Townsquare Media Inc (TSQ) Reports Mixed Third Quarter Results Amidst Digital Growth
Net revenue excluding political revenue flat year-over-year, with digital representing 52% of total net revenue.
Adjusted EBITDA decreased by 12% year-over-year, while digital advertising net revenue increased by 5.5%.
Strong cash generation allowed for significant debt repurchase and share buybacks.
Guidance for Q4 2023 projects net revenue between $110.6 million and $112.6 million, and Adjusted EBITDA between $24.8 million and $25.8 million.
On November 9, 2023, Townsquare Media Inc (NYSE:TSQ) released its financial results for the third quarter ended September 30, 2023. The company reported a net revenue decrease of 4.6% to $115.1 million compared to the same period in 2022. Excluding political revenue, the net revenue decreased by 3.8%. The digital segment of the business, however, showed resilience with a 5.5% increase in digital advertising net revenue. Despite the overall decline in net revenue, digital now accounts for 52% of Townsquare's total net revenue and 57% of its total Adjusted Operating Income.
Financial Performance Overview
Adjusted EBITDA for the quarter decreased by 12.1% to $27.2 million, and net income saw a significant decrease of $39.3 million. The diluted loss per share was $2.27, while Adjusted Net Income per diluted share was $0.46. The company also highlighted a strong cash generation with $39 million of cash flow from operations in the first nine months of 2023, an increase of $7 million compared to the prior year.
Debt Repurchase and Share Buybacks
Bill Wilson, CEO of Townsquare Media Inc, expressed satisfaction with the company's ability to repurchase and retire approximately $14 million of its Unsecured Senior Notes at a discount during the third quarter. The company also repurchased approximately 94,000 Class A shares in the third quarter, bringing the year-to-date total to 1.7 million shares. Townsquare ended the quarter with a strong cash balance of $38 million and net leverage of 4.49x.
Segment Reporting and Future Outlook
The company operates through three reportable segments: Subscription Digital Marketing Solutions, Digital Advertising, and Broadcast Advertising. The Subscription Digital Marketing Solutions segment experienced a 12.6% decrease in net revenue, while the Digital Advertising segment grew by 5.5%. The Broadcast Advertising segment saw an 8.6% decrease in net revenue, which was 7.2% when excluding political revenue.
For the fourth quarter of 2023, Townsquare expects net revenue to be between $110.6 million and $112.6 million, with Adjusted EBITDA projected between $24.8 million and $25.8 million. The full-year 2023 guidance anticipates net revenue to be between $450 million and $452 million, and Adjusted EBITDA between $100 million and $101 million.
Capital Resources and Dividend Announcement
As of September 30, 2023, Townsquare had $38.0 million in cash and cash equivalents and $503.6 million of outstanding indebtedness. The Board of Directors approved a quarterly cash dividend of $0.1875 per share, payable on February 1, 2024, to shareholders of record as of January 2, 2024.
Despite facing challenges in the broader advertising market, Townsquare Media Inc's digital growth and strategic financial management demonstrate the company's resilience and commitment to delivering value to its shareholders. Investors and potential GuruFocus.com members interested in a detailed analysis of Townsquare Media Inc's financials can find more information on GuruFocus.com.
Explore the complete 8-K earnings release (here) from Townsquare Media Inc for further details.
This article first appeared on GuruFocus.
