Urban One, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Urban One 2026 Second Quarter Earnings Call. As a reminder, this conference is being recorded. We will begin this call with the following safe harbor statement. During this conference call, Urban One will be sharing with you certain projections or other forward-looking statements regarding future events or its future performance. Urban One cautions you that certain factors, including risks and uncertainties referred to in the 10 Ks, 10 Qs, and other reports it periodically files, with the Securities and Exchange Commission could cause the company's actual results to differ materially from those indicated by its projections or forward-looking statements. This call will present information as of August 4th, 2026. Please note that Urban One disclaims any duty to update any forward-looking statements made in the presentation. In this call, Urban One may also discuss some non-GAAP financial measures in talking about its performance. These measures will be reconciled to GAAP either during the course of this call or in the company's press release, which can be found on its website at www.urbanone.com. A replay of the conference call will be available from 2 o'clock p.m. Eastern Time, August 4th, 2026 until 1159 p.m. Eastern Time on Tuesday, August 11th, 2026. Callers may access the replay by calling 1-800-770-2030. International callers may dial direct 1-609-800-9909. The replay access code is 3701023. Access to live audio and a replay of the conference will also be available on Urban One's corporate website at www.urbanone.com. The replay will be made available on the website for seven days after the call. No other recordings or copies of this call are authorized or may be relied upon. I will now turn the call over to Alfred C. Liggins, Chief Executive Officer of Urban One, who is joined by Peter Thompson, Chief Financial Officer. Mr. Liggins, please go ahead.

Also joining us as usual is Jody Drew, our Chief Financial Officer of TV One, Chris Simpson, our General Counsel, and Karen Wishart, our Chief Administrative Officer. As you've seen in the press release and the results that have come out, We have seen sequential improvements over Q1, but still we are in a rate of decline, less decline than Q1. However, still a tough first half of the year. We are expecting and many more. We are hopeful because of competitive races in Ohio, Texas, Georgia, North Carolina and Indiana. During the quarter we have continued to reduce our leverage with market repurchases of our debt An average price of approximately 42 cents on the dollar. That's about a $60.2 million long-term debt reduction and an annual interest savings of $4.6 million. and the first half of the year, we have decided to adjust our guidance down from 60 to the mid-50s, even though we still don't know exactly where politicals are going to come out. And also, we closed on our Dallas acquisition. I believe that was August 17th. And that's off to a good start, and that's going to contribute significantly to the last five and a half months. There's potential upside there, but still out of an abundance of caution and trying to be more accurately elected to bring the guy down. That could change, but at this point in time, we're saying mid-50s. I'm going to turn it over to Peter to go into the details of the numbers, and then we can open it up for Q&A. Peter?

Thanks, Alfred. So consolidated net revenues for three months under June 30th, 26 was approximately $85.8 million, which was a 6.4% decrease year over year. Net revenue for the radio broadcasting segment was $35.3 million, a decrease of 3.9% year over year. Excluding political, net revenue for radio was down 6.6% year over year. According to Miller Kaplan, our local ad sales were down 10.1% against the market that was down 7.8%. And our national advertising sales were down 1.5% against the market that was down 4.6%. So we outperformed on national and underperformed a little on local. Our largest ad category was services, which was down approximately 0.7%, primarily due to legal services. Government public category was up 14.5% as a result of political spending. And telecommunications category was up 16.9%. All the other major categories were down in the quarter. Net revenue for each media was $4.8 million in the same quarter, applying a 10.6% from the prior year. and Justin Ebedar, which was a loss of $1 million. And we just continued to see declines in network revenue available for us to participate in. Net revenue for digital segments down 8.4% at $9.4 million. Decrease was driven by the decrease in national direct revenue streams as a result of reductions in DEI-focused spending. and a lot of clients spending in general due to microeconomic concerns. We recognized approximately $37.1 million of revenue from our cable television segment during the quarter, a decrease of 7.4%. Cable television advertising sales were down 9.6%. We had strong competition from the NBA playoffs, and that contributed to prime delivery declines of 21% year-over-year for persons 25 to 54. and this along with a continued weak scatter market led to more commercial units continuing to be allocated to direct response at lower average unit rates. Cable television affiliate revenue was down by 4.5% driven by subscriber churn as linear cable continues to decline and that was partially offset by an increase in subscriber rates. Traditional linear cable TV subscribers at TV1 as measured by Nielsen finished Q2 at 27.3 million compared to 34.3 million at the end of Q2 2025. Inclusive of virtual subscribers, TV1 finished with 30.5 million Nielsen subscribers compared to 35.4 million in the second quarter of 2025. Declined obviously being driven by linear Churn, Clio TV, and 27.2 million traditional linear Nielsen subs, and 31.1 million inclusive of virtual subscribers. Through the first four weeks of Q3 2026, TV1 is up by 4% in prime, persons 25, 54, delivering, compared to Q2 2026, and only down 3% compared to Q3 2025. Operating expenses, excluding depreciation, amortization, stock-based compensation, and impairment charges, were approximately $75 million for the three months, compared to approximately $78.1 million for the comparable period in 2025. This decrease was mainly driven by sales and marketing expense decreases in the operating segments. Radio expenses were down by 1.6%, or half a million dollars. driven primarily by lower revenue and lower bad debt reserves, so lower expenses connected to revenue, sales, commission, etc. Reach operating expenses were down 17% or $1.2 million primarily due to lower bad debt reserves. Operating expenses in the digital segment were down 8.7% driven by a decrease in traffic acquisition costs, commissions, headcount savings, and bad debt reserves. Operating expenses in the cable television segment were up 4.1%, driven by a combination of programming expenses and accounting for new executive agreements at TV1. Operating expenses in corporate were down by approximately 16.7%, driven by low professional service fees and other compensation-related costs. Consolidated adjusted EBITDA was $11.7 million, down 16%. Solidated broadcast and digital operating income was approximately $22.2 million, a decrease of 13.7% year-over-year. Interest expense in the P&L was down to approximately $2.1 million, down from $9.7 million last year. It's reflecting the debt repurchase accounting and lower effective interest rates under the troubled debt restructuring rules. We made cash interest payments of approximately $5 million during the quarter. The semiannual cash interest payment for the 2030 and 2031 notes was made on April 1st, and the next payment is due on October 1st for the full 180 days of accrued interest, which is approximately $12.1 million. During the three months ended June 30th, we repurchased approximately $23.5 million of our 2031 second lien notes at a weighted average price of $42. Thank you very much. which amortizes over the remaining term and we've separated that out in the press release so you can see what that is. We drew an additional $10 million in the second quarter under the asset-backed facility which resulted in total outstanding balance there of $20 million. We made a further additional draw of $7 million during the quarter and then we just repaid this week $5 million in the third quarter. So we're at $22 million drawn there, and we have current borrowing capacity of an incremental $24.1 million. We recognize approximately $13.9 million of goodwill impairment charge and approximately $300,000 of long-lived asset impairment charges related to REACH media. We recorded depreciation and amortization expense of approximately $6.2 million. which includes $4.4 million of amortization for the radio broadcasting license and TV1 trade name. Benefit from income taxes was approximately $1.7 million. We paid cash taxes, net of refunds in the amount of approximately $500,000 and capital expenditures for the quarter were approximately $1.7 million. Net loss was approximately $7 million or $1.58 per share. compared to a net loss of $77.9 million or $17.41 per share for the second quarter of 2025. During the three months, we did not repurchase any shares of Class A common stock and we repurchased 129,543 shares of Class D common stock for approximately $600,000 at an average price of $4.50. That was under the annual repurchase program for employee stock. We also executed stock-vest tax repurchases of 145,513 shares of Class D common stock, which is approximately $700,000, an average price of $4.52 during the quarter. As of June 30th, the current contract's outstanding debt balance was approximately $323.2 million, including the ABL draw. ended unrestricted cash was $15.4 million, resulting in net death of approximately $307.9 million, compared to $46.2 million of LTM reports of adjusted EBITDA. The total leverage ratio of 6.66 times. As we previously announced in March, we agreed to sell WMXG and WLNK radio Broadcast Licenses in Charlotte, North Carolina to unrelated third parties for approximately $0.7 million and $4.2 million, respectively. We completed both sales on June 1, 2026 and recognized a gain of $4.7 million. In April, we entered into an agreement to acquire Service Broadcasting Group in Dallas, Texas. including radio stations KKDA and KRNB for $22 million. At the same time, we also entered into an agreement to sell radio station KZMJ to Fusion Dallas LLC for $6 million. We completed on the sale of KZMJ on July 6th and recognized a gain of $3.2 million in the third quarter. We also completed the acquisition of Service Broadcasting Group on July 17, 2026. With that, I'll hand back to Alfred. Thank you, Peter.

Operator, can you go to the lines for Q&A, please?

We will now begin the question and answer session. To ask a question, press star, then the number one on your telephone keypad. Our first question will come from the line of Ben Briggs with Stonex Financial. Please go ahead.

Hey, good morning, guys. Thank you for taking the time to take the questions. So I've got a couple here. So, you know, a lot of puts and takes here, but obviously we've got midterms coming up. I know that you mentioned political is going to be a tailwind. Is there any way you can quantify that or even give some, I guess, relative data? guidance versus what it was like previously. I know that with the Dallas acquisition, there may be some changes as far as what the political domain is.

Yeah, that's difficult. We don't know yet how much money people are going to We won't know until we actually get into the negotiation of it. It's also going to depend on exactly how competitive people think it's going to be. I do know that we've got radio budgeted at about $11.1 million. and then 22, we did 12, basically 13, you know, and so, you know, not quite as, you know, we're not, we're saying that we're not going to be quite as robust as 22, but, you know. Yeah, there was a big, was it a big Georgia runoff? Yeah, it was a big Georgia runoff, right, you know, so, yeah. And it was a runoff, so you kind of got two bites of the apple. George is expected to be competitive again in the OSSOF race, but there won't be a runoff. So you just don't know. It's hard to tell. I mean, it feels like it's going to be... I mean, fortunately, what we can... We can look at polls and say where the races are close. Like close in Georgia. She's supposedly kind of behind the curve on fundraising, which I don't really understand given a competitive race like that. Why wouldn't people be throwing money at it? So there's all these wild cards. But anyway, let's just say it's going to be competitive. Indiana's going to be competitive on a... I think it's a state attorney general's race. Ohio is supposedly competitive with Sherrod Brown trying to reclaim a seat in the Senate. And everybody in the country has been talking about Texas and Tallarico versus Paxton. Anything could change, right? The gap could widen and people feel like it's less competitive. Hope that doesn't happen. And then also the other wild card is how much do advertisers spend with radio versus spending with digital and TV, etc. So suffice it to say, it feels like there are multiple competitive races in And you're right, Dallas should be different for us because we've got a very strong position against the African American audience. The Democrats are looking more competitive and so that should bode well for us. But exactly how well for it, I can't tell you. You can find somebody who can actually really predict what the ad dollar market is going to be in this industry. You probably could make money with them on Cowsheep.

I will keep that in mind. I will keep that in mind.

But those are the races that we feel will help us, right? Yeah.

Yep, yep. I think you said you've got about $11.1 million budgeted for political and fiscal 2016. Correct. In radio. Will anything flow through to TV from political?

Yeah, I mean, TV usually only gets political and presidential. Digital should see some, but TV now. Got it. That's right. Yeah, yeah.

Are you expecting much from digital?

I don't remember what the budget is. I think it's maybe a couple million bucks or something like that, yeah, or maybe a million dollars. Yeah, maybe it's a million dollars. And so, because digital can obviously be geo-targeted, right? Yep, yep.

Okay. And then kind of moving along, so I know on the last call you guys discussed some AM towers that might get sold. Is there anything to report there?

Nothing to report now. It's a process. It's ongoing, you know, right this second. And, you know, we feel good that we're going to have a positive outcome, and we think there will be a positive outcome this year.

Got it. Okay, thank you. And then last one from me is, so I know you moved guidance from $60 million to mid-50s. I think on the last call, there had been a discussion of about $40 million of free cash flow expectation. In 2026, is it safe to say, you know, using the mid-50s EBITDA, that it would be about $35 million of free cash flow expectation now? Am I thinking about that the right way?

Yeah, there's some more puts and takes on non-cash stuff like ADU burning through that, right, and off ADU balances. It's probably lower than that now just because of the, The composition of how we're getting to the revenue and to the EBITDA number.

Okay. All right. Fair enough. Listen, I really appreciate the time. Thank you again for taking the questions. And good luck in the third quarter. Thank you. Thank you.

Our next question will come from the line of Aaron Watts with Deutsche Bank. Please go ahead.

Hey, everyone. Thank you for Thank you for taking my questions. I've got a couple, if I may, around the ad environment. I'll start on the radio side. I see the sequential improvement from first quarter, but I think 2Q came in a little weaker than you had guided us last quarter. I appreciate it's difficult to be around a percentage point smart in advance on radio ads, but any factors you'd call out that maybe pushed 2Q a little softer than you had originally anticipated back in May on your last call?

Yeah, I mean, I think local came in lighter than we thought, and we underperformed the market locally. Within that, obviously, there's a whole – it's not really one category. It was just across the board. And so, yeah, the patients that we gave at the last call, we did miss those a little bit, and I think almost all of that was in local.

Peter, any – Anything you'd call out that is right now pushing national to be a bit firmer than local?

Not really.

We've been underperforming the marketplace nationally, so I think we just righted that ship a little bit.

Okay. If I look ahead to your 3Q radio guide down 2.8%, does that compare to the minus 3.9 you just reported in 2Q? Does that imply some firming in the underlying core ad market, or is that purely the political lift, Alfred, you were just kind of talking about a minute ago?

Look, you've got political starting to seep in there. You've got improvements in our Washington, D.C. market over what it was a year ago based on some format changes. Atlanta is doing better than we thought it in Q3, and that's before politicals jumped in there. I think I looked at the Atlanta forecast for political. It's not a huge number in Q3, as I remember.

Yeah, we don't have a lot of political on the books yet for Q3. We've only got a quarter million dollars, so actually the Payson's ex-political report

all year long. Houston had a great Q1, a tough Q2, starting to do better again in Q3 and Q4. We lost some momentum because of World Cup, believe it or not. because so many people took money and put it against that that we felt like it really hurt us, particularly in Houston.

Okay, now that is helpful context. And I guess one last one for me, shifting over to the TV side. Was it many of those same factors kind of weighing on TV advertising or anything else? in particular to the TV side that you would call out that's pushing advertising.

TV is more of an inventory problem. You know, more CTV impressions out there. Weaker scatter market means that dollars start to default. We're going into upfront now, right? So upfront, you know, shows, you know, You've got less advertisers coming for linear. And then when you look at CTV, you've got more impressions because of Netflix and Amazon. and then you've got a weaker scatter market. Long story short, it's putting pricing pressure on the ad rates, particularly as ad rates start to default to direct response. I think those are the same kind of macro trends that folks are seeing in the linear cable business. I haven't been following everybody's numbers, When I see Warner Brothers Discovery Report, etc., it's kind of similar factors.

Okay. All right. Great. Thank you for the time. Appreciate the thoughts.

Thank you. Our next question will come from the line of Dennis Panula with LePan Partners. Please go ahead.

Hi. Good morning, gentlemen. Thanks for taking the questions. Most of my questions are actually already answered. I just have one last question. You guys had, what, about 14.1? This question is for Mr. Thompson. 14.1 million in non-cash goodwill and intangibles, write-downs?

Yeah.

Does that sound about right?

Yes. And that was all at Reach Media.

That was all on the network. Just because the way you guys word your press releases and don't actually, you know, mentioned or specifically talk about that. What would the bottom line look like without that $14.1 million non-cash write-down?

Well, look, we add it back in adjusted EBITDA because it is non-cash. So in the headline numbers that we look at when we talk about the $11.7 million of adjusted EBITDA, it's already added back there. Obviously, on net loss and EPS and stuff, it's in there. and you would add that back.

Of course. I'm being a little facetious because a lot of people don't, some investors probably don't get what it means. I think if you broke it down just a little bit clearer for some of the investors, I think it would be helpful. Just my two cents. Again, it's only worth a penny. We have this non-cash issue pretty much every quarter and it just beats to hell and makes the top line number. When people look at the top line number, they see a loss of like $11 million.

Those impairments do swamp the numbers. I mean, hopefully we're cycling through.

You guys are working so hard to get your expenses down. You guys have done a great job with You know, interest expense, obviously. You know, you've tweaked your... You've become much more efficient in all your operations. And you get no benefit for it because this non-cash stuff knocks the crap out of you guys all the time.

Yeah. Look, it's... It's the way that Gap tells us we do it, and that's what we stick to. What I was saying was... We're cycling through, hopefully, the end of that because we moved our... Our radio FCC licenses to be amortized. So we made them finite lives and we amortized them. And so we shouldn't see, we won't see big impairments there. We've written down all of the goodwill outreach, so there's not any more to go. So I think, I'm hopeful as we move forward, we shouldn't see nearly as many of the non-cash impairments.

And that's actually a great positive, and I'm glad you noted that. All I'm saying is you go into great detail, you know, radio down X percent, TV down X percent. You guys go into great detail in your PR, but nowhere in there does it state that there was a non-cash charge that made you guys lose $14 million. And that's all I'm saying is that maybe you extrapolate that in your PR a little bit better.

Julie knows it.

Got it. Yeah. Gentlemen, have a great day. I thank you for taking the call. Thank you so much. Thank you.

Again, for questions, press star one, and our next question will come from the line of Adam Jacobson with RBR.com. Please go ahead.

Hi, good morning. Thank you for taking my question. I wanted to dive in a little bit more regarding the impairment charges because if you look at the overall numbers and you look at the portrait of urban one, you're not was basically reflective of the impairment charge lowering to 14.16 million from 130.08 million. And as the last gentleman noted, the adjusted EBITDA here is certainly very important. And you've been talking a lot about political dollars. But let's move ahead to 2027. Political is cyclical. So what are your plans in terms of the overall portrait for Urban One past political? are you going to be focusing and doubling down on the multicultural story? Are you going to be looking at some of the non-multicultural assets and questioning, well, is there opportunity there or is that a non-essential asset? Just wondering what the post-political portrait is for you or is that still a little too early to ask?

I think we have shown that We are open to expanding outside of our core African American targeted demographic, particularly as it relates to our radio operation and in particular as it relates to markets where we already operate and we're building scale. I think I've said that we believe that that does give us more arrows in our quiver to help drive local ad solutions for our clients in those local markets. And we've seen success in that. So I think you'll see us continue to do that. Managing political versus We believe that there will be further consolidation. We don't have any plans to go outside of our urban footprint in television at this point. And we've looked at some digital businesses that would have taken that but couldn't come to terms on price. So I think the most likely place that that You're in the business. I'm assuming the RVR is Radio Business Report. Do you know that there's going to be further consolidation? There's a lot of assets for sale. And the key is to be able to acquire something that is de-levering, number one, and a creative. And you also got to be able to acquire it at a value level that takes into account that even if you own Everything, you know, there's probably still pressure on your top line in a market because there's just pressure against the medium in the advertising space, right? Yes. And so, but look, that's been helpful to us. Houston is... Our largest market now and our acquisition of the Cox Stations was very beneficial to us there. Dallas was an urban acquisition but that was a market where neither them or us were making any real money. and I think the way we're configured now will actually fix that. So we're just trying to be smart about how we do it. By the way, the trail, the radio consolidation trail is littered with companies that went bankrupt through consolidation just for the sake of consolidation. You have to be very deliberate about it.

Thank you, I really appreciate your answer. Yeah, thank you.

This concludes the question and answer session and I'll hand the call back over to Alfred for any closing comments.

Thank you, operator, and thank you for those folks that participated and asked questions. We look forward to speaking with you either offline if you have additional questions or next quarter, and we'll have a better handle on how the year shapes up on the next conference call. Thank you.

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