ENTRAVISION COMMUNICATIONS CORP

Previous wording

Our net revenue for the three-month period ended September 30, 2024 was $97.2 million. Of this amount, revenue generated by our media segment accounted for approximately 62%, and revenue generated by our advertising technology & services segment accounted for approximately 38%, of total revenue. Prior to the sale of our EGP business during the second quarter of 2024, our advertising technology & services segment accounted for the majority of our revenue. With the sale of our EGP business, we anticipate that net revenue in terms of total dollars will be significantly lower in future periods, at least for the foreseeable future. As a result, cash flow from operations will be materially and adversely affected in future periods.

Current wording

Our net revenue for the three-months period ended March 31, 2025 was $91.9 million. Of this amount, revenue generated by our media segment accounted for approximately 45%, and revenue generated by our advertising technology & services segment accounted for approximately 55% of total revenue.

Previous wording

Our revenue grew by double digits in the third quarter of 2024 compared to the comparable period of 2023, driven primarily by growth of political advertising revenue and Smadex.

Current wording

During the first quarter of 2025, our revenue grew by double digits in the first quarter of 2025 compared to the comparable period of 2024, driven primarily by growth of our advertising technology & services segment, partially offset by a decrease in revenue in our media segment. In addition, during the first quarter of 2025 we:

Previous wording

Our network affiliation agreement with TelevisaUnivision provides certain of our owned stations the exclusive right to broadcast TelevisaUnivision’s primary Univision network and UniMás network programming in their respective markets. We also generate revenue under a marketing and sales agreement with TelevisaUnivision, which give us the right to manage the marketing and sales operations of TelevisaUnivision-owned Univision affiliates in three markets – Albuquerque, Boston and Denver. Under our proxy agreement with TelevisaUnivision, we grant TelevisaUnivision the right to negotiate the terms of retransmission consent agreements with multichannel video programming distributors, or MVPDs, for our Univision- and UniMás-affiliated television station signals. Revenue generated from retransmission consent agreements represents payments from MVPDs for access to our television station signals so that they may rebroadcast our signals and charge their subscribers for this programming. The term of each of these current agreements expires on December 31, 2026 for all of our Univision and UniMás network affiliate stations. TelevisaUnivision also owns approximately 10% of our common stock on a fully-converted basis. For more information regarding these agreements and the stock that TelevisaUnivision owns, see Note 2 to Notes to Condensed Consolidated Financial Statements.

Current wording

Our network affiliation agreement with TelevisaUnivision provides certain of our owned stations the exclusive right to broadcast TelevisaUnivision’s primary Univision network and UniMás network programming in their respective markets. We also generate revenue under a marketing and sales agreement with TelevisaUnivision, which gives us the right to manage the marketing and sales operations of TelevisaUnivision-owned Univision affiliates in three markets – Albuquerque, Boston and Denver. Under our proxy agreement with TelevisaUnivision, we grant TelevisaUnivision the right to negotiate the terms of retransmission consent agreements with multichannel video programming distributors, or MVPDs, for our Univision- and UniMás-affiliated television station signals. Revenue generated from retransmission consent agreements represents payments from MVPDs for access to our television station signals so that they may rebroadcast our signals and charge their subscribers for this programming. The term of each of these current agreements expires on December 31, 2026 for all of our Univision and UniMás network affiliate stations. TelevisaUnivision also owns approximately 10% of our common stock on a fully-converted basis. For more information regarding these agreements and the stock that TelevisaUnivision owns, see Note 2 to Notes to Condensed Consolidated Financial Statements.

Previous wording

The following table sets forth selected data from our operating results for the three- and nine-month periods ended September 30, 2024 and 2023 (in thousands):

Current wording

The following table sets forth selected data from our operating results for the three-month periods ended March 31, 2025 and 2024 (in thousands):

Previous wording

Cost of revenue. Cost of revenue increased to $26.8 million for the three-month period ended September 30, 2024 from $21.4 million for the three-month period ended September 30, 2023. This increase was primarily attributable to an increase of $2.0 million in cost of revenue from our media segment, and an increase of $3.4 million in cost of revenue from our advertising technology & services segment.

Current wording

Cost of revenue. Cost of revenue increased to $33.5 million for the three-month period ended March 31, 2025 from $22.7 million for the three-month period ended March 31, 2024. This increase was primarily due to an increase of $0.4 million in cost of revenue from our media segment, and an increase of $10.4 million in cost of revenue from our advertising technology & services segment.

Previous wording

Direct Operating 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 wording

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.

Previous wording

Direct operating expenses increased to $35.6 million for the three-month period ended September 30, 2024, from $28.7 million for the three-month period ended September 30, 2023. This increase was primarily attributable to an increase of $5.1 million in direct operating expenses in our media segment and an increase of $1.8 million in direct operating expenses in our advertising technology & services segment.

Current wording

Direct Operating Expenses. Direct operating expenses increased to $35.5 million for the three-month period ended March 31, 2025 from $31.8 million for the three-month period ended March 31, 2024. This increase was primarily due to an increase of $3.8 million in direct operating expenses in our advertising technology & services segment, partially offset by a decrease of $0.1 million in direct operating expenses in our media segment.

Previous wording

Selling, general and administrative expenses increased to $17.1 million for the three-month period ended September 30, 2024 from $11.9 million for the three-month period ended September 30, 2023. This increase was primarily attributable to an increase of $2.2 million in selling, general and administrative expenses in our media segment and an increase of $3.0 million in selling, general and administrative expenses in our advertising technology & services segment.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $15.5 million for the three-month period ended March 31, 2025, from $14.3 million for the three-month period ended March 31, 2024. This increase was primarily due to an increase of $0.8 million in selling, general and administrative expenses in our media segment, and an increase of $0.3 million in selling, general and administrative expenses in our advertising technology & services segment.

Previous wording

Corporate expenses decreased to $6.9 million for the three-month period ended September 30, 2024 from $13.3 million for the three-month period ended September 30, 2023. This decrease was primarily due to a decrease of $2.0 million in salaries and bonus expense, a decrease of $2.0 million in non-cash stock-based compensation, a decrease of $0.4 million in professional services expense, and a decrease of $2.5 million in corporate expenses due to the realignment of our operations as noted above. This decrease was partially offset by an increase of $0.6 million in audit fees.

Current wording

Corporate Expenses. Corporate expenses decreased to $7.8 million for the three-month period ended March 31, 2025 from $12.2 million for the three-month period ended March 31, 2024. This decrease was primarily due to a decrease of $0.9 million in salaries and bonus expense, including a reduction in the base salary and cash bonus components of our three most senior executives' compensation, a decrease of $2.1 million in non-cash stock-based compensation, a decrease of $0.6 million in audit fees, and a decrease of $0.8 million in corporate expenses due to the realignment of our operations as noted above.

Previous wording

Depreciation and amortization decreased to $3.9 million for the three-month period ended September 30, 2024 compared to $4.7 million for the three-month period ended September 30, 2023, primarily due to fully amortized intangible assets.

Current wording

Depreciation and amortization decreased to $3.5 million for the three-month period ended March 31, 2025 compared to $4.7 million for the three-month period ended March 31, 2024, primarily due to fully amortized intangible assets.

Previous wording

Change in fair value of contingent consideration. As a result of the change in fair value of the contingent consideration, we recognized income of $0.7 million for the three-month period ended September 30, 2024, primarily related to an earnout of a past acquisition, and we recognized income of $0.1 million for the three-month period ended September 30, 2023, related to the acquisition of BCNMonetize.

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 $0.2 million for the three-month period ended March 31, 2024.

Previous wording

Foreign currency (gain) loss. We had a foreign currency gain of $0.1 million for the three-month period ended September 30, 2024 compared to a foreign currency loss of $0.3 million for the three-month period ended September 30, 2023. Foreign currency gains and losses are primarily due to currency fluctuations that affect our operations located outside the United States.

Current wording

Foreign currency (gain) loss. We had a de minimis foreign currency loss for the three-month period ended March 31, 2025 compared to a foreign currency loss of $0.3 million for the three-month period ended March 31, 2024. Foreign currency gains and losses are primarily due to currency fluctuations that affect our operations located outside the United States.

Previous wording

Interest Expense, net. Interest expense, net increased to $3.4 million for the three-month period ended September 30, 2024 from $3.3 million for three-month period ended September 30, 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 million, which were made in the first half of 2024.

Current wording

Interest Expense, net. Interest expense, net decreased to $3.1 million for the three-month period ended March 31, 2025 from $3.9 million for three-month period ended March 31, 2024. This decrease was primarily due to lower interest rate on our debt and a lower principal balance due to prepayments totaling $20 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 $0.1 million for the nine-month period ended September 30, 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 nine-month period ended September 30, 2023 due to the refinancing of our previous credit facility with our 2023 Credit Facility.

Current wording

Gain (loss) on debt extinguishment. We recorded a de minimis loss on debt extinguishment for the three-month period ended March 31, 2024 due to prepayment of $10.0 million of our 2023 Credit Facility.

Previous wording

Realized gain (loss) on marketable securities. For each of the three-month periods ended September 30, 2024 and 2023 we recorded a de minimis amount of realized gain and loss, respectively, related to our available for sale securities.

Current wording

Realized gain (loss) on marketable securities. For the three-month period ended March 31, 2025 we recorded a de minimis realized gain, related to our available for sale securities. For the three-month period ended March 31, 2024 we recorded $0.1 million of realized loss, related to our available for sale securities.

Previous wording

Income Tax Expense or Benefit. Income tax expense for the three-month period ended September 30, 2024 was $15.0 million. The effective tax rate for the three-month period ended September 30, 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, and non-taxable non-territorial income. Income tax benefit for the three-month period ended September 30, 2023 was $1.0 million. The effective tax rate for the three-month period ended September 30, 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.

Current wording

Income Tax Expense or Benefit. Income tax benefit for the three-month period ended March 31, 2025 was $8.1 million, or 14% of our pre-tax loss. The effective tax rate for the three-month period ended March 31, 2025 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non deductible executive compensation, share-based compensation from foreign employees, and transaction costs. Income tax benefit for the three-month period ended March 31, 2024 was $4.1 million, or 36% of our pre-tax loss. The effective tax rate for the three-month period ended March 31, 2024 was different from our statutory rate due to non deductible executive compensation, changes in the fair value of the contingent consideration liability, goodwill impairment, and non-taxable non-territorial income.

Previous wording

Based on our analysis, we determined that it was more likely than not that our deferred tax assets would be realized for all jurisdictions with the exception of certain of our digital operations and certain U.S. Foreign Tax Credit carryovers. As a result of historical losses from our digital operations primarily in Spain, Uruguay, Mexico and Argentina, certain U.S. Foreign Tax Credit carryovers and capital losses due to sale of subsidiaries management has determined that it is more likely than not that deferred tax assets of $31.6 million at September 30, 2024 will not be realized and therefore we have established a valuation allowance in that amount on those assets.

Current wording

Based on our analysis, we determined that it was more likely than not that our deferred tax assets would be realized for all jurisdictions with the exception of certain of our digital operations, certain U.S. Foreign Tax Credit carryoversand certain states deferred tax assets. As a result of historical losses from our digital operations primarily in Uruguay, Mexico and Argentina, certain U.S. Foreign Tax Credit carryovers, and capital loss, management has determined that it is more likely than not that deferred tax assets of $18.0 million at March 31, 2025 will not be realized and therefore we have established a valuation allowance in that amount on those assets.

Previous wording

The Organization for Economic Co-operation and Development (“OECD”) Pillar 2 guidelines address the increasing digitalization of the global economy, re-allocating taxing rights among countries. The OECD, many other member states and various other governments have adopted, or are in the process of adopting, Pillar 2 which calls for a global minimum tax of 15% to be effective for tax years beginning in 2024. The OECD guidelines published to date include transition and safe harbor rules around the implementation of the Pillar 2 global minimum tax. The Company is monitoring developments and evaluating the impacts these new rules will have on its tax rate, including eligibility to qualify for these safe harbor rules.

Current wording

The Organization for Economic Co-operation and Development (“OECD”) Pillar 2 guidelines address the increasing digitalization of the global economy, re-allocating taxing rights among countries. The OECD, many other member states and various other governments have adopted, or are in the process of adopting, Pillar 2 which calls for a global minimum tax of 15% to be effective for tax years beginning in 2024. The OECD guidelines published to date include transition and safe harbor rules around the implementation of the Pillar 2, global minimum tax. We are monitoring developments and evaluating the impacts these new rules will have on our tax rate, including eligibility to qualify for these safe harbor rules.

Previous wording

Earlier this year, our recently appointed CEO, who is also our chief operating decision maker, 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. Those sales were completed during the second quarter of 2024. Our EGP business generated 73%, and 70% of consolidated revenue for the year ended December 31, 2023 and the six-month period ended June 30, 2024, respectively.

Current wording

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.

Previous wording

The sale of our EGP business allows 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 management structure accordingly.

Current wording

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.

Previous wording

As a result, effective July 1, 2024, we have realigned our operating segments, and for financial reporting purposes, we report in two segments – media and advertising technology & services – consistent with our current operational and management structure. 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 U.S. Latinos. Our advertising technology & services segment consists of programmatic ad services through Smadex, our demand side programmatic ad platform, and Adwake, which includes BCNMonetize, our mobile growth solutions business.

Current wording

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.

Previous wording

Net Revenue. Net revenue in our media segment increased to $59.8 million for the three-month period ended September 30, 2024 from $48.7 million for the three-month period ended September 30, 2023. This increase was primarily due to an increase of $9.2 million in broadcast advertising revenue, driven by political advertising revenue, an increase of $2.7 million in digital advertising revenue, and an increase of $0.4 million in other revenue, partially offset by a decrease of $0.4 million in spectrum usage rights revenue and a decrease of $0.9 million in retransmission consent revenue.

Current wording

Net Revenue. Net revenue in our media segment decreased to $41.0 million for the three-month period ended March 31, 2025 from $45.8 million for the three-month period ended March 31, 2024. This decrease was primarily due to a decrease of $3.7 million in broadcast advertising revenue, and a decrease of $1.1 million in retransmission consent revenue, partially offset by an increase of $0.1 million in digital advertising revenue.

Previous 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.

Current wording

In general, many of our broadcast stations face declining audiences, which we believe is present across the traditional 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 consume, 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, including through an emphasis on local news and increased digital offerings, and their integration with our broadcast offerings. No assurances can be given that such strategies will be successful.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses in our media segment increased to $10.9 million for the three-month period ended September 30, 2024 from $8.7 million for the three-month period ended September 30, 2023, primarily due to an increase of $0.7 million in salaries and other employee benefits, and an increase of $1.2 million in corporate expenses due to the realignment of our operations as noted above. The remaining increase was due to other items which were individually immaterial.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses in our media segment increased to $10.8 million for the three-month period ended March 31, 2025 from $10.0 million for the three-month period ended March 31, 2024, primarily due to an increase of $1.0 million in salaries and other employee benefits, and an increase of $0.8 million in expenses due to the realignment of our operations as noted above. The increase was offset bya decrease of $0.5 million in bad debt expense and other items which were individually immaterial.

Previous wording

Net Revenue. Net revenue in our advertising technology & services segment increased to $37.4 million for the three-month period ended September 30, 2024 from $28.7 million for the three-month period ended September 30, 2023. The increase was primarily due to increases in advertising revenue from Smadex and Adwake, which includes BCNMonetize.

Current wording

Net Revenue. Net revenue in our advertising technology & services segment increased to $50.9 million for the three-month period ended March 31, 2025 from $32.4 million for the three-month period ended March 31, 2024. The increase was primarily due to increases in advertising revenue from Smadex and Adwake.

Previous wording

Direct operating expenses. Direct operating expenses in our advertising technology & services segment increased to $6.4 million for the three-month period ended September 30, 2024 from $4.6 million for the three-month period ended September 30, 2023, primarily due to an increase of $0.8 million in cloud infrastructure expenses associated with the increase in revenue, an increase of $0.5 million in salaries, and severance expense of $0.4 million.

Current wording

Direct operating expenses. Direct operating expenses in our advertising technology & services segment increased to $9.0 million for the three-month period ended March 31, 2025 from $5.2 million for the three-month period ended March 31, 2024, primarily due to an increase of $3.3 million in cloud infrastructure expenses and an increase of $0.5 million in salaries.

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. We had positive cash flow from operations of $61.9 million for the nine-month period ended September 30, 2024. 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. We had negative cash flow from operations of $15.2 million for the three-month period ended March 31, 2025. 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 $90.3 million, and available for sale marketable securities in the additional amount of

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 $73.6 million, and available for sale marketable securities in the additional amount of $4.5 million, as of March 31, 2025. Our liquidity is not materially affected by the amounts held in accounts outside the United States.

Previous 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.

Current wording

The 2023 Credit Agreement contains various financial covenants (see Note 2 to Notes to Condensed Consolidated Financial Statements). 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.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

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 is expected to be significantly lower than it was prior to the disposition of our EGP business. As a result, cash flow from operations will be materially and adversely affected in future periods, which could also adversely affect our liquidity. 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, whether as a direct or indirect result of the disposition of our EGP business or otherwise, we may be required to seek 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 wording

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.

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"). For detailed information regarding certain terms of our 2023 Credit Agreement and Credit Facility, see Note 2 to Notes to Condensed Consolidated Financial Statements.

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

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, and $1.25 million was applied to the Revolving Credit Facility.

Current wording

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).

Previous wording

Net cash flow provided by operating activities was $61.9 million for the nine-month period ended September 30, 2024, compared to $69.1 million for the nine-month period ended September 30, 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 in the nine-month period ended September 30, 2024 included the loss on sale related to the EGP business of $45.1 million, impairment charges of $49.4 million, depreciation and amortization expense of $17.0 million, non-cash stock based compensation of $12.4 million, income related to the change in fair value of contingent consideration of $13.2 million, deferred income taxes of $3.3 million, and income attributable to redeemable noncontrolling interest of $2.8 million. Significant non-cash items in the nine-month period ended September 30, 2023 included depreciation and amortization expense of $20.3 million, non-cash stock based compensation of $17.1 million, and income related to the change in fair value of contingent consideration of $8.9 million. We expect to have positive cash flow from operating activities for the 2024 year. The decrease in cash flow provided by operating activities was partially offset by increase in net changes in our working capital of $49.1 million for the nine-months periods ended September 30, 2024 compared to $35.5 million for the nine-months periods ended September 30, 2023. The net changes in working were primarily due to the timing of cash payments to publishers in the EGP business and timing of collections in the EGP business.

Current wording

Net cash flow used in operating activities was $15.2 million for the three-month period ended March 31, 2025, compared to net cash flow provided by operating activities of $33.4 million for the three-month period ended March 31, 2024. The decrease in cash flow from operating activities was primarily due to a decrease in net changes in our working capital of negative $20.9 million for the three-month period ended March 31, 2025 compared to positive $28.3 million for the three-month period ended March 31, 2024. The net changes in working capital were primarily due to the timing of cash payments to publishers and collections from customers. The decrease in cash flow from operating activities was also due to an increase in net loss after adjusting for non-cash items. Significant non-cash items in the three-month period ended March 31, 2025 included impairment charges of $23.7 million, loss on lease abandonment charges of $25.2 million, depreciation and amortization expense of $3.5 million, deferred income taxes of $1.5 million, and non-cash stock based compensation of $2.6 million. Significant non-cash items in the three-month period ended March 31, 2024 included impairment charges of $49.4 million, depreciation and amortization expense of $7.1 million, non-cash stock based compensation of $5.4 million, change in fair value of contingent consideration of $1.4 million, deferred income taxes of $4.2 million, and income attributable to redeemable noncontrolling interest of $2.8 million. We expect to have positive cash flow from operating activities for the full year 2025.

Previous wording

Net cash flow used in investing activities was $28.1 million for the nine-month period ended September 30, 2024, compared to $13.9 million for the nine-month period ended September 30, 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 $43.0 million for the nine-month period ended September 30, 2024 compared to $6.9 million spent on the purchase of businesses for the nine-month period ended September 30, 2023, and a reduction in proceeds from the sale of marketable securities to $10.4 million for the nine-month period ended September 30, 2024 compared to $38.1 million for the nine-month period ended September 30, 2023. The increase in cash flow used in investing activities was partially offset by a reduction in capital expenditures to $6.3 million for the nine-month period ended September 30, 2024 compared to $19.9 million for the nine-month period ended September 30, 2023 as a result of the build out of our corporate headquarters in the prior year period, no spend on purchases of marketable securities for the nine-month period ended September 30, 2024 compared to $11.4 million for the nine-month period ended September 30, 2023, and proceeds from a loan receivable associated with the sale of the EGP business of $10.7 million for the nine-month period ended September 30, 2024 compared to the issuance of a loan receivable of $13.6 million for the nine-month period ended September 30, 2023. We anticipate that our capital expenditures will be approximately $7.0 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 $2.5 million for the three-month period ended March 31, 2025, compared to net cash flow provided by investing activities of $6.1 million for the three-month period ended March 31, 2024. The decrease in net cash flow used in investing activities was primarily due to a reduction in proceeds from the sale of marketable securities to $0.4 million for the three-month period ended March 31, 2025 compared to $8.8 million for the three-month period ended March 31, 2024. We anticipate that our capital expenditures will be approximately $7.0 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

Net cash flow used in financing activities was $49.3 million for the nine-month period ended September 30, 2024, compared to $55.2 million for the nine-month period ended September 30, 2023. The decrease in cash flow used in financing activities was primarily due to payments of contingent consideration of $14.3 million for the nine-month period ended September 30, 2024 compared to $35.1 million for the nine-month period ended September 30, 2023, distributions to noncontrolling interest of $1.1 million for the nine-month period ended September 30, 2024 compared to $3.4 million for the nine-month period ended September 30, 2023, and payments of $1.8 million of debt issuance costs for the nine-month period ended September 30, 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 nine-month period ended September 30, 2024.

Current wording

Net cash flow used in financing activities was $4.6 million for the three-month period ended March 31, 2025, compared to $16.8 million for the three-month period ended March 31, 2024. The decrease in cash flow used in financing activities was primarily due to $10.3 million of payments on debt during the three-month period ended March 31, 2024, payments of contingent consideration of $0.9 million for the three-month period ended March 31, 2024, and distributions to noncontrolling interest of $1.1 million for the three-month period ended March 31, 2024, all of which did not recur in the three-month period ended March 31, 2025.