Entravision Communications Corporation

Greetings. Welcome to EntraVision Communications Corporation Fourth Quarter and Full Year 2021 Earnings Conference Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kimberly Estrikin of Investor Relations. Thank you. You may begin.

Thank you, Operator. Good afternoon, everyone, and welcome to EntraVision's Fourth Quarter and Full Year 2021 Earnings Conference Call. I hope everyone is staying healthy and safe. Joining me on the call today are Walter Ulloa, Chairman and Chief Executive Officer, and Chris Young, Chief Financial Officer. Before we begin, I must inform you that this conference call will contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ. Please refer to Entrevision's SEC filings for a list of risks and uncertainties that could impact actual results. This call is the property of Entrevision Communications Corporation. Any redistribution, retransmission, or rebroadcast of this call in any form without the express written consent of Entrevision Communications Corporation is strictly prohibited. Also, this call will include non-GAAP financial measures. The company has provided a reconciliation of these non-GAAP financial measures to their most comparable GAAP measures in today's press release. The press release is available on the company's website, and was filed with the SEC on Form 8K. In addition, all pro forma figures, including revenue, operating expenses, and consolidated adjusted EBITDA, noted throughout the prepared remarks, include contributions of EntraVision, Cisneros Interactive, Media Donuts, and 365 Digital in the prior year period. I will now turn the call over to Walter Ulloa, Chairman and Chief Executive Officer.

Thank you, Kimberly, and good afternoon, everyone. We appreciate you joining us for Entrevision's fourth quarter and full year 2021 earnings call. 2021 was a transformational year for Entrevision. Through organic growth, strategic partnerships, and acquisitions, we continued to develop our business beyond traditional television and radio broadcasting. We have become a leading global media marketing services and technology company. serving technology and media platforms and advertising clients around the world. We have a talented, experienced, and energetic team of professionals in over 30 countries with the expertise and resources to continue to grow Entrevision's business into the future. I'm also pleased to announce that our board of directors has approved a new share repurchase program of up to $20 million of our common stock. The board also approved a cash dividend for the first quarter of 2022 of two and a half cents per share payable to shareholders on March 31st, 2022. Now let's review Entrevision's consolidated results for the fourth quarter 2021. Net revenue for the fourth quarter totaled $233.9 million, up 36% year over year. On a pro forma basis, revenue increased 21% over the fourth quarter of 2020. Growth during the fourth quarter was largely driven by our digital segment, as well as from improvements in our core television and audio businesses. Consolidated adjusted EBITDA totaled $32.9 million for the fourth quarter, up 1% year-over-year. Excluding $12.8 million in net political and related cash flow in the fourth quarter of 2020, adjusted EBITDA increased 65% year-over-year in the fourth quarter of 2021. Moving beyond the quarter, our full year results were even more impressive. For the year, consolidated net revenue reached an all-time record and totaled $760.2 million, up 121% over 2020. Free cash flow also reached an all-time record and totaled $78.7 million, up 83% over 2020. Consolidated adjusted EBITDA totaled $88 million in 2021, an increase of 46% over the prior year period. Importantly, even as our top line continued to grow, we maintained a lean cost structure. As Chris Young will discuss in his remarks, we have retained many of the cost reductions we put in place at the beginning of the pandemic. Our continued focus on expense management has helped drive our incredible EBITDA and free cash flow. Now let's take a look at our segment performance, starting with digital, which is our largest segment and comprise 76% of our total revenue in the fourth quarter. For the quarter, digital revenue totaled approximately $177.5 million, up 69% compared to the prior year period. On a pro forma basis, digital revenue increased 40% compared to the fourth quarter 2020. For the full year 2021, digital revenue totaled $555.3 million, up 288% over 2020. Our digital segments growth during the fourth quarter and the year was driven by the excellent performance of Enter Business Cisneros Interactive and Smatics, our global mobile programmatic and DSP user acquisition business. Also contributing to our growth were our more recent acquisitions of Media Donuts serving the Southeast Asia market and 365 Digital, a leading marketing services and commercial digital partnership business based in South Africa. As I mentioned earlier, Entrevision is now a global digital enterprise. Our digital segment serves over 1,800 clients each month across 30 countries with campaigns running in more than 120 countries spanning five continents. Our Entrevision Cisneros Interactive Digital Commercial Partnership business has a unique capability to execute very large digital ad campaigns on Facebook and Spotify throughout Latin America. Compared to the United States, Latin America is still in the early stages of digital advertising and marketing growth, but showing impressive industry growth and potential. Due to its unique market position and the demand for local digital ad solutions, Entrevision's Cisneros Interactive revenue grew 95% in 2021 as compared to the prior year. As I noted, we are also seeing strong performance by our Entrevision Media Donuts and Entrevision 365 digital business units. With Media Donuts, Entrevision provides services across eight countries in Southeast Asia, and with 365 Digital, we serve the broader South African market. We've been able to leverage the local teams of these business units to generate global synergies to help advertisers reach audiences and consumers in these markets. In addition to our digital commercial partnership businesses, programmatic digital services have also helped drive our growth. Smatics, our proprietary DSP business based in Barcelona, Spain, has been a cornerstone of our programmatic digital services since 2018. There are few companies in the world that offer demand-side platform services like Smatics. Smatics has developed a highly competitive offering, in part due to a favorable competitive landscape and the efficiency, transparency, and performance of the platform. Smatics has demonstrated strength in the gaming, fintech, and mobile delivery industries, to mention a few, and we continue to strengthen our staff with expertise in these categories. With a strong understanding of the mobile gaming market, Smatics has been setting new monthly revenue records. Smatics revenue increased 120% in the fourth quarter of 2021 compared to the prior year. Even with this record performance, we are at the very beginning of our expansion in mobile gaming, and the growth opportunity ahead of us is tremendous. Mobile users grew at a compounded rate of 25% since 2019, with gaming representing 40% of that growth. Along with gaming, fintech and delivery have also become top focus areas for SMATICS and EnterVision. Now let's turn to our television segment, which comprised 17% of revenue for the fourth quarter. Television revenue was $40.2 million in the fourth quarter, down 20% compared to the prior year period, primarily due to a decrease in political ad revenue. Excluding $11.1 million in political ad spend in the fourth quarter 2020 and $400,000 of political spend in the fourth quarter 2021, core television advertising increased 2%. National advertising revenue increased 4%, and local advertising revenue declined 1% year over year. When comparing the fourth quarter 2021 total television revenue with pre-COVID fourth quarter 2019 results, television improved 9%. For the full year, television revenue was down 5%. Excluding political revenue, however, television finished up 11% compared to 2020. In terms of advertising categories, the auto category, and in particular new car sales, continued to face supply chain pressures. While auto ad sales were down 30% in the fourth quarter year over year, many of our clients have recently indicated to us that they anticipate some improvement in auto spending in the second half of 2022. Offsetting auto declines, services were up 8% and travel and leisure were up 92% compared to last year's same period. Media, grocery, restaurants, and product brands also grew in the fourth quarter from the previous year. We're also looking forward to the return of political ad spend this year. EntreVision's local television markets are situated in states where political messaging to Latino voters continues to be a top priority for both parties, as well as special interest groups. In addition, with California considering legalizing sports betting, it could be a very robust year for political ad spend. One last comment about our television segment. As we previously discussed, on December 31, 2021, we ended our Univision affiliations in the D.C., Orlando, and Tampa markets. We anticipate some impact to the television segment's top line and operating cash flow as a result of the loss of these affiliations. However, the growth of our digital segment, along with the anticipated strength in political advertising spend this year, is expected to more than offset this loss in revenue and operating cash flow in 2022. Finally, let's turn to our audio segment, which comprises the remaining 7% of fourth quarter revenue. Audio revenue totaled $16.1 million for the fourth quarter, consistent with the year-ago period. Excluding political spend of $3 million in the fourth quarter of 2020 and $200,000 of political spend in the fourth quarter of 2021, core audio revenue increased 20% versus the fourth quarter of 2020. When comparing the fourth quarter of 2021 with the pre-COVID fourth quarter of 2019 results, audio grew 16%. On a full year basis, audio revenue improved 25% when compared to 2020. National advertising revenue increased 28%, while local advertising revenue was up 24% year over year. Execution across our audio business was strong. The segment's cash flow generation during the fourth quarter alone exceeded that of the full year 2019. Gross margin of the audio segment was also a record and totaled 36% in the fourth quarter. Services, retail, travel, and leisure, restaurants, product brands, telecom, and media all delivered strong double-digit growth for our audio division in the fourth quarter of 2021 versus the prior year period. In short, I could not be prouder of Edger Vision's performance in 2021, and we believe that we have created significant momentum for 2022. Before I speak further, I will turn the call over to Chris Young, our CFO, to further discuss our fourth quarter of 2021, as well as provide our first quarter 2022 pacings. Chris?

Thanks Walter and good afternoon everyone. As Walter discussed, revenue for Q4 2021 totaled $233.9 million, an increase of 36% from the fourth quarter of 2020. For the year, revenue totaled a record $762.2 million and represented a 121% increase over the $344 million we generated in 2020. For our digital segment, revenue totaled $177.5 million in the fourth quarter, up 69% year over year, and up 40% on a pro forma basis as compared to Q4 of 2020. For the year, digital revenue totaled $555.3 million and represented a 288% increase over the $143.3 million in digital revenue generated in 2020. On a pro forma basis for our various acquisitions, digital revenue for the year grew 80%. For our TV segment, total revenue was $40.2 million in the fourth quarter, down 20% year over year. Excluding political, core ad revenue was up 2% year over year. Retransmission revenue for the quarter totaled $9 million, which was up 2% year over year. For the year, TV revenue was up $146.8 million, which represented a 5% decline over the prior year, excluding $22.6 million in political advertising in the prior year. Core TV revenue increased by 11% over the prior year. Lastly, for our audio segment, revenue totaled $16.1 million in the fourth quarter, consistent with the prior year period. Excluding political, core audio revenue was up 22% over Q4 of last year. For the year, audio revenue totaled $58 million, which represented a 25% increase over 2020. Now let's turn to expenses. Direct operating expenses totaled $33 million for Q4 2021, up 3% from $31.9 million in Q4 2020. Excluding EnterVision Cisneros Interactive, Media Donuts, and 365 Digital, direct expenses were flat year-over-year. SG&A expenses were $15.1 million for the quarter, an increase of 8% compared to $14 million in the year-ago period. Excluding EnterVision's Cisneros Interactive, Media Donuts, and 365 Digital, SG&A expenses were down 5% compared to the prior year quarter. Finally, corporate expenses increased by 21% to total $11.2 million for the quarter compared to $9.3 million in the same quarter of last year. The primary driver of corporate expense increases was an increase in non-cash stock-based compensation expense. Consolidated adjusted EBITDA totaled $32.9 million for the fourth quarter, up 1% from $32.6 million in the prior year period. For the year, consolidated adjusted EBITDA totaled $88 million, up 46% from $60.4 million in 2020. Free cash flow, as defined in our earnings release, was $30.9 million in the quarter, or a conversion rate of 94% of adjusted EBITDA, compared to $28.6 million in the fourth quarter of last year. For the year, free cash flow was $78.7 million, an all-time record of 83% over $43 million generated in the prior year with a conversion rate of 89% of total adjusted EBITDA. Very high cash flow conversion in both digital and audio segments helped drive the strong conversion rate during the quarter. Earnings per share for the fourth quarter were $0.04 compared to $0.24 per share in the same period last year. The decline is primarily due to an $8.2 million increase in the fair value of contingent consideration, which is the amount we owe the sellers of Entrevision Cisneros Interactive due to the significantly improved performance since we acquired it, along with contingent consideration for other transactions. Excluding this one-time charge, plus an additional one-time non-cash impairment charge for the cancellation of a contract, earnings per share were 15 cents. For the year 2021, earnings per share were $0.33 compared to a $0.05 loss per share in 2020. Excluding the one-time fair value contingent charge and the one-time impairment charge, earnings per share were $0.44. Cash paid for income taxes was $0.6 million for the fourth quarter compared to $2.2 million in the same quarter of last year. For the year, cash paid for income taxes totaled $4.1 million in 2021 compared to $7.7 million paid in 2020. Net cash interest expense was $1.6 million for the fourth quarter, compared to $1.3 million in the same quarter of last year. Cash capital expenditures for Q4 totaled $1.6 million, bringing our full-year capital expenditures to $5.8 million, down from $9.1 million in 2020. Turning to our balance sheet, cash and marketable securities as of December 31, 2021, totaled $185.1 million. Total debt was $212 million. Net of 75 million of cash and marketable securities on the books, our total leverage as defined in our credit agreement was 1.56 times at the end of the fourth quarter. Net of total cash and marketable securities, our total net leverage was 0.31 times. On to our pacings for the first quarter of 2022. As of today, revenue from our digital segment is pacing plus 52% over the prior year. Factoring in IntraVision Cisneros Interactive, Media Donuts, and 365 digital revenue generated in Q1 of 2021, our digital segment on a pro forma basis is pacing plus 39%. Our TV segment is pacing minus 16% over the prior year period, with core TV advertising, excluding political, booked thus far in the quarter, pacing at a minus 18%. As Walter noted, we do expect our TV revenue to decline in 2022 from the loss of three of our Univision affiliations. That said, we more than make up for any TV revenue decline with our digital segment performance. Lastly, our audio segment is pacing at plus 7% over the prior year period, with core audio, excluding political books thus far in the quarter, pacing at a plus 6%. All in, our total revenue compared to last year is pacing at a plus 32%. On a pro forma basis, our total revenue is currently pacing at a plus 24% over last year. With that, I'll turn the call back over to Walter. Walter?

Thanks, Chris. As you can see from our pacings for the first quarter, EnterVision's business remains on an upward track. We are a leading global advertising media and ad tech solutions organization that connects brands and advertisers on platforms like Facebook, Spotify, TikTok, Twitter, and Univision with audiences and consumers in growth economies around the world. We are excited about the enormous opportunities these connected consumers bring to thousands of global companies, and we are investing in the future of mobile connected consumers. At the same time, we've expanded our digital services and offerings. We've also expanded our geographic footprint in Latin America, Southeast Asia, and Africa. These are massive, addressable markets where the digital consumer has yet to be fully engaged and where EnterVision has a strong early mover advantage. With the transformation of our business and overall go-to-market strategy, we believe that our value proposition for both our advertising clients and our investors has grown even stronger. Linear television and audio remain core contributors to Entrevision's overall performance, while our digital businesses will drive strong growth going forward. We have positioned ourselves to partner with some of the largest, most innovative digital companies today. That concludes our prepared remarks. I want to thank you again for your continued support of Entrevision. Chris and I would like to open up the call to your questions. Operator?

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Michael Kapinski with Noble Financial. Please proceed.

Thank you. Well, first off, congratulations on your quarter. And quite frankly, you beat almost, well, every segment that expectation that I had. So great job. A couple of questions regarding your loss of your affiliate agreements. Just can you talk a little bit about the mitigating factors? Your pacing data for TV is actually better than what I was looking for in my estimate for Q1. So I was just wondering, were there offsetting items in Q1 that you had in terms of mitigating those revenues, losses, that you can talk about, first of all?

Michael, thanks for your remarks, by the way.

So some mitigating factors. We do have programming up and running. We still have the stations in the market. We just lost the affiliation. So right now we've got some independent programming that's running on those stations, and that's going to generate right now about – about $1.5 million in cash flow on an annual rate. Those are somewhat temporary arrangements. We are still looking for something that's a bit more attractive, but that's the mitigating factor to that expense.

Gotcha. And, Chris, can you give us a sense of what the expense outlook is going to look like, particularly for television and maybe your digital businesses as well? I know that you're showing very strong results revenue growth for digital, but can you kind of give us a sense of how we should think about margins and so forth?

Sure. So for TV, you should think about total operating expenses for Q1 to be down low to mid-single digits. Radio expenses should be around flat. And for digital all-in, this is before COGS, mind you. COGS is a big ticket item. But before COGS, you should look for digital to be right around a high single digit to maybe 10%. It's obviously a higher growth business.

Yeah. And gotcha. And can you also talk a little bit about, you know, obviously there's a lot of geopolitical issues. Have you seen any advertising impact from, you know, what's going on out there or any advertisers talk about, you know, about being a little concerned? What are you seeing? And just in the sense of what you're hearing from the advertisers. Yeah.

Hi, Michaelis Walter. By the way, thank you again for the comments you made earlier in the call. We haven't seen any impact on our business as a result of the international conflict. that's basically the summary. Very little, I would say, no impact so far. And we'll continue to monitor it and see how things develop. But so far, it all looks pretty stable on our end.

It's terrific that you guys are generating such large free cash flow as well. And now you have this building cash balance. Can you give us a sense of uses of cash, your appetite for acquisitions, the current market environment for acquisitions. Obviously, you have a share repurchase authorization as well, but just kind of like what your thoughts are in terms of allocation of capital.

Well, we continue to seek strategic, accretive businesses that complement what we already own and operate. So that'll be certainly the the guidance or strategy going forward. But other than that, that's really all I can tell you. You mentioned the stock purchase program, our buyback program, and also our dividend, which we announced. But that really summarizes my comments. Chris?

No, yeah, you've got the new buyback program that shows that we see nothing but strength and green lights for the upcoming year. We've got a lot of confidence in the business. And to the extent that we continue to look for opportunities on the acquisition front, that's where most of our work is focused on.

And you guys have to be immensely frustrated with the stock price, trading at six and a half times enterprise value to cash flow. Obviously, trading below radio companies, trading below that of TV companies, and significantly below that of digital companies. What do you think investors are missing here at this point? Do you think that they just haven't caught up to the story of your digital transition? Or what are your thoughts about the current stock price?

Well, I think if you – by the way, we agree with your comments on the stock price. It sounds like a good idea for buyback, right? So hence the stock buyback program. But I lost my train of thought. Sorry. What was the question? I think historically, when you say IntraVision, everyone thinks TV, radio, broadcast. And I think that's what we're stuck with as far as a reputation. And we're pivoting the business as we speak. You see that in the numbers. We're attracting a different investor base, but we're right smack in the middle of that transition. And I think that transition is going to take time with investors. And that's what we're doing. We're going to be much more proactive on the stock circuit with presentations, getting the word out, getting on the road, non-deal roadshows, just to kind of get the message out that we are a completely different company than we were three years ago.

Just to add to Chris's comments, Michael, I mean, we're transforming the business, as was commented in our remarks. And it's a transitionary period, so it's going to take a little more time for investors to understand our strategy and certainly our growth story. We continue to post the kind of growth that we did last year, and we had a very strong fourth quarter. All of our businesses performed well. Our digital business is exceptionally well. Radio is performing better than ever, so we're really pleased with the work we're doing there. It's a result of maintaining or retaining the the costs and cutbacks that we made in 2020, and also we have Chris Munoz, who oversees national sales, leading that unit for us, and he's done a terrific job with his team of growing national sales and network sales for our radio business. And then you heard Chris's pacing report, and we're pleased with the way our first quarter is shaping up, and we think it's going to be a great year.

Well, congratulations again. Good luck to you guys. Thanks.

Thanks, Michael.

Thanks, Michael.

Our next question is from James Dix with Industry Capital Research. Please proceed.

Hey, good afternoon, guys. I just wanted to talk first about some big picture stuff on digital technology. I've been going through the S-1 that Aleph Group filed over the past quarter, and it raised a couple just bigger picture questions I thought you might address on the call. First of which, when you look at the overall digital segment, I mean, do you have any rough – I think you've indicated that Facebook is your biggest partner, certainly for Cisneros it is, but now you've made some other acquisitions. Any rough sense of what the revenue mix is by your major partners – you know, for your biggest partners for that segment? And, you know, are there any big expectations for that mix to change over the next year? You know, what would be the dynamics for that?

Well, I'll address, I think, the first part of the question, which is who's our biggest partner, and that would be in our commercial digital partnership business, and that would be Facebook of all the partners that we have. that we associate with, including Twitter, TikTok, Spotify, et cetera. And do we think anything will change? I mean, like I said, we're certainly pleased with the way the year has started. You know, every quarter will be different, but right now we're very positive about not only our fourth quarter, which gave us considerable momentum into Q1, but also what we had in... I hope I answered your question.

Yes.

James, we're also working on partnerships, broadening out those partnerships in different regions, and that's a work in progress. So that will also change the mix a little bit as we go forward.

Good point. As you know, we just announced our partnership with Roku in Mexico. We think that's going to be certainly a good story for our digital business.

And we've got another partnership that's been inked, but we're not at a point to announce it yet. So that's also a work in progress.

Okay. I mean, I think Alec, for example, indicates that Facebook is their biggest partner, but it's not quite 50% of their revenue. I mean, is it safe to say that it's more for you, that Facebook is more than 50% for you?

Yes.

Okay. Definitely. Okay. Great.

And then... I just want to... James, I just want to add that, you know, we have three... digital businesses in our suite of digital products. And the first is our U.S. Digital Division. We provide digital solutions to primarily medium and small businesses in our broadcast markets. That division had a great, great year. Asmatix, which is the core of our whole lab performance business, our proprietary DSP technology. Another fantastic year for, or I should say a fantastic fourth quarter for SMATICS, and it's off to a great, great start in Q1. So we expect... great results from SMATICS this year. And then, of course, our commercial partnership business with Facebook, Spotify, TikTok, and others. So that's performed well throughout 2021 and Q4 and now into 2022.

Okay, great. And just shifting a bit, following up on the geopolitical issues, I mean, Is it safe to say that, at least internationally, the bulk of your revenue comes from Latin America, once you're outside of the US, as opposed to Europe? I know 365 Digital is your newest one, and then you have Media Donuts. But it might be helpful for investors to have a little bit better sense of your revenue mix in terms of the major regions, Asia, Europe, if there is any Latin America, just as we going to go through this year?

The majority of our digital business does come from Latin America. That said, you know, our other 365 digital are all growing, you know, at a great pace, as well as SMATIC. So, you know, we just want to make sure that everything's growing on an upward track, and that's what we see right now.

Yeah, first and foremost, you've got the Latin America. Secondarily, you've got the southern Asia-Pacific rim, and then everywhere else, particularly in the U.S.

Is it safe to say you have minimal revenue exposure in Europe?

Yes.

Yes. That's where our semantics business is based, in Barcelona, but that's pretty far from the conflict. We're in Western Europe. Yeah. Okay.

And then one last one on digital. Just looking at what Aleph has disclosed, they seem to be getting a fair amount of margin expansion, EBITDA margin expansion at least, even though they are, but you seem to be a larger business than you. I mean, what type of margin expansion or just margin trajectory do you think we should be seeing now that you have all your units under the fold. How should we be thinking about that kind of over the course of a year or two? What are the dynamics in the margins, do you think?

Sure. Well, we finished up for 2021. Digital margins were right on 7%. And as revenue scales, you should see that 7% move into the 8, 8.5, and maybe even 9% range, depending on how revenue scales.

And you think that could happen over the next year or two?

I do, yeah.

Okay, great. And then just on the rest of the business, one thing, Chris, the pacing numbers that you gave for TV, they included the loss of the affiliations. They do.

That's right, they do.

Any rough sense as to what the pacings would be if you kind of excluded those affiliation changes and just looked at the rest of the groups?

Excluding the lost stations, we were looking at a plus four. So the core business is healthy, it's just the loss of those stations creates that hole that you need for television.

Okay, great. And then for retransmission revenue, any outlook we should be looking at for the year? You know, just as the whole pay TV industry continues to work through, you know, pressure on subscribers and things like that.

Yeah, retransmission revenue for the year finished out at $37 million. You know, for 22 for the year, that'll probably drop by $1 or $2 million, mainly being driven by the loss of subs. That's just what's happening today.

Okay, great. And then one last one, just in terms of your corporate expense, how should we be thinking about kind of a steady state corporate? Is it going to be kind of slightly up from last year, and then the timing of non-cash comp will once again be kind of a fourth quarter item, or how should we be thinking about that?

Yeah, corporate expense for the year, you should think about it up no single figure. And really the driver there, again, you're talking about, you know, had non-cash comp in the fourth quarter, had that not been there, corporate expense would have been down three points. But, yeah, think about the growth in the low single digits.

Okay, so low single digits off what you printed for the year.

Yes.

Yeah, okay. Okay, great. Thanks very much.

Thanks, James. Thanks, James.

Our final question is from Chris Sakai with Singular Research. Please proceed.

Hi, I'm in for Lisa Springer. I just had two or three questions. Could you comment on which platform partners are currently the most important contributors to digital ad revenues? And what you see is the opportunities to both add new partners and grow revenues from existing partners.

Well, I commented earlier, Chris, that our number one partner in terms of revenue growth is Facebook. But that said, we have partnerships with Facebook. With Spotify, with TikTok, with Twitter, and those partnerships are also going quite nicely.

But Facebook is the biggest. Okay.

Great. And then do you have any opportunities for new partners?

We do. I mentioned Roku earlier, and we're working on another partnership that we should be able to announce probably in the second quarter. But we're continuing to develop new partnerships and find ways to continue our revenue growth and momentum.

Okay, great. With 2022 being an election year, what size impact on political ad spending have you seen in the past midterm elections? And do you have any sense if ad spending during this cycle will be higher than in the past?

We think it's going to be higher. Internally, we have a goal of $11 million of political. But I think there's a good chance we could go past that. one of the key markets of California. As you may know, California is in the process of deciding whether to legalize gambling. That's gonna be on the online gambling. That's gonna be on the ballot this November. So we expect a lot of resources invested into that particular political measure in California.

Okay, great. And then I know you sort of mentioned about acquisitions. You know, and you guys are looking for additional acquisitions, but are these new acquisitions going to target new geographic markets, or are they going to focus more on expanding your footprint in existing markets?

Probably both. You know, new geographic markets and then adding to our existing market coverage. Okay. Great. Well, thanks for the answers. Thank you. Thank you.

We have reached the end of our question and answer session. I would like to turn the conference back over to Walter Ulloa for closing comments.

Thank you, Operator. Thank you again for joining us today and for your support, everyone. We look forward to sharing our progress with you at the upcoming Deutsche Bank, Guggenheim, and Noble Capital Markets Investor Conferences in March and April, and then again on our first quarter earnings call in May. Thank you.

Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.