iHeartMedia Q2 2023 Earnings Call Transcript

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Provided by Quartr
August 8, 2023

There are 9 speakers on the call.

Operator

Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the Iheartmedia Second Quarter 2023 Earnings Conference Thank you. Mike McGinnis, Head of Investor Relations, you may begin your conference.

Speaker 1

Good morning, everyone, and thank you for taking the time to join us for our Q2 2023 earnings call. Joining me for today's discussion are Bob Pittman, our Chairman and CEO and Rich Bressler, our President, COO and CFO. At the conclusion of our prepared remarks, management will take your questions. In addition to our press release, We have an earnings presentation available on our website that you can use to follow along with our remarks. Please note that this call may include forward looking statements regarding and financial performance and operating results.

Speaker 1

These statements are based on management's current expectations and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company's SEC filings. Additionally, during the call, we will refer to certain non GAAP financial measures. Reconciliations between GAAP and non GAAP financial measures are included in our earnings release, earnings presentation and our SEC filings, which are available in the Investor Relations section of our website. And now, I'll turn the call over to Bob.

Speaker 2

Thanks, Mike, and good morning, everyone. We are pleased to report that our Q2 2023 results were in line with our previously provided adjusted EBITDA and revenue guidance ranges. The signs of improvement in the advertising marketplace that we called on in our Q1 call have continued, and we're seeing indications of improving macroeconomic trends, which we expect to have a positive impact on us in the second half of the year and similar to what you probably heard from others, we expect most of that positive impact in Q4. While we're carefully monitoring these improving macroeconomic conditions, we're also continuing our expense management work. These actions and the work we've done over the past couple of years to make our organization more efficient have allowed us to be resilient during this recent period of advertising softness.

Speaker 2

These actions have also freed up additional capital that enabled us to continue reducing our highest cost debt at advantageous prices, while also continuing to reinvest in our high growth areas like podcasting. The continued positive performance of our digital audio group led by our podcast business and the significantly improved relative performance of our multi platform group during the soft advertising period compared to the last downturn in 2020 are encouraging metrics for us. Additionally, while the advertising environment remains challenging in the short term, We note that there are some opportunities that iHeart is uniquely positioned to take advantage of. Linear TV's viewership continues its precipitous decline. The Hollywood labor strikes have already had an impact on content distribution and will likely have an impact on future content creation, both of which could have a negative impact on video audiences.

Speaker 2

And there's an ongoing and well publicized upheaval in social media platforms. These opportunities, along with the important and first of its kind Dentsu study about the audio sector that just came out last week, Clearly demonstrate the unique and powerful impact of audio, including both podcasting and radio, and creates maybe the best environment we've had to make our case to advertisers and their agencies about the power and value of audio media with radio and podcasting at the forefront. With that backdrop, let me take you through some key financial results of the quarter. In the Q2, we generated adjusted EBITDA of $191,000,000 slightly above the midpoint of the guidance range we provided of $180,000,000 to $200,000,000 and more than double the adjusted EBITDA we generated in the Q1. Our 2nd quarter adjusted EBITDA was down 19.4% year over year, which is a significant improvement from Q1, which was down 35.7% year over year.

Speaker 2

Our consolidated revenues for the quarter were down 3.6% compared to the prior year quarter, a little better than the guidance we provided of down mid single digits. And excluding the impact of political, our consolidated revenues were down 1.8%. Turning now to our individual operating segments. In the 2nd quarter, our Digital Audio Group revenues were 261,000,000 up 3.3% versus prior year. Adjusted EBITDA was $85,000,000 up 7.2% versus prior year and our Digital Audio Group adjusted EBITDA margins were 32.4%.

Speaker 2

We believe the Digital Audio Group's adjusted EBITDA performance benefited from the strategic fixed cost investments we've made in the past few quarters. This quarter also illustrates the strong flow through characteristics of the business as our Q2 Digital Audio Group margins expanded 120 basis points year over year and were 820 basis points better than the Q1. Within the Digital Audio Group, our podcast revenues, even in the slower ad market, grew 13% versus prior year. Further evidence about our leadership position in the industry and illustrating how powerful podcasting is as both a short term and long term growth engine for the company. Our digital ex podcast revenues were down 1.6% versus prior year, with the prior year benefiting from non returning COVID related advertising spend.

Speaker 2

We expect our digital ex podcasting revenues to be back to positive growth in the Q3. In the second quarter, podcasting was by far the best performing segment of the advertising marketplace, and we continue to have the largest podcast audience reach in the United States. In June, Iheart was once again ranked the number one podcast publisher in the U. S. With more monthly downloads than the next 2 largest podcast publishers combined according to PodTrak.

Speaker 2

Our leadership position in podcasting is, in part, the result of the unparalleled scale of our complete audio form that we use to promote our shows across our digital products and across our broadcast assets, which have 3 times the consumer reach of the largest TV network and twice the reach of the next largest audio service. A great example of this is the story of Paper Ghost, One of our true crime podcasts that we recently began to promote extensively on our broadcast radio stations. Within 2 weeks, its downloads jumped by more than 100% And it reached the top 10 in Apple's podcast true crime charts. Our leadership position with podcast listeners is also driven by the breadth and depth of the content we create. We're the only publisher with podcasts ranked in all 19 of PodTrax content categories, And we have the most top 10 shows of any publisher as well.

Speaker 2

And as the podcasting industry at large continues to embrace more rational content cost, Iheart as the leading publisher in the industry will continue to benefit. The overall podcasting industry has also reached a significant milestone It now surpasses all the ad enabled streaming music services and daily usage according to Edison, and there are now more weekly podcast listeners than there are Netflix subscribers. In addition to podcast listeners' extraordinary engagement with the medium, we think this audience diversity and reach advantage is a compelling value proposition for advertising partners as well. And finally, podcasting and broadcast radio are truly complementary businesses. As you can see by their listening profiles, 68% of broadcast radio listening happens out of home and 69% A podcast listening occurs in the home.

Speaker 2

These listening patterns are complementary because at their core, they provide the same benefit to listeners. Both are companionship mediums and both keep their listeners company just at different times and locations throughout the day. And the natural synergy between these two mediums gives us a real advantage in podcast content creation, promotion, marketing, and advertising sales, As you can see in our consumer engagement, revenue, and profitability metrics. And critically for us, podcast usage does not come at the expense of radio usage. Rather, instead, according to a recent survey, 70% of podcast listeners say they replaced time spent with social media platforms, 50% say they replaced time spent with YouTube and 46% say they replaced time spent with streaming music services to make time for their podcast listening.

Speaker 2

In addition to our industry leading podcast business, we also have the number one streaming digital radio service, which is 5 times larger than our closest competitor. We have the largest social footprint of any audio service by a factor of 7, and we operate 3,000 national and local websites that reach almost 150,000,000 people in the United States each month, all of which represent additional opportunities for advertising partners to interact with our highly engaged consumer base and provide additional revenue growth for the company. Let's turn now to our multi platform group, which includes our broadcast radio networks and events businesses. In the 2nd quarter, revenues were $596,000,000 down 5.9% versus prior year, which is an improvement from down 7.4% in the Q1. Adjusted EBITDA was $162,000,000 down 16.5% versus prior year, which is a substantial improvement from down 35% in the Q1 and nearly doubled the adjusted EBITDA we generated in the Q1.

Speaker 2

2nd quarter multi platform group adjusted EBITDA margins were 27.3%. To put this recent performance in perspective, During the 2020 economic downturn, our 2nd quarter multi platform group revenues were down 53.4% year over year compared to down just 5.9% year over year in Q2 of this year. We think that significant improvement is partly attributable to the technology and data investments we've made to make our broadcast radio assets more like digital assets for advertisers, including data enabled targeting, algorithmic buying, attribution and performance measurement capabilities along with our unique smart audio product and our growing AI capabilities, leading to strong revenue growth potential for our broadcast radio assets. Platform group does continue to be impacted by some of the advertising uncertainty we called out in the Q1. As we mentioned in our Q1 call, our smaller advertisers have been more likely to continue to spend through the uncertainty while there was some softness in our larger advertisers.

Speaker 2

In Q2, our smaller advertisers remained resilient And we saw a gradual improvement from our larger advertisers as well, which leads us to believe that we'll continue to see improvements in the business through the remainder of the year. I do want to point out that the biggest driver in terms of our full year financial performance is always the Q4. The Q4 is always our largest revenue, EBITDA and free cash flow quarter of the year because it's also the largest quarter of the year for most of our advertising partners in terms of sales and advertising spend. If you remember last year, despite the slowdown in the macro trends throughout the year, the Q4 turned out to be the best quarter in Iheart's history as advertisers accelerated their spin. So the question will be, will the advertisers who've cut back or stood on the sidelines throughout the year start to spend as they enter the 4th quarter?

Speaker 2

Based on the improving trends we've mentioned here and how the Q4 of last year performed, we think the answer to that is most likely yes, but we'll have better insight into those trends as we near the end of the Q3. Turning to the state of the broadcast radio industry, Radio continues to be a vital and trusted source of information, entertainment, companionship and support for 100 of millions of Americans and is irreplaceable during times of crisis and disaster in local communities. There is no better evidence of that unique power that radio has with the consumers than what we saw happen in the Senate 2 weeks ago with the AM Radio For Every Vehicle Act, bipartisan legislation which would require automakers to keep AM radio in new cars, including EVs at no additional cost to the consumer. This bill introduced by senators Markey and Cruz and currently with 28 cosponsors equally divided between Democrats and Republicans passed out of committee with near unanimous bipartisan support, importantly, with the full support of Chairwoman Cantwell and is the result of listeners' strong feedback to Congress and reflects the passionate and vocal consumer base that radio enjoys. Broadcast Radio's reach and the loyalty that audiences have to its variety of host, Programs and content is unmatched in media today, and iHeart's ability to connect those audiences with our advertising partners directly correlates to the advertising revenue potential of these assets.

Speaker 2

Remember, historically, advertising has always followed the consumer, And consumers are on the radio and staying on the radio. So Iheart's mass reach will become even more important as advertisers and agencies struggle to replace the rapidly declining reach that has historically been provided by linear TV and cable networks. As a reminder, CBS, The largest TV network has seen its consumer reach cut in half since the early 2000s, while iheart's broadcast radio consumer reach grew over the same period and now reaches an audience almost twice the size of CBS. And critically, for our advertising partners, Streaming video services have been unable to compensate for the decline in linear TV reach, which again highlights the opportunity we have before us. Now we know some are asking if broadcast radio is a revenue and earnings growth platform for the company or if it's a declining business that digital must compensate for.

Speaker 2

Provide long term sustainable revenue and earnings growth for Iheart. Before I turn it over to Rich, I'm going to leave you with this final thought. As we look to the back half of twenty twenty three, we know we're up against some tough year over year comps as the second half of twenty twenty two benefited from a very strong midterm political cycle as well as some non returning COVID related advertising. But with the actions we've taken to improve our operating efficiency In combination with the gradual improvement we're seeing in the advertising marketplace, we believe we'll see a continued quarter over quarter sequential improvement. This will also help position us for a strong 2024, which as a reminder is also a presidential political year.

Speaker 2

And now I'll turn it over to Rich.

Speaker 3

Thanks, Bob. As I take you through our results, you'll notice that as Bob mentioned, we slightly exceeded our previously provided guidance for the quarter. Our Q2 2023 consolidated revenues were down 3.6% year over year, a little better than the guidance we provided of down mid single digits. And excluding the impact of political, our consolidated revenues were down 1.8%. Our consolidated direct operating expenses decreased 2.8% for the quarter.

Speaker 3

This decrease was primarily driven by cost savings initiatives, including reduced compensation expense and lower digital royalty fees, which in the prior year quarter benefited from the settlement of amounts related to prior periods. This decrease was partially offset by the increase of certain expenses tied to the growing digital revenues, including 3rd party digital costs and production costs. Our consolidated SG and A expenses increased 3.9% for the quarter, primarily driven by higher variable compensation expense and higher bad debt expense, partially offset by lower sales commissions. As a reminder, we paid minimal bonuses to our employees last year. We generated 2nd quarter GAAP operating loss of $897,000,000 compared to operating income of $83,000,000 in the prior year quarter.

Speaker 3

Included in our GAAP operating loss was the impact of a 9 $61,000,000 non cash intangible impairment related to our FCC licenses and goodwill. If you recall, When we emerged from bankruptcy in May of 2019, when the macroeconomic environment was much different than it is today, We applied fresh start accounting, which resulted in a significant write up of our intangible assets. We revisit and evaluate our intangible asset valuations each year using analysis which incorporate among other things consideration of the current macroeconomic conditions, current interest rate levels and current equity and debt valuations in the marketplace. These key factors have shifted substantially over even the past couple of years, driven in part by the Fed's sharp interest rate increases. Incorporating these updated factors into our analytical review results in an adjustment to the book value of our intangible assets.

Speaker 3

Our 2nd quarter adjusted EBITDA was $191,000,000 compared to $237,000,000 in the prior year quarter and slightly above the midpoint of the guidance range we provided of $180,000,000 to $200,000,000 and more than double the adjusted EBITDA we generated in the Q1. Turning now to the performance of our operating segments. And as a reminder, there are slides in the earnings presentation on our segment performances. In the Q2, Digital Audio Group revenues were $261,000,000 up 3.3% year over year, and they comprised approximately 28% of our 2nd quarter consolidated revenues. Digital Audio Group adjusted EBITDA was $85,000,000 of 7.2% year over year and our Q2 margins also improved year over year to 32.4%.

Speaker 3

Within the Digital Audio Group are our podcasting revenues, which grew 12.9% year over year and our non podcasting digital revenues, which were down approximately 1.6% year over year, reflecting non returning COVID related advertising spending in the prior year. And as Bob said, we expect to be back to positive revenue growth for our Digital X podcasting revenues in the 3rd quarter. As anticipated, in the Q2, we continued to see improvements in our Digital Audio Group EBITDA flow through and EBITDA margins. And in the long term, we continue to believe our Digital Audio Group should be a 35% adjusted EBITDA margin business. Multiplatform group revenues were $596,000,000 down 5.9% year over year.

Speaker 3

Adjusted EBITDA was $162,000,000 down 16.5% year over year and nearly double the adjusted EBITDA we generated in the Q1. Multiplatform group adjusted EBITDA margins also improved sequentially to 27.3%. Audio and Media Services Group revenues were 66,000,000 call was down approximately 7% year over year and adjusted EBITDA was $18,000,000 down from $22,000,000 in the prior year. Excluding the impact of political in the prior year quarter, Audio and Media Services Group revenues were up 2.4%. At quarter end, We had approximately $5,200,000,000 of net debt outstanding and our total liquidity was $585,000,000 which includes a cash balance of $165,000,000 Our quarter ending net debt to adjusted EBITDA ratio was 6 times.

Speaker 3

We remain committed to our long term goal of a net debt to adjusted EBITDA ratio of approximately 4 times. As highlighted on past calls, we have no material maintenance entered into no debt maturities until mid-twenty 26. In the current macro environment, this type of debt profile positions us to be both resilient and opportunistic in responding to debt market developments. In Q2, we repurchased $80,000,000 of the principal balance of our 8.3 senior unsecured notes at a meaningful discount to their par value, generating both earnings and free cash flow accretion. This brings our total repurchase of these notes to $430,000,000 reducing the outstanding amount from $1,450,000,000 to approximately $1,000,000,000 and results in aggregate annualized interest savings of approximately $40,000,000 We monitor market conditions And as opportunities arise, we will continue to improve and optimize our capital structure.

Speaker 3

In the Q2, we generated $39,000,000 of free cash flow, including the impact of $5,000,000 of real estate asset sales. While free cash flow conversion this quarter was lower than we had anticipated, This was largely driven by the timing of collections, which will reverse themselves in Q3. We had over $30,000,000 of billings from a few customers that were due towards the end of June that we received on July 5. These are not bad debts, just certain customers holding payments a bit longer. As Bob mentioned earlier, we expect to generate positive free cash flow for each subsequent quarter in 2023 with a significant amount expected to be generated in the Q4.

Speaker 3

I want to turn now to our outlook for Q3 as well as some thoughts on the full year and 2024. We expect our Q3 2023 revenues to be down mid single digits and down low single digits excluding the impact of political revenue. Revenue for the month of July was down approximately 5%. Turning to the individual segments, we expect multi platform group revenues to be down high single digits. Excluding the impact of political, We expect multi platform group revenues to be down mid single digits with the revenue slightly higher than Q2 revenue.

Speaker 3

We expect Digital Audio Group revenues to be up mid single digits and we expect Audio Media Services revenues to be down in the high teens were down low single digits, excluding the impact of political. Turning to adjusted EBITDA. For Q3 2023, We expect to generate consolidated adjusted EBITDA in the range of $195,000,000 to $205,000,000 I want to comment on the following items affecting free cash flow. In addition to the tax planning initiatives mentioned on our Q1 call, We have identified additional opportunities to further reduce our cash tax burden and now expect to pay approximately $15,000,000 of cash taxes in 2023, almost half the prior guide of $25,000,000 to $30,000,000 Our estimate of full year 20 23 capital expenditures remains at $90,000,000 Cash restructuring expenses remain down year over year, which we expect to continue through the remainder of the year and expect to be around $50,000,000 We continue to be impacted by the current interest rate environment as approximately 40% of our debt is floating, but we are committed to opportunistically improving our capital structure and reducing our interest expense as the market allows. In Bob's opening remarks, he commented on the unique opportunity Iheart has been presented with to capitalize on changes and disruptions that have taken place across the advertising and media ecosystems.

Speaker 3

And we have included a slide in the investor presentation on the Dentsu study he referenced. With that context in mind, I'd like to provide some thoughts on our outlook for the back half of twenty twenty three and what that means for us in 2024 and beyond. Sequential improvement and that our Digital Audio Group revenues will continue to grow in the second half of twenty twenty three. These improving trends, in combination with our performance in the 1st and second quarters relative to guidance, along with a presidential election ahead, which is giving us every indication and will generate record political advertising revenues, gives us confidence that this advertising marketplace recovery continues, We expect to have a strong 2024 with the resumption of our growth story in terms of revenue, profitability and free cash flow generation. And of course, this growth will increase our ability to continue to improve our capital structure.

Speaker 3

We remain committed to driving shareholder value through our rigorous allocation of capital, identifying additional cost savings opportunities, utilizing new technologies to expand our product offerings and improving our operational efficiency. And finally, on behalf of our entire senior management team, Bob and I want to thank our team members who work to deliver for their communities and for Iheart every day. Now we will turn it over to the operator to take your questions. Thank you.

Operator

And your first question comes from the line of Steven Cahill from Wells Fargo. Your line is open.

Speaker 4

Thank you. Maybe to start off, we've heard a lot over the last couple of weeks about some of the differences going on in local versus national. I think just with your larger portfolio, you have a little more weighting to national versus some of your radio peers. That's where we've heard that there's a bit more weakness. So wondering if you could just compare and then contrast those trends a little bit.

Speaker 4

And then Rich, maybe just on the expense management, It seems like there is some cross currency here. Corporate expense was up a little bit in the quarter. You talked about not paying bonuses last year, and I'm sure that's something that you'd like Back to for employee retention. So how do we think about both the corporate and the non corporate expense base going forward, as you look to manage those tightly, but also have some other expenses that you might be leaning into a bit?

Speaker 5

Great. Hey, Steve, let me take the first question. I think when you look at the national local, we really look at it as more larger advertisers and smaller advertisers. I would point out that although we may have a greater exposure to larger advertisers, we also tend to get a greater share of that advertising as well. So I think that probably compensates.

Speaker 5

And I think in terms of the smaller advertisers where people have needed to spend their money, We've seen them sort of continue to spend through the softness. The larger advertisers have been a mixed bag. Some have been in At the levels they were and some categories actually are up in the large advertisers and some are holding back. We think they're holding back. And again, like many people have already been talking, it looks like probably Q4 is the quarter when that breaks loose.

Speaker 6

Yes. Hey, Steve, it's Rich. And by the way, to Bob's point, you saw that it looks like that. And if you go back to last year I mean Q4, I think you'll see we had a strong Q4 and the larger advertisers in particular came back during that quarter. On expense management, we continue to aggressively manage expenses, specifically to your question, Really, the increase in corporate expenses for Q2 almost entirely relates to just bonus accruals Yes, we didn't pay bonuses last year.

Speaker 6

But just I'd say overall, the expense management, if you just kind of look at the benefits In terms of savings, we got even within our Q3 guidance, we gave it 1 $95,000,000 to $205,000,000 We've got some pretty significant savings baked into those numbers also on cost savings. So feel good about where we are, our cost savings and corporate is really entirely related to accrual bonuses.

Speaker 4

And then maybe just a quick follow-up, the impairment that you took, is that related to any M and A that you've done over the last few years or is that sort of a broader goodwill and intangible charge for the company writ large? Thank you.

Speaker 6

Steve, it's 100% the latter. It's just honestly, it's an accounting and mathematical exercise. Simply more than anything else, it really happens because of the current fair value of our debt and equity and that triggers An impairment and by the way, that's driven by the spike in interest rates that we've all seen. Again, and truly just a mathematical calculation And non cash, just to make sure that's 100% clear.

Operator

And your next question comes from from B. Riley Securities. Your line is open.

Speaker 7

Yes. Good morning, everybody. Thanks for taking the questions. Just I want to unpack the optimism about the 4th quarter recovery a little bit, just especially given the guidance for mid single digit revenue decline in the Q3. Just what is it that's giving you that confidence that you'll see that recovery in the Q4?

Speaker 7

Is it Actual conversations with advertisers saying it is, is it visibility into the bookings pipeline, just trying to unpack that relatively more optimistic outlook for the Q4. Others haven't been as willing to be that aggressive on where they think budgets will recover too. Thanks.

Speaker 4

Yes. If you look at

Speaker 5

last year, for example, although the year was softening Starting probably about the Q2. By the time we got to Q4, we had a record Q4 for the company and a record quarter for the company. We also look at companies, especially as you get to large advertisers. Usually their biggest sales quarter, almost all of them is Q4. It's when they spend the big money on advertising.

Speaker 5

If you're going to hold out for the year, the 1 quarter you probably will not hold out for is Q4. And as we've had conversations with advertisers as well as looking at historical trends, we feel confident that Q4 certainly is going to be much stronger. I think the question is how much stronger?

Speaker 6

Yes. And the only thing I might just add to what Bob said when you talk about, I think you used the word optimism. I think if you just look at it, I think Q1, we did about $811,000,000 of revenues company. Q2, just look at sequential improvement. We just announced $920,000,000 If you kind of look at the our overall guidance for Q3, that would lead you to about 9 $40,000,000 So I think as we're thinking about Q4, it's exactly obviously what Bob said between large and small advertisers, What we saw last year and just then look at the sequential performance that the company has had this year in terms of strengthening.

Speaker 6

And by the way, You've also seen it reflected in the EBITDA numbers where pretty much Q2, the numbers we just announced, have pretty much doubled the numbers we had in Q1 On an absolute basis for EBITDA.

Speaker 7

Great. Thanks. And then just a follow-up. So I I know we're still a little bit a ways away from the 2024 political advertising cycle. But one thing I think I'm consistently hearing is a lot of the campaigns Want to leverage digital channels more effectively next year, whether that's CTV or podcast.

Speaker 7

Is there anything you're doing Maybe to prepare yourself specifically on the podcast side to capture some of those political budgets at this point.

Speaker 5

Well, look, we are not only on podcasting, but on our broadcast radio as well. We're developing the data capabilities that I think the political advertisers are looking for. And I think when you say they're moving to digital, I think what they're really moving to is they're getting much more digitally informed media buying. And so I think any services that can provide that extra layer of data, I think will benefit from it. And again, Our radio, broadcast radio in addition to podcasting on our digital properties, we are putting that in place.

Speaker 5

And as you know, it's been a priority for the company.

Speaker 4

All right. Thanks guys. I'll turn it over.

Operator

And your next question comes from the line of Jim Goss from Barrington Research. Your line is open.

Speaker 8

All right, thanks. Bob, you mentioned that you thought radio was not in a declining phase, but the core radio business Would at least be growing modestly. I'm wondering if you could look at that a little bit more in terms of The core direct sales versus the digital components, because it seems that over the years that category that's been called radio has had a difference in shares with the digital elements. And I know they're complementary, but the direct sales versus the other radio ad placements.

Speaker 5

I'm not sure exactly understand what you mean about direct sales. Could you just clarify that?

Speaker 8

Well, I guess I just mean, I think you have Sales staffs that have relationships with the advertisers and then you probably also have Other ads interspersed digitally placed ads. And are you saying that the Directly placed ads would be at least flat or growing very modestly as a core for the business?

Speaker 4

Yes. I think if

Speaker 5

you look at how we sell our advertising, we have a number of ways that we do. The reason we have so many platforms is each one is a door That an advertiser can come through and understand Iheart, develop a relationship with Iheart and then In most cases, they spread to our other platforms as well. What's exciting about broadcast radio, 1st and foremost, is it has the audience. And the study Dentsu just did was pretty amazing. It said radio was the most efficient of all audio platforms providing 10x more efficiency when compared to the average online video ad.

Speaker 5

So we know that radio giving them a 10x efficiency Yes, we are building up programmatic capabilities. Your point about buying, I assume that's what you're talking about buying directly That advertisers will be able to go in and they should basically self-service, buy what they want to offer platforms And we will append data to that or allow them to append their data to it, which will make it again more valuable, more usable. We also have a group that deals just with the clients and the major clients and we are really marketing partners. They are looking for marketing solutions, Although it's bought as media in these discussions, it's not a media discussion. It is a marketing discussion.

Speaker 5

And again, having the platforms we do and having the unique scale we do, twice the reach of the biggest TV network, twice the reach of the next largest audio service Gives us the opportunity to do things others can't. And then of course, we have great relationships we think with the agencies from the major holdco's all the way down to the smallest agencies and we put a great priority of maintaining those relationships as well. So I think we're looking at all of those benefiting from the addition of data, benefiting from making it easier, Benefiting from making it all look like digital. And as you know with the Triton acquisition we made, we built out a unified platform for audio. So if people find an audience they want, not a Nielsen audience, but a specific audience for their needs, We can find that audience seamlessly across all forms of audio and we again think that is a big boost To broadcast radio as well, having it added to that array.

Speaker 6

Yes. And by the way, just one last point I might add from a Performance standpoint and another standpoint, you did see that we were down if you look at sequential performance for MPG Group. During this year, we were down 5.9% this quarter. And in Q1, we were down The MPG Group Multiplatform Group was down a little 7.4%. So one of the things we said in terms of tracking and looking at our progress The outlook and everything Bob just said is look at the sequential improvement in MPG and also look at double the EBITDA number in terms of the performance.

Speaker 6

And by the way, if you go back to 2020, in terms of coming out of that period of time in the And obviously dramatic economic slowdown. Q2 was down 50 over 50% compared to Q1 of the prior year. So again, just all the data points show significant improvements in our overall performance in multi platform group As a result, as Bob said, to the sales force and the access we have into the marketplace.

Speaker 8

Okay. And one other thing, and this might be implicit Somewhat in what you've just been saying, but does the complementary nature of radio and podcasting that you've pointed out between in home and out of home, enable a cross selling in certain categories or the local national blend and do the same Sales people address both or are there specialists that might do one versus the other?

Speaker 5

Yes, we do have some specialists, but as you know, we have built an organization a number of years ago that any seller anywhere can sell anything, We built out the technology tools to support them in doing that. So that allows us to some people call it bundling, but allows us Put together the right marketing mix for an advertiser and you're right, podcasting is much more significant in home in terms of its overall usage and radio out of home. So putting those 2 together, it gives us a sort of a 24 hour opportunity with that consumer and is a Great value.

Speaker 8

All right. Thanks. Appreciate it.

Speaker 5

And thank you for your help today.

Speaker 6

Thank you all. Well, on behalf of Bob, myself, the rest of the management team, thanks everybody for listening to the Iheart story. We're all available, Mike McGinnis, for any questions you have on follow-up and appreciate everybody's time.

Operator

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

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iHeartMedia Q2 2023
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