Executive Summary

Q3 results in line with company guidance but below Street on revenue and EPS; net revenue $106.8M (−7.4% YoY; ex-political −4.5%) and Adjusted EBITDA $22.0M (−13.5% YoY; ex-political −2.0%), with GAAP diluted EPS of −$0.36 and Adjusted EPS of $0.05 . Versus S&P consensus, revenue ($108.0M*) and EPS ($0.065*) were modest misses as reported actuals came in at $106.8M and $0.05, respectively (see Estimates Context) .
FY25 guidance cut on both revenue and Adjusted EBITDA, driven by steeper-than-expected declines in remnant digital advertising tied to search referral pressures and lighter political; FY25 revenue now $426–$430M (prior $435–$440M) and Adjusted EBITDA $88–$90M (prior $90–$94M) .
Digital remains the profit engine: Direct digital (owned-and-operated + programmatic) up mid-to-high single digits, while remnant website revenue fell ~50% YoY in Q3 to ~$2.5M (very high-margin), creating a disproportionate drag; TSI (subscription SaaS) delivered 21% YoY segment profit growth with ~33% margin .
Capital allocation stable: debt reduced by $17M since the February refinancing; quarterly dividend of $0.20/share approved (implied dividend yield ~13% at last close) .

What Went Well and What Went Wrong

What Went Well
- Direct digital strength and execution: programmatic grew high-single digits and owned-and-operated digital up ~10% YoY; excluding remnant, Ignite would have grown ~5% in Q3 .
- TSI profit acceleration: Q3 TSI segment profit +21% YoY; YTD +19% with ~33% margin, driven by service model redesign, sales force productivity, and AI-enabled efficiency .
- Expense discipline protected margins ex-political: Adjusted EBITDA margin excluding political expanded YoY despite revenue pressure; broadcast ex-political margins improved to 28% vs 25% .
What Went Wrong
- Remnant digital advertising shock: remnant website revenue declined ~50% YoY in Q3 (from ~$5.0M to ~$2.5M), tied to industry-wide search referral declines, pressuring both revenue and high-margin mix .
- Broadcast declines persisted: Broadcast revenue −13.8% total and −8.1% ex-political; macro and secular headwinds, with continued national softness and cancellations .
- Political underperformance vs plan: Q4 political expected < $1M vs $7.2M last year; FY25 political < $2M (below internal expectations), contributing to guidance reduction .

Financial Results

Key P&L by quarter (oldest → newest):

Metric	Q1 2025	Q2 2025	Q3 2025
Net Revenue ($M)	$98.7	$115.4	$106.8
GAAP Diluted EPS ($)	−$0.12	$0.09	−$0.36
Adjusted EPS ($)	−$0.05	$0.22	$0.05
Adjusted EBITDA ($M)	$18.1	$26.4	$22.0

Q3 2025 vs prior year:

Metric	Q3 2024	Q3 2025
Net Revenue ($M)	$115.3	$106.8
GAAP Diluted EPS ($)	$0.63	−$0.36
Adjusted EPS ($)	$0.35	$0.05
Adjusted EBITDA ($M)	$25.5	$22.0

Segment revenue (YoY) and segment profit (YoY):

Segment Net Revenue ($M)	Q3 2024	Q3 2025	YoY
Digital Advertising	$40.9	$40.2	−1.5%
Subscription Digital Marketing Solutions	$19.1	$18.6	−2.3%
Broadcast Advertising	$54.5	$47.0	−13.8%
Other	$0.8	$0.9	+4.9%
Total	$115.3	$106.8	−7.4%

Segment Profit ($M)	Q3 2024	Q3 2025	YoY
Digital Advertising	$10.8	$8.6	−20.1%
Subscription Digital Marketing Solutions	$5.1	$6.2	+21.1%
Broadcast Advertising	$16.0	$13.4	−16.3%
Other	−$0.4	−$0.2	(nm)
Total	$31.5	$28.0	−11.2%

KPIs and balance sheet highlights:

KPI	Q3 2025
Digital % of YTD Total Net Revenue	55%
Digital % of YTD Segment Profit	55%
TSI (Subscription) Q3 Segment Profit Margin	~33% (Q3 commentary)
Broadcast ex-political segment profit margin (Q3)	28% vs 25% prior year
Remnant website revenue	~$2.5M in Q3 (−50% YoY)
Cash & Cash Equivalents	$3.2M (9/30/25)
Total Debt Outstanding	$463.4M (9/30/25)
Net Leverage	4.71x (TTM Adjusted EBITDA basis)
Debt Reduction Since Feb’25	$17M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Revenue ($M)	Q4 2025	N/A	$105–$109	New
Adjusted EBITDA ($M)	Q4 2025	N/A	$21.5–$23.5	New
Net Revenue ($M)	FY 2025	$435–$440	$426–$430	Lowered
Adjusted EBITDA ($M)	FY 2025	$90–$94	$88–$90	Lowered
Dividend	Next Payable	$0.20/share (declared)	$0.20/share (Feb 2, 2026)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2025, Q1 2025)	Current Period (Q3 2025)	Trend
AI/search impact on web traffic/remnant monetization	Emerging pressure discussed; H1 remnant down modestly; “Liberation Day” macro event noted as revenue headwind	Remnant down ~50% YoY in Q3 to ~$2.5M; expected to stabilize H2’26; main driver of FY guide cut	Worsening near term
Programmatic (Ignite) and O&O digital	H1: programmatic +HSD; O&O strong; digital = 55–56% of mix	Programmatic +HSD; O&O +~10% YoY; excluding remnant, Ignite +~5%	Positive growth driver
TSI (subscription) profitability and sales force	H1: TSI profit growth with 27% margin; sales team resized for productivity	Q3 TSI profit +21% YoY; ~33% margin; revenue flat near term; growth returns in 2026 as hiring resumes	Margin up; rev growth deferred
Broadcast trends/share	H1: Broadcast −~9% YoY; outperformed industry; share gains	Q3 broadcast −13.8% total; −8.1% ex-political; ex-political margin 28%; pacing slightly better in Q4	Stabilizing ex-political
Political revenue	2025 expected modest; stronger in 2026	Q4 < $1M vs $7.2M LY; FY25 < $2M; below prior internal expectations; 2026 “quite bullish”	Near-term weaker
Leverage/interest expense and dividend	Refinanced to 2030; debt paydown; dividend maintained	Debt −$17M since Feb; two Fed cuts reduce annualized interest by ~$2.3M; dividend maintained	Deleveraging continues

Management Commentary

“Our third quarter results met our previously issued net revenue and Adjusted EBITDA guidance… Adjusted EBITDA margins excluding political improved year-over-year, despite revenue declines.” – Bill Wilson, CEO .
“Without the remnant drag… our Q3 digital advertising increased +5%... O&O up 10% and programmatic up high single digits.” – Bill Wilson .
“In the third quarter… remnant revenue declined 50% YoY… This was the main driver of our change in guidance on the revenue line and the profit line.” – Bill Wilson .
“Townsquare Interactive delivered another quarter of very strong profit growth… segment profit increasing 21% YoY, with margins ~33% in Q3 2025.” – Stuart Rosenstein, CFO .
“Since the February refinancing, we have reduced our outstanding debt by $17 million… while also maintaining our high yielding dividend.” – Bill Wilson .

Q&A Highlights

Broadcast stabilization and margins: Management expects ex-political declines to improve from −8% in 2025 to mid-single-digit declines in 2026, with Q4 pacing slightly better; broadcast ex-political margin expanded to 28% in Q3 from 25% .
Government/Medicare ad impact: No positive offset; rather, cancellations and softness were observed in government-related categories during the shutdown period .
TSI westward expansion (Phoenix office): Hiring and productivity tracking to plan; TSI 2025 expected to be one of the division’s best profit years; revenue growth to resume in 2026 as headcount rebuilds .
Media partnerships (third-party programmatic): ~+$6M revenue in 2025 at ~20% margin; pipeline building; potential to $50M over five years .
Remnant outlook and timing: Headwind expected to persist through at least H1’26, stabilizing in H2’26; this was the primary driver of FY guide reduction .

Estimates Context

Q3 2025 vs S&P Global consensus: revenue $107.99M* vs actual $106.76M (miss), EPS $0.065* vs actual $0.05 (miss). EBITDA consensus $22.27M* vs company Adjusted EBITDA $22.02M; note SPGI “actual” EBITDA definitions may differ from company’s Adjusted EBITDA .
Previous quarters: Q2 revenue $115.45M vs $114.77M* (beat), EPS $0.22 vs $0.26* (miss) . Q1 revenue $98.68M vs $98.94M* (slight miss), EPS −$0.05 vs −$0.045* (in line) .
Values retrieved from S&P Global.*

Q3 vs consensus table:

Metric	S&P Consensus*	Actual	Comment
Revenue ($M)	108.0*	106.8	Modest miss
Primary EPS ($)	0.065*	0.05	Modest miss
EBITDA ($M)	22.27*	22.02 (Adj. EBITDA)	In line (definitions may differ)

Values retrieved from S&P Global.*

Key Takeaways for Investors

Mix shift matters: The 50% YoY collapse in high-margin remnant website revenue was the key negative surprise and the principal driver of the FY25 guide cut; management expects stabilization only in H2’26, extending the near-term drag .
Underlying digital engine remains solid: Ex-remnant, Ignite grew ~5% with O&O +~10% and programmatic +HSD; this supports a medium-term rebound as remnant stabilizes and media partnerships scale .
TSI profitability inflecting: Sustained >30% margins with 21% profit growth in Q3; revenue growth likely re-accelerates in 2026 as hiring resumes, offering durable mix benefits .
Broadcast stabilizing ex-political: Ex-political declines steady (−8% in Q3), margins improved to 28%; Q4 ex-political pacing slightly better suggests a base forming ahead of a 2026 political year .
Capital allocation consistent: ~$17M debt reduction since Feb refinance; dividend maintained at $0.20/share (~13% yield at last close), with rate cuts lowering cash interest by ~$2.3M annualized at current balances .
Near-term estimates likely drift lower: With FY revenue and EBITDA cut and Q4 political light, Street models may reset 2025–H1’26; focus turns to 2026 recovery cadence in remnant, political tailwind, and TSI growth .
Trading setup: Potential pressure near term on lowered FY guide and AI/search headwinds; longer-term upside hinges on digital growth drivers (programmatic, O&O, partnerships) and normalization of remnant monetization .

Appendix: Additional Details and Disclosures

Cash flow: YTD operating cash flow $18.0M through 9/30/25; Q3 used for $9M term loan reduction (including $6M repurchased at a discount) .
Liquidity and leverage: $3.2M cash, $463.4M debt; gross/net leverage 4.74x/4.71x on TTM Adjusted EBITDA of ~$97.8M .
Dividend: $0.20/share payable Feb 2, 2026 to holders of record Jan 26, 2026 .

All non-GAAP definitions and reconciliations are provided in the company’s press release and 8-K materials .

Townsquare Media, Inc. (TSQ)·Q3 2025 Earnings Summary