Good morning, and welcome to Townsquare Media's Third Quarter 2025 Conference Call. As a reminder, today's call is being recorded, and your participation implies consent to the recording. With that, I would like to introduce the first speaker for today's call, Claire Yenicay, Executive Vice President. Please go ahead.

Thank you, operator, and good morning to everyone. Thank you for joining us today for Townsquare's third quarter financial update. With me on the call today are Bill Wilson, our CEO, and Stuart Rosenstein, our CFO and Executive Vice President. Please note that during this call, we may make statements that provide information other than historical information, including statements relating to the company's future expectations, plans and prospects. These statements are considered forward-looking statements under the safe harbor provision of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from these statements. These statements reflect the company's beliefs based on current conditions, but are subject to certain risks and uncertainties, including those that are detailed in the company's annual report on Form 10-K filed with the SEC. During this call, we may discuss certain non-GAAP financial measures, including adjusted EBITDA. Such non-GAAP financial measures should be used in conjunction with all the information contained in the quarterly, year-end and current reports available on our website. I would also encourage all participants to go to our corporate website and download our investor presentation, as Bill will reference some of those slides during our discussion this morning. At this time, I would like to turn the call over to Bill Wilson.

Thank you, Claire, and thank you all for joining us today. It's great to reconnect with everyone. We are pleased to share with you this morning that Townsquare's third quarter results met the total net revenue and adjusted EBITDA guidance that we provided on our last call, reflecting our team's hard work in the current macroeconomic environment. Despite numerous headwinds that we have encountered, we are proud that the execution of our digital-first local media strategy has allowed us to deliver excellent results for our clients while also producing strong cash flow from operations due to the thoughtful and deliberate management of our expense base. In the third quarter, our guidance was that total net revenue would be $106.5 million to $108.5 million, and it finished right in line with $106.8 million. We also provided guidance that third quarter adjusted EBITDA would be between $22 million and $23 million, and it came in right at $22 million. Importantly, due to our strong expense management, adjusted EBITDA margins, excluding political, actually improved year-over-year despite ex political revenue declines. By now, it should be very clear that Townsquare has transformed from a legacy broadcast company into a digital-first local media company and that our digital platform and digital execution sets us apart from others in local media. In 2024, approximately 52% of our company's total net revenue and 50% of our total segment profit was generated from our digital solutions. In the first 9 months of 2025, our digital revenue grew 2% year-over-year. And as a result, our digital revenue expanded to a very significant 55% of our total net revenue, which as highlighted on Slide 11, is industry-leading at more than 2 times the industry average. Total digital segment profit increased 4% year-over-year in the first 9 months of the year with a strong profit margin of 26%, up slightly year-over-year, and digital's year-to-date contribution grew to 55% of our total segment profits. As we have consistently stated for many years, digital is and will continue to be Townsquare's growth engine and the area we focus the bulk of our investment capital going forward, consistent with our strategy of being a digital-first local media company, focusing on markets outside the top 50 in the United States and further differentiating us from others in local media. Let's first dive into the results of our 2 digital divisions, starting with Townsquare Ignite, our digital advertising business. In Q3, we're seeing 2 very different trends play out in our digital advertising business. Digital advertising related to our direct-to-client sales remains very healthy, including strong revenue growth. However, these gains are offset in the short-term by significant deterioration in online audience trends that have significantly impacted our indirect or also known as remnant revenue on both our local and national websites, which we discussed on our last call. In the third quarter, the negative indirect trends were enough to offset growth, leading to a slight overall digital advertising revenue decline of less than 2% year-over-year. Let's start with the positives before diving into and detailing the headwinds. First, our digital programmatic business, which makes up approximately 60% of our digital advertising segment revenue, continues to deliver strong results with high single-digit revenue growth in the third quarter. We believe that this part of our business has very strong organic growth opportunities, and we expect it will continue to be our primary growth driver going forward. As a reminder, our programmatic platform provides our customers with precise targeted solutions, giving them the ability to reach a high percentage of their potential customers across desktop, mobile, connected TV, email, paid search and social media platforms, utilizing display, video and native executions. We essentially act as a full-service digital agency for our clients. From providing campaign strategies, creative services to buying inventory, optimizing campaigns and providing real-time reporting and analytics and insights, providing a level of service that is often not available in the markets we operate. In addition, we are simply able to offer a more cost-effective campaign to our clients than most of our competitors, given our scale across our 74 market footprint, our first-party data and our in-house proprietary demand-side trading desk that is integrated with more than 15 advertising buying platforms with access to all major digital advertising exchanges and therefore, more than 250 billion impressions per day. Second, our third-party media partnership model, which is a component of this programmatic business has been progressing quite well since its beta launch in early 2024. This strategy will be a meaningful component of our digital advertising growth in future years, although in 2025, it's still small, adding approximately $6 million of revenue this year at approximately 20% profit margin. As a reminder, and as we've shared on previous calls, through this capital-light model, we partner with others in local media and handle all the major components of the digital advertising solution, including managing the creative, buying the inventory, optimizing the inventory and customer support of the digital campaigns, and importantly, effectively training our partner sales team to sell our solutions. Therefore, we can enter new markets to offer programmatic digital advertising solutions without having to acquire radio broadcast assets to do so, freeing up our capital for other purposes. I expect that in approximately 5 years, this division can grow to be at least $50 million in revenue for Townsquare and approximately a 20% profit margin. Ultimately, our goal with this division is to become the chosen provider of digital programmatic advertising to broadcasters and digital agencies in local markets outside of major cities. We are proud and honored to currently have 6 strong partners in this division, and we expect that number to grow in 2026 and beyond. And third, direct sales of our locally owned and operated digital properties, which includes locally sold advertising, aka traditional feet on the street selling our own inventory on our own 400 local websites and mobile apps was quite strong in both the third quarter and year-to-date periods, up approximately 10% year-over-year. Given the overall weak advertising environment, we're especially proud of the success of our local sales team and what they've been doing in driving direct sales growth, and we believe that they will continue to drive this growth going forward. Now to address the digital advertising headwinds that have been created from the emergence of AI and its subsequent impact on content creators and their corresponding online audience. As I'm sure you're aware, this is an industry-wide issue among web publishers of scale. For example, publishers including well-known names like Forbes, Daily Mail, Washington Post and CNN are seeing major drops in traffic to their websites. In fact, in August, 45 of the top 50 U.S. news websites experienced year-over-year declines in search traffic with the 4 publishers I just mentioned averaging declines in search traffic of over 40% year-over-year in July. As we detail on Slide 13, both our local and national websites are also experiencing meaningful declines in our search engine traffic, leading to declines in our overall digital inventory. This impacts our ability to monetize any remnant inventory unsold by our direct sales team, digital inventory that we have historically sold via programmatic bidding engines. Although a much smaller part of our digital advertising segment, the declines have been significant. For context, revenue from remnant inventory on our websites was approximately $20 million in 2024 and accounted for 13% of our digital advertising revenue. In the third quarter of this year, this revenue stream declined 50% year-over-year, going from $5 million in Q3 2024 to only $2.5 million in Q3 2025 and thus a decline of $2.5 million, which is very high-margin revenue and an acceleration from Q2's decline of approximately 25%, thus creating a drag on our performance and causing our digital advertising revenue to decline 2% year-over-year in the third quarter as opposed to the slight growth we originally expected when we last spoke. Important to highlight that excluding revenue from remnant inventory sold programmatically, Q3 digital advertising revenue would have increased 5% year-over-year. Unfortunately, we continue to see these search referral trends in Q4 and believe this headwind will exist through at least the first half of 2026 before remnant revenue stabilizes at a lower run rate. As a result, we expect Q4's digital advertising revenue to be again muted. And again, I'd like to emphasize that while it's a meaningful drag in the short term, it represents only a small portion of our business and the majority of our segment, including our programmatic business, which represents 60% of our digital advertising revenue continues to deliver very healthy revenue growth. Let's now turn to our second digital business, which is our subscription-based digital marketing solutions SaaS business, Townsquare Interactive. We are pleased to share that our fantastic profit performance has continued in the third quarter, and we again expect strong profit growth in the fourth quarter. In the first 9 months of 2025, segment profit has increased 19% year-over-year, an increase of $3 million. This is an excellent result as year-to-date profit margins expanded to 33% as opposed to the customary 28% profit margin we've delivered over the past few years. As we detailed on our last call, the increase in Townsquare Interactive's profit margin is largely due to 3 causes: number one, the restructuring of our customer service model in 2023 that allows us to grow more efficiently. Number two, changes to our sales structure late last year and early this year have led to both a smaller sales team, which is temporary, but very importantly, a more productive sales team. And finally, number three, the deployment of AI solutions to improve efficiency. Thus, we remain very confident that the changes we have made to both our customer service and sales models, along with the continued deployment of AI solutions are setting Townsquare Interactive up for the next decade of efficient and profitable growth and success. However, as I just mentioned and also highlighted on our last call, with a smaller sales team comes slower sales velocity and therefore, muted revenue performance in the short term. In the third quarter, Townsquare Interactive's revenue decreased approximately 2% year-over-year and was just in line with Q2's total revenue as expected and shared on our last call. We expect Q4 revenue at Townsquare Interactive to be roughly in line with Q3's $18.6 million, and we are confident that we will return to revenue growth during calendar year 2026 once we have reached previous sales staffing levels. In the meantime, we expect that strong profit growth will continue in Q4 and 2026 as we expect profit margins to remain above 30% in Q4 and above our historical levels next year. We look forward to sharing our strong full year profit results next quarter as we expect our profit performance at TSI in 2025 to be one of the best in the division's 12-year history. As you have heard me consistently state, I am very confident that Townsquare Interactive is on track and set up for long-term profitable growth and success, and I believe that 2025 expected profit performance is a great proof point of that. Turning to our third and final business segment, broadcast local radio. As you're all aware, we view local radio as an extremely valuable asset with significant cash flow properties, unparalleled consumer reach and an important local connection to our audience and our clients. However, radio is not a growth driver for Townsquare. And in the third quarter, broadcast advertising net revenue, excluding political, performed exactly as we telegraphed on our last call and declined 8% ex-political year-over-year, in line with our performance through the first half of the year. Despite broadcast revenue declines and macro headwinds, we have consistently outperformed the industry in 2025, gaining local and national broadcast market share according to Miller Kaplan estimates. With our differentiated local content on our local radio broadcast, combined with being able to offer clients marketing solutions powered by the combination of digital and radio, we believe that we will continue to gain broadcast and total market share across our market footprint while also generating a solid profit as we carefully manage expenses to maintain a strong broadcast profit margin. In fact, in Q3, our broadcast profit margin expanded significantly year-over-year when excluding political from 25% in Q3 2024 to 28% in Q3 2025. As we close out 2025, we expect to see digital advertising trends consistent with our Q3 performance with continued strength in programmatic and direct sales of our owned and operated 400-plus websites and mobile apps, offset by ongoing headwinds tied to the decline in search referral traffic. As I already noted, I expect Q4 revenue at Townsquare Interactive to be in line with Q3's revenue. We anticipate a slight improvement in ex-political performance in our Broadcast segment in Q4. Although on a total basis, we will see a large decline due to the significant political comp we had in Q4 of last year, coupled with lighter than forecasted fourth quarter political revenue this year. As a result of that, and as Stuart will share shortly, our full year revenue and adjusted EBITDA guidance will be revised. Importantly, our business model continues to generate strong cash flow from operations, which we have been applying towards organic investment in our business and debt paydown as well as rewarding our shareholders with current returns in the form of a dividend, which we will continue to do. And now I'll hand it over to Stuart to discuss our financial results and guidance in more detail.

Thank you, Bill, and good morning, everyone. It's great to speak to you today. We're very pleased to report that our third quarter results met our revenue and EBITDA guidance. Third quarter net revenue, excluding political, declined 4.5% year-over-year and 7.4% in total to net revenue of $106.8 million, within our guidance range of $106.5 million to $108.5 million. Third quarter adjusted EBITDA, excluding political, declined 2.1% year-over-year and 13.6% in total to $22 million, which was also within our guidance range of $22 million to $23 million. I would like to highlight that when excluding the political impact in 2024 and 2025, adjusted EBITDA margins expanded slightly from 20% in the third quarter of 2024 to 20.5% in the third quarter of 2025 as we thoughtfully managed our expense base. Townsquare Ignite, our digital advertising segment, experienced slight revenue declines in the third quarter as accelerated weakness in remnant indirect digital advertising revenue offset continued growth in the direct sales of our programmatic offering and our owned and operated digital portfolio. In total, third quarter digital advertising revenue declined 1.6% year-over-year. Third quarter digital advertising segment profit margins were impacted by the same forces and as a result, margins contracted year-over-year to 21.5%. As expected and we previously projected, Townsquare Interactive, our subscription Digital Marketing Solutions segment's third quarter net revenue decreased 2.3% year-over-year. We are thrilled to share that as expected and consistent with performance all year, Townsquare Interactive delivered another quarter of very strong profit growth with Q3 segment profit increasing 21% year-over-year with segment profit growth of approximately $1.1 million. Segment profit margins were very strong at 33% in Q3 2025. And for the full year, we expect Townsquare Interactive's profit margin to remain above 30%. In 2025, we are very confident in our expectation that we will deliver strong profit growth for our Townsquare Interactive business, which is very beneficial after the profit losses in 2023 and 2024. Q3 broadcast advertising net revenue decreased in line with our expectations, which was similar to declines in the first half of the year on an ex-political basis. In the third quarter, broadcast revenue declined 8.1%, excluding political and 13.8% in total, each as compared to the prior year. Importantly, broadcast segment profit margins meaningfully increased year-over-year when excluding political from 25% in the third quarter of 2024 to 28% in the third quarter of this year. We're very proud of how our team is working diligently to manage our broadcast expense base in the face of revenue declines. Our third quarter net loss was $5.5 million or $0.36 per diluted share. In the first 9 months of the year, net loss improved $31 million year-over-year, primarily due to the reduction in non-cash impairment charges in 2025. We'd like to remind you that any benefit or provision for income taxes included on the face of the income statement is for GAAP financial statement purposes only. We maintain significant tax attributes, including approximately $96 million of federal NOL carryforwards and other substantial tax shields related to the tax amortization of our intangible assets. We continue to believe that we will not be a material cash taxpayer until approximately the year 2028. As Bill highlighted, and I would again like to emphasize, we consistently have strong cash flow generation. We generated $18 million of cash flow from operations in the first 9 months of 2025. Cash flow from operations before cash interest payments was $59 million and was 5% or $3 million higher than the previous year. In the third quarter, we repaid $9 million of our term loan, including $6 million, which we purchased at a discount in the open market and our second amortization payment of $2.9 million. Since the February refinancing, we have reduced our outstanding debt by $17 million as of the end of the third quarter. In addition, our cash this year has been used to fund $41 million of interest payments, $10 million of dividend payments and $28 million of fees associated with our February refinancing. With $463 million of total debt outstanding and $3 million of cash on hand at September 30, our net leverage is 4.71x. And I'd like to highlight that since our term loan is a floating rate instrument, the 2 recent interest rate cuts totaling 50 basis points translates to roughly $2.3 million of annualized interest reduction based on the current debt balances. As always, our number one priority is to invest in our local business through organic internal investments that support our revenue and profit growth, particularly our digital growth engine. We plan to continue to invest in our digital product technology, sales, content and support teams, specifically in our Townsquare Interactive and Townsquare Ignite businesses to maintain our strong competitive advantage in these markets outside the top 50 cities. In addition, we plan to use our excess cash flow to reduce our debt through both mandatory and voluntary debt repayments and, of course, support our high-yielding dividend. Our Board has approved our next quarterly dividend payable on February 2 to shareholders of record as of January 26. The dividend of $0.20 per share equates to $0.80 per share on an annualized basis and implies an annual payment of approximately $13 million based on our current share count and a dividend yield of approximately 13% based on our current share price. For our full year outlook, due to much steeper-than-expected declines in our search engine traffic and its related indirect revenue, coupled with much lower-than-forecasted political revenue, we expect that our net revenue will come in lighter than previously expected. As these are both very high-margin revenue streams, this also impacts our adjusted EBITDA guidance, but due to our strong expense management to a much lesser degree. Specifically, for the fourth quarter, we expect net revenue to be between $105 million and $109 million. We expect fourth quarter adjusted EBITDA to be between $21.5 million and $23.5 million. As a reminder, in the fourth quarter of 2024, we generated $7.2 million of political revenue versus our current forecast of less than $1 million of political revenue in the fourth quarter of 2025. This guidance implies that Townsquare's 2025 full year revenue will be between $426 million and $430 million, with political revenue of less than $2 million as compared to $3 million we generated in 2023, the last non-political year. We expect full year adjusted EBITDA will be between $88 million and $90 million. And with that, I will now turn the call back over to Bill.

Thank you, Stuart, and thanks to everyone for taking the time to be updated on Townsquare's Q3 results this morning. We greatly appreciate it. I'd like to close today's call by emphasizing our confidence in our digital-first local media strategy and the long-term profitable growth potential of our digital platform. Direct digital advertising sales remain strong, and Townsquare Interactive is driving incredible profit growth in 2025 with margins north of 30%. Our mature cash cow broadcast advertising platform continues to generate a solid profit, and Q3 ex-political broadcast profit margins are actually up year-over-year due to solid expense management. We continue to generate strong cash flow. And after refinancing our debt in February, which extended our maturity profile to 2030, we have already reduced our outstanding term loan by $17 million through September, all while maintaining our high-yielding dividend, delivering attractive current returns to our shareholders. Most importantly, we are confident in our ability to build shareholder value for our investors through long-term net revenue, profit and cash flow growth, net leverage reduction and future dividend payments. As always, we wouldn't have the confidence in our long-term success without the Townsquare team's effort, passion and commitment that is directly driving our growth and innovation each day. I could not be more appreciative of our team and their tremendous work. With that, operator, at this time, please open the line for any and all questions.

Our first question comes from Michael Kupinski with NOBLE Capital Markets.

Just a couple of questions here. First, I want to start on the broadcasting side. I see that, obviously, we see core advertising kind of decline. And typically, in an off-election year, we would kind of get the core advertising up because of the displacement from political. And we should just see continued deterioration there, of course, secular headwinds. I get that. I was just wondering if and when do you think we'll see some stabilization on core advertising there? And I know it's not a main focus for you, but I was just wondering what do you think will take to see at least some stabilization on the core advertising front?

Thank you, Michael. It's always great to hear from you. As you mentioned, there is a long-term decline currently in broadcast radio, similar to what we're seeing in broadcast television. Based on information we've gathered from publicly reported companies, the industry is down by low double digits year-to-date. As we indicated in our earlier call, Q3 results showed an 8% decline excluding political ad revenues, which aligns with Q1 and Q2 performance. We've also observed that Q4 is showing slight improvement in this area, up by about 1 to 1.5 points, although the change isn't significant. It’s worth mentioning that our broadcast profit margin has improved year-over-year, increasing to 28% in Q3 this year from 25% in Q3 2024, representing a 3-basis point gain. We see digital as our primary growth driver and acknowledge that our beloved broadcast business, which plays a crucial role in our digital success, remains a traditional cash cow, but is not our growth engine. Additionally, we are proud that our local sales team has been gaining market share. According to Miller Kaplan, we are taking local spot share from competitors in the 74 markets where we operate and also increasing our total spot share. In a declining market, we are performing better than the industry, evidenced by our negative 8% compared to the industry's negative 11%. Addressing your question about stabilization, we see some small improvements in Q4. However, the macro environment in 2025 has posed significant challenges due to various uncertainties, including the recent government shutdown and interest rate fluctuations, which affected both our digital and broadcast advertising. Assuming a swift resolution to the government situation, my expectation for 2026 is that the current negative 8% will improve to low to mid-single digits. To be conservative, I would project mid-single digits for broadcast in 2026. Looking ahead to 2027 and beyond, specifically excluding political factors since next year will entail substantial political advertising, we anticipate being in the low single digits. Thus, for core radio, I expect negative mid-single digits in 2026 and then negative low single digits in 2027 and 2028. I'll pass it back to you for any other questions or follow-ups.

You've been able to maintain some pretty impressive margins. Is there much to cut there? I mean, given that you have these pretty high margins, I mean, it's surprising that given the type of revenue declines that you had in core advertising, you still maintain some pretty healthy margins.

We appreciate you noting that, and we agree. And Stuart and his team as well as many others have done a great job. Quite honestly, the short answer is yes, we have a lot of opportunity. We talked about this on a couple of calls, but we're currently continuing to deploy AI solutions throughout our company that are providing efficiency as well as increased productivity. So, we're very proud of the fact that if you look at our broadcast profit margins ex-political, they're up and quite healthy, as you noted. And we are quite confident we'll be able to maintain that. We're profit margins up, as I just noted, to 28%, 3 basis points up from 25% in Q3 '25 on a decline of negative 8% ex-political is quite great work that our team has done, and I'm quite proud of. We will be able to continue to do that and take out expenses in line with wherever the revenue comes in. And I think we've proven that over the last several years, and we'll do the same moving forward. I'll turn it back to you, Michael.

Indicated that they have had some government-related advertising in Q4, like Medicare enrollment, things like that. Did you have any type of government-related shutdown advertising impact?

Are you saying you've heard from others that they've received additional purchases? Yes, we have not observed that. We have not noticed any additional purchases related to the government shutdown. We have experienced some weakness in that area when speaking with our local customers. National remains a significant challenge for us. It's a minor portion of our business, less than 10% of our broadcast business. But to put it simply, we have not experienced any positive effects or additional purchases connected to the government shutdown or Medicare or anything related to that.

Yes. No, I was actually told that they were experiencing an impact from advertisers.

Yes, we have seen that. We've observed canceled orders and similar issues throughout the year due to the cutbacks in health services. So yes, to answer your question, we have seen a negative impact. I apologize for initially misunderstanding. The answer is yes.

And then final question, I don't want to take up too much time. A part of the attraction of the new office in Phoenix was in your Interactive segment was to focus on the West Coast expansion. I was just wondering if you could talk a little bit about your Interactive business on the west of the Mississippi. What were your goals on milestones? Could you just talk a little bit about your thoughts on how that office is kind of progressing?

I am very pleased with the development of the Phoenix office and our Townsquare Interactive SaaS-based subscription division. To start, the main reason for opening the Phoenix office was to expand our talent pool, which has proven successful in attracting sales talent. Following the hiring of sales representatives, we also added customer support personnel and subject matter experts skilled in design, CRM, and digital marketing for our Townsquare Interactive clients. This office is meeting our expectations, and I am quite satisfied with its performance. Looking at Townsquare Interactive overall, I am very proud of how the division has been performing. In the third quarter, we achieved a 21% increase in profit, and year-to-date through September, we have seen a 19% profit growth, totaling over $3 million in incremental profit in the first nine months of the year. I mentioned in our last call that I anticipate this will be the best year for profit growth in the division's history. The profit margin has seen an increase, which is noteworthy; you may recall that our Townsquare Interactive profit margin typically hovers around 28%. However, due to our new service model, which I have discussed in detail in previous calls, along with the integration of AI solutions and a new sales approach that allows for greater revenue per salesperson, the profit margin has risen to 33% year-to-date. We expect this trend to continue into the fourth quarter. While revenue has remained relatively stagnant, as I highlighted in our last call, we have significantly reduced our sales force by over 40%. Despite this, the profitability of our remaining sales representatives, as well as those we plan to bring on board in the future, is considerably higher. This has led to impressive profit growth despite stagnant revenue. Looking ahead to 2026, we expect revenue growth to resume as we add more sales personnel and return to previous levels. We are confident we can maintain a profit margin of over 30% while actively hiring our sales team. To summarize, after experiencing a decline of approximately $5 million in profit between 2023 and 2024, we are now on track to add back about $3.5 million in incremental profit in 2025. This reinforces the inherent strength of the division and our confidence in the future of Townsquare Interactive. This progress includes our operations in Phoenix. Now, I will turn it back to you, Michael, unless you have any follow-up questions.

And the next question comes from the line of Patrick Sholl with Barrington Research.

Yes, you mostly answered my question regarding long-term profitability expectations for Interactive. Do you anticipate maintaining the low to mid-30s range going forward, or is there potential for expansion? Also, what is your timeframe for potential margin expansion in Interactive?

Yes, it's good to hear from you, Patrick. Thank you for the questions, as always. I expect us to maintain low 30% margins over the next couple of years, especially with our aggressive investments. We aim to rebuild the sales team, as we experienced a loss of over 40%. This decision has proven beneficial, as reflected in our profit growth. In the short term, I anticipate our profit margins will remain around 32% to 33%. However, I believe there is potential for margin expansion looking toward late 2027, 2028, and 2029. This presents a significant opportunity as we focus on enhancing our service model and scaling our sales team efficiently, while also prioritizing excellent customer service. Thus, I expect to remain within this profit margin range for the next 18 to 24 months, which represents a substantial improvement compared to the past several years, with opportunities for margins to expand beyond that. I'll turn it back to you, Patrick.

And then on Ignite, I think I heard you say that excluding the programmatic headwinds, it was up mid-single digits in Q3. If I have that wrong, please correct me. Could you talk about the different trends between your own markets and the third-party markets? Additionally, what are the different macro trends in that area compared to any specific category issues?

No, great question. I'm happy you brought that up, as I was planning to address it in my closing remarks if no one else did. Your observation is spot on. Excluding the remnant drag from indirect sales, our digital advertising increased by 5% in Q3 compared to a reported decline of 1.7%. This 5% also reflects areas like online and streaming radio, which are not high-growth zones for us. To break this down for everyone, our Ignite division, which handles our digital advertising, comprises 60% from programmatic sales and 40% from owned and operated platforms. I'm really proud of our Townsquare team, as our owned and operated digital advertising grew by 10% in Q3 and also increased by 10% year-to-date. Meanwhile, our programmatic revenue, which makes up the other 60%, saw high-single-digit growth in Q3. The bigger question is regarding our indirect sales. This refers to unsold inventory made available for real-time bidding exchanges, and we saw positive results due to our large digital audience. However, audience trends have been negatively impacted by shifts in AI usage, resulting in a 40% average decline in search traffic for web publishers like us. For Townsquare, we expect our remnant revenue for 2024 to be $20 million, which is a high-margin figure. However, we believe this will drop by $7.5 million to about $12.5 million in 2025. In the first half of 2025, this decline was just over $2 million, but in Q3 alone, we saw a $2.5 million decrease, marking a 50% year-over-year drop. We anticipate Q4 may worsen slightly. Overall, this remnant decline is a major factor driving our adjustments to our revenue and profit guidance, which has now reduced by 2% to 4%. We didn't expect this $5.5 million decline, particularly since remnant revenue has a very high profit margin. Additionally, while we initially anticipated over $3 million in political revenue, we are now expecting under $2 million. Although political advertising is generally strong, it didn't align with our market this time around. Looking ahead to 2026, we're optimistic about the political landscape. To summarize, without the remnant issues, Q3 digital advertising would have been up by 5%, with our owned and operated business increasing by 10%, and programmatic, which is 60% of our digital revenue, showing strong performance with high-single-digit growth. We believe indirect remnant will stabilize in the latter half of 2026, setting us up for significant growth opportunities in Ignite and our core broadcast business. Overall, it's a detailed answer, but I appreciate the opportunity to clarify these dynamics. I'm ready for any follow-ups or additional questions.

So, regarding the digital media partnerships, I believe you mentioned an expectation of $6 million for the year. I was curious how much of that was generated in Q3 and what it suggests about your own digital selling efforts in the market.

Our digital selling efforts are showing promising results, with our owned and operated channels up by 10% in Q3, independent of media partnerships. Programmatic sales increased by high-single digits. If we exclude media partnerships, the growth remains in high-single digits, but it would be about 1.5 points lower than the overall figure. We are pleased with our six current partners, who also express satisfaction with our collaboration. As previously discussed, we are proceeding cautiously, treating this as if we are acquiring a new market, which involves thorough training for both our sales team and our partners' sales teams. This approach has proven beneficial, as evidenced by the increase in their performance compared to previous associations. They switched to us due to our strong capabilities and are experiencing growth in their revenue and profits. Looking ahead, we anticipate growth for this division, projecting it will grow from $6 million this year to potentially $50 million over the next five years, with significant growth expected in 2026. While we expect to maintain high-single-digit growth in programmatic, this figure would be reduced by about 1.5 points or just over 1 point when accounting for media partnerships.

And we have no further questions at this time. I would like to turn it back to Bill Wilson for closing remarks.

Thank you, operator, and thank you all for joining us this morning to hear about not only our Q3 results, but probably more importantly, what we expect for the rest of the year and even more telling is what we expect in 2026 to be a great year for Townsquare. So, we look forward to updating you again. It's going to be a little bit of time for our year-end report. But if anybody has any questions, as always, please reach out at any time we're available to you, and I hope you have a great day.

And that concludes today's conference call. Thank you all for joining. You may now disconnect.