iHeartMedia Revenue Rises as Digital Profit Outpaces Radio
Second-quarter revenue reached $977.2 million as political advertising supplemented slower underlying growth.
The audio-media company iHeartMedia (IHRT) increased second-quarter revenue 4.7%, while Digital Audio generated more than twice the adjusted EBITDA of its Multiplatform business for a sixth consecutive quarter.
Growth slowed from 9.6% in the first quarter, and the deceleration was nearly as pronounced after excluding political advertising, with growth easing to 3.5% from 9.3%. Revenue still increased about 10.5% sequentially from $884 million.
iHeartMedia’s adjusted EBITDA fell 2.9% from a year earlier to $151.5 million, improving from an 11.4% decline in the prior quarter. Operating income was essentially flat at $35.5 million, while free cash flow swung to positive $46.0 million from negative $114 million sequentially and negative $13.2 million a year earlier. The increase in operating cash flow was primarily due to collection timing.
Digital Audio revenue rose 12.4% to $364.1 million, though growth slowed from 18% in the first quarter. Podcast revenue increased 20.7% to $162.1 million, while digital revenue excluding podcasts grew 6.6%. Digital Audio adjusted EBITDA climbed 14.5% to $123.2 million, and its margin expanded to 33.8% from 33.2% a year earlier.
Multiplatform revenue declined 1.6% to $535.7 million, reversing the prior quarter’s 4% growth. Broadcast revenue edged up 0.5% as barter gains offset lower spot advertising, while Networks revenue fell 3.8% and Sponsorship and Events dropped 16.3%. Multiplatform adjusted EBITDA decreased 39.2% to $58.6 million, and its margin contracted to 10.9% from 17.7%.
Audio & Media Services posted the fastest segment growth, with revenue rising 18.8% to $80.5 million and adjusted EBITDA increasing 54.6% to $36.7 million. Digital and political advertising and lower operating expenses helped lift its margin to 45.6% from 35.0%.
For the third quarter, iHeartMedia expects mid-single-digit revenue growth and adjusted EBITDA of $180 million to $220 million. It continues to forecast about $800 million of full-year adjusted EBITDA and roughly $200 million of free cash flow, while raising expected in-year cost savings to $125 million. The company also extended the maturity of its $450 million revolving facility to January 2029 and expanded its video podcasts to services including Netflix and Hulu.