iHeartMedia, Inc.

star 1. As a reminder, today's call is being recorded. I will now hand today's call 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 for our fourth quarter 2023 earnings call. Joining me for today's discussion are Bob Piven, 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 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, during this 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.

Thanks, Mike, and good morning, everyone. We're pleased to report that our fourth quarter 2023 results were in line with our previously provided adjusted EBITDA and revenue guidance ranges. Before I take you through the fourth quarter highlights, I want to share some thoughts on the year we've just had. While the advertising marketplace ended up being more uncertain than we had originally anticipated when we began the year, we navigated that ad environment and at the same time continued to make important strides in the initiatives that are critical to our longer-term success, including substantial progress in developing our proprietary technology platform to enhance our advertising business, which will unlock programmatic and automated trading revenue for our broadcast inventory. the application of AI to translate our podcast content, enabling cost-effective international expansion into non-English language markets, and continuing to extend our audience leadership position beyond just AMFM and onto new devices and platforms. At the same time, we continue to look at our cost base and have built a culture within the organization that is relentless in driving efficiencies. And of course, we have a new tool to use to fuel that, which is AI. Now let me take you through some of the key financial results of the quarter. In the fourth quarter, we generated adjusted EBITDA of $208 million. Within the guidance range, we provided of $205 million to $215 million. Our consolidated revenues for the quarter were down 5.2% compared to the prior year quarter, a little better than the guidance we provided of down high single digits. Excluding the impact of political, our consolidated revenues were flat. and we generated $142 million of free cash flow. Turning now to our individual operating segments, the Digital Audio Group generated fourth quarter revenues of $318 million, up 5.5% versus prior year, and now represents approximately 30% of the company's total revenue. And for the full year, the Digital Audio Group generated over $1 billion of revenue. For the quarter, the Digital Audio Group generated adjusted EBITDA of $117 million, up 17.3% versus prior year, and the Digital Audio Group's adjusted EBITDA margins were 37%, up from 33% in Q4 2022. This was the highest margin we've ever achieved in a quarter for the Digital Audio Group, and I would note that for the full year, this was the Digital Audio Group's best adjusted EBITDA and adjusted EBITDA margin as well, at approximately $350 million of adjusted EBITDA with a margin of 33%. Within the digital audio group, our podcast revenues grew 16.6% versus prior year. Podcasting continues to be the hottest new consumer medium, and as we are the industry leader, it remains a strong growth engine for the company. Additionally, our financial discipline has paid off as our podcasting EBITDA margins continue to be accretive to our total company EBITDA margins. In December... iHeart was once again ranked the number one podcast publisher in the U.S. with more monthly downloads than the next two largest podcast publishers combined, according to PodTrack. Our leadership position in podcasting is, in part, the result of the power of our broadcast radio assets, which we have used to build new lines of business for the company, starting out with the iHeartRadio app over 10 years ago, our marquee live events business, including the iHeartRadio Jingle Ball Tour, and most recently with podcasting. In addition to our industry-leading podcast business, we also have the number one streaming digital radio service, which has five times the listening of our closest competitor. We have the largest social footprint of any audio service by a factor of seven, and we operate 3,000 national and local websites that reach more than 120 million people in the United States each month. all of which represent additional opportunities for our advertising partners to interact with our highly engaged consumer base and provide additional revenue growth for the company. Turning now to the multi-platform group, which includes our broadcast radio, networks, and events businesses. In the fourth quarter, revenues were $684 million, down 6.7% versus prior year, and down 3.2%, excluding the impact of political advertising. Adjusted EBITDA was $142 million, down 38.5% versus prior year. And as a reminder, we're comparing this performance to Q4 2022, which benefited significantly from the impact of record political advertising spend for non-presidential election year. As we look to the year ahead, we see 2024 as a recovery year, and we expect a return to growth mode, which will benefit all of our assets with a disproportionate adjusted EBITDA benefit to our multi-platform group and broadcast radio assets because of the higher operating leverage in that segment. We expect to see our multi-platform group performance improve quarter by quarter throughout the year. And, of course, as 2024 is the presidential election year, we expect to see a material benefit from political advertising the back half of the year as well. And looking at our digital audio group, we're excited about the growth of the overall digital audio TAM as well as our own growth within it. And now I'll turn it over to Rich.