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iHeartMedia Discloses Q2 Financial Results

Broadcaster sees continued recovery of commercial advertising market

iHeartMedia, radio stationsiHeartMedia says it is positioned to return to revenue levels last seen in 2019 by the end of this year as the company continues to bounce back from the COVID-19 pandemic.

In its second quarter 2021 earnings call on Thursday the country’s largest radio broadcast company reported a 77% year-over-year revenue increase to $862 million for the quarter ending June 30.

The company’s Multiplatform Group, which includes nearly 860 radio stations, continued to rebound from the pandemic amid the return of the commercial advertising market. The company says revenues in the segment were up nearly 70% compared to the same period in 2020 to $605.8 million. For comparison, iHeartMedia disclosed revenue from the second quarter 2021 was down 21% compared to Q2 in 2019.

[Read: iHeartMedia Continues in Recovery Mode]

Specifically, radio broadcast revenue was up nearly 85% in Q2 YoY on a reported basis while iHeartMedia’s network business, which includes Premiere Networks and the Total Traffic and Weather Network, grew 28.3% compared to Q2 in 2020.

Podcasting remains a strong focus of the company. iHeartMedia Chairman and CEO Bob Pittman spent a large amount of time on Thursday’s earning’s call examining the Digital Audio Group, which includes all digital assets like podcasting. The group showed a 112% year-over-year increase in Q2 revenue to $197.9 million. Podcasting revenues were up even more at 152% compared to the same period in 2020.

iHeartMedia’s build out of its tech capabilities continues, Pittman said, but it’s not only podcasting catching the eye of advertisers. The company continues investment in the expansion of broadcast radio in digital devices, he said. “We have invested in broadcast radio to make it look like digital for the advertiser. When you look at the unique reach we have with broadcast radio and having the ability to make that digital, and put that into a digital buy, at a very efficient price,” Pittman said

The broadcaster’s Audio and Media Services segment, which includes Katz Media Group and software provider RCS, saw revenue grow by 55.9% in Q2 compared to the comparative period in prior year, as a result of the continued recovery from the negative impact of the COVID-19 pandemic, according to the company’s financial report filed with the U.S. Securities and Exchange Commission.

Pittman said on Thursday’s earnings call iHeartMedia is still facing some uncertainties, but “based on what we are seeing we remain confident we will be back to 2019 adjusted EBITA levels by the end of 2021.”

The broadcaster, which emerged from bankruptcy in 2019, continues to centralize resources into its Center of Excellence; and its SEC filing on Thursday indicates the savings from the endeavor could be substantial.

iHeartMedia President/COO/CFO Rich Bressler said during Thursday’s earnings call capital expenditures will be elevated in 2021 primarily due to the proactive streamlining of the audio company’s real estate footprint. The company projects cap ex of $165 million to $185 million in 2021 and then a return to normal levels in 2022.

“The [real estate] program has made certain real estate assets redundant enabling the company to sell such assets to partially offset the initiative expenditures,” Bressler said. “The real estate program is a company wide effort to leverage new technology and adopt new best practices to make our office spaces more efficient.”

By the conclusion of the real estate project, the company experts to reduce occupied square footage and rent and related expenses by approximately 50%, Bressler said.

iHeartMedia continues to eye debt reduction, Bressler said on Thursday. The broadcaster announced in July it made a voluntary prepayment of $250 million of debt. The majority of the prepayment was used to prepay a portion of iHeartMedia’s $2.07 billion term loan, according to the iHeartMedia SEC filing. As of June 30, 2021, the company was carrying nearly $6 billion in total debt.