iHeartMedia, Inc.

Good day and thank you for standing by. Welcome to the iHeartMedia first quarter 2022 earnings 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 need to press star 1 on your telephone. Please be advised that today's call is being recorded. If you're recording for the assistance, please press star 0. For the lecture and the conference, over to speaker today, Mr. Michael McGinnis, Deputy CFO. Please go ahead.

Good afternoon, everyone, and thank you for taking the time to join us for our first quarter 2022 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 investor presentation that you can use to follow along with our remarks. Please note that this call may include forward-looking statements regarding our financial performance and operating results. 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, this call will include certain non-GAAP financial measures. Reconciliations of non-GAAP financial measures are included in our earnings release, investor 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.

Thanks, Mike, and good afternoon, everybody. Thank you for joining our first quarter 2022 earnings conference call. We're pleased to report another quarter of strong results for iHeart during a quarter when we, like all businesses, faced a unique combination of macroeconomic challenges. We believe our performance this quarter is further evidence of the successful execution of our digital transformation and multiplatform strategy, which delivered solid results while operating in a turbulent macro environment. The digital transformation of the company continues as a priority, and the investments we've made and will continue to make in that effort present significant opportunities for the company to participate in exciting new and developing markets. Our recent announcement of the NFT-based non-fund squad media franchise and our Super League Roblox partnership are examples of how we think iHeart can leverage our existing non-cash resources to build a position in these exciting new metaverse and Web3 areas. As you may have seen in March, we announced that Sam Engelbart, co-founder and partner of Galaxy Digital, joined our board of directors. In addition to a wealth of operating experience, Sam has expertise, key relationships, and a deep understanding of Web3 and emerging consumer tech platforms. That experience, coupled with Sam's background in media and entertainment, will be uniquely valuable to the company as this space develops. We are committed to building on the momentum of iHeart's successful transformation into a data-led, digital-driven business with leading consumer platforms like podcasting, all powered by the scale and unparalleled reach of our highly profitable broadcast radio assets, the largest audio sales force, and the only unified ad tech stack in audio advertising. We believe our first quarter performance is further evidence of the resiliency and high growth potential of our business, and that we are poised for continued success in 2022 and beyond. In everything we do, we focus on optimizing our earnings and free cash flow. We believe this is the right approach to create equity value for our shareholders, particularly in this current environment. Before Rich takes you through the detailed results of the first quarter, I want to touch on a couple of key points. We continued our strong financial performance in the first quarter. Our first quarter consolidated revenue grew 19.4%. compared to prior year, slightly exceeding the high end of our guidance range we provided of 17 to 19%. One of our strengths as a company is our diverse revenue base. We execute across 160 owned local markets, and no single advertising category comprises more than 5% of our revenues, and no single advertiser more than 2%, all of which helps to mitigate pockets of ad category softness. We generated adjusted EBITDA of $145 million for the quarter, an increase of 42% versus prior year, and we expanded our adjusted EBITDA margin by 275 basis points. Looking at our operating segments individually, we continue to deliver industry-leading growth in our digital audio group. Within the digital audio group are our podcast revenues, which were up 79% versus prior year, which outperformed the overall podcast industry growth of 22%, according to Magna, and our digital X podcast revenues, which were up 22% versus prior year, which outperformed the industry growth of 16%, according to Magna. We expect to continue to increase our share of both. Included in our digital X podcasting business are our streaming products, third-party extension products, social, OTT, and display advertising. This allows us to offer holistic advertising solutions, leveraging our deep relationships with our consumers to tens of thousands of our long-term advertisers. All of this is PowerBuyer's sales strategy of any seller, anywhere, can sell anything. A unique iHeart capability and is enabled by the unparalleled ad tech we've built and acquired. This quarter, digital revenues represented 25% of total company revenues compared to pre-pandemic Q1 2020 when they represented only 12%. And this quarter, podcasting revenues alone represented almost 10% of total company revenues, clear evidence of the success of our digital transformation. And in March, according to PodTrack, iHeart was again ranked the number one podcast publisher in the U.S. with more downloads than the next three largest podcast publishers combined. Our multi-platform group, which includes our broadcast radio, networks, and events businesses, continues to demonstrate that it is also a growth engine for the company in both revenue and earnings, as well as powering the creation of our new platforms. We grew multi-platform group revenue by 15% year-over-year, even though we were operating in a challenging environment, and we believe that the multi-platform group will continue its growth trajectory for five important reasons. One, we see evidence that certain key advertising categories like auto, entertainment, and retail will continue their recovery to pre-pandemic levels, and others like pharma will continue their strong growth. And we also see opportunity in ad platforms, as well as new ad categories and accounts like cryptocurrency players and sports betting. Two, According to Miller Kaplan, we continue to take share from and outpace our competitors in the radio advertising space, and we expect that to continue as a meaningful vector of growth. Three, looking more broadly across the media landscape, we continue to focus on the TV and digital TAMs, which represent other important growth vectors for us. According to Nielsen, ad-supported TV reach continues to decline. In the month of April, it was down to just 41% reach of American consumers for the largest broadcast TV network, and just 24% for the largest cable TV network, compared to iHeart's broadcast radio audience, which again, according to Nielsen, reaches 90% of Americans every month. Broadcast radio in general, and iHeartMedia specifically, is the most efficient and cost-effective asset an advertiser can utilize to provide the missing reach in any TV-centric advertising campaign at scale. Four, on the digital TAM side, we continue to modernize our advertising capabilities with data-infused solutions, including our smart audio product that makes our broadcast inventory compatible with digital planning and buying. Additionally, the recently launched iHeart Audience Network, the first open audio marketplace that brings together broadcast, podcast, and streaming audience at unprecedented scale, coupled with the largest sales force in audio, provides us the capabilities for our broadcast radio to further participate in the $160 billion digital TAM. And for all advertising opportunities, we have one more unique characteristic, our on-air personalities. A recent engagement lab study shows that radio has twice the trust of social media and more trust than even TV. And trust is key to any marketing campaign, period. And finally, within our multi-platform group, we see the continued recovery of our events business, which we expect to continue to grow given our ability to build new live and virtual events and the pent-up consumer and advertiser demand for these live events and experiences. Before I turn it over to Rich, I want to spend a moment to give you our general outlook on the advertising marketplace and what we think its impact is on us. Looking at the marketplace, we believe advertising always follows the consumer. And right now, we see a consumer base that wants to spend, to travel, and to lead full lives again. And importantly for us, they're highly engaged with audio. Yet at the same time, many sectors of the economy are experiencing obstacles, rising inflation, higher interest rates, supply chain issues, and global uncertainty. Even with those headwinds, we believe advertisers are choosing to build for and support returning consumer demand. As evidenced by our first quarter advertising revenue, and even with the macro concerns, that balance is encouraging for us for the remainder of the year. As we look ahead to the rest of the year, we expect our revenues to continue to grow, our margin profile to continue to expand, and our free cash flow to grow substantially over prior year. We'll continue to examine our business for further efficiencies and modernizations, and as we adopt new technologies, we believe we'll find new ways to optimize our expense base, including our previously announced real estate rationalizations. We'll also continue to build out capabilities like we did in Q1 for our digital sales service and new audience platforms. We'll continue to invest in areas with high growth potential like our new advertising and data platforms. And we'll remain committed to innovation and being at the forefront of new technologies and digital platforms like Web3 and the Metaverse like we've done before in podcasting. Audio has never been hotter, and we believe our strong position as the number one audio company in America is across broadcast radio, podcast publishing, and digital radio is our unique advantage in the media space. And now, Rich will take you through more details of our earnings.