CUMULUS MEDIA INC (CMLS)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 revenue declined 1.2% year-over-year to $218.6M while Adjusted EBITDA increased 9.8% to $25.0M, aided by ~$10.1M of political revenue; underlying ex-political EBITDA fell to $15.9M from $21.4M, reflecting continued broadcast softness .
• GAAP results were dominated by a non-cash intangible impairment of $224.5M, driving a GAAP net loss of $231.1M in Q4 and $283.3M for FY 2024; management emphasized these impairment charges were primarily FCC-related .
• Digital momentum remains the bright spot: Digital Marketing Services (DMS) grew 23% in Q4 and 27% for FY; management said DMS is “pacing up 30% in Q1,” positioning it to offset macro headwinds .
• Cost actions are material: ~$35M of annualized fixed cost reductions executed in Q4 (on top of prior reductions) and ~$43M annualized from 2024 actions overall; $28M of the Q4 actions benefit 2025, improving operating leverage into a non-political year .
• 2025 setup: Q1 revenue pacing down mid-single digits (down low-single digits ex-political and ex-Daily Wire); podcast headwinds include the loss of Daily Wire (−$4M Q1; −$15M FY) and Dan Bongino’s temporary departure (≈−$15M from Q2 through year-end) .

What Went Well and What Went Wrong

• What Went Well

  • DMS growth and KPIs: DMS revenue grew 23% in Q4; for Q4 KPIs, customer count +18% and average digital order size +11%; management: “we doubled down on investing in growth areas, particularly in our digital marketing services business, which is pacing up 30% in Q1” .
  • Cost discipline: ~$35M annualized fixed cost reductions executed in Q4; $43M annualized in 2024 actions; net debt fell to $578.3M at year-end from $595.1M in 2023 .
  • Sports-led monetization: Robust advertiser interest in live sports; NFL partnership drove all-time highs for Super Bowl revenue, with continued strength into the next Super Bowl cycle .

• What Went Wrong

  • Broadcast softness widened: National headwinds broadened to local by year-end; automotive, mortgage-related, and jobs categories were weak, citing rates, tariffs, and macro uncertainty .
  • Underlying EBITDA deteriorated ex-political: Q4 political revenue was $10.1M; ex-political Adj. EBITDA declined to $15.9M from $21.4M YoY, underscoring core softness despite cost cuts .
  • Podcast revenue headwinds: Daily Wire transition completed by year-end (≈−$4M Q1 2025; ≈−$15M FY) and Dan Bongino’s temporary departure (≈−$15M impact from Q2–Q4 2025) add pressure to digital growth balancing .

Financial Results

Headline results by quarter (oldest → newest):

Note: S&P Global consensus estimates were unavailable at run-time due to API limits; we will update when accessible.

Q4 segment revenue mix vs prior year:

Selected KPIs and balance sheet:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Strategic focus: “We doubled down on investing in growth areas, particularly in our digital marketing services business, which is pacing up 30% in Q1… and we drove additional cost efficiencies with 2024 actions that will result in $43 million of annualized fixed cost savings” .
• Long-term optionality: “Our 2024 refinancing efforts provided us with the time needed… to create new revenue streams and build additional long-term value” .
• On DMS advantage: “Over half of our DMS customers are digital-only… our ability to deliver outcomes… outperform the industry benchmarks by an average of 25%” .
• Macro headwinds: “Underlying trends… are continuing in Q1 with broadcast demand weakness, reflecting ongoing concerns about inflation, higher than previously expected interest rates, the potential impact of tariffs and deteriorating consumer sentiment” .
• Capital allocation: “Our capital allocation focus will remain on reducing net debt… we have a prudent track record… net debt reductions of more than 40% since 2019” .

Q&A Highlights

• Network/Westwood One pruning: Management is continuously rightsizing content relative to revenue/EBITDA opportunity; sports (NFL, NCAA) provides a buffer amid national weakness .
• Category color: Weakness in auto, mortgage-related, and jobs; some resilience in financial services (auto insurance). Local pullback seen as broad-based, not radio-specific; advertisers cite tariffs and macro uncertainty .
• DMS economics: Unit contribution margins ≈35%; investments mainly in sales and fulfillment with immediate ROI; insourcing slightly boosts margins over time .
• Non-core monetization: Land in Nashville and other assets could support debt reduction; prior FM stick sales in 2023 had zero EBITDA loss .
• Debt approach: 2026 maturities (~$24M) manageable with liquidity; evaluating repurchases across stack over time, mindful of 2025 non-political EBITDA profile .
• Deregulation: Company supportive; could catalyze deals and new entrants; optionality high though timing uncertain .

Estimates Context

• S&P Global consensus (EPS, revenue, EBITDA) for Q4 2024 and prior quarters was unavailable at run-time due to data limits. As a result, we cannot provide “vs. consensus” comparisons in this recap; we will update when S&P Global data are accessible.

Key Takeaways for Investors

• Core demand remains soft, but DMS is scaling with improving KPIs and Q1 pacing +30%; this is the primary offset to broadcast ad weakness and a key medium-term growth engine .
• Expect a non-political year adjustment in 2025; however ~$28M of incremental fixed-cost savings flowing through should cushion EBITDA and improve operating leverage .
• Near-term digital headwinds from Daily Wire and Bongino (~$30M combined 2025 revenue impact) raise the bar for DMS and other podcasting to backfill; monitor new content partnerships and video expansion .
• Sports remains a differentiated monetization lever (NFL/NCAA), providing relative resilience in network revenue and marquee event revenue (Super Bowl) .
• Balance sheet risk moderated by 2024 refinancing to 2029 and liquidity; management prioritizes debt reduction and selective asset monetization (e.g., land) .
• Watch macro catalysts (rates, inflation trajectory, tariff clarity) for a potential turn in auto/mortgage-sensitive categories and small-business sentiment .
• Regulatory shifts (ownership cap changes) could unlock strategic alternatives (swaps, consolidation), enhancing long-term optionality .

Appendix: Additional Sources (Q-2 and Q-1 context)

• Q3 2024 results: revenue $203.6M, Adj. EBITDA $24.1M; digital revenue +7.5% YoY; network +5.5% on sports .
• Q2 2024 results: revenue $204.8M, Adj. EBITDA $25.2M; DMS +24% YoY; exchange extended maturities to 2029; ABL upsized to $125M .