Urban One (UONEK) Q2 FY26 earnings call: guidance and Q&A

Can management quantify the expected political ad revenue for the upcoming period, especially with the Dallas acquisition?

Management stated it's difficult to quantify precisely as it depends on spending and competitiveness of races. They budgeted Radio at $11.1 million for FY26, down from $13 million in 2022 due to no expected Georgia runoff. Digital might see $1-2 million. They highlighted competitive races in Ohio, Texas, Georgia, North Carolina, and Indiana as potential drivers.

“I do know that we've got Radio budgeted at about $11.1 million. And in '22, we did 12 -- basically 13. And so not quite as -- we're not -- we're saying that we're not going to be quite as robust as '22, but...”

asked by Ben Briggs · answered by Alfred Liggins

Given the adjusted EBITDA guidance of mid-$50 million, would free cash flow now be around $35 million, down from the previously discussed $40 million?

CFO Peter Thompson indicated it would likely be lower than $35 million due to "more puts and takes on non-cash stuff like ADU burning through that, writing off ADU balances" and the composition of revenue/EBITDA.

“Yes. There's some more puts and takes on non-cash stuff like ADU burning through that, writing off ADU balances. It's probably lower than that now just because of the composition of how we're getting to the revenue and to the EBITDA number.”

asked by Ben Briggs · answered by Peter Thompson

Q2 Radio ad revenue was weaker than guided; what factors contributed to this, particularly local vs. national?

Peter Thompson stated local ad sales came in lighter than expected, and the company underperformed the local market across the board. National ad sales, however, saw improvement after underperforming previously.

“Yes. I mean I think local came in lighter than we thought and we underperformed the market locally. Within that, obviously, there's a whole -- it's not really one category. It was just across the board. And so yes, the pacing that we gave on the last call, we did miss those a little bit. And I think almost all of that was in local.”

asked by Aaron Watts · answered by Peter Thompson

Does the Q3 Radio guide (down 2.8%) imply underlying core ad market firming or is it purely political lift?

Alfred Liggins attributed it to a combination of political starting to sweep in, improvements in the Washington D.C. market due to format changes, and Atlanta performing better than expected even before political. He noted struggles in Indianapolis and momentum loss in Houston due to the World Cup.

“You've got political starting to sweep in there. You've got improvements in our Washington, D.C. market over what it was a year ago based on some format changes. Atlanta is doing better than we thought it in Q3, and that's before political jumped in there.”

asked by Aaron Watts · answered by Alfred Liggins

What specific factors are weighing on TV advertising, beyond general macro trends?

Alfred Liggins explained it's primarily an "inventory problem" with more CTV impressions (Netflix, Amazon) and a weaker scatter market. This leads to pricing pressure, particularly as ad rates default to direct response. He noted these are similar macro trends seen across linear cable.

“TV is more of an inventory problem, more CTV impressions out there, weaker scatter market means that dollars start to default. We're going into upfront now, right? So upfront shows that you've got less advertisers coming for linear.”

asked by Aaron Watts · answered by Alfred Liggins

Why aren't the non-cash goodwill and intangibles write-downs (totaling $14.1 million) more clearly highlighted in press releases, given their impact on net loss?

Peter Thompson acknowledged that impairments "swamp the numbers" for net loss and EPS, but are added back for adjusted EBITDA. He expressed hope that future non-cash charges would be less significant as Reach Media's goodwill is fully written down and Radio FCC licenses are now amortized. He agreed to consider clearer communication in press releases.

“Yes. No, those impairments do swamp the numbers. I mean, hopefully, we're cycling through to get that... We've written down all of the goodwill at Reach. So there's not any more to go. So I think I'm hopeful that as we move forward, we shouldn't see nearly as many of the noncash [indiscernible].”

asked by Dennis Pannullo · answered by Peter Thompson

Beyond the cyclical political ad revenue, what is Urban One's strategy for future growth, particularly regarding multicultural assets, non-multicultural assets, and potential consolidation?

Alfred Liggins stated the company is open to expanding outside its core African-American demographic in radio to build scale and drive local ad solutions, citing success in this area. He expects further consolidation in radio, focusing on deleveraging and accretive acquisitions at appropriate valuations, acknowledging industry pressures. He clarified no plans to expand outside the urban footprint in TV.

“I think we have shown that we are open to expanding outside of our core African-American targeted demographic, particularly as it relates to our radio operation and in particular, as it relates to markets where we already operate and we're building scale.”

asked by Adam Jacobson · answered by Alfred Liggins