iHeartMedia, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the iHeartMedia Q4 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require further assistance, please press star zero. I would like to turn the conference over to Mike McGinnis, head of investor relations. Please go ahead, sir.

Good morning, everyone, and thank you for taking the time to join us on our fourth quarter 2021 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. Please note that in addition to our press release, we have an investor presentation that you can use to follow along with our remarks. Before we begin, let me quickly cover the safe harbor statements on slide two. During this call, we will make forward-looking statements, including the current and expected impact of COVID-19 on the company's liquidity, financial position, and results of operations. These estimates are based on the current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ from these expectations and assumptions, and these risks and uncertainties are discussed in more detail in our filings with the SEC. During this call, we will refer to certain non-GAAP financial measures. Reconciliations between our GAAP and non-GAAP financial measures can be found in our earnings release or in the investor presentation available on our website. And now I'll turn the call over to Bob.

Thanks, Mike, and good morning, everybody. Thank you for joining our fourth quarter 2021 earnings conference call. We're delighted to report another strong quarter and wrap up a very strong year. which we see as evidence of the progress we've made in the continuing digital transformation of the company. In 2021, we achieved a number of important milestones, both financial and operational, that reflect the success of our company's transformation into a data-led digital business with important new platforms like podcasting, all built upon the flywheel effect of the scale and unparalleled reach of our broadcast radio assets and the only unified ad tech stack in audio advertising. We believe we're poised for continued success in 2022 and beyond, and that our Q4 and full-year 2021 performance is strong evidence of that momentum. Before Rich takes you through the detailed results of the fourth quarter, I want to touch on a couple of key points. First, our revenues continued their strong performance in the fourth quarter while driving margin expansion in both of our two key segments. Our fourth quarter consolidated revenue grew 14% compared to prior years. You may recall that our guidance was an increase of 10% versus prior year, excluding political Q4 revenue increased 25% versus prior year. Importantly, for the first time since the beginning of the pandemic, our quarterly consolidated revenues exceeded their pre-pandemic comps, with Q4 2021 revenues up 3.5% when compared to Q4 2019. We generated adjusted EBITDA of $294 million for the quarter, an increase of 11% versus prior year, while generating $52 million of free cash flow. For our segments, in Q4 2021, our multi-platform group adjusted EBITDA margins were 34%, and our digital audio group adjusted EBITDA margins were 36%, both of which represent year-over-year margin expansion. Second, we continue to deliver industry-leading growth in our digital audio group, and the momentum continues. The digital audio group grew Q4 revenues by 59% versus prior year, and within that group, podcast revenue was up 130% versus prior year, and digital X podcast revenue was up 36% versus prior year. To put those results in context, according to Magna, in Q4 2021, we significantly outperformed the podcasting industry growth of 30%, and the digital X podcasting industry growth of 20%. continuing our trend of outperformance compared to the industry. In Q4 2021, digital revenues represented 26% of total company revenues compared to Q1 2019 when they represented under 10%. And in Q4 2021, podcasting revenues alone represented almost 10% of total company revenues, clear evidence of our digital transformations. And in January, according to PodTrack, iHeartMedia was again the number one podcast publisher in the U.S., now with more downloads than the next four largest publishers combined. Finally, the multi-platform group, which includes our broadcast radio, networks, and events businesses, continues to demonstrate its that it is also a growth engine for the company in both revenue and earnings. Q4 revenues grew by 9% versus prior year, and when excluding the impact of political, Q4 revenues increased 17% versus prior year. We're confident that we will reach our 2019 multi-platform group revenue levels and continue our growth past that point, and here's why. We believe certain key advertising categories will continue the recovery to pre-pandemic levels, like auto, entertainment, and retail, and others like pharma continue their strong growth. And there are also new ad categories and customers that are continually added to the mix, like cryptocurrency players and sports betting. We'll also continue to take share from competitors in the radio advertising space. According to Miller Kaplan, we continue to outpace our broadcast competitors and expect to continue to take share there. Looking more broadly across the media landscape, we believe the TV TAM represents an important growth opportunity for us as well. Ad-supported TV reach continues to decline, down to 54% reach for the largest broadcast TV network and just 32% reach for the largest cable network, compared to iHeartRadio's broadcast radio audience, which reaches 90% of Americans every month. Broadcast radio in general, and iHeartMedia specifically, is the most efficient and effective way for an advertiser to provide the missing reach in any TV-centric advertising campaign. We've also developed the capabilities for our broadcast radio assets to participate in the $160 billion digital TAM through the utilization of data-infused solutions, including our smart audio product. Finally, Within our multi-platform group, we expect our events business to not only recover to pre-pandemic levels, but to grow from there, given the pent-up consumer demand for live events and experiences and our ability to build new live and virtual events. These financial results we're reporting today are a reflection of the continued successful execution of our strategy and the momentum of both our multi-platform and digital audio groups. As recent studies have shown, consumers now spend more time with audio than they do with linear TV, and the advertisers are following that trend with an increased allocation to audio advertising. We believe that our consumer reach is the number one audio company in America, with a leading position in broadcast radio, podcast publishing, and digital radio, supported by an unmatched sales force and ad tech capabilities, set us up to benefit from those trends in a way no other company is capable of. And we will continue to build new platforms for our brands and creators to serve consumers and advertisers using our unique assets to build a strong position in Web3, the metaverse, NFTs, and tokens as the market opportunity develops. And now Rich will take you through more details of our earnings and a look ahead in the Q1.