Townsquare Media, Inc. (NYSE: TSQ) (“Townsquare”, the “Company,” “we,” “us,” or “our”) announced today its financial results for the third quarter ended September 30, 2023.
“I am pleased to share that Townsquare’s third quarter results met our previously issued guidance. In the third quarter, net revenue excluding political revenue declined -4% year-over-year (and decreased -5% year-over-year in total), and Adjusted EBITDA decreased -12% year-over-year. Our Digital Advertising segment delivered revenue and profit growth once again in the third quarter, as September year-to-date revenue and Adjusted Operating Income increased +10% and +19%, respectively, each as compared to the prior year. In total, Digital now represents 52% of Townsquare’s total September year to-date net revenue and 57% of our total September year-to-date Adjusted Operating Income,” commented Bill Wilson, Chief Executive Officer of Townsquare Media, Inc.
“Our performance this year, and particularly the growth of our Digital Advertising segment, has reinforced our confidence in our Digital First Local Media Strategy, our deliberate focus on markets outside of the Top 50, and the long-term, profitable growth potential of our digital platform.”
Mr. Wilson continued, “The strong cash generation characteristics of our assets allowed us to produce $39 million of cash flow from operations in the first nine months of 2023, an increase of $7 million as compared to the prior year. We could not be more pleased to share that given our strong cash position, we were able to repurchase and retire approximately $14 million of our Unsecured Senior Notes at a discount during the third quarter, bringing our year-to-date total bond repurchases to $27 million. In addition, we repurchased approximately 94,000 Class A shares in the third quarter (in total, we’ve repurchased 1.7 million shares in 2023), and continue to pay a high-yielding dividend while also investing in our business. We also ended the quarter with a strong cash balance of $38 million and net leverage of 4.49x, retaining financial flexibility moving forward.”
The Company announced today that its Board of Directors approved a quarterly cash dividend of $0.1875 per share. The dividend will be payable on February 1, 2024 to shareholders of record as of the close of business on January 2, 2024.
Segment Reporting
We have three reportable operating segments, Subscription Digital Marketing Solutions, Digital Advertising and Broadcast Advertising. The Subscription Digital Marketing Solutions segment includes our subscription digital marketing solutions business, Townsquare Interactive. The Digital Advertising segment, marketed externally as Townsquare Ignite, includes digital advertising on our owned and operated digital properties, our first party data digital management platform and our digital programmatic advertising platform. The Broadcast Advertising segment includes our local, regional, and national advertising products and solutions delivered via terrestrial radio broadcast, and other miscellaneous revenue that is associated with our broadcast advertising platform. The remainder of our business is reported in the Other category, which includes our live events business.
Third Quarter Highlights*
• As compared to the third quarter of 2022:
• Net revenue decreased 4.6%, and 3.8% excluding political
• Net income decreased $39.3 million
• Adjusted EBITDA decreased 12.1%
• Total Digital net revenue decreased 1.5%
• Subscription Digital Marketing Solutions (“Townsquare Interactive”) net revenue decreased 12.6% • Digital Advertising net revenue increased 5.5%
• Total Digital Adjusted Operating Income increased 0.1%
• Subscription Digital Marketing Solutions Adjusted Operating Income decreased 10.6%
• Digital Advertising Adjusted Operating Income increased 6.3%
• Broadcast Advertising net revenue decreased 8.6%, and 7.2% excluding political
• Diluted loss per share was $2.27, and Adjusted Net Income per diluted share was $0.46
• Repurchased $14.2 million of our 2026 Secured Senior Notes below par
• Repurchased 0.1 million shares of the Company’s common stock
Year-to-Date Highlights*
• As compared to the nine months ended September 30, 2022:
• Net revenue decreased 1.0%, and 0.3% excluding political
• Net income decreased $51.6 million
• Adjusted EBITDA decreased 11.8%
• Total Digital net revenue increased 3.2%
• Subscription Digital Marketing Solutions net revenue decreased 7.3%
• Digital Advertising net revenue increased 10.1%
• Total Digital Adjusted Operating Income increased 7.5%
• Subscription Digital Marketing Solutions Adjusted Operating Income decreased 10.9%
• Digital Advertising Adjusted Operating Income increased 19.3%
• Broadcast Advertising net revenue decreased 6.5%, and 5.3% excluding political
• Repurchased an aggregate $27.1 million of our 2026 Secured Senior Notes below par
• Repurchased 1.7 million shares of the Company’s common stock
See below for discussion of non-GAAP measures.
Guidance
For the fourth quarter of 2023, net revenue is expected to be between $110.6 million and $112.6 million, and Adjusted EBITDA is expected to be between $24.8 million and $25.8 million.
For the full year 2023, net revenue guidance is expected to be between $450 million and $452 million, and Adjusted EBITDA guidance is expected to be between $100 million and $101 million.
Quarter Ended September 30, 2023 Compared to the Quarter Ended September 30, 2022
Net Revenue
Net revenue for the three months ended September 30, 2023 decreased $5.5 million, or 4.6%, to $115.1 million as compared to $120.6 million in the same period in 2022. Broadcast Advertising net revenue decreased $5.1 million, or 8.6%, and Subscription Digital Marketing Solutions net revenue decreased $2.9 million, or 12.6%, as compared to the same period in 2022. These revenue declines were partially offset by Digital Advertising net revenue which increased $2.0 million, or 5.5%, and Other net revenue which increased $0.5 million, or 42.4%, as compared to the same period in 2022. Excluding political revenue of $0.6 million and $1.6 million for the three months ended September 30, 2023 and 2022, respectively, net revenue decreased $4.6 million, or 3.8%, to $114.5 million, Digital Advertising net revenue increased $2.1 million, or 5.6%, to $38.9 million, and Broadcast Advertising net revenue decreased $4.2 million, or 7.2%, to $53.6 million.
Net (Loss) Income
For the quarter ended September 30, 2023, we reported a net loss of $36.5 million, as compared to net income of $2.8 million in the same period last year, primarily due to a $20.7 million increase in non-cash impairment charges, a $15.2 million increase in the provision for income taxes and a $5.5 million decrease in net revenue, partially offset by a $2.7 million decrease in direct operating expenses, due in part to lower compensation. Adjusted Net Income was approximately flat as compared to the prior year.
Adjusted EBITDA
Adjusted EBITDA for the three months ended September 30, 2023 decreased $3.7 million, or 12.1%, to $27.2 million, as compared to $30.9 million in the same period last year. Adjusted EBITDA (Excluding Political) decreased $2.9 million, or 9.9%, to $26.6 million, as compared to $29.6 million in the same period last year.
Nine Months Ended September 30, 2023 Compared to the Nine Months Ended September 30, 2022
Net Revenue
Net revenue for the nine months ended September 30, 2023, decreased $3.4 million, or 1.0%, to $339.4 million as compared to $342.8 million in the same period in 2022. Broadcast Advertising net revenue decreased $10.7 million, or 6.5%, and Subscription Digital Marketing Solutions net revenue decreased $4.9 million, or 7.3%. These declines were partially offset by Digital Advertising net revenue which increased $10.5 million, or 10.1%, and Other net revenue which increased $1.8 million, or 26.4%, as compared to the same period in 2022. Excluding political revenue of $1.2 million and $3.5 million for the nine months ended September 30, 2023 and 2022, respectively, net revenue decreased $1.1 million, or 0.3% to $338.2 million, Digital Advertising net revenue increased $10.6 million, or 10.3%, to $113.7 million, and Broadcast Advertising net revenue decreased $8.6 million, or 5.3%, to $152.7 million.
Net (Loss) Income
Net income for the nine months ended September 30, 2023 decreased $51.6 million, or 493.4%, to a net loss of $41.1 million, as compared to net income of $10.5 million in the same period last year, primarily driven by a $45.5 million increase in non cash impairment charges, a $4.4 million increase in the provision for income taxes, a $3.7 million increase in direct operating expenses and a decrease in net revenue of $3.4 million. Adjusted Net Income decreased $6.7 million, primarily driven by higher direct operating expenses and the decrease in net revenue, partially offset by a lower provision for income taxes.
Adjusted EBITDA
Adjusted EBITDA for the nine months ended September 30, 2023 decreased $10.1 million, or 11.8% to $75.2 million, as compared to $85.3 million in the same period last year. Adjusted EBITDA (Excluding Political) decreased $8.1 million, or 9.9%, to $74.2 million, as compared to $82.3 million in the same period last year.
Liquidity and Capital Resources
As of September 30, 2023, we had a total of $38.0 million of cash and cash equivalents and $503.6 million of outstanding indebtedness, representing 4.86x and 4.49x gross and net leverage, respectively, based on Adjusted EBITDA for the twelve months ended September 30, 2023, of $103.6 million.
The table below presents a summary, as of November 3, 2023, of our outstanding common stock.
| Security | Number Outstanding | Description |
| Class A common stock | 13,680,703 | One vote per share. |
| Class B common stock | 815,296 | 10 votes per share.1 |
| Class C common stock | 1,961,341 | No votes.1 |
| Total | 16,457,340 |
Each share converts into one share of Class A common stock upon transfer or at the option of the holder, subject to certain conditions, including compliance with FCC rules.
Conference Call
Townsquare Media, Inc. will host a conference call to discuss certain third quarter 2023 financial results and 2023 guidance on Thursday, November 9, 2023 at 8:00 a.m. Eastern Time. The conference call dial-in number is 1-888-999-5318 (U.S. & Canada) or 1-848-280-6460 (International) and the confirmation code is 11153822. A live webcast of the conference call will also be available on the investor relations page of the Company’s website at www.townsquaremedia.com.
A replay of the conference call will be available through November 16, 2023. To access the replay, please dial 1-844-512-2921 (U.S. and Canada) or 1-412-317-6671 (International) and enter confirmation code 11153822. A web-based archive of the conference call will also be available at the above website.
