Earnings Call Transcript - IHRT Q2 2024

Mike McGuinness, Head of Investor Relations

Good morning, everyone, and thank you for taking the time to join us for our second quarter 2024 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 in the company's SEC filings. 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.

Bob Pittman, Chairman and CEO

Thanks, Mike, and good morning, everyone. We are pleased to report that our second quarter 2024 results were in line with our previously provided adjusted EBITDA and revenue guidance ranges, and we're seeing sequential improvement in our revenue growth. While the marketplace continues to be dynamic with the changing outlook on interest rates, inflation trends, global uncertainty, and rapidly evolving domestic political landscape, we continue to see strong momentum in our podcast business, our digital ex-podcast business, and the sequential improvement of our multi-platform group's year-over-year revenue performance. As we look at the back half of the year, our results will reflect the continuing positive impact of an ad market recovery year, material upside from political advertising, as well as the benefit of our ongoing focus on cost efficiencies. Now let me take you through some of the key financial results of the quarter. In the second quarter, we generated adjusted EBITDA of $150 million in the middle of the guidance range we provided of $140 million to $160 million. Our consolidated revenues for the quarter were up 1% compared to the prior year quarter, a little above the guidance range of approximately flat year-over-year, and excluding the impact of political, our consolidated revenues were up 0.1% compared to the prior year quarter. This marks the first quarter that our consolidated revenues increased year-over-year since Q4 2022. Turning now to our individual operating segments. The Digital Audio Group generated second quarter revenues of $286 million, up 10% versus prior year just above our previously provided guidance of high single digits and represented 31% of the company's total revenue. For the quarter, the Digital Audio Group generated adjusted EBITDA of $92 million, up 9% versus prior year. The digital audio group's adjusted EBITDA margins were 32%, continuing the trend of sequential margin improvement from the first to second quarter. Within the Digital Audio Group, our podcast revenues, which grew 8% versus prior year, we expect our podcast revenues to return to double-digit year-over-year growth for the third quarter, the fourth quarter, and the full year. Our non-podcast digital revenues grew 10% versus prior year, and we expect that strength to continue as well. In June, iHeart was once again ranked the #1 podcast publisher in the U.S. with more monthly downloads than the next two largest podcast publishers combined according to Podtrac, and our financial discipline in podcasting continues to pay off as our podcasting EBITDA margins remain accretive to our total company adjusted EBITDA margins. As a reminder, our leadership position in podcasting is in part the result of the power of our broadcast radio assets. We've used those assets to build not only the podcast business, but also the iHeartRadio app, which is the #1 digital radio service and our marquee live events business, which includes the recent iHeartRadio Music Awards and the iHeart Country Festival. In addition to our industry-leading podcast business and our digital radio streaming service, which has 5 times the digital listening of our closest competitor, we also have the largest social footprint of any audio service by a factor of 7, and we operate 3,000 national and local websites that reach more than 110 million people in the United States each month, all of which represent additional opportunities for our advertising partners to interact with our highly engaged consumer base and provide additional revenue growth for the company. Turning now to the Multiplatform Group, which includes our broadcast radio networks and events businesses. In the second quarter, revenues were $576 million, down 3% versus prior year, slightly better than our previously provided guidance of down mid-single digits and down 4%, excluding the impact of political advertising. Adjusted EBITDA was $104 million compared to $162 million in the prior year quarter due primarily to the timing of certain noncash marketing expenses associated with our iHeartRadio Music Awards we discussed last quarter. Additionally, we expect the Multiplatform Group to have positive year-over-year revenue growth in the back half of the year, yet another indication of the continuing strengthening of the ad market and our performance within it. And this year, iHeart is serving as the exclusive audio home for the NBC coverage of the 2024 Summer Olympics in Paris with the original new podcast from the Olympic Village as well as station streaming real-time play-by-play coverage of the games, all in partnership with NBCU. With the unparalleled reach and audience of iHeart's platforms, our coverage of the games results in significant engagement on our broadcast, digital, and podcast platforms and invaluable cross-promotion to our partner, NBCU, showing the strength of our relationship with our listeners and validating the ability of our audio assets to drive off-platform behavior, too. Looking at the company as a whole, we remain focused on growth from expanding businesses and developing new consumer and revenue opportunities to the development of programmatic platforms that enable the automated buying, selling, and planning of our broadcast radio inventory, which allows us to participate in the growing and substantial digital and programmatic total addressable markets and our continued focus on expense management, driving efficiencies and structuring our business using technology, including AI, drives both short and long-term profitability.

Rich Bressler, President, COO and CFO

Thank you, Bob. As I take you through our results, you'll notice that our second quarter 2024 results were in line and in some cases, slightly above our revenue and adjusted EBITDA guidance ranges. Our Q2 2024 consolidated revenues were up 1% year-over-year, a little above the guidance we provided of approximately flat year-over-year. Our consolidated direct operating expenses increased 7.6% for the quarter. This increase was primarily driven by higher variable content costs related to the increase in digital revenues as well as an increase in event costs related to the timing of the 2024 iHeartRadio Music Awards, which was in the second quarter of 2024 and the first quarter of 2023, as mentioned in our last earnings call. Our consolidated SG&A expenses increased 9.6% for the quarter. The increase was driven primarily by higher noncash marketing expenses due to the timing of the iHeartRadio Music Awards as mentioned before, as well as the costs incurred in connection with executing on our cost savings initiatives, partially offset by lower bad debt expenses and lower bonus expenses. We generated second quarter GAAP operating loss of $909.7 million compared to a loss of $897.2 million in the prior year quarter. Included in our GAAP operating loss was the impact of a $920 million noncash intangible impairment related to our FCC licenses and goodwill. Our second quarter adjusted EBITDA was $150 million, within the guidance range we provided of $140 million to $160 million and compared to $191 million in the prior year quarter. 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 revenues were $286 million, up 9.5% year-over-year and they comprise 31% of our second quarter consolidated revenues. The Digital Audio Group's adjusted EBITDA was $92 million, up 8.6% year-over-year and our Q2 margins were 32.2%. Within the Digital Audio Group, our podcasting revenues of $105 million, which grew 8.1% year-over-year. We expect to resume double-digit revenue growth trajectory in the third quarter, the fourth quarter, and for the full year as well and our non-podcasting digital revenues of $181 million, which grew 10.3% year-over-year, reflecting the investments we have made in building out our more diversified digital capabilities. The Multiplatform Group's revenues were $576 million, down 3.4% year-over-year or down 4%, excluding the impact of political. Adjusted EBITDA was $104 million, down from $162 million in the prior year quarter, and the Multiplatform Group's adjusted EBITDA margins were 18.1%. Turning to the Audio & Media Services Group. Revenues were $70 million, up 6.5% year-over-year and adjusted EBITDA was $24 million, up 28.9% from $18 million in the prior year. Excluding the impact of political, the Audio & Media Services Group revenues were up 0.1%. As we've highlighted in our past calls, we remain focused on financing opportunities available to us including with respect to our debt maturities, the earliest of which is May 2026. We are engaged in active dialogue with a group holding more than a majority of our debt, and we look forward to sharing an update regarding our ongoing refinancing activities when appropriate. At quarter-end, we had approximately $4.85 billion of net debt outstanding, which was the lowest net debt position in the history of our company. Our total liquidity was $791 million at quarter-end, which includes a cash balance of $365 million. Our quarter-ending net debt to adjusted EBITDA ratio was 7.3x. And in 2024, we expect to make progress towards our goal of a net debt-to-adjusted EBITDA ratio of approximately 4x. In the second quarter, our free cash flow was $6 million compared to $34 million in the prior year quarter. As a reminder, our free cash flow typically builds throughout the year, and we expect to see significant sequential quarterly growth in our free cash flow in each of the remaining quarters in 2024. We also expect to generate robust political advertising this year. And as a reminder, that political revenue is paid upfront, which will help further fuel our free cash flow generation in Q3 and Q4. Turning now to our outlook for Q3 and the full year. We expect our Q3 2024 revenues to be up mid-single digits. We are still closing the books for the month of July, but expect revenues to be up low single digits. Turning to the individual segments for Q3. We expect the Digital Audio Group's revenue and our podcasting revenue to both be up low double digits. We expect the Multiplatform Group revenues to be down low single digits. We expect the Audio & Media Services Group's revenues to be up approximately 40%. We expect to generate third-quarter adjusted EBITDA in the range of $200 million to $220 million compared to $204 million in the prior year quarter. We expect our full year 2024 revenues to be up mid-single digits. Our full year 2024 political revenues are currently pacing approximately 20% higher than the last presidential election cycle and have sequentially improved from the up 16% we discussed in our Q1 call, which gives us confidence that this will be a record political year for us and that we will outperform the $167 million of political revenue we generated in 2020. We expect to generate full-year adjusted EBITDA in the range of $760 million to $800 million compared to $697 million in the prior year. Within that guidance range, our second half revenues will be up 8% to 11% year-over-year, and our adjusted EBITDA will be up 25% to 30% year-over-year. Turning to some of the items affecting our full-year free cash flow. We expect our cash taxes to be approximately 10% of adjusted EBITDA in 2024. Our estimate of full-year 2024 capital expenditures is now expected to be approximately $90 million. Cash restructuring expenses will be approximately $70 million this year as we continue to execute on new opportunities to optimize our organization for efficiency and growth. On behalf of our entire management team, Bob and I want to thank our team members who work to deliver for their communities, our advertising partners and for iHeart every day. Now we will turn it over to the operator to take your questions. Thank you.

Jim Goss, Analyst

What was the reason for the podcast gains to be so depressed in the latest quarter relative to the rest of digital? And why are you pretty confident that you can return to double-digit growth?

Rich Bressler, President, COO and CFO

Jim, it's Rich, thank you. When we mention depressed, we still experienced 8% revenue growth in podcasting. As Bob pointed out, two key points are worth noting: first, we faced a challenging comparison to last year. More importantly, we anticipate a return to double-digit revenue growth in podcasting for both Q3 and Q4, as well as for overall growth for the full year. In this quarter, we provided not only quarterly guidance but also guidance for the full year, indicating an expected total company revenue growth of 8% to 11% and a 25% EBITDA growth for the second half of the year. Some of this can be attributed to timing factors. Overall, the business remains very healthy, and we are optimistic as we move forward.

Bob Pittman, Chairman and CEO

Let me just talk a little specificity too, that when we talk about unusual comps, we have one that was prior year related to COVID vaccine. As you can imagine, there was no chance that was coming back for this year. So there's a few things like that, that we were up against in terms of comps, which we think are an absolute anomaly and don't reoccur in the year.

Jim Goss, Analyst

Okay. So it's more of a comp issue. So that's good to know. And in fact, just a little bit more on the evolution of the podcasting business in terms of content costs and ad demand. I think a lot more attention is being paid to it. I'm just wondering how you think these develop and where you think we are in the maturity cycle for that business? Is it still very early? Or are we getting a little more second or third inning? Where would you say we are in terms of the development of podcasting?

Bob Pittman, Chairman and CEO

Well, it's a great question. I think in terms of audience usage, if you follow the statistics not only are more people using podcasting, coming to podcasting, but they are spending more time with it. So you have two growth vectors, an increasing audience and increasing usage by the existing audience. And I don't see that abating anytime soon. As you know, that has surpassed the reach now of the streaming music services. And I think obviously a very positive sign. I think in terms of monetization, we're still in the early days of understanding how to monetize it, although I think we're making great progress on it. And I think the industry is as well. Advertisers have a great interest, a great desire in podcasting when we walk in the door to talk to advertisers, podcasting is usually top of their list of things they want to talk about. I think in terms of the economics of it, I think that's still working through the system, although I think it's getting better. I mean there was a time at which people were, in our opinion, paying uneconomic prices for the content of the podcasting. I think they've all pretty much acknowledged that, that didn't make money, and you're seeing company after company come out with statements saying they're pulling back and being more rational there. Again, that's usually the way industries go. When they start, there's sort of an exuberance and people think the normal loss of economics don't apply, they do. When they realize that, you see them beginning to normalize. I think we're sort of in the normalizing phase of that. We've had extraordinary discipline which is why we've been able to generate a nice healthy profit on podcasting almost since the beginning and it continues to be an important profit driver for us, not just a revenue driver.

Rich Bressler, President, COO and CFO

And Jim, to expand on what Bob mentioned, many industry experts project the U.S. advertising podcasting market to be around $2 billion, with estimates ranging between $1.8 billion and $2 billion. Looking ahead three, four, or five years, these projections vary widely, but they all indicate significant growth for the U.S. podcasting industry, whether it reaches $4 billion, $5 billion, or $6 billion. This growth is substantial. Additionally, we discussed the stage of the industry, and while I'm not the best with sports analogies, it's evident that major advertisers are starting to engage with podcasting, which is crucial because they contribute significant advertising dollars.

Bob Pittman, Chairman and CEO

I would also just add one final point, which we make often, but is probably worth repeating here is that we have chosen, since the beginning to play in the publisher segment of the podcasting industry, which is where we think profit lies. We have shied away from sales rep deals, although we have pieces of our company to do some sales reps for podcasting as part of other businesses. But as the focus of the company, we've been in the publishing sector and I think that is really the right place to be.

Jim Goss, Analyst

Okay. I have another question if that's alright. You mentioned some discussions regarding debt maturities, with the earliest ones coming up in May 2026. Besides extending maturities or refinancing, are there other options available, such as debt equity swaps or ATMs? I assume you want to address these matters well before the deadline. I'm curious if you could outline some of the broader implications, understanding that you may not be able to go into specifics.

Rich Bressler, President, COO and CFO

Yes, Jim. So thanks for the question. Look, no specifics, we’re not going to talk about any of the details, just to say we continue to be in active discussions with a group of debt holders across the company, obviously bound by confidentiality agreements. We remain incredibly focused on improving our capital structure, working with the market to improve our capital structure. And obviously, we’ll be back to you all, we have more to say on that.

Jessica Reif Ehrlich, Analyst

Obviously, the two most important topics have already been covered. So maybe moving on to other drivers. Can you maybe talk about where else you can find cost savings? You've kind of been going through efficiencies for the last couple of years. So just where else could you find something? And then secondly, in terms of revenue, you guys have talked about Programmatic. Can you talk about what the opportunity is and when we should start seeing a benefit?

Bob Pittman, Chairman and CEO

Sure. Let me address the first question about finding cost savings. We believe technology has opened up numerous opportunities for cost reductions by enhancing efficiency, a trend we've observed over the last several decades. Currently, we are experiencing one of the most significant technological advancements since the mid-90s when the Internet emerged as a productivity tool. I spend a considerable amount of time analyzing how we would structure our company if we were to start it today, considering our existing technology systems and organizational structure. We identify areas where there is a substantial gap between our current practices and those we would implement if starting anew. I am proud to lead a highly skilled and dedicated management team focused on improving efficiency, which not only reduces costs but also helps our employees perform their tasks more effectively, ultimately giving us a competitive edge. As you know, we've made significant investments in technology, particularly in upgrading our systems and developing platforms like Programmatic. This platform provides several advantages, including integrating our existing systems for serving ads, tracking inventory, billing, and more into a unified system. Whether using the platform directly or the traditional method of phone calls, users will engage with the same inventory system. Our investment in Jelli allows us to manage inventory from our broadcast radio stations similarly to our digital products. This platform enables us to connect broadcast inventory with key Demand-Side Platforms, or DSPs, enhancing our reach in the advertising market. We also believe we offer valuable benefits to advertisers, who are eager to engage with digitally focused platforms. Our robust reach and audience access set us apart, as broadcast radio can reach 90% of the American population, whereas the largest TV networks reach around 38%, and major cable networks reach less than 20%. Digital-only platforms like Spotify and Pandora only reach 20% and 16%, respectively. Advertisers looking to effectively connect with audiences find that broadcast radio provides unique access that they cannot achieve through other avenues. Therefore, we see a significant market need for our offerings and anticipate that this will benefit us as we continue to move forward.

Rich Bressler, President, COO and CFO

Just on just two quick things. Just one thing just back on the cost. Bob said, I think if you just go back over our history during not just taking advantage of technologies, but just in terms of just finding ways to be just more efficient in general, combining different operations, just we've got a pretty good track record of taking costs out. Whether there has been specifically announced cost programs or just the way we do this is as Bob said, we just really want to emphasize that in terms of the amount of cost we've taken out. And then the only thing I'm not in Programmatic is, to Bob's point is, look, we know the market is there already. You just look at the amount of dollars that are going through Programmatic and subsets of that on things like retail media networks, which is just over a subset of that. And we are actually allowed one DSP platform that called Magnite, again testing some proof of concepts out there. So we're actually live in the marketplace in a test. Yes, I think you have talked about this before in a test concept out there.

Bob Pittman, Chairman and CEO

And I would add one more thing on to Rich’s point, because I think he’s right on it just in terms of our own culture of cost. Since 2019, we’ve taken a substantial amount of cost out of the Multiplatform Group, I think it’s about 7%. And we have used those savings to fund our higher growth and new initiatives, so we constantly are looking at reallocation of resources, we don’t keep adding costs on top of cost.

Stephen Laszczyk, Analyst

Maybe two, if I could. Bob, on the ad market, could you maybe just talk a little bit more about what you're hearing from your advertising partners that gives you confidence in the back half outlook for improvement in Multiplatform? And then to the extent you see opportunity to see upside in that outlook, I'd be curious what verticals you think they could come from? And then just quickly on political. I think you called out your degree of confidence is increasing on the political side. What's driving that? And then, I guess, specifically in some of these battleground states, could you remind us what your footprint looks like and to the extent you have exposure, the sizing and magnitude of that?

Bob Pittman, Chairman and CEO

Certainly. In the advertising market, we're observing similar trends as major holding companies release their results. Companies are discussing their advertising spending, and there appears to be a sense of caution at the start of the year regarding expenditures. Last year, many shifted funds from mass market advertising to performance-driven strategies. However, there's a growing concern that this approach is losing effectiveness since the top of the funnel isn't adequately filled. Advertisers are now turning back to full funnel strategies and partners like us to expand their reach and connect with new audiences. They have discovered that incorporating our advertising with performance ads can enhance response rates, which is beneficial for those heavily invested in digital marketing who are seeking new customers. We believe this gives us a significant edge. This year, we anticipate a recovery in the advertising market, which typically leads economic trends. Last year saw a slowdown, but this year appears to be on the upswing without signs of decline. Our diverse advertiser base strengthens our position, with no single category exceeding 5% and no advertiser over 2% of our revenue. Opportunities seem to exist across various verticals, aside from COVID vaccine advertising. Most sectors are either actively seeking advertising or are planning for 2025. In terms of politics, our extensive reach is a significant advantage. With a vast number of Americans listen to us, we can effectively reach nearly every voter, which is crucial for political advertisers seeking to connect with audiences at all levels. Additionally, there are various initiatives that present further opportunities for us, particularly from political action committees investing significantly this year.

Rich Bressler, President, COO and CFO

By the way, if you just look at – just given some of the data. I mean, obviously, we also with the Fed last week and speculation of rate cuts probably saw the unemployment data today, which was pretty encouraging. And also, I think we referred to in our remarks that we’re actually pacing about 20% ahead this year. And just as a reminder, 2020 was the best presidential cycle, political year we had as a company, which was $157 million. And again, pacing is just an indication at a point in time, but we’re pacing 20% ahead this year. And the bulk of that is obviously the second half of the year. And look, I think we all read the same press out, there’s not going to be anything new in terms of the fundraising that’s happening on both sides, not just from a presidential election but on the Senate and the House and the down do the amount of money in. So it just seems to be an enormous amount of money that’s coming to the marketplace, coupled with what we said about the economy is our confidence in the second half of the year.

David Hamburger, Analyst

So could you unpack for us a little bit the trends and what's driving the growth in Digital ex podcast and then maybe you can help us understand better the complexion of the margin differential between the podcast business and the digital business broadly. You did mention how tight the podcast business is back to your broadcast radio business. So maybe you can help us understand better the complexion of the margins in the podcast business and how do you see those evolving?

Bob Pittman, Chairman and CEO

Well, let me start with the margin issue that I think in podcast as we said we're in the publisher side of the business, which has the much better margin. And being the publisher obviously, is a better margin business. In the rest of digital, we have some things like our own streaming service in which we have a very high margin because that's all of our products, but we also resell some of the products. And even including over-the-top, those are lower margins. So it's a mix of products there, and we try and manage that mix very carefully to maximize the margin for us. If a seller can get $1,000, where are you going to put it? Well, first thing you have to do is put it somewhere that's going to be really great for the client. But within that, we also want to manage the mix. So it's also good for our business, and we're also very cognizant of margin.

Rich Bressler, President, COO and CFO

Yes, expanding on that, David, if we consider our digital business excluding podcasting, which experienced a brief quarter, it should continue to showcase the growth we've discussed. Historically, we've anticipated that growth to illustrate the diversity of our digital offerings. While we emphasize podcasting, it’s important to note, as Bob mentioned, that we also have streaming, websites, and various social extensions. Notably, we have publicly stated that the EBITDA margins for these businesses range from 40% to 70%. Although we don’t disclose many details, it’s evident that the higher-margin businesses, including those related to publishing and podcasting where we retain most of the intellectual property, differ significantly from engagements with third parties that provide comprehensive solutions for clients. This latter approach typically yields lower margins. Regarding podcasting, I want to reiterate how strong this area is for us. We made a strategic choice years ago ensuring that every seller can market all of our products anytime and anywhere. With over 1,000 sellers in our company, they aren’t limited to just broadcasting or streaming; they can promote podcasting daily. There are currently around 3 million to 4 million podcasts in the U.S., and we host some of the best ones. There is immense potential for growth by integrating podcasting with our broadcasting capabilities. So to address your question about how we view podcasting and its integration into our overall business strategy, it is closely linked to the advantages of our other offerings.

Bob Pittman, Chairman and CEO

I would add one more thing, and you didn’t specifically ask this, but I think it’s an important part, inherent in your question. Is you’re also seeing, I think, in the performance of the digital group as a whole and certainly in the digital, even ex podcasting, is you’re beginning to see our platforms. We talked about the platforms we’re building out to try and get the broadcast radio onto the digital buying systems. Well, we’ve already got a lot of our digital onto the digital buying systems. And I think you’re beginning to see the impact of that in terms of the growth. And so if you sort of say, can you show me some early value of this investment you’ve made in Triton and Jelli and places like that, yes, look at the digital numbers, and we expect that to continue to grow in terms of importance, not only for our broadcast radio, but also for our digital as well.

Marlane Pereiro, Analyst

I wanted to discuss the adjusted EBITDA guidance for the full year, which is projected to be between $760 million and $800 million. Could you provide a detailed explanation of any one-time items that are affecting this guidance for the year?

Rich Bressler, President, COO and CFO

There are no one-time items affecting our guidance for the year. We provided full-year guidance, including Q3 guidance within that range. If you look at Q3, it may fall in the 205 range, even though we presented a range or you can choose any number you prefer. For Q4, it would likely be around 320 if you consider the midpoint of the overall consensus. I want to assure you of the confidence we have in these numbers. Most of our political revenue occurs in Q3 and Q4, and we’ve discussed our current pacing. When we last spoke at the end of Q1 earnings, our political pacing was up about 16% year-over-year, and now it is up about 20%. As Bob mentioned in his comments, we continue to see improvement from Q1 to Q2, which we expect to carry on through the rest of the year. Observing the current environment, particularly with the Fed and the unemployment data, does not diminish our confidence for the second half of the year.

Marlane Pereiro, Analyst

Got it. That's helpful. And then if we do think about the full-year number, excluding political, so if we take the high end, let's say, 800, we assume political is 170, although I realize you commented it was pacing 20% up. But just back of the envelope, those numbers imply roughly 630, so how should we think about like how much do you attribute that to crowd out? So for example, like how much of that political actually crowding out core advertising?

Rich Bressler, President, COO and CFO

Yes, I appreciate your question. Keep in mind that this is inventory. We didn't sell it to political entities as we would have if we were selling the inventory in a different manner. One of the significant advantages of the political category is that we anticipate a very strong year in free cash flow. Political is another category that Bob discusses. If you consider the category simply, the positive aspect is that we receive our cash upfront, which is unique to this category. However, you cannot separate it out in that manner.

Bob Pittman, Chairman and CEO

I believe that during political years, we see improved performance, which places additional pressure on inventory due to heightened demand. This is a category that occurs every other year, benefiting not just the political sector but also others.

Rich Bressler, President, COO and CFO

Just wanted to make sure there are no other questions. And if not, Bob and I and the entire management team, thank you all for taking the time to listen and focus on iHeart. And we are all available for questions following up Mike McGuinness and the rest of the guys. So thank you.

Operator, Operator

This concludes today's call. Thank you for your participation. You may now disconnect.