Sign in

You're signed outSign in or to get full access.

EC

ENTRAVISION COMMUNICATIONS CORP (EVC)·Q2 2024 Earnings Summary

Executive Summary

  • Q2 2024 continuing operations delivered net revenue of $82.654M (+12% YoY) and consolidated EBITDA of $10.470M, returning to positive continuing net income of $3.732M; free cash flow rose to $15.702M from $2.288M in Q2 2023 .
  • Strategic transformation completed: sale of Entravision Global Partners (EGP) closed June 28; EGP results reported as discontinued operations, driving a headline net loss attributable to common shareholders of $(31.680)M for Q2 due to disposal losses and impairment charges recognized in H1 .
  • Segment mix improving: Digital (Smadex, Adwake) grew 36% YoY to $41.068M with operating margin of 6%; Television declined 5% YoY as news expansion pressured margins to 11%; Audio down 4% YoY but margins improved to 15% .
  • Board declared a $0.05 dividend ($4.5M) payable Sept 30; leverage at 3.0x under credit agreement (net of $50M cash) and 2.2x net of total cash and marketable securities as of June 30 .
  • SPGI Wall Street consensus estimates were unavailable; estimate comparison omitted. Values from company documents only; no S&P Global estimates could be retrieved.

What Went Well and What Went Wrong

What Went Well

  • Digital growth and margin improvement: Digital revenue +36% YoY to $41.068M; operating margin 6% (vs -1% in Q2’23) driven by Smadex and Adwake performance .
  • Strong cash generation: Operating cash flow $17.696M (+70% YoY) and free cash flow $15.702M (+586% YoY) supported liquidity while paying down debt .
  • Political advertising setup: Expanded local news (70 hires; 280+ hours/week) positioning to capture election-year political demand; “We now have morning, midday, early evening and late news in all of our markets...” (CEO) .

What Went Wrong

  • Discontinued operations loss: EGP disposal and related charges produced Q2 discontinued ops net loss of $(35.412)M and $(80.570)M net loss YTD attributable to common shareholders .
  • Television revenue/margins compression: TV revenue down 5% YoY; operating margin fell to 11% from 25% due to news expansion costs and lower spectrum/retransmission revenue .
  • Segment headwinds: Audio revenue -4% YoY amid softer ad demand; broader structural audience shifts toward streaming/podcasts continue to pressure traditional media .

Financial Results

MetricQ2 2023Q1 2024Q2 2024
Net Revenue – Continuing ($USD Millions)$73.719 $78.176 (calc from $160.830 H1 - $82.654 Q2) $82.654
Net Income – Continuing ($USD Millions)$(5.826) $(7.510) (calc from H1 $(3.778)$ minus Q2 $3.732) $3.732
Consolidated EBITDA ($USD Millions)$14.213 $4.530 $10.470
EBITDA Margin (%)19.3% (14.213/73.719) 5.8% (4.530/78.176) 12.7% (10.470/82.654)
Free Cash Flow ($USD Millions)$2.288 $30.632 (33.375 OCF - 2.743 Capex) $15.702
EPS – Continuing (Basic & Diluted)$(0.07) n/a (not disclosed separately)$0.04

Notes: EBITDA Margin is calculated from cited values. Q1 continuing net revenue and net income are derived from H1 minus Q2 figures in the same filing.

Segment Breakdown (Continuing operations)

Segment Net Revenue ($USD Millions)Q2 2023Q1 2024Q2 2024
Digital$30.234 $38.222 (79.290 H1 - 41.068 Q2) $41.068
Television$29.943 $28.549 $28.577
Audio$13.542 $11.405 $13.009
Total$73.719 $78.176 (sum of Q1 segments) $82.654

Segment Operating Margin (%)

SegmentQ2 2023Q1 2024Q2 2024
Digital-1% (commentary) 1% (2.339/237.491 incl. discontinued; CFO stated 1%) 6% (commentary)
Television25% 9% 11%
Audio12% -2% 15%

KPIs and Balance Sheet Highlights (as of/for Q2 2024)

KPIValue
Cash and Marketable Securities$88.3M
Total Debt (credit agreement definition)$187.8M
Leverage Ratio (net of $50M cash)3.0x
Leverage Ratio (net of total cash & marketable securities)2.2x
Operating Cash Flow (Q2)$17.696M
Capital Expenditures (Q2)$1.994M
Dividend Declared$0.05/share; $4.5M aggregate

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Capital ExpendituresFY 2024≈$6M (Q1 call) ≈$7M (Q2 call) Raised
DividendQ3 2024$0.05/share (Q1 board approval) $0.05/share payable Sept 30 (Q2 PR) Maintained
Digital Revenue PacingQ3 2024n/a+17% vs Q3’23 pacing (commentary) New color
Television Revenue PacingQ3 2024n/a+9% vs Q3’23 pacing (commentary) New color
Audio Revenue PacingQ3 2024n/aFlat vs Q3’23 pacing (commentary) New color

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2023 8-K and Q1 2024)Current Period (Q2 2024)Trend
Digital portfolio transformationMeta ASP wind-down disclosed; dependence noted EGP sold; discontinued ops; focus on Smadex & Adwake Strategic refocus; de-risking
Political advertising & news expansionNews expansion to capture election-year revenue began; 70 hires Full rollout; morning/midday/evening/weekend news across markets Execution progress
Smadex/Adwake performance & technologySmadex building AI capabilities; returned to industry growth rates Both units growing faster than industry and profitable Strengthening
Leverage & liquidityPrepaid $10M in Q1; liquidity strong Further $10M prepayment in Q2; leverage at 3.0x/2.2x Deleveraging
NFL partnershipn/a3-year extension of Spanish-language audio partnership (press release) Content differentiation

Management Commentary

  • “We completed the transformation... to divest our digital platform representation business to Aleph Group... We now have the opportunity to focus on our core U.S. media business at a critical time...” – CEO Michael Christenson .
  • “Digital revenue was $41.1M, up 36% YoY... operating margin 6% vs -1%... driven by Smadex and Adwake” – CFO Mark Boelke .
  • “We now provide news in the morning, midday, early evening and late news in all of our markets... 280 hours per week of local news” – CEO/CFO .
  • “Cash and marketable securities as of June 30 totaled $88.3M... leverage ratio 3.0x under our credit agreement; 2.2x net of total cash” – CFO .

Q&A Highlights

  • The call consisted of prepared remarks without a published Q&A section; pacing and capital allocation commentary provided by management .
  • Clarifications included segment pacing for Q3 and full-year capex expectations .

Estimates Context

  • Wall Street consensus estimates (S&P Global) were unavailable due to data access limits at the time of retrieval; no EPS/revenue estimate comparison is provided. Results are anchored on company filings and press releases .
  • Given the transformation (EGP discontinued), forward estimates likely need meaningful revision to reflect the new continuing-operations base.

Key Takeaways for Investors

  • Continuing operations stabilized with YoY revenue growth and positive net income; EBITDA margin improved sequentially as digital margins normalized post-ASP exit .
  • Strategic refocus on U.S. media and adtech (Smadex/Adwake) simplifies the story and may reduce volatility; watch pacing-to-actual conversion in Q3-Q4 political windows .
  • Television margins are structurally lower near term due to news investments but should leverage high-value political inventory; monitor retransmission and spectrum revenue trends .
  • Strong liquidity and active deleveraging (two $10M prepayments YTD) support dividend continuity; leverage covenant headroom appears adequate at current EBITDA levels .
  • Free cash flow inflecting positively (Q2 and H1) improves capital flexibility despite discontinued ops charges; sustained OCF is a key metric into the election cycle .
  • Near-term stock drivers: confirmation of Q3 pacing into realized political spend, continued digital growth/margins at Smadex/Adwake, and evidence of television rating gains monetizing into core ads .

Sources: Q2 2024 press release and 8-K , Q2 2024 10-Q , Q2 2024 earnings call transcript , June 14 sale announcement , July 1 Aleph completion , Q1 2024 10-Q and call .