iHeartMedia’s multi-platform strategy resulted in its first quarter revenue increasing 19.4% year-over-year to a sum of $843 million.
Top executives at iHeart point to the growth of its digital audio group as evidence its digital transformation is working even as the broadcaster navigates a turbulent economic environment. Digital audio group revenue totaled $214 million, which was up 36% compared to the same period a year ago. Podcasting, which is part of the digital audio group, accounted for 10% of company revenue with $69 million in Q1 revenue ending March 30, 2022.
The company’s digital business also includes streaming products, third party extension products, social, OTT and display advertising, according to the company. Digital represented 25% of total company revenues in the first quarter.
Of the company’s three reportable segments, the multiplatform group, which includes its 850 radio stations, reported revenue growth of 14.9% in the first quarter of 2022 compared to the previous year. The segment, which also includes it network operations and live events, totaled $571.1 million in revenue in Q1 2022.
Chairman/CEO Bob Pittman said the company’s events business continues to recover “given our ability to build new live and virtual events and the pent up consumer and advertiser demand for these experiences.”
The broadcaster’s Audio and Media Services Group, which includes, which includes Katz Media Group and RCS, reported $60.8 million in revenue in the first quarter, a 10% jump YoY.
“We’re pleased to report another quarter of strong results, and believe our performance is further evidence of the successful execution of our digital transformation and multiplatform strategy, and the power of our position as the #1 audio company in America across broadcast radio, digital radio, and podcasting” Pittman said.
Pittman continued: “We remain committed to building on iHeart’s transformation into a data-led, digitally-focused business; to investing in areas with high growth potential; and to continuing our focus on innovation and being at the forefront of new technologies and digital platforms which create incremental growth opportunities for audio.”
iHeart’s diverse revenue base means the company doesn’t need to rely upon a single advertising category, which helps mitigate pockets of ad softness, Pittman said on Thursday’s earnings call with investors.
The boost in revenue helped iHeart to an operating income of $12 million, versus an operating loss of $76 million in Q1 2021, according to the media company’s latest financial disclosure.
Capital expenditures for the three months, which ended March 31, 2022, were $22.6 million compared to $19 million during the same period in 2021. Capital expenditures in Q1 increased primarily due to our real estate consolidation initiatives aimed at reducing its structural cost base, the company said.
“We expect to continue to examine our business for further efficiencies and modernizations, and as we adopt new technologies, we believe we will find new ways to optimize our expense base, including our previously announced real estate rationalization,” Pitman said.
In his preview of second quarter pacing, iHeart President/COO Rich Bresler said he expects Q2 2022 revenues to be up approximately 10% -14% YoY despite a slower than expected April. “We are just closing April and our consolidated revenues are up 8%,” he said.
iHeartMedia announced earlier this week it is building out a new digital audio ad network and has hired former Stitcher Chief Revenue Officer Sarah van Mosel to lead it. The iHeart Audience Network (iAN) will collect advertising inventory from iHeartRadio databases and independent publishers across streaming and podcasting.
“The iHeart Audience Network brings together broadcast, podcast and streaming audiences at unprecedented scale, coupled with the largest sale force in audio, provides us the capabilities for our broadcast radio to participate in the $160 billion digital sector,” Pittman said.
iHeartMedia said in a press release iAN will allow marketers to attain scale in their digital audio buys and give them the ability to reach addressable audiences across multiple channels and devices.
The broadcaster’s balance sheet listed $5.7 billion in total debt and $5.4 billion of net debt as of March 30, 2022.
Randy J. Stine has spent the past 40 years working in audio production and broadcast radio news. He joined Radio World in 1997 and covers new technology and regulatory issues. He has a B.A. in journalism from Michigan State University.