Q3 2025 Beasley Broadcast Group Inc Earnings Call

Good morning and welcome to Beasley broadcast group. Third quarter 2025 earnings call before proceeding. I would like to emphasize that today's conference call on webcast will contain forward-looking statements about our future performance, and results of operations that involve risks and uncertainties described in the risk factors section of our most recent annual reports on form, 10K as supplemented by our quarterly report on form, 10 Q.

Today's webcast will also contain a discussion of certain non-gaap Financial measures within the meaning of items. 10 of Regulation SK, a Reconciliation of these non-gaap measures with their most directly comparable, Financial measures calculated and presented in accordance with gaps. Can be found in this morning's news announcement and on the company's website, I would also remind listeners that following its completion, a replay of today's call can be accessed for 5 days on the company's website www.bg.com

You can also find a copy of today's press release on the investors or Press Room sections of the site. At this time, I would like to turn the conference over to your host Beasley broadcast group CEO, Caroline Beasley.

Thank you, Alana, and good morning, everyone. We appreciate you joining us to review our third quarter results. Before we begin, I want to share an important update. Lauren Burroughs, our Chief Financial Officer, resigned effective October 17th to pursue a new opportunity. We thank her for her contributions to the company over the last year, and we wish her much success in this next chapter. Effective immediately, I am serving as Beasley's Principal Financial Officer to ensure continuity and maintain the financial discipline that has always been central to our culture. Sean Greening has been elevated to Chief Accounting Officer, and together we are working closely with our finance and operations teams to ensure a seamless transition.

Many of you know that I've served it served in Beasley Finance leadership for much of my career including as EDP CFO Treasurer and secretary until 2016 that experience provides both continuity and a deep knowledge of the company's Financial framework. As we continue to navigate the evolving media landscape.

Against this backdrop, our strategy remains clear and our execution remains disciplined number 1 to scale, higher margin, digital products, number 2, strengthen the quality of our earnings and number 3 pivot. Our sales organization toward direct data-driven relationships

VB in Tampa on September 29th.

However, given the government shutdown, we are still in a holding pattern for our Fort Meyers closing.

Now, moving on to our results. For the third quarter total company Revenue was approximately 51 million representing an 11% decline on a same station basis or a 7.5% decline year-over-year excluding 2.7 million of political and Q3 24

While this result was broadly consistent with the expectations we outlined last quarter, we are disappointed with our revenue performance this year, and we view these results as unacceptable. Despite disciplined expense management that helped offset much of the topline shortfall, the rate of revenue decline underscores a fundamental need to execute more aggressively across ourselves or accelerate the transformation already in motion. We are taking deliberate structural steps to strengthen accountability, sharpen focus, and realign our go-to-market strategy towards sustainable growth.

As we discussed last year. Last quarter, we are aggressively retooling, ourselves org to align with the realities of a modern digitally-led Marketplace. This process is well underway, and we are adding dedicated, digital aees and digital sales, managers and markets to accelerate, adoption and execution.

We recognize that this transformation will not happen overnight. Many of our legacy sellers remain more comfortable with traditional over-the-air products.

Driving sustained digital growth requires a fundamentally different sales skill. Over the past several months, we have focused on redefining roles, compensation structures, and training programs to build a culture of digital fluency and accountability. At the same time, our digital business continues to outperform, serving as clear validation of our strategy and demonstrating the long-term potential of the Beasley platform.

Year to date. Digital Revenue has accounted for roughly 25% of company Revenue that compares with 19% at this time last year and on a same station basis, digital Revenue group approximately 28% year-over-year driven by the continued expansion of our Ono products and accelerating Advertiser adoption across our digital portfolio.

What stands out is not just the growth rate, but the quality of that growth, advertisers are spending differently, not simply more campaigns are increasingly integrated across display, audio and streaming. The result is a healthier more Diversified digital business. That is both scalable and durable.

Among our products Audio Plus delivered and exceptional, quarter revenue from Audio Plus exceed exceeded 1.2 million in Q3.

Representing over 200% growth from Q2 driven by extraordinary performance in Philadelphia, Detroit and Boston.

These markets exemplify the power of pairing, our broadcast products with targeted data-rich, digital Solutions, a combination that is resonating strongly with advertisers seeking both reach and precision.

Our digital margins. Tell the same story. Digital segment operating income reached 28% on a stained station basis. The highest in the company's history, this Improvement reflects greater control of our inventory, economics with o, Ando products representing roughly 58% of total digital revenue for the quarter. That mix gives us stronger pricing flexibility and lower transaction, friction all of which compound over time.

While programmatic demand continues to grow. The real driver of profitability is our ability to capture and activate first-party insights.

By delivering advertisers measurable Roi and leveraging campaign automation through Audio Plus for generating higher average deal values with less operational complexity.

In short, we're no longer just selling Impressions, we're selling intelligence precision and performance visibility that evolution is powering the sustained. Digital margin expansion, you're seeing quarter of a quarter.

Enabling small and midsize businesses to plan and purchase digital campaigns across our properties. Independently. With testing complete, we are preparing to launch in the fourth quarter across more markets. This platform represents an important step in expanding access to Beasley's, digital ecosystem, simplifying how advertisers engage with our inventory. Unlocking new customer segments and driving high margin incremental, digital Revenue through automation.

Local, direct Revenue, which includes digital packages sold locally, grew 3.5% year-over-year. Now, representing your nearly 60% of total local business

Discontinued rebalancing towards a direct relationship-based revenue. This enhances predictability and reduces exposure to external volatility.

Finally, we we maintain our focus on efficiency and expense control in Q3, we executed a comprehensive cost reduction targeting, non-revenue generating functions, duplicative systems and underperforming vendor relationships.

Collectively, these measures are expected to yield and additional 1.5 million in run rate. Savings hitting the p&l by year end with full benefit realized in 2026.

These cost cutting measures will only compound, the progress we've already achieved. Billing on the structural efficiencies established earlier this year and last year and the third quarter station, operating expenses were down 8% year-over-year or nearly 4 million dollars. And this is blessed the askap Retro adjustment, we do plan to book, the BMI retro adjustment, and fourth quarter, also corporate expenses were down nearly 50% year-over-year and that's partially due to 1-time reclass benefits, which we will discuss in further detail.

In the last 12 months, we have centralized core functions such as accounting and Engineering support. Automated manual processes, across our business and rationalized vendor relationships to capture national scale, pricing and eliminate redundancy.

We've also simplified management layers and consolidated corporate services across markets, aligning $6 million in overhead with our streamlined footprint. For the 9-month period ending September 30, total corporate and station operating expenses are down $15 million, and this includes over $4 million.

Of 1 time expenses such as separate and other expenses, excluding these 1-time expenses, total corporate and station operating, expenses are down nearly 20 million, these declines reflect durable. Structural efficiency gains, not temporary belt. Tightening through all of this, our Focus remains unchanged number 1, driving higher quality, Revenue, number 2, executing with consistency. And number 3, positioning these leaf for durable profitable growth. And with that, I'm going to turn the call over to Alana Goldstein our Director of Finance who will provide additional detail on the quarter Financial results. Alana Thank You, Caroline and good morning everyone. Let me expand on some of the Dynamics behind our third quarter performance, and how we're positioning the company as we close out the year, while total company revenue of 51 million represented, an

11% year-over-year decline on a same station basis and 7 and a half. Percent decline ex-political the composition of that Revenue continues to improve in quality.

Agency softness remains a single largest drag on total revenue. However, the story beneath the top line is 1 of improving mixed resilience.

National agency revenue, excluding political, declined approximately 16% year-over-year, reflecting continued contraction in large-scale, traditional media. This decline is driven by continued pullbacks in telecom, cable insurance, and quick service restaurant advertising; the category remains under sustained pressure. As agencies reallocate budgets toward digital performance channels and reduce forward commitments across broadcast.

The rate of decline accelerated modestly from the 12.1. Decrease, in due to reinforcing the importance of easily pivot toward direct client relationships, and digital monetization.

reflecting stronger expectation and improved conversion in key markets, including Philadelphia Tampa, and New Jersey,

Declined primarily tied to category, with specific softness in auto retail and sports betting. The gap left by agency contraction continues to be partially offset by the ongoing strength of local direct business, which, as Caroline previously mentioned, grew 3.5% year-over-year and now represents nearly 60% of total local revenue.

New business remains under pressure down approximately 12% year-over-year, ex-political, but the rate of decline has slowed materially compared to q2's 21.6% contraction.

We are seeing increased pipeline activity across retail. Professional Services and Regional Healthcare categories. Both Healthcare alone now accounting for nearly 9% of total revenue up from 6%. A year ago, 1 of the few categories, delivering consistent double-digit growth this year.

From a category standpoint, the mix continues to evolve in a way that supports our long-term strategy consumer services accounting for roughly 30% of total revenue, underscoring, the strength of locally driven service based advertisers across Home, Improvement Healthcare, and personal services. Meanwhile entertainment Auto and Retail continue to show weakness representing approximately 14%.

9% and 16% of total revenue respectively.

Entertainment declined, nearly 40% year-over-year, reflecting delayed commitments from National promoters and a softer event. Calendar, Otto was down. Roughly 8% constrained by manufacturer level budget, compression and dealer consolidation.

Retail. Decreased 22% year-over-year as advertisers continued to shift spending towards e-commerce and digital performance platforms.

Taken together, these trends point to a more balanced revenue mix and incremental recovery across several core categories.

While agency and National channels, remain Under Pressure, local execution, and digital adoption are helping to offset the headwinds and provide a clearer line of sight and destabilization heading into Q4.

Our digital business continues to define the tra trajectory of our company.

The Caroline previously, mentioned Revenue, grew approximately 28% year-over-year on the same station basis accounting for roughly 25% of total company Revenue.

What's most notable this quarter is the step change in digital profitability on a total company basis. Not to be confused with the same station basis. Digital operating margin expanded from roughly 7% in the prior year period to 21% in Q3, reflecting the combined effects of portfolio optimization.

Titer cost. Control. An approved monetization efficiency.

Turning to expenses this remains 1 of the clearest proof points of our transformation.

As Caroline previously mentioned, operating expenses for the quarter were down approximately 8% year-over-year for million dollars.

Corporate expenses are now nearly 50% lower than prior year period. However, in Q3 25, we benefited from the 1-time 3 classification of 278,000 in capital expenditures and a 526,000 franchise adjustment, which reduced reported corporate expenses in the current quarter. We do expect Franchise Tax expense to Trend higher in Q4 2025 as those adjustments normalized.

While we recognize no severance of the corporate level, in Q3 2025, we recognized over $400,000 in corporate severance expense in Q3 244. All of which makes the year-over-year reduction up here more pronounced than it truly is on a normalized basis.

During the quarter, we incurred approximately $1.1 million in one-time costs, primarily related to severance from the Q3 workforce realignments and transaction fees tied to the pending Fort Myer sale and the sale of WPB in Tampa.

I'm profitability station operating income, or FOI, with $4.9 million adjusted FOI excluding stock-based compensation, severance, and one-time items, with $5.9 million and adjusted EBITDA with $3.9 million, excluding dollars in stock-based compensation, $1 million in severance, and $1.6 million in transaction fees and one-time expenses.

Million dollars, largely consistent with prior periods. We remain disciplined in capital allocation and continue to prioritize leveraging the proceeds from the Fort Myers transactions as they are realized.

The combined effect of these actions is a leaner, more efficient enterprise.

1 capable of generating higher return on every dollar of revenue in converting cost savings into sustainable shareholder value.

From a liquidity standpoint, we maintain a cash position of 14.3 million.

Capital expenditures totaled approximately $2.2 million in Q3, primarily reflecting one-time investments tied to our buildout of a combined centralized engineering center and studio relocation project in Charlotte, North Carolina. This initiative is designed to consolidate engineering infrastructure while also transitioning our local studio operations into a more modern, cost-efficient footprint.

The project is expected to reduce annual operating expenses by nearly 1 million dollars in 2026.

The program remains on track for completion by q1 of 2026 with the majority of related capex, expected to occur. In Q4 2025 with that, I'll turn the call back over to Caroline. Thank you, Alana, before we move into our ratings recap, I want to take a moment to acknowledge a tremendous loss within our

Family, earlier this month, we said goodbye to Pierre Robert, a legendary voice in Philadelphia and one of the most beloved figures in rock radio. Pierre's passing marks the end of an era, not only for WMMR but for our entire company and for the generations of listeners who grew up with his voice. His warmth and his genuine love of music, for more than four decades, Pierre embodied everything that makes local radio meaningful: authenticity, storytelling, and a deep connection with his community. His kindness and energy inspired countless colleagues and listeners alike, and his influence will continue to shape our culture for years to come.

On behalf of everyone at Beasley including our colleagues at WMMR. We extend our heartfelt, condolences to Pierre's family and the many fans who welcome them into their lives.

His spirit will always be part of Who We Are.

Now turning to ratings? Beasley Brands, continue to deliver strong results during the third quarter. According to the latest, nilson data, our combined PPM, and diary Market ratings Rose 6% year-over-year in aqh, among adults, 2554 underscoring the continued strength of our content

Our Brands and our connection to a core audiences.

Speaking of our connection to our audiences. We were once again recognized at the 2025 NAB. Marconi Awards where WMMR Philadelphia earned 3 Marconi number 1, legendary station of the Year number 2 Major Market station of the year. And number 3, Major Market personality of the year with Preston and Steve a remarkable achievement that speaks to both Heritage and innovation.

As we look to the fourth quarter, we remain both realistic and encouraged while industry, headwinds persist. Particularly in agency categories, we continue to see momentum in the areas, under our Direct Control, including local, direct, and oh, Ando product growth.

Now it including approximately 8.2 million in political revenue from the fourth quarter of last year. Total company revenue for Q4 is pacing down roughly 20% year-over-year.

Revenue is pacing down in the high single digits, which is generally consistent with third quarter trends.

We are expecting the full year 2025 station operating and corporate expenses. To be down between 25 and 30 million. This excludes Severance and other 1-time expenses.

We remain committed to advancing our strategy of scaling, our hired margin, digital products, improving our overall margins across, all products, and pivoting ourselves toward direct data-driven Revenue.

By executing on these initiatives. We will strengthen our balance sheet and deliver long-term value for our shareholders partners and employees.

So, I thank you for your continued support. And Alana, I think we have a few questions that came in earlier today.

Here are the questions that were submitted prior to this call?

Number 1, can you comment further on the agency Channel issues? At what point do we anniversary? The challenges there?

Yes, as I just mentioned, uh agency business, um, continues to be a headwind. Although we do see it as slightly improved uh, in the fourth quarter, X political, we do expect that we will be anniversary. The anniversary of these challenges will take shape in first quarter of next year.

Thank you.

My challenges, do you?

You expect to do more cost savings in 2026.

Yes. Uh, a couple of things: we anticipate the benefit of savings from our third and fourth quarter cuts to be about $1 million for next year. Plus, we are looking at further savings as we go into 2026.

And last question, can you provide a sales price on Fort Meyers? Who is the buyer of Fort Meyers? Do you see the opportunity for more assets sales? So there are 2 transactions. Um, that cover the Fort Meyers sell, uh, 1 is for 9 million. The other is for 9 million, so a total of 18 million, um, to Fort Meyers broadcasting and some broadcasting. Um, and as I've said this entire year, we're always open to discussing a creative transactions that will help us reduce our debt and our Leverage.

Thank you so much that concludes our conference call this morning.

Thank you very much. Colby will hand it over to you.

Thank you. This concludes today's conference call. You may now disconnect