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.

Thank you, Bob. As I take you through our results... You'll notice that, as Bob mentioned, our fourth quarter 2023 results were in line with our previously provided adjusted EBITDA and revenue guidance ranges. Our Q4 2023 consolidated revenues were down 5.2% year-over-year, a little better than the guidance we provided of down high single digits. Excluding the impact of political, our consolidated revenues were flattened. our consolidated direct operating expenses increased 0.4% for the quarter. This small increase was primarily driven by higher broadcast content fees and higher variable content costs, resulting from an increase in digital segment revenue, including profit sharing costs and production costs, but somewhat mitigated by lower third-party digital costs and reduced compensation expense as a result of our ongoing cost savings initiatives. our consolidated SG&A expenses increased 8.5% for the quarter, primarily driven by increased trade and barter marketing expense associated with the promotion of our events business in the quarter, including the streaming of our iHeartRadio music festival moving to Hulu, as well as increased variable bonus expense, which we stated on last quarter's call when discussing our Q4 guidance. These increases were partially offset by expense reductions driven by our ongoing cost savings initiatives. We generated a fourth quarter gap operating income of $79.8 million compared to $172.8 million in the prior year quarter. Our fourth quarter adjusted EBITDA was $208 million compared to $316 million in the prior year quarter, which as a reminder was an election year, and within the guidance range we provided of $205 to $215 million dollars. 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 fourth quarter, the Digital Audio Group's revenues were $318 million, up 5.5% year-over-year, and they comprised approximately 30% of our fourth quarter consolidated revenues. The Digital Audio Group's adjusted EBITDA was $117 million, up 17.3% year-over-year, And our Q4 margins were 36.7%, a year-over-year increase of 370 basis points. Within the digital audio group are our podcasting revenues, which grew 16.6% year-over-year, and our non-podcasting digital revenues, which declined 1.1% year-over-year. The Multi-Platform Group's revenues were 684 million, down 6.7 percent year-over-year, or down 3.2 percent, excluding the impact of political. Adjusted EBITDA was 142 million, down 38.5 percent year-over-year. The Multi-Platform Group's adjusted EBITDA margins were 20.7 percent. The Multi-Platform Group's fourth quarter margins were primarily impacted by year-over-year increases in trade and barter marketing expenses. As I mentioned previously, as well as increases to certain programming fees and bad debt expenses, which were partially offset by the previously announced ongoing cost reduction programs. To take a step back, as you can see from the results in this quarter, we've continued to build out a successful and high-growth digital business, which for the full year 2023 generated over a billion dollars of revenue with a 33% adjusted EBITDA margin. What might not be as apparent is that as part of our relentless focus on efficiencies, we've been reallocating capital from our lower growth multi-platform group to feed our higher growth digital audio group. In fact, since 2019, we have actually reduced our multi-platform group expenses by approximately 7%, which has in part helped us to fund the growth of our digital audio group, whose adjusted EBITDA grew by approximately 270% over that same time period. And as digital has a higher growth rate than our multi-platform group, the adjusted EBITDA of the digital audio group in Q4 2023 is now approximately 80% as large as the multi-platform group's adjusted EBITDA, up from 11% in Q4 2019. Turning to the Audio and Media Services Group, revenues were $68 million, down approximately 28.6% year-over-year, and adjusted EBITDA was $21 million, down from $45 million in the prior year. Excluding the impact of political in the prior year quarter, the Audio and Media Services Group's revenues were down 5.2%. And as a reminder, the Audio and Media Services Group also includes television revenues, which has greater year-to-year peaks and troughs due to the impact of political advertising. At quarter end, we had approximately $4.9 billion of net debt outstanding, and our total liquidity was $772 million, which includes a cash balance of $346 million. Our quarter-ending net debt to adjusted EBITDA ratio was seven times. And in 2024, we expect to make progress towards our long-term goal of a net debt to adjusted EBITDA ratio of approximately four times. As highlighted on past calls, we have no material maintenance covenants and no debt maturities until May 2026. We continue to be opportunistic in responding to market developments and opportunities surrounding our capital structure. In Q4, we repurchased $15 million of the principal balance of our 8 and 3A 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 $534 million, reducing the outstanding amount from $1.45 billion to approximately $916 million. and results in aggregate annualized interest savings of approximately $45 million. In the fourth quarter, we generated $142 million of free cash flow. Turning now to our outlook for Q1. The first quarter got off to a slow start with January revenue down 8% year over year. However, we are seeing momentum in February and March, which are both pacing up low single digits. And we are now currently pacing slightly better than down 1% for the quarter. And we expect our Q1 2024 revenues to be flat to down 2% year over year. And we are seeing that momentum continuing into Q2, which is pacing up low single digits as well. So we see this trajectory as further validation that January was an anomaly and a positive sign for us as we progress throughout the year. We expect to generate first quarter adjusted EBITDA in the range of $100 to $110 million compared to $93 million in the prior year quarter. Turning to the individual segments for Q1, we expect the digital audio group revenues to be up mid-single digits. We expect the multi-platform group's revenue to be down mid-single digits. And we expect the audio and media services group revenue to be up approximately 10%. In terms of free cash flow, as a reminder, Q1 is always our lowest free cash flow quarter of the year. And in Q1 2023, we generated negative free cash flow before returning to positive free cash flow generation in all subsequent quarters. Turning to some of the items affecting our full-year free cash flow. We expect our cash taxes to be approximately 10% of adjusted EBITDA in 2024. Our estimate of full-year 2024 capital expenditures is expected to be approximately $100 million. Cash restructuring expenses will be approximately $50 million. While not included in free cash flow calculation, In February 2024, we received $101 million of cash proceeds from our equity stake in the sale of BMI. As Bob mentioned, we expect 2024 to be back in growth mode as we continue to see signs of improvement throughout our business and the broader advertising marketplace. And as a reminder, during the last presidential election, we generated $167 million of political revenue. So in combination with our ongoing efficiency efforts and given the power of technology now at our disposal, we expect to see a significant year-over-year improvement in our adjusted IBITDA performance. And finally, on behalf of our entire management team, Bob and I want to thank our team members who work to deliver for their communities and for iHeart every single day. Now we'll turn it over to the operator to take your questions. Thank you.

Thank you. If you would like to ask a question at this time, press star 1 on your telephone keypad. Your first question is from the line of Jessica Reese with BOA Securities.

Hi. Good morning. Thank you. A couple of questions on podcasting. You talk about just the overall industry, what you're seeing in terms of growth, some of the implications of changes in competitors' strategies, and what do you think your share is now? And then I have another question.

Well, thanks, Jessica. Look, I think podcasting by almost any measurement, and there are a number of them out there, show it to be the biggest growth vector in the media business today, and we don't see any sign that it's subsiding. As we've said very early on, we think it's a really clear adjacent business to radio. Some would argue it's sort of radio on demand, radio-like programming that's available on demand. And I think the marketplace has gotten a lot more rational. I think people who had ideas about subscriptions, about pay, about exclusivity, about paying tons of money for people in hopes that one day it would be profitable have all sort of fallen by the wayside. And we've gotten back to very clear basics, which is obviously helpful to us because it turns into a rational marketplace in terms of dealing with both talent and dealing with advertisers. The podcast sector continues to have superior CPMs, premium CPMs. It, by most measurements, garners the most attention. The podcast hosts are trusted. It's sort of every metric you click off, Jessica, is sort of this wonderful, superior metric. And so I think that's sort of the way we look at the marketplace. In terms of share, it's hard to understand. I think it's hard to get the true denominator on it. But I think people have said we're sort of 20% share in the marketplace. If you take some of the numbers, that's sort of where it works out. Obviously, in terms of profitability, we're a lot more than that.

Yeah. Hey, Jess. I just want a couple quick things and then go to your next question. By the way, in the investor deck, you know, what's interesting, not just about us, but, you know, we have a slide in there that I point people to that shows the scale of podcasting that makes up more than two times in terms of time spent. It's double the amount of ad streaming, the ad streaming music services. So in terms of its breadth, out there, not just ourselves. The other thing I would say is think about podcasting. All the people that kind of predict advertising revenue talk about the pool of podcasting dollars. You know, most estimate that was about, I don't know, $1.8 billion, $2 billion for U.S. ad dollars last year. People are talking about it going to $4, $5, $6 billion, whether you go three years out, four years out, five years out at the box point. So I don't think there's any debate about the TAM growing in terms of podcasting, which I think tells you that we really are, even with all of our success and financial success, that we're in the early days. And one of the things I always kind of point to what's interesting is that really big advertisers just started to come to podcasting a couple of years ago. And the reason why that's so important is because big advertisers the state, the obvious, but I think it's important to rear and bring big dollars. And just finally, I'd say, you know, it does start with an audience, not just the size, but level of engagement. And when you look at podcasting, um, and Jess, you've been doing this a long time, like we have, um, it's the most engaged medium any of us have ever seen. I think the number is something like 85% of every podcast that started is listened to all the way through. So if you make that connection, it is no surprise about the growth in podcasting revenue because of the effectiveness with advertisers.

You know, I would add one more thing, Jessica, just on the future, that, you know, as a reminder, we've been building out the ad tech platform with the data and analytics, which will allow us, and it's obviously one of the advantages of having such a strong hand in podcasting, that if someone finds an audience they really like, that's really engaged, that's very important to them, we'll be able to find that audience in broadcast radio at greater scale and add it to the podcast reach of whatever they're doing. So for us, it promises to extend the power of podcasting directly into our broadcast radio as well.

Great. And then thank you for all of that. And then the follow-up is just on advertising. I mean, you guys seem relatively optimistic as the year progresses. So Can you just give us maybe a little deeper dive on what you're seeing in the marketplace in terms of strength or weakness in certain categories? And then, Rich, just one last follow-up. You reiterated your goal of four times leverage, but what do you think the timeframe is to get there?

Well, if I can jump in on the advertising question, Jessica. We think advertising is strengthening. We called it last year. We thought this year would be the recovery year. We're seeing that. January was a little slow, but it's picked up in February and March and seeing it into the second quarter. So we're optimistic that we're seeing that and that we'll be a beneficiary of it.

Yeah, and in terms of the leverage ratio, we haven't given a specific time frame. Look, we do expect to make significant progress this year towards getting to four times, and which has also helped, and we highlighted this in the release about the sale of our equity interest in BMI. We received approximately $100 million, $101 million to that. So when you look at our asset base and our performance, this company continues to be a great generator of free cash flow, and we'll continue to focus on the generation of free cash flow.

Thank you.

Thank you, Jess.

Your next question is from the line of Stephen Cahill with Wells Fargo.

Thank you. So, first, just on the advertising inflection from down eight in January to pacing up low single digits February, March, you know, wondering if there's particular areas that you can point to that's driving that, whether it's national improving, whether it's particular categories coming back to the market that you hadn't seen. And just to clarify, I want to make sure that those comments are all kind of excluding any impact from political, so their underlying market, if that's correct. And I have a couple of follow-ups.

Sure. Look, I think we're seeing across the board, seeing a strengthening of advertising. You know, obviously some groups of advertisers will be stronger than others, but as a reminder, we have no category that's more than 5% of our ad revenue. So we're pretty diverse in terms of our exposure to categories. And I think you know again For whatever reason and I think listening to others you heard it in the marketplace the January just start off a little slow You know, it can be a lot of external variables that do stuff. It's the slowest month of the year But as the year picked up, you know in February people are here and I think in our discussions with advertisers I think everybody's looking for growth out of their business and growth is driven by advertising Yeah, it's David's rich

The only other thing I might add is, you know, we don't, Bob mentioned in terms of categories, also as a reminder, we have no individual advertiser that's more than 2% overall. And we also commented, I think we see, you know, we expect this growth even to continue into Q2. As we look to go forward on political, just as a reminder, there's some political dollars in Q1, but they are very small. They're immaterial.

the overall company i think bob stated in his remarks uh that we expect this to be a robust political year but that's really going to manifest itself in q3 q4 as you would expect great and then um just on digital x podcast i think it was flat in 23 it was down a bit in q4 could you just help us understand what the trends are there is there continued pricing pressure there are you seeing any

engagement uh issues on your ad supported music platforms because we've seen a lot of growth and things like tiktok so we just love to understand the trends in digital x podcast well one one point i would make is that last year we talked some about rebalancing the mix of uh ad products going for profitability and i think you've seen that come through in the margin of our digital business in this quarter yeah and the other thing i would say look we had uh

Just as a reminder, in DigitalX podcasting, which obviously we think continues to be a great growth engine for us, we had a tough comp last year because we were still dealing with a significant amount of COVID money last year when you look at that comparison. Again, I'm not a big person about, okay, you take this out, you take that out, look over here what it could grow, but I do think it's kind of worth it's kind of worth calling that out. And just by the way, a little bit, I can't help myself in terms of you, we look at our asset base and you mentioned TikTok, just as a reminder, you know, in terms of our reach and level of engagement, we reach over 90%, which has been the resiliency. And, you know, TikTok is somewhere kind of in the mid 30% overall in terms of reach of the country. So I think people always have to remember in terms of our reach, in terms of reach of American, in terms of consumers, and our level of engagement, the unique asset we have as a company continues to be that. And just to bring it full circle, Bob commented for a second on our technology, but just as a reminder, I think it was a response to the podcasting question with Jessica. But, you know, we've got the ability even on our broadcast inventory to do everything any of the big tech digital players can do, but we do it one to cohort, one, two, and four, many, which is obviously the way the world is going away from one to one.

Thanks. And then just lastly, you have a lot of maturities in 26 and then a couple more walls in 27 and 28. What's the timing when you start to engage in those discussions? You know, I know this is a growth year. You'll, you know, based on consensus, deleverage with pre-cash flow. You'll generate a lot more EBITDA, but you'll still probably be entering those discussions at a higher level of leverage than your target. So how do we just kind of think about risk and opportunity there?

Well, Steve, I don't think this will surprise you. I'm not going to comment on anything specific. But, you know, safe to say, And you reiterated, you know, first and foremost, continuing to execute the generation of significant free cash flow. And, you know, we are focused on our maturities, and we're evaluating all of them, and we continue to focus on our refinancing of the balance sheet, as you would expect. But, you know, our objectives haven't changed at all, and our focus has not changed.

Thank you.

Your next question is from the line of Ben Swinburne with Morgan Stanley.

Thank you, guys. Good morning. Rich, how are you thinking about the expense trends in 24? Any color on kind of expense growth or how you're thinking about margins? I assume you should get some nice margin expansion given the political year. And then I just wanted to clarify on the restructuring. You mentioned $50 million. Is that cash tied to last year's restructuring activity or are there additional cost actions that you're announcing today that are taking place in 2024. And then I just want to follow up.

Thanks, Ben. So let me, maybe not exactly a note order. Let me take your last one first. No, we just, you know, again, continuing to want to provide, you know, transparency, just giving an estimate of what we think as you look into 24. And we're not announcing any new cash, new cost, excuse me, programs today, but I think if you go back over the last couple years, you know, the rigor we apply both in terms of, you know, our course programs, efficiencies. I think in the beginning of Bob's opening remarks, he talked about that, talked about taking advantage of AI, you know, as we go forward, AI technology. But quite frankly, I think it's called AI. It's obviously called, everybody uses the word AI today. But if you look at our track history over the last two, three, four years, we've continued to look at our company and rigorously look at efficiencies. And today, I really would focus people on, in terms of our remarks, that if you look at what we did with the multi-platform group since 2019, we've actually reduced our overall expense base by 7%. And what we've done with that is two things. We've invested in terms of our higher growth businesses on the digital side, including podcasting. I think the number we gave is, if it is up 170%, you know, I'm sorry, 270%, I apologize, over that period of time. And I'll just remind us, and we generate a lot of free cash flow during that period of time. And just to be clear, we believe multi-platform is a growth business. It's not, you know, we don't believe it's as high growth as a digital business, but we expect, we've said this before, multi-platform to get back to low single-digit growth. And again, to reiterate and state the obvious, it's a great free cash flow business. And if you look in the 2024, I would just remind us, you know, political is our highest margin EBITDA business in a company that has a lot of high margin EBITDA business. And it's one of the great advertising categories where we get the cash up front. in terms of political.

Got it. Okay. That's very helpful. And then I just was curious, you guys gave some helpful cash tax guidance as well for the year. There's a lot of stuff happening in sort of, you know, right in Congress or maybe not happening, but potentially happening around tax changes. I'm just wondering if you have any advice for us beyond 24 on thinking about cash tax rates for IHART.

No, I mean, look, I think the advice we've said is about 10% of the DA in cash taxes. We're all aware of the various efforts going on, but that assumes no changes that we've all been reading about in any of the proposed changes, potential changes out there, which at least some of the potential changes could impact us very favorably, but we have not assumed that at this point.

Got it. Okay. Thanks so much.

Your next question is from the line of Jim Gross with Barrington Research.

Good morning. It was encouraging to see your confidence in the growth in the digital audio group continuing through the year. Are you thinking this is not just a one-year issue, but that that's a steady trend that you feel will go on for several years or beyond? And you also drew attention to the improvement in the margin for that sector. I'm wondering if you have any thoughts on what the upside might be in the margin ultimately, and is AI driving some of those gain potential?

Let me hit the first part of that, and I'll let Rich take the other, is we see the digital TAM continuing to expand, and we are able to participate in it through our digital audio group, And we also think that we are probably expanding our growth within that as well. And obviously adding the technology to our broadcast radio inventory, our strategy is to get that into the digital TAM too so that eventually the broadcast radio inventory benefits from the growth of digital overall.

Yeah, and I'm sorry, Jim, your second question, second part?

Just the drivers of the margin improvement and what the upside. Oh, I'm sorry. Do you have some thought in the margin in mind?

Well, you know what, we've always, I apologize for asking you to repeat it.

Look, we've always talked about to think about the digital TAM on margin when you model out as kind of a 35% in the DA business. And I think as you look at our numbers and the data, we continue to make great progress towards that. So and back on your cost and NAI, you know, a little bit like I think I commented on the previous questions and, you know, Ben's question, you know, cost and efficiency and that constant rigor is something we continue to do and look to technology to help take advantage of it. And again, I think we, for the first time, really just tried to put in context and demonstrate and put some real data around it. What we mentioned about the expense reduction to multi-platform group, which again, doesn't take away from our view that it will return to a growth engine. But, you know, in terms of the rigorous allocation of capital that we've been allocating it, more capital to our highest growth areas. So other than saying I expect us to get to that 35% if a DA margin on an annual basis, but for the digital audio group, I wouldn't comment any further.

Okay, and maybe lastly, with your core broadcasting business, it's essentially becoming almost a supportive element to the growth in the digital businesses, it would seem, although you did talk about the social media and the websites and the other supportive elements within broadcast. I wonder if you could talk about the role you envision with the broadcast business.

Sure. Look, at the heart of it, we have this incredible and unique reach. We reach 90% of Americans with our AMFM broadcast business, our assets. That's higher than Facebook and Google. It's double, more than double the broadcast network, TV networks, and no one in the digital audio space comes close. So that is a real advantage we have. We reach consumers. And if you go to the fundamentals of marketing, the basics marketing is the more people I can tell my message to, the more business I'll have because a certain percentage of everyone I tell will turn into a customer. So we know that's valuable. The problem with broadcast radio has not been the consumer reach, has not been the consumer. It has been how we're selling our advertising. And we are developing the technology platform so that the advertisers who are looking for that inventory to look like digital inventory will have the platform that allows that to happen. We think that's the major benefit to us in broadcast radio. So broadcast radio... doing extraordinarily well with the consumer, and has a huge upside opportunity in our mind for advertising sales because of, one, that reach, and, two, our ability to serve that reach, as Rich talked earlier, being able to provide that same kind of reach to specific cohorts, not just Nielsen audiences.

Okay. Thanks for that. Appreciate it.

Your next question is from the line of Steven Laschet with Goldman Sachs.

Hey, great. Thank you. Maybe one on political and then one on podcasting. I guess first for Bob, could you talk a little bit more about what you're seeing in terms of the adoption of political advertising on podcasting? How big of an opportunity do you think it is this year? And is it something you think the campaigns are looking at as incremental or a makeshift within their budget for audio as a whole? And then I also think you called out the opportunity for podcasting in non-English markets. Just curious if you could spend a little time talking about the tech stack and the pieces that you've brought together on that side and where you're at in terms of the supply-demand funnels in those markets and when you think you could start seeing that become a meaningful contributor to revenue for podcasting. Thank you.

Well, let me start with political. We think that, of course, the biggest opportunity is probably broadcast radio for political. As TV's reach has declined, the candidates and the people with issues have to reach the voters, and we have the ability to do that. Now, the political advertisers look very closely at which cohorts, which groups of people, and now with the data and analytics we have available, we're able to serve that need, so we think that helps us substantially with political this year. The other thing to remember is that only 6% of voters say no one influences me. That means 94% of the people are influenced by somebody else, people in their household, their coworkers, people at the gym, religious leaders, et cetera. So when you're looking at targeting, and I think they've all recognized this, if you target just the voter, you're not targeting and not reaching the people who are influencing them. The great news about broadcast radio is if they buy a cohort on broadcast radio that's their target, everybody else basically hears the message as well. So the people influencing them will have the message and hopefully can influence that voter. So we see that's very important. You're right about podcasting. Clearly with the impact of political and podcasting, there is opportunity there. and that probably would be a big growth area for podcasting this year as well.

Do you want to talk about translation?

The non-English opportunity in podcasting.

We have been experimenting. It's getting better. Not quite to the level we need it to be to say, let's roll it out, but it's making fast uh a pace uh gains in terms of the quality and we anticipate probably in this year that we'll get stuff of that quality how quickly we'll be able to monetize it and get it out there i don't think we have any projections yet but we'll know a lot more by probably the next couple of earnings calls by the way it is just as a side note one of the areas when people when you look at ai

that it really is efficient to use AI to help on that translation. Again, as Bob said, I wouldn't change your numbers this year for it. It's not significant, but it is an inevitable benefit from AI.

It is uneconomic to do it manually because there's so many episodes, there's so many podcasts, there's so many languages, and AI is really the solution.

Got it. Thank you both.

First of all, on behalf of Bob, myself, and quite frankly, the entire management team and everybody at iHeart, really appreciate everybody taking the time to listen to the iHeart story. And we're here for any follow-up questions. Thank you again.

This concludes today's call. Thank you for joining. You may now disconnect your lines.