Townsquare Media Q4 2025 Earnings Call - Digital engine holds as AI cuts remnant revenue; programmatic and direct sales power 2026 recovery

Operator: Good morning, and welcome to Townsquare Media fourth quarter 2025 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 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. Please go ahead.

Claire Yenicay, Executive Vice President, Townsquare Media: Thank you, operator, and good morning to everyone. Thank you for joining us today for Townsquare’s fourth quarter financial update. With me on the call today 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 provision 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 will 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. In addition, our annual shareholder letter is now available on our website. At this time, I would like to turn the call over to Bill Wilson.

Bill Wilson, Chief Executive Officer, Townsquare Media: Thank you, Claire, and thank you all for joining us today. It’s great to speak with you this morning. We’re very pleased to share with you today that Townsquare’s fourth quarter results, and therefore our full year results for 2025, met the total net revenue and Adjusted EBITDA guidance that we provided on our last call, reflecting our team’s hard work in the current environment. We are proud that the execution of our digital-first local media strategy allowed us to deliver excellent results for our clients while also outperforming competitors and gaining market share in 2025.

In addition, we produced strong cash flow from operations due to the thoughtful and deliberate management of our expense base and executed a refinancing in a challenging environment that was unforgiving to the broadcast media companies, extending our maturity profile through 2030 and granting us ample runway to execute our growth strategy. Due to our strong cash flow characteristics, we were able to pay down debt throughout the year while also maintaining a high-yielding dividend for our shareholders and organically investing in our business for future growth. Before diving into our results, I’d like to take a minute to address our dividend. I bring this up because due to the stock price performance at year-end, our dividend yield spiked, causing some investors to contact us and express concern about the dividend safety.

To be transparent, we do not pay too much attention to the implied dividend yield as we believe the underlying strength of our digital advertising business and its differentiation is not reflected in the current stock price, making the dividend yield a somewhat irrelevant metric at times. With that backdrop and context, I’m pleased to share that management, along with our board of directors, remain confident in the strong cash flow generation that our business model delivers and therefore in our ability to support our dividend at its current rate. Now back to our results. 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 came from digital, which is up from 52% in 2024. In 2025, 56% of our total segment profit was generated from our digital solutions, which is up from 50% in 2024. As highlighted on slide 10, this is industry leading at two times our competitors as on average, they only have 30% of their revenue coming from digital sources. 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 United States and further differentiating us from others in local media.

Our digital growth engine is comprised of two segments: Digital advertising, which we call Townsquare Ignite, and subscription digital marketing solutions, which we call Townsquare Interactive. While we expect both to deliver long-term profitable growth with strong profit margins, we expect that our digital advertising business, and more specifically our digital programmatic business, will be our leading growth vehicle. In 2025, our digital advertising business started the year with strong revenue growth rates. In fact, revenue grew +8% year-over-year in Q1 of 2025. As the year progressed, however, we were faced with two very different trends.

Digital advertising related to our direct-to-client sales were very healthy and strong, but were largely offset by a decline in indirect revenue, also known as remnant revenue. Driven by a significant deterioration in our online audience trends on our local and national websites, which you may recall we went into great detail on our last earnings call. All in all, 2025 digital advertising revenue increased +2% year-over-year. This growth was driven by, one, our programmatic digital advertising platform, and two, the direct local sales of our owned and operated or O&O digital properties. First, our digital programmatic business, which made up approximately 65% of our digital advertising segment 2025 revenue, delivered strong full year revenue results of +9% year-over-year for digital programmatic.

We believe 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 leadership team. We expect programmatic 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 nicely 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 partnerships revenue was approximately $6 million and we had 6 local media partners.

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. Therefore, 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 can grow to be $50 million in revenue for Townsquare at an approximate 20% profit margin. Ultimately, our goal with this initiative and division is to become the chosen provider of digital programmatic advertising to broadcasters and digital agencies in local markets outside of major cities.

We are proud and honored to share that in addition to the six strong partners we had in this division in 2025, we have now signed agreements with five additional parties, bringing the total to 11 media partners, and we are excited to start working with them. In total, our programmatic digital business, which again now makes up 65% of our digital advertising segment, is on a roll and firing on all cylinders as we start 2026 with revenue up a strong approximately 20% year over year in Q1. Again, in Q1 2026, we’re up approximately 20% in our programmatic digital advertising business. Our local teams are selling digital advertising better than ever, while at the same time our media partnership division is on pace to nearly double revenue in 2026.

Second, the direct sales of our local O&O digital assets, which include our local salespeople selling the inventory on our own 400+ local mobile apps and local websites, was also quite strong in 2025, growing +9% year-over-year, driven by increases in both number of clients and average monthly spend. In Q1 2026, sales of our local O&O digital assets is projected to be over +10%. With the deep skill set of our digital product and engineering team, we have developed a multitude of digital advertising solutions for our clients, bringing national scale and sophistication to our size markets, including high impact solutions that are not available on programmatic exchanges such as site takeovers, first impression full site coverage, mobile interstitials, sponsored social mentions, endorsements, and so much more.

In addition, we have the unique ability to collect and analyze first-party data from our digital audience, allowing us to provide detailed and unique insights about consumer behaviors, audience interest, and purchase intent that drive real results with strong ROI for our clients, giving us a true strategic advantage over our local competition. We’re especially proud of the success of our local sales team and what they’ve done to drive direct sales growth, and they continue to do so. A conviction that is currently supported by our first quarter forecast, which has Q1 revenue for our direct sold O&O digital advertising up over 10% year-over-year. Now, to address the digital advertising headwinds created by the emergence of AI, which we also detailed on our last earnings call.

For clarity, AI is negatively impacting the revenue that we get by selling excess or remnant digital inventory, our owned and operated websites programmatically, AKA impressions that were unsold by our local sales team due to the fact that we now have less excess digital inventory available to be sold. In 2025, our digital audience decreased as referrals from search engines such as Google declined significantly as again, we addressed on earlier earnings calls. Unique visitors to our O&O local and national websites and mobile apps was on average approximately 40 million people per month in 2025, a decline of approximately 45% as compared to the approximately 70 million per month in 2024. As we have previously shared, this is an industry-wide issue impacting publishers of all sizes to a significant degree.

Revenue generated from remnant inventory on our websites, which as a reminder, is almost 100% profit margin revenue for us, declined approximately 40% year-over-year to approximately $12 million in 2025, and this was from approximately $20 million in 2024. Therefore, remnant indirect digital revenue declined from being approximately 13% of our total digital advertising revenue to now being just 8% in 2025. Importantly, our direct digital advertising sales were not impacted by the decline in audience. As I’ve already shared, direct sales of our local O and O websites increased +9% in 2025 year-over-year and is now pacing up over +10% in Q1 2026.

This is because although the declines of our audience are material, we have so much excess or unsold digital inventory due to the huge scale of our audience, that we are nowhere near close to touching the amount of digital advertising we can sell directly. This meaningful and unforeseen drag on our otherwise strong digital advertising performance significantly muted our overall revenue and profit growth rates in 2025. In fact, excluding the revenue from remnant inventory sold programmatically, 2025 digital advertising revenue overall would have increased +8% year-over-year for Townsquare. We have been asked if we believe that our digital audience and therefore our indirect digital advertising revenue will go to zero, and also if that then impacts our direct digital advertising revenue. The answer is without a doubt, no. Why is that?

Quite simply, it’s because there are other drivers of digital audience to our websites and mobile apps that are not tied to Google and other search engines, providing us a floor. A meaningful portion of our traffic is driven by social media as well as direct visits to our websites and mobile apps from our loyal audience, as well as traffic from our local email newsletters, as well as traffic from mobile alerts and many other sources of organic traffic. We’re leaning into this, developing new traffic strategies, building new content publishing tools, and reinvigorating our team. Early signs are very, very promising. In January, unique visitors to our websites increased month-over-month. Although still down year-over-year, they also reached our highest audience level in January since July of 2025.

This is an early proof point that even with the impact of AI and search engine traffic, we are in a differentiated position given our focus on hyperlocal content coupled with the power of our social media platforms to stop the decline, and we believe grow our online audience once more. As we have outlined on our last earnings call, the year-over-year comparison for remnant indirect revenue will be quite negative through August of this year. We forecast Q1 and Q2 remnant revenue to be down approximately 40% year-over-year in each quarter. Then for Q3 and Q4 2026, we expect remnant revenue to be approximately flat year-over-year.

For the full year 2026, our expectation is that the approximately $12 million in remnant indirect revenue declines to approximately $9 million in 2026 and thus approximately a $3 million decline. Again, this is close to 100% profit margin for Townsquare. The positive news is that with our online audience to our owned and operated properties growing in January over December, we forecast that revenue will be up over 10% in Q1 2026 versus Q4 2025. On a sequential basis, at a minimum, we expect that the remnant revenue decline we experienced throughout 2025 will subside substantially and quite possibly we could have ongoing quarter-over-quarter growth like we are experiencing Q1 2026 versus Q4 of 2025. A very positive development and one that I foreshadowed on our last call during our Q&A session.

Again, although our Q1 remnant revenue is down approximately 40% year-over-year, I’d like to emphasize that it represents only a small portion, approximately 8% of our total digital advertising revenue today. In fact, the majority of our digital advertising segment, including and especially our programmatic business, continues to deliver very strong and healthy profitable revenue growth. We expect that Q1 2026 digital advertising revenue overall will be up high single digits given the strength of our direct sales results. In addition, even with the decline of an estimated $3 million in indirect remnant revenue, our full year forecast is for digital advertising to also be up high single digits for 2026, which is a significant acceleration from 2025 +2% growth.

Again, in 2026 full year, we expect our digital advertising in total to be up high single digits versus 2025’s full year +2% growth. At Townsquare Interactive, our subscription digital marketing solutions business, we are proud to share that we delivered the highest segment profit margin in its history. As well as the best profit growth since 2019 and the second strongest year-over-year profit improvement ever, with year-over-year segment profit growing nearly +$4 million versus the prior year or +17%, nearly erasing the past two years of profit declines at Townsquare Interactive. Our strong profit performance at Townsquare Interactive is largely due to three factors. One, the restructuring of our customer service model in 2023 that allows us to grow more efficiently.

Number two, changes to our sales structure at the end of 2024 and early 2025 that has led both to a temporarily smaller sales team, down approximately 40%, but very importantly, a more productive sales team with much higher ROI. Finally, number three, efficiency 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 improvement in efficiency across the business, from helping to create websites to assisting with customer service. However, as I just mentioned, with a much smaller sales team comes slower sales velocity and therefore muted revenue performance at Townsquare Interactive in the short term. In 2025, Townsquare Interactive net revenue declined -0.7% year-over-year, and we expect year-over-year declines in revenue to continue short term as we rebuild our sales teams.

It is absolutely our plan to rebuild our sales team to prior levels as we still have the utmost confidence in our service offering and the addressable market for Townsquare Interactive, which in our estimation is nearly 9 million target customers, as outlined on slide 14. We expect Q1 revenue at Townsquare Interactive will decline approximately 8%. Based on current forecasts, we could see a return to quarter-over-quarter revenue growth as early as Q3 2026. In the meantime, we expect that strong profit margins will continue throughout 2026, just as we delivered in 2025.

I’d like to emphasize that we remain very confident that the changes we have made to both our customer service and our sales model, along with our continued deployment of AI solutions, combined with the future growth of our sales teams, are setting Townsquare Interactive up for the next decade of efficient and profitable growth and success. 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 to 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 and -12.6% in total.

Despite broadcast revenue declines and macro headwinds, we outperformed the industry again in 2025, gaining local and national broadcast market share, according to Miller Kaplan estimates. In Q1 2026, we are currently forecasting a very slight improvement in the ex-political performance in our broadcast segment versus Q4 and full year 2025. With our differentiated local content on our local radio broadcast, combined with being able to offer clients marketing solutions powered by the combination of digital plus radio, we believe that we will continue to gain broadcast market share 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 fact, we were able to manage broadcast expenses in 2025 such that despite revenue declines, broadcast segment profit margins were approximately 26% in both 2024 and 2025 when excluding the impact of political revenue. 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 details. All yours, Stu. Take it away, please.

Stuart Rosenstein, Chief Financial Officer and Executive Vice President, Townsquare Media: Thank you, Bill, and good morning, everyone. It’s great to speak to you today. We are very pleased to report that our fourth quarter results met our revenue and Adjusted EBITDA guidance. Fourth quarter net revenue declined 4.5% year-over-year, excluding political and 9.6% in total to net revenue of $106.5 million, which was within our guidance range of $105-$109 million. Full year net revenue declined 2.8% year-over-year, excluding political and 5.2% in total to $427.4 million.

Fourth quarter Adjusted EBITDA, excluding political, declined 17% year-over-year and 30.9% in total to $21.5 million, which was also within our guidance range of $21.5-$23.5 million. Full year Adjusted EBITDA, excluding political, declined 3% and 12.2% in total.

I would also like to highlight that when excluding the impact of political in 2024 and 2025, Adjusted EBITDA margins were flat at 20.3% in each year as we thoughtfully managed our expense base to manage the declines in broadcast and the high margin digital headwinds. Townsquare Ignite, our digital advertising segment, experienced slight revenue declines in the fourth quarter as weakness in the remnant digital advertising revenue offset continued growth in the direct sales of our programmatic offerings and our owned and operated digital portfolio. In total, fourth quarter digital advertising revenue declined 1% year-over-year, a slight improvement from Q3 declines. For the year, this translated to modest growth in our digital advertising revenue of 1.6% year-over-year.

As Bill also noted, we expect strength in direct digital advertising sales to offset the ongoing headwinds from remnant revenue in Q1, with Q1 digital advertising revenue growth accelerating over Q4. In 2025, our digital advertising profit margin declined to approximately 22% due to the loss of high-margin remnant digital revenue that we have described at length. As a result, going forward, we expect digital advertising margins to remain in the low 20s. As expected, and as we previously projected, Townsquare Interactive, our subscription digital marketing solution segment’s Q4 net revenue decreased 5.6% year-over-year and 0.7% for the full year period.

We’re thrilled to share that as expected and consistent with performance all year, Townsquare Interactive delivered another quarter of very strong profit growth with Q4 segment profit increasing 12% year-over-year. In 2025, total segment profit at Townsquare Interactive increased an impressive 17.4% year-over-year, representing segment profit growth of $3.7 million, which represented an all-time high profit margin for the segment of 33.6%. In 2026, we’re very confident in our expectation that profit margins will remain in line with 2025 profit margins due to the efficiencies and cost savings that have been implemented.

Broadcast advertising net revenue declines on an ex-political basis were consistently down approximately 8% year-over-year for the quarter of 2025, and therefore for the full year as well. As 2025 was not a political year, the declines were more meaningful on a total basis. In the fourth quarter, total broadcast revenue declines 17.8%, and for the year, total broadcast revenue declined 12.6%, each as compared to the prior year. Importantly, broadcast segment profit margins were approximately flat in 2024 and 2025 when excluding political at approximately 26% each year. We’re very proud of how our team is working diligently to manage our broadcast expense base in the face of revenue declines.

Our fourth quarter net loss was $4.8 million, or $0.32 per diluted share. In 2025, our net loss improved $1.2 million year-over-year to a net loss of $9.8 million. We’d like to remind you that any benefit or provision for income taxes included on 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 the end of 2028. As Bill highlighted, and I would again like to emphasize, we consistently have strong cash flow generation.

We generated $31 million of cash flow from operations in 2025. Cash flow from operations before cash interest payments was $83 million, which was only down 2% or $2 million lower than the previous year, despite the year-over-year declines in Adjusted EBITDA. In 2025, following the February 2025 refinancing, we repaid $23 million of our outstanding debt, including $6 million of term loans, which we purchased at a discount in the open market during the third quarter. In addition, our cash this year has been used to fund $52 million of interest payments, $13 million of dividend payments, and $28 million of fees associated with our February refinancing. For clarity, our current annualized interest expense is approximately $39 million.

With $457 million of total debt outstanding and $5 million of cash at year-end on our balance sheet, our net leverage was 5.14 times. I’d like to remind you that since our term loan is a floating rate instrument, each quarter point interest rate cut translates to approximately $1.1 million of annualized interest reduction based on our current debt balance. As always, our number one 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 businesses to maintain our strong competitive advantages in our markets outside the top 50 cities.

In addition, 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. Speaking of our dividend, our board has approved our next quarterly dividend payable May 4 to shareholders of record as of April 27. The dividend of $0.20 per share equates to $0.80 per share on an annualized basis and implies an annual payment of approximately $13 million based on our current share count and a dividend yield of approximately 11% based on our current share price. As Bill mentioned, it’s both management’s and the board’s belief that our current share price does not reflect the inherent value of Townsquare.

Therefore, we are 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. As Bill also highlighted at the top of the call this morning, our plan is to continue to support our dividend at the current rate. Importantly, Townsquare management team and board of directors collectively own 16% of the company’s equity, ensuring that our interests remain closely aligned with those of our fellow stakeholders as we work to build long-term value. Turning now to first quarter and full year 2026 outlook. We expect first quarter net revenue to be between $96 million and $98 million, which represents low single-digit year-over-year declines. We expect first quarter Adjusted EBITDA to be between $16 million and $17 million.

As a reminder, in the first quarter, we typically have the lowest revenue of the year due to advertising cyclicality. Our margins are typically lower in our advertising segments in the first quarter as a result. For the full year, we currently expect that our revenue will be between $420 million and $440 million. Embedded in this guidance is the 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. We hope this is a conservative estimate, but as political has come in below expectations over the past few years, we believe this approach is prudent. We expect that our 2026 Adjusted EBITDA will be between $87 million and $93 million.

With that, I will now turn the call back over to Bill.

Bill Wilson, Chief Executive Officer, Townsquare Media: Thank you, Stu, and thanks to everyone for taking the time to be updated on Townsquare’s year-end 2025 results this morning. We greatly appreciate it. As we begin 2026, there are also many areas of strength across Townsquare worth highlighting. Number 1, our digital advertising revenue will be returning to high single-digit revenue growth in Q1, driven by the strength of our programmatic offering and the success of our media partnership division, as well as the strong, consistent revenue growth of the direct sales of our local digital O&O properties. As I detailed earlier, we are already seeing early signs of month-over-month online audience stabilization and thus remnant revenue stabilization. As I also noted earlier, we are also currently forecasting a very slight improvement in the ex-political performance in our broadcast segment versus the -8% ex-political declines in each quarter of 2025.

Townsquare Interactive profit margins remain very strong at all-time highs, and we expect to see sequential revenue improvement towards the back half of the year. 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. As always, we wouldn’t have the confidence in our long-term success without the Townsquare’s team’s effort, passion, and commitment that is directly driving our growth and innovation each and every day. We are building a more focused, more digital, more resilient Townsquare, and we believe that the strong foundation we have built over the past 16 years positions us well for the years ahead. I could not be more appreciative of our team and their tremendous work each day.

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 the star followed by the number 1 on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number 2. If you are using a speakerphone, please leave the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Patrick Sholl with Barrington Research. Please go ahead.

Patrick Sholl, Analyst, Barrington Research: Hi. Thanks for taking the question. You touched on AI earlier. I was just curious the extent to which you’re seeing some of your clients on the Townsquare Interactive side use those type of tools to you know kind of self-serve just on their own solutions for those types of services.

Bill Wilson, Chief Executive Officer, Townsquare Media: Hey, good morning, Patrick. Thank you for the question. Always good to hear from you. Yeah, we’re quite proud of how the company overall and really specifically the furthest along is Townsquare Interactive in terms of deploying AI tools for greater efficiency. That’s why, as you saw in 2025, the highest profit margin that we’ve ever operated Townsquare Interactive at, it was around low thirties, I think it was 33% versus traditionally a couple years ago, we were in about 28%. We expect that to continue for the full year.

2026. Quite proud of the Townsquare Interactive team and where we’re operating currently on a full year picture. As I said earlier, expecting to return to quarter-over-quarter revenue growth towards the end of 2026, while still continuing to operate at a very high profit margin. Specifically to your question about clients, not necessarily what we’re doing, we’re not seeing that for the Townsquare Interactive clients. Just as a reminder for everybody on the call, I know you’re aware of this, Patrick, but you know, we’re targeting businesses with less than $10 million in annual revenue, less than 20 employees. We have in the investor deck how large a TAM that is in terms of the target market. These are businesses that are looking for help to operate all of their digital marketing solutions.

It’s not just, you know, having a website is really not what we’re about. It’s really helping them operate their business and grow their business and reach more customers. As I’ve outlined on a prior earnings call, at this point, every one of our clients is using our CRM. We’re able to collect offline information about their clients as well as obviously online information about their clients, and then do ongoing text-based marketing, email marketing, as well as digital advertising marketing on their behalf. We’re not seeing clients. The target market for us are not those who wanna do a self-service. That’s always been there even prior to AI. We’ve talked about this for over a decade now.

There was always, you know, GoDaddy and Wix and Squarespace and all these other, what I would call freemium models, where you can have a web presence for free, and then, you know, a la carte ad services. That’s not the value proposition for Townsquare Interactive. It’s really for an average ARPU of $300, we’re handling all of your digital marketing solutions and helping you really operate your business much more effectively. We haven’t seen AI have any negative impact at Townsquare Interactive. If anything, as I outlined on the call, it’s helping us really improve our marketing, as well as our profit margin from 28% to 33% to 34%. Feel quite bullish on Townsquare Interactive as we go into 2026 and beyond. I’ll turn it back to you for any follow-ups, Patrick.

Patrick Sholl, Analyst, Barrington Research: Thanks. Yeah, just on the digital advertising side on the media partnerships, could you just maybe talk a little bit about like what stage and sort of ramping up the partnerships that you launched in 2025 are, and kind of how you expect the 2026 new partners to sort of start to flow through?

Bill Wilson, Chief Executive Officer, Townsquare Media: No, I appreciate that, Patrick. Thank you. As I outlined on the prepared remarks, couldn’t be more bullish on our digital advertising business in 2026 and, most importantly over the next five years. You know, we’ve detailed in great detail the last few calls about the headwinds of the remnant piece, and as I outlined on the call, that is now starting to subside. We have growth in our unique visitors in January, as well as February versus Q4 of 2025. Therefore, as I mentioned on the last call, you know, our remnant indirect revenue went from $20 million in 2024 to $12 million in 2025. On a full year 2026 basis, we expect that now to only decline to roughly $9 million.

It’ll be a $3 million headwind is our expectation for full year 2026. With all of that said, in Q1, our digital advertising’s up and pacing over 7% versus prior year. Just to put that in perspective, in 2025, that was 1.6% growth. In Q4, we were actually slightly negative in digital advertising because of the remnant issue. To be up and pacing over 7% in Q1, and we expect that to be high single digits on a full year basis, we couldn’t be more bullish about our Ignite digital advertising segment. The team is just, quite honestly, on fire.

Our programmatic division, last year, just what we’re doing, which is 65% of our digital advertising on the programmatic side, was up 9% in 2025, and as I mentioned on the call, in Q1 is up over 20%. Our direct sold of our owned and operated websites and mobile apps, in 2025 was up 9% and is up currently over 10% in Q1 2026. A lot of momentum. Couldn’t be more proud of the team and what we’re doing there. Specifically to your question on media partnerships, it’s been, it’s interesting how this ebb and flow is like it’s gone extremely well from the beginning, but the number of partners, particularly over the last six months, who are inbound reaching out to our team has really accelerated.

As I mentioned, you know, we had 6 partners in 2025, and they’re great partners, each and every one of them. We now have signed 11. We’ll probably add a 12th throughout 2026. The pipeline is quite robust. We did roughly $1 million in 2024 with our media partners. As you may recall, Patrick, that was really the initial launch. Last year, that was $6 million on an annualized basis, and this year we expect that to roughly double. That’s really organic growth from our existing 6 partners, as we onboard more people. We operate that media partnership division at roughly a 20% profit margin, as you may recall, and I expect that to be a $50 million business within four years.

I think the proof point of our performance in 2025 and what we expect in 2026 is a good indication of that. In terms of the new partners, we don’t really expect a lot of revenue in 2026. We’ll be onboarding them now, which means a lot of training, and really minimal revenue from the incremental five. For the original six that we had in 2025, I think every one of them, or almost every one of them, has doubled their revenue versus what before they approached and partnered with us. As you may recall, each of these companies that we are honored to be working with, they’ve all been doing programmatic digital advertising before us.

They were using other people in the space, and they moved to us because of what we can do and how differentiated it is and all the tools and solutions we provide and having lived the book and run the playbook that we’re asking and helping them run. It’s quite differentiated. Each one of those businesses almost or over doubled their revenue with us in their first year versus what they were doing annualized prior to coming with us. Again, the media partnership division on fire, but most importantly, our entire Ignite division with $161 million in revenue last year, $36 million in profit, is trending up in Q1 over 7% from prior year. On a full year basis, we expect to be high single-digit growth versus 2025.

I’ll turn it back to you, Patrick, to see if you have any other questions on Ignite or any other Townsquare-related questions.

Operator: No. Thank you. Thank you.

Bill Wilson, Chief Executive Officer, Townsquare Media: Thank you, Patrick. Appreciate the questions.

Operator: Thank you. The next question comes from Michael Kupinski with Noble Capital Markets. Please go ahead.

Michael Kupinski, Analyst, Noble Capital Markets: Thank you and good morning, everyone. I’m really happy to hear that revenue trends are improving. I was just wondering if you can talk a little bit about what’s driving the slight improvement in broadcast advertising outside of political? I was just wondering, have you seen any disruptions in and around, you know, the geopolitical issues and war and so forth?

Bill Wilson, Chief Executive Officer, Townsquare Media: Thank you, Michael. Always great to hear from you. Yeah, we’re quite, you know, quite pleased at how the year has started for 2026 for Townsquare and even more excited about the full year. Our revenue trends are slightly improving ex political and broadcast, as you just mentioned. I just highlighted the high single-digit growth on our Q1 as well as full year basis for digital advertising and our strong profit margins, highest ever, will continue in Townsquare Interactive and have revenue growth returning quarter-over-quarter in the back half of the year. Clearly, the geopolitical environment has not been favorable, yet we’re seeing a significant improvement in our business in 2026 versus 2025. Therefore, you know, God willing, this geopolitical situation is handled and there’s an off-ramp sooner than later.

We expect when that does happen, whenever that does happen, we’ll see even a greater improvement in each of these businesses. Particularly digital advertising and broadcast will be most impacted from the geopolitical environment. Townsquare Interactive is really insulated from that to a large degree. You know, as I mentioned, programmatic and digital advertising up over 20% in Q1. Direct sold over our owned and operated mobile sites and websites is up over 10%. That’s with this geopolitical situation. I think we’ll continue to work through the challenges in the environment, but we couldn’t be more pleased with the improved revenue picture in 2026 versus 2025.

As to your question, I do expect as that gets off-ramped and resolved, that our advertising business will even pick up pace from where it is today, which we’re quite pleased with. I’ll turn it back to you for any other follow-ups, Michael.

Michael Kupinski, Analyst, Noble Capital Markets: Well, that’s really encouraging. Do you see opportunities to expand interactive services into new verticals or markets? Is there a bifurcation in markets such as West Coast versus East Coast? I’m just wondering if you can give us additional color there.

Bill Wilson, Chief Executive Officer, Townsquare Media: Yeah. No, I mean, for Townsquare Interactive, for those who recall, it’s our SaaS-based subscription business. We’re very diversified in terms of types of customers. You know, everything from lawyers, doctors, to contractors and so forth and so on. It’s a very diversified client base. It’s completely diversified from a location standpoint. It is all U.S.-based businesses, so we’re not international there. As you may recall, the large majority of our clients are outside of our local market footprint because of our call center. The team is operating at a high level, and it’s really about our revenue growth will come back as we build the sales team, and we’ve outlined that in quite an amount of detail.

Team is operating at a high level, doing quite well, diversified and really helping these businesses navigate, and operate at a much more efficient scale than they have previously. Quite bullish on Townsquare Interactive. As I outlined on the digital advertising side, as well as what you just said, it’s nice to see, although slight, broadcast improved from last year’s performance ex political. As I believe the geopolitical situation subsides, our broadcast business will improve even more in 2026. As it relates to Townsquare Interactive, quite diversified, not West Coast versus East Coast, all over the U.S. and performing quite nicely as we begin the year, Michael.

Michael Kupinski, Analyst, Noble Capital Markets: Gotcha. Your third-party media partnerships, I wanna follow up on Patrick’s question. What is the primary gating issue for significantly accelerating this business, both for you, if you have one now and for your target companies?

Bill Wilson, Chief Executive Officer, Townsquare Media: Yeah. The only reason we’re not scaling quicker right now, and I believe we will continue to scale and maybe even increase the rate of acceleration as we go into 2027, is one of the key differentiators for us and why so many local companies, be it media companies and now more and more local agencies are coming to us for this solution, is our ability to train the sales team. We’ve actually lived this playbook for over a decade and performed at quite a high level. It’s not only for them about revenue diversification, but we’re doing, you know, hand-to-hand sales training in their markets with their team going on four-legged sales calls.

We’re taking the best of the best in digital sales and marketing and partnering with each of these companies, not only to train them and then leave, but more importantly, we’re actually going on all the sales calls. It is somewhat labor-intensive. That’s why we’re also operating this at roughly a 20% margin. That’s the gating factor. It’s hard to hire somebody new from the outside of Townsquare and then deploy them to a partner. We’re really taking people who’ve been with us over a decade, who excel in digital marketing and advertising with clients, and using our best of the best, what we would call the ninjas of the company, and deploying them not only for our own teams, but for these media partners.

As I said, you know, I believe this will be a $50 million division within four years. We’re quite pleased that we went from $1 million in 2024 in revenue to $6 million last year. I’m quite confident that we’ll nearly double, if not more than double, in 2026. That’s really with the existing six partners that we had in 2025. As I highlighted, we’ve already added an additional five to be at 11 now. We haven’t onboarded all of the new five, and we will be doing so. We’re quite bullish on Ignite overall, as you can hear, and what we said in terms of pacing up high single digits% in Q1, and we expect that to continue for the full year.

Our immediate partnership division, I think, is incredibly differentiated versus others, and that’s why more and more people are reaching out proactively to us for us to really white label and handle all of their digital advertising solution and help them grow. Quite pleased that, as I said to Patrick, not only is this helping our company, but each one of these partners has, if not doubled, nearly doubled their revenue versus what before they came to us on an annualized basis. Again, our Ignite division is, quite honestly, firing on all cylinders. The headwinds of Remnant is starting to subside, and we’ll lap that in August. Even with that headwind through now through August, we’re pacing up high single digits% versus prior years. Media partnership, key component of that.

Couldn’t be more proud of our team and really honored to be working with our partners, Michael, so I’ll turn it back to you.

Michael Kupinski, Analyst, Noble Capital Markets: Yeah. One final question. Obviously, this goes to capital allocation. I know that, you know, I appreciate you addressed the free cash flow that you have and the fact that the dividend’s secure and so forth. You know, obviously, the depressed stock price kind of limits you in terms of making acquisitions. Are you kind of disappointed that, you know, I know in the past you indicated that radio could lead to build your digital business in many markets, and obviously, there’s a lot of stations on the market. Has your thoughts changed in terms of making radio acquisitions and getting, you know, foothold into some of these markets where you can expand your digital operations?

Have your thoughts kind of changed on that now, you know, given the fact that your digital business is now kind of, you know, are expanding into markets that you’re currently not in? I mean, do you need to think about acquisitions in radio to kind of grow their base business? You know, have your thoughts changed there?

Bill Wilson, Chief Executive Officer, Townsquare Media: It’s a great question, Michael. I appreciate that. Obviously, I think we sit in the catbird seat in that if we don’t do any acquisitions, we are in a great place of revenue and profit growth for the next 5 years. The media partnership division, where we’re white labeling our digital advertising, which we just walked through, is really allows us to, as opposed to acquiring, incremental radio stations, partner with others who already have sales teams in these markets that we’re primarily not in, and then to grow. You know, as I just outlined, we believe that’s a $50 million revenue business within 4 years at a 20% profit margin without having to deploy any capital other than hiring more and more people to support the division, which is quite nice.

That said, as we’ve demonstrated for the last 16 years since Townsquare was founded, when we do acquire radio stations, we’re able to diversify the revenue base quite substantially from broadcast advertising to digital advertising and digital marketing solutions. You know, last year, 56% of our segment profit was from our two digital businesses, and that was up 6 points from 2024. 2025, we had 56% of our company’s profit from digital businesses, and that was only 50% in 2024. When I say only, we’re obviously leading in terms of local media in that space, and 55% of our revenue last year from digital. We have demonstrated over and over and consistently that we can take traditional media assets and radio and diversify the revenue and profit base quite aggressively and quite successfully.

We have been having many conversations and, in essence, wargaming what we believe will be happening later this year with FCC and Commissioner Carr, where the ownership caps, we believe, will be loosened and maybe even in markets 100 and below go away completely. Again, I think we sit in the best seat because we don’t have to do acquisitions to grow. We’re gonna grow organically. We have the benefit of this media partnership division, which we’re growing through other markets and other companies and helping them without deploying capital. But that said, we could either acquire radio stations for cash or do swaps or other interesting potentials for us, and those are some of the conversations we’ve been having, particularly in a world where deregulation has.

You know, going back to your point, which I appreciate you highlighting, you know, our dividend is secure. You know, I think as Stu mentioned on the call, in 2025, we had cash flow from operations was $83 million before cash interest payments. We are quite confident in maintaining the dividend, which is, you know, over 11% today. We believe, and we are quite confident and patient, that over time, as more and more investors understand our growth trajectory and our business, that the stock price will increase, and therefore, the dividend yield will come down. We actually do not even pay any attention to the dividend yield. In terms of capital allocation, our number one priority, Michael, is to delever. Our goal is to get into the low threes over the next several years.

In the meantime, we sit in a great situation where we can grow organically quite nicely. We’re also proven that if we were to acquire other radio markets, that we can diversify that revenue base and grow our overall profit. That’s how we’re looking currently at capital allocation, and I think a lot of interesting things can happen, not only for Townsquare over the next 18 months, specifically in the radio division, but I think for the industry overall, ’cause I do believe deregulation will happen, and that’ll be great for overall business, and the ability to scale. I’ll turn it back to you in case you have any other questions, Michael.

Michael Kupinski, Analyst, Noble Capital Markets: Nope. That’s it. Thank you.

Bill Wilson, Chief Executive Officer, Townsquare Media: Thank you.

Operator: Thank you. At this time, we have reached the end of the question and answer session. Let me turn the call over to Bill Wilson for closing remarks. Please go ahead.

Bill Wilson, Chief Executive Officer, Townsquare Media: Thank you, operator. I appreciate everybody taking the time this morning to start the week and get updated on Townsquare. Most importantly, how we’re looking at 2026 and the momentum that we have across our company, but in particular, our digital businesses with Ignite and what I’ve been sharing in terms of what we’re experiencing as we start the year in Q1 and what we expect for the full-year basis in terms of high single-digit revenue growth versus last year. With Townsquare Interactive continuing to operate at that 33%-34% profit margin and returning to revenue growth in the back half of the year. Just sitting quite nicely. I would encourage everybody to read the annual shareholder letter.

I believe Claire mentioned that at the top of the call, but would encourage everybody to go to our corporate website at Townsquare Media and download the shareholder letter. We really look forward to getting back together. It’ll be, I think, 7-8 weeks from now, and update everybody on Q1 and importantly, our continued confidence and momentum for 2026 and beyond. Thank you, everybody. Hope everybody has a great day.

Operator: Thank you. Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.