ENTRAVISION COMMUNICATIONS CORP
For the period ended Dec 31, 2024. Filed Mar 6, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 6, 2025
EVC$8.99+19.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-14.
0000950170-24-031460
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-06.
0000950170-25-034661
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 135 previous paragraphs and 126 current paragraphs.
51 unchanged; 33 reworded; 41 added; 50 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (41)
Current report
Entravision owns and operates one of the largest groups of Spanish language television and radio stations in the United States. Our mission is to serve our Latino audience as a trusted provider of useful news, information and entertainment and to serve our advertisers by providing multi-channel marketing capabilities to engage our audience.
Current report
Entravision also owns and operates a smaller group of television stations that broadcast English language programming and has operations that provide programmatic advertising technology and services. We have organized our operations into two reportable segments. Our media segment includes our television, radio and digital marketing operations. Our advertising and technology services segment provides programmatic advertising and technology services through Smadex, our demand-side programmatic advertising purchasing platform, and Adwake, our performance-based media advertising agency.
Current report
In 2024 we discontinued and divested a significant portion of Entravision’s operations, which largely consisted of a collection of acquisitions that had been completed prior to 2024.
Current report
Our net revenue for the year ended December 31, 2024 was $364.9 million. Of this amount, revenue generated by our media segment accounted for approximately 61%, and revenue generated by our advertising technology & services segment accounted for approximately 39% of total revenue.
Current report
Our consolidated net revenue for the year ended December 31, 2024 increased 23% over the prior year period.
Current report
We achieved record political advertising revenue in 2024. In fact, 2024 marked the fifth election cycle in a row where we benefited from increased political advertising revenue compared to the previous election cycle.
Current report
Following a decision by Meta to terminate its ASP program globally, including us, and an evaluation of our business in light of that decision, we sold our EGP business in a series of transactions in the second quarter of 2024. The sale of our EGP business has allowed us to focus our operations on the products and services we sell instead of the type of advertising medium in which we sell them, which had been our historic operational approach. We have realigned our operational and management structure accordingly.
Current report
In 2024 we significantly enhanced our local news programming. We also made substantial investments in our news operations to capitalize on advertising inventory during our newscasts. We added early morning and midday news in all of our markets, whereas previously we broadcast early evening and late-night news. As a result of implementing this strategy, we added 107 new weekly newscasts on our TelevisaUnivision- affiliated television stations, delivering more than 400 hours of weekly news coverage across 415 newscasts. We now provide morning, midday, early evening and late news in all of our markets; and
Current report
In late 2024 we increased the size of our media sales team and it is our current intention that this will continue in 2025. We also intend to focus on enhancements to our operations and sales support, training and leadership functions.
Current report
Asset information by segment is not reported because we do not use this measure to assess performance or make decisions to allocate resources
Current report
Cost of revenue. Cost of revenue increased to $102.2 million for the year ended December 31, 2024 from $77.2 million for the year ended December 31, 2023. This increase was primarily attributable to an increase of $5.8 million in cost of revenue from our media segment, and an increase of $19.2 million in cost of revenue from our advertising technology & services segment.
Current report
Direct Operating Expenses. Direct operating expenses increased to $136.3 million for the year ended December 31, 2024 from $113.2 million for the year ended December 31, 2023. This increase was primarily attributable to an increase of $14.1 million in direct operating expenses in our media segment and an increase of $9.0 million in direct operating expenses in our advertising technology & services segment.
Current report
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $62.9 million for the year ended December 31, 2024 from $49.8 million for the year ended December 31, 2023. This increase was primarily attributable to an increase of $6.8 million in selling, general and administrative expenses in our media segment and an increase of $6.3 million in selling, general and administrative expenses in our advertising technology & services segment.
Current report
Corporate Expenses. Effective July 1, 2024, with the realignment of our operations and reassignment of certain responsibilities, certain costs that were previously included as corporate expenses, primarily salaries, are now included in direct operating expenses and in selling, general and administrative expenses.
Current report
Corporate expenses decreased to $37.5 million for the year ended December 31, 2024 from $50.3 million for the year ended December 31, 2023. This decrease was primarily due to a decrease of $1.9 million in salaries and bonus expense, a decrease of $3.9 million in non-cash stock-based compensation, a decrease of $3.2 million in professional services expense, and a decrease of $4.8 million in corporate expenses due to the realignment of our operations from three to two segments, as noted above. This decrease was partially offset by an increase of $1.1 million in severance expense.
Current report
In our former EGP business, we acted as an intermediary between primarily global media companies and advertisers, which consisted of either the enterprise or its ad agency running the advertisement. Our customers were both these primarily global media companies and advertisers. On March 4, 2024, we received a communication from Meta that it intended to wind down its ASP program globally and end its relationship with all of its ASPs, including us, by July 1, 2024. As a result of this communication from Meta, our CEO, who is also our CODM, led a thorough review of our operations, cost structure, digital strategy and organization of our business. This review led to the decision to sell the enterprises comprising our EGP business -- the largest business unit of what was then our digital segment. Following this decision, during the second quarter of 2024, we entered into a definitive agreement to sell substantially all of our EGP business to IMS. The transaction was completed on June 28, 2024. The remaining parts of our EGP business, Jack of Digital and Adsmurai, were each sold back to their respective founders in separate transactions during the second quarter of 2024.
Current report
Prior to the sale of the EGP business, for financial reporting purposes we reported in three segments – digital, television and audio, based on the type of medium in which we sold advertising. The sale of the EGP business has allowed us to focus our operations on the products and services we sell instead of the type of advertising medium in which we sell them, which had been our historic operational approach. As a result of the sale of our EGP business, effective July 1, 2024, we have realigned our operating segments into two segments – media and advertising technology & services – consistent with our current operational and management structure, as well as the basis that is now used for internal management reporting and how our CEO evaluates our business. Our reportable segments are the same as our operating segments. Prior periods have been recast to conform to this presentation.
Current report
Our media segment consists of sales of advertising through various media, including television, radio and digital. We own and/or operate 49 primary television stations and 44 radio stations (37 FM and 7 AM), reaching and engaging Latinos in the United States. Our television operations comprise the largest affiliate group of both the top-ranked Univision television network and TelevisaUnivision’s UniMás network, with TelevisaUnivision-affiliated stations in 15 of the nation’s top 50 U.S. Latino markets. We own and operate one of the largest groups of primarily Spanish-language radio stations in the United States. We provide digital marketing solutions in all of the U.S. markets where we have broadcast operations.
Current report
Our advertising technology & services segment consists of programmatic ad services through Smadex, our demand side programmatic ad platform, and Adwake, our mobile growth solutions business.
Current report
Media
Current report
Net Revenue. Net revenue in our media segment increased to $222.1 million for the year ended December 31, 2024 from $196.3 million for the year ended December 31, 2023. This increase was primarily due to an increase of $18.8 million in broadcast advertising revenue, driven by political advertising revenue, an increase of $8.7 million in digital advertising revenue, and an increase of $2.2 million in other revenue, partially offset by a decrease of $1.3 million in spectrum usage rights revenue and a decrease of $2.7 million in retransmission consent revenue.
Current report
Cost of revenue. Cost of revenue in our media segment increased to $16.7 million for the year ended December 31, 2024 from $11.0 million for the year ended December 31, 2023, primarily due to the increase in digital advertising revenue.
Current report
Direct operating expenses. Direct operating expenses in our media segment increased to $111.0 million for the year ended December 31, 2024 from $96.9 million for the year ended December 31, 2023, primarily due to an increase of $6.9 million in salaries, primarily associated with the expansion of our news programming in anticipation of this year's election cycle, an increase of $3.7 million in other costs associated with the increase in revenue, an increase of $1.7 million in corporate expenses due to the realignment of our operations as noted above, an increase of $0.8 million in ratings services, and an increase of $0.6 million for repairs and maintenance. The remaining increase was due to other items which were individually immaterial.
Current report
Selling, general and administrative expenses. Selling, general and administrative expenses in our media segment increased to $42.8 million for the year ended December 31, 2024 from $36.0 million for the year ended December 31, 2023, primarily due to an increase of $4.3 million in salaries and other employee benefits, and an increase of $3.1 million in corporate expenses due to the realignment of our operations as noted above. The increase was offset by other items which were individually immaterial.
Current report
Advertising Technology & Services
Current report
Net Revenue. Net revenue in our advertising technology & services segment increased to $142.9 million for the year ended December 31, 2024 from $100.8 million for the year ended December 31, 2023. The increase was primarily due to increases in advertising revenue from Smadex and Adwake.
Current report
Cost of revenue. Cost of revenue in our advertising technology & services segment increased to $85.5 million for the year ended December 31, 2024 from $66.3 million for the year ended December 31, 2023, primarily due to the increase in digital advertising revenue.
Current report
Direct Operating Expenses. Direct operating expenses in our advertising technology & services segment increased to $25.3 million for the year ended December 31, 2024 from $16.3 million for the year ended December 31, 2023, primarily due to an increase of $5.9 million in cloud infrastructure expenses and an increase of $3.1 million in salaries.
Current report
Selling, General and Administrative Expenses. Selling, general and administrative expenses in our advertising technology & services segment increased to $20.1 million for the year ended December 31, 2024, from $13.8 million for the year ended December 31, 2023, primarily due to an increase of $3.8 million in salaries, severance expense of $1.3 million, cloud software expense of $0.8 million, and rent expense $0.5 million.
Current report
On March 4, 2024, we received a communication from Meta that it intended to wind down its authorized sales partner, or ASP, program globally and end its relationship with all of its ASPs, including us, by July 1, 2024. As a result, we conducted a thorough review of our digital strategy, operations and cost structure, and during the second quarter of 2024 made the decision to dispose of the operations of EGP, our digital commercial partnerships business, which was completed during the second quarter of 2024.
Current report
The disposition of our EGP business, the largest business unit of what was then our digital segment, will have a material effect on our results of operations in that total revenue from our advertising technology & services operations, and consolidated revenue, will be, and is expected to remain, significantly lower than it was prior to the disposition of our EGP business. As a result, cash flow from operations will be materially adversely affected in future periods, which could also adversely affect our liquidity and, as discussed below, our ability to comply with financial covenants under the 2023 Credit Agreement.
Current report
The 2023 Credit Agreement contains various financial covenants (see Note 10 to Notes to Consolidated Financial Statements). As of December 31, 2024, we were in compliance with the financial covenants in the 2023 Credit Agreement. Compliance with these financial covenants is measured quarterly and our failure to meet the covenant requirements would constitute an event of default. In such event, if we were unable to obtain the necessary waivers or amendments, all outstanding borrowings, together with accrued and unpaid interest and other amounts payable thereunder, would become immediately due and payable. Additionally, the lenders would have the right to proceed against the collateral granted to them to secure that debt, which includes substantially all of our assets.
Current report
As a result of the sale of the EGP business, our consolidated EBITDA (as defined in the 2023 Credit Agreement and as discussed in more detail below under “Consolidated EBITDA”) has been, and is expected to remain, significantly reduced and, in response, we have taken action to reduce certain expenses to mitigate this fact. In addition, as discussed above, we also have an aggregate $100.6 million of cash and marketable securities as of December 31, 2024, and management projects that we could prepay debt as necessary to remain in compliance with our financial covenants under the 2023 Credit Agreement should that become necessary.
Current report
Based on management’s current financial projections and our ability to prepay our debt, management believes that we will maintain compliance with our financial covenants under the 2023 Credit Agreement. Given the inherent uncertainty in financial projections management has identified additional controllable cost reduction actions that can be taken, if necessary, to maintain sufficient liquidity to fund its business activities and to maintain compliance with its debt covenants. Management further believes that our existing cash and projected operating cash flows are adequate to meet our operating needs, liabilities and commitments over the next twelve months from the issuance of the accompanying consolidated financial statements.
Current report
To the extent that our then-current liquidity is insufficient to fund our business activities or if we do not remain in compliance with our financial covenants under the 2023 Credit Agreement, as a result of not achieving financial projections or otherwise, we may be required to take additional actions which could include seeking additional equity or debt financing in the future to satisfy capital requirements. There is no guarantee that any such capital would be available to us on favorable terms or at all. The failure to obtain any required capital could have a material adverse effect on our operations and financial condition.
Current report
In March 2024, we made a prepayment of $10.0 million, of which $8.75 million was applied to the upcoming quarterly principal payments in 2024 under the Term A Facility (as defined in the 2023 Credit Agreement), and $1.25 million was applied to the Revolving Credit Facility (as defined in the 2023 Credit Agreement).
Current report
In June 2024, we made an additional prepayment of $10.0 million, of which $4.9 million was a mandatory prepayment as a result of the EGP disposition. The prepayment was applied to the quarterly principal payments in 2025 under the Term A Facility.
Current report
Consolidated EBITDA is presented in accordance with the definition provided in our 2023 Credit Facility.
Current report
Net cash flow used in financing activities was $57.7 million for the year ended December 31, 2024, compared to $64.2 million for the year ended December 31, 2023. The decrease in cash flow used in financing activities was primarily due to payments of contingent consideration of $15.7 million for the year ended December 31, 2024 compared to $35.1 million for the year ended December 31, 2023, distributions to noncontrolling interest of $1.1 million for the year ended December 31, 2024 compared to $3.4 million for the year ended December 31, 2023, and payments of $1.8 million of debt issuance costs for the year ended December 31, 2023 as a result of the refinancing of our credit facility. The decrease in cash flow used in financing activities was partially offset by $20.0 million of debt prepayments during the year ended December 31, 2024.
Current report
For the year ended December 31, 2024, we recorded impairment charge of goodwill in our media unit in the amount of $43.3 million. See Note 6 to Notes to Consolidated Financial Statements for more details.
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Removed paragraphs (50)
Previous report
our consolidated revenue surpassed $1.0 billion for the first time, driven primarily by growth in our digital segment;
Previous report
we hired Michael Christenson as Chief Executive Officer in July;
Previous report
we entered into new digital partnerships with Pinterest and Snap, in part to diversify our portfolio of digital commercial partners;
Previous report
we acquired BCNMonetize, a global mobile app marketing solutions company:
Previous report
we designed and began to implement a strategy to maximize political advertising revenue in the 2024 election cycle, including making a significant investment in our sales teams and enhancing local news programming; and
Previous report
we entered into $275 million Credit Facility.
Previous report
Recent Developments
Previous report
Through Entravision Global Partners, our digital commercial partnerships business, we act as an intermediary between primarily global media companies and advertisers. These global media companies include Meta, for whom the Company acts as an ASP, ByteDance, X Corp., Spotify, Snap and Pinterest, as well as other media companies, in 31 countries worldwide.
Previous report
On March 4, 2024, we received a communication from Meta that it intends to wind down its ASP program globally and end its relationship with all of its ASPs, including us, by July 1, 2024. For the fiscal years ended December 31, 2023 and 2022, ASP revenue from Meta represented approximately 53% and 49%, respectively, of the Company’s consolidated revenue and 63% and 63%, respectively, of the Company’s digital segment revenue. We are currently evaluating the overall impact of Meta’s decision on our digital advertising business, but expect that our consolidated and digital segment revenue and cash flow from operations will be materially and adversely affected in future periods as a result of the planned termination of such program by Meta. We have initiated a review of our operating strategy and cost structure, but such plans may not be sufficient or timely enough to offset the expected loss of revenue, and therefore may also adversely affect liquidity in future periods.
Previous report
For a definition of consolidated EBITDA, please see Liquidity and Capital Resources discussion below.
Previous report
For a definition of consolidated EBITDA, please see Liquidity and Capital Resources discussion below.
Previous report
Cost of revenue-Digital. Cost of revenue increased to $800.4 million for the year ended December 31, 2023 from $623.9 million for the year ended December 31, 2022, primarily due to the increase in digital advertising revenue.
Previous report
Direct Operating Expenses. Direct operating expenses increased to $128.5 million for the year ended December 31, 2023 from $122.6 million for the year ended December 31, 2022. This increase was primarily attributable to our digital segment, primarily due to an increase in expenses associated with the increase in digital advertising revenue, and an increase in non-cash stock-based compensation.
Previous report
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $92.0 million for the year ended December 31, 2023 from $75.2 million for the year ended December 31, 2022. This increase was primarily attributable to our digital segment, primarily due to an increase in salary expense, and due to various acquisitions, which did not fully contribute to our financial results in our digital segment in the comparable prior period.
Previous report
Corporate Expenses. Corporate expenses increased to $50.3 million for the year ended December 31, 2023 from $49.4 million for the year ended December 31, 2022. This increase was primarily due to increases in professional service fees, audit fees and rent expense, partially offset by a decrease in severance expense incurred in 2022 upon the passing of our former Chief Executive Officer, and due to a decrease in bonus expense.
Previous report
Digital
Previous report
Net Revenue. Net revenue in our digital segment increased to $932.7 million for the year ended December 31, 2023 from $747.1 million for the year ended December 31, 2022. The increase was primarily due to an increase in advertising revenue from our digital commercial partnerships business, and due to various acquisitions, which did not fully contribute to our financial results in our digital segment in the comparable prior period, as more fully described in Note 3 to Notes to Consolidated Financial Statements.
Previous report
Cost of revenue. Cost of revenue in our digital segment increased to $800.4 million for the year ended December 31, 2023 from $623.9 million for the year ended December 31, 2022, primarily due to the increase in advertising revenue.
Previous report
Direct operating expenses. Direct operating expenses in our digital segment increased to $37.8 million for the year ended December 31, 2023 from $32.5 million for the year ended December 31, 2022, primarily due to an increase in expenses associated with the increase in digital advertising revenue, and an increase in non-cash stock-based compensation.
Previous report
Selling, general and administrative expenses. Selling, general and administrative expenses in our digital segment increased to $57.9 million for the year ended December 31, 2023 from $41.6 million for the year ended December 31, 2022, primarily due to an increase in salary expense, and due to various acquisitions, which did not fully contribute to our financial results in our digital segment in the comparable prior period.
Previous report
Television
Previous report
Net Revenue. Net revenue in our television segment decreased to $120.9 million in 2023, from $144.7 million in 2022, primarily due to decreases in political advertising revenue and national advertising revenue, partially offset by increases in local advertising revenue, spectrum usage rights revenue and retransmission consent revenue.
Previous report
Direct Operating Expenses. Direct operating expenses in our television segment decreased to $60.7 million for the year ended December 31, 2023 from $61.3 million for the year ended December 31, 2022, primarily due to a decrease in expenses associated with the decrease in advertising revenue, partially offset by an increase in non-cash stock-based compensation.
Previous report
Selling, General and Administrative Expenses. Selling, general and administrative expenses in our television segment decreased to $20.2 million for the year ended December 31, 2023 from $20.7 million for the year ended December 31, 2022, primarily due to a decrease in bad debt expense.
Previous report
Audio
Previous report
Net Revenue. Net revenue in our audio segment decreased to $53.2 million in 2023, from $64.4 million in 2022, primarily due to a decrease in political advertising revenue, and decreases in local and national advertising revenue.
Previous report
Direct Operating Expenses. Direct operating expenses in our audio segment increased to $29.9 million for the year ended December 31, 2023 from $28.8 million for the year ended December 31, 2022, primarily due to an increase in non-cash stock-based compensation, and due to an increase in salaries.
Previous report
Selling, General and Administrative Expenses. Selling, general and administrative expenses in our audio segment increased to $13.9 million for the year ended December 31, 2023 from $12.9 million for the year ended December 31, 2022, primarily due to increased rent expense in temporary office space until the move to our new permanent offices, which was completed in June 2023.
Previous report
On March 4, 2024, we received a communication from Meta that it intends to wind down its ASP program globally and end its relationship with all of its ASPs, including us, by July 1, 2024. This decision by Meta will have a material impact on our digital operations, and we have initiated an evaluation of the impact of this decision, including a review of our operating strategy and cost structure. To the extent that our current liquidity is insufficient to fund future activities, or we do not remain in compliance with our financial covenants under the 2023 Credit Agreement, we may be required to seek additional equity or debt financing in the future to satisfy capital requirements in response to these adverse developments or other changes in our circumstance or unforeseen events or conditions.
Previous report
Our liquidity is not materially affected by the amounts held in accounts outside the United States. The majority of our cash and cash equivalents is held outside the United States, primarily in Uruguay, Spain and Singapore, none of which countries have foreign currency controls. We hold smaller amounts of cash in certain countries that do have foreign currency controls, including Argentina, Brazil, India and Pakistan, which could impact our ability to freely repatriate such funds from those countries to the United States.
Previous report
As provided for in the 2023 Credit Agreement, our 2023 Credit Facility consists of (i) a $200.0 million senior secured Term A Facility, which was drawn in full, and (ii) a $75.0 million Revolving Credit Facility (the “Revolving Credit Facility”), of which $11.5 million was drawn at the closing. In addition, the 2023 Credit Agreement provides that we may increase the aggregate principal amount of our 2023 Credit Facility by an additional amount equal to $100.0 million plus the amount that would result in our first lien net leverage ratio (as such term is used in the 2023 Credit Agreement) not exceeding 2.25 to 1.0, subject to our satisfying certain conditions.
Previous report
Borrowings under our 2023 Credit Facility were used (a) to repay in full all of our and our subsidiaries' then outstanding obligations under the 2017 Credit Agreement, (b) to pay fees and expenses in connection with the 2017 Credit Facility and to terminate the 2017 Credit Agreement and (c) for general corporate purposes. The 2023 Credit Facility matures on March 17, 2028 (the “Maturity Date”).
Previous report
The 2023 Credit Facility is guaranteed on a senior secured basis by certain of our existing and future wholly-owned domestic subsidiaries, and secured on a first priority basis by our and those subsidiaries’ assets.
Previous report
Our borrowings under the 2023 Credit Facility bear interest on the outstanding principal amount thereof from the date when made at a rate per annum equal to either: (i) the Term SOFR (as defined in the 2023 Credit Agreement) plus a margin between 2.50% and 3.00%, depending on the Total Net Leverage Ratio (as defined in the 2023 Credit Agreement) or (ii) the Base Rate (as defined in the 2023 Credit Agreement) plus a margin between 1.50% and 2.00%, depending on the Total Net Leverage Ratio. In addition, the unused portion of the Revolving Credit Facility is subject to a rate per annum between 0.30% and 0.40%, depending on the Total Net Leverage Ratio.
Previous report
As of December 31, 2023, the interest rate on our Term A Facility and the drawn portion of the Revolving Credit Facility was 8.21%.
Previous report
Consolidated EBITDA means net income (loss) plus gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation included in operating and corporate expenses, net interest expense, other operating gain (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses, syndication programming amortization less syndication programming payments, revenue from the Federal Communications Commission, or FCC, spectrum incentive auction less related expenses, expenses associated with investments, EBITDA attributable to redeemable noncontrolling interest, acquisitions and dispositions and certain pro-forma cost savings. We use the term consolidated EBITDA because that measure is defined in both the 2017 Credit Agreement and the 2023 Credit Agreement, and does not include gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses, syndication programming amortization less syndication programming payments, revenue from FCC spectrum incentive auction less related expenses, expenses associated with investments, EBITDA attributable to redeemable noncontrolling interest, acquisitions and dispositions and certain pro-forma cost savings.
Previous report
Consolidated EBITDA is a non-GAAP measure. For a reconciliation of consolidated EBITDA to cash flows from operating activities, its most directly comparable U.S. GAAP financial measure, please see page 26.
Previous report
Net cash flow used in financing activities was $64.2 million for the year ended December 31, 2023, compared to net cash flow used in financing activities of $92.8 million for the year ended December 31, 2022. During the year ended December 31, 2023, we made debt payments of $215.7 million, dividend payments of $17.6 million, distributions to noncontrolling interest of $3.4 million, payments of contingent consideration of $35.1 million, payments of $1.8 million of debt issuance costs, payments for taxes related to shares withheld for share-based compensation plans of $4.1 million, and received $213.1 million proceeds from borrowings on debt and $0.6 million related to the issuance of common stock upon the exercise of stock options. During the year ended December 31, 2022, we made payments of contingent consideration of $65.3 million, dividend payments of $8.5 million, debt payments of $3.3 million, payments for taxes related to shares withheld for share-based compensation plans of $4.5 million, spent $11.3 million for the repurchase of Class A common stock, and received $0.2 million related to the issuance of common stock upon the exercise of stock options.
Previous report
Credit Risk
Previous report
We have credit risk in our digital segment insofar as we are required to pay the media companies for which we act as commercial partner for all inventory purchased regardless of whether we are able to collect on a transaction from the local advertiser. We believe that we manage this credit risk effectively, in part by analyzing the creditworthiness of these customers; however, we can give no assurance that this will continue to be the case in future periods.
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Reworded paragraphs (33)
Previous wording
The disc ussion and analysis of our financial condition and results of operations for 2023 compared to 2022 appears below. As permitted by SEC rules, we have omitted the disc ussion and analysis of our financial condition and results of operations for 2022 compared to 2021. See Item 7, “Management’s Discussions and Analysis of Financial Condition and Results of Operations”, in our Annual Report on Form 10-K for the year ended December 31, 2022, for this discussion.
Current wording
The disc ussion and analysis of our financial condition and results of operations for 2024 compared to 2023 appears below. As a smaller reporting company, we have chosen to omit the discussion and analysis of our financial condition and results of operations for 2023 compared to 2022.
Previous wording
See Notes 3 and 10 to Notes to Consolidated Financial Statements for details.
Current wording
See Notes 3 and 4 to Notes to Consolidated Financial Statements for details.
Previous wording
Separate financial data for each of the Company’s operating segments is provided below. Segment operating profit (loss) is defined as operating profit (loss) before corporate expenses, change in fair value of contingent consideration, impairment charge, other operating (gain) loss, and foreign currency (gain) loss. The Company evaluates the performance of its operating segments based on the following (in thousands):
Current wording
Separate financial data for each of our operating segments is provided below. Segment operating profit (loss) is defined as operating profit (loss) before corporate expenses, change in fair value of contingent consideration, impairment charge, other operating (gain) loss, and foreign currency (gain) loss. We evaluate the performance of our operating segments based on the following (in thousands):
Previous wording
Net Revenue. Net revenue increased to $1,106.9 million for the year ended December 31, 2023 from $956.2 million for the year ended December 31, 2022. This increase was primarily attributable to an increase in advertising revenue from our digital commercial partnerships business and from various acquisitions, which did not fully contribute to our financial results in the comparable prior period. The increase was partially offset by a decrease in political advertising revenue in our television and audio segments.
Current wording
Net Revenue. Net revenue increased to $364.9 million for the year ended December 31, 2024 from $297.0 million for the year ended December 31, 2023. This increase was primarily attributable to an increase of $25.8 million in advertising revenue from our media segment, and an increase of $42.1 million in advertising revenue from our advertising technology & services segment.
Previous wording
Depreciation and Amortization. Depreciation and amortization increased to $28.0 million for the year ended December 31, 2023 from $25.7 million for the year ended December 31, 2022. This increase was primarily attributable to amortization of the intangible assets from our recent acquisitions.
Current wording
Depreciation and Amortization. Depreciation and amortization increased to $16.8 million for the year ended December 31, 2024 from $16.4 million for the year ended December 31, 2023. This increase was primarily attributable to an increase of $0.9 million in depreciation and amortization in our media segment, partially offset by a decrease of $0.5 million in depreciation and amortization in our advertising technology & services segment.
Previous wording
Change in fair value of contingent consideration. As a result of the change in fair value of the contingent consideration related to our various acquisitions, we recognized income of $2.5 million for the year ended December 31, 2023, and incurred an expense of $14.2 million for the year ended December 31, 2022.
Current wording
Change in fair value of contingent consideration. As a result of the change in fair value of the contingent consideration, primarily related to earnouts of certain past acquisitions, we recognized income of $0.6 million for the year ended December 31, 2024, and an expense of $0.8 million for the year ended December 31, 2023.
Previous wording
Impairment. We incurred an impairment charge of $12.3 million related to certain FCC licenses in our audio segment, and an impairment charge of $1.0 million, due to a termination of an agreement with a media company for which we act as commercial partner in our digital segment. We incurred an impairment charge of $1.6 million related to certain FCC licenses in our television and audio segments for the year ended December 31, 2022.
Current wording
Impairment. For the year ended December 31, 2024, we incurred an impairment charge of $61.2 million, of which $43.3 million was related to goodwill impairment and $17.9 million was related to certain FCC licenses in our media segment. For the year ended December 31, 2023, we incurred an impairment charge of $13.3 million, of which $12.3 million related to certain FCC licenses in our media segment, and an impairment charge of $1.0 million, due to a termination of an agreement with a media company for which we acted as commercial partner in our then digital segment.
Previous wording
Foreign currency loss. We had a foreign currency loss of $0.9 million for the year ended December 31, 2023 compared to a foreign currency loss of $3.0 million for the year ended December 31, 2022. Foreign currency gains and losses are primarily due to currency fluctuations that affect our digital segment operations located outside the United States.
Current wording
Foreign currency loss. We had a foreign currency loss of $0.7 million for the year ended December 31, 2024 compared to a foreign currency loss of $2.0 million for the year ended December 31, 2023. Foreign currency gains and losses are primarily due to currency fluctuations that affect our operations located outside the United States.
Previous wording
Other operating (gain) loss. We had other operating loss of $0.6 million for the year ended December 31, 2023, primarily due to the sale of 365 Digital in our digital segment (see Note 10 to Notes to Consolidated Financial Statements), partially offset by gain on assets previously held for sale in our audio segment.
Current wording
Other operating (gain) loss. We had other operating loss of $0.6 million for the year ended December 31, 2023, primarily due to the sale of certain entities doing business as 365 Digital in our then digital segment, partially offset by gain on assets previously held for sale in our then audio segment.
Previous wording
Interest Expense, net. Interest expense, net increased to $12.2 million for the year ended December 31, 2023 from $8.0 million for the year ended December 31, 2022. This increase was primarily due to a higher interest rate on our debt, partially offset by interest income on our available for sale securities.
Current wording
Interest Expense, net. Interest expense, net increased to $14.0 million for the year ended December 31, 2024 from $13.4 million for the year ended December 31, 2023. This increase was primarily due to lower interest income, partially offset by a lower interest rate on our debt and a lower principal balance due to prepayments totaling $20.0 million, which were made in the first half of 2024.
Previous wording
Gain (loss) on debt extinguishment. We recorded a loss on debt extinguishment of $1.6 million for the year ended December 31, 2023 due to the refinancing of our previous credit facility (the "2017 Credit Facility") with our 2023 Credit Facility.
Current wording
Gain (loss) on debt extinguishment. We recorded a loss on debt extinguishment of $0.1 million for the year ended December 31, 2024 due to prepayments totaling $20.0 million under our 2023 Credit Facility. We recorded a loss on debt extinguishment of $1.6 million for the year ended December 31, 2023 due to the refinancing of our previous credit facility with our 2023 Credit Facility.
Previous wording
Realized gain (loss) on marketable securities. We recorded a realized loss on marketable securities of $0.1 million and $0.5 million for the years ended December 31, 2023 and 2022, respectively.
Current wording
Realized gain (loss) on marketable securities. We recorded a realized loss on marketable securities of $0.1 million for each of the years ended December 31, 2024 and 2023.
Previous wording
Income Tax Expense or Benefit. Income tax benefit for the year ended December 31, 2023 was $2.8 million. The effective tax rate for the year ended December 31, 2023 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non deductible executive compensation, changes in the fair value of the contingent consideration liability, and non-taxable non-territorial income. Income tax expense for the year ended December 31, 2022 was $11.6 million. The effective tax rate for the year ended December 31, 2022 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non deductible executive compensation, changes in the fair value of the contingent consideration liability, and non-taxable non-territorial income.
Current wording
Income Tax Expense or Benefit. Income tax expense for the year ended December 31, 2024 was $4.1 million. The effective tax rate for the year ended December 31, 2024 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non deductible executive compensation, changes in the fair value of the contingent consideration liability, capital loss on disposal of subsidiaries, changes in uncertain tax benefits, worthless stock deduction, and goodwill impairment. Income tax benefit for the year ended December 31, 2023 was $8.4 million. The effective tax rate for the year ended December 31, 2023 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non-deductible executive compensation, changes in the fair value of the contingent consideration liability and worthless stock deduction.
Previous wording
In general, our audio segment faces declining audiences, which we believe is present across the industry, competitive factors with other major Spanish-language broadcasters, and changing demographics and preferences of listening audiences, particularly younger audiences, including podcasts and other streaming services. We anticipate that these changes in listener habits will persist at least for at least for the foreseeable future and possibly permanently. Additionally, we have previously noted a trend for advertising to move increasingly from traditional media, such as radio, to new media, such as digital media, and we expect this trend will also continue. While we believe that none of these new technologies and services can completely replace local broadcast radio stations due to the element of localism that broadcast radio offers, the challenges we face in our radio operations from new technologies and services will continue to require attention from management.
Current wording
In general, most of our media operations face declining audiences, which we believe is present across the broadcast industry, competitive factors with the other major Spanish-language broadcasters, and changing demographics and preferences of audiences, particularly younger audiences, in terms of the media they prefer to view, including streaming and social media. We anticipate that these changes in viewer habits will persist at least for the foreseeable future and possibly permanently. Additionally, we have previously noted a trend for advertising to move increasingly from traditional media, such as television and radio, to new media, such as digital media, and we expect this trend will also continue. While we believe that none of these new technologies and services can completely replace local broadcast stations due to the element of localism that broadcasting offers, the challenges we face in our broadcast operations from new technologies and services will continue to require attention from management. We must continue to remain vigilant to meet these changes, including the need to further adjust our business strategies accordingly. No assurances can be given that such strategies will be successful.
Previous wording
We have previously noted a trend in our digital operations globally whereby revenue is shifting more to programmatic revenue. As a result, advertisers are demanding more efficiency and lower cost from intermediaries like us. In response to this trend, we have been offering our programmatic purchasing platform, Smadex, to advertisers. We are also experiencing lower margins related to revenue generated from our Entravision Global Partners business, as a result of relative negotiating strength and industry trends generally. We expect these trends will continue in future periods, likely further resulting in a more pronounced lower margin business in our digital segment. For example, beginning in the second half of 2023, we have begun receiving a lower rate of payment on our sales made on behalf of Meta, resulting in further lower margins. The digital advertising industry remains dynamic and is continuing to undergo rapid changes in technology, customer expectation and competition. We expect this trend to continue and possibly accelerate. We must continue to remain vigilant to meet these dynamic and rapid changes including the need to further adjust our business strategies accordingly. No assurances can be given that such strategies will be successful.
Current wording
We have previously noted a trend on a global basis in our advertising technology & services operations whereby revenue is shifting more to programmatic revenue. As a result, advertisers are demanding more efficiency and lower cost from intermediaries like us. In response to this trend, we have been offering our programmatic purchasing platform, Smadex, to advertisers. The digital advertising industry remains dynamic and is continuing to undergo rapid changes in technology, customer expectation and competition. We expect this trend to continue and possibly accelerate. We must continue to remain vigilant to meet these dynamic and rapid changes, including the need to further adjust our business strategies accordingly. No assurances can be given that such strategies will be successful.
Previous wording
While we have a history of operating losses in some periods and operating income in other periods, we also have a history of generating significant positive cash flows from our operations. We had net loss attributable to common stockholders of $15.4 million for the year ended December 31, 2023, and net income attributable to common stockholders of $18.1 million and $29.3 million for the years ended December 31, 2022 and 2021, respectively. We had positive cash flow from operations of $75.2 million, $78.9 million and $65.3 million for the years ended December 31, 2023, 2022 and 2021, respectively. For at least the next twelve months, we expect to fund our working capital requirements, capital expenditures and payments of principal and interest on outstanding indebtedness, with cash on hand and cash flows from operations.
Current wording
While we have a history of operating losses in some periods and operating income in other periods, we also have a history of generating significant positive cash flows from our operations. We had net loss attributable to common stockholders of $148.9 million and $15.4 million for the years ended December 31, 2024 and 2023, respectively, and net income attributable to common stockholders of $18.1 million for the year ended December 31, 2022. We had positive cash flow from operations of $74.7 million, $75.2 million and $78.9 million for the years ended December 31, 2024, 2023 and 2022, respectively. For at least the next twelve months, we expect to fund our working capital requirements, capital expenditures and payments of principal and interest on outstanding indebtedness, with cash on hand and cash flows from operations.
Previous wording
We currently believe that our cash position is capable of meeting our operating and capital expenses and debt service requirements for at least the next twelve months from the issuance of this report. We believe that our position is strengthened by cash and cash equivalents on hand, in the amount of $105.7 million, and available for sale marketable securities in the additional amount of $13.2 million, as of December 31, 2023.
Current wording
We currently believe that our cash position is capable of meeting our operating and capital expenses and debt service requirements for at least the next twelve months from the issuance of this report. We believe that our position is strengthened by cash and cash equivalents on hand, in the amount of $95.9 million, and available for sale marketable securities in the additional amount of $4.7 million, as of December 31, 2024. Our liquidity is not materially affected by the amounts held in accounts outside the United States.
Previous wording
On March 17, 2023, we entered into the 2023 Credit Facility, pursuant to the 2023 Credit Agreement, by and among us, Bank of America, N.A., as Administrative Agent, and the other financial institutions party thereto as Lenders (collectively, the “Lenders” and individually each a “Lender”). The 2023 Credit Agreement amended, restated and replaced in its entirety our previous credit agreement (the "2017 Credit Agreement").
Current wording
On March 17, 2023, we entered into the 2023 Credit Facility, pursuant to the 2023 Credit Agreement, by and among us, Bank of America, N.A., as Administrative Agent, and the other financial institutions party thereto as Lenders (collectively, the “Lenders” and individually each a “Lender”). The 2023 Credit Agreement amended, restated and replaced in its entirety our previous credit agreement.
Previous wording
For more information, see Item 1A, "Risk Factors", Note 9 to Notes to Consolidated Financial Statements, and the 2023 Credit Agreement itself, which is filed as exhibits to this report.
Current wording
For more information, see Item 1A, "Risk Factors", Note 10 to Notes to Consolidated Financial Statements, and the 2023 Credit Agreement itself, which is filed as an exhibit to this report.
Previous wording
Consolidated EBITDA is a non-GAAP measure. The most directly comparable GAAP financial measure to consolidated EBITDA is cash flows from operating activities. A reconciliation of this non-GAAP measure to cash flows from operating activities follows (in thousands):
Current wording
Consolidated EBITDA is a non-GAAP measure. The most directly comparable GAAP financial measure to consolidated EBITDA is net income (loss) attributable to common stockholders.
Previous wording
Because consolidated EBITDA is a measure governing several critical aspects of our 2023 Credit Facility, and since our ability to borrow under our Revolving Credit Facility is subject to compliance with a consolidated EBITDA financial covenant, we believe that it is important to disclose consolidated EBITDA to our investors. Our 2023 Credit Facility contains a total net leverage ratio financial covenant. The total net leverage ratio, or the ratio of consolidated total debt (net of up to $50.0 million of unrestricted cash) to trailing-twelve-month consolidated EBITDA, affects both our ability to borrow from our Revolving Credit Facility and our applicable margin for the interest rate calculation. Under our 2023 Credit Agreement, our maximum total leverage ratio may not to exceed 3.25 to 1.00. In addition, our 2023 Credit Agreement contains interest coverage ratio financial covenant (calculated as set forth in the 2023 Credit Agreement), with a minimum permitted ratio of 3.00 to 1.00.
Current wording
We use the term “consolidated EBITDA” because that term is defined in our 2023 Credit Agreement. Under the terms of our 2023 Credit Agreement, consolidated EBITDA is a measure that governs several critical aspects of our 2023 Credit Facility, including, among other things, financial covenants with which we must comply and financial ratios which we must maintain in order to borrow funds needed for the operation of our business and with respect to the interest rates that we pay on our 2023 Credit Facility. For example, our 2023 Credit Agreement contains a total net leverage ratio financial covenant. The total net leverage ratio, or the ratio of consolidated total debt (net of up to $50.0 million of unrestricted cash) to trailing-twelve-month consolidated EBITDA, affects both our ability to borrow from our Revolving Credit Facility and our applicable margin for the interest rate calculation. Under our 2023 Credit Agreement, our maximum total leverage ratio may not exceed 3.25 to 1.00. In addition, our 2023 Credit Agreement contains an interest coverage ratio financial covenant (calculated as set forth in the 2023 Credit Agreement), with a minimum permitted ratio of 3.00 to 1.00.
Previous wording
While many in the financial community and we consider consolidated EBITDA to be important, it should be considered in addition to, but not as a substitute for or superior to, other measures of liquidity and financial performance prepared in accordance with accounting principles generally accepted in the United States of America, such as cash flows from operating activities, operating income (loss) and net income (loss). Consolidated EBITDA has certain limitations because it excludes and includes several important financial line items as noted above. Therefore, we consider both non-GAAP and GAAP measures when evaluating our business. Consolidated EBITDA is also used to make executive compensation decisions.
Current wording
Therefore, we believe that it is important to disclose consolidated EBITDA to our investors to understand our compliance with these, and certain other, terms of our 2023 Credit Agreement. While many in the financial community and we consider consolidated EBITDA to be important, it should be considered in addition to, but not as a substitute for or superior to, other measures of financial performance and liquidity prepared in accordance with accounting principles generally accepted in the United States of America, such as operating income (loss), net income (loss) and cash flows from operating activities. Consolidated EBITDA has certain limitations because it excludes and includes several important financial line items as noted above. Therefore, we consider both non-GAAP and GAAP measures when evaluating our business. Consolidated EBITDA is also used to make executive compensation decisions.
Previous wording
We did not repurchase any shares of our Class A common stock during 2023. As of December 31, 2023, we have repurchased a total of 1.8 million shares of our Class A common stock under the current share repurchase program for an aggregate purchase price of $11.3 million, or an average price per share of $6.43. All such repurchased shares were retired as of December 31, 2023.
Current wording
We did not repurchase any shares of our Class A common stock during 2024. As of December 31, 2024, we have repurchased a total of 1.8 million shares of our Class A common stock under the share repurchase program for an aggregate purchase price of $11.3 million, or an average price per share of $6.43. All such repurchased shares were retired as of December 31, 2024.
Previous wording
Net cash flow provided by operating activities was $75.2 million for the year ended December 31, 2023, compared to net cash flow provided by operating activities of $78.9 million for the year ended December 31, 2022. We had net loss of $15.6 million for the year ended December 31, 2023, which included non-cash items such as deferred income taxes of $11.0 million, depreciation and amortization expense of $28.0 million, non-cash stock-based compensation expense of $23.7 million, change in fair value of contingent consideration of $2.5 million, loss on debt extinguishment of $1.6 million, and impairment charge of $13.3 million. We had net income of $20.2 million for the year ended December 31, 2022, which included non-cash items such as deferred income taxes of $3.7 million, depreciation and amortization expense of $25.7 million, non-cash stock-based compensation expense of $20.0 million, change in fair value of contingent consideration of $14.2 million, and impairment charge of $1.6 million. We expect to have positive cash flow from operating activities for the 2024 year.
Current wording
Net cash flow provided by operating activities was $74.7 million for the year ended December 31, 2024, compared to net cash flow provided by operating activities of $75.2 million for the year ended December 31, 2023. The decrease in cash flow from operating activities was primarily due to a decrease in net income after adjusting for non-cash items. Significant non-cash items for the year ended December 31, 2024 included impairment charges of $110.7 million, the loss on sale related to our former EGP business of $45.2 million, depreciation and amortization expense of $20.8 million, non-cash stock based compensation of $13.8 million, income related to the change in fair value of contingent consideration of $13.2 million, deferred income taxes of $10.3 million, and income attributable to redeemable noncontrolling interest of $2.8 million. Significant non-cash items for the year ended December 31, 2023 included depreciation and amortization expense of $28.0 million, non-cash stock based compensation of $23.7 million, impairment charges of $13.3 million, income related to the change in fair value of contingent consideration of $2.5 million, deferred income taxes of $11.0 million, and loss on debt extinguishment of $1.6 million. We expect to have positive cash flow from operating activities for the 2025 year. The decrease in cash flow provided by operating activities was partially offset by increase in net changes in our working capital of $58.6 million for the year ended December 31, 2024 compared to $36.6 million for the year ended December 31, 2023. The net changes in working capital were primarily due to the timing of cash payments to publishers in our former EGP business and timing of collections in that business.
Previous wording
Net cash flow used in investing activities was $16.0 million for the year ended December 31, 2023, compared to net cash flow used in investing activities of $60.5 million for the year ended December 31, 2022. During the year ended December 31, 2023, we spent $11.4 million on purchases of marketable securities and $27.3 million in net capital expenditures, made a loan of $13.6 million, spent $6.9 million on purchase of businesses, and received $43.3 million from the sale of marketable securities. During the year ended December 31, 2022, we spent $106.4 million on purchases of marketable securities, spent $11.5 million in net capital expenditures, spent $5.2 million on investments in VIEs, net of cash consolidated, received $59.8 million from the sale of marketable securities, and received $2.7 million from the sale of assets. We anticipate that our capital expenditures will be approximately $6.0 million during the full year 2024. The amount of our anticipated capital expenditures may change based on future changes in business plans and our financial condition and general economic conditions. We expect to fund capital expenditures with cash on hand and net cash flow from operations.
Current wording
Net cash flow used in investing activities was $26.8 million for the year ended December 31, 2024, compared to $16.0 million for the year ended December 31, 2023. The increase in cash flow used in investing activities was primarily due to net cash divested in the sale of the EGP business of $40.5 million for the year ended December 31, 2024 compared to $6.9 million spent on the purchase of businesses for the year ended December 31, 2023, and a reduction in proceeds from the sale of marketable securities to $10.8 million for the year ended December 31, 2024 compared to $43.3 million for the year ended December 31, 2023. The increase in cash flow used in investing activities was partially offset by a reduction in capital expenditures to $8.4 million for the year ended December 31, 2024 compared to $27.3 million for the year ended December 31, 2023 as a result of the build out of our corporate headquarters in the prior year period, a reduction in spend on purchases of marketable securities to $2.3 million for the year ended December 31, 2024 compared to $11.4 million for the year ended December 31, 2023, and proceeds from a loan receivable associated with the sale of the EGP business of $13.6 million for the year ended December 31, 2024 compared to the issuance of a loan receivable of $13.6 million for the year ended December 31, 2023. We anticipate that our capital expenditures will be approximately $8.0 million during the full year 2025. The amount of our anticipated capital expenditures may change based on future changes in business plans and our financial condition and general economic conditions. We expect to fund capital expenditures with cash on hand and net cash flow from operations.
Previous wording
Our material contractual obligations at December 31, 2023 which are not reflected as liabilities in the Consolidated Balance Sheets include media research and ratings providers, to provide television and radio audience measurement services, of approximately $41.6 million, and other amounts consist primarily of obligations for software licenses utilized by our sales team of approximately $8.0 million.
Current wording
Our material contractual obligations at December 31, 2024 which are not reflected as liabilities in the Consolidated Balance Sheets include media research and ratings providers, to provide television and radio audience measurement services, of approximately $34.0 million, and other amounts consist primarily of obligations for software licenses utilized by our sales team of approximately $5.5 million.
Previous wording
We have also entered into employment agreements with certain of our key employees, including Michael Christenson, Christopher T. Young, Jeffery A. Liberman, Karl Meyer, and Juan Saldivar.
Current wording
We have also entered into employment agreements with certain of our key employees, including our current Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer and Chief Revenue Officer.
Previous wording
The income approach estimates fair value based on our estimated future cash flows of each reporting unit, discounted by an estimated weighted-average cost of capital that reflects current market conditions, which reflect the overall level of inherent risk of that reporting unit. The income approach also requires us to make a series of assumptions, such as discount rates, revenue projections, profit margin projections and terminal value multiples. We estimated our discount rates on a blended rate of return considering both debt and equity for comparable publicly-traded companies in the television, radio and digital media industries. These comparable publicly-traded companies have similar size, operating characteristics and/or financial profiles to us. We also estimated the terminal value multiple based on comparable publicly-traded companies in the television, radio and digital media industries. We estimated our revenue projections and profit margin projections based on internal forecasts about future performance.
Current wording
The income approach estimates fair value based on our estimated future cash flows of each reporting unit, discounted by an estimated weighted-average cost of capital that reflects current market conditions, which reflect the overall level of inherent risk of that reporting unit. The income approach also requires us to make a series of assumptions, such as discount rates, revenue projections, profit margin projections and terminal value multiples. We estimated our discount rates on a blended rate of return considering both debt and equity for comparable publicly-traded companies in the media and advertising technology industries. These comparable publicly-traded companies have similar size, operating characteristics and/or financial profiles to us. We also estimated the terminal value multiple based on comparable publicly-traded companies in the media and advertising technology industries. We estimated our revenue projections and profit margin projections based on internal forecasts about future performance.
Previous wording
The estimated fair value of indefinite life intangible assets is determined by using an income approach. The income approach estimates fair value based on the estimated future cash flows of each market cluster that a hypothetical buyer would expect to generate, discounted by an estimated weighted-average cost of capital that reflects current market conditions, which reflect the overall level of inherent risk. The income approach requires us to make a series of assumptions, such as discount rates, revenue projections, profit margin projections and terminal value multiples. We estimate the discount rates on a blended rate of return considering both debt and equity for comparable publicly-traded companies in the television, radio and digital media industries. These comparable publicly-traded companies have similar size, operating characteristics and/or financial profiles to us. We also estimated the terminal value multiple based on comparable publicly-traded companies in the television, radio and digital media industries. We estimated the revenue projections and profit margin projections based on various market clusters signal coverage of the markets and industry information for an average station within a given market. The information for each market cluster includes such things as estimated market share, estimated capital start-up costs, population, household income, retail sales and other expenditures that would influence advertising expenditures. Alternatively, some stations under evaluation have had limited relevant cash flow history due to planned or actual conversion of format or upgrade of station signal. The assumptions we make about cash flows after conversion are based on the performance of similar stations in similar markets and potential proceeds from the sale of the assets.
Current wording
The estimated fair value of indefinite life intangible assets is determined by using an income approach. The income approach estimates fair value based on the estimated future cash flows of each market cluster that a hypothetical buyer would expect to generate, discounted by an estimated weighted-average cost of capital that reflects current market conditions, which reflect the overall level of inherent risk. The income approach requires us to make a series of assumptions, such as discount rates, revenue projections, profit margin projections and terminal value multiples. We estimate the discount rates on a blended rate of return considering both debt and equity for comparable publicly-traded companies in the television, radio and digital media industries. These comparable publicly-traded companies have similar size, operating characteristics and/or financial profiles to us. We also estimated the terminal value multiple based on comparable publicly-traded companies in the media and advertising technology industries. We estimated the revenue projections and profit margin projections based on various market clusters signal coverage of the markets and industry information for an average station within a given market. The information for each market cluster includes such things as estimated market share, estimated capital start-up costs, population, household income, retail sales and other expenditures that would influence advertising expenditures. Alternatively, some stations under evaluation have had limited relevant cash flow history due to planned or actual conversion of format or upgrade of station signal. The assumptions we make about cash flows after conversion are based on the performance of similar stations in similar markets and potential proceeds from the sale of the assets.
Previous wording
Broadcast Advertising. Revenue related to the sale of advertising in the television and audio segments is recognized at the time of broadcast. Revenue for contracts with advertising agencies is recorded at an amount that is net of the commission retained by the agency. Revenue from contracts directly with the advertisers is recorded as gross revenue and the related commission or national representation fee is recorded in operating expense. National advertising revenue generally represents revenue from advertising time sold to an advertiser or its agency that is placed from outside a station’s market. We typically engage national sales representative firms to work with our station sales managers and solicit national advertising sales, and we pay certain sales representation fees to these firms relating to national advertising sales. Local advertising revenue is generated predominantly from advertising time sold to an advertiser or its agency that is placed from within a station’s market. Local advertising sales include sales to advertisers that are local businesses or advertising agencies, and regional and national businesses or advertising agencies, which place orders from within a station’s market or directly with a station’s local sales staff. We employ our own local sales force that is responsible for soliciting local advertising sales directly from advertisers or their ad agencies.
Current wording
Broadcast Advertising. Revenue related to the sale of advertising on our television and radio stations is recognized at the time of broadcast. Revenue for contracts with advertising agencies is recorded at an amount that is net of the commission retained by the agency. Revenue from contracts directly with the advertisers is recorded as gross revenue and the related commission or national representation fee is recorded in operating expense.
Previous wording
Digital Advertising. Revenue related to our digital segment is recognized when display or other digital advertisements record impressions on the websites and mobile and Internet-connected television apps of media companies on whose digital platforms the advertisements are placed or as the advertiser’s previously agreed-upon performance criteria are satisfied. In our arrangements with media companies for which we act as commercial partner, we have concluded that we are the principal in the transaction and therefore recognize revenue on a gross basis, because (i) we are responsible for fulfillment of the contract, including customer support, resolving customer complaints, and accepting responsibility for the quality or suitability of the product or service; (ii) we have pricing discretion over the transaction; and (iii) we carry inventory risk and are required to pay the media companies for which we act as commercial partner for all inventory purchased regardless of whether we are able to collect on a transaction.
Current wording
Digital Advertising. Revenue related to digital advertising is recognized when display or other digital advertisements record impressions on the websites and mobile and Internet-connected television apps of media companies on whose digital platforms the advertisements are placed or as the advertiser’s previously agreed-upon performance criteria are satisfied. We have concluded that we are the principal in the transaction and therefore recognize revenue on a gross basis, because we (i) are responsible for fulfillment of the contract, including customer support, resolving customer complaints, and accepting responsibility for the quality or suitability of the product or service; (ii) have pricing discretion over the transaction; and (iii) carry inventory risk for all inventory purchased regardless of whether we are able to collect on a transaction.
Previous wording
Spectrum Usage Rights. We generate revenue from agreements associated with our television stations’ spectrum usage rights. Revenue is recognized in accordance with the contractual fees over the term of the agreement or when we have relinquished all or a portion of our spectrum usage rights for a station or have relinquished its rights to operate a station on the existing channel free from interference.
Current wording
Spectrum Usage Rights. We generate revenue from agreements associated with our television stations’ spectrum usage rights. Revenue is recognized in accordance with the contractual fees over the term of the agreement or when we have relinquished all or a portion of our spectrum usage rights for a station or have relinquished our rights to operate a station on the existing channel free from interference.
Previous wording
Webelieve that inflation has not had a material impact on our results of operations for each of our fiscal years in the three-year period ended December 31, 2023. However, based on recent inflation trends, the economy in Argentina has been classified as highly inflationary. As a result, we applied the guidance in ASC 830, “Foreign Currency Matters”, by remeasuring non-monetary assets and liabilities at historical exchange rates and monetary-assets and liabilities using current exchange rates. There can be no assurance that future inflation would not have an adverse impact on our operating results and financial condition.
Current wording
Webelieve that inflation has not had a material impact on our results of operations for each of our fiscal years in the three-year period ended December 31, 2024. However, there can be no assurance that future inflation would not have an adverse impact on our operating results and financial condition.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
A reconciliation of this non-GAAP measure to its most directly comparable GAAP financial measure follows (in thousands):
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
In general, our television segment faces declining audiences, which we believe is present across the industry, competitive factors with the other major Spanish-language broadcasters, and changing demographics and preferences of audiences, particularly younger audiences, in terms of the media they prefer to view, including streaming and social media. We anticipate that these changes in viewer habits will persist at least for the foreseeable future and possibly permanently. Additionally, notwithstanding the increase in local advertising revenue, we have previously noted a trend for advertising to move increasingly from traditional media, such as television, to new media, such as digital media, and we expect this trend will also continue.