Entravision Communications Corporation

Greetings and welcome to the Intravision First Quarter 2025 Earnings Conference Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Roy Neer.

Please go ahead. Good afternoon, everyone, and welcome to Intravision's First Quarter 2025 Earnings Call. I am Roy Neer, Vice President of Financial Reporting and Investor Relations. Joining me today are Michael Christiansen, our Chief Executive Officer, and Mark Belke, our Chief Financial Officer. Before we begin, I would like to inform you that this 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. The press release is available on the company's investor relations page and was filed with the SEC on form 8A. I will now turn the call over to Michael Christensen.

Thanks, Roy. And thank you to all of you for joining our call today. As Roy said, we're here to discuss our results for the first quarter of 2025. And we'll be taking questions at the end of our remarks. As you saw in our press release, on a consolidated basis, we increased our revenue 17% to $91.9 million in 1Q25 compared to 1Q24. Excluding certain non-cash accounting charges that Mark will discuss, we had an operating loss of $3.9 million in 1Q25. Our objective is to grow our business and earn a profit, so we acknowledge we have work to do to improve our operating performance. As you all know, we report our results for two segments, media and advertising technology and services, what we call ATS. For our media segment, our revenue declined 10% in 1Q25, compared to 1Q24. Some of our local advertisers reduced their ad spend in 1Q25 compared to 4Q24 and 1Q24. We had fewer active local advertisers in 1Q. The average spend per active local advertiser increased slightly But this was not enough to offset the decrease in the number of active local advertisers. Our smaller advertisers pulled back more than our larger advertisers in one queue. We saw similar results in our national business. What I can share with you on this call is that our revenue was lowest in January. February was better than January. March was better than February, and April was better than March. In terms of operating expenses and profitability, we're making a number of important investments in our media business in 2025. We're adding capacity to our local sales teams, more sellers, and we're adding digital sales specialists and digital sales operations capabilities. so we can do more digital. When we analyze our local markets and our local advertiser base, we see an opportunity to increase revenue by adding sales capacity. In addition, virtually all our local advertising customers are also advertising in digital channels, search, social, streaming video, and streaming audio. And we believe we can serve their needs in these digital channels as well as our traditional broadcast video and audio channels. The increase in operating expenses in our media segment, these investments, was a little less than $1 million in 1Q25 compared to 1Q24. So about $3 million on an annualized basis. The combination of lower revenue and increased operating expenses produced an operating loss for our media segment of $2.6 million for 1Q25, compared to an operating profit of $3 million in 1Q24. Now for our advertising technology and services segment. ATS revenue was 57% higher in 1Q25 compared to 1Q24. We had more customers and we had higher spend per customer. We continue to invest in our ATS segment in 1Q25 to grow revenue and operating profits. We're investing in our engineering team to continue to improve our technology to build more powerful AI capabilities into our platform, and we're investing to increase the capacity of our sales organization for ATS. In addition, our infrastructure costs will grow as our revenue grows, not at the same pace, but they will grow. The combination of these investments, investments in increased operating expenses, resulted in operating expenses that were $4.1 million higher in 1Q25 compared to 1Q24. That's $16 million higher on an annualized basis. ATS revenue grew faster than operating expenses, so our operating profit was $6.5 million in 1Q25. significantly higher than 1Q24. We have funded these operating expense investments for both media and ATS in part by reducing our corporate expenses. We reduced our corporate expenses by $4.5 million in 1Q25 compared to 1Q24. nearly $18 million on an annualized basis. So to summarize, in media, we're investing to increase our local sales capacity and we're investing to expand our digital sales and digital sales operations capabilities. More sellers, more digital. In ATS, we're investing to add more engineers to advance our technology and to increase our sales capacity. So more technology, better technology, and more sellers. We believe these investments will help us build a stronger company. Now I'll ask Mark to share with you more details of our financial results for first quarter 2025. Mark. Thank you, Mike.