, 2000 twenty-three consolidated revenues were down 5.2% year over year, a little better than the guidance, we provided of down high single digits.

Bob: Excluding the impact of political Ah consolidated revenues were flat.

Bob: Arkansas, They direct operating expenses increased 0.4% for the quarter. This small increase was primarily driven by higher broadcast content fees and higher variable content costs, resulting from an increase in digital segment revenue, including profit sharing costs and production costs [noise], but somewhat mittag.

Rich Bressler: This small increase was primarily driven by higher broadcast content fees and higher variable content costs resulting from an increase in digital segment revenue, including profit sharing costs and production costs, but somewhat mitigated by lower third-party digital costs and reduced compensation expense as a result of our ongoing cost savings initiatives. Our consolidated SG&A expenses increased 8.5% for the quarter, primarily driven by increased trade and barter marketing expense associated with the promotion of our events business in the quarter, including the streaming of our iHeartRadio music festival moving to Hulu, as well as increased variable bonus expense, which we stated on last quarter's call when discussing our Q4 guidance. These increases were partially offset by expense reductions driven by our ongoing cost savings initiatives.

Bob: Guided by low a third party digital costs and reduced compensation expense as a result of our ongoing cost savings initiatives.

Bob: Our consolidated SG&A expenses increased 8.5% for the quarter, primarily driven by increased trade in border marketing expense associated with the promotion of our adventure business in the quarter, including the streaming of our Iheartradio Music Festival moving to Hulu as well as increased variable bonus expense.

Bob: [noise] [noise], which we stayed at our last quarters call when discussing our queue for guidance. These increases were partially offset by expense reductions [noise] driven by our ongoing cost savings in issues [noise], we generate a fourth quarter gap operating income of 79.8 million compared to 172.8 million and the <unk>.

Prior year quarter.

Bob: Our fourth quarter, just it if it ta was 208 million compared to $316 million in the prior year quarter, which as a reminder, was an election year and within the guidance range, we provided of $205 million to $215 million, turning now to the performance of our operating segments and as a reminder, there are slides and.

Rich Bressler: We generated a fourth quarter gap operating income of $79.8 million compared to $172.8 million in the prior year. Our fourth quarter adjusted EBITDA was $208 million, compared to $316 million in the prior quarter, which, as a reminder, was an election year, and within the guidance range we provided of $205 to $215 million. Turning now to the performance of our operating segment, and as a reminder, there are slides in the earnings presentation on our segment performance. In the fourth quarter, the Digital Audio Group's revenues were $318 million, up 5.5% year-over-year, and they comprised approximately 30% of our fourth-quarter consolidated revenue. The Digital Audio Group's adjusted EBITDA was $117 million, up 17.3% year-over-year, and our Q4 margins were 36.7%, a year-over-year increase of 370 basis points. Within the Digital Audio Group are our podcasting revenues, which grew 16.6% year-over-year, and our non-podcasting digital revenues, which declined 1.1% year-over-year. The Multi-Platform Group's revenues were $684 million, down 6.7% year-over-year, or down 3.2%, excluding the impact of political. Adjusted EBITDA was $142 million, down 38.5% year-over-year.

Bob: Earnings presentation on our segment performances.

Bob: In the fourth quarter. The digital audio group's revenues were 380 million up 5.5% year over year and they comprise approximately 30% of our fourth quarter consolidated revenues. The digital audio groups. Adjusted EBITDA was 117 million of 17.3% year over year [noise] and are.

Bob: Q for margins, where 36.7% a year over year increase of 370 basis points within.

Within the digital audio group or a pod casting revenues, which grew 16.6% year over year [noise] and are non pod casting digital revenues, which declined 1.1% year over year.

Bob: The multiplatform group's revenues were 684 million down 6.7% year over year [noise], we're down 3.2%, excluding the impact of political adjusted EBITDA. It was 142 million down 38.5% year over year. The multiplatform groups adjusted EBITDA margins were 20.7% the.

Bob: Multiplatform groups Fourthquarter margins were primarily impacted by year over year increases in trading border marketing expenses as I mentioned previously as well as increases to certain programming fees embed dead expenses, which were partially offset by the previously announced ongoing cost reduction programs.

Speaker Change: To take a step back as you can see from the results from this quarter. We've continued to build out a successful in high growth digital business [noise], which for the full year 2023, [noise] generated over a billion dollars of revenue [noise] with a 33% adjusted EBITDA margin what might not be as a parent is as part of our relentless folk.

Rich Bressler: The Multi-Platform Group's adjusted EBITDA margins were 20.7%. The Multi-Platform Group's fourth-quarter margins were primarily impacted by year-over-year increases in trade and barter marketing expenses, as I mentioned previously, as well as increases to certain programming fees and bad debt expenses, which were partially offset by the previously announced ongoing cost reduction program. To take a step back, as you can see from the results in this quarter, we've continued to build out a successful and high-growth digital business, which will generate over a billion dollars of revenue for the full year 2023 with a 33% adjusted EBITDA margin. What might not be as apparent is that, as part of our relentless focus on efficiencies, we've been reallocating capital from our lower growth multi-platform group to feed our higher growth digital audio group.

Speaker Change: [noise] aren't efficiencies [noise], we've been reallocating capital from a lower growth Multiplatform group [noise] defeat our higher growth digital audio group in fact since 2019, we have actually reduced our multiplatform group expenses by approximately 7%, which has in part helped us to fund the growth of our digital audio group.

Speaker Change: [noise], whose adjusted EBITDA grew by approximately 270% over that same time period, and there's digital has a higher growth rate that are multi platform group. The adjusted EBITDA of the digital audio group in Q4 2000 twenty-three is now approximately 80% as long.

Speaker Change: George as the multi platform groups adjusted EBITDA up from 11% in Q4 2019, turning to the audio and media services group [noise] revenues were $68 million down approximately 28.6% year over year, [noise] and adjusted EBITDA was $21 million down from 45.

Rich Bressler: In fact, since 2019, we have actually reduced our multi-platform group expenses by approximately 7%, which has, in part, helped us to fund the growth of our digital audio group, whose adjusted EBITDA grew by approximately 270% over that same period. And as digital has a higher growth rate than our multi-platform group, the adjusted IVID-DA of the digital audio group in Q4 2023 is now approximately 80 percent as large as the multi-platform group's adjusted IVID-DA, up from 11 percent in Q4 2019. Turning to the Audio and Media Services Group, revenues were $68 million, down approximately 28.6% year-over-year, and adjusted EBITDA was $21 million, down from $45 million in the prior year. Excluding the impact of political events in the prior year quarter, the Audio and Media Services Group's revenues were down 5.2%.

$5 million in the prior year, excluding the impact of political in the prior year quarter. The audio of media services groups revenues were down 5.2% and as a reminder, the audio media services Group also includes television revenues, which has greater year your peaks and troughs due to the impact of political.

Speaker Change: Advertising.

Speaker Change: A corner and we had approximately $4.9 billion of net debt outstanding and our total liquidity was 772 million, which includes a cash balance of $346 million [noise].

Speaker Change: Corter ending net debt to justice EBIT a ratio was seven times in 2024, we expect to make progress towards a long term goal of a net debt to adjusted EBITDA a ratio of approximately four times.

Speaker Change: As highlighted past calls we have no material maintenance covenant and no debt maturities until May 2026, [noise], we continue to be opportunistic and responding to market development and opportunities surrounding our capital structure in queue for we repurchased $15 million of the principal balance of are eight and three.

Rich Bressler: And as a reminder, the Audio and Media Services Group also includes television revenues, which have greater year-to-year peaks and troughs due to the impact of political avenues. At quarter end, we had approximately $4.9 billion of net debt outstanding, and our total liquidity was $772 million, which included a cash balance of $346 million. Our quarter-ending net debt to adjusted EBITDA ratio was $7.

Speaker Change: Be a senior unsecured note at a meaningful discounted are par value [noise] generating both earnings and free cash flow accretion. This brings are totally purchase of these notes to $534 million [noise], reducing the outstanding amount from 1.45 billion to approximately 916 million and results.

Rich Bressler: In 2024, we expect to make progress towards our long-term goal of a net debt-to-adjusted EBITDA ratio of approximately 4%. As highlighted on past calls, we have no material maintenance covenant and no debt maturities until May 2026. We continue to be opportunistic in responding to market developments and opportunities surrounding our capital. In Q4, we repurchased $15 million of the principal balance of our 8 and 3A senior unsecured notes at a meaningful discount to their par value, generating both earnings and free cash flow accretion. This brings our total repurchase of these notes to $534 million, reducing the outstanding amount from $1.45 billion to approximately $916 million, and results in aggregate annualized interest savings of approximately $45 million. In the fourth quarter, we generated $142 million of free cash.

Speaker Change: [noise] aggregate annualized interest savings of approximately $45 million in the fourth quarter, we generate $142 million a free cash flow turning now to our outlook for Q1, the first quarter got off to a slow start with January revenue down 8% year over year. However, we are seeing.

Speaker Change: Momentum in February March, which are both pacing up low single digits and we are now currently pacing slightly better than down 1% for the quarter and we expect our Q1 2024 revenues to be flat to down 2% year over year, and we are seeing that momentum continue.

Speaker Change: Viewing into Q2, which is pacing up low single digits as well.

Speaker Change: So we see this trajectory as further validation that January wasn't an anomaly and a positive sign for us as we progress throughout the year.

Speaker Change: We expected generate first quarter adjusted EBITDA in the range of 100 to 110 million compared to $93 million in the prior year quarter.

Speaker Change: Turning to the individuals segments B Q1, we expect the digital audio group revenues to be up mid single digits. We expect a multi platform boots revenue to be down mid single digits and we expect the audio immediate services group revenue to grab approximately 10%.

Rich Bressler: We're turning now to our outlook for Q1. The first quarter got off to a slow start with January revenue down 8% year-over-year. However, we are seeing momentum in February and March, which are both pacing up low single digits. And we are now currently pacing slightly better than down 1% for the quarter, and we expect our Q1 2024 revenues to be flat to down 2% year-over-year. And we are seeing that momentum continuing into Q2, which is pacing up low single digits as well. So we see this trajectory as further validation that January was an anomaly and a positive sign for us as we progress throughout the year. We expect to generate first quarter adjusted EBITDA in the range of $100 to $110 million compared to $93 million in the prior year quarter.

Speaker Change: In terms of free cash flow as a reminder, Q1 is always our lowest free cash flow quarter of the year and in Q1 2000 twenty-three we generated negative free cash flow before returning to positive free cash flow generation and all subsequent quarters.

Speaker Change: Turning to zombie items affecting our full year free cash flow, we expect our cash taxes to be approximately 10% of adjusted EBITDA in 2024.

Speaker Change: Estimate of full year 2024 capital expenditures is expected to be approximately $100 million cash restructuring expenses will be approximately $50 million. While not included in free cash flow calculation in February 2024, we received $101 million of cash proceeds.

Rich Bressler: Turning to the individual segments for Q1, we expect the digital audio group revenues to be up mid-single digit, we expect the multi-platform group's revenue to be down mid-single digit, and we expect the Audio and Media Services Group revenue to be up approximately 10%. In terms of free cash flow, as a reminder, Q1 is always our lowest free cash flow quarter of the year.

Speaker Change: [noise] from our equity stake in the cellar BMI.

Speaker Change: As Bob mentioned, we expect 2024 to be back in growth mode. As we continue to see signs of improvement throughout our business and the broader advertising market place and as a reminder, during the last presidential election, we generate $167 million a political revenue so in combination with.

Rich Bressler: And in Q1 2023, we generated negative free cash flow before returning to positive free cash flow generation in all subsequent quarters. Now, turning to some of the items affecting our full year free cash. We expect our cash taxes to be approximately 10% of adjusted EBITDA in 2021. Our estimate of full year 2024 capital expenditures is expected to be approximately $100 million, and cash restructuring expenses will be approximately $50 million. While not included in the free cash flow calculation, in February 2024, we received $101 million of cash proceeds from our equity stake in the sale of BMO.

Speaker Change: Ongoing efficiency efforts and given the power of technology now at our disposal, we expect to see a significant year over year improvement in our adjusted EBITDA performance and finally on behalf of our entire management team, Bob and I want to thank our team members, who work to deliver for their communities and.

Speaker Change: For Iheart every single day.

Speaker Change: Now will turn it over to the operator to take your questions. Thank you.

Speaker Change: Thank you if you would like to ask a question at this time press star one on your telephone keypad.

Speaker Change: Yeah first question is from the line of Jessica right, let B L. A securities.

Jessica: Hi, Good morning, Thank you and a couple of questions I pod casting.

Rich Bressler: As Bob mentioned, we expect 2024 to be back in growth mode as we continue to see signs of improvement throughout our business and the broader advertising marketplace. And as a reminder, during the last presidential election, we generated $167 million in political revenue. So, in combination with our ongoing efficiency efforts and given the power of technology now at our disposal, we expect to see a significant year-over-year improvement in our adjusted IVET-DA performance. And finally, on behalf of our entire management team, Bob and I want to thank our team members who work to deliver for their communities and for iHeart every single day. Now we'll turn it over to the operator to take your questions. Thank you. If you would like to ask a question at this time, press star 1 on your telephone keypad.

Jessica: You talk about like just the overall industry, what you're seeing in terms of <unk>.

Jessica: Some of the implications of change isn't competitor strategies and what do you think it's Sarah is now and then I have another question.

Speaker Change: Well thanks Jessica.

Look I think broadcasting by almost any measurement and there are a number of them out there and show it to be the biggest growth vector in the media business today, and we don't see any find that it's subsiding as we.

Speaker Change: <unk> said very early on we think it's a really clear adjacent business to radio someone argue it sort of radio on demand radio like programming that's available on demand and I think the marketplace has gotten a lot more rational I think people who had ideas about subscriptions about pay.

Speaker Change: A about exclusivity about paying tons of money for people in hopes that one day it would be profitable have all sort of fallen by the wayside and we've gotten back to very clear basics, which is obviously helpful to watch because it turns into a rational market place in terms of dealing with both talent and dealing with advertisers.

Jessica Jean Reif Ehrlich Cohen: Your first question is from Jessica Reese with BOA Security. Hi, good morning, thank you. A couple of questions about podcasting. You talk about just the overall industry, what you're seeing in terms of growth, some of the implications of changes in competitors' strategies, and what do you think your share is now? And then I have another question. Well, thanks, Jessica.

Speaker Change: The podcast.

Speaker Change: Sector continues to have superior Cpm's premium cpm's it by most measurement garners.

Speaker Change: Garners the most attention the the podcasts coaster trusted it sort of every metric you click off Jessica is sort of this wonderful superior metric.

Bob Pittman: Look, I think podcasting, by almost any measurement, and there are a number of them out there, shows it to be the biggest growth vector in the media business today, and we don't see any sign that it's subsiding. You know, as we've said very early on, we think it's a really clear adjacent business to radio. Some would argue it's sort of radio on demand, radio-like programming that's available on demand

Speaker Change: And so I think that's sort of the way we look at the marketplace in terms of share it's hard to understand I think it's hard to get the true denominator on it but you know I think people have said, we're sort of a 20% share in the marketplace. That's me you know if you take some of the numbers that sort of where it works out obviously in terms of.

Bob Pittman: And I think the marketplace has gotten a lot more rational. I think people who had ideas about subscriptions, about pay, about exclusivity, about paying tons of money for people in hopes that one day it would be profitable have all sort of fallen by the wayside, and we've gotten back to very clear basics, which is obviously helpful to us because it creates a rational marketplace in terms of dealing with both talent and dealing with advertisers. The podcast sector continues to have superior CPMs, premium CPMs, it garners the most attention, the podcast hosts are trusted, it's sort of every metric you click off, Jessica, is sort of this wonderful, you know, superior metric, and so I think that's sort of the way we look at the marketplace in terms of share.

Speaker Change: Profitability.

Speaker Change: A lot more than that.

Speaker Change: Hey, Jess just.

Speaker Change: A couple of quick things and then go to your next question by the way in the Investor that you know what's interesting not just about us, but you know we haven't slide in there they're unemployed people to that and chosen to scale of pod casting that nature more than two times in terms of time spent its job over here.

Speaker Change: <unk> on the edge Dreaming of yesterday's music services show in charge of it's a brat.

Speaker Change: L out there not just don't show the other thing I would say is thinking about pod casting all the people that can't predict advertising revenue talk about the pool of pod casting dollars.

Speaker Change: Most estimate there was about I don't know a <unk> for you $100 last year people were talking about it go into $456 billion, where do you go three years four years out five years out the boss point. So I don't think there's any debate about the tan growing in terms of pod casting and the other in which I think tells you.

Bob Pittman: It's hard to understand, I think it's hard to get the true denominator on it, but I think people have said we're sort of a 20% share in the marketplace. That's, you know, if you take some of the numbers, that's sort of where it works out. Obviously, in terms of profitability, you know, we're a lot more than that. Yeah, hey Jess, I just want to follow up on a couple quick things and then go to your next question.

Speaker Change: That we really are even with all our success and financial success that were in the early days and what are the things I always point to what's interesting is that really big advertisers just started to hum to pod casting a couple of years ago and the reason why that's so important is because big advertising.

Rich Bressler: By the way, in the investor deck, you know, what's interesting, not just about us, but we have a slide in there that I point people to that shows the scale of podcasting that makes up more than two times in terms of time spent, it's double the amount of ad streaming, the ad streaming music services, so in terms of its breadth out there, not just ourselves. The other thing I would say is think about podcasting. All the people that kind of predict advertising revenue talk about the pool of podcasting dollars. Most estimate that it was about, I don't know, a billion, eight, two billion for US ad dollars last year. People are talking about it going to four, five, six billion dollars, whether you go three years out, four years out, five years out, to Bob's point.

Speaker Change: The state the obvious but I think it's important to reiterate bring big dollars and just finally I'd say you know it does start with an audience factors the size of a level of engagement and when you look at pod casting and just you've been doing this a long time like we have it's the most engage medium any.

Speaker Change: Of us you've ever seen and I think I remember something like 85% of every podcasts that started as listen to all the way through so you make that connection. It is no surprise about the growth pod casting revenue because of the effectiveness with advertisers you know I would add one more thing Jessica just on the future that you know as a reminder, we'd been built.

Rich Bressler: So I don't think there's any debate about the TAM growing in terms of podcasting and other forms of media, which I think tells you that we really are, even with all of our success and financial success, in the early days. And one of the things I always point to as interesting is that really big advertisers just started to come to podcasting a couple of years ago. And the reason why that's so important is because big advertisers, to state the obvious, I think it's important to reiterate, bring big dollars. And just finally, I'd say it does start with an audience, not just the size, but the level of engagement. And when you look at podcasting, Jess, you've been doing this a long time, like we have, it's the most engaged medium any of us have ever seen. I think the number is something like 85% of every podcast that starts is listened to all the way through.

Speaker Change: Pulling out the AD tech platform with the data and analytics, which will allow us and it's obviously a one of the advantages of having such a strong hand in pod casting that if someone finds her audience. They really liked it's really engaged is very important to them will be able to find it that audience and broadcast radio at greater scale.

Speaker Change: And add it to the podcast Ah reach of whatever they're doing so for us. It promises to you know extend the power pod casting directly into our broadcast radio as well.

Speaker Change: Right and then thank you for that all of that and then the follow up it kept on advertising I mean, you guys.

Speaker Change: <unk> relatively optimistic as being a progressive so.

Speaker Change: What can you give us it might be a little deeper diver on what you're seeing in the marketplace in terms of.

Speaker Change: But his strength or weakness in certain categories and then one last follow up Uhm you reiterated you call a four times leverage but you know what do you think the time frame that he got there.

Bob Pittman: So if you make that connection, it is no surprise about the growth in podcasting revenue because of the effectiveness with advertisers. You know, I would add one more thing, Jessica, just on the future: as a reminder, we've been building out the ad tech platform with data and analytics, which will allow us, and this is obviously one of the advantages of having such a strong hand in podcasting, that if someone finds an audience they really like, that's really engaged, that's very important to them, we'll be able to find that audience on broadcast So for us, it promises to, you know, extend the power of podcasting directly into our broadcast radio as well. Great And then I thank you for that, for everything. And then the follow up is just advertising. I mean, you guys and Bob Pittman.

Speaker Change: Well, if I can jump in on the advertising question. Jessica We think advertising is strengthening we called it last year. We thought this year would be the recovery year, we're seeing that January with a little slow, but it's picked up in February and March and seeing it into in the second quarter. So we're optimistic that.

Speaker Change: We're seeing that and that will be a beneficiary of it yeah and in terms of issues reinsurance and leverage.

Speaker Change: Ratio, we haven't given a specific time frame, we do expect.

Speaker Change: To make significant progress this year towards getting two four times and.

Speaker Change: Which is also help then we highlighted this is it related to that other show up our equity interest M. B M. I received approximately 100 million $101 million.

Speaker Change: To that so you know when you look at our asset base of our performance.

Speaker Change: This company continues to be a great generation generator excuse me a free cash flow and we will continue to focus on the generation free cash flow.

Rich Bressler: Well, if I can jump in on the advertising question, Jessica. We think advertising is strengthening. We predicted it last year.

Speaker Change: Thank you.

Speaker Change: Thank you just.

Speaker Change: Your next question is from the line <unk>, what's the last <unk>.

Steven Lee Cahall: We thought this year would be the recovery year, and we're seeing that. January was a little slow, but things picked up in February and March and we're seeing it into the second quarter, so we're optimistic that we're seeing that and that we'll be a beneficiary of it. In terms of the leverage ratio, we haven't given a specific timeframe. We do expect to make significant progress this year towards getting to four times, which has also helped, and we highlighted this in the release about the sale of our equity interest in BMI. We received approximately $100 million, $101 million for that, so when you look at our asset base and our performance, this company continues to be a great generator of free cash flow and will continue to focus on the generation of free cash flow. Thank you. Your next question is from the line of Steven Cahall with Wells Fargo. Thank you.

Speaker Change: Thank you. So first just on the advertising inflection firm down eight in January 10th pacing up low single digits February March I'm wondering if there is particular areas that you can point to that's driving that whether it's national improving whether it's particularly particular categories coming back to the mark.

Speaker Change: Get that you hadn't seen and and just to clarify I Wanna make sure that those comments are all kind of excluding any impact from political so their underlying market. If that's correct and I have a couple of follow ups.

Speaker Change: Sure look I I think we're seeing across the board seeing a strengthening of advertising.

Speaker Change: Obviously, some groups of advertisers will be stronger than others, but as a reminder, we have no category that's more than five per cent of our AD revenue. So we're pretty diverse in terms of our exposure to categories and I think you know again for whatever reason and I think listening to others you heard it in the market.

Bob Pittman: So first, just on the advertising inflection from down eight in January to pacing up low single digits in February and March, wondering if there's particular areas that you can point to that's driving that, whether it's national improving, whether it's particular categories coming back to the market that you hadn't seen. And just to clarify, I want to make sure that those comments are all kind of excluding any impact from politics, so their underlying market, if that's correct. And I have a couple of questions. Sure, look, I think we're seeing across the board a strengthening of advertising. You know, obviously, some groups of advertisers will be stronger than others, but as a reminder, we have no category that's more than 5% of our ad revenue. So we're pretty diverse in terms of our exposure to categories. And I think, you know, again, for whatever reason, and I think listening to others, you heard it in the marketplace, that January just started off a little slow. You know, there can be a lot of external variables that do stuff. It's the slowest month of the year.

Speaker Change: <unk> the January to start off a little slow and you know it can be a lot of external variables do stuff. It's the slowest month of the year, but as the ear picked up a mirror on February people are here and I think in our discussions with advertisers I think everybody's looking for growth out of their business and the growth is driven by advertising.

Speaker Change: H David Triche, then the only other thing I might add is.

Speaker Change: Yeah, we don't barbiturate charge of categories. Ulcers reminder, we have no individual advertiser, that's more than 2% overall and we also comment that <unk>.

Speaker Change: You know we expect this growth.

Speaker Change: Continue into cue to go forward on political just as a reminder, there's there's some political dollars in queue walk, but they are very smaller immaterial to the overall company I think Bob stated in his remarks that we expect us to be robust political here, but that's where are we going to manifest itself in Q3.

Rich Bressler: But as the year picked up, you know, in February, people are here. And I think in our discussions with advertisers, I think everybody's looking for growth out of their business, and growth is driven by advertisers. Yeah, hey Steve, it's Rich.

Speaker Change: Q for as you would expect.

Speaker Change: Great and then just on digital X podcast I think it was flat and twenty-three was down a bit in Q4 could you just help us understand what the trends are there is there continued pricing pressure. There are you seeing any engagement issues on your AD supported music platforms, because we've seen a lot of growth and things.

Rich Bressler: The only other thing I might add is, you know, we don't, Bob mentioned that in terms of categories, also as a reminder, we have no individual advertiser that's more than 2% overall. And we also commented, I think we see, expect this growth even to continue into Q2. As we look to go forward on politics, just as a reminder, there are some political dollars in Q1, but they are very small. They're immaterial to the overall company. I think Bob stated in his remarks that we expect this to be a robust political year, but that's really going to manifest itself in Q3, Q4, as you would expect. Great.

Speaker Change: <unk> <unk>. So we just loved to understand the trends in digital X podcast.

Speaker Change: One point I would make is that last year, we talk some about rebalancing the mix of add products going for profitability and I think you've seen that come through in the margin of our digital business in this quarter, yeah and the other.

Speaker Change: Thing I would say look we had and just as a reminder, and digital arts pod casting, which obviously, we think continues to be a great growth engine for us we had a tough cop last year, because we're still dealing with a significant amount of COVID-19 money.

Steven Lee Cahall: And then just on Digital X Podcast, I think it was flat in 23. It was down a bit in Q4. Could you just help us understand what the trends are there? Is there continued pricing pressure there? Are you seeing any engagement issues on your ad-supported music platforms?

Speaker Change: Last year when you look at that we looked at comparison. So you cut it again I'm not a big person about okay. You take this out and you can't get out look over here, what it could grow but but I do think it's kind of work, it's kind of work call and that just by the way. What we are here to help myself in terms of you we will look at our occupation.

Rich Bressler: Because we've seen a lot of growth in things like TikTok, so we'd just love to understand the trends in Digital X. Well, one point I would make is that last year, we talked some about rebalancing the mix of ad products going for profitability, and I think you've seen that come through in the margin of our digital business this quarter. Yeah, and the other thing I would say, look, we had, just as a reminder, in DigitalX Podcasting, which obviously we think continues to be a great growth engine for us, we had a tough comp last So we kind of, again, I'm not a big person about, okay, you take this out, you take that out, look over here, what could grow.

You mentioned talk just as a reminder.

Speaker Change: Yeah I'm in charge of our reach a level of engagement, we reach over 90%, which is <unk> <unk> <unk> <unk> <unk> 30 per cent overall church and reach of the country. So I think people always have to remember in terms of our reach return to reach American in terms of consumers and our level of engagement.

Speaker Change: The unique asset we have is a company continues to read that just to bring a full circle Bob comment did for a second one in our technology, but just as a reminder, I think it was in response to the podcast in question with Jessica but you know we've got the ability even on a broadcast.

<unk> to do everything any of the big <unk> digital players can do what we do at one two cohort one to report many which is obviously the way the world is going away from one to one.

Steven Lee Cahall: But I do think it's kind of worth calling that out. And just by the way, a little bit. I can't help myself. In terms of our asset base, and you mentioned TikTok, just as a reminder, in terms of our reach and level of engagement, we reach over 90%, which has been the resilience, and TikTok is somewhere kind of in the mid-30% overall in terms of reach across the country. So I think people always have to remember, in terms of our reach, in terms of reach in America, in terms of consumers, and our level of engagement, the unique asset we have as a company continues to be that. And just to bring it full circle, Bob commented for a second on our technology, but just as a reminder, I think it was a response to the podcasting question with Jessica, but we've got the ability, even on our broadcast inventory, to do everything any of the big digital players can do, but we do want to cohort one, two, and four many, which is obviously the way. Thanks. And then, just lastly, you have a lot of maturities in 26, and then a couple more walls in 27 and 28.

Speaker Change: Thanks, and then just lastly, do you have a lot of maturity and 26, and then a couple more walls and 27 and 28, what's the timing when you start to engage in those discussions you know I know this is a <unk> you know based on consensus Deleveraged with free cash flow, you'll generate a lot more EBITDA, but you.

Speaker Change: So I'll probably be entering those discussions at a higher level of leverage than your target. So how do we just kind of think about risk and opportunity there.

Speaker Change: Well I don't think this will surprise you I'm not going to comment on anything on anything specific but you know safe to say in your <unk>. Your first and foremost can change your extra Q.

Speaker Change: Generation of significant free cash flow and you know we are focused on all maturities and we're evaluating all of them and we continue to focus on a refinancing at a balance sheet as as you would expect but you know our objectors haven't changed at all and our focus has not changed.

Rich Bressler: What's the timing when you start to engage in those discussions? You know, I know this is a growth year, you'll, you know, based on consensus, deleverage with pre-cash flow, you'll generate a lot more EBITDA, but you'll still probably be entering those discussions at a higher level of leverage than your target. So how do we just kind of think about risk and opportunity there? Well, Steve, I don't think this will surprise you.

Speaker Change: Thank you.

Speaker Change: Your next question is from the line of Dance Bang Bang with Morgan Stanley.

Speaker Change: Thank you guys sat good morning, Rich How're you thinking about the expense trends in 24 any color on kind of expense grow with their higher thing that margins I assume you should get some nice margin expansion and given the political year and then I just wanted to clarify on the restructuring you mentioned 50 million is that.

Rich Bressler: I'm not going to comment on anything specific, but it's safe to say, and you reiterated this, first and foremost, continuing to execute the generation of significant free cash flow. And we are focused on our maturities, and we're evaluating all of them. And we continue to focus on our refinancing of the balance sheet, as you would expect. But our objectives haven't changed at all, and our focus has not changed.

Speaker Change: Cash tied to last year's restructuring activity are there additional cost actions that you're announced today that are taking place in 2024.

Speaker Change: And then I just thought I would feel so.

Rich: Thanks, Ben So let me or maybe not exactly a note or we can take your last one person or are we just.

Rich: Getting.

Rich: Continuing to want to provide transparency just give me an estimate of what we think of as you're looking good as you look into 24, and we're not announcing any new cash a new cost excuse me programs today, but I think if you go back over the last couple of years out you know.

Rich Bressler: Thank you. Your next question is from the line of Ben Swinburne with Morgan Stanley. Thank you, guys, good morning.

Rich: The regular we apply both in terms of you know of course programs efficiencies I think in the beginning a barge opening remarks are you a talked about that talked about taking advantage of a I as we go forward out of technology of your quite frankly, I think it's called a topic called <unk>.

Benjamin Daniel Swinburne: Rich, how are you thinking about the expense trends in 2024? Any call around what kind of expense growth or how you're thinking about margins? I assume you should get some nice margin expansion given the political year. And then I just wanted to clarify on the restructuring. You mentioned 50 million. Is that cash tied to last year's restructuring activity, or are there additional cost actions that you're announcing today that are taking place in 2024? And then I just had to pause.

Rich: <unk> today, but if you look at our track history over the last you know 234 years. Yeah. We've continued to look at our company and rigorously look at efficiencies and today, you know I I really would focus people on in terms of all remarks that if you look at what we did with the multi platform group.

Rich Bressler: Thanks, Ben. So, maybe not exactly in that order, let me take your last one first. No, we just, you know, again, in continuing to want to provide, you know, transparency, just giving an estimate of what we think, as you look at the good, as you look into 24. And we're not announcing any new cash, new cost, excuse me, programs today. But I think if you go back over the last couple of years, you know, the rigor we apply, both in terms of, you know, our cost programs, efficiencies, I think, in the beginning of Bob's opening remarks, he talked about that, talked about taking advantage of AI, you know, as we go forward, AI technology, but quite frankly, I think it's called AI, it's obviously called AI today.

Rich: Since 2019, we've actually reduce the role will spend space by 7% and we used to and what we've dealt with that is two things. We've invested in terms of our higher growth businesses on the digital side, including podcast here I think the number we gave us if it is up to 170 per.

Speaker Change: <unk> you know.

Speaker Change: <unk> I'm, sorry, 270 per cent I apologize over that period of time, and I'll, just remind us whichever and we've generate a lot of free cash flow during that period of time and just to be clear. We believe multi platform is a growth business. It's not yeah. We don't believe it is high road as the digital business, but we expect we <unk>.

Speaker Change: Just before multiplatform to get back to Ah low single digit growth and again to rearrange taped you, obviously too great free cash flow business and if you look into 2024 I would just remind us your political is our highest margin of it at the a business in in a company that has a lot.

Rich Bressler: But if you look at our track record over the last, you know, two, three, four years, you know, we've continued to look at our company and rigorously look at efficiencies. And today, you know, I really would focus people on in terms of our remarks that if you look at what we did with the multi platform group, since 2019, we've actually reduced our overall expense base by 7%. And what we've done with that is two things. We've invested in terms of our higher growth businesses on the digital side, including podcasting. I think the number we gave is, if it is up 170%, you know, I'm sorry, 270%, I apologize, over that period of time. And I'll just remind you that we said, and we generated a lot of free cash flow during that period of time. And just to be clear, we believe multi-platform is a growth business. It's not, you know, we don't believe it's as high growth as a digital business, but we expect, we've said this before, multi-platform to get back to low single-digit growth.

Speaker Change: Hi margin, if if you're a business and it's one of the great advertising categories, where we get the cash upfront and in terms of political.

Speaker Change: Got it okay.

Speaker Change: That's very helpful. And then I just was curious you guys gave us some helpful cash tax guidance as well for the year, there's a lot of stuff happening in and sort of you know right in in Congress, or maybe not happening, but potentially happening around tax changes.

Speaker Change: I'm wondering if you have any advice for us beyond 24 on taking about cash tax rates for iheart.

Speaker Change: No I mean look we I I think the advice you. We've said is about 10% of the D. I a cash taxes.

Speaker Change: We're all aware you know of the various efforts going on but that assumes no changes that we've all been reading about any of the proposed changes potential changes out there, which at least have the potential changes can impact us very favorably, but we have not sure at this point got it okay. Thanks, so much.

Speaker Change: Your next question is from the line <unk> Barrington research.

Rich Bressler: Good morning, it was encouraging to see your <unk>.

Benjamin Daniel Swinburne: And again, to reiterate and state the obvious, it's a great free cash flow business. And if you look into 2024, I would just remind us, you know, political is our highest-margin EBITDA business in a company that has a lot of high-margin EBITDA businesses. And it's one of the great advertising categories where we get the cash up front in terms of, Okay. That's very helpful.

Rich Bressler: Growth in the digital audio group the continuing theory year is this are you.

Rich Bressler: Thinking this is not just the one ear issue, but that that's steady trend that you feel will go on for several years or yeah.

Rich Bressler: And you also get attention to the improvement in the margin for that sector. I'm wondering if if you have any thoughts on what date upset might be an American ultimately and that's accurate driving some of the potential.

Rich Bressler: And then I just was curious, you guys give some helpful cash tax guidance as well for the year. There's a lot of stuff happening in sort of, you know, right in Congress, or maybe not happening, but potentially happening around tax changes. I'm just wondering if you have any advice for us beyond 24 on thinking about cash tax rates for iHeart.

Rich Bressler: Potential.

Speaker Change: So let me get the first part of that in Olive rich take the other is we see the digital Tam continuing to expand and we are able to participate in it through our digital audio group and we also think that we are probably expanding our growth within that as well and obviously, adding the.

Benjamin Daniel Swinburne: No, I mean, look, we, I think the advice we've said is about 10% of the D.A. in cash taxes. We're all aware, you know, of the various efforts going on, but that assumes no changes that we've all been reading about any of the proposed changes, potential changes out there, which at least some of the potential changes could impact us very favorably, but we have not assumed. Got it. Okay. Thanks so much.

Speaker Change: Technology to our broadcast radio inventory our strategy is to get that into the digital town too. So that eventually the broadcast radio inventory it benefits from the growth of digital overall.

Yeah, and I'm sorry, your second question second part.

Speaker Change: Just the drivers of the marching up for a month and what the upside Oh I'm sorry.

James Charles Goss: Your next question is from the line of Jim Gross with Barrington Research. Good morning. It was encouraging to see your confidence in the growth in the digital audio group continuing through the year. Are you thinking this is not just a one-year issue but that this is a steady trend that you feel will go on for several years or beyond? And you also drew attention to the improvement in the margin for that sector. I'm wondering if you have any thoughts on what the upside might be in the margin ultimately, and is AI driving some of that gain potential?

Speaker Change: Five and the margin in mind.

Speaker Change: Well you know what we've always apologize fresh get repeated we've always talked about to think about the digital Tam large and when your model that is kind of a 35% into D. A business and I think as you look at our numbers and the data.

Speaker Change: We continue to make great progress towards that so and back on your cost and Nai, yeah, a little bit like I think I commented on the previous questions. And then question you know cost and efficiency in that constant rigor is something we continue to do.

Bob Pittman: Let me hit the first part of that, and I'll let Rich take the second, is that we see the digital TAM continuing to expand, and we are able to participate in it through our digital audio group, and we also think that we are probably expanding our growth within that as well. And obviously, adding the technology to our broadcast radio inventory; our strategy is to get that into the digital TAM too so that, eventually, the broadcast radio inventory benefits from the growth of digital overall. Yeah, and I'm sorry, your second question, second part?

Speaker Change: And and look to technology to help help take advantage of it and again I think we with for the first time really just tried to put in context and demonstrate and put some real data round. It will read mentioned about the expense reduction at the mobile platform group, which again doesn't take away.

Speaker Change: Our view that it will return to a growth engine, but you know in terms of the rigorous application of capital that we've been advocating it more capital to our highest growth areas. So other than saying I I expect us to get to that 35% a margin on an annual basis, hoping to do digital or you'll go but we can.

Rich Bressler: Just the drivers of the margin improvement and what the upside is, do you have some thought about the margin in mind? Well, you know what, we've always, I apologize for asking you to repeat it. Look, we've always talked about thinking about the digital TAM margin when you model it out as kind of a 35% in the DA business. And I think, as you look at our numbers and the data, we continue to make great progress towards that. So, and back on your cost and AI, you know, a little bit like I commented on the previous questions and, you know, Ben's question: cost and efficiency and that constant rigor are something we continue to do and look to technology to help take advantage of it. And again, I think we, for the first time, really just tried to put it in context and demonstrate and put some real data around it. When we mentioned the expense reduction at the multi-platform group, which again doesn't take away from our view that it will return to a growth engine.

Speaker Change: Common any further.

Speaker Change: Okay, Uhm, maybe lastly, with.

Speaker Change: Your <unk> car broadcast one business.

Speaker Change: Frankly, becoming on the fifth of part of element for the garage.

Speaker Change: The digital <unk>, They would fame, although we did talk about.

Speaker Change: The social media and the website. So yeah, there's some part of elements within broadcast.

Speaker Change: I Wonder if you could talk about the role you envision broadcasts business.

Speaker Change: Sure look at the at the heart of it we have this incredible and unique reach we reach 90 per cent of Americans with R. R. A M. F M broadcast business, our assets, that's higher than Facebook and Google, It's double more than doubled the broadcast network.

Speaker Change: T V networks and no one in the digital audio space comes close so that is a real advantage. We have we reach consumers and if you go into the fundamentals of marketing the basics marketing is the more people I can tell my message to the more business I'll have because a certain percentage of everyone I tell will turn into a customer.

Rich Bressler: But, you know, in terms of the rigorous allocation of capital that we've been allocating it, more capital to our highest growth areas. So other than saying, I expect us to get to that 35% DA margin on an annual basis, but for the digital Oreo group, I wouldn't comment. Okay, and maybe lastly, with.

Speaker Change: So we know that is valuable the problem with broadcast radio has not been the consumer rage has not been the consumer it has been how we're selling our advertising and we have are developing the technology platform. So that the advertisers who are looking for that inventory to look like digital inventory.

James Charles Goss: Your core broadcasting business is essentially becoming almost a supportive element to the growth of the digital businesses, it would seem, although you did talk about social media and websites and the other supportive elements within broadcasting. I wonder if you could talk about the role you envision for the broadcast business. Sure.

Speaker Change: We'll have the platform that allows that to happen. We think that's the the the major benefit to us and and broadcast radio So broadcast radio doing extraordinarily well the consumer and has a huge upside opportunity and are mine for advertising sales because of one that reach and and two.

Bob Pittman: Look, at the heart of it, we have this incredible and unique reach. We reach 90% of Americans with our AMFM broadcast business, and our assets. That's higher than Facebook and Google.

Bob Pittman: It's double, more than double the broadcast network, TV networks, and no one in the digital audio space comes close. So that is a real advantage we have. We reach consumers. And if you go to the fundamentals of marketing, the basics of marketing are, the more people I can tell my message to, the more business I'll have, because a certain percentage of everyone I tell will turn into a customer. So we know that it's valuable.

Speaker Change: Our ability to serve that reaches rich talked earlier being able to provide that same kind of reached to specific cohorts not just nielsen audiences.

Speaker Change: Okay. Thanks for that I appreciate it.

Speaker Change: Your next question is from the line is Steven Laschet.

Bob Pittman: The problem with broadcast radio has not been the reach of the consumer, has not been the consumer. It has been how we sell our advertising. And we are developing the technology platform so that the advertisers who are looking for that inventory to look like digital inventory will have the platform that allows that to happen.

Stephen Neild Laszczyk: Goldman Sachs.

Stephen Neild Laszczyk: A great. Thank you maybe one on political and then one on broadcasting I guess first for Bob [noise] could you talk a little bit more about what you're seeing in terms of the adoption of political advertising on pod casting how big of an opportunity do you think it is a Sharon is this something you think the the campaigns are looking at us as incremental or or.

Bob Pittman: We think that's the major benefit to us in broadcast radio. So broadcast radio is doing extraordinarily well with the consumer and has a huge upside opportunity, in our mind for advertising sales because of, one, that reach, and two, our ability to serve that reach, as Rich talked earlier, being able to provide that same kind of reach to specific cohorts, not just Nielsen audiences. Thanks for that. Your next question is from the line of Stephen Laszczyk with Goldman Sachs. Hey, great.

Stephen Neild Laszczyk: Or a mix shift within our budget for for audio as a hall and then I also think he called out the opportunity for pod casting and Non-english markets. Just curious if you can't spend it all the time talking about the tach stack and the pieces that you're <unk> together on that side and where you're at in terms of the spiderman finals in those markets and when you think of it could start seeing that become a meaningful contributor.

Stephen Neild Laszczyk: Thank you. Maybe one on politics and then one on podcasting. I guess first, for Bob, just talk a little bit more about what you're seeing in terms of the adoption of political advertising on podcasting. How big of an opportunity do you think it is this year?

Stephen Neild Laszczyk: To revenue for broadcasting Thank you.

Well, let me start with political we think that of course, the biggest opportunity is probably broadcast radio for political S. T. V's reaches declined the the candidates have three and the people with issues have to reach the voters.

Bob Pittman: Is this something you think the campaigns are looking at as incremental or a makeshift within their budget for audio as a whole? And then I also think you called out the opportunity for podcasting in non-English markets. Just curious if you could spend a little time talking about the tech stack and the pieces that you've brought together on that side, and where you are in terms of the supply-demand funnels in those markets, and when you think you could start seeing that become a meaningful contributor to revenue for podcasting. Thank you.

Stephen Neild Laszczyk: And we have the ability to do that now the the political advertisers look very closely at which cohorts, which groups of people and now with the data and analytics. We have available we're able to serve that need. So we think that helps us substantial political this year. The other thing to remember is that only.

6% of voters say no one influences me.

Bob Pittman: Well, let me start with politics. We think that, of course, the biggest opportunity is probably broadcast radio for politics. As TV's reach has declined, the candidates have to reach, and the people with issues have to reach the voters, and we have the ability to do that. Now, political advertisers look very closely at which cohorts, which groups of people, and now, with the data and analytics we have available, we're able to serve that need. So we think that helps us substantially with politics this year. The other thing to remember is that only 6% of voters say no one influences them. That means 94% of people are influenced by somebody else, people in their household, their co-workers, people at the gym, religious leaders, etc. So, when you're looking at targeting, and I think they've all recognized this, if you target just the voter, you're not targeting and not reaching the people who are influencing them.

Stephen Neild Laszczyk: That means 94% of the people are influenced by somebody else people in the household their coworkers people at the gym religious leaders et cetera, So when you're looking at targeting Ah and I think they've all recognize this if you target just the voter you're not targeting.

Stephen Neild Laszczyk: And not reaching the people who are influencing them the great news about broadcast radio as if they buy a cohort on broadcast radio that's their target.

Stephen Neild Laszczyk: Everybody else basically here's the message as well so the people are influencing them, we'll be we'll have the message and hopefully can influence that voter. So we see that is very important you're right about pod casting clearly with the the impact up of political and pod casting there is opportunity there.

Stephen Neild Laszczyk: And that probably would be a big growth area for for broadcasting this year as well.

Stephen Neild Laszczyk: And what was it was something on <unk> you want to have that translation.

Stephen Neild Laszczyk: Oh, and the non English opportunity in Pakistan English on yeah, well, we we had been experimenting it's getting better and not quite to the level, we need it to be to say, let's roll it out, but it is making fast a pace ah gains in terms of the quality and we.

Bob Pittman: The great news about broadcast radio is that if they buy a cohort on broadcast radio that's their target, everybody else basically hears the message as well, so the people influencing them will have the message and, hopefully, can influence that voter. So we see that's very important. You're right about podcasting, clearly with the impact of politics and podcasting, there is opportunity there, and that probably would be a big growth area for podcasting this year as well. And what was something about podcasting, you want to talk about translation? The non-English opportunity in podcasting. The non-English, yeah.

Stephen Neild Laszczyk: Pay probably in this year that will get stuff of that quality, how quickly will be able to monetize it and get it out there I don't think we have any projections, yet, but we'll know a lot more by probably the next couple of of earnings calls by the way. It is just as a side note wanted the hours when people when you look at AI that real.

Stephen Neild Laszczyk: <unk> is efficient to use a <unk> to help on that translation.

Stephen Neild Laszczyk: Again as box I wouldn't change your numbers here for it it's not it's not significant but it is you know that that would benefit familiar it is an economic to do it manually cause there's so many episodes of so many pot guess, there's so many languages.

Bob Pittman: We have been experimenting. It's getting better, not quite to the level we need it to be to say, "Let's roll it out," but it's making fast gains in terms of quality, and we anticipate probably this year that we'll get stuff of that quality. How quickly we'll be able to monetize it and get it out there, I don't think we have any projections yet, but we'll know a lot more by probably the next couple of earnings calls.

Stephen Neild Laszczyk: Is really the solution.

Speaker Change: Got it thank you both.

Speaker Change: Well first of all on behalf of Bob myself in contact with the entire management team that everybody Diehard I'll really appreciate everybody, taking the time to listen to the IHOP story.

Speaker Change: And we're here for any follow up questions. Thank you again.

Rich Bressler: By the way, it is just as a side note, one of the areas when you look at AI, that it really is efficient to use AI to help with that translation. Again, as Bob said, I wouldn't change your numbers this year for it. It's not significant, but it is an area that would benefit from AI. It is uneconomic to do it manually because there are so many episodes, there are so many podcasts, there are so many languages, and AI is really the solution.

Speaker Change: This concludes today's call. Thank you for joining you may now disconnect your lines.

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Speaker Change: [music].

Rich Bressler: Got it. Thank you both. Well, first of all, on behalf of Bob, myself, and, quite frankly, the entire management team and everybody at iHeart, I really appreciate everybody taking the time to listen to the iHeart story, and we're here for any follow-up questions. Thank you again. This concludes today's call. Thank you for joining us. You may now disconnect your line.

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