SaaS Offering Impact on TSI
Q: How does the new SaaS offering affect TSI's subscriptions, ARPU, and margins?
A: Bill Wilson explained that the new SaaS-based business management platform has reinvigorated Townsquare Interactive (TSI). After five quarters of subscriber losses totaling over 7,350, they grew subscribers by 275 in Q2 and expect more growth in Q3 [1]. Revenue growth has resumed month-over-month, and profits jumped in Q2 over Q1 [1]. They are investing aggressively in the SaaS product, which bundles services like CRM, email and text marketing, appointment scheduling, and payment invoicing [1]. Despite investments causing profits to dip back to Q1 levels, ARPU remains on par, and margins are consistent in the mid to high 20% range [1]. Wilson expressed confidence in TSI's future trajectory, especially for 2025 and 2026 [1].

Advertising Outlook and Economic Environment
Q: What are advertisers saying about the economic environment as you enter Q3?
A: Bill Wilson noted that local and regional advertisers are feeling quite good despite uncertainties [0]. Developments like the positive jobs report and expected interest rate cuts provide a tailwind, as high interest rates have challenged small businesses [0]. Inflation has come down dramatically from a year ago, and wage pressures have eased, making it easier to find workers [0]. They expect broadcast advertising to perform better in Q3 than in Q2, and digital advertising to grow around 4%, even though national digital advertising is projected to be down roughly 30% [0]. Programmatic advertising, now 60% of their digital advertising, was up 9% in Q2 and is expected to continue growing in Q3 [0].

Core Radio Business Outlook
Q: What are the future trends in broadcasting's advertising and audience over the next five years?
A: Bill Wilson highlighted that their broadcast business has held up better than most due to their focus on markets outside the top 50 [4]. In those markets, their AM/FM radio reaches 50% of the adult population weekly [4]. They have maintained local teams and DJs, who also contribute to digital content, enhancing their value [4]. Despite seeing broadcast as a declining asset with expected low single-digit declines over time, they view it as a cash cow generating significant profitability [4]. They plan to continue investing in their DJs and serving their local communities, expecting stability or growth in their audience due to the decline of local newspapers and other media in their markets [4].

TSI Recovery and Subscriber Trends
Q: Have you moved past startup issues with West Coast offices, and what are subscriber trends?
A: Bill Wilson stated that they've moved past the startup phase with their West Coast offices, particularly in Phoenix, which is "humming quite nicely" [2]. They've added great team members and are focused on scale and efficiency [2]. Regarding subscriber trends, they lost smaller clients who struggled with higher interest rates and inflation [2]. With the new SaaS-based platform, they're now attracting larger customers and expanding into new verticals like healthcare and legal professions [2]. This broader verticalization is expected to drive future growth [2].

White Label Opportunities Without Cannibalization
Q: How do you offer white label options without competing with yourselves?
A: Bill Wilson explained that they're not concerned about cannibalization because there are over 9 million target customers, and they currently serve under 25,000 [3]. They are beginning a test in Q4 with a multi-market radio company to white-label their Ignite digital solution, with potential to extend to Townsquare Interactive in 2025 [3]. They will coordinate with partners to avoid calling on the same clients [3]. Additionally, local agencies are increasingly approaching them to white-label their digital advertising solutions [3]. These white-label opportunities could accelerate growth meaningfully in 2025 and beyond [3].