Audacy

Good morning and welcome to the Odyssey Inc. fourth quarter 2021 earnings call. All participants will be in a listen-only mode. This conference is being recorded. I would like to introduce your first speaker for today's call, Mr. Richard Schmaling, CFO and Executive Vice President. Sir, you may begin.

Thank you, Stacey. This call is being recorded. A replay will be available shortly after the conclusion of today's call. at the replay link or number noted in our release. During this call, the company may make forward-looking statements which are based upon the company's current expectations and involve risks and uncertainties. The company's actual results could differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause actual results to differ materially are described in the risk factor section of the company's annual report on Form 10-K. as such risk and uncertainties may be updated from time to time in the company's SEC filings. We assume no obligation to update any forward-looking statements except as may be required by law. During this call, we may reference certain non-GAAP financial measures. We refer you to the Investors page of our website at odysseyinc.com for reconciliations of such measures and other pro forma financial information. I'll now turn the call over to David Field, our president and CEO.

Thank you, Rich, and good morning, everyone. Thanks for joining Odyssey's fourth quarter earnings call. I'm pleased to report that 2021 ended on a very solid note as we completed a year of strategic transformation across the organization and positioned ourselves for strong growth in 2022 and beyond. Through the course of the year, we made great progress across all of our emerging and evolving businesses to enhance our competitive position our organizational capabilities, and our growth opportunities. We made a very important addition to our lineup in Q4 with the addition of AmpliWave, formerly Wide Orbit's audio streaming and ad tech business, which will meaningfully accelerate and secure our digital roadmap. And operationally, we ended the year with solid revenue growth, and we are off to a very good start in 2022 with strong performances across our business lines. Odyssey ended 2021 in a significantly enhanced position, versus the start of the pandemic or even at the start of last year. We have purposefully reimagined Odyssey as a scaled, multi-platform audio content and entertainment company with outstanding leadership positions across the full spectrum of audio, including the fastest growing areas of the business. We believe we have a meaningful competitive advantage as the number one creator of original premium audio content to our unrivaled leadership position in local radio news and sports, augmented by our position as the most critically acclaimed creator of original podcast content. We are working to build upon this position by continuing to build additional exclusive content offerings across our radio, podcasting, and digital platforms, and working to develop significant listener experience enhancements on our Odyssey distribution platforms. In 2021, we accelerated our organizational evolution through a number of important strategic acquisitions organic growth initiatives, structural improvements, and senior talent additions. And we are well positioned to take advantage of the exciting growth opportunities within the dynamic and increasingly important audio market as we capitalize on our evolution from a leading radio broadcaster to a scaled first-tier multi-platform audio leader with deep digital marketing capabilities to meaningfully expand our customer relationships. Turning to fourth quarter results, revenue grew 8% over the prior year quarter, and 13% ex-political, led by double-digit growth in both digital and spot radio. Local spot revenues continued to recover, up 13%, while digital revenues grew 16%. We are back to live events, but with a much lighter schedule than before the pandemic, as we ran at about 30% of our pre-COVID level of events. For the full year, revenues grew 15%, and were up 18% ex-political, with adjusted EBITDA up 48%. We also had a terrific year in sports betting as our ad revenues in that category grew 130% to $45 million, exceeding our expectations and rapidly pushing towards our $100 million target for this category. With several large states like New York recently legalizing mobile sports betting, we expect continued strong growth in this category during 2022. We continue to see an interesting evolution in the recovery of certain key advertising categories. During fourth quarter, Otto remained highly impacted by supply chain issues, as did a handful of other categories. At the same time, we experienced significant recoveries in several categories that have been hindered by the pandemic. And in addition, a number of categories have eclipsed 2019 sales levels, as Rich will share during his remarks. The post-pandemic recovery is also manifesting itself in rebounding ad rates on spot radio. While total revenues have yet to recover to pre-pandemic 2019 levels, it is useful to note that excluding political, as well as what we believe is the transient impact of lower auto advertising and our curtailed event schedule, fourth quarter revenues were within 5% of pre-pandemic levels. 2021 was a busy transformational year for Odyssey. We rebranded the company at the end of March to reflect our evolution into a scaled multi-platform content and entertainment company, establishing a consumer-facing brand identity. Our 2021 acquisitions of Podcorn and AmpliWave, plus BetQL just prior to the start of the year, are important additions to our capabilities that will fuel accelerated growth and enhance how we serve our listeners and customers. We are very excited about each of these fast-growing new components of Odyssey. Both BetQL and Podcorn are growing at triple-digit rates And while starting from a small base, we foresee meaningful contributions to our future growth as we continue to build on these exciting emerging platforms in the sports betting and podcast marketplaces. Podcorn has now surged to 60,000 podcast creators on its platform. No other influencer marketing platform for podcasters approaches that scale and breadth. AmpliWave was Wide Orbit's digital audio streaming and ad tech business that we recently acquired in October and relaunched under its new name. This important acquisition will give us control of our end-to-end product roadmap and accelerate a number of growth opportunities while also enabling us to provide streaming and ad tech products to customers. We are off to a great start with AmpliWave, both in terms of product development and in growing their customer base. We believe 2022 is setting up to be a strong year for Odyssey as we are able to capitalize on the many meaningful organizational enhancements that we've made across the organization in the form of acquisitions, innovation, and new talent and capabilities. As we increasingly benefit from these enhancements and integrate the various pieces across the company, they will contribute to an acceleration of our top and bottom line growth. At the same time, we are optimistic about the continued recovery and normalization of our radio business as the disruptive impact of the pandemic and ultimately supply chain issues wane. And on a broader note, we are very optimistic about the future of the audio business, which continues to gain momentum with advertisers as other primary forms of advertising suffer substantial disruption. Audio in general, and radio in particular, remain highly undervalued, with audio attracting just 9% of ad dollars, despite garnering 31% of people's time with media, according to a 2021 work study. Odyssey is well positioned to get a healthy, larger share of the growing audio market as we continue to elevate our presence in the national advertising community around our scaled, enhanced, increasingly digital premium quality platforms. In 2022, we are focused on five key performance drivers that are integral to our success. Number one, expanding our offering of differentiated premium audio content to accelerate audience growth across all platforms. Number two, bolstering our customer marketing partnerships around our holistic multi-platform data-enhanced product line. Number three, elevating our digital distribution platforms to provide an enhanced listening experience. Number four, driving meaningful innovation across our business. And number five, continuously building audio's talent and culture to ensure a best-in-class team. We are feeling very good about the state of our digital business across all three primary areas, including podcasting, streaming audio, and digital marketing solutions. Streaming audio had a strong 2021 with revenues growing over 35% for the year, and we continue to see strong underlying fundamentals with TLH up double digits in Q4 and RPMs at an all-time high. With significant improvements on tap for our Odyssey digital platform later in 2022 and the addition of our exclusive representation of Major League Baseball's digital audio inventory this season, including both podcasting and streaming, we expect strong growth in this important market segment over the next couple years and beyond. And our podcast business had a solid 2021 and is well positioned for a terrific 2022 and beyond. As one of the three largest podcast publishers, reaching over 40 million monthly listeners, according to Triton, we have scale. But what truly differentiates us in the marketplace is the premium quality of our work, which is second to none. Odyssey's podcasts were featured in nearly every year-end best-of list, including several number ones or best podcast of the year honors that we are incredibly proud of the team's work. Our work figured prominently on best of lists from the likes of the New York Times, Apple, Fortune, The Atlantic, Amazon, Entertainment Weekly, Vogue, Esquire, The New Yorker, Time, The Financial Times, and more. Our new original show, 9-12, was the year's number one most critically acclaimed show. While our partner, Glennon Doyle's We Can Do Hard Things, was Apple's number one top news show of the year. We rolled out our first two C-13 feature podcast movies, Ghostwriter and Treat, and created several other big hits, including Gone South and Fallen Angels from Cadence 13, and the official Succession podcast from Pineapple Street Studios in partnership with HBO. All in, six of our shows cracked the Apple top ten during the fourth quarter. In addition, we are continuing to progress on our plans to drive higher margins from our podcasting business by adding more local podcasts to the product mix and driving more audience-based addressable campaigns for brand advertisers. We are off to a great start with our podcast business in 22, led by a string of new releases, including the new hit podcast, Fly on the Wall, with its rich storytelling on Saturday Night Live, hosted by David Spade and Dana Carvey, featuring guests the likes of Chris Rock, Tom Hanks, Tina Fey, Conan O'Brien, and many more. Turning to business conditions, we are off to a very good start in 2022. We are experiencing strong growth in essentially every segment of our business with signs of some acceleration in spot radio across both local and national. This despite the fact that we are still experiencing significant challenges with auto advertising due to the lingering impact of supply chain issues. Overall, based on current pacings, we are expecting first quarter revenue growth in the mid-teens versus prior year. And as we look at the remainder of the year, we are cautiously optimistic as we anticipate strong growth across digital, podcasting events, and political, and the near normalization of our radio business as the pandemic wanes and supply chain issues are hopefully resolved by Q3. This all presumes, of course, that we don't see a significant macroeconomic or pandemic disruption, but right now we are on a solid trajectory. As such, we continue to expect 2022 EBITDA to be at about the same level as our 2019 pre-pandemic results. In sum, we are excited about where the company is today and all the enhancements and additions we have made to elevate and transform Odyssey to capitalize on the emerging opportunities in audio, better serve listeners and customers than ever before, and deliver strong results for our shareholders. And with that, I'll turn it over to Rich.