Q2 2025 Spanish Broadcasting System Inc Earnings Call

Conference specialist by pressing the Starkey followed by zero.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Please note that this event is being recorded. I would now like to turn the conference over to Mr. Mike Smarjassi. Please go ahead.

Please note that this event is being recorded I would now like to turn the conference over to Mr. Mike Smart Jaffe. Please go ahead.

Thank you and good morning, everyone.

Mike Smarjassi: Thank you, and good morning, everyone. Before we begin, please recognize that certain statements on this conference call are not historical fact. They may be deemed, therefore, to be forward-looking statements under the Private Securities Litigation Reform Act of 1995. In particular, statements about future results expected to be obtained from the company's current strategic initiatives are forward-looking statements. Many important factors may cause the company's actual results to differ materially from those discussed in any such forward-looking statement. Spanish Broadcasting System Inc. undertakes no obligation to publicly update or revise its forward-looking statements. Please also note that we will be discussing non-GAAP financial measures.

Before we begin please recognize that certain statements on this conference call are not historical fact may be deemed therefore to be forward looking statements under the private Securities Litigation Reform Act of 1095 and.

In particular.

Statements about future results expected to be obtained from the Companys current strategic initiatives are forward looking statements.

Many important factors may cause the company's actual results to differ materially from those discussed in any such forward looking statement.

Finished broadcasting system undertakes no obligation to publicly update or revise its forward looking statements.

Please also note that we will be discussing non-GAAP financial measures.

The company believes that operating income before depreciation and amortization.

Mike Smarjassi: The company believes that operating income before depreciation and amortization, loss on the disposal of assets, impairment charges, and other operating expenses, excluding non-cash-based compensation or adjusted OIBDA, is useful in evaluating its performance because it reflects the measure of performance for the company's stations before considering costs and expenses related to capital structure and dispositions. This information is not intended to be considered in isolation or as a substitution for operating income, net income or loss, cash flows from operating activities, or any other measure used in determining the company's operating performance or liquidity that is calculated in accordance with U.S. GAAP. I will now turn the call over to Mr. Raúl Alarcón Jr.

Loss on the disposal of assets impairment charges and other operating expenses, excluding noncash based compensation or adjusted EBITDA is useful in evaluating its performance.

Because it reflects the measure of performance for the company stations.

Before considering costs and expenses related to capital structure and dispositions.

This information is not intended to be considered in isolation or as a substitution for operating income net income or loss cash flows from operating activities or any other measure used in determining the company's operating performance or liquidity that is calculated in accordance.

With U S GAAP.

I will now turn the call over to Mr. Raul I'll call them.

Thank you Mike Good morning, ladies and gentlemen, and thank you for joining me for this SBS second quarter 2025 earnings call since our last call. We continue to progress in executing our strategic roadmap, including investing in our growth initiatives and driving efficiencies across our operations doing.

Raúl Alarcón Jr.: Thank you, Mike. Good morning, ladies and gentlemen, and thank you for joining me for this SBS second quarter 2025 earnings call. Since our last call, we continue to progress in executing our strategic roadmap, including investing in our growth initiatives and driving efficiencies across our operations. During the second quarter, the advertising market across our industry continued to face challenges, resulting from a number of marketplace uncertainties that have caused advertisers to pull back on their ad spend. Despite these near-term headwinds, we remain committed to implementing our plan as we cycle through this environment, and we believe the long-term benefits of our revenue enhancement and diversification efforts, combined with our commitment to reducing costs, will lead to improved results for years to come. During the quarter, we further decreased operating expenses by $3 million, or 10% compared to last year's comparable period.

The second quarter, the advertising market across our industry continued to face challenges, resulting from a number of marketplace uncertainties that have caused advertisers to pull back on their AD spend. Despite these near term headwinds we remain committed to implementing our plan as we cycled through this environment and we believe the long term benefit.

<unk> of our revenue enhancement and diversification efforts.

With our commitment to reducing costs will lead to improved results for years to come.

During the quarter, we further decreased operating expenses by $3 million or 10% compared to last years comparable period. This was 20% ahead of our goal of decreasing another $2 5 million of expenses during the quarter. Moreover for the first six months of the year, we have reduced our operating.

Raúl Alarcón Jr.: This was 20% ahead of our goal of decreasing another $2.5 million of expenses during the quarter. Moreover, for the first six months of the year, we have reduced our operating expenses by $6.1 million, or 11%, representing another significant achievement. In fact, I can confidently predict a total savings of $13 million plus in 2025 versus 2024 expenses. More importantly, even as we eliminate these costs, we are delivering consistently strong audience shares across our premier station portfolio while leveraging our content across our digital multi-platform ecosystem. These efforts are supporting increasing brand visibility and engagement across multiple consumer touchpoints, expanding our revenue growth potential, and positioning SBS as a next-generation media leader for U.S. Hispanics. Digital is and will continue to be a strategic focal point of our company's future development.

<unk> expenses by $6 $1 million or 11% representing another significant achievement in.

In fact.

I can confidently predict a total savings of $13 million plus in 2025 versus 2020 for expenses.

More importantly, even as we eliminate these costs, we are delivering consistently strong audience shares across our premier station portfolio, while leveraging our content across our digital multi platform ecosystem.

These efforts are supporting increasing brand visibility and engagement across multiple consumer touch points, expanding our revenue growth potential and positioning SBS as a next generation media leader for U S. Hispanics digital is and will continue to be a strategic focal point of our company's future.

Yeah.

Our newest station in Houston, K R. O I S M. La <unk> continues to build on its dominant position among Hispanic listeners displacing heritage stations that have operated in the nation's fourth largest market for decades and is fully on its way to becoming the most successful startup.

Raúl Alarcón Jr.: Our newest station in Houston, KROI FM La Ley, continues to build on its dominant position among Hispanic listeners, displacing heritage stations that have operated in the nation's fourth-largest market for decades, and is fully on its way to becoming the most successful startup in the history of Spanish radio, as measured by ratings and revenue. Reflecting the strength of our digital strategy and the reach of our AIRE Radio Networks, KROI's morning show with Raul Brindis is now on its way to capturing a leading position among the nation's top 18 to 49 streaming stations, joining our WSKQ flagship in New York City, the most streamed station in the nation.

In the history of Spanish radio as measured by ratings and revenue.

Reflecting the strength of our digital strategy and the reach of our <unk> radio networks.

Otherwise morning show with road bring these is now on its way to capturing a leading position among the nations top 18 to 49 streaming stations, joining our Ws gatekeeper flagship in New York City. The most streamed station in the nation.

We are also building on the momentum of Mendy and Christie, our new morning show on W. S. U N S M in Tampa, which is delivering solid ratings growth as loyal listeners tuning to reconnect with these immensely talented hosts who during the last decade have ranked as the number one Hispanic radio program.

Raúl Alarcón Jr.: We are also building on the momentum of Nandi and Christy, our new morning show on WSUN FM in Tampa, which is delivering solid ratings growth as loyal listeners tune in to reconnect with these immensely talented hosts, who, during the last decade, have ranked as the number one Hispanic radio program in the greater Tampa Bay area. These incredibly popular shows continue gaining traction via LaMusica, our top-ranked streaming audiovisual entertainment app, joining all of our brands in reaching more fans on a national scale while elevating our ability to monetize our content investments. As we build and support all of the brands under the Spanish Broadcasting System Inc. umbrella, we are ensuring that fans everywhere can access our content via LaMusica regardless of where they live and work. Let me give you some Q2 highlights.

In the greater Tampa Bay area.

He is incredibly popular shows continued gaining traction via la Musica.

Top right streaming audio visual entertainment App, joining all of our brands in reaching more fans on a national scale, while elevating our ability to monetize our content investments as we build and support all of the brands under the Sps umbrella, we are ensuring that fans everywhere.

Access are pumping via la Musica, regardless of where they live and work let.

Let me give you some Q2 highlights.

The music grew unique users by 18% in Q2.

Raúl Alarcón Jr.: LaMusica grew unique users by 18% in Q2, driven primarily by our new Houston station that itself more than doubled its digital audience in Q2 compared to Q1. Social media strategy is also attracting new users, in particular YouTube. Views grew by 140% in Q2 compared to Q1. Once again, Houston was a major contributor to the growth, closely followed by Mega New York, which nearly doubled its audience in Q2 compared to Q1. Our session length set a new record with a staggering 55-minute average time spent listening, with KROI and WSKQ driving the averages up, with loyal listeners staying online for hours at a time. This summer also saw the successful launch of LaMusica TV on Roku, the number one TV streaming platform in the U.S.

Driven primarily by our new Houston station that itself more than doubled its digital audience in Q2 compared to Q1.

Social media strategy is also attracting new users and particular Youtube.

Abuse grew by 140% in Q2 compared to Q1.

Once again Houston was a major contributor to the growth closely followed by Mega New York, which nearly doubled its audience in Q2 compared to Q1.

Our session lengths and set a new record with a staggering 55 minute average time spent listening with K R. O Y and W. S. K cute driving the averages up with loyal listener staying online for hours at a time.

The summer also saw the successful launch of languish at the TV on Roku the number one TV streaming platform in the U S. We are now streaming of $24 seven slate of digital video radio formats, and iconic Ani of talents and music along with the hottest celebrity and.

Raúl Alarcón Jr.: We are now streaming a 24/7 slate of digital video, radio formats, and iconic on-air talents and music, along with the hottest celebrity and entertainment news. We believe the growth potential of this platform is enormous, given the size and continued expansion of the Hispanic population in the U.S. and the brand connections we are building. Ultimately, LaMusica TV will also premiere Spanish Broadcasting System Inc.'s live concerts, including major events such as its Cali Bash, Miami Bash, and Mega Mezcla venue performances, as well as its unplugged artist showcases. In summary, we are pursuing multiple growth initiatives across our audio outlets, digital streaming, network syndication, and live events businesses, all supported by our consistent ability to attract and promote the best talent in the industry and drive audience engagement.

Entertainment use.

We believe the growth potential of this platform is enormous given the size and continued expansion of the Hispanic population in the U S and the brand connections we are building.

Ultimately no musical television will also premier Sps's live concerts, including major events, such as Kelly back Miami Bash and Mega Mess club venue performances as well as its unplugged artist showcases in summary, we are pursuing multiple growth initiatives across our audio outage.

That's digital streaming network syndication and live events businesses, all supported by our consistent ability to attract and promote the best talent in the industry and drive audience engagement.

S. P. S has evolved into a multiplatform media organization with a strong and growing roster of content and a loyal and expanding fan base. We believe our revenue expansion and diversification plan combined with our continued emphasis on cost reduction along with an expected improvement.

Raúl Alarcón Jr.: SBS has evolved into a multi-platform media organization with a strong and growing roster of content and a loyal and expanding fan base. We believe our revenue expansion and diversification plan, combined with our continued emphasis on cost reduction, along with an expected improvement in our nation's economy, will strengthen our ability to deliver revenue growth as well as improved cash flows to the benefit of all our stakeholders. In addition, in support of our comprehensive deleveraging plan previously delineated, we have recently sold our Puerto Rico television stations and are confident that we will sell our remaining non-core assets as well as ancillary real estate in the near future. I'd like to thank all of you for joining us this morning. Your continued support is very much appreciated by all of us at SBS.

Our nation's economy will strengthen our ability to deliver revenue growth as well as improved cash flows to the benefit of all our stakeholders.

Edition in support of our comprehensive deleveraging plan previously delineated we have recently sold on Puerto Rico television stations and are confident that we will sell our remaining noncore assets as well as ancillary real estate in the near future.

And with that.

I'd like to thank all of you for joining US. This morning, you continued support is very much appreciated by all of us at SBS.

For those of you that would like to contact us directly with any further questions or comments, please email us at Investor Relations.

Raúl Alarcón Jr.: For those of you that would like to contact us directly with any further questions or comments, please email us at investor.relations@sbscorporate.com. Thank you all.

Relations at S. P S corporate dotcom and thank you all.

The conference.

<unk> has now concluded. Thank you for attending today's presentation you may now disconnect.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Sure.