Q3 2025 iHeartMedia Inc Earnings Call

Speaker #1: To ask a question, please press star, followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded.

Speaker #1: I would now like to turn the call over to Michael McGuinness, Head of Investor Relations. Thank you. Please go ahead.

Speaker #2: Good afternoon, everyone, and thank you for taking the time to join us for our third-quarter 2025 earnings call. Joining me for today's discussion are Bob Pittman, our Chairman and CEO, and Rich Bressler, our President, COO, and CFO.

Speaker #2: At the conclusion of our prepared remarks, management will take your questions. In addition to our press release, we've made our earnings presentation available on our website that you can use to follow along with our remarks.

Speaker #2: 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 on today's call and in the company's SEC filings, including our recent 8-K filing.

Speaker #2: 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.

Speaker #2: Earnings presentation and our SEC filings, which are available in the Investor Relations section of our website. And now I'll turn the call over to Bob.

Speaker #3: Thanks, Mike, and good afternoon, everyone. In the third quarter, even though 2025 is a non-political year, we generated an EBITDA of $205 million, slightly above the midpoint of our previously provided guidance range of $180 million to $220 million and flat compared to the prior year.

Speaker #3: Our consolidated revenue for the quarter was at the high end of our guidance of down low single digits and was down 1.1% compared to the prior year quarter.

Speaker #3: Excluding the impact of politics, our consolidated revenue was up 2.8%. Turning to our individual operating segments, the Digital Audio Group generated third-quarter revenue of $342 million, up 13.5% versus the prior year, above our previously provided guidance of up high single digits.

Speaker #3: The digital audio group generated third quarter adjusted EBITDA of $130 million, up 30.3% versus prior year, and the digital audio group's adjusted EBITDA margins were 38.1% compared to 33.2% in the prior year.

Speaker #3: And we're making continued progress toward our stated goal of achieving full year adjusted EBITDA margins in the mid-30s. Within the digital audio group, our podcast revenue was in line with our guidance of up low 20s, it grew 22.5% compared to prior year, as we continue to feel the flywheel effect of our number one audience position in podcast publishing according to PodTrack.

Speaker #3: We believe we have the most profitable podcasting business in the United States. Importantly, our podcasting EBITDA margins remain accretive to our total company EBITDA margins.

Speaker #3: In Q3, approximately 50% of our podcasting revenue was generated by our local sales force, up from about 11% in Q3 of 2020. This demonstrates the unique advantage of having what we believe is the largest local sales force in media, with a presence across 160 markets, in addition to our strong national sales force.

Speaker #3: In the third quarter, our non-podcast digital revenue grew 8% compared to the prior year. Earlier today, we announced an exciting new partnership with iHeart's ecosystem.

Speaker #3: This partnership will include a slate of podcasts from TikTok creators, a dedicated broadcast radio station available across the country, and expanded access to our live events starting with our 2025 Jingle Ball Tour, which will deepen creator engagement across audio and video platforms.

Speaker #3: Open new monetization opportunities through integrated sponsorships and cross-platform distribution, and reinforce iHeart's unique position at the intersection of culture, content, and scale. Turning now to the multi-platform group, which includes our broadcast radio, networks, and events businesses.

Speaker #3: In the third quarter, revenue was $591 million, down 4.6% versus prior year, and in line with our previously provided guidance range of down mid-single digits.

Speaker #3: Excluding the impact of political advertising, multi-platform group revenue was down 2.5%. And the multi-platform group's adjusted EBITDA was $119 million, down 8.3% versus prior year.

Speaker #3: As we mentioned last quarter, historically, we've seen that the largest advertisers and advertising agency groups are a good indicator of what's to come. We continue to see growth in the performance of the top 50 advertisers and the four largest advertising agency groups for both the multi-platform group and the total company.

Speaker #3: These results give us confidence that our plan to return the multi-platform group to revenue growth is on the right track. And what gives us further confidence in our ability to get the multi-platform group back in the growth mode is that it all starts with audience.

Speaker #3: We have more broadcast radio listeners today than we had 10 years ago, and even 20 years ago. Our challenge is one of monetization. A key component in meeting that challenge is to make our broadcast inventory transact like digital, unlocking a significant monetization opportunity for the company and which will greatly benefit our broadcast revenues.

Speaker #3: On last quarter's call, we announced the hiring of Lisa Coffey as our Chief Business Officer, and I'm happy to report she's already making real progress, including last week's announcement of our programmatic audio partnership with Amazon, which provides advertisers using Amazon DSP access to iHeart's vast audio portfolio.

Speaker #3: Our non-podcast digital inventory will be available immediately, and our podcast and broadcast radio inventory will follow in 2026. One of the essential components of our programmatic capability is the digital iHeart audience database, which includes the radio simulcast listening on our digital services.

Speaker #3: This enables our targeting, measurement, and attribution tools to bridge between broadcast impressions and digital identity. Enabling broadcast inventory to transact in DSPs alongside streaming video and display.

Speaker #3: In essence, we are making our broadcast radio inventory look like digital inventory. It's important that we continue to grow and improve the proprietary audience database. Part of our investment in this initiative includes partnering with third parties through non-cash marketing plans aimed at increasing our digital audience and engagement. In turn, we provide meaningful marketing for those partners as part of this relationship.

Speaker #3: Looking at our cost structure, we're still on track to generate $150 million net savings in 2025. Rich will get into more detail, but I want to take this opportunity to announce that we have taken actions that will generate an additional $50 million of incremental annual savings beginning in 2026.

Speaker #3: As a reminder, we run the company with a relentless focus on maximizing the efficiency of our operating structure, including using new technologies like AI-powered tools and services.

Speaker #3: Now let me share with you what we're currently seeing in the ad market. We're feeling similar momentum to what some of the other ad-supporting companies have discussed, right now spending is holding up and discussions with advertisers are positive.

Speaker #3: At the same time, the government shutdown does add a level of uncertainty. This year continues to be an important one for iHeart. The company continues to make significant progress in the growth of our digital business.

Speaker #3: We're seeing important signs of improvement in our broadcast business, specifically in the strength of our whole co and our biggest national advertising partners. We're making progress in our sales monetization efforts, which we expect to have wide-ranging implications for iHeart.

Speaker #3: And we remain committed to our culture of innovation and efficiency. And now I'll turn it over to Rich.

Speaker #2: Thank you, Bob. Good afternoon, everyone. Our Q3 2025 consolidated revenue was at the high end of our guidance of down low single digits and was down 1.1% compared to the prior year quarter.

Speaker #2: Excluding the impact of political, our consolidated revenue was up 2.8%. Let me provide you with some additional detail on our advertising revenue performance this quarter.

Speaker #2: As Bob mentioned, the continued strong performance of our largest clients and advertising agency partners is encouraging. And as a reminder, we have diversified advertising revenue.

Speaker #2: There is no advertising category greater than about 5% of our total advertising revenue, and no individual advertiser that is more than about 2% of our total advertising revenue.

Speaker #2: As you can see on slide 11, in the third quarter, the largest category gainers in terms of absolute dollars were healthcare, telecom, professional services, and retail, and the four categories that declined the most in terms of absolute dollars were political, financial services, food and beverage, and entertainment.

Speaker #2: And in the third quarter, our five largest advertising categories in terms of absolute dollars were healthcare, home building and improvement, financial services, auto, and entertainment.

Speaker #2: Our consolidated direct operating expenses decreased 2.6% for the quarter. This decrease was primarily driven by a decrease in employee compensation costs in connection with our modernization initiatives taken in 2024, partially offset by higher variable content costs associated with the revenue growth of our digital businesses.

Speaker #2: Our consolidated SG&A expenses decreased 1.1% for the quarter, driven primarily by our modernization initiatives including decreased employee compensation costs, partially offset by an increase in employee health and benefit expenses.

Speaker #2: We generated a third-quarter GAAP operating loss of $116 million, which includes the impact of a $209 million impairment charge directly related to the value of FCC licenses, compared to an operating income of $77 million in the prior-year quarter.

Speaker #2: We generated adjusted EBITDA of $205 million, slightly above the midpoint of our previously provided guidance range of $180 million to $220 million, and flat to the prior year.

Speaker #2: And as a reminder, Q3 of 2024 benefited from political spend related to the presidential election cycle. Before I turn to our segment performances, I also want to reiterate Bob's statement on our cost management work.

Speaker #2: We remain on track to generate $150 million of net savings in 2025. And as a reminder, our Q3 results included the benefit of $40 million of net savings.

Speaker #2: In addition, this quarter we took new actions that will generate $50 million of additional annual savings beginning in 2026, and the majority of these savings will benefit the multi-platform group.

Speaker #2: We have again included slides in our investor presentation slide five and six that provide more details on our cost savings. Turning now to the performance of our operating segments.

Speaker #2: And as a reminder, there are slides in the earnings presentation on our segment performances. In the third quarter, the Digital Audio group's revenue was $342 million, up 13.5% year over year and above our guidance of up high single digits.

Speaker #2: The digital audio group's adjusted EBITDA was $130 million, up 30.3% year over year, and our Q3 adjusted EBITDA margins were 38.1%, up from 33.2% in the prior year.

Speaker #2: Within the digital audio group, our podcasting revenue was $140 million, which grew 22.5% year over year and is in line with our guidance of low 20s growth that we provided.

Speaker #2: Our third quarter non-podcasting digital revenue grew 8% year over year to $202 million. Turning now to the multi-platform group, revenue was $591 million, down 4.6% compared to the prior year and in line with our previously provided guidance range.

Speaker #2: Excluding the impact of political revenue, our multi-platform group revenue was down 2.5%. Adjusted EBITDA was $119 million, down 8.3% from $130 million in the prior year quarter.

Speaker #2: The multi-platform group's adjusted EBITDA margins were 20.2%, compared to 21% in the prior year quarter. Turning to the Audio and Media Services group, revenue was $67 million, down 26% year over year.

Speaker #2: As a reminder, Q3 of the prior year benefited materially from political advertising. Excluding the impact of political revenue, the Audio and Media Services group revenue was down 3.4%.

Speaker #2: Adjusted EBITDA was $23 million, down 49.1% compared to the prior year, again due almost entirely to the impact of political advertising in the prior year quarter.

Speaker #2: As Bob mentioned in his remarks, investment in our proprietary audience database is a key component of our sales modernization efforts. Some of that investment takes the form of marketing partnerships to drive engagement with the iHeartRadio digital services.

Speaker #2: In Q3, those relationships drove an increase in our non-cash marketing revenues, and due to the timing of our marketing campaigns, some of the corresponding expenses relating to those agreements will be recognized in subsequent periods.

Speaker #2: While we may continue to experience some quarterly mismatching of these non-cash partnership marketing campaigns, in both directions, we believe that obtaining these critical marketing resources for our sales modernization initiative on a non-cash basis is a prudent way to preserve capital.

Speaker #2: In the third quarter, our free cash flow was a negative $33 million, compared to $73 million in the prior year quarter. This year-over-year variance has three main drivers.

Speaker #2: Q3 of last year benefited from approximately $40 million of political revenue, which is the only advertising category that has paid in advance of the airing of the advertisement.

Speaker #2: Second, as I mentioned earlier, we generated revenue from new marketing partnerships on a non-cash basis as part of our sales modernization initiatives. And third, we were negatively impacted by the timing of working capital items that will positively impact Q4.

Speaker #2: We expect to generate meaningful free cash flow in Q4. At quarter-end, our net debt was approximately $4.7 billion. Our total liquidity was $510 million, and our cash balance was $192 million, which includes $100 million borrowed under the ABL facility, which we intend to pay back by year-end.

Speaker #2: Our quarter-ending net debt to adjusted EBITDA ratio was 6.6 times. Let me now turn to our fourth quarter guidance. We expect to generate fourth quarter adjusted EBITDA in the range of $200 to $240 million, compared to $246 million in the prior year quarter.

Speaker #2: As a reminder, the fourth quarter financial results of last year benefited from the presidential election cycle, which generated $83 million of political revenue for us.

Speaker #2: We expect our consolidated Q4 2025 revenue to be down low single digits compared to the prior year and up mid-single digits excluding the impact of political revenue.

Speaker #2: We are still closing the books for October, but we expect October revenue to be down in the mid-teens and approximately flat, excluding the impact of political revenue.

Speaker #2: From Q4 2024. Turning to the individual segments for Q4, we expect the digital audio group's revenue to be up high single digits with podcasting revenue expected to grow in the mid-teens.

Speaker #2: That would mean for the full year, we expect our podcasting revenue to grow in the low 20s. We expect the multi-platform group's revenue to be down in the low single digits and up in the low single digits, excluding the impact of political revenue.

Speaker #2: And we expect the audio and media services group revenue to be down approximately 20% and up approximately 15% excluding the impact of political revenue.

Speaker #2: Now we will turn it over to the operator to take your questions. Thank you. Thank you. As a reminder to ask a question, please press star, followed by the number one on your telephone keypad.

Speaker #2: Our first question comes from Aaron Watts from Deutsche Bank. Please go ahead; your line is open.

Speaker #3: Hi, thanks for having me on. I've got a few questions if I can sneak them in here. Rich, if I heard you correctly, on the free cash flow, there were some timing items in there that skewed this year compared to last year.

Speaker #3: Fourth quarter is going to—you're going to see that reverse. As cash flows in, after you repay the ABL, how do you think about using your excess cash towards whether it's front-end maturities or perhaps attacking some of the debts that's trading at a larger discount in the market?

Speaker #4: Aaron, thanks. Thanks for the question. So, just a couple of things. Yes, I think you captured correctly the point in terms of negative free cash flow for Q3 and the fact that we expect to generate meaningful cash flow, and also to reiterate our plan on paying back the ABL in Q4.

Speaker #4: This year, in terms of the maturities, look, I think we've always done a pretty good job historically. The company was looking to reduce the overall cost of our capital structure.

Speaker #4: And we're going to be opportunistic and continue to have that one goal in mind: to create a more efficient capital structure for all of our stakeholders.

Speaker #3: Okay. And in your MPG group, I believe your third quarter revenues excluding political came in a little bit light relative to your expectations. That looks like it's trending better in 4Q overall, though I imagine crowd out is helping there.

Speaker #3: Can you just talk a little bit more about the underlying ad environment? What's balancing the momentum you're seeing with your large clients? And then maybe relatedly, as you turn the corner into 26, how we should be thinking about political and the upside you see there, perhaps versus past cycles for you?

Speaker #4: Well, maybe I'll just start on a couple of points. Actually, I think, in terms of the multi-platform group and the trends and everything, that came in pretty much as we expected.

Speaker #4: For Q3 out there, so obviously, Bob talked about in terms of our future. We'll talk about more of our confidence and continue strengthening that group. On just to take your last question second on political.

Speaker #4: We're not going to talk about anything specific regarding the political landscape heading into the 2026 election cycle. The only couple of things I would say is we expect it to be a strong revenue cycle for us on the political front without giving any details on any numbers.

Speaker #4: And again, when you look at our capabilities, including to build out of our audio tech stack and all of our recent announcements on things like with Amazon and broadcast and in the DSP, we're just going to continue to be better and better equipped to take more dollars as we go forward as a company out there.

Speaker #4: But I think overall, it should be a good election year cycle based on everything we know today. And you guys are all seeing the same things on the phone that we know.

Speaker #4: Maybe Bob comment on the advertising environment.

Speaker #3: Yeah, look, I think the advertising environment is pretty good. We looked at the big advertisers, our largest advertisers, and our biggest advertising agencies, the big hold codes.

Speaker #3: And the trends are very good. I mean, obviously, sort of no one knows what the impact of government shutdown is, but right now we're not feeling anything on it.

Speaker #3: And continued to feel good about it. Okay. That's helpful. If I could just sneak one last one in, you mentioned we've seen a couple of announcements this past week around advancing your programmatic initiatives, including with Amazon, StackAdapt, I thought the inclusion of broadcast radio inventory was particularly interesting.

Speaker #3: Can you remind us where you stand with the other major DSPs now? Should these agreements be incremental to the current revenue base? And what's the timeline for this to be a material mover for the P&L?

Speaker #4: I think as we look at the DSPs, we are and we have agreements with all the major DSPs for at least part of our inventory.

Speaker #4: And in the case of Amazon, we announced we'll be adding our broadcast inventory next year. In the case of DV360, we do have our broadcast inventory in there.

Speaker #4: Yahoo as well. And so we're looking at the major DSPs. We have the relationships in place. And it's really building out. And as we think about programmatic and very rough terms, Rich and I think about it as really we're building another podcast business.

Speaker #4: That we think it probably has that kind of flow-through. And if you remember, I think it was a 2020, we did about 50 million in podcast revenue.

Speaker #4: And you see how it's grown. So our expectation is that programmatic also grows. It's roughly sort of that same trajectory. And we think it's got the same kind of potential for us in terms of developing new incremental revenue sources for the company.

Speaker #4: And so for us, we think it's a very big positive force. And it's the reason we've invested so much in building out that programmatic platform.

Speaker #2: Aaron, the one thing I just might add to in terms of what Bob built upon and you mentioned about Amazon and Bob mentioned that in his opening remarks and the announcement that we made this morning with TikTok, the way and Bob gave the apparently analysis with respect to podcasting, the way we think about it is we've got as Bob commented on our unparalleled audience.

Speaker #2: And the value of that unparalleled audience. And we've got all of our platforms. And what we are constantly focused on in continued to the monetization of our existing platforms is how do we continue to look at looking at are there potential new revenue streams off of those platforms or on the revenue streams?

Speaker #2: Podcasting—it’s an interesting one. Bob pointed out what the numbers were. We just mentioned TikTok; we talked about programmatic for broadcasting. So, I think you should think about it as our constant focus to take the unique engaged audience we have and how we continue to get new revenue from that audience—revenue streams.

Speaker #3: Okay, great. Appreciate all the detail. Thanks, guys.

Speaker #1: Our next question comes from Sebastiano Petty from JP Morgan. Please go ahead. Your line is open.

Speaker #5: Hi, thanks for taking the question, guys. Maybe just starting with podcasting for a minute there. Both Bob and Rich. Third-quarter numbers kind of came in a little bit better than expected.

Speaker #5: I feel like this has been a common theme with you guys. I mean, anything to think about why the growth rate in podcasting might slow to the mid-teens level.

Speaker #5: It seems like you have a relatively easier comp as you look at the prior year's growth rate for relative to the first three quarters of 2024.

Speaker #5: And also, if you kind of look at it on a two-year stack basis, it seems to be yeah, it seems to be a little conservative there.

Speaker #5: So anything that may be particular callout. And then relatedly, obviously, Netflix deal also announced TikTok. Any way to perhaps unpack not necessarily looking for forward guidance related to those deals, but just maybe the phasing and the cadence on how long has that kind of come on, how we should be thinking about that phasing into the P&L over time and what that could mean?

Speaker #5: Thank you.

Speaker #2: Yeah, thanks. Thanks for the question, Sebastian. Look, no surprise, we’re not going to comment in terms of phasing of anything going forward. In terms of that, and just back to the question just answered before with Aaron, I think the whole bucket of things does come under that focus of generating new revenue streams from our unique audience that’s out there.

Speaker #2: If you look at podcasting just for a second, if you look at the first three quarters, the guys we do for, again, we look at it everything in a couple of different ways.

Speaker #2: That gives you about a 23% growth rate on revenue for podcasting, but it's a little misleading because you get numbers and percentages that can sometimes be misleading.

Speaker #2: If you kind of take the guidance we've given for Q4 and compare it to the actual number we just reported on for Q3, the absolute dollars in podcast revenue growth is bigger in Q4 than Q3.

Speaker #2: And again, I think it can be a middle sweep. You just do percentages because you're obviously it's math. You're dealing on a bigger base and the numbers are getting bigger.

Speaker #2: But if you look at the dollars that are there, I think in Q3 we're up about $25 million in podcasting revenue sequentially. And if you kind of do the range or middle of the range, we'd be up about $30 million in terms of Q4 out there for podcasting.

Speaker #2: So again, what counts is follow the money—the money, the money—not the percentages. And so it doesn't show any signs of slowing down.

Speaker #3: And by the way, just to add, last year, it was a lower percentage in Q4 than earlier in the year, but it was just like this year, a higher number in terms of absolute dollars added in Q4.

Speaker #3: In terms of just the way we see podcasting and the way we see opportunities growing, we do think, let's talk about video podcasting. I don't think there's any evidence that it's a transformation of audio to video, but what it is, is an opportunity to add video podcasting on top of the audio podcasting we have today.

Speaker #3: So, again, our constant quest to find new revenue streams for our existing products. If you sort of look at where the big pool of money everyone is shooting for these days, it's YouTube; they've got a lot on their video.

Speaker #3: And so I think it's if you look at the industry, there's a lot of discussion about that and we sort of see it that way, not as a threat to audio, but as an adjunct.

Speaker #5: Rich, I'm going to follow up with a phasing question you might be willing to answer. On the $50 million cost-cutting program that's going to hit the numbers more in 2026, is there any way to perhaps think about the phasing of that in terms of when we kind of hit full run rate?

Speaker #5: Is that a full run rate out the gate since you guys are kind of announcing it a couple of months in advance here? Any just maybe way to think about the 50 million as it pertains to MPG group's financials next year?

Speaker #2: I would, it's a good question. I would think about it exactly in terms of the rhythm of coming in. Let me go back. Yes, it is a full run rate, beginning of the year, actioned.

Speaker #2: Very similar to when we had our $150 million program we did last year. If you look at the slides in the deck where we broke down this year's numbers on the course program, I would look at taking the new program of 50 and both think about it phasing in the same way in terms of Q1, a little smaller in Q1 and more evenly in Q2, Q3, and Q4.

Speaker #2: And I would look at it when you look at the percentages I think there's actually a slide on page six in there. It actually kind of breaks it out for you in the investor deck, which shows about 61% MPG.

Speaker #2: And I don't have to read through it, but it goes through all the different ones. And it's right behind the slide on the 150 million dollar net program.

Speaker #3: Thanks, guys.

Speaker #1: Our next question comes from Stephen Laschik from Goldman Sachs. Please go ahead. Your line is open.

Speaker #4: Hey, guys. Great. Thanks for taking the questions. Maybe just a follow-up on podcasting. A little bit longer term, but just curious as you look out into 2026, 2027, if you think these levels of growth that we're seeing in the podcast business, north of 20%, are sustainable based on the pipeline of new content or visibility you might have into certain renewals that could potentially be up for grabs in terms of bringing new content on or the monetization levers you think could come into focus as some of these digital capabilities and inventory scale?

Speaker #4: I would just be curious about your thoughts on the sustainability of either high teens or 20-plus percent revenue growth in that side of the business.

Speaker #3: Well, look, I don't want to do any projections of the future, but I will say that if you look at the trends, what you're finding is more people are listening to podcasts today than ever.

Speaker #3: And the people who are listening are listening to more episodes than ever. So we got two vectors of growth there. And of course, we're bringing more and more advertisers to podcasting as well.

Speaker #3: It's probably the hottest category in media right now, and so you're seeing the net impact of that too.

Speaker #2: And Stephen, just one point. I think to build upon Pa's advertising because the one point you didn't say, just to hit that head on, is there is the demand out there.

Speaker #2: And I would use the word the effectiveness. Of the advertising. There's a reason you're seeing the growth in podcasting revenue out there. In terms of the consumer use, and by the way, the stickiness of it, I think it's something like approximately, I don't know, 75, 80% of all podcasts are listened all the way through.

Speaker #2: And you can fast forward and you can do everything else you can do with online video. Out there. And just as a reminder, it's only been a relatively small number of years that big advertisers to Bob's point have really come to podcasting.

Speaker #2: Prior to that, I mean, great advertisers, but it was much more of a DR, direct response, medium. And the reason why big advertisers coming to podcasting is so important is because it brings big dollars.

Speaker #2: And then the last point, just to close off that we started to talk about last quarter in Q2 and now Q3: about 50% of our podcasting advertising revenue is originated locally.

Speaker #2: And if you go back, I don't know, three, four years ago, about 10% of our podcasting revenue was originated locally. So I just think you look at all those data points.

Speaker #2: And from our standpoint, when you look at projections by all these third parties that talk about the growth—whether it goes to $4 billion, $5 billion, or whatever—over a period of revenue for U.S.-based advertising podcasting revenue, it’s no surprise because of the effectiveness of it.

Speaker #2: And you look at us continuing to take market share because of the position we have in podcasting. So I think it's set up very well.

Speaker #3: I wanted just to add one other thing. We talked about our ad tech platform and we talked about programmatic and we sort of focus on how that's going to help broadcast radio.

Speaker #3: But remember, it's also a vector of growth for podcasting to get podcasting in the programmatic DSPs as well.

Speaker #4: That's helpful. And then maybe just one on the broadcast side, if I can. I'm curious, Bob, as you look at the competitive environment for advertising more holistically, there's been a lot made about AVOD inventory coming on over the last year or two.

Speaker #4: We're just curious if you could speak to the visibility you have into that competitive intensity, where we are in really that playing out. And if you think that impairs maybe some of the monetization points you would make on terrestrial radio, recovering from a monetization perspective over the next year, so how much of a headwind that is.

Speaker #3: I don't think it's a headwind at all. As a matter of fact, I think if you talk to people in the advertising business, radio has sort of got a little bit of a renaissance here.

Speaker #3: And people are talking about all the studies coming out. One just came out from WPP major study, which if you've not looked at, it's probably worth looking at, which makes the point that adding radio early in a campaign money is to add radio to the campaign.

Speaker #3: That's WPP saying that from their study. And we've got a number of other studies which are showing the same thing. We're showing that if you add radio to a social campaign, the response rate, I think, is up like 83%.

Speaker #3: So, as you think about it, if you're an advertiser, you say, "Okay, I need more business." Well, I can either spend more money on increasing my social spend, or I can spend money on radio to get more response rate out of my existing social spend.

Speaker #3: And I think they're finding that that latter is a much more economic choice. And it also, at the same time, they get the added benefit of getting brand building as well on top of their performance marketing.

Speaker #3: So actually, we're quite encouraged about what's going on. I think sort of the final frontier for us is that you've got people who are planning and buying advertising almost all of it is on this one platform and on this one screen of digital.

Speaker #3: then radio is over to the side and it's a lot of extra work to buy it. We think, and we've indeed talking to the experts all are encouraged by it, that as you move that to the same screen, so they can easily buy radio and buy it on the same criteria they're buying their other digital I think breaks down And the biggest hurdle because you say when you've got the big reach, you've got the impact, almost every study shows radio has better engagement than almost any other medium.

Speaker #3: The results are great. You got more radio listeners today than you had 10 or 20 years ago. Why isn't it performing as it should?

Speaker #3: And we think it's a structural issue, and we've invested heavily in fixing that structural issue.

Speaker #2: And can I just mention very quickly, just bring back Stephen, because to your question, your question then, Bob's point, and then I'm just going to go back and repeat what we said a couple of times in this call.

Speaker #2: And here you have all within the last couple of days Amazon, the Amazon announcement you saw and talking about getting our broadcast inventory into the DSP and the TikTok announcement that was made this morning with ourselves and TikTok in addition to other aspects of the announcement and podcasting and everything else.

Speaker #2: You'll see that there's also goes into broadcast radio with the rollout of a TikTok radio. Which will be a new iHeartRadio station. That will be done with TikTok.

Speaker #2: So to me, all the data points from an iHeart standpoint talk about the potential upside in the future and the recognition of the capabilities of broadcast radio to deliver results.

Speaker #3: And to be clear, one of our major goals is to get our multi-platform group back to revenue growth.

Speaker #4: That's helpful. Thank you both.

Speaker #2: Thank you.

Speaker #1: Our next question comes from Patrick Scholl from Barrington Research. Please go ahead, your line is open.

Speaker #5: Hi, thanks for taking the question. Just another question on podcasting. I was kind of curious on how you view the longer-term opportunity within in podcasting to bring in political dollars.

Speaker #5: How do you think that's currently being monetized versus where you think it can go longer term with the increased ad sales from local that helps maybe bias that higher?

Speaker #3: But it's a really good question. And if you look at all the chatter from last year's political spend, it's clear that people said, "Wow, one of the real variables was podcasting." And so we think it is a very positive for political advertising moving to podcasting as well.

Speaker #5: Okay. And then just in the ad market, is there any sort of variance across some of the local markets and how that is trending?

Speaker #5: Any local headwinds or is it more broad-based?

Speaker #6: Yeah, I don't think we've seen any big.

Speaker #2: Not the unusual.

Speaker #6: Yeah, no changes there.

Speaker #5: Okay. Thank you.

Speaker #1: Our last question comes from Ken Silver from Stifel. Please go ahead, your line is open.

Speaker #7: Hi, Bob and Rick. Thanks for the time. A lot of my questions were answered. So let me just ask you two. I guess the first one is on the sponsorship and events revenue line.

Speaker #7: I know it's a small line, but it was down almost 10% in the third quarter and it's down almost 6% year to date. How maybe help us understand that a little better and what's the outlook for '26?

Speaker #7: Is that going to sort of revert back to sort of stable or up or is there sort of something that's going on that's sort of going to continue to put pressure on this line item?

Speaker #2: Yeah, look, I would just it's really a small number. In terms of some ups and downs, and remember, we've got all the large events that you guys all know about.

Speaker #2: We do 20,000 events in total as a company. So I think the small is just some not relative, small-time time issues and as you think about it going forward, your question again, we're not going to talk about anything specific going forward, but I think you can continue to expect the events business to be played the same role it has with iHeart.

Speaker #2: Both from an absolute dollar and from a promotional standpoint and very importantly, one of our key multi-platforms. And again, I think if you again, another endorsement looking at our announcement this morning, with TikTok, and the connection that we're going to bring and step up even more between artists creators and our community with the power of storytelling, this is going to be another really great ability to continue to demonstrate to artists and to the advertising community and our listeners what we can do.

Speaker #3: Yeah, let me just add on the events too. If you look at the brand attributes of anybody doing music or audio or anything, the one area where iHeart goes bonkers in terms of consumer is they identify us as the brand that has the big events.

Speaker #3: It has been tremendous for us in building the iHeartRadio brand. And now you think about not only are we building the iHeartRadio brand, but we're making a profit on it.

Speaker #3: And the second issue, which is probably not fully captured in the numbers, is that when we do the big events, so bring advertisers into them and we use it as a marketing opportunity for us.

Speaker #3: And we often package together the events with other advertising as well which show up on other lines.

Speaker #7: Okay, that's helpful. And so just to be clear, you haven't lost any significant partner sponsors for your event? Okay.

Speaker #2: No. No. No, it's actually pushing the question zero. No.

Speaker #7: Yeah, okay. Thank you. And then the other one I wanted to ask you was this quarter and I think last quarter you started showing the incrementals on margins on the digital and the decremental margins on the terrestrial, the multi-platform group.

Speaker #7: And I think you're showing 90% decremental margin for multi-platform. I'm just trying to get a sense. Is there a way to meaningfully improve that?

Speaker #2: Well, again, remember to the multi-platform group, it's not specifically your question. I would say two things. If you look back from a trending standpoint, we've continued to make improvement on that.

Speaker #2: And I think in terms of the float, the improvement on that, for lack of a better term, negative float or the float through, if you track that, we're happy to take you through that.