Entravision Communications Corporation

Good afternoon and welcome to the EntraVision first quarter 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal conference specialist by pressing the star key followed by zero. As of today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Kimberly Esterkin with Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and welcome to EdProvision's first quarter 2023 earnings conference call. Joining me today are Chris Young, Interim Chief Executive Officer and Chief Financial Officer, and Jeffrey Lieberman, President and Chief Operating 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. I will now turn the call over to Chris Young.

Thank you, Kimberly, and good afternoon, everyone. We appreciate you joining our first quarter 2023 earnings call. In the first three months of the year, InterVision saw the continued strength of our digital businesses combined with the resiliency of our TV and audio segments. Revenues for the quarter totaled $239 million, an increase of 21% year-over-year, and ahead of our previously disclosed pacings of plus 16% for our consolidated business. This performance is particularly impressive given the current difficult macroeconomic conditions along with the anticipated year-over-year headwinds from decreased political spend in our broadcast business. These results are also a strong testament to our ability to evolve our business and adapt to the rapidly evolving technology, media, and entertainment industries. I want to thank our entire team at Entrevision for your hard work this past quarter in making this growth possible. For the quarter, digital comprised 82% of total revenue and was up 28% as compared to the prior year period. TV accounted for 13% of revenue and declined 2% year-over-year, while audio made up the remaining 5% of revenue and declined 3% year-over-year. As Jeff will speak about shortly, both the TV and audio segments saw weaknesses on the national front as advertisers became more cautious with spending, particularly in light of the recent regional banking crisis. That said, our local TV and audio businesses remained fairly resilient. even without the benefit of political advertising during the quarter. Consolidated EBITDA for the quarter totaled $13 million, a decrease of 28% year-over-year. This decline in our consolidated EBITDA is largely the result of both non-returning political revenue at our broadcasting business, coupled with increased operating and corporate expenses, which I will cover in more detail later on the call. In addition, during the quarter, we entered into a new $275 million credit facility, extending the maturity of our debt to March 2028 while increasing the flexibility of our balance sheet. We remained well capitalized, and with this new facility, combined with our free cash flow generation, we continue to have significant dry powder to be opportunistic on the M&A side. Speaking of free cash flow, during the first quarter, free cash flow totaled $3.9 million, or a conversion rate of 30% of consolidated EBITDA. Also, the company's board of directors approved a $0.05 dividend, which is in line with our pre-pandemic levels. Let's begin our discussion with our largest revenue segment, digital, which comprised 82% of first quarter revenues. Digital revenue was $196.5 million for the first quarter, improving 28% year-over-year. Entrevision provides a full suite of digital marketing services in 40 countries, including traditional brand awareness solutions, along with transactional and performance-driven services. In the U.S., our digital solutions include digital audio, lead generation, over-the-top digital video solutions, and branded content production capabilities that complement our existing TV and audio offerings with result-driven services for local clients. Outside the U.S., Entrevision's client-centric philosophy, extensive audience reach, and superior campaign performance technology generated strong results for our clients. We partner with premier global marketing platforms, including Meta, Spotify, TikTok, and Twitter, as well as providing branding services and performance solutions for more than 4,000 clients in emerging high-growth economies. These platforms have reported layoffs in the U.S., but we continue to add sellers as needed, pushing forward our growth path in new markets across the globe. Latin America and Asia in particular led the revenue growth for the quarter. In addition, we also saw our mobile user acquisition business grow 40% due to our industry-focused approach, client retention strategies, and best-in-class technology. In terms of regions that contributed to digital revenue growth, our Latin American business unit improved 15% year-over-year, largely driven by our exclusive commercial representation partnership with Meta, and our Asia business revenue grew 35% year-over-year, mainly driven by success with TikTok, along with strong performance of our mobile user acquisition operation. We are now serving 11 countries in Southeast Asia, including our latest addition in Mongolia. We also see growing demand for our digital advertising services in Singapore, the Philippines, and Vietnam. Our mobile user acquisition programmatic demand-side platform, Smatics, declined 11% versus the prior year period, mainly due to decreased revenue in the crypto and fintech verticals. However, we remain optimistic as the other industry verticals, such as gaming and online gambling, are ramping up their ad spend. Also following the end of the quarter, in April, IntraVision converted an outstanding loan and acquired a majority stake in AdsMirai, a leading social commerce and e-commerce marketing service provider, which is headquartered in Barcelona. For the quarter, on a pro forma basis, AdsMirai revenues improved 94% compared to the prior year period. This investment in AdsMirai strengthens Entrevision's client-centric solutions portfolio. We believe that commerce and retail-related marketing will play a critical role in the future of advertising. AdsMirai optimizes digital catalogs for online retailers in the fashion, wellness, beauty, and education verticals. Moreover, AdsMirai provides technology solutions that empower its clients to connect to its payment, accounting, logistics, and most importantly, social commerce strategies by leveraging a SaaS model. Brands can optimize campaign investment while also having access to real-time campaign performance data. We look forward to scaling AdsMirai's operations throughout our regions over time. I'll now turn the call over to Jeff Lieberman to speak further to our TV and audio business segments. Jeff?