Welcome to the Cumulus Media Quarterly Earnings Conference Call. I will now turn it over to Collin Jones, Executive Vice President of Strategy and Development and President of Westwood One. Sir, you may proceed.

Thank you, Operator. Welcome everyone to our Fourth Quarter and Full Year 2024 Earnings Conference Call. I’m joined today by our President and CEO, Mary Berner, and our CFO, Frank Lopez-Balboa. Before we start, please note that certain statements in today’s press release and discussed on this call may constitute forward-looking statements under federal securities laws. Actual results may differ materially from the results expressed or implied in forward-looking statements. These statements are based on management’s current assessments and assumptions, and they are subject to a number of risks and uncertainties, as discussed in our filings with the SEC. In addition, we will also use certain non-GAAP financial measures. We believe the supplementary information is useful to investors, although it should not be considered superior to the measures presented in accordance with GAAP. A full description of these risks, as well as financial reconciliations to non-GAAP terms, are in our press release and SEC filings. The press release can be found in the Investor Relations portion of our website and our Form 10-K was also filed with the SEC shortly before this call. A recording of today’s call will be available for about a month via a link in the Investors portion of our website. With that, I’ll now turn it over to our President and CEO, Mary Berner.

Thanks, Collin, and good morning, everyone. As you know, the radio industry has faced significant challenges over the last few years. The pandemic, unfavorable secular trends and a significant downdraft in national advertising, which began in early 2022 and, as we noted on other calls, affected us disproportionately, given our business mix. Nonetheless, in the face of those headwinds, Cumulus outperformed, continuing to best its peers through the end of 2023 on key metrics, such as cost take-outs, EBITDA margin recovery, free cash flow conversion, net leverage and liquidity. However, last year brought additional challenges in the form of accelerated national headwinds, as well as an industry-wide slowdown in local broadcast advertising, which became more pronounced toward the end of the year. But as we have demonstrated time and again, while we can’t control external factors, we can control how we respond to mitigate the impacts of the macro environment and how we get more out of the assets that we have. As I’ll talk more about in a moment, last year we doubled down on and are seeing the fruits of investing in digital. We evolved the way we sell our broadcast business. We further re-engineered our cost structure, and we extended our balance sheet maturities through a comprehensive exchange refinancing. In parallel, as part of a comprehensive effort to create additional long-term value, we are fundamentally transforming the way we use and leverage our key assets, which include, a massive megaphone that reaches 92% of the country and more than 250 million listeners every month. Almost 500 locally embedded sales professionals who leverage their market insights and ability to walk products into the door to drive sales. Established relationships with 30,000 local and national businesses who are natural customers for new products we develop. An audio-first content machine that creates and distributes content in a wide variety of formats across multiple platforms. And an extensive, constantly growing library of premium audio content that can be redeployed and monetized in multiple ways. Reimagining how we leverage these assets means developing new products organically and through partnerships, which we can monetize through our sales force and relationships. It means creating new content and redistributing existing content through new channels and to incremental audiences, and it means taking advantage of the power of our local and national brands, to name just a few. This is happening alongside our day-to-day blocking and tackling and our relentless focus on business optimization. Collectively, these efforts will help us to generate more revenue, create additional value, and take further advantage of the financial flexibility and optionality that we secured last year by extending our debt maturities to 2029. Turning back to 2024 performance, I’ll start with our digital businesses, which now account for approximately 19% of our total company revenue in aggregate. Our digital marketing services business continues to be an area of outsized growth. On a revenue increase of 27% year-over-year, it went from being the smallest of our digital businesses in 2023 to the largest in 2024. As a reminder, we built the digital marketing services business from scratch, and grew it profitably and organically from day one through strategic investments and by pivoting our radio-only sales force to one that now provides our clients with an expanded set of marketing tools and services in addition to broadcast radio. To put a finer point on this, our expanded capabilities are allowing us to upsell our existing customers as demonstrated by the 30% year-over-year increase in legacy radio-only customers who now also buy DMS. This has also driven new customer growth, allowing us to add digital-only customers up 31% year-over-year. And in fact, today, over half of our DMS customers are digital-only accounts. Also worth noting, we began 2025 with significant momentum in the DMS business, having achieved all-time highs in several key performance indicators during the fourth quarter, including customer count up 18%, average digital order size per customer up 11%, and we’ve improved our already high retention rate. These achievements are further evidence of our competitiveness in the DMS market, and they reflect three key components, which in combination are difficult to replicate. First, our on-the-ground sales teams whose local insights and relationships underpin our go-to-market efforts. Second, our fully integrated and customizable solutions. And third, our ability to deliver outcomes for our clients that outperform industry benchmarks by an average of 25%. Also, as I mentioned, we continue to make additional investments to accelerate the growth of DMS. For example, since the third quarter, we’ve nearly doubled the size of our centralized digital agency team, the group responsible for driving improvements in campaign performance, customer satisfaction and campaign efficacy, leading, as I just said, to better customer retention and same-store sales. We also continue to add new products to our DMS portfolio, as well as more digital sales associates. With significant runway still ahead of us in the DMS market, we see a lot of upside from continuing our ability to leverage our unique competitive positioning. Moving to podcasting, where we were a top 10 podcast at the end of the year, we continue to add new products in 2024, notably the Benny Show, hosted by Benny Johnson, which secured the number five spot among news talk podcasts following the elections, and Evita Duffy, whose podcast debuted at number 11. From a revenue standpoint, podcast revenue was down slightly in 2024, reflecting Daily Wire’s decision to start taking its ad sales function in-house. This transition was fully completed by the end of 2024. Excluding Daily Wire, podcast revenue was up over 35% in 2024. In Q1, we expect that growth from existing podcasts and new content additions will come close to fully offsetting the loss of Daily Wire, which represents a $4 million negative revenue comp in that quarter, and an approximately $15 million negative revenue comp for the full year. While we had expected that by the end of 2025, as I just said, increased revenue from our podcast assets would largely offset the impact of the Daily Wire exit, you may have seen earlier this week that Dan Bongino accepted an appointment to become the Deputy Director of the FBI. We congratulate Dan on his new position, but his appointment will, of course, mean that while he is serving in the administration, he will be unable to perform his radio show or podcast. That said, we look forward to welcoming him back in the future. In the meantime, we are working on programming to fill the void, although we do anticipate that this will be an additional headwind in 2025, comparable to the loss of the Daily Wire comp for the year. Streaming, our third digital business, was down 4% during the year. As mentioned on prior calls, we had a difficult comp in 2024 caused by the expiration of a fixed-rate sales contract. However, as we’ve repeatedly stated, we believed that taking back our inventory was the right long-term move because we knew that it would allow us to better manage and optimize the monetization of our streaming impressions, which grew 15% in 2024. And proof of that is the fact that the streaming revenue is currently pacing up in Q1. With regard to our broadcast business, while we’ve benefited from approximately 19 million of political advertising during the year, as I said, the already difficult headwinds accelerated as the demand pressure impacting national advertising expanded to local advertisers, particularly as we approach the end of the year. Nonetheless, there were bright spots. For example, advertiser interest in live sports remained robust, allowing us to capitalize on our exclusive audio relationship with the NFL to book all-time highs in revenue for the Super Bowl in 2024. Drafting off that success, we bested that mark to achieve another new all-time high in this year’s Super Bowl. Another bright spot was the success of our hyper-focused efforts in local advertising in areas where we were seeing demand resilience. For example, as first discussed during our Q2 2024 earnings call, our multi-market, multi-platform business known as Beyond Home Market or BHM, grew up nicely in 2024, up 35% year-over-year and we can continue to see that growth trend accelerate in these early days of 2025. It’s also worth noting that our BHM teams have not only been successful in bringing in large new clients to radio, but have also built some of our digital-only clients into $1 million-plus relationships, a testament to our acumen and the sophistication of our capabilities. As we look ahead from a revenue perspective, the underlying trends that we saw at the end of 2024 are continuing in Q1, with broadcast demand weakness reflecting ongoing concerns about inflation, higher than previously expected interest rates, the potential impact of tariffs and deteriorating consumer sentiment, while DMS growth continues to be robust. On a total company basis, we are currently pacing down mid-single digits for the quarter. Normalizing for political and the loss of Daily Wire, Q1 revenue is pacing down low single digits. These trends underscore how critical our efforts to reduce costs have been and will continue to be, and as such, in the fourth quarter, we continue to reduce costs across the organization. Through a combination of reductions in force, contract management and renegotiations, and continuing to adapt the way we operate the business, we generated approximately $35 million at the annualized net cost reductions in Q4, which are on top of the nearly $128 million of cost reductions that we already had made from 2019 through Q3. Or said another way, from 2019 through 2024, we reduced our fixed cost base by 22%, and through 2025, that number will be over 27%. Moving to the balance sheet, despite the challenging operating environment, we were able to maintain our liquidity position at year-end versus the prior quarter, benefiting from cash generated from operations. Further, during the year, as I mentioned, we completed the refinancing of our debt, which extended maturities to 2029, buying us additional financial flexibility and optionality. Looking ahead, our focus remains on reengineering the business to drive operating efficiency, while still investing in our digital businesses to drive growth. Additionally, managing our balance sheet will continue to be critical to fully realizing the potential that we believe our assets can yield. To that point, our capital allocation focus will remain on reducing net debt, which we have a proven track record of doing, with net debt reductions of more than 40% since 2019, utilizing cash generated from operations and the monetization of non-core and non-EBITDA producing assets. So before turning it over to Frank, I’d like to note that we’ve been very active engaging with shareholders this year. We really appreciate all the feedback that we received. Also, I want to highlight the addition of Steve Galbraith, who is a major shareholder to our Board. Also worth noting, the Board made a determination to not renew the shareholder rights plan, which was put in place in Q1 of last year. And finally, I want to express how proud and appreciative I am of the entire Cumulus team for continuing to deliver in the face of such a challenging market environment. Looking ahead, we will remain laser-focused on mitigating the impacts of broadcast radio trends through cost reductions and investment in our digital business. Additionally, as we reimagine our business for the long-term, we will continue to unlock additional opportunities that leverage our many key assets, and given the refinancing we completed in 2024, we have more time to execute these strategies. In this rapidly evolving media and regulatory landscape, we believe that with our strong operating track record and this great collection of assets, there will be more and more options for us to generate growth, both organically and through partnerships, and build long-term value for shareholders. With that, I’ll turn the call over to Frank.

Thank you, Mary. Starting with the fourth quarter, revenue was down 1.2% in line with the pacing commentary that we gave in our last earnings call. The quarter also benefited from $10.1 million of political revenue. EBITDA for the quarter was $25 million. Digital continued to be a growth area of 1.9% in total, with digital marketing services remaining a particular bright spot, growing 23%. As Mary mentioned, we’re very pleased with our development of the DMS business and ability to accelerate its growth through our various investments in sales, product, fulfillment and support capabilities. On the broadcast side, as mentioned in our last earnings call, third quarter network revenue benefited from the timing of the NFL schedule, which on the flip side negatively impacted fourth quarter revenue. Additionally, the continuing national advertising headwinds were aggravated by a pullback in local advertising as we approached the presidential election. We did not see that pullback improve materially post-election, with many F&Bs citing ongoing macroeconomic concerns as an impediment to spending. As a result, revenue declined across most major ad categories in both our national and local broadcast businesses. Turning to expenses, total expenses in the quarter decreased by $5 million year-over-year, driven by fixed cost reductions and lower variable costs reflecting revenue declines, partially offset by an increase in variable expenses from our digital businesses. Drilling down into cost cuts, $35 million of annualized net fixed cost reductions were executed during the fourth quarter, of which $7 million were realized in Q4, with an additional $28 million benefiting 2025. The benefits from our fixed cost reductions will help offset much of the general market weakness on an ex-political basis, as well as the loss associated with the Daily Wire and Dan Bongino relationships. Further, these actions will continue to improve the operating leverage of the company. For the full year, revenue was down 2.1% and EBITDA finished at $82.7 million. Digital was up 5% year-over-year, with digital marketing services growing 27% for the year. Total expenses for the year decreased by over $9 million, driven by fixed cost reductions and lower variable costs from lower revenue, again, partially offset by higher variable expenses from our growing DMS business. Moving to cash flow and the balance sheet, we ended the year with $64 million in cash, $642 million of debt at maturity and $578 million of net debt, down from $595 million at the end of 2023. Cash from operations during the quarter was $17 million, bringing full-year operating cash flow to $13 million when excluding costs associated with last year’s refinancing. CapEx for the year was $19.5 million, coming in lower than our previous guidance of $25 million. And in 2025, we expect CapEx to be $22.5 million, and additionally, we do not expect to be a material payer of taxes. Looking forward to the first quarter, as Mary said, we’re currently pacing down mid-single digits and down low-single digits on an ex-political and ex-Daily Wire basis. On Daily Wire specifically, Q1 comparable impact will be approximately $4 million to revenue and $15 million for the full year, which we initially expected would be largely offset through other podcasts. However, the loss of Bongino presents an additional revenue impact starting at Q2 of approximately $15 million through the balance of the year. With that, I’ll now turn the call over to the operator for Q&A.

Thank you. Our first question comes from Michael Kupinski with Noble Capital Markets. Michael, go ahead.

Good morning and thanks for taking my questions. Just a couple of quick questions here. What do you think is needed to kind of turn around national advertising?

Hi. Mike, I’m sorry, so you said what, can you repeat the question?

I’m just wondering, what do you think is, are the metrics or things that are needed to start to see an improvement in national advertising?

I believe that the declines are due to the external macro environment. If and when those change, I think that will certainly help. For example, Westwood One has been significantly affected because it operates entirely on a national scale. However, coming out of the pandemic, it was the best performer in the company. Therefore, as the economy shifts and external factors improve, I think we can begin to see an improvement.

In terms of Westwood One, have you moved away from low-performing or low-margin shows? Should we anticipate further declines in the network in 2025?

Yeah. I mean, with regard to the shows, that’s part of an ongoing process. We are always evaluating the performance of the shows that we have. So, it’s an ongoing process. Expect, Frank, do you have anything to add?

Yes. So, when you look at the cost efficiency efforts we went through in the fourth quarter and we talked about the aggregate size of $35 million on an annualized basis, there was a significant component of that was right sizing our content for the revenue and EBITDA opportunity it generates and that’s the ongoing part of the business in the network, as well as the local business. Now, with regard to the network for the balance of the year, while we don’t give guidance for the balance for the entire year, that business is 100% correlated to what’s happening in the national environment. But I will say, having the sports in our portfolio, the NFL, which performed very well and we’re looking forward to the NCAA, that will be a buffer to what we’ve seen in the general market weakness in national.

Gotcha. And then, on the broadcast spot side, I was wondering if you can just talk a little bit about maybe are there specific ad categories that might be tied to interest rates or things like that that account for the weakness or is it a fairly broad-based decline that we’re seeing or that you saw in the fourth quarter and seeing carried through in the first quarter? Can you give us some color on that?

Sure. It was broad-based, but as you can imagine, the sectors which are mostly levered to the economy and particularly interest rates were affected most. So, in particular, the auto category was weak for us. And that shouldn’t be surprising, given the affordability of cars, weaker consumer sentiment and the financeability of cars. Other categories which are levered to the economy and we’ve talked about this in the past, are national advertisers who advertise for mortgage products. In addition to that, in an economy that’s getting a little bit weaker from an employment perspective, the job sector has been weaker. But having said that, there have been some areas of relative outperformance in the business, which includes financial services, particularly the auto insurance side. I’d also like to say, pre-COVID, there was a big correlation to our national business and our local business, and they all tended to actually move together. We’ve just been in an environment, particularly the past couple of years, with uncertainty in the economy, uncertainty in terms of tariffs more recently, that there’s been a disengaging of that correlation. So, there’s some sectors on the market that do better and others are doing worse, and that’s what’s driving our current results.

Gotcha. And I was just wondering, since you’re making investments in your marketing services area, I was wondering, can you give us a sense of what margins you’re getting out of that segment? And given the investment spin, what you’re kind of anticipating might the margin be as we kind of go into 2025, 2026?

Yes. So, and I’ve mentioned this, and we’ve mentioned this in previous calls, the unit contribution margins of our DMS business is approximately 35%. And our investments that we’re making, unlike other companies, is not in the tech stack. It’s actually in people from a sales perspective, and in people from a fulfillment, and taking in house some of the fulfillment. And before we hire anyone, we make sure that we have an immediate ROI on those investments, particularly in the fulfillment area and we’re seeing that in terms of the hires, not only in terms of the customer satisfaction, but a slightly increased margin by bringing some of that in-house. So, in terms of investment, it’s not a huge dollar investment compared to the entire company, but extremely meaningful and impactful in terms of driving the topline growth. And as I mentioned, we’re looking to accelerate the growth from already strong growth last year, and over time, improving margins in that business.

Thanks for that color, Frank. And I was just wondering on, turning back to the balance sheet, my last question, are there additional, if you can just outline for us the prospects of other non-core assets that you think that you have that might help to accelerate the debt pay down?

We continue to have some non-core assets. We’ve talked about in the past, we have a nice piece of land in Nashville, which is a nice market. And depending on the market, we’ll look to monetize that at efficient levels. We also, if you remember a couple of years ago, in 2023, we were able to monetize two FM sticks for $17 million, one in Westchester and one in Detroit. And those were sold to religious broadcasters and the EBITDA contribution that we lost on that was zero. Those are transactions that come up from time-to-time. We also, as we prune and look at our portfolio, we’ll look at where we have excess land, which individually may not be huge dollars compared to what we’ve done in the past. But collectively, we’re optimistic that can add up to something that will help us reduce debt. And as a reminder, for creditors on the phone, we invest in our business through our CapEx. So I would expect to see some degree of asset sales this year, and stay tuned on that.

Okay. Thanks, Frank. I appreciate it. That’s all I have. Thank you.

Thank you, Michael. Our next question comes from line of Aaron Watts with Deutsche Bank. Aaron, your line is now open.

Hi. Thanks for having me on. Two questions. I appreciate your commentary around the ad environment, exiting 2024 and into 2025. Seems to echo what we’re hearing so far from other broadcasters. If I focus in on spot, did you see or are you seeing any improvement in sentiment? As the first quarter played out or as you look into 2Q? And I appreciate visibility is probably fairly limited, but any rays of light around spot advertising specifically, potentially rebounding as you think about the full year?

Aaron, I’ll take that. So in the first quarter, what’s driving or pacing down mid-single digits is a continued weakness, both in the network as national demand and local demand. And while there are categories in local which are doing okay, going back to what we talked about in our last earnings call in November, right before the election, we hoped uncertainty would be lifted from the market, which would give confidence for small businesses to expand and grow and invest. And it’s happened thus far, going into 2025, while the sentiment from our discussions with local advertisers in general is constructive in terms of economic activity, there’s still a lot of uncertainty, and I don’t have to tell you, but Paris has an example of uncertainty in terms of term rates coming down. And so it’s hard to predict how that’s going to manifest itself in the second quarter, because we need those conditions to change, to materially change the direction. But that’s what we’re seeing in the first quarter. And obviously, we’re hoping for that improvement in the market. So we’ll see that in both local and in our national businesses.

That’s helpful. Do you feel that, as you speak with these local advertisers in particular, that their pullback is radio specific or do you think that that’s been a general pullback that’s impacting other media outlets as well? I guess, I’m asking, do you feel as though radio is losing share or is this more of a broad-based pullback or hesitation on behalf of advertisers?

What we’re seeing now is…

I…

...I think a broad-backed pullback. Go ahead, Mary.

I think you made a good point. Frank mentioned categories, and we know that automotive is a significant category for broadcast radio operators. We're still hearing that it doesn't relate directly to radio; rather, as Frank pointed out, it's more about uncertainties regarding tariffs and federal electric vehicle funding, which adds complexity to the outlook. This offers a glimmer of hope since this major category isn't attributing the pullback specifically to radio.

Okay. That’s really helpful. And then if I could ask one more, there’s been a lot of chatter, obviously, around deregulation in the media space. It’d be great to hear your latest perspective on that and acknowledging the current leverage profile, how might Cumulus participate as either a buyer or a seller?

I’ll take that, Aaron. So you’re right. There’s been a lot of speculation and talk about deregulation, and we’re supportive of that. And we would welcome that, particularly the raising of caps. It remains to be seen if that will happen and when that will happen. But a lot of these rules were put in place decades ago when there was not as dispersed competition for advertising and we think that makes sense. If that were to occur, we would benefit from potential increased yield activity. Station swaps in markets which are very concentrated is something that would probably come on the table, which to-date over the past several years have been nominal. To the extent we have deregulation from a competition perspective as well, that could bring in new dollars either to consolidate within the industry or new entrants into the industry. And so that’s all that factors into our view of deregulation, which we’re 100% supportive of. With regard to how we participate in that, that’s speculative and we can’t comment on it. But whenever there’s deregulation and an ability to look at a business differently, I think that proves to the benefit of everyone in the industry.

Okay. Thanks. I appreciate that.

Thank you, Aaron. Our next question comes from line of Patrick Sholl with Barrington Research. Patrick, your line is now open.

Hi. Good morning. I just had a couple of questions on podcasting, I guess, with a pretty significant adjustment in that segment. I guess, how are you approaching that as a potential growth area? I guess, like, what sort of remains of it? Is it mostly just shows that are kind of both on the radio properties, like, and distributed as podcasts or do you also have additional ad sales relationships in there?

Yeah. There’s plenty of growth in podcasting for us. We generally go to the addition of new shows or strong executions to capture audience growth from our current podcasters in both audio and video. And so, you may know that we basically are an ad rep firm for podcasts. So we also grow by developing new partnerships, which is what I mentioned in the prepared remarks. We have two big ones. So they continue and also our local broadcasting continues to gain traction. And that’s usually around our power brands, like The Ticket in Dallas or the Bird Show in Atlanta. So I would say the growth comes from new podcasts, growing the ones that we have through all sorts of ways that we marketing, et cetera. And then we’re also expanding into video for some of them and that is another way to grow it.

Okay. And then can you talk a little bit about the DMS side and maybe the stickiness of specific services or is it largely like the full suite that you offer?

So on DMS, and Mary did talk about it in her prepared remarks, what we like about the business is the importance and the deepening the relationships we have with existing customers and new customers. And it’s really I think everyone should take away the fact that over half of our customer base are new customers to Cumulus as differentiating and we think it’s impressive because that’s another growth avenue. It’s a business that has a very high retention and it’s only improving through the actions that we’re taking. And although it’s not exactly like a long-term subscription business, it’s actually behaving increasingly more like that because we’re adding net new customers, churn is very low. We have a great set of products and so as we continue to roll it out aggressively and deepen that sales effort, we’re bullish about that growth.

Okay. Thank you.

Thank you, Patrick. Our next question comes from line of Avi Steiner with JPMorgan. Avi, your line is now open.

Thank you. Two questions for me, just one on the debt side and I apologize if I miss this. So as you potentially sell a few more assets, I think you should stay tuned, but also you’ve got some cash. I’m curious how you think about the smaller 2026 maturities versus the opportunity in your other debt, which is trading at materially lower levels. And then I’ve got one more second.

Sure. Avi, with regard to our debt maturities, you’re obviously cognizant that we have approximately $24 million maturing in 2026. And if you look at our year end cash and our ABL availability, if we were to freeze that and go forward a year, that would give us plenty of liquidity for that. Having said that, we did not purchase any debt in the fourth quarter. That was largely driven by going through the assessment of the market and seeing where the outlook is going to be for the balance of the year. EBITDA, notwithstanding all the changes that we’ve made in terms of the cost structure, given it’s an ex-political year, most analysts will model EBITDA to be lower this year, which is not unusual in a non-political year. And so you can do the math in terms of our interest expense, lease payments and our CapEx guidance to see what may be a potential cash burn before asset sales. So that’s a long way of saying that we’re very focused on the entire debt stack and we’ll just evaluate it as we go through the year with our Board and make decisions. But at this point, there hasn’t been any decision on when to buy, what to buy, et cetera. But that’ll be evolving throughout the year.

Okay. And my last question again, and if this is covered, I apologize. I think I heard Mary say the company didn’t renew the shareholder rights plan and I’m just curious if you could talk about the thoughts around that. And I am done. Thank you very much. I appreciate it.

I’ll take that as well. Well, as you know, we put in the shareholder rights plan or the Board put in the shareholder rights plan last year in response to a very specific situation and set of discussions and that’s all public information. We’ve always said from a company perspective that we’re here, the Board and managers here to maximize shareholder value. That was something that occurred last year for one specific reason. And at this point, we’re not concerned about it and the Board decided not to renew it. I don’t think it’s any more complicated than that.

Thank you for the time.

Thank you.

Thanks everybody for joining us and we look forward to talking to you again in a couple of months. Have a nice day.

That concludes today’s earnings call. Thank you for your participation. I hope you have a wonderful rest of your day.