Audacy

Greetings and welcome to Odyssey, Inc.' 's first quarter 2022 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, David Field, Chairman, President, and Chief Executive Officer. Please go ahead.

Hi, good morning. This is Rich Schmeling. Welcome to Odyssey's first quarter earnings conference call. 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 the reconciliations of such measures and other pro forma financial information. With that, I'll turn it over to David Field.

Thanks, Rich. Good morning, everybody. Thanks for joining Odyssey's first quarter earnings call. I'm pleased to report that Odyssey had a great first quarter, posting strong top line and bottom line financial performance. We also made excellent strategic progress, as we work to transform the organization in order to enhance our competitive position, accelerate our future growth, and capitalize on the compelling opportunities in the dynamic audio marketplace. We continue to move with great purpose and urgency to drive strategic transformation and innovation across the company. Over the past couple of years through a number of strategic acquisitions, organic growth initiatives, structural improvements, talent additions, and premium content development, Odyssey has evolved into a scaled leadership position across broadcasting, podcasting, and digital audio. We have established ourselves as the number one creator of original premium audio content, which includes our lineup of critically acclaimed podcasts, our exclusive digital audio content, and our unrivaled leadership position in local sports and news radio. We are the flagship home of 38 proteins plus dozens of college programs and are also now the exclusive podcasting and digital audio sales partner of Major League Baseball. And with the addition of Amperwave, we are accelerating the development of our ad tech and streaming capabilities in order to control our product roadmap and better serve our customers and the 200 million Americans who listen and engage with our content. During the first quarter, we posted top-line growth of 14%, with digital growing by 16%, and spot radio up 14%. In fact, our local radio revenues were up 18%, underlining the strong ongoing recovery in our local radio markets. Adjusted EBITDA grew 152%, reflecting significant margin improvement. It is interesting to note that roughly half of our markets posted EBITDA that exceeded their 2019 level. Total revenues in EBITDA lag somewhat farther behind 2019 in most of our larger and our coastal markets, which have been most impacted by the pandemic disruption. but the progress is clear and we are on our way. I'd like to share some additional color on some of the highlights of our strategic progress since the start of the year. In first quarter, we launched the Odyssey Digital Audience Network, or ADAN, an addressable aggregate of over 60 million listeners across our app, streaming content, and podcast lineup, enabling precision targeting at scale, coupled with real-time optimization and reporting. ADAN is fully integrated into our emerging tech stack, bringing actionable brand insights and detailed campaign reporting for our customers. ADAN enables our entire sales organization across the country, local, regional, and national to connect our customers with our audiences across all of our digital distribution platforms simply and seamlessly. ADAN should be a meaningful contributor to our future growth, providing a highly appealing, effective vehicle for advertisers to reach our large and expanding addressable audiences. Towards the end of April, we announced an affiliate partnership with Fox News Audio. Under this agreement, Fox News Audio will migrate their linear audio stream to Amperwave as a customer of our cloud-based distribution and monetization platform. We will also be enabling Odyssey's patented Rewind technology to make Fox News Audio's live streams fully interactive. Odyssey will also be the exclusive third-party ad sales representative for all of Fox News Audio's streaming inventories. Amber Wave is emerging as an important addition to our capabilities. As we noted when we made this acquisition in the fall of 21, Amber Wave gives us control of our end-to-end product roadmap, enabling us to enhance and accelerate the development of our Odyssey platform capabilities and features. And that will become increasingly visible over the course of the next year as we will be rolling out a series of new releases to our Odyssey digital platform that will incorporate new product features to enhance the listener and advertiser experience by enabling more personalized interactive audio. We will also be adding a great deal of new original content available exclusively on our digital platform. We believe these enhancements will drive significant audience growth on the Odyssey digital platforms, enabling high margin revenue opportunities in 2023 and beyond. As I mentioned earlier, digital revenues grew 16% during the quarter, led by strong performances in our podcasting and streaming businesses. Podcast revenues were up 37%. We also grew margins nicely in the business as we continue to execute our strategy of driving a higher margin mix of products across our podcast business. Podcast growth was supported by strong double-digit growth in downloads and unique listeners. The Odyssey Podcast Network reached an average of 32 million American listeners each month during the quarter, according to Triton, which is just about a third of all U.S. podcast listeners. Importantly, our high-margin local podcasts are now one of the fastest-growing areas of the business, with downloads up over 50% and strong growth in CPMs and RPMs. We also had a strong contribution from our industry-leading premium-branded podcast business, as well as our podcast content licensing business. We continue to be the podcast partner of choice for leading brands such as Nike, HBO Max, Netflix, and others. In addition, during the quarter, we announced a podcast slate deal with Amazon, in which they will purchase a slate of at least four podcast series from our Pineapple Street studios. This deal marks the first time Amazon has done a content slate deal with any podcast studio. We delivered the first show, We'll Be Wild, a few weeks back, and it launched as the number one podcast in the country on the Apple charts. The year is already off to a great start with Fly on the Wall, the breakout hit featuring former SNL stars Dana Carvey and David Spade, with a guest list that includes most of the legion of SNL stars who appeared over the years. And we also produce the companion podcast for Netflix film Don't Look Up and HBO Max's Winning Time, the story of the rise of the L.A. Lakers dynasty. Podcorn, the largest native advertising marketplace for podcasts, which we acquired last year, continues to grow by triple digits, albeit off of a very small base. We see great opportunity to continue scaling this business into a material contributor, particularly when we are able to fully integrate Podcorn into our ad tech platform in the future. Streaming revenues were up 21%, and the underlying metrics of our streaming business accelerated during the quarter with solid growth in MAUs and PLH, particularly across mobile and connected devices. The weak link for our digital group this quarter was our digital marketing solutions business, which was flattish as a couple large customers from 2021 were inactive during the period, dragging down our overall digital growth. In sum, it was a strong quarter of financial performance and strategic progress across our company, and we're very excited about what lies ahead. Odyssey today is a fundamentally enhanced and stronger organization than ever before. Our work is far from done, but we are excited about what we are building to establish an enriched offering for listeners and customers, enabling us to participate fully in what we believe is a very bright future for scaled, multi-platform audio companies with outstanding, exclusive, premium content that listeners love. Our team is hard at work executing on this opportunity to complete our transformation from a leading radio broadcaster to a leading multi-platform audio content and entertainment brand with an elevated national platform and profile, full participation in digital advertising, and substantially larger shares of ad spending. With that, I'll turn it over to Rich and then your questions. Thanks.