ENTRAVISION COMMUNICATIONS CORP

Previous wording

Our media business 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 news, information, and entertainment. We serve our advertisers by providing marketing capabilities across broadcast and digital media.

Current wording

Through our media business we own 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 news, information, and entertainment. We serve our advertisers by providing marketing capabilities across broadcast and digital media.

Previous wording

We have organized our operations into two reportable segments. Our media segment includes its television, radio and digital marketing operations. Our ATS segment consists of Smadex and Adwake.

Current wording

We have organized our operations into two reportable segments. Our media segment consists of our television, radio and digital marketing operations. Our ATS segment consists of Smadex and Adwake.

Previous wording

Our net revenue for the three-month period ended June 30, 2026 was $227.9 million. Of this amount, revenue generated by our media segment accounted for approximately 20%, and revenue generated by our ATS segment accounted for approximately 80% of total revenue.

Current wording

Our net revenue for the three-month period ended September 30, 2026 was $226.3 million. Of this amount, revenue generated by our media segment accounted for approximately 22%, and revenue generated by our ATS segment accounted for approximately 78% of total revenue.

Previous wording

During the second quarter of 2026, our revenue grew by triple digits, driven by revenue growth in our ATS segment, partially offset by a decrease in revenue in our media segment compared to the comparable period of 2025. In addition, during the second quarter of 2026:

Current wording

During the third quarter of 2026, our revenue grew by 88%, driven by revenue growth in our ATS segment and an increase in revenue in our media segment, compared to the comparable period of 2025. In addition, during the third quarter of 2026:

Previous wording

ATS revenue increased by 230% during the second quarter of 2026 compared to the second quarter of 2025, primarily due to a large customer in Asia that we acquired in the second half of 2025, andincreases in monthly active advertisers and revenue per monthly active advertiser.

Current wording

ATS revenue increased by 133% during the third quarter of 2026 compared to the third quarter of 2025, primarily due to an increase in revenue from a few large customers, primarily in Asia, andincreases in monthly active advertisers and revenue per monthly active advertiser.

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. Under our proxy agreement with TelevisaUnivision, we grant TelevisaUnivision the right to negotiate the terms of retransmission consent agreements with 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. 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. 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. Under our proxy agreement with TelevisaUnivision, we grant TelevisaUnivision the right to negotiate the terms of retransmission consent agreements with 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. 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. The term of each of these current agreements was scheduled to expire on December 31, 2026 for all of our Univision and UniMás network affiliate stations. On October 5, 2026, TelevisaUnivision and we extended each of these agreements on their respective current terms for three months, until March 31, 2027. The extension term of each agreement renews automatically for successive three-month periods unless either party gives 30 days' notice that the agreements will not be further renewed.

Previous wording

The following table sets forth selected data from our operating results for the three- and six-month periods ended June 30, 2026 and 2025 (in thousands):

Current wording

The following table sets forth selected data from our operating results for the three- and nine-month periods ended September 30, 2026 and 2025 (in thousands):

Previous wording

Net Revenue. Net revenue increased to $227.9 million for the three-month period ended June 30, 2026 from $100.7 million for the three-month period ended June 30, 2025. This increase was primarily due to an increase of $127.5 million in net revenue from our ATS segment, partially offset by a decrease of $0.3 million in net revenue from our media segment.

Current wording

Net Revenue. Net revenue increased to $226.3 million for the three-month period ended September 30, 2026 from $120.6 million for the three-month period ended September 30, 2025. This increase was primarily due to an increase of $4.6 million in net revenue from our media segment, and an increase of $101.1 million in net revenue from our ATS segment.

Previous wording

Net revenue increased to $424.9 million for the six-month period ended June 30, 2026 from $192.6 million for the six-month period ended June 30, 2025. This increase was primarily due to an increase of $1.1 million in net revenue from our media segment, and an increase of $231.2 million in net revenue from our ATS segment.

Current wording

Net revenue increased to $651.2 million for the nine-month period ended September 30, 2026 from $313.2 million for the nine-month period ended September 30, 2025. This increase was primarily due to an increase of $5.7 million in net revenue from our media segment, and an increase of $332.3 million in net revenue from our ATS segment.

Previous wording

Cost of revenue. Cost of revenue increased to $117.9 million for the three-month period ended June 30, 2026 from $38.0 million for the three-month period ended June 30, 2025. This increase was primarily due to an increase of $1.4 million in cost of revenue from our media segment, and an increase of $78.5 million in cost of revenue from our ATS segment.

Current wording

Cost of revenue. Cost of revenue increased to $112.6 million for the three-month period ended September 30, 2026 from $51.0 million for the three-month period ended September 30, 2025. This increase was primarily due to an increase of $0.1 million in cost of revenue from our media segment, and an increase of $61.5 million in cost of revenue from our ATS segment.

Previous wording

Cost of revenue increased to $219.9 million for the six-month period ended June 30, 2026 from $71.5 million for the six-month period ended June 30, 2025. This increase was primarily due to an increase of $3.5 million in cost of revenue from our media segment, and an increase of $144.9 million in cost of revenue from our ATS segment.

Current wording

Cost of revenue increased to $332.4 million for the nine-month period ended September 30, 2026 from $122.5 million for the nine-month period ended September 30, 2025. This increase was primarily due to an increase of $3.6 million in cost of revenue from our media segment, and an increase of $206.4 million in cost of revenue from our ATS segment.

Previous wording

Direct Operating Expenses. Direct operating expenses increased to $50.6 million for the three-month period ended June 30, 2026 from $37.7 million for the three-month period ended June 30, 2025. This increase was primarily due to an increase of $2.0 million in direct operating expenses in our media segment, and an increase of $10.9 million in direct operating expenses in our ATS segment.

Current wording

Direct Operating Expenses. Direct operating expenses increased to $54.7 million for the three-month period ended September 30, 2026 from $41.2 million for the three-month period ended September 30, 2025. This increase was primarily due to an increase of $1.2 million in direct operating expenses in our media segment, and an increase of $12.3 million in direct operating expenses in our ATS segment.

Previous wording

Direct operating expenses increased to $95.4 million for the six-month period ended June 30, 2026 from $73.2 million for the six-month period ended June 30, 2025. This increase was primarily due to an increase of $3.5 million in direct operating expenses in our media segment, and an increase of $18.7 million in direct operating expenses in our ATS segment.

Current wording

Direct operating expenses increased to $150.1 million for the nine-month period ended September 30, 2026 from $114.5 million for the nine-month period ended September 30, 2025. This increase was primarily due to an increase of $4.7 million in direct operating expenses in our media segment, and an increase of $30.9 million in direct operating expenses in our ATS segment.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $19.0 million for the three-month period ended June 30, 2026, from $16.5 million for the three-month period ended June 30, 2025. This increase was primarily due to an increase of $2.9 million in selling, general and administrative expenses in our ATS segment, partially offset by a decrease of $0.3 million in selling, general and administrative expenses in our media segment.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $21.0 million for the three-month period ended September 30, 2026, from $19.0 million for the three-month period ended September 30, 2025. This increase was primarily due to an increase of $2.1 million in selling, general and administrative expenses in our ATS segment, partially offset by a decrease of $0.1 million in selling, general and administrative expenses in our media segment.

Previous wording

Selling, general and administrative expenses increased to $37.2 million for the six-month period ended June 30, 2026, from $32.0 million for the six-month period ended June 30, 2025. This increase was primarily due to an increase of $0.2 million in selling, general and administrative expenses in our media segment, and an increase of $5.0 million in selling, general and administrative expenses in our ATS segment.

Current wording

Selling, general and administrative expenses increased to $58.1 million for the nine-month period ended September 30, 2026, from $51.0 million for the nine-month period ended September 30, 2025. This increase was primarily due to an increase of $0.1 million in selling, general and administrative expenses in our media segment, and an increase of $7.1 million in selling, general and administrative expenses in our ATS segment.

Previous wording

Corporate Expenses. Corporate expenses increased to $6.6 million for the three-month period ended June 30, 2026 from $6.4 million for the three-month period ended June 30, 2025. This increase was primarily due an increase of $0.6 million in non-cash stock-based compensation partially offset by a decrease of $0.3 million in salaries and benefits.

Current wording

Corporate Expenses. Corporate expenses increased to $6.8 million for the three-month period ended September 30, 2026 from $6.3 million for the three-month period ended September 30, 2025. This increase was primarily due an increase of $0.5 million in non-cash stock-based compensation.

Previous wording

Impairment. During the first quarter of 2025, we incurred an impairment charge of $23.7 million related to broadcast licenses and fixed assets of the two television stations in Mexico that are held for sale.

Current wording

Impairment. We recorded impairment charges of $5.7 million and $29.4 million for the three- and nine-month period ended September 30, 2025, respectively, primarily related to broadcast licenses and fixed assets of the two television stations in Mexico that are held for sale.

Previous wording

Loss on lease abandonment. During the first quarter of 2025, we incurred a loss on lease abandonment of $25.2 million related to our previous Santa Monica lease.

Current wording

Loss on lease abandonment. During the first quarter of 2025, we incurred a loss on lease abandonment of $25.2 million related to the previous Santa Monica lease for our then corporate headquarters.

Previous wording

Restructuring costs. During the third quarter of 2025 our management began to implement the Plan, intended to support revenue growth and reduce expenses, primarily in our media operations. For the six-month period ended June 30, 2026, we recorded $1.0 million in restructuring costs.

Current wording

Restructuring costs. During the third quarter of 2025 our management began to implement the Plan, intended to support revenue growth and reduce expenses, primarily in our media operations. For the three- and nine-month period ended September 30, 2026, we recorded $0.4 million and $1.4 million in restructuring costs, respectively. For the three- and nine-month period ended September 30, 2025, we recorded $3.2 million in restructuring costs.

Previous wording

We had a foreign currency loss of $0.3 million for the three-month period ended June 30, 2026, and a de minimis foreign currency loss for the three-month period ended June 30, 2025.

Current wording

We had a foreign currency gain of $0.2 million for the three-month period ended September 30, 2026, compared to foreign currency loss of $0.1 million for the three-month period ended September 30, 2025.

Previous wording

We had a foreign currency loss of $0.5 million for the six-month period ended June 30, 2026, and a de minimis foreign currency loss for the six-month period ended June 30, 2025.

Current wording

We had a foreign currency loss of $0.3 million for the nine-month period ended September 30, 2026, compared to foreign currency loss of $0.1 million for the nine-month period ended September 30, 2025.

Previous wording

Interest Expense, net. Interest expense, net decreased to $2.5 million for the three-month period ended June 30, 2026 from $3.4 million for three-month period ended June 30, 2025. This decrease was primarily due to lower interest rate on our debt and a lower principal balance.

Current wording

Interest Expense, net. Interest expense, net decreased to $2.4 million for the three-month period ended September 30, 2026 from $3.2 million for three-month period ended September 30, 2025. This decrease was primarily due to lower interest rate on our debt and a lower outstanding principal balance.

Previous wording

Interest expense, net decreased to $5.5 million for the six-month period ended June 30, 2026 from $6.5 million for the six-month period ended June 30, 2025. This decrease was primarily due to lower interest rate on our debt and a lower principal balance.

Current wording

Interest expense, net decreased to $7.9 million for the nine-month period ended September 30, 2026 from $9.7 million for the nine-month period ended September 30, 2025. This decrease was primarily due to lower interest rate on our debt and a lower outstanding principal balance.

Previous wording

For each of the six-month periods ended June 30, 2026 and 2025 we recorded a de minimis amount of realized gain related to our available for sale securities.

Current wording

For each of the nine-month periods ended September 30, 2026 and 2025 we recorded a de minimis amount of realized gain related to our available for sale securities.

Previous wording

Income Tax Expense or Benefit. Income tax expense for the three-month period ended June 30, 2026 was $7.8 million, or 28% of our pre-tax income. The effective tax rate for the three-month period ended June 30, 2026 was different from our statutory rate due to foreign and state taxes, non-deductible executive compensation, share-based compensation from foreign employees, and Net Controlled Foreign Corporation Tested Income. Income tax benefit for the three-month period ended June 30, 2025 was $0.8 million, or 19% of our pre-tax loss. The effective tax rate for the three-month period ended June 30, 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.

Current wording

Income Tax Expense or Benefit. Income tax expense for the three-month period ended September 30, 2026 was $6.9 million, or 27% of our pre-tax income. The effective tax rate for the three-month period ended September 30, 2026 was different from our statutory rate due to foreign and state taxes, non-deductible executive compensation, share-based compensation from foreign employees, and Net Controlled Foreign Corporation Tested Income. Income tax benefit for the three-month period ended September 30, 2025 was $2.8 million. The effective tax rate for the three-month period ended September 30, 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, Global Intangible Low-Taxed Income, and transaction costs.

Previous wording

Income tax expense for the six-month period ended June 30, 2026 was $13.2 million, or 29% of our pre-tax income. The effective tax rate for the six-month period ended June 30, 2026 was different from our statutory rate due to foreign and state taxes, non-deductible executive compensation, share-based compensation from foreign employees, and Net Controlled Foreign Corporation Tested Income. Income tax benefit for the six-month period ended June 30, 2025 was $8.9 million, or 15% of our pre-tax loss. The effective tax rate for the six-month period ended June 30, 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.

Current wording

Income tax expense for the nine-month period ended September 30, 2026 was $20.0 million, or 28% of our pre-tax income. The effective tax rate for the nine-month period ended September 30, 2026 was different from our statutory rate due to foreign and state taxes, non-deductible executive compensation, share-based compensation from foreign employees, and Net Controlled Foreign Corporation Tested Income. Income tax benefit for the nine-month period ended September 30, 2025 was $11.7 million. The effective tax rate for the nine-month period ended September 30, 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.

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, certain U.S. Foreign Tax Credit carryovers and certain states deferred tax assets. As a result of historical losses from our digital operations primarily in certain jurisdictions, 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 $18.5 million at June 30, 2026 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 carryovers and certain states deferred tax assets. As a result of historical losses from our digital operations primarily in certain jurisdictions, 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 September 30, 2026 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. On January 5, 2026, the OECD released the “Side-by-Side” (SbS) Safe Harbor guidance, effective January 1, 2026. This guidance provides a framework for coordinating the U.S. tax system with Pillar 2 rules, potentially limiting top-up tax liabilities for qualifying periods. We included the tax impact of Pillar 2 in the income tax for the three- and six-month periods ended June 30, 2026, based on the rules effective for that period, and continues to evaluate the impact of the SbS guidance on future periods.

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. On January 5, 2026, the OECD released the “Side-by-Side” (SbS) Safe Harbor guidance, effective January 1, 2026. This guidance provides a framework for coordinating the U.S. tax system with Pillar 2 rules, potentially limiting top-up tax liabilities for qualifying periods. We included the tax impact of Pillar 2 in the income tax for the three- and nine-month periods ended September 30, 2026, based on the rules effective for that period, and continues to evaluate the impact of the SbS guidance on future periods.

Previous wording

As of June 30, 2026 and December 31, 2025, we had unrecognized tax benefits of $31.9 million and $31.7 million. We will recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.

Current wording

As of September 30, 2026 and December 31, 2025, we had unrecognized tax benefits of $32.1 million and $31.7 million. We will recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.

Previous wording

Our media segment consists of sales of advertising through various media, including television, radio and digital. We own and/or operate one of the largest groups of Spanish-language television and radio stations in the United States. Our assets include 47 television stations and 44 radio stations (37 FM and 7 AM). These stations are concentrated in 13 of the 20 highest-density Latino markets in the United States. We are the largest affiliate group of the Spanish-language Univision and UniMás networks, which are owned by TelevisaUnivision. We also provide digital marketing services for businesses targeting Latino consumers.

Current wording

Our media segment consists of sales of advertising through various media, consisting of television, radio and digital. We own and/or operate one of the largest groups of Spanish-language television and radio stations in the United States. Our assets include 47 television stations and 44 radio stations (37 FM and 7 AM). These stations are concentrated in 13 of the 20 highest-density Latino markets in the United States. We are the largest affiliate group of the Spanish-language Univision and UniMás networks, which are owned by TelevisaUnivision. We also provide digital marketing services for businesses targeting Latino consumers.

Previous wording

Our ATS segment provides global performance marketing solutions primarily to mobile app developers. We operate this segment through two distinct business units: Smadex, our programmatic demand-side advertising platform; and Adwake, our performance-based digital marketing agency.

Current wording

Our ATS segment provides global performance marketing solutions primarily to mobile app developers. We operate this segment through two brands. Smadex, our programmatic demand-side advertising platform; and Adwake, our performance-based digital marketing agency.

Previous wording

Net Revenue. Net revenue in our media segment decreased to $45.1 million for the three-month period ended June 30, 2026 from $45.4 million for the three-month period ended June 30, 2025. This decrease was primarily due to a decrease of $2.3 million in broadcast advertising revenue and a decrease of $1.0 million in spectrum usage rights revenue partially offset by an increase of $2.4 million in digital advertising revenue, and an increase of $0.5 million in retransmission consent revenue.

Current wording

Net Revenue. Net revenue in our media segment increased to $49.1 million for the three-month period ended September 30, 2026 from $44.5 million for the three-month period ended September 30, 2025. This increase was primarily due to an increase of $4.7 million in broadcast advertising revenue, which was primarily political advertising revenue, and an increase of $0.5 million in retransmission consent revenue, partially offset by a decrease of $0.6 million in spectrum usage rights revenue.

Previous wording

Net revenue in our media segment increased to $87.5 million for the six-month period ended June 30, 2026 from $86.4 million for the six-month period ended June 30, 2025. This increase was primarily due to an increase of $5.7 million in digital advertising revenue, an increase of $0.8 million in retransmission consent revenue, and an increase of $0.2 million in other revenue, partially offset by a decrease of $3.6 million in broadcast advertising revenue and a decrease of $2.0 million in spectrum usage rights revenue.

Current wording

Net revenue in our media segment increased to $136.6 million for the nine-month period ended September 30, 2026 from $130.9 million for the nine-month period ended September 30, 2025. This increase was primarily due to an increase of $5.6 million in digital advertising revenue, an increase of $1.1 million in broadcast advertising revenue, and an increase of $1.3 million in retransmission consent revenue, partially offset by a decrease of $2.5 million in spectrum usage rights revenue.

Previous wording

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. In particular, the radio broadcast industry remains in a general state of decline as a result of numerous factors, including technological advancements in how audiences consume audio content, such as podcasts overtaking talk radio, leading to fragmentation in radio audiences; changing consumer preferences, especially among younger audiences who tend to prefer interactive and on-demand experiences over the linear broadcast model; economic pressures in the form of certain high fixed operational costs; and competition with other forms of media, especially digital, for advertising revenue. We anticipate that these changes in viewer habits and preferences will persist at least for the foreseeable future and possibly permanently.

Current wording

In general, the traditional broadcast industry is continuing to experience dramatic transformation. Most of our broadcast stations face declining audiences, which we believe is the situation 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 consume, including streaming and social media. In particular, the radio broadcast industry remains in a general state of decline as a result of numerous factors, including technological advancements in how audiences consume audio content, such as podcasts overtaking talk radio, leading to fragmentation in radio audiences; changing consumer preferences, especially among younger audiences who tend to prefer interactive and on-demand experiences over the linear broadcast model; economic pressures in the form of certain high fixed operational costs; and competition with other forms of media, especially digital, for advertising revenue. We anticipate that these changes in viewer habits and preferences, and in the broadcast industry as a whole, will persist at least for the foreseeable future and possibly permanently.

Previous wording

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 at least for the foreseeable future and possibly permanently. While we believe that none of these new technologies and services can completely replace local broadcast stations due to the element of localism that traditional broadcasting offers, the challenges we face in our broadcast operations from new technologies and services will persist and continue to present significant challenges, requiring attention, adaptability and action from management. We must continue to address these changes, including the need to further adjust our business strategies accordingly. Among the steps we have taken so far has been an emphasis on increasing local news and digital offerings, and their integration with our broadcast offerings. No assurances can be given that these or other strategies will be successful in meeting the changes and challenges we face.

Current wording

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 at least for the foreseeable future and possibly permanently. While we believe that none of these new technologies and services can completely replace local broadcast stations due to the element of localism that traditional broadcasting offers, the challenges we face in our broadcast operations from new technologies and services will persist and continue to present significant challenges, requiring attention, adaptability and action from management. We must continue to address these changes, including the need to further adjust our business strategies accordingly. No assurances can be given that these or other strategies will be successful in meeting the changes and challenges we face.

Previous wording

Cost of revenue in our media segment increased to $11.4 million for the six-month period ended June 30, 2026 from $7.9 million for the six-month period ended June 30, 2025, primarily due to the increase in costs associated with the increase in digital advertising revenue and a decrease in gross margins.

Current wording

Cost of revenue in our media segment increased to $16.5 million for the nine-month period ended September 30, 2026 from $12.9 million for the nine-month period ended September 30, 2025, primarily due to the increase in costs associated with the increase in digital advertising revenue and a decrease in gross margins.

Previous wording

Direct Operating Expenses. Direct operating expenses in our media segment increased to $28.8 million for the three-month period ended June 30, 2026 from $26.8 million for the three-month period ended June 30, 2025, primarily due to an increase of $0.7 million in salaries and other employee benefits, an increase of $0.2 million in non-cash stock-based compensation, an increase of $0.1 million in rent expense, an increase of $0.1 million in music license fees, and an increase of $0.9 million in other items which were individually immaterial.

Current wording

Direct Operating Expenses. Direct operating expenses in our media segment increased to $29.8 million for the three-month period ended September 30, 2026 from $28.6 million for the three-month period ended September 30, 2025, primarily due to an increase of $0.9 million in costs associated with the increase in advertising revenue, an increase of $0.4 million in salaries and other employee benefits, an increase of $0.3 million in non-cash stock-based compensation, an increase of $0.1 million in rent expense, and an increase of $1.1 million in other items which were individually immaterial, partially offset by a decrease of $1.6 million in music license fees.

Previous wording

Direct operating expenses in our media segment increased to $56.9 million for the six-month period ended June 30, 2026 from $53.4 million for the six-month period ended June 30, 2025, primarily due to an increase of $0.9 million in expenses associated with the increase in revenue, an increase of $0.8 million in salaries and other employee benefits, an increase of $0.3 million in music license fees, an increase of $0.1 million in rent expense, and an increase of $1.4 million in other items which were individually immaterial.

Current wording

Direct operating expenses in our media segment increased to $86.7 million for the nine-month period ended September 30, 2026 from $81.9 million for the nine-month period ended September 30, 2025, primarily due to an increase of $1.9 million in expenses associated with the increase in revenue, an increase of $1.4 million in salaries and other employee benefits, an increase of $0.2 million in non-cash stock-based compensation, an increase of $0.2 million in rent expense, and an increase of $2.4 million in other items which were individually immaterial, partially offset by a decrease of $1.3 million in music license fees.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses in our media segment decreased to $10.7 million for the three-month period ended June 30, 2026 from $11.0 million for the three-month period ended June 30, 2025, primarily due to a decrease of $0.2 million in bad debt expense, a decrease in rent expense of $0.2 million, and a decrease of $0.3 million in other items which were individually immaterial, partially offset by an increase of $0.4 million in salaries and other employee benefits.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses in our media segment decreased to $11.4 million for the three-month period ended September 30, 2026 from $11.6 million for the three-month period ended September 30, 2025, primarily due to a decrease in rent expense of $0.3 million, and a decrease of $0.2 million in other items which were individually immaterial, partially offset by an increase of $0.3 million in salaries and other employee benefits.

Previous wording

Selling, general and administrative expenses in our media segment increased to $22.0 million for the six-month period ended June 30, 2026 from $21.8 million for the six-month period ended June 30, 2025, primarily due to an increase of $0.7 million in salaries and other employee benefits, and an increase of $0.3 million in bad debt expense, partially offset by a decrease in rent expense of $0.5 million and a decrease of $0.3 million in other items which were individually immaterial.

Current wording

Selling, general and administrative expenses in our media segment increased to $33.5 million for the nine-month period ended September 30, 2026 from $33.4 million for the nine-month period ended September 30, 2025, primarily due to an increase of $0.9 million in salaries and other employee benefits, and an increase of $0.3 million in bad debt expense, partially offset by a decrease in rent expense of $0.9 million and a decrease of $0.2 million in other items which were individually immaterial.