Q2 2026 Urban One Inc Earnings Call

Speaker #1: Ladies and gentlemen, thank you for standing by, and welcome to the Urban One 2026 second-quarter earnings call. As a reminder, this conference is being recorded.

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Urban One 2026 Q2 earnings call. As a reminder, this conference is being recorded. We will begin this call with the following safe harbor statement. During this conference call, Urban One will be sharing with you certain projections or other forward-looking statements regarding future events or its future performance. Urban One cautions you that certain factors, including risks and uncertainties referred to in the 10-Ks, 10-Qs, and other reports it periodically files with the Securities and Exchange Commission, could cause the company's actual results to differ materially from those indicated by its projections or forward-looking statements. This call will present information as of 4 August 2026. Please note that Urban One disclaims any duty to update any forward-looking statements made in the presentation.

Speaker #1: We will begin this call with the following safe-harbor statement: during this conference call, URBAN ONE will be sharing with you certain projections or other forward-looking statements regarding future events or its future performance.

Speaker #1: Urban One cautions you that certain factors, including risks and uncertainties referred to in the 10-Ks, 10-Qs, and other reports periodically filed with the Securities and Exchange Commission, could cause the company's actual results to differ materially from those indicated by its projections or forward-looking statements.

Speaker #1: This call will present information as of August 4, 2026. Please note that Urban One disclaims any duty to update any forward-looking statements made in the presentation.

Speaker #1: In this call, URBAN ONE may also discuss some non-GAAP financial measures in talking about its performance. These measures will be reconciled to GAAP either during the course of this call or in the company's press release, which can be found on its website, at www.urbanone.com.

Operator: In this call, URBAN ONE may also discuss some non-GAAP financial measures in talking about its performance. These measures will be reconciled to GAAP either during the course of this call or in the company's press release, which can be found on its website at www.urbanone.com. A replay of the conference call will be available from 2:00 PM Eastern Time, 4 August 2026, until 11:59 PM Eastern Time on Tuesday, 11 August 2026. Callers may access the replay by calling 1-800-770-2030. International callers may dial direct 1-609-800-9909. The replay access code is 3701023. Access to live audio and a replay of the conference will also be available on URBAN ONE's corporate website at www.urbanone.com. The replay will be made available on the website for 7 days after the call. No other recordings or copies of this call are authorized or may be relied upon.

Speaker #1: A replay of the conference call will be available from 2 o'clock PM Eastern Time August 4, 2026, until 11:59 PM Eastern Time on Tuesday, August 11, 2026.

Speaker #1: Callers may access the replay by calling 1-800-770-2030. International callers may dial direct at 1-609-800-9909. The replay access code is 3701023. Access to live audio and a replay of the conference will also be available on URBAN ONE's corporate website at www.urbanone.com.

Speaker #1: The replay will be made available on the website for seven days after the call. No other recordings or copies of this call are authorized or may be relied upon.

Speaker #1: I will now turn the call over to Alfred C. Liggins, Chief Executive Officer of URBAN ONE, who is joined by Peter Thompson, Chief Financial Officer. Mr. Liggins, please go ahead.

Operator: I will now turn the call over to Alfred C. Liggins, Chief Executive Officer of URBAN ONE, who is joined by Peter Thompson, Chief Financial Officer. Mr. Liggins, please go ahead.

Speaker #2: Also joining us as usual is Jody Drewer, Chief Financial Officer at TV1, Chris Simpson, our General Counsel, and Karen Wishart, our Chief Administrative Officer.

Alfred C. Liggins III: Also joining us as usual is Jody Drewer, our Chief Financial Officer at TV One, Chris Simpson, our General Counsel, and Karen Wishart, our Chief Administrative Officer. As you've seen in the press release and the results that have come out, we have seen sequential improvements over Q1, but still we are in a rate of decline, less decline than Q1. However, still a tough H1. We are expecting things to pick up as we move into Q3 as political starts to become more and more of a factor in our numbers. Even though it's an unknown, we're hopeful because of competitive races in Ohio, Texas, Georgia, North Carolina, and Indiana. During the quarter, we have continued to reduce our leverage with market repurchases of our debt.

Speaker #2: As you've seen in the press release and the results that have come out, we have seen sequential improvements over Q1. But still, we are in a rate of decline—less decline than Q1.

Speaker #2: But however, still a tough first half of the year. We are expecting things to pick up as we go into move into Q3, as political starts to become more and more of a factor in our numbers.

Speaker #2: Even though it's an unknown, we're hopeful because of competitive races in Ohio, Texas, Georgia, North Carolina, and Indiana. During the quarter, we have continued to reduce our leverage with market repurchases of our debt.

Alfred C. Liggins III: We spent about $23.5 million purchasing our 2031 Second Lien Notes at an average price of approximately $0.42 on the dollar. That's about a $60.2 million long-term debt reduction and an annual interest savings of $4.6 million. However, because of the H1, we have decided to adjust our guidance down from 60 to the mid-50s, even though we still don't know exactly where political's going to come out. Also, we closed on our Dallas acquisition. I believe that was 17 August.

Speaker #2: We spent about $23.5 million purchasing our 2031 second lien notes at an average price of approximately $42 cents on the dollar. That's about a 60.2 million dollar long-term debt reduction, and an annual interest savings of 4.6 million dollars.

Speaker #2: However, because of the weak first half of the year, we have decided to adjust our guidance down from 60 to the mid-50s. Even though we still don't know exactly where political's going to come out.

Speaker #2: And also, we closed on our Dallas acquisition—I believe that was August 17—and that's off to a good start. That's going to contribute significantly to the last five and a half months.

Peter Thompson: Yeah.

Alfred C. Liggins III: That's off to a good start, and that's going to contribute significantly to the last five and a half months. There's potential upside there. Still, out of an abundance of caution and trying to be more accurately elected to bring the guide down. That could change, but at this point in time, we're saying mid-50s. I'm going to turn it over to Peter to go into the details of the numbers, and then we can open it up for Q&A. Peter?

Speaker #2: There's potential upside there, but still, out of an abundance of caution and trying to be more accurate, we elected to bring the guide down.

Speaker #2: That could change, but at this point in time, we're saying mid-50s. I'm going to turn it over to Peter to go into the details of the numbers, and then we can open it up for Q&A.

Speaker #2: Peter?

Speaker #3: Thanks, Alfred. So, consolidated net revenues for 3 months ended June 30, 2026, was approximately $85.8 million, which was 6.4% decrease year over year. Net revenue for the radio broadcasting segment was $35.3 million, a decrease of 3.9% year over year.

Peter Thompson: Thanks, Alfred. Consolidated net revenues for three months ended 30 June 2026 was approximately $85.8 million, which was 6.4% decrease year over year. Net revenue for the radio broadcasting segment was $35.3 million, a decrease of 3.9% year over year. Excluding political, net revenue for radio was down 6.6% year over year. According to Miller Kaplan, our local ad sales were down 10.1%, against a market that was down 7.8%, and our national advertising sales were down 1.5% against a market that was down 4.6%. We outperformed on national and underperformed a little on local. Our largest ad category was services, which was down approximately 0.7%, primarily due to legal services. Government public category was up 14.5% as a result of political spending, and the telecommunications category was up 16.9%. All the other major categories were down in Q2.

Speaker #3: Excluding political, net revenue for radio was down 6.6% year over year, according to Miller Kaplan. Our local ad sales were down 10.1% against a market that was down 7.8%, and our national advertising sales were down 1.5% against a market that was down 4.6%.

Speaker #3: So we outperformed on national and underperformed a little on local. Our largest ad category was services, which was down approximately 0.7%, primarily due to legal services.

Speaker #3: The government/public category was up 14.5% as a result of political spending, and the telecommunications category was up 16.9%. All the other major categories were down in the quarter.

Speaker #3: Net revenue for each media was 4.8 million dollars in the same quarter. Decline of 10.6% from the prior year. And adjusted EBITDA reached was a loss of $1 million.

Peter Thompson: Net revenue for Reach Media was $4.8 million in the same quarter, decline of 10.6% from the prior year. Adjusted EBITDA on Reach was a loss of $1 million. We just continued to see declines in network revenue available for us to participate in. Net revenue for digital segment was down 8.4% at $9.4 million. Decrease was driven by the decrease in national direct revenue streams as a result of reductions in DEI-focused spending and lower client spending in general due to macroeconomic concerns. We recognized approximately $37.1 million of revenue from our cable television segment during the quarter, a decrease of 7.4%. Cable television advertising sales were down 9.6%, with strong competition from the NBA playoffs, and that contributed to prime delivery declines of 21% year over year for persons 25 to 54.

Speaker #3: And we just continued to see declines in network revenue available for us to participate in. Net revenue for digital segments down 8.4% at 9.4 million dollars.

Speaker #3: Decrease was driven by the decrease in national direct revenue streams. As a result of reductions in DEI-focused spending, a lower client spending in general due to macroeconomic concerns.

Speaker #3: We recognize approximately $37.1 million of revenue from our cable television segment during the quarter, a decrease of 7.4%. Cable television advertising sales were down 9.6%.

Speaker #3: It's strong competition from the NBA playoffs and that contributed to prime delivery declines of 21% year over year for persons 25, 54. And this, along with a continued weak scatter market, led to more commercial units continue to be allocated to direct response.

Peter Thompson: This, along with a continued weak scatter market, led to more commercial units continuing to be allocated to direct response at lower average unit rates. Cable television affiliate revenue was down by 4.5%, driven by subscriber churn as linear cable continues to decline, and that was partially offset by an increase in subscriber rates. Traditional linear cable TV subscribers at TV One, as measured by Nielsen, finished Q2 at 27.3 million, compared to 34.3 million at the end of Q2 2025. Inclusive of virtual subscribers, TV One finished with 30.5 million Nielsen subscribers, compared to 35.4 million in Q2 2025. Decline obviously being driven by linear churn. Cleo TV had 27.2 million traditional linear Nielsen subs and 31.1 million inclusive of virtual subscribers.

Speaker #3: That lower average unit rates. Cable television affiliate revenue was down by 4.5%, driven by subscriber churn, as linear cable continues to decline. And that was partially offset by an increase in subscriber rates.

Speaker #3: Traditional linear cable TV subscribers at TV1, as measured by Nielsen Finch Q2 at 27.3 million, compared to 34.3 million at the end of Q2 '25.

Speaker #3: Inclusive of virtual subscribers, TV1 finished with 30.5 million Nielsen subscribers, compared to 35.4 million in the second quarter of 2025. Decline, obviously, being driven by linear churn.

Speaker #3: Cleo TV had 27.2 million traditional linear Nielsen subs and 31.1 million inclusive of virtual subscribers. Through the first four weeks of Q3 2026, TV One is up by 4% in prime persons 25-54 delivering.

Peter Thompson: Through the first four weeks of Q3 2026, TV One is up by 4% in prime persons 25 to 54 delivery compared to Q2 2026, and only down 3% compared to Q3 2025. Operating expenses, excluding depreciation, amortization, stock-based compensation, and impairment charges, were approximately $75 million for the three months, compared to approximately $78.1 million for the comparable period in 2025. This decrease was mainly driven by sales and marketing expense decreases in the operating segments. Radio expenses were down by 1.6%, or half a million dollars, driven primarily by lower revenue and lower bad debt reserves, so lower expenses connected to revenue, sales commission, et cetera. Reach operating expenses were down 17%, or $1.2 million, primarily due to lower bad debt reserves. Operating expenses in the digital segment were down 8.7%, driven by a decrease in traffic acquisition costs, commissions, headcount savings, and bad debt reserves.

Speaker #3: Compared to Q2 2026. And only down 3% compared to Q3 2025. Operating expenses excluding depreciation and amortization stock-based compensation and impairment charges were approximately 75 million dollars for the three months.

Speaker #3: Compared to approximately $78.1 million for the comparable period in 2025, this decrease was mainly driven by sales and marketing expense decreases in the operating segments.

Speaker #3: Radio expenses were down by 1.6%, or half a million dollars, driven primarily by lower revenue and lower bad debt reserves. So lower expenses connected to revenue and sales commission, etc.

Speaker #3: Reach operating expenses were down 17%, or $1.2 million, primarily due to lower bad debt reserves. Operating expenses in the digital segment were down 8.7%, driven by a decrease in traffic acquisition costs, commissions, headcount savings, and bad debt reserves.

Speaker #3: Operating expenses in the cable television segment were up 4.1%, driven by a combination of programming expenses and accounting for new executive agreements at TV1.

Peter Thompson: Operating expenses in the cable television segment were up 4.1%, driven by a combination of programming expenses and accounting for new executive agreements at TV One. Operating expenses in corporate, down by approximately 16.7%, driven by lower professional service fees and other compensation-related costs. Consolidated adjusted EBITDA was $11.7 million, down 16%. Consolidated broadcast and digital operating income was approximately $22.2 million, a decrease of 13.7% year over year. Interest expense in the P&L was down to approximately $2.1 million, down from $9.7 million last year. It's reflecting the debt repurchase accounting and lower effective interest rates under the troubled debt restructuring rules. We made cash interest payments of approximately $5 million during the quarter.

Speaker #3: Operating expenses incorporate down by approximately 16.7%, driven by lower professional service fees and other compensation-related costs. Consolidated adjusted EBITDA was 11.7 million dollars, down 16%.

Speaker #3: Consolidated broadcast and digital operating income was approximately $22.2 million, a decrease of 13.7% year over year. Interest expense in the P&L was down to approximately $2.1 million, down from $9.7 million last year.

Speaker #3: It's reflecting the debt repurchase accounting and lower effective interest rates under the troubled debt restructuring rules. We made cash interest payments of approximately $5 million during the quarter.

Peter Thompson: The semiannual cash interest payment for the 2030 and 2031 notes was made on 1 April, and the next payment is due on 1 October for the full 180 days of accrued interest, which is approximately $12.1 million. During the three months ended 30 June, we repurchased approximately $23.5 million of our 2031 second lien notes at a weighted average price of 42% of par debt repurchase of the 2031 second lien notes in the second quarter reduced the outstanding long-term debt balance to $303.2 million. Year to date, that's a total reduction in long-term debt of $60.2 million and an annualized interest saving of $4.6 million. Under the troubled debt restructuring account, the long-term debt on the balance sheet includes a premium which amortizes over the remaining term, and we've separated that out in the press release so you can see what that is.

Speaker #3: The semi-annual cash interest payment for the 2013 and 2031 notes was made on April 1st, and the next payment is due on October 1st for the full 180 days of accrued interest, which is approximately $12.1 million.

Speaker #3: During the three-month end of June 30th, we repurchased approximately 23.5 million dollars of our 2031 secondly notes as a way to average price of 42% of par debt repurchase of the 2031 secondly notes in the second quarter, reduced the outstanding long-term debt balance to 303.2 million dollars.

Speaker #3: Year-to-date, as the total reduction in long-term debt of 60.2 million dollars, and an annual annualized interest saving of 4.6 million dollars. Under the troubled debt restructure accounting, the long-term debt on the balance sheet includes a premium which amortizes over the remaining term, and we've separated that out in the press release so you can see what that is.

Speaker #3: We drew an additional 10 million dollars in the second quarter under the asset-backed facility. Which resulted in total outstanding balance there of 20 million dollars.

Peter Thompson: We drew an additional $10 million in the second quarter under the asset-backed facility, which resulted in total outstanding balance there of $20 million. We made a further additional draw of $7 million during the quarter, and then we just repaid this week $5 million in the third quarter. We're at $22 million drawn there, and we have current borrowing capacity of an incremental $24.1 million. We recognize approximately $13.9 million of goodwill impairment charge and approximately $300,000 of long-lived asset impairment charges related to Reach Media. We recorded depreciation and amortization expense of approximately $6.2 million, which includes $4.4 million of amortization for the radio broadcasting license and TV One trade name. Benefit from income taxes was approximately $1.7 million. We paid cash taxes net of refunds in the amount of approximately $500,000, and capital expenditures for the quarter are approximately $1.7 million.

Speaker #3: We made a further additional draw of 7 million dollars and then during the quarter, and then we just repaid this week 5 million dollars in the third quarter.

Speaker #3: So we're at 22 million dollars drawn there, and we have current borrowing capacity of an incremental 24.1 million dollars. We recognize approximately 13.9 million dollars of goodwill impairment charge and approximately 300,000 dollars of long-lived asset impairment charges related to reach media.

Speaker #3: We recorded depreciation and amortization expense approximately 6.2 million dollars, which includes 4.4 million dollars of amortization for the radio broadcasting license and TV1 trade name.

Speaker #3: Benefit from income taxes was approximately $1.7 million. We paid cash taxes, net of refunds, in the amount of approximately $500,000. Capital expenditures for the quarter were approximately $1.7 million.

Speaker #3: Net loss was approximately 7 million dollars, or 1.58 per share, compared to a net loss of 77.9 million dollars, or 17.41 cents per share for the second quarter of 2025.

Peter Thompson: Net loss was approximately $7 million or $1.58 per share, compared to a net loss of $77.9 million, or $17.41 per share for the same quarter of 2025. During the three months, we did not repurchase any shares of Class A common stock, and we repurchased 129,543 shares of Class D common stock for approximately $600,000 at an average price of $4.50. That was under the annual repurchase program for employee stock. We also executed stock-based tax repurchases of 145,513 shares of Class D common stock, which was approximately $700,000 at an average price of $4.52 during the quarter. As of June 30, the current contract outstanding debt balance was approximately $323.2 million, including the ABL draw. Ending unrestricted cash was $15.4 million, resulting in net debt of approximately $307.9 million, compared to $46.2 million of LTM reported adjusted EBITDA for the total leverage ratio of 6.66 times.

Speaker #3: During the three months, we did not repurchase any shares of Class A common stock, and we repurchased 129,543 shares of Class D common stock for approximately $600,000, at an average price of $4.50.

Speaker #3: That was under the annual repurchase program for employee stock. We also executed stock-based tax repurchases of 145,513 shares of class D common stock, which was approximately 700,000 dollars, at an average price of $4.52 during the quarter.

Speaker #3: As of June 30th, the current contracts and outstanding debt balance was approximately 323.2 million dollars, including the ABL draw, ended unrestricting cash ending unrestricted cash was 15.4 million dollars, resulting in net debt of approximately 307.9 million dollars, compared to 46.2 million dollars of LTM reports at adjusted EBITDA for the total leverage ratio of 6.66 times.

Speaker #3: As we've previously announced in March, we agreed to sell our WMXG and WLNK radio broadcast licenses in Charlotte, North Carolina, to unrelated third parties for approximately 0.7 million dollars and 4.2 million dollars, respectively.

Peter Thompson: As we previously announced in March, we agreed to sell our WMXG and WLNK radio broadcast licenses in Charlotte, North Carolina, to unrelated third parties for approximately $0.7 million and $4.2 million, respectively. We completed both sales on June 1, 2026, and recognized a gain of $4.7 million. In April, we entered into an agreement to acquire Service Broadcasting Group in Dallas, Texas, including radio stations KKDA and KRNB for $22 million. At the same time, we also entered into agreement to sell radio station KZMJ to Fuzion Dallas, LLC for $6 million. We completed on the sale of KZMJ on July 6 and recognized a gain of $3.2 million in Q3. We also completed the acquisition of Service Broadcasting Group on July 17, 2026. With that, I'll hand back to Alfred.

Speaker #3: We completed both sales on June 1st, 2026, and recognized gain of 4.7 million dollars, in April we entered into an agreement to acquire service broadcasting group in Dallas, Texas, including radio stations KKDA and KRNB for 22 million dollars, same time we also entered into agreement to sell radio station KZMJ to Fusion Dallas, LLC for 6 million dollars.

Speaker #3: We completed on the sale of KZMJ on July 6th and recognized gain of 3.2 million dollars in the third quarter. We also completed the acquisition of service broadcasting group on July 17th, 2026.

Speaker #3: With that, I'll hand it back to Alfred.

Speaker #1: Thank you, Peter. Operator, can you go to the lines for Q&A, please?

Alfred C. Liggins III: Thank you, Peter. Operator, can you go to the lines for Q&A, please?

Speaker #2: We will now begin the question and answer session. To ask a question, press star, then the number 1 on your telephone keypad. Our first question will come from the line of Ben Briggs with Stonex Financial.

Operator: We will now begin the question and answer session. To ask a question, press star then 1 on your telephone keypad. Our first question will come from the line of Ben Briggs with StoneX Financial. Please go ahead.

Speaker #2: Please go ahead.

Speaker #4: Hey, good morning, guys. Thank you for thank you for taking the time to take the questions. So I've got a couple here. So, you know, a lot of puts and takes here, but obviously we've got midterms coming up.

Ben Briggs: Hey, good morning, guys. Thank you for taking the time to take the questions. I've got a couple here. A lot of puts and takes here, but obviously we've got midterms coming up. I know that you mentioned political is going to be a tailwind. Is there any way you can quantify that or even give some, I guess, relative guidance versus what it was like previously? I know that with the Dallas acquisition, there may be some changes as far as what the political demand because-

Speaker #4: I know that you mentioned political is going to be a tailwind. Is there any way you can quantify that, or even give some I guess relative guidance versus what it was like previously?

Speaker #4: I know that with the Dallas acquisition, there may be some changes as far as what the political demand looks like, just because—?

Speaker #1: Yeah, that's difficult.

David Brownie: Yeah, that's difficult. That's like we don't know yet how much money people are gonna

Speaker #5: That's like, yeah, we don't know yet how much money people are going to, you know, spend. I mean, that's, you know, we won't know until we actually get into the negotiation, you know, of it.

Alfred C. Liggins III: We actually get into the negotiation of it. It's also going to depend on exactly how competitive people think it's going to be. I do know that we've got radio budgeted at about $11.1 million. Then 2022, we did basically $13 million. We're saying that we're not going to be quite as robust as 2022.

Speaker #5: It's also going to depend on, you know, exactly how competitive people, you know, think it's going to be. I do know that we've got radio budgeted at about 11.1 million dollars, you know, and then in '22 we did 12, basically 13, you know, and so, you know, not quite as, you know, you know, we're not we're saying that we're not going to be quite as robust as '22, but, you know.

Peter Thompson: Yeah, there was a big, was it a big Georgia runoff back then?

Speaker #4: Yeah, there was a big was it a big Georgia?

Speaker #5: So yes, it was a big Georgia runoff, right? You know, so, and it was a runoff, so, you kind of got two bites of the apple.

Alfred C. Liggins III: There was a big Georgia runoff, right. It was a runoff, so you kind of got two bites of the apple. Georgia's expected to be competitive again, right, in the runoff race. There won't be a runoff. You just don't know. It's hard to tell. Fortunately, what we can tell, we can look at polls and say where the races are close, right? Like close in Georgia. The governor's race looks close there, Keisha Lance Bottoms, against, I forgot the Republican candidate's name. That looks close. She's supposedly kind of behind the curve on fundraising, which I don't really understand given on a competitive race like that, why wouldn't people be throwing money at it? There's all these wild cards, let's just say it's going to be competitive.

Speaker #5: You know, Georgia's expected to be competitive again, right, in the off-soft race, but, you know, there won't be a runoff yet. And so you just don't know.

Speaker #5: It's just like, you know, it's, you know, it's hard to tell. I mean, it feels like it's going to be I mean, fortunately, what we can tell, we can look at polls and say, you know, where the races are close, right?

Speaker #5: Like, you know, close in Georgia, there also the governor's race looks close there, you know, Keisha Lance Bottoms against I forgot the Republican candidate's name.

Speaker #5: That looks close. You know, she's supposedly kind of behind the curve on fundraising, which I don't really understand, given, you know, in a competitive race like that, you know, why wouldn't people be throwing money at it?

Speaker #5: So there's all these, you know, wild cards, but anyway, let's just say it's going to be competitive. Indiana's going to be competitive on a I think it's a state attorney general's race.

Alfred C. Liggins III: Indiana's going to be competitive on a, I think it's a state attorney general's race. Ohio is supposedly competitive with Sherrod Brown trying to reclaim a seat in the Senate. Everybody in the country has been talking about Texas and James versus Ken. Anything could change, right? The gap could widen, and people feel like it's less competitive. Hope that doesn't happen. Then also the other wild card is how much do advertisers spend with radio versus spending with digital and TV, et cetera. Suffice it to say, it feels like that there are multiple competitive races in places that we have stations. You're right, Dallas should be different for us because we've got a very strong position against the African American audience, the Democrats looking more competitive. That should bode well for us. Exactly how well for it, I can't tell you.

Speaker #5: Ohio, is supposedly competitive, with Sherrod Brown, you know, trying to reclaim a seat in the Senate. And, you know, everybody in the country has been, you know, talking about Texas and Tallerico, you know, versus Paxton.

Speaker #5: And you think it changed, right? The gap could widen and people feel, you know, like it's less competitive. Hope that doesn't happen. And then the also the other wild card is how much do advertisers spend with radio versus spending with digital and TV, etc.

Speaker #5: So, you know, suffice it to say it feels like that they're multiple competitive races in places that we have stations. And you're right, Dallas, you know, should be different for us because we've got, you know, a very strong position against the African American audience.

Speaker #5: The Democrats are looking more competitive, and so that should bode well for us. But, you know, exactly how well it will, I can't tell you.

Speaker #5: If you can find somebody who can actually really predict what the, you know, the ad dollar market's going to be in this industry, you know, you probably could make money with them on Kashi.

Alfred C. Liggins III: If you can find somebody who can actually really predict what the ad dollar market's going to be in this industry, you probably could make money with them on Kalshi.

Speaker #4: I will keep that in mind. I will keep that in mind.

Ben Briggs: I will keep that in mind. I will keep that in mind.

Speaker #5: But those are the races that we feel like, you know, that we feel will help us, right? Yeah.

Alfred C. Liggins III: those are the races that we feel will help us, right? Yeah.

Speaker #4: Yep, yep. Now, I think you said you've got about 11, 11.1 million budgeted for political and fiscal '26.

Ben Briggs: Yep. Now, I think you said you've got about 11.1 million budgeted for political and fiscal 2026-

Alfred C. Liggins III: Correct

Speaker #5: Correct.

Speaker #4: In radio—well, does anything flow through to TV from political?

Ben Briggs: in radio. Will anything flow through to TV from political?

Alfred C. Liggins III: Yeah. TV usually only gives political and a presidential. Digital should see some, but TV, no.

Speaker #5: Yeah, I mean, TV usually only gets political in a presidential, you know, so digital should see some, you know, but TV, no. That's right, right?

Ben Briggs: Got it.

Alfred C. Liggins III: That's right.

Ben Briggs: Okay.

Alfred C. Liggins III: Right. Yeah.

Speaker #5: Yeah, yeah.

Speaker #4: Are you expecting much from digital?

Ben Briggs: Are you expecting much from digital?

Alfred C. Liggins III: I don't remember what the budget is. I think it's maybe a couple million bucks or something like that. Or maybe $1 million. Maybe it's $1 million. Digital can obviously be geo-targeted, right?

Speaker #5: I don't remember what the budget is. I think it's maybe a couple million bucks or something like that. Yeah, or maybe a million dollars.

Speaker #5: Yeah, maybe it's a million dollars. And so, because digital can obviously be a geo-targeted, right? So.

Ben Briggs: Yep. Okay. Kind of moving along, I know on the last call, you guys discussed some AM towers that might get sold. Is there anything to report there?

Speaker #4: Yep, yep. Okay. And then kind of moving along, so I know on the last call you guys discussed some AM towers that might get sold.

Speaker #4: Is there anything to report there?

Speaker #5: Nothing to report now. It's a process. It's ongoing, you know, right this second. And, you know, we feel good that we're going to have a positive outcome this year.

Alfred C. Liggins III: Nothing to report now. It's a process that's ongoing right this second. We feel good that we're going to have a positive outcome, and we think there'll be a positive outcome this year.

Speaker #4: Got it. Okay. Thank you. And then last one from me is, so I know you move guidance from 60 million to mid-50s. I think on the last call, there had been a discussion of about 40 million of free cash flow expectation.

Ben Briggs: Got it. Okay. Thank you. Last one from me is, I know you moved guidance from $60 million to mid-$50s. I think on the last call, there had been a discussion of about $40 million of free cash flow expectation in 2026. Is it safe to say, using the mid-$50s EBITDA, that it would be about $35 million of free cash flow expectation now? Am I thinking about that the right way?

Speaker #4: In 2026, is it safe to say, you know, using mid-50s EBITDA, that it would be about 35 million of free cash flow expectation now?

Speaker #4: Am I thinking about that the right way?

Speaker #5: Yeah, there's some more puts and takes. On non-cash stuff like ADU, burning through that, right, and off ADU balances, it's probably lower than that now.

Peter Thompson: Yeah. There's some more puts and takes on non-cash stuff like ADU, burning through that, writing off ADU balances. It's probably lower than that now, just because of the composition of how we're getting to the revenue and to the EBITDA number.

Speaker #5: Just because of the composition of how we're going to the revenue and to the EBITDA number.

Speaker #4: Okay. All right. Fair enough. Listen, I really appreciate the time. Thank you again for taking the questions. And good luck in third quarter.

Ben Briggs: Okay. All right. Fair enough. Listen, I really appreciate the time. Thank you again for taking the questions, and good luck in Q3.

Speaker #5: Thank you. Thank you.

Peter Thompson: Thank you.

Alfred C. Liggins III: Thank you.

Speaker #1: Our next question will come from the line of Erin Watts with Deutsche Bank. Please go ahead.

Operator: Our next question will come from the line of Aaron Watts with Deutsche Bank. Please go ahead.

Speaker #6: Hey everyone, thank you for taking my questions. I've got a couple, if I may, around the ad environment. Neil, I'll start on the radio side.

Aaron Watts: Hey, everyone. Thank you for taking my questions. I've got a couple, if I may, around the ad environment. I'll start on the radio side. I see the sequential improvement from Q1, but I think Q2 came in a little weaker than you had guided us last quarter. I appreciate it's difficult to be around 1 percentage point smart in advance on radio ads, but any factors you'd call out that maybe pushed Q2 a little softer than you had originally anticipated back in May on your last call?

Speaker #6: I see the sequential improvement from first quarter, but I think Q2 came in a little weaker than you had guided us last quarter. I appreciate it's difficult to be around a percentage point smart in advance on radio ads, but are there any factors you'd call out that maybe pushed Q2 a little softer than you had originally anticipated back in May on your last call?

Speaker #5: Yeah, I mean, I think local came in lighter than we thought and we underperformed the market. Locally, within that, obviously, there's a whole it's not really one category.

Peter Thompson: Yeah. I think local came in lighter than we thought, and we underperformed the market locally. Within that, obviously, it's not really 1 category. It was just across the board. Yeah, the pacings that we gave at the last call, we did miss those a little bit, and I think almost all of that was in local.

Speaker #5: It was just across it was just across the board. And so, yeah, the patience that we gave in the last call, we did miss those a little bit.

Speaker #5: And I think almost all of that was in local.

Speaker #6: Peter, anything you'd call out that is right now pushing national to be a bit firmer than local?

Aaron Watts: Peter, anything you'd call out that is right now pushing national to be a bit firmer than local?

Speaker #5: Not really. It's the way it's been. We've been underperforming the marketplace nationally. So I think we just righted that ship a little bit.

Peter Thompson: Not really.

Aaron Watts: Okay.

Peter Thompson: It's the way it's been. We've been underperforming the marketplace nationally, so I think we just righted that ship a little bit.

Speaker #6: Okay. If I look ahead to your 3Q radio guides down 2.8%, does that compare to the minus 3.9 you just reported in 2Q? And does that imply some firming in the underlying core ad market, or is that purely the political lift you Alfred, you were just kind of talking about a minute ago?

Aaron Watts: Okay. If I look ahead to your Q3 radio guide down 2.8%, does that compare to the -3.9% you just reported in Q2? Does that imply some firming in the underlying core ad market, or is that purely the political lift, Alfred, you were just talking about a minute ago?

Speaker #5: Look, you've got political starting to seep in there. You've got improvements in our Washington, D.C. market, you know, over what it was, you know, a year ago, based on some format changes.

Alfred C. Liggins III: Look, you've got political starting to seep in there. You've got improvements in our Washington, DC market over what it was a year ago based on some format changes. Atlanta is doing better than we thought it in Q3. That's before politicals jumped in there. I think I looked at the Atlanta forecast for political.

Speaker #5: Atlanta is doing better than we thought it in Q3. And that's before politicals jumped in there I think I looked at that. Atlanta forecast for political, it's not a huge number.

Alfred C. Liggins III: It's not a huge number in Q3, as I remember.

Speaker #5: In Q3, as I remember—yeah, we don't have a lot of political on the books yet. For Q3, we've only got a quarter of a million dollars.

Peter Thompson: Yeah. We don't have a lot of political on the books yet for Q3.

Alfred C. Liggins III: Yeah.

Peter Thompson: We've only got a quarter million dollars.

Speaker #5: So actually, the patience that's political are roughly the same. We're struggling in the Indianapolis, which has been a struggle all year long. Houston had a great Q1.

Alfred C. Liggins III: Yeah.

Peter Thompson: actually, the pacings, that's what's more.

Alfred C. Liggins III: Yeah

Peter Thompson: roughly the same.

Alfred C. Liggins III: We're struggling in Indianapolis, which has been a struggle all year long. Houston had a great Q1, a tough Q2, starting to do better again in Q3 and Q4. We think we lost the momentum because of World Cup, believe it or not. Just so many people took money and put it against that we felt like it really hurt us, particularly in Houston. Yeah.

Speaker #5: Tough Q2. Starting to do better again in Q3 and Q4. You know, we think we lost some momentum because of the World Cup, believe it or not.

Speaker #5: You know, because so many people, like, took money and put it against that, we felt like it really hurt us, particularly in Houston.

Speaker #5: Yeah.

Speaker #6: Okay, now that is helpful context. And I guess one last question for me, shifting over to the TV side—were many of those same factors weighing on TV advertising, or was there anything in particular on the TV side that you would call out that's pushing advertising?

Aaron Watts: Okay. No, that is helpful context. I guess one last one from me, shifting over to the TV side. Was it many of those same factors kind of weighing on TV advertising or anything in particular to the TV side that you would call out that's pushing advertising there?

Alfred C. Liggins III: TV's more of an inventory problem. More CTV impressions out there, weaker scatter market means that dollars start to default. We're going into upfront now, right? Upfront shows that you've got less advertisers coming for linear. Then when you look at CTV, you've got more impressions because of Netflix and Amazon, and then you've got a weaker scatter market. Long story short, it's putting pricing pressure on ad rates, particularly as ad rates start to default to direct response. I think those are the same kind of macro trends that folks are seeing in the linear cable business. I haven't been following everybody's numbers, but when I see Warner Bros. Discovery report, et cetera, it's kind of similar factors.

Speaker #5: TV is more of an inventory problem. You know, more CTV impressions out there. Weaker scatter market means that dollars start to default. We're going into upfront now, right?

Speaker #5: So upfront, you know, shows, you know, that you've got less advertisers coming, you know, for linear. You know, and then, you know, when you look at CTV, you've got more impressions, you know, because of Netflix and Amazon.

Speaker #5: And then you've got a weaker scatter market. Long story short, it's putting pricing pressure. You know, on ad rates, particularly as ad rates start to default, you know, to direct response.

Speaker #5: I mean, yeah, I think those are the same kind of macro trends that, you know, folks are seeing in the linear cable business. I haven't been following everybody's numbers, you know, but, you know, when I see Warner Brothers Discovery report, etc., you know, you know, it's kind of, you know, it's kind of similar factors.

Speaker #6: Okay. All right, great. Thank you for your time. I appreciate the thoughts.

Aaron Watts: Okay. All right. Great. Thank you for the time. Appreciate the thoughts.

Speaker #5: Thank you.

Alfred C. Liggins III: Thank you.

Speaker #1: Our next question will come from the line of Dennis Panula with LaPann Partners. Please go ahead.

Operator: Our next question will come from the line of Dennis Pannullo with Lapan Partners. Please go ahead.

Speaker #7: Hi, good morning, gentlemen. Thanks for taking the questions. Most of my questions have actually already been answered. I just have one last question. You guys had, what, about $14.1 million—this question is from Mr. Thompson—$14.1 million in non-cash goodwill and intangibles write-downs?

Dennis Pannullo: Hi. Good morning, gentlemen. Thanks for taking the questions. Most of my questions are actually already answered. I just have one last question. You guys had, what, about This question is for Mr. Thompson, $14.1 million in non-cash goodwill, intangibles, write-downs?

Peter Thompson: Yeah.

Speaker #7: Does that sound about right?

Dennis Pannullo: That sound about right?

Speaker #5: Yes. And that was all at that was all at reach media. That was all on the network.

Peter Thompson: Yes.

Dennis Pannullo: And-

Peter Thompson: That was all at Reach Media. That was all from our network. Yeah.

Speaker #7: Yeah. Just because of the way you guys word your press releases and don't actually mention or specifically talk about that, what would the bottom line have looked like without that 14.1 million dollar non-cash right down?

Dennis Pannullo: Just because the way you guys word your press releases and don't actually mention or specifically talk about that, what would the bottom line have looked like without that $14.1 million non-cash write-down?

Speaker #5: Well, look, we add it back in adjusted EBITDA because it is non-cash. So, in the headline numbers that we look at when we talk about the $11.7 million of adjusted EBITDA, it's already added back there.

Peter Thompson: Well, look, we add it back in adjusted EBITDA because it is non-cash. In the headline numbers that we look at when we talk about the $11.7 million of adjusted EBITDA, it's already added back there. Obviously, on net loss and EPS and stuff, it's in there, and you would add that back.

Speaker #5: Obviously, on net loss and EPS and stuff, it's in there. And you would add that back.

Speaker #7: Of course. And being a, you know, being a little facetious because, you know, a lot of people don't, you know, some investors probably don't get what, you know, EBITDA means.

Dennis Pannullo: Being a little facetious because a lot of people don't, some investors probably don't get what EBITDA means. I think if you broke it down just a little bit clearer for some of the investors, I think it would be helpful. Just my $0.02. Again, it's only worth a $0.01.

Speaker #7: And, you know, I think if you broke it down just a little bit clearer for some of the investors, I think it would be helpful.

Speaker #7: Just my two cents—you know, again, it's only worth a penny—being that, you know, we have this non-cash issue pretty much every quarter.

Peter Thompson: Yeah.

Dennis Pannullo: Being that we have this non-cash issue pretty much every quarter, it just beats the hell and makes the top-line number.

Speaker #7: And, you know, it just beats the hell and makes the, you know, the top line number when people look at the top line number, they see a loss of like 11 million dollars.

Peter Thompson: Yeah.

Dennis Pannullo: When people look at the top-line number, they see a loss of like $11 million. It kind of just bothers us.

Speaker #7: And, you know, kind of just.

Peter Thompson: Yeah. No, those impairments do swamp the numbers. Hopefully, we're cycling through the end of that.

Speaker #5: Yeah, I know it does. Those impairments do swamp the numbers. I mean, hopefully we're cycling through.

Speaker #7: You know, when you guys are working so hard to get your expenses down, you guys have done a great job with, you know, interest expense, obviously, you know, you've tweaked your you've become much more efficient in what your operations.

Dennis Pannullo: You guys are working so hard to get your expenses down. You guys have done a great job with interest expense, obviously. You've become much more efficient in all your operations, you get no benefit for it because this non-cash stuff knocks the crap out of you guys all the time.

Speaker #7: And you get no benefit for it because it's non-cash stuff knocks the crap out of you guys all the time.

Speaker #5: Yeah. Look, it's the way that Gap tells us we do it. And that's what we stick to. What I was saying was the cycling we're cycling through, hopefully, the end of that because we moved our radio FCC licenses.

Peter Thompson: Yeah. Look, it's the way that GAAP tells us we do it, that's what we stick to. What I was saying was-

Dennis Pannullo: I'm not saying-

Peter Thompson: we're cycling through, hopefully, the end of that because we moved our radio FCC licenses to be amortized. We made them finite licenses, we amortize them. We shouldn't see, we won't see big impairments there. We've written down all of the goodwill at Reach, there's not any more to go. I think, I'm hopeful that as we move forward, we shouldn't see nearly as many of the non-cash-

Speaker #5: To be amortized. So we made them finalize. And we amortize them. And so we shouldn't see we won't see big impairments there. We've written down all of the goodwill at reach.

Speaker #5: So there's not any more to go. So I think, I mean, I'm hopeful as we move forward, we shouldn't see nearly as many of the non-cash impairments.

Dennis Pannullo: Yeah

Peter Thompson: impairment charges.

Speaker #7: Yeah. And that's actually a great positive. And I'm glad you noted that. All I'm saying is you're going into great detail. You know, about, you know, radio down X percent, you know, TV down X percent.

Dennis Pannullo: That's actually a great positive, I'm glad you noted that. All I'm saying is you go into great detail about radio down X percent, the TV down X percent. You always go into great detail in your PR, but nowhere in there does it state that there was a non-cash charge that made you guys lose $14 million. That's all I'm saying is that, maybe extrapolate that in your PR a little bit better.

Speaker #7: And you guys go into great detail in your PR. But nowhere in there does it state that, you know, there was a non-cash charge that, you know, made you guys lose 14 million bucks.

Speaker #7: And that's all I'm saying is that, you know, maybe extrapolate that in your PR a little bit better.

Peter Thompson: Duly noted.

Speaker #5: Julie knows it. Got it. Yeah.

Alfred C. Liggins III: Got it. Yeah.

Speaker #7: Gentlemen, have a great day. And I thank you for taking the call.

Dennis Pannullo: Gentlemen, have a great day, and thank you for taking the call.

Speaker #5: Thank you so much. Thank you.

Peter Thompson: Thank you so much.

Alfred C. Liggins III: Thank you.

Speaker #1: Again, for questions, press star one, and our next question will come from the line of Adam Jacobson with RBR.com. Please go ahead.

Operator: Again, for questions, press star one. Our next question will come from the line of Adam Jacobson with rbr.com. Please go ahead.

Speaker #8: Hi, good morning. Thank you for taking my question. I wanted to dive in a little bit more regarding the impairment charges, because if you look at the overall numbers and you look at the portrait of URBAN ONE, your net loss was basically reflective of the impairment charge lowering to $14.16 million from $130.08 million.

Adam Jacobson: Hi. Good morning. Thank you for taking my question. I wanted to dive in a little bit more regarding the impairment charges because, if you look at the overall numbers and you look at the portrait of URBAN ONE, your net loss was basically reflective of the impairment charge lowering to $14.16 million from $130.08 million. As the last gentleman noted, the adjusted EBITDA here is certainly very important, and you've been talking a lot about political dollars. Let's move ahead to 2027. Political is cyclical, so what are your plans in terms of the overall portrait for URBAN ONE past political? Are you going to be focusing and doubling down on the multicultural story? Are you going to be looking at some of the non-multicultural assets and questioning, well, is there opportunity there, or is that a non-essential asset?

Speaker #8: And as the last gentleman noted, the adjusted EBITDA here is certainly very important. And you've been talking a lot about political dollars. But let's move ahead to 2027.

Speaker #8: Political is cyclical. So what are you plans in terms of the overall portrait for URBAN ONE past political? Are you going to be focusing and doubling down on the multicultural story?

Speaker #8: Are you going to be looking at some of the non-multicultural assets and questioning, well, is there opportunity there, or is that a non-essential asset?

Speaker #8: Just wondering what the post-political portrait is for you, or is that still a little too early to ask?

Adam Jacobson: Just wondering what the post-political portrait is for you, or is that still a little too early to ask?

Speaker #5: I think we have shown that, you know, we are open to expanding outside of our core African American targeted demographic, particularly as it relates to our radio operation and in particular as it relates to markets where we already operate and we're building scale.

Alfred C. Liggins III: I think we have shown that we are open to expanding outside of our core African American targeted demographic, particularly as it relates to our radio operation and in particular as it relates to markets where we already operate and we're building scale. I think I've said that we believe that that does give us more arrows in our quiver to help drive local ad solutions for our clients in those local markets, and we've seen success in that. I think you'll see us continue to do that. Managing political versus non-political years is something that we do every two years. We know there won't be political next year like there was a political last year, and so we'll have an operating plan to deal with that. Yeah, we believe that there will be further consolidation in the radio business.

Speaker #5: I think I've said that we believe that that does give us more arrows in our quiver to help, you know, drive local ad solutions for our clients in those local markets.

Speaker #5: And we've seen success in that, so I think you'll see us continue to do that. You know, managing political versus non-political years is something that we do.

Speaker #5: Like, you know, every two years. And so, you know, we know there won't be political, you know, next year, like there was political last year.

Speaker #5: And so we'll have an operating plan to deal with that. But yeah, we believe that there will be further consolidation in the radio business.

Speaker #5: We don't have any plans to go outside of our urban footprint in television, you know, at this point. And we've looked at some digital businesses that would have taken that, but couldn't, you know, come to terms on price.

Alfred C. Liggins III: We don't have any plans to go outside of our urban footprint in television at this point. We've looked at some digital businesses that would have taken that but couldn't come to terms on price. I think the most likely place that that happens is in radio because, look, you're in the business. I'm assuming the RBR is radio business report. You know that there's gonna be further consolidation. There's a lot of assets for sale. The key is to be able to acquire something that is de-levering, number one, and accretive. You also got to be able to acquire it at a value level that takes into account That even if you own everything, there's probably still pressure on your top line in a market because there's just pressure against the medium in the advertising space, right?

Speaker #5: So I think the most likely place that that happens is in radio because, you know, look, you're in the business. I'm assuming the RBR is radio business report.

Speaker #5: Do you know that there's going to be further consolidation? There's a lot of assets for sale. And the key is to be able to acquire something, you know, that is delevering, number one, and accretive. And you’ve also got to be able to acquire it at a value level that takes into account that, even if you own everything, you know, there's probably still pressure on your top line in a market, because there's just pressure against the medium in the advertising space, right?

Speaker #5: You know?

Adam Jacobson: Yes.

Speaker #8: Yes.

Speaker #5: And so, but look, that's been helpful, you know, to us. Houston is, you know, our largest market, you know, now. And, you know, our acquisitions at Cox stations was, you know, very beneficial, you know, to us there.

Alfred C. Liggins III: Look, that's been helpful to us. Houston is our largest market now, and our acquisition of the Cox stations was very beneficial to us there. Dallas was an urban acquisition, but that was a market where neither them or us were making any real money. I think the way we're configured now will actually fix that. We're just trying to be smart about how we do it. By the way, the radio consolidation trail is littered with companies that went bankrupt through consolidation just for the sake of consolidation. You have to be very deliberate about it.

Speaker #5: Dallas was an urban acquisition, but that was a market where we had, you know, neither them nor us were making any real money. You know, and I think the way we're configured now, we'll actually fix that, right?

Speaker #5: So, we're just trying to be smart about how we do it. By the way, the trail—the radio consolidation trail—is littered with companies that went bankrupt through consolidation just for the sake of consolidation.

Speaker #5: You have to be very deliberate about it.

Adam Jacobson: Thank you. I really appreciate your answer.

Speaker #8: Thank you. I really appreciate your answer.

Speaker #5: Yep. Thank you.

Alfred C. Liggins III: Yeah. Thank you.

Speaker #1: This concludes the question-and-answer session. I'll hand the call back over to Alfred for any closing comments.

Operator: This concludes the question and answer session. I'll hand the call back over to Alfred for any closing comments.

Speaker #5: Thank you. Operator, and thank you for those folks that participated and asked questions. We look forward to speaking with you either offline, if you have additional questions, or next quarter.

Alfred C. Liggins III: Thank you, operator. Thank you for those folks that participated and asked questions. We look forward to speaking with you either offline if you have additional questions or next quarter. We'll have a better handle on how the year shapes up on the next conference call. Thank you.

Speaker #5: And we'll have a better handle on how the year shapes up on the next conference call. Thank you.

Operator: This concludes today's call. Thank you again for joining. You may now disconnect.