Townsquare Media Q1 2026 Earnings Call - Digital Revenue Surges to 59% of Total Net Revenue

Operator: Good morning, and welcome to the Townsquare Media First Quarter 2026 earnings call. As a reminder, today’s call is being recorded, and your participation implies consent to such recording. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require your operator assistance during the conference, please press star zero on your telephone keypad. With that, I would like to introduce the first speaker for today’s call, Claire Yenicay, Executive Vice President.

Claire Yenicay, Executive Vice President, Townsquare Media: Thank you, operator, and good morning to everyone. Thank you for joining us today. With me on the call are Bill Wilson, our CEO, and Stuart Rosenstein, our CFO and Executive Vice President. Please note that during this call, we may make statements that provide information other than historical information, including statements relating to the company’s future expectations, plans, and prospects. These statements are considered forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from these statements. These statements reflect the company’s beliefs based on current conditions that are subject to certain risks and uncertainties, including those that are detailed in the company’s annual report on Form 10-K filed with the SEC. During this call, we may make certain non-GAAP financial measures, including adjusted EBITDA.

Such non-GAAP financial measures should be used in conjunction with all the information contained in the quarterly, year-end, and current reports available on our website. I would also encourage all participants to go to our corporate website and download our investor presentation, as Bill will reference some of those slides during our discussion this morning. At this time, I would like to turn the call over to Bill Wilson.

Bill Wilson, Chief Executive Officer (CEO), Townsquare Media: Thank you, Claire, and thank you all for joining us today. It’s great to speak with you this morning. We’re pleased to share our first quarter results with you today, which demonstrate the strength of our digital advertising platform and validate our digital-first local media strategy with a focus on local markets outside of the top 50. We are proud to share that our first quarter results met the guidance that we provided on our last call and that we’re currently seeing ongoing improvement in digital advertising trends and pacing in Q2 and the back half of 2026. As a result of our digital-first strategy, we are also reaffirming the full-year net revenue and adjusted EBITDA guidance that we provided on our last earnings call.

By now, it should be very clear that Townsquare has transformed from a legacy broadcast company into a digital-first local media company, and that our digital platform and digital execution sets us apart from others in local media. In 2025, approximately 55% of our company’s total net revenue and 56% of our total segment profit was generated from our digital solutions. In the first quarter of 2026, our digital revenue grew to be a very significant 59% of our total net revenue in the quarter, an all-time high, and as highlighted on slide 10, is roughly 2 times our competitors, as on average, they have only 30% of their revenue coming from digital sources. Even more importantly, our digital profit contributed a very significant 63% of our total profit in the first quarter, also an all-time high.

As we have consistently stated for many years, digital is, and digital will continue to be, Townsquare’s growth engine and the area where we focus the bulk of our investment capital going forward, consistent with our strategy of being a digital-first local media company, focusing on markets outside the top 50 in the U.S. and further differentiating us from others in local media. Now, let’s dive into our fastest-growing business, digital advertising, which we call Townsquare Ignite, the larger of our two digital segments. As I stated would happen on our last call, our digital advertising net revenue increased high single digits in the first quarter, with revenue increasing +7% over the prior year, a significant improvement from 2025’s digital advertising growth of approximately +2%.

Our first quarter digital advertising revenue growth of +7% was driven by the same trends that we have seen for the past several quarters and have also discussed at length previously. Strong digital advertising related to our direct-to-client sales and declines in our indirect revenue, also known as remnant revenue, which will moderate in Q3. The strong growth of our direct-to-client sales is made up of 2 revenue streams. Number 1, our programmatic digital advertising platform, and Number 2, the direct local sales of our owned and operated, or O&O, digital properties, both of which are performing quite well. First, our digital programmatic business, which make up approximately 65% of the digital advertising segment’s 2025 revenue, delivered a very impressive and strong first quarter revenue results of +21% year-over-year.

We believe that this part of our business has very strong organic growth opportunities, supported by our best-in-class digital offering, strong industry tailwinds, and a great and excellent leadership team. We expect it will continue to be our primary growth driver in 2026 and beyond. Our third-party media partnership model, which is a component of our programmatic business, has been progressing quite well since its beta launch in early 2024. This strategy will be a meaningful component of our digital advertising growth in future years. In 2025, media partnership revenue was approximately $6 million, and we had six local media partners. In Q1, we roughly doubled revenue from Q1 2025, and for the full year are on track to approximately double the $6 million we generated in 2025.

As a reminder, through this capital-light model, we partner with other local media companies and handle all the major components of their digital advertising campaigns, including managing the creative, buying and optimizing the inventory, providing customer support of the digital campaigns, and importantly, training our partners’ sales teams to sell our solutions. We can enter new markets to offer programmatic digital advertising solutions without having to acquire radio broadcast assets to do so, freeing up our capital for other purposes. I expect that in four years, this division will grow to be $50 million in revenue for Townsquare at an approximately 20% profit margin. Our goal with this initiative is to become the chosen provider of digital programmatic advertising to broadcasters and digital agencies in local markets outside of major cities.

On our last earnings call, we announced that we were up to 11 partners to start 2026. I’m pleased to share that since then, we have added 2 more partners. Looking ahead to the second quarter, our programmatic digital advertising business continues to fire on all cylinders, with revenue expected to be up over 20% year-over-year again. Our local teams are selling digital advertising better than ever, while at the same time our media partnership division is performing extremely well. As I noted previously, is on pace to nearly double revenue in 2026.

The direct sales of our local O&O digital assets, which includes our local salespeople selling the inventory of our own 400 plus local websites and mobile app, was up +10% in Q1 2026, as expected, and continues to show consistent and strong growth in Q2. We owe our success here to the sophisticated digital advertising solutions that have been developed by our skilled digital product and engineering team. The hard work of our local content teams is continuing to drive our audience, even in the face of AI search traffic related headwinds, and of course, the dedication of our local sales teams. Revenue generated from remnant inventory on our own mobile apps and websites, as I outlined on numerous previous earnings calls, declined -40% year-over-year to $12 million approximately in 2025 from approximately $20 million in 2024.

Our expectation remains the same as we shared on our last call for the full year. Remnant indirect revenue will decline from approximately $12 million in 2025 to approximately $9 million in 2026, with most of the year-over-year decline occurring in the 1st seven months of 2026. As a reminder, this approximately $3 million year-over-year revenue decline is close to 100% profit margin for Townsquare. I’d like to emphasize that remnant revenue represents a small portion, approximately 8% of our total digital advertising revenue today. In the 1st quarter of 2026, indirect remnant digital advertising revenue declined -37% year-over-year, but importantly, very importantly, grew sequentially over Q4 2025, a very positive and important development.

Thankfully, our strong direct digital advertising revenue growth more than offset the declines in this quarter. Looking ahead to Q2, we expect similar year-over-year remnant revenue declines to Q1, yet important stability, if not slight growth, quarter-over-quarter in Q2. I’d like to take the time to highlight why we are seeing our digital audience stabilizing even in the face of lower search engine referrals. A meaningful portion of our audience and traffic is driven by social media, as well as direct visits to our websites from our loyal audience, as well as traffic from our local email newsletters and our mobile app alerts and other sources of organic traffic. We’re leaning into this, developing new traffic strategies, new audience strategies, building new content publishing tools, and reinvigorating our team.

We shared early promising signs on our last call that in January, unique visitors increased month-over-month, reaching our highest audience level since the July of 2025. That trend, I’m happy to report, continued through the first quarter as our audience of 25 million unique visitors on average per month in Q1 was larger than our audience in Q4, which was approximately 20 million. This is early proof point that even with the impact of AI on search engine traffic, we are in a very differentiated position given our focus on hyper-local content coupled with the power of social media platforms to stop the decline, and we believe grow our online audience once more, just like we have in Q1. As I highlighted earlier, the majority of our digital advertising segment is our programmatic business.

In addition to directly selling of our owned and operated properties, which continues to deliver very strong and healthy profitable revenue margins, and therefore, we expect Q2 digital advertising revenue overall will continue to perform incredibly well with growth accelerating from Q1’s +7%, all due to the strength of the results from our direct local sales teams, as we are still very confident in our full year digital advertising revenue forecast of high single-digits growth given our momentum today. At Townsquare Interactive, our subscription digital marketing solutions business, we once again delivered very strong profit margins in the first quarter despite anticipated revenue declines. In the first quarter, Townsquare Interactive revenue declined exactly as I expected and outlined on our last call at -8% year-over-year, driven by slower overall sales velocity due to a smaller sales force.

However, first quarter segment profit margins expanded by 1.5 percentage points year-over-year, driven largely by 3 factors. 1, the restructuring of our customer service model in 2023 that allows us to grow more efficiently. 2, changes to our sales structure at the end of 2024 and early 2025 that have led both to a temporary smaller sales team, but very importantly, a more productive sales team with much higher ROI. 3, efficiencies gained from AI. We are very proud of how our Townsquare Interactive team has embraced AI and leveraged its usage for meaningful cost savings and improvements in efficiency across the business, from helping to create websites to assisting with customer service. In the meantime, we remain committed to our plan to rebuild our sales team to prior level, but acknowledge that it will take some time to do so.

We expect Q2 revenue at Townsquare Interactive will decline in line with Q1’s performance at approximately -8% year-over-year. Yet, importantly, quarter-over-quarter, the results of the revenue will decline be much smaller and expected to be in the low single digits at approximately -2% quarter-over-quarter. We are also restating our belief that based on our current forecast, we may see a return to month-over-month revenue growth as early as Q3 2026, which I shared on our last call as well. In the meantime, we expect that strong profit margins will continue throughout 2026, just as we delivered in 2025. Importantly, we believe the addressable market for Townsquare Interactive, which in our estimation is nearly 9 million target customers, remains as attractive as ever. Now, turning to our third and final business segment, broadcast radio.

As you are all aware, at Townsquare, we view local radio as an extremely valuable asset with significant cash flow properties, unparalleled consumer reach, and an important local connection to our audience and our clients. However, radio is not a growth driver for Townsquare, and in 2025, broadcast advertising net revenue, excluding political, declined -8% year-over-year. We saw a slight moderation in those declines in the first quarter, with broadcast net revenue declining -6.9% excluding political and -6.6% in total. In Q2 2026, we’re currently forecasting similar year-over-year declines for ex-political broadcast revenue. Despite broadcast revenue declines, we outperformed the industry in our broadcast business again in the first quarter, gaining local and national broadcast market share according to Miller Kaplan estimates.

With our differentiated local content and strong local brands, we believe that we will continue to gain broadcast and total market share across our market footprint, while also generating a solid profit as we carefully manage expenses to maintain a strong broadcast profit margin. In the long term, it is our belief that our differentiated digital platform will deliver strong growth to offset future core broadcast revenue declines. Now, I’ll hand it over to Stu to discuss our financial results and guidance in more detail. All yours, Stu. Take it away.

Stuart Rosenstein, Chief Financial Officer (CFO) and Executive Vice President, Townsquare Media: Thank you, Bill. Good morning, everyone. It’s great to speak to you today. We’re very pleased to report that our first quarter results met our revenue and adjusted EBITDA guidance. As Bill highlighted, in Q1, 63% of our segment profit was generated from our two digital divisions, the highest profit percentage ever for Townsquare. First quarter net revenue declined 1.9% year-over-year to net revenue of $96.8 million within our guidance range of $96 million-$98 million. First quarter adjusted EBITDA declined 9.7% year-over-year to $16.4 million, which was also within our guidance range of $16 million-$17 million.

We had a very impressive quarter at Townsquare Ignite, our digital advertising segment, where revenue growth rates rebounded sequentially very significantly from a slight year-over-year decline in Q4 2025 to strong year-over-year revenue growth of 6.8% in Q1 of 2026. As Bill noted, looking ahead to the second quarter, we expect digital advertising revenue growth to further strengthen and be even higher than Q1’s growth rate. As expected, and we previously projected, Townsquare Interactive, our subscription digital marketing solution segment’s Q1 net revenue declined 7.9% year-over-year. We are pleased to share that, as expected and consistent with recent performance, Townsquare Interactive’s segment profit margins increased year-over-year to 33.7%.

We remain very confident in our expectation that profit margins will be in line with 2025 profit margins for the remainder of 2026 due to the efficiencies and cost savings that have been implemented. Broadcast advertising net revenue declines moderated slightly in the first quarter as we foreshadowed our last earnings call. In the first quarter, total broadcast revenue declined 6.6% and 6.9% excluding political revenue, each as compared to the prior year. We believe that this trend will continue in the second quarter as well. This is compared to the consistent negative 8% ex-political broadcast revenue declines we experienced in each quarter of 2025. Broadcast segment profit margins dipped to approximately 19% in the first quarter, in part due to revenue declines and in part due to seasonality.

Our first quarter broadcast profit margins are typically the lowest for the year. We expect that our broadcast segment profit margins will return to the mid-to-high 20s for the remainder of the year, averaging out to the mid-20s for the full year, consistent with 2025 profit margins. Our first quarter net income was $3 million or $0.16 per diluted share as compared to a net loss of $0.12 per diluted share in the prior year period. We’d like to remind you that any benefit or provision for income taxes included in the face of the income statement is for GAAP financial statement purposes only.

We maintain significant tax attributes, including approximately $121 million of federal NOL carryforwards and other substantial tax shields related to the tax amortization of our intangible assets. We continue to believe that we will not be a material cash taxpayer until approximately end of 2028. One of our business model’s strongest attributes is our consistent cash flow generation. In the first quarter, we generated $4.2 million of cash flow from operations, more than the cash flow from operations generated in the first quarters of both 2025 and 2024. We ended the quarter with $457 million of debt outstanding and $2 million of cash on our balance sheet.

As of March 31st, our net leverage was 5.27 times. I’d like to remind you that since our term loan is a floating rate instrument, each quarter point interest cut translates to roughly $1.1 million of annualized interest reduction based on our current debt balance. As always, our number 1 priority is to invest in our local businesses through organic internal investments that support our revenue and profit growth, particularly our digital growth engine. We plan to continue to invest in our digital product technology, sales, content, and support teams, specifically in our Townsquare Interactive and Townsquare Ignite business, to maintain our strong competitive advantage in markets outside the top 50 cities. We plan to use our excess cash flow to reduce our debt through both mandatory and voluntary debt repayments and, of course, support our high-yielding dividend.

Our board has approved our next quarterly dividend payable on August 3rd to shareholders of record as of July 27th. The dividend of $0.20 per share equates to $0.80 per share on an annualized basis and implies an annual payment of approximately $14 million based on the share count and a dividend yield of approximately 12% based on our current share price. As we mentioned on our last earnings call, it is both management’s and the board’s belief that our current share price does not reflect the inherent value of Townsquare. We’re not concerned about the implied dividend yield, as we believe it will come down as and when our business is better understood by investors and our business returns to growth. Turning now to the second quarter.

We expect second quarter net revenue to be between $114 million and $116 million, which at the midpoint is approximately flat on a year-over-year basis. We expect second quarter adjusted EBITDA to be between $24 million and $25 million. For the full year, we are reaffirming our expectations that our revenue will be between $420 million and $440 million, and that adjusted EBITDA will be between $87 million and $93 million. Embedded in this guidance is forecasted political revenue of approximately $8 million, which is in line with the $7.5 million of political revenue we received during the 2022 election cycle. With that, I will now turn the call back over to Bill.

Bill Wilson, Chief Executive Officer (CEO), Townsquare Media: Thank you, Stu, and thanks to everyone for taking the time to be updated on Townsquare’s first quarter results this morning. We greatly appreciate it. Each and every year, our business mix continues to shift to be a greater percentage of both digital profit and revenue, as I highlighted earlier. In Q1, 59% of our total revenue was generated from our differentiated digital solutions, and importantly, 63% of our total profit was digital profit, each our highest percentages ever. We want to reiterate that we are very confident in the future success of our differentiated digital platform, including the following highlights to start 2026.

Number one, our digital advertising revenue has returned to high single-digit revenue growth in Q1 and will only strengthen throughout the year due to the consistent strength of our programmatic offering and the success of our media partnership division, as well as the strong revenue growth of the direct sales of our local digital O&O properties and the stabilization of our online audience and remnant revenue that I outlined earlier. Number two, Townsquare Interactive’s very strong profit margins, coupled with our current forecast of sequential revenue improvement in the back half of the year. Number three, lastly and most importantly, we are confident in our ability to build shareholder value for our investors through long-term net revenue, profit, and cash flow growth, net leverage reduction, and consistent future quarterly dividend payments at the current rate.

Our success is a direct result of the passion, creativity, and relentless execution of our team members across the company. From our local market teams who continue to build deep connections with their communities and deliver results for our clients to our digital product and engineering teams who are driving innovation and advancing our platform forward each day. I am continually impressed by what this team accomplishes together. We remain confident in our strategy, focused on execution, and are very excited about the opportunities ahead. With that, operator, at this time, please open the line for any and all questions.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any key. One moment please for your first question. Your first question comes from Patrick Sholl with Barrington Research. Your line is now open.

Patrick Sholl, Analyst, Barrington Research: Hi, thanks for taking the question. I was just wondering if you could dive into a little bit more on some of the drivers that you see contributing to potentially improving month-over-month revenue in Interactive starting, I guess, in the second half of the year.

Bill Wilson, Chief Executive Officer (CEO), Townsquare Media: Good morning, Patrick. Thank you for the question. Yeah, I actually just spent a week down with the team in Charlotte for Townsquare Interactive, where they’re headquartered, along with their secondary office in Phoenix.

As I talked about 8 weeks ago on our prior call for year-end 2025, we’re seeing continued improvement in our churn. Our churn, as I mentioned on our last call, was returning to our historical low levels and has only improved in Q1 from last year. As we’re sitting here today, Q2 is pacing even better than Q1. As we outlined on our last call, the team is deploying a lot of tools, internal tools for efficiency that are utilizing AI, so that’s helping our, you know, profit margin. As I said earlier, our profit margin in Q1 expanded to 33.7% versus Q1 of 2025 of 32.5%. We’re able to scale more effectively, we’re really serving our customers better than we ever have, therefore, the churn is coming down.

Our really only hurdle, which I’ve outlined really over the last several calls, is getting back to the level of our sales personnel in terms of size of sales team at Townsquare Interactive. We outlined the changes we made in the beginning of 2025, which created a lot more revenue per salesperson, but we shrunk our sales team over the course of 2025. We’re now building that up, but it is gonna take time. The combination of lower churn, greater efficiency in utilizing a lot of AI tools, and growing back our sales team, we expect to see month-over-month revenue growth in the back half of 2026. As I outlined on the prepared remarks, you know, in Q2, we expect a decline again about negative 8% year-over-year as we did in Q1 from a revenue perspective.

On a sequential quarter-over-quarter basis, you’ll see improvement to about -2% revenue decline quarter-over-quarter. Hopefully that gives you a sense, Patrick, of why we’re so confident. I definitely walked away from that trip last week incredibly confident, not only about the back half of this year, but more importantly, as we look over the next 3 to 5 years for Townsquare Interactive. I’ll turn it back to you for any follow-up questions.

Patrick Sholl, Analyst, Barrington Research: Sure. Thank you. I was just kind of curious on like the reduction in churn that you mentioned. Like, maybe just talk about like some of what you’re seeing with regards to the macro environment with the increase in energy prices and, you know, also, you know, I just realized that you’re utilizing AI tools in the selling process, but maybe just the ability of the potential client base to utilize AI tools for some of the services and just how that’s contributing to churn as well.

Bill Wilson, Chief Executive Officer (CEO), Townsquare Media: Yeah. I think what we, as you know, but for the benefit of everybody on the call, we redid our entire customer service model, starting in 2023. That really bled into and continued in 2024. Our satisfaction rate from our customers, how quickly we’re able to quickly any task that they call up and ask us to do. The marketing we’re doing, I think we’ve outlined on these calls that we’re doing a lot more outbound marketing, email marketing, text-based marketing, even digital advertising marketing, utilizing the data that they’re capturing in the CRM that we deployed a few years ago. All of those components are helping customer satisfaction, which is bringing down churn. You know, we moved from a one-to-one model to a pooled model, that’s created a lot more customer satisfaction.

It was very disruptive in the beginning, as we outlined, and churn spiked as a result of that in 2023 and 2024. Now we’re back to historically low levels. As I just mentioned, Q1 churn better than 2025. As we’re sitting here in May, Q2 is pacing from a churn perspective to be even lower than Q1. You asked about the macro environment and clearly that’s having an impact, particularly in advertising. We’re seeing advertising being placed later in month or shorter runs. That’s definitely apparent to us in the broadcast side as well as our digital advertising side, even though our digital advertising is going incredibly well. I would say it’s on fire from a direct sold perspective, which we could talk more about.

Clearly, as energy prices are impacting, particularly, small and medium-sized businesses, we’re seeing that. With all of that said, you know, we mentioned on the broadcast side, we had very slight moderation in the decline. Last year, we declined negative 8% ex-political throughout the year and full year 2025. You know, that moderated to, you know, negative 7% ex-political in Q1. We clearly are hearing from our customers, particularly as the conflict in the Middle East continues and gas prices continue to go up month-over-month, that that’s a strain on them. They’re obviously watching their advertising budget and their expenses overall. They’re still spending, but as I just noted, they may be spending quicker to the flight time, not booking as far in advance, and we’re seeing that.

I think, as hopefully the conflict resolves over the coming months, that’ll be a tailwind, if and when that occurs, particularly for our advertising segment. It really hasn’t bled over to Townsquare Interactive. I think the advertising component is very different than the digital marketing solutions component. Obviously, it, you know, we expect hopefully a resolution, and that’ll even be a greater tailwind for our advertising business for not only digital but broadcast as well. I’ll turn it back to you, Patrick.

Patrick Sholl, Analyst, Barrington Research: Okay. Thank you.

Bill Wilson, Chief Executive Officer (CEO), Townsquare Media: You got it. Thank you for the questions, Patrick.

Operator: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Michael Kupinski with Noble Capital Markets. Your line is now open.

Michael Kupinski, Analyst, Noble Capital Markets: All right. Thank you for taking my questions. Good morning. A couple questions here. Your white label digital media partnership business seems to have gained some traction, but so far, it’s been with some smaller operators. I was just wondering, do you believe that the service could be attracted to larger station groups, or do you think it’s more likely that you will see more singles and doubles from that partnership arrangement?

Bill Wilson, Chief Executive Officer (CEO), Townsquare Media: Thank you, Michael. Good morning to you as well. Yeah, we couldn’t be more proud of our programmatic business. As we outlined, our digital advertising, 65% now of our total digital advertising is programmatic. In Q1, that grew 21% year-over-year. Even stripping out the success of media partnerships, we would be close to 20% growth year-over-year in Q1 as well without that. That said, this division is on fire. Shauna, who’s been leading that with Todd, has been doing an amazing job. You know, we had six partners in 2025. As we outlined previously, we grew from $1 million in 2024 in revenue to $6 million in revenue last year. I expect that to, if not double, get close to it.

Based on our current pacing, I think we’ll more than double to $6 million in revenue, and we operate that at a 20% profit margin. As you know, Michael, but for the benefit of everybody on the call, we expect that to be in 4 years or less, $50 million in revenue at a 20% profit margin. Last year, we had 6 media partners. Now we have 13. I think the success we’ve had with each one of our partners, and we’re proud and honored to be partnered with them, has become really well known in the industry. We’re close to doubling everybody’s revenue in terms of what we forecast for 2026 for the existing partners versus what they did in 2025. They’re obviously quite pleased. We’re quite pleased.

Getting to your specific question, the majority of these are small operators. One thing I would highlight is some of them are in the top 50 markets, which are not the footprint of our own radio stations and digital footprints. We’ve had great success actually in the top 50 markets with those partners, and that’s a testament to them as well as utilizing our platform. Confidentially, we obviously can’t discuss who we’ve been speaking to, but our pipeline is literally dozens and dozens of local media companies, primarily radio, but there’s also some television, outdoor, print, and other legacy media companies who have seen what we’ve done for ourselves, now have heard from partners what we’re doing for them, and therefore, our inbound queue of media partners has grown quite nicely and continues to do so.

Some of those, to your question is, hey, are there opportunities if you’re a larger media company? The answer is yes. Obviously, we’re a large media company. Our programmatic division in Q1 is, you know, up over 20%, and as I said, in Q2 is pacing above 20% again. So clearly the solutions we have are tremendous for all size operators. Although we haven’t announced any larger ones that have, say, you know, 70, 80, 90+, properties or either radio stations or television stations, that is clearly a opportunity.

If those conversations continue and result in a partnership, I can’t say with certainty, but I can tell you with certainty that the solutions we’re deploying for these smaller operators clearly work for larger operators as well, and we’re quite excited that our Q2 pacing is in programmatic’s up over 20% again, like it was in Q1, and that our direct sold, own-owned, owned and operated, which was up 10% in Q1, is again trending quite nicely in Q2 at that level as well. Michael, I’ll turn it back to you.

Michael Kupinski, Analyst, Noble Capital Markets: Yeah. You know, Bill, you indicated that you’re in the top 50 markets now in that business and, you know, historically, you’ve always said that that wasn’t the area that you would play in. It seems like a big opportunity for you. Can you just kind of tell us about the opportunities that you’re seeing in some of the top 50 markets? Is that now an area that you feel comfortable in playing in at this point?

Bill Wilson, Chief Executive Officer (CEO), Townsquare Media: Thank you, Michael. You are correct. The partners that we’re having, like Steel City Media and others in the top 50 markets, we’re seeing real strong penetration in those markets. We’re seeing shifting market share for those companies in terms of digital growth in the programmatic space. In the larger markets, at times we do see larger revenue spends, you know, client spends per month on average than maybe outside of the top 100 markets. Clearly, the good news is our solutions work in the top 50 markets. From an acquisition standpoint, our stance still is that we’d be more interested in markets outside the top 50.

I think we’re more highly differentiated across the board in local radio, in our owned and operated content for our digital websites and mobile apps, as well as our Townsquare Interactive solutions. As it relates to potential acquisitions, be it swaps or inter-incremental markets or incremental stations, our viewpoint is still to focus outside the top 50. As we’re talking to media partners, there are many who have properties in the top 50, and we put them in touch with our existing partners, and they’re hearing how well our solutions are working. We are quite confident playing in the digital advertising space in the top 50. We know it’s working quite well for our partners. Yet, I don’t think at this point in time we’d be interested in acquiring properties in the top 50.

Hopefully that gives you some color, but I’ll turn it back to you, Michael.

Michael Kupinski, Analyst, Noble Capital Markets: Yeah. I mean, first of all, congratulations on executing your digital strategy. On your O&O digital advertising in Q1 and outlook is pretty impressive. You know, given the reports out there that, you know, digital advertising is, you know, kind of slowing and, you know, for some radio operators, how much visibility do you have into the second half on digital advertising demand trends, particularly if, you know, from your local advertisers?

Bill Wilson, Chief Executive Officer (CEO), Townsquare Media: Yeah, I appreciate that, Michael. I appreciate you using the word impressive because, you know, we’re quite pleased and proud of our digital advertising growth. In terms of the back half, we’re seeing even actually greater strength in Q2 than Q1. That’s true in our programmatic space, that’s true in our owned and operated space. As I mentioned, it was great in Q1 that our online audience grew from 20 million in Q4 to 25 million in Q1 this year. A nice improvement in our audience, and that, as I said, also helped us from a remnant standpoint. Although it’s only 8% of our digital advertising, that was obviously a headwind, and there was a lot of concern from investors if that would continue.

That’s why we outlined that we expect that $12 million last year to go to $9 million in revenue this year and that be lapped in August. It’s really the first 7 months. As we lap that, our owned and operated digital growth is projected to be actually nicely higher, quite higher in the back half of the year than the front half of the year. That also bleeds into in the calculation of overall digital advertising. We expect to be stronger in Q2 and the back half of the year than Q1, although we grew, you know, obviously +7% in Q1, which was nice, after growing on average 2% full year last year. Real acceleration and improvement in our digital advertising business.

As your question is, we expect the back half to be even stronger than how we’re starting this year with all the momentum that we’re seeing.

Michael Kupinski, Analyst, Noble Capital Markets: Thank you. If I can flip one more in. On your Townsquare Interactive, where are you in terms of getting your sales force into your steady state sales force level? Like, what % of your goal are you at this point?

Bill Wilson, Chief Executive Officer (CEO), Townsquare Media: We still have quite a way to go. We’ve actually just started beefing up or increasing the size of our recruiting team. The recruiters we do have are doing quite nicely in bringing in talent. But as we said, I think we said it either on the year-end call or maybe the Q4 call, our sales force was down 40% in terms of size of sales team. That is gonna take us That we will not get back to those levels until 2027. That said, based on the lowering of churn and based on the fact that we are incrementally, quarter-over-quarter growing our sales team, we have the opportunity in the back half of this 2026 to see month-over-month revenue growth.

Combining that with the performance of customer service and the lower churn, we’re seeing really strong profit margins as well. I don’t expect us to get back to our goal until 2027. That said, with our trajectory right now of churn and adding sales for people, as well as we’re still seeing higher revenue per sales rep than we historically have, I believe we have an opportunity in the back half of 2026 to grow month-over-month revenue. As I said, I just spent the week in Charlotte. I couldn’t be more confident, more energized.

Sometimes, obviously, you know, the internal view may not always be apparent on the outside, but as we look at the next 3 to 5 years for Townsquare Interactive, I’m very confident they’re getting back to their mojo of the early 2020, 2021, 2022 type of financial performance, and that’ll be more evident, I think, as we go into 2027 and beyond. Feeling quite good. Obviously, the fact that 63% of our total profit is driven by our 2 digital businesses is the highest ever for the company, and the 59% of total revenue coming from these 2 digital divisions is the highest ever as well. We’re feeling quite well-positioned.

You know, as you know, Michael, we don’t operate this on a quarter-over-quarter or year-to-year basis, but as we look at the next 5 year, we feel like we’re incredibly well-situated from an organic standpoint. To your questions about media partnership and our success with the 13 current partners, the pipeline that we have, coupled with, you know, we’re playing in some of the top 50 markets through these partners, couldn’t be more excited about the momentum we have right now. Thank you for the question, and I’ll turn it back to you in case you have any others.

Michael Kupinski, Analyst, Noble Capital Markets: Thanks, Bill. That’s all I have. Thank you.

Bill Wilson, Chief Executive Officer (CEO), Townsquare Media: Thank you, Michael.

Operator: There are no further questions at this time. I will now turn the call over to Bill for closing remarks.

Bill Wilson, Chief Executive Officer (CEO), Townsquare Media: Thank you, operator. Thank you all for joining us this morning to hear about not only our Q1 results, but importantly, how we’re looking at the full year as well as the next few years. As Stu said, we had more cash flow from operations in Q1 2026 than we did in Q1 2025 or Q1 2024. We’re feeling quite confident about how well we’re situated for not only this year but the next several years. I’m really proud of our Townsquare team. The innovation, the momentum, the excitement that the team is building is really incredible, and I just wanna thank them and thank you for joining us this morning and look forward to regrouping in a few months and updating you on the back half of the year and how that’s coming together for us.

feeling quite confident and hope everybody has a great day.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.