Good afternoon, and welcome to iHeartMedia's Q2 2025 Earnings Call. As a reminder, this conference call is being recorded. I would now like to turn the call over to Mike McGuinness, Head of Investor Relations. Thank you. Please go ahead.

Good afternoon, everyone, and thank you for taking the time to join us for our second quarter 2025 earnings call. Joining me for today's discussion are Bob Pittman, our Chairman and CEO; and Rich Bressler, our President, COO and CFO. At the conclusion of our prepared remarks, management will take your questions. In addition to our press release, we have an earnings presentation available on our website that you can use to follow along with our remarks. Please note that this call may include forward-looking statements regarding our financial performance and operating results. These statements are based on management's current expectations, and actual results could differ from what is stated as a result of certain factors identified on today's call and the company's SEC filings, including our recent 8-K filing. Additionally, during this call, we will refer to certain non-GAAP financial measures. Reconciliations between GAAP and non-GAAP financial measures are included in our earnings release, earnings presentation and our SEC filings, which are available in the Investor Relations section of our website. And now I'll turn the call over to Bob.

Thanks, Mike, and good afternoon, everyone. Our second quarter performance was solid and slightly ahead of our initial expectations as we continue to execute on key initiatives while navigating a still uncertain macro environment. In the second quarter, we generated adjusted EBITDA of $156 million at the upper end of our previously provided guidance range of $140 million to $160 million and 4% above prior year. Our consolidated revenue for the quarter was above our guidance of down low single digits and was up 0.5% compared to the prior year quarter. Excluding the impact of political revenue, our consolidated revenue was up 1.5%. Turning to our individual operating segments now. The Digital Audio Group generated second quarter revenue of $324 million, up 13.4% versus prior year, slightly above our previously provided guidance of up low double digits. The Digital Audio Group generated second quarter adjusted EBITDA of $108 million, up 17.1% versus prior year. And the Digital Audio Group's adjusted EBITDA margins were 33.2% versus 32.2% in the prior year, making continued progress toward our stated goal of achieving adjusted EBITDA margins in the mid-30s. Within the Digital Audio Group, our podcast revenue was above our guidance of up low 20s. It grew 28.5% compared to prior year as we continue to feel the growing flywheel effect of our strong leadership in podcast publishing and the benefit of our unique complementary assets that help to build podcasting. Our podcasting financial discipline and our focus on the high-margin podcast publishing sector continue to fuel what we believe is the most profitable podcasting business in the United States. Importantly, our podcasting EBITDA margins remain accretive to our total company EBITDA margins. And in the second quarter, our non-podcast digital revenue grew 4.7% compared to prior year. We often talk about the tremendous advantages this company has in building out the number one podcast audience. But I want to point out that we also have an advantage on the ad sales side of podcasting. iHeart has the largest local sales force in audio. We probably have the largest local sales force of anyone in media as well, and you can see that advantage in our revenue performance. In Q2, about 50% of our podcasting revenue was generated by our local sales force, up from about 14% in Q2 of 2020. Our unparalleled local sales organization gives us an important and unique advantage for both our current and future revenue growth. Turning now to the Multiplatform Group, which includes our broadcast radio, networks and events businesses. In the second quarter, revenue was $545 million, down 5.4% versus prior year and at the upper end of our previously provided guidance range of down mid- to high single digits. Excluding the impact of political advertising, revenue was down 4.8%. The Multiplatform Group's adjusted EBITDA was $96 million, down 7.6% versus prior year. Historically, we've seen that the largest advertisers and advertising agency groups are a good indicator of what's to come in the future. With that context, I want to share two data points with you. First, our top 50 Multiplatform Group advertisers for Q2 were up in revenue by 4% year-over-year. And second, the four largest advertising agency groups were up in revenue by 7% year-over-year in Multiplatform Group advertising. These results give us added confidence that our plan to return the Multiplatform Group to revenue growth is on the right track. We also continue to make progress on our ad tech platform, specifically building capabilities to allow our broadcast radio inventory to be bought and sold like digital advertising and to be a part of the key integrated buying systems. And today, we announced that Lisa Coffey is joining the company in the newly created role of Chief Business Officer to drive those efforts. Lisa has a long history in ad tech and digital and mobile advertising, including leading the team that introduced Amazon advertising to the U.S. agency marketplace. In summary, the company's second quarter performance is important evidence of our ability to generate positive financial results even though the marketplace remains a little uncertain. Additionally, our podcasting momentum continues to build with both consumers and advertisers, and we continue to make meaningful progress to reignite the revenue growth of our Multiplatform Group. And finally, cost management remains a major focus. We are still on track to generate $150 million in net savings in 2025, and we continue to look for additional cost savings opportunities in both our structure and our operations using the power of AI and our unique scale. And now I'll turn it over to Rich.

Thank you, Bob, and good afternoon. Our Q2 2025 consolidated revenue was above our guidance of down low single digits and was up 0.5% compared to the prior year quarter. Excluding the impact of political, our consolidated revenue was up 1.5%. Let me provide you with some additional detail on our advertising revenue performance this quarter. And as a reminder, we had diversified advertising revenue. There is no advertising category greater than about 5% of our total advertising revenue and no individual advertiser that is more than about 2% of our total advertising revenue. As you can see on Slide 10, in the second quarter, the largest category gainers in terms of absolute dollars were financial services, telecom, professional services and healthcare. And the four categories that declined the most in terms of absolute dollars were restaurants, political, media and publishing and entertainment. At the end of the second quarter, our five largest advertising categories in terms of absolute dollars were financial services, homebuilding and improvement, healthcare, auto and entertainment. Additionally, Bob gave you some information about the top 50 Multiplatform Group advertisers and the four largest advertising agency groups' revenue performance for the Multiplatform Group. Now let me share with you the performance for the total company. First, in Q2, the top 50 advertisers for the total company were up 9% year-over-year. And second, the four largest advertising agency groups for the total company were up 14% year-over-year. As we think about uncertainty in the marketplace, the performance of our largest clients in advertising agency groups is encouraging. Our consolidated direct operating expenses increased 2.4% for the quarter. This increase was primarily driven by higher variable content costs associated with the revenue growth of our digital businesses, partially offset by a decrease in employee compensation costs in connection with our modernization initiatives taken in 2024. Our consolidated SG&A expenses decreased 4.3% for the quarter, driven primarily by our modernization initiatives, including decreased employee compensation costs, partially offset by an increase in non-cash trade and barter expense as well as an increase in employee health and benefit expenses. We generated second quarter GAAP operating income of $35.4 million compared to an operating loss of $909.7 million in the prior year quarter. And as a reminder, in the prior year quarter, we recognized a $920 million impairment charge related to FCC licenses and goodwill. We generated adjusted EBITDA of $156 million at the upper end of our previously provided guidance range of $140 million to $160 million and 4% above prior year. Before I turn to our segment performances, as Bob stated, we are still on track to generate $150 million of net savings in 2025. Our Q2 results included the benefit of $40 million of net savings. And as a reminder, our Q1 results included the benefit of $27 million of net savings. This quarter, we have again included a slide in our investor presentation, Slide 5, that provides a few different ways of identifying the cost savings, including by segment, function and type. Hopefully, this level of detail is helpful as you update your models. Turning now to the performance of our operating segments. And as a reminder, there are slides in the earnings presentation on our segment performances. In the second quarter, the Digital Audio Group's revenue was $324 million, up 13.4% year-over-year and slightly above our guidance of up low double digits. The Digital Audio Group's adjusted EBITDA was $108 million, up 17.1% year-over-year, and our Q2 adjusted EBITDA margins were 33.2%, up from 32.2% in the prior year. Within the Digital Audio Group, our podcasting revenue was $134 million, which grew 28.5% year-over-year and well above the guidance we provided of up low 20s. Podcasting's strong Q2 revenue performance with its high adjusted EBITDA flow-through helped expand the segment's Q2 adjusted EBITDA margin by about 100 basis points compared to the prior year. Our second quarter non-podcasting digital revenue grew 4.7% year-over-year to $190 million. Turning now to the Multiplatform Group. Revenue was $545 million, down 5.4% compared to the prior year and at the higher end of our previously provided guidance range. Excluding the impact of political revenue, our Multiplatform Group revenue was down 4.8%. Adjusted EBITDA was $96 million, down 7.6% from $104 million in the prior year quarter. The Multiplatform Group's adjusted EBITDA margins were 17.7% compared to 18.1% in the prior year quarter. Turning to the Audio & Media Services Group. Revenue was $68 million, down 3.3% year-over-year, and adjusted EBITDA was $24 million, flat to prior year. Excluding the impact of political revenue, the Audio & Media Services Group revenue was up 3.8%. At quarter end, our net debt was approximately $4.6 billion. Our total liquidity was $527 million, and our cash balance was $236 million, which includes $100 million borrowing under the ABL facility. We intend to pay back the ABL in the second half of the year as our free cash flow builds in its normal cadence. Our quarter ending net debt to adjusted EBITDA ratio was 6.5 times. In the second quarter, our free cash flow was a negative $13 million compared to $6 million in the prior year quarter. Let me now turn to our third quarter guidance. Given the uncertainty in the marketplace, we are providing a slightly wider range of adjusted EBITDA guidance than we normally do. We expect to generate third quarter adjusted EBITDA in the range of $180 million to $220 million compared to $205 million in the prior year quarter. As a reminder, the third quarter financial results of last year benefited from the presidential election cycle, which generated $44 million of political revenue for us. We expect our consolidated Q3 2025 revenue to be down low single digits compared to prior year and up low single digits, excluding the impact of political revenue. Our July pacing was down 1.8% compared to prior year and down 0.3%, excluding the impact of political revenue. Turning to the individual segments for Q3. We expect the Digital Audio Group's revenue to be up high single digits with podcasting revenue expected to grow in the low 20s. We expect the Multiplatform Group's revenue to be down mid-single digits and approximately flat, excluding the impact of political revenue. And we expect the Audio & Media Services Group revenue to be down approximately 30% and down mid-single digits, excluding the impact of political revenue. As we look ahead to the full year, as we discussed on our Q1 earnings call, our full year 2025 guidance didn't contemplate the current macro volatility we all continue to see. Therefore, to achieve our full year guidance, we still need to see some positive movement in the macro and an easing of the advertising market's uncertainty. And as a reminder, Q4 is our and the advertising industry's largest revenue quarter for the year. Now we will turn it over to the operator to take your questions. Thank you.

Our first question today will come from Patrick Sholl from Barrington Research.

Just maybe a quick follow-up on the guidance that you provided. You mentioned the categories of growth in Q2. I was just wondering if that was kind of consistent with what you're seeing in Q3 or some other categories picking up.

Thank you for the question, Pat. We haven't specifically discussed categories moving forward. However, we did highlight for the first time how our top 50 advertisers and our key advertising agency relationships are performing, both for the MPG Group and the overall company. While I’m not focusing on categories, I think this can serve as a strong indication of the future. We feel comfortable with the guidance we've provided, supported by the performance of our major advertisers and agencies. Still, I haven't shared specific details regarding categories.

Okay. Can you discuss the growth trends between digital streaming and podcasting? Are there any differences in audience data or growth rates that you could share, and what advertisers are looking for in these areas?

We have not provided that level of detail, but the numbers clearly show that podcasting is thriving. Overall, we are pleased with the performance, and the momentum in consumer and advertiser acceptance of podcasting is continuing.

And by the way, I want to remind you that we have our Multiplatform strategy in the company. We've discussed various segments like broadcast, networks, and podcasting, which, as Bob mentioned, is thriving. Additionally, we have our streaming extensions and other digital assets that are not related to podcasting. Instead of focusing solely on individual audience sizes, it’s important to consider the overall impact of iHeart and how these elements work together for advertising purposes. Our best advertisers typically have the strongest relationships, which leads to better retention and overall experiences.

Our next question comes from Ken Silver from Stifel.

Just a few questions. First, on the EBITDA guide with the range being $40 million. I mean if revenues are going to be down low single digits, you're sort of very specific on that number, but there's still a pretty big EBITDA range. So is there sort of some uncertainty about things on the expense side?

No. No, we're just looking. And again, for context, we widened the range a little bit here. But remember, when you look at a couple of things are coming down to EBITDA and first and foremost, you look at revenue mix, too, as we talk about where the revenue in terms of coming in, whether it's coming from Multiplatform or the products in Multiplatform or the Digital Audio Group and the products within the Digital Audio Group. So that's really all you're seeing in terms of that range out there.

I think they have a broader range due to ongoing uncertainty in the marketplace, and we acknowledge that.

Okay. Just a couple more. On the EBITDA bridge chart, which is helpful on Slide 12, just 2 questions. One is this net cost savings bar of $40 million, should we expect that number to be similar or higher in the third quarter?

You should expect it to be the same. And I just think for a little bit of context or some context, I believe we mentioned this on last quarter's call, we said just as you think about it, we had, I think, $27 million in Q1, our expense savings. And then we said at that point, think about the remaining three quarters to be equal at $40 million a quarter. And I think as Bob stated in his opening remarks and I stated, we are on track 100% to achieve the $150 million in net cost savings. And I think this quarter in Q2 on the implementation following up on what we did in Q1 is tangible evidence that we're on track to achieve the numbers.

Okay. And then the last bar before the $156 million, this negative $10 million, like can you maybe just say what that was and if that's going to repeat?

It's just higher benefits. Like most companies, as we complete a year and close a quarter, we assess what is happening with our employees and adjust accordingly. We've typically maintained that number for most quarters. While I can't predict future numbers, it's not a significant issue. We aren't entirely sure if we've made the adjustments, but based on our past experience, it won't deviate much from that range.

Okay, great. The announcement today about hiring Lisa is definitely encouraging. Is there any more information to report on programmatic? Are you on any additional demand-side platforms? If I missed the announcement, I apologize.

We've made significant progress, and while I don't have all the announcements in front of me, Lisa's arrival is a positive development. She is an expert in the field, and while we've been developing the technology platform, her role will focus on attracting advertisers and generating revenue. Additionally, her input will shape the final stages of the platform's development.

Operator, maybe we'll just pause for a few seconds just to make sure that there are no additional questions or if someone would like to ask a question. I just want to make sure we capture all the questions that are out there. Okay. If there are no more questions, first of all, thank you all on behalf of Bob, myself and the rest of the management team for listening and taking the time to listen and talk to us about the iHeart story. And Bob, myself and Mike McGuinness and the rest of the team are available any time to do follow-up and answer your questions. But thank you very much.

This concludes today's conference call. You may now disconnect.