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TM

Townsquare Media, Inc. (TSQ)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered net revenue of $117.8M (+2.6% YoY) and Adjusted EBITDA of $31.2M (+25.8% YoY), in line with prior guidance; digital advertising growth accelerated to +15.5% and Townsquare Interactive returned to YoY revenue growth (+1.9%) .
  • Adjusted diluted EPS was $0.60, matching S&P Global consensus, and revenue modestly beat consensus ($117.8M vs $116.4M); GAAP diluted EPS was $1.42, aided by lower non‑cash impairment charges .
  • 2025 guidance initiated: revenue $435–$455M and Adjusted EBITDA $90–$98M; Q1 2025 revenue $98–$100M and Adjusted EBITDA $17–$18M; quarterly dividend raised to $0.20 (annualized $0.80, +1.3%) .
  • Strategic catalysts: debt refinancing to 2030 (SOFR+500 bps term loan; ~+$9M annual interest headwind near‑term), continued digital momentum (programmatic and media partnerships), and dividend increase supporting yield-focused investors .

What Went Well and What Went Wrong

What Went Well

  • Digital acceleration and mix: Q4 digital advertising net revenue +15.5%; total digital net revenue +10.8% YoY; digital comprised 52% of 2024 total net revenue and 50% of segment profit. “Digital is and will continue to be Townsquare’s growth engine” .
  • Interactive turnaround: TSI returned to YoY growth (+1.9%) in Q4, with management expecting Q1 2025 revenue growth ~4% and ~20% profit growth. “One of the biggest accomplishments in 2024 was achieving a turnaround at Townsquare Interactive” .
  • Cash generation and capital returns: $28.2M CFO in Q4 and $48.8M in 2024; repurchased $36M of bonds and $24M of equity; dividend increased to $0.20 per share .

What Went Wrong

  • Broadcast headwinds ex‑political: Q4 broadcast net revenue −13.3% ex‑political; full‑year broadcast ex‑political −6.1%, with management expecting ~6% decline again in 2025 .
  • Interest expense step‑up: new 2030 term loan raises annual interest to ~$45M (≈+$9M YoY), a near‑term EPS/FCF headwind until deleveraging and/or rate cuts mitigate .
  • Q2 2024 weakness (for trend context): adjusted diluted EPS $0.14 with elevated impairments and adjusted EBITDA down −8.3% YoY; national digital advertising remained soft earlier in the year .

Financial Results

Consolidated performance vs prior quarters

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$118.225 $115.311 $117.813
Diluted EPS (GAAP, $)$(3.26) $0.63 $1.42
Adjusted EBITDA ($USD Millions)$26.2 $25.5 $31.2
Adjusted Diluted EPS ($)$0.14 $0.35 $0.60

Segment breakdown (Q4 YoY)

SegmentQ4 2023 Revenue ($M)Q4 2024 Revenue ($M)YoY ChangeQ4 2024 Segment Profit ($M)
Digital Advertising (Ignite)$36.434 $42.074 +15.5% $11.823
Subscription Digital Marketing Solutions (TSI)$19.134 $19.495 +1.9% $5.816
Broadcast Advertising$57.903 $55.546 −4.1% $19.852
Other$1.315 $0.698 −46.9% $(0.259)
Total$114.786 $117.813 +2.6% $37.232

Ex‑political detail (Q4)

MetricQ4 2023Q4 2024
Political Revenue ($USD Millions)$1.657 $7.199
Net Revenue ex‑Political ($USD Millions)$113.129 $110.614
Broadcast Revenue ex‑Political ($USD Millions)$56.321 $48.813
Digital Advertising Revenue ex‑Political ($USD Millions)$36.359 $41.608

KPIs and balance sheet highlights

KPIQ4 2024FY 2024
Digital net revenue growth+10.8% YoY +0.6% YoY
Digital share of total net revenue—52%
Digital share of total segment profit—50%
Cash from Operations ($M)$28.2 $48.8
Cash & Equivalents ($M)$33.0 $33.0
Net leverage (x)—4.33x
Quarterly dividend per share ($)$0.20 (declared Mar 17, 2025) —

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net RevenueQ4 2024$114.8–$118.8M (Actual $117.8M) Maintained / Met
Adjusted EBITDAQ4 2024$30.8–$31.8M (Actual $31.2M) Maintained / Met
Net RevenueQ1 2025—$98–$100M Initiated
Adjusted EBITDAQ1 2025—$17–$18M Initiated
Net RevenueFY 2025—$435–$455M Initiated
Adjusted EBITDAFY 2025—$90–$98M Initiated
Dividend (quarterly)2025$0.1975 (Nov 2024) $0.20 Raised (+1.3%)
Broadcast ex‑politicalFY 2025~−6% in 2024 ~−6% expected Maintained

Earnings Call Themes & Trends

TopicQ-2 (Q2 2024)Q-1 (Q3 2024)Current (Q4 2024)Trend
Digital programmatic growthProgrammatic +9% YoY; testing white‑label with broadcasters/agencies Ignite growth accelerated to +4.7% YoY; total digital +1.1% Ignite +15.5% YoY; media partnerships momentum (SummitMedia, Steel City) Accelerating
Townsquare Interactive SaaSLaunched business management platform; subscriber and MoM revenue growth resumed Sequential improvements; TSI −5.8% YoY but improving Returned to YoY growth (+1.9%); Q1 2025 revenue +~4% guided Turning positive
Macro/advertising environmentLocal advertisers relatively healthy; tailwinds expected from rate cuts Return to total and digital revenue growth; political tailwind “Advertising market overall is quite healthy”; stronger pacing into Q2 Improving
Regulatory (FCC deregulation)——Management expects deregulation; positions TSQ as natural acquirer outside top 50 Potential upside
Political revenue$1.5M in Q2; full‑year estimate $14–$16M Q3 political $3.7M; YTD $6.2M Q4 political $7.2M; full‑year $13.4M Within cycle
Balance sheet/refinancePlanning to refinance 2026 notes; strong cash flow Geared up for refinancing Refinancing completed; 2030 maturity; ~+$9M annual interest Executed, near‑term cost up

Management Commentary

  • “Digital is and digital will continue to be Townsquare’s growth engine… our differentiated strategy and business model generated meaningful cash flow consistently throughout the year.” — CEO Bill Wilson .
  • “In Q4 2024, our total digital revenue grew approximately +11% year-over-year.” .
  • “We expect Q1 2025 segment profit at Townsquare Interactive will increase on a year-over-year basis for the first time in 2 years.” .
  • “We completed the successful refinancing… a $470M Term Loan B (SOFR + 500 bps)… annual interest expense of approximately $45M, ~+$9M vs 2024.” — CFO Stuart Rosenstein .
  • “Our Board has approved an increase to our dividend… $0.20 per share… dividend yield of approximately 10% based on our current share price.” — CFO .
  • “We created the Media partnership division… partnerships with Summit Media and Steel City Media… a potential significant growth driver in 2026 and beyond.” — CEO ; SummitMedia PR confirms strategic alliance .

Q&A Highlights

  • TSI ARPU and pricing mix: ARPU ~$300; some offerings >$400, SaaS offering can be <$300; expect ~$300 ARPU next 2 years .
  • Broadcast trajectory: ex‑political decline expected ~6% again in 2025; digital revenue could approach ~55% of total in Q1 2025 .
  • FCC deregulation and M&A: TSQ sees itself as best‑positioned acquirer outside top‑50 markets; alternative growth via Ignite media partnerships (target ~$7–$8M 2025 top line; longer‑term $50M top line, ~$10M profit by 2027–2028) .
  • Macro tone: despite uncertainty, management cites healthy digital advertising, improving monthly pacing into Q2 2025 .
  • TSI subscribers disclosure: TSQ stopped disclosing subscriber counts; emphasized revenue and profit growth trajectory .

Estimates Context

MetricQ2 2024Q3 2024Q4 2024
Revenue Consensus ($USD Millions)*$117.845*$115.474*$116.413*
Revenue Actual ($USD Millions)$118.225 $115.311 $117.813
Primary/Adjusted EPS Consensus ($)*$0.36*$0.345*$0.60*
Adjusted Diluted EPS Actual ($)$0.14 $0.35 $0.60

*Values retrieved from S&P Global.

  • Q4: modest revenue beat and EPS in line (Adjusted $0.60 vs $0.60) .
  • Q3: essentially in line (revenue −$0.16M vs consensus; adjusted EPS $0.35 vs $0.345*) .
  • Q2: revenue slight beat; adjusted EPS miss vs consensus amid higher non‑cash items and mix .

Key Takeaways for Investors

  • Digital-led model is working: Ignite’s +15.5% Q4 growth and TSI’s return to YoY growth underpin mix shift toward higher-margin digital segments .
  • 2025 setup: guidance embeds political headwind but anticipates digital growth to offset; watch execution in media partnerships and TSI profit ramp .
  • Capital returns remain active: dividend raised to $0.20; share/bond repurchases demonstrate confidence and FCF resilience .
  • Near-term headwind: interest expense step-up post-refinance (~$45M run-rate) dampens EPS until deleveraging and/or rates decline .
  • Broadcast is a managed cash cow: expect ~6% ex‑political decline; margins targeted mid‑20s in non‑election years .
  • Catalysts: continued programmatic momentum, third‑party media partnerships scaling, and potential FCC deregulation could open accretive M&A options outside top‑50 markets .
  • Trading implication: Q4 in-line/beat on key metrics with a dividend increase supports yield and improving digital narrative; monitor Q1 pacing vs guidance and interest cost impact .