Townsquare Media Inc

Previous wording

Townsquare is a community-focused digital media and subscription digital marketing solutions company with market leading local radio stations, principally focused outside the top 50 markets in the United States. Our integrated and diversified products and solutions enable local, regional and national advertisers to target audiences across multiple platforms, including digital, mobile, social, video, streaming, e-commerce, radio and events. Our assets include a subscription digital marketing solutions business (“Townsquare Interactive”), providing a business management platform, website design, creation and hosting, search engine optimization, social platforms and online reputation management as well as other monthly digital services for approximately 23,575 small to medium sized businesses; a robust digital advertising division (“Townsquare Ignite,” or “Ignite”), a powerful combination of a) an owned and operated portfolio of more than 400 local news and entertainment websites and mobile apps along with a network of leading national music and entertainment brands, collecting valuable first party data and b) a proprietary digital programmatic advertising technology stack with an in-house demand and data management platform; and a portfolio of 349 local terrestrial radio stations in 74 U.S. markets strategically situated outside the Top 50 markets in the United States. Our portfolio includes local media brands such as WYRK.com, WJON.comand NJ101.5.com, and premier national music brands such as XXLmag.com, TasteofCountry.com, UltimateClassicRock.com, and Loudwire.com.

Current wording

Townsquare is a community-focused digital media and subscription digital marketing solutions company with market leading local radio stations, principally focused outside the top 50 markets in the United States. Our integrated and diversified products and solutions enable local, regional and national advertisers to target audiences across multiple platforms, including digital, mobile, social, video, streaming, e-commerce, radio and events. Our assets include a subscription digital marketing solutions business (“Townsquare Interactive”), providing a business management platform, website design, creation and hosting, search engine optimization, social platforms and online reputation management as well as other monthly digital services for small to medium sized businesses; a robust digital advertising division (“Townsquare Ignite,” or “Ignite”), a powerful combination of a) an owned and operated portfolio of more than 400 local news and entertainment websites and mobile apps along with a network of leading national music and entertainment brands, collecting valuable first party data and b) a proprietary digital programmatic advertising technology stack with an in-house demand and data management platform; and a portfolio of 349 local terrestrial radio stations in 74 U.S. markets strategically situated outside the Top 50 markets in the United States. Our portfolio includes local media brands such as WYRK.com, WJON.comand NJ101.5.com, and premier national music brands such as XXLmag.com, TasteofCountry.com, UltimateClassicRock.com, and Loudwire.com.

Previous wording

•Net revenue decreased $3.0 million, or 2.5%, primarily driven by a $2.8 million decrease in our Subscription Digital Marketing Solutions net revenue and a $0.6 million decrease in our Other net revenue, partially offset by a $0.4 million increase in our Digital Advertising net revenue.

Current wording

•Net revenue increased $0.2 million, or 0.2%, primarily driven by a $1.9 million increase in our Digital Advertising net revenue, partially offset by a $1.2 million decrease in our Subscription Digital Marketing Solutions net revenue and a $0.6 million decrease in our Other net revenue.

Previous wording

•Broadcast Advertising reported an operating loss of $15.4 million for the three months ended June 30, 2024, as compared to an operating loss of $5.7 million for the three months ended June 30, 2023. The increase of $9.7 million is primarily due to an increase in non-cash impairment charges of $11.6 million, partially offset by a decrease in direct operating expenses of $1.4 million. The Digital Advertising segment reported operating income of $8.8 million for the three months ended June 30, 2024, which represents a decrease of $5.4 million, as compared to operating income of $14.1 million for the same period in 2023. The decrease is primarily due to an increase of $3.7 million in direct operating expenses and a non-cash goodwill impairment charge of $1.8 million. Subscription Digital Marketing Solutions reported operating income of $4.6 million, a decrease of $0.9 million from the three months ended June 30, 2023 due to the decrease in net revenue discussed above, partially offset by a $2.1 million decrease in direct operating expenses.

Current wording

•Broadcast Advertising reported operating income of $12.7 million for the three months ended September 30, 2024, as compared to an operating loss of $13.1 million for the three months ended September 30, 2023. The increase of $25.8 million is primarily due to a decrease in non-cash impairment charges of $26.5 million, partially offset by an increase in direct operating expenses of $1.1 million. The Digital Advertising segment reported operating income of $10.4 million for the three months ended September 30, 2024, which represents a decrease of $1.0 million as compared to operating income of $11.4 million for the same period in 2023. The decrease is primarily due to an increase of $2.8 million in direct operating expenses, partially offset by a $1.9 million increase in net revenue. Subscription Digital Marketing Solutions reported operating income of $4.4 million, a decrease of $0.9 million from the three months ended September 30, 2023 due to a $1.2 million decrease in net revenue, partially offset by a $0.5 million decrease in direct operating expenses.

Previous wording

Certain key financial developments in our business for the six months ended June 30, 2024, as compared to the same period in 2023 are summarized below:

Current wording

Certain key financial developments in our business for the nine months ended September 30, 2024, as compared to the same period in 2023 are summarized below:

Previous wording

•Net revenue for the six months ended June 30, 2024 as compared to the same period in 2023, decreased $6.5 million, or 2.9%, primarily driven by a $6.1 million decrease in our Subscription Digital Marketing Solutions net revenue, a $0.7 million decrease in Other net revenue, and a $0.6 million decrease in Broadcast Advertising net revenue. These decreases were partially offset by a $0.8 million increase in our Digital Advertising net revenue.

Current wording

•Net revenue for the nine months ended September 30, 2024 as compared to the same period in 2023, decreased $6.3 million, or 1.8%, primarily driven by a $7.2 million decrease in our Subscription Digital Marketing Solutions net revenue and a $1.3 million decrease in Other net revenue. These decreases were partially offset by a $2.7 million increase in our Digital Advertising net revenue.

Previous wording

•Operating income decreased $14.1 million for the six months ended June 30, 2024, primarily due to a $7.3 million increase in stock-based compensation and a decrease in net revenue of $6.5 million.

Current wording

•Operating income increased $11.6 million for the nine months ended September 30, 2024, primarily due to a $29.4 million decrease in non-cash impairment charges, partially offset by a $7.8 million increase in stock-based compensation, $6.3 million decrease in net revenue, and a $2.9 million increase in transaction and business realignment costs.

Previous wording

Net revenue for the three months ended June 30, 2024 decreased $3.0 million, or 2.5%, as compared to the same period in 2023. Our Subscription Digital Marketing Solutions net revenue decreased $2.8 million, or 12.9%, as compared to the same period in 2023 due to a reduction in net subscribers. Our Other net revenue decreased $0.6 million due to fewer live events. Our Broadcast Advertising net revenue decreased $0.1 million, or 0.2%, as compared to the same period in 2023, essentially flat. These decreases were partially offset by an increase in our Digital Advertising net revenue of $0.4 million, or 1.0%, due to purchases of new advertising.

Current wording

Net revenue for the three months ended September 30, 2024 increased $0.2 million, or 0.2%, as compared to the same period in 2023. Our Digital Advertising net revenue increased $1.9 million, or 4.7%, as compared to the same period in 2023 due to purchases of new advertising. Our Broadcast Advertising net revenue increased $0.2 million, or 0.3%, essentially flat. These increases were partially offset by a decrease in our Subscription Digital Marketing Solutions net revenue of $1.2 million, or 5.8%, due to a reduction in net subscribers as compared to the same period in 2023. Our Other net revenue decreased $0.6 million due to the elimination of low profit events in 2024.

Previous wording

Direct operating expenses for the six months ended June 30, 2024, decreased by $1.6 million, or 1.0%, as compared to the same period in 2023. Our Subscription Digital Marketing Solutions direct operating expenses for the six months ended June 30, 2024 decreased $4.9 million, or 15.7% due to lower compensation costs and bad debt. Our Broadcast Advertising direct operating expenses decreased by $3.5 million, or 4.5% primarily driven by lower compensation costs, as compared to the same period in 2023, and our Other direct operating expenses for the six months ended June 30, 2024, decreased $0.4 million, or 6.9%, as compared to the same period in 2023, due to a decrease in live events during the period. These decreases were partially offset by our Digital Advertising direct operating expense increase of $7.2 million, or 14.3%, due to higher inventory and compensation costs.

Current wording

Direct operating expenses for the three months ended September 30, 2024 increased by $2.5 million, or 3.0%, as compared to the same period in 2023. Our Digital Advertising direct operating expenses increased $2.8 million, or 10.2%, due to higher inventory costs and bad debt. Our Broadcast Advertising direct operating expenses increased $1.1 million, or 2.8%, primarily driven by higher bad debt and employee benefits expenses. These increases were partially offset by a $0.8 million, or 39.9%, decrease in Other direct operating expenses due to a decrease in live events during the period and a $0.5 million, or 3.7%, decrease in Our Subscription Digital Marketing Solutions direct operating expenses due to lower compensation, partially offset by higher software costs, each as compared to the same period a year ago.

Previous wording

Stock-based compensation expense for three months ended June 30, 2024 increased $6.2 million, or 295.3%, as compared to the same period in 2023, primarily due to $3.8 million in expense recognized for the cash settlement of options, $1.8 million of expense recognized for the stock bonus program and due to grants during the fourth quarter of 2023 and the first quarter of 2024. For further discussion, see Note 9, Stockholders' Equity, in the Notes to Unaudited Consolidated Financial Statements.

Current wording

Stock-based compensation expense for three months ended September 30, 2024 increased $0.5 million, or 22.0%, as compared to the same period in 2023, primarily due to $0.9 million expense recognized for the stock bonus program, partially offset by stock option grants that vested prior to the third quarter of 2024. For further discussion, see Note 9, Stockholders' Equity, in the Notes to Unaudited Consolidated Financial Statements.

Previous wording

The Company incurred a $28.4 million impairment charges related to FCC licenses in 26 of our 74 local markets during the three months ended June 30, 2024, as compared to impairment charges of $16.6 million in 20 of our 74 local markets in the same period a year ago.

Current wording

The Company incurred no impairment charges related to its FCC licenses during the three months ended September 30, 2024, as compared to impairment charges of $23.6 million in 24 of our 74 local markets in the same period a year ago.

Previous wording

Unfavorable changes in key assumptions utilized in the impairment assessment of our FCC licenses may affect future testing results. For example, keeping all other assumptions constant, a 100-basis point increase in the weighted average cost of capital as of the date of our last quantitative assessment would cause the estimated fair values of our FCC licenses to decrease by $18.9 million which would have resulted in an additional impairment charge of $16.4 million as of June 30, 2024. Further, a 100-basis point decline in the long-term revenue growth rate would cause the estimated fair values of our FCC licenses to further decrease by $9.5 million which would have resulted in a further impairment charge of $8.4 million as of June 30, 2024. Assumptions used to estimate the fair value of our FCC licenses are also dependent upon the expected performance and growth of our traditional broadcast operations. In the event broadcast revenue experiences actual or anticipated declines, such declines will have a negative impact on the estimated fair value of our FCC licenses, and the Company could recognize additional impairment charges, which could be material.

Current wording

Unfavorable changes in key assumptions utilized in the impairment assessment of our FCC licenses may affect future testing results. For example, keeping all other assumptions constant, a 100-basis point increase in the weighted average cost of capital as of the date of our last quantitative assessment would cause the estimated fair values of our FCC licenses to decrease by $21.1 million which would have resulted in an additional impairment charge of $3.3 million as of September 30, 2024. Further, a 100-basis point decline in the long-term revenue growth rate would cause the estimated fair values of our FCC licenses to further decrease by $10.5 million which would have resulted in a further impairment charge of $9.0 million as of September 30, 2024. Finally, a 100-basis point decline in operating profit margins would result in a decrease in the estimated fair values of our FCC licenses of $10.3 million which would result in an impairment charge of $9.0 million.

Previous wording

During the second quarter of 2024, in connection with an interim goodwill impairment assessment, the Company concluded that the carrying amounts of the National Digital and Live Events reporting units exceeded their fair values, resulting in the recognition of a non-cash goodwill impairment charges of $1.8 million and $0.9 million, respectively, for the six months ended June 30, 2024. An interim impairment assessment was considered necessary as a result of declines in revenue and increases in the weighted average cost of capital. For further discussion, see Note 5, Goodwill and Other Intangible Assets, in the Notes to Unaudited Consolidated Financial Statements.

Current wording

During the third quarter of 2024, in connection with an interim goodwill impairment assessment, the Company concluded that the carrying amount of the Live Events reporting unit exceeded its fair value, resulting in the recognition of a non-cash goodwill impairment charges of $1.7 million for the three months ended September 30, 2024. An interim impairment assessment was considered necessary as a result of continuing declines in revenue and profit. Following the non-cash goodwill impairment charge recognized during the three months ended September 30, 2024, the Live Events reporting unit had no goodwill as of September 30, 2024. During the three months ended September 30, 2023, the Company concluded that the carrying amount of the Local Advertising reporting unit exceeded its fair value, resulting in the recognition of a non-cash goodwill impairment charge of $2.8 million. For further discussion, see Note 5, Goodwill and Other Intangible Assets, in the Notes to Unaudited Consolidated Financial Statements.

Previous wording

During the three months ended June 30, 2024, the Company recorded an impairment charge of $1.6 million related to certain of its equity securities, which are measured at cost minus impairment. The Company recorded impairment charges of $9.2 million related to one of its investment securities during the same period in 2023. For further discussion, see Note 6, Investments, in the Notes to Unaudited Consolidated Financial Statements.

Current wording

During the three months ended September 30, 2024, the Company recorded an impairment charge of $0.2 million related to one of its equity securities, which is measured at cost minus impairment. The Company recorded impairment charges of $4.4 million related to one of its investment securities during the same period in 2023. For further discussion, see Note 6, Investments, in the Notes to Unaudited Consolidated Financial Statements.

Previous wording

We recognized a provision for income taxes of $18.8 million for the three months ended June 30, 2024, as compared to an income tax benefit of $6.5 million for the same period in 2023. Our effective tax rate for the three months ended June 30, 2024 and 2023 was approximately (62.7)% and 70.7%, respectively. The effective tax rate and income tax provision for the three months ended June 30, 2024 is primarily driven by an increase in the valuation allowance for interest expense carryforwards resulting from the non-cash impairment charges and an increase in non-deductible compensation costs recorded during the three months ended June 30, 2024.

Current wording

We recognized a benefit for income taxes of $5.1 million for the three months ended September 30, 2024, as compared to an income tax provision of $17.5 million for the same period in 2023. Our effective tax rate for the three months ended September 30, 2024 and 2023 was approximately 82.6% and 91.9%, respectively. The effective tax rate and income tax provision for the three months ended September 30, 2024 is driven by the valuation allowance for interest expense carryforwards resulting from non-cash impairment charges and an increase in certain non-deductible compensation costs recorded during the three months ended September 30, 2024.

Previous wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023

Current wording

Nine months ended September 30, 2024 compared to nine months ended September 30, 2023

Previous wording

The following table presents the Company's reportable segment net revenue and direct operating expenses for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table presents the Company's reportable segment net revenue and direct operating expenses for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

Direct operating expenses for the three months ended June 30, 2024 decreased by $0.1 million, or 0.2%, as compared to the same period in 2023. Our Subscription Digital Marketing Solutions direct operating expenses decreased by $2.1 million, or 14.1% as compared to the same period in 2023 due to lower compensation costs and bad debt. Our Broadcast Advertising direct operating expenses decreased $1.4 million, or 3.5%, primarily driven by lower compensation. These decreases were partially offset by a $3.7 million, or 13.9%, increase in our Digital Advertising direct operating expenses as compared to the same period in 2023 primarily driven by higher inventory costs and bad debt. Other direct operating expenses decreased $0.4 million, or 7.7%, due to a decrease in live events during the period, as compared to the same period a year ago.

Current wording

Direct operating expenses for the nine months ended September 30, 2024, increased by $0.9 million, or 0.4%, as compared to the same period in 2023. Our Digital Advertising direct operating expenses increased $10.0 million, or 12.9%, due to higher inventory and compensation costs, as well as an increase in bad debt. This increase was partially offset by a $5.5 million, or 11.9%, decreases in our Subscription Digital Marketing Solutions direct operating expenses due to lower compensation costs and bad debt; a $2.4 million, or 2.1%, decrease in our Broadcast Advertising direct operating expenses primarily driven by lower compensation costs; and a $1.2 million, or 15.2%, decrease in our Other direct operating expenses due to a decrease in live events during the period, each as compared to the same period in 2023.

Previous wording

Stock-based compensation expense for the six months ended June 30, 2024, increased $7.3 million, or 188.7%, as compared to the same period in 2023 due to $4.6 million in expense recognized related to the cash settlement of options, $1.8 million of expense recognized for the stock bonus program and due to grants during the fourth quarter of 2023 and the first quarter of 2024. For further discussion, see Note 9, Stockholders' Equity, in the Notes to Unaudited Consolidated Financial Statements.

Current wording

Stock-based compensation expense for the nine months ended September 30, 2024, increased $7.8 million, or 125.8%, as compared to the same period in 2023 due to $4.6 million in expense recognized related to the cash settlement of options, $2.6 million of expense recognized for the stock bonus program and due to grants during the fourth quarter of 2023 and the first quarter of 2024. For further discussion, see Note 9, Stockholders' Equity, in the Notes to Unaudited Consolidated Financial Statements.

Previous wording

Transaction and business realignment costs for the three months ended June 30, 2024 increased $1.3 million as compared to the same period in 2023, primarily due to local market operational cost reduction efforts.

Current wording

Transaction and business realignment costs for the nine months ended September 30, 2024 increased $2.9 million as compared to the same period in 2023, primarily due to local market operational cost reduction efforts.

Previous wording

The Company recorded total impairment charges of $29.7 million related to FCC licenses in 26 of our 74 local markets during the six months ended June 30, 2024, as compared to impairment charges of $24.8 million to FCC licenses in 20 of our 74 local markets in the same period a year ago. The impairment charges were primarily driven by increases in the discount rate applied in the valuation of our FCC licenses due to an increase in the weighted average cost of capital, decreases in third-party forecasts of broadcast revenues and an increase in the estimate of initial capital costs due to rising prices. For further discussion, see Note 5, Goodwill and Other Intangible Assets, in the Notes to Unaudited Consolidated Financial Statements.

Current wording

The Company recorded total impairment charges of $29.7 million related to FCC licenses in 26 of our 74 local markets during the nine months ended September 30, 2024, as compared to impairment charges of $48.4 million to FCC licenses in 32 of our 74 local markets in the same period a year ago. The impairment charges were primarily driven by increases in the discount rate applied in the valuation of our FCC licenses due to an increase in the weighted average cost of capital, decreases in third-party forecasts of broadcast revenues and an increase in the estimate of initial capital costs due to rising prices. For further discussion, see Note 5, Goodwill and Other Intangible Assets, in the Notes to Unaudited Consolidated Financial Statements.

Previous wording

During the second quarter of 2024, in connection with an interim goodwill impairment assessment, the Company concluded that the carrying amounts of the National Digital and Live Events reporting units exceeded their fair values, resulting in the recognition of a non-cash goodwill impairment charges of $1.8 million and $0.9 million, respectively, for the three months ended June 30, 2024. An interim impairment assessment was considered necessary as a result of declines in revenue and increases in the weighted average cost of capital. For further discussion, see Note 5, Goodwill and Other Intangible Assets, in the Notes to Unaudited Consolidated Financial Statements.

Current wording

During the third quarter of 2024, in connection with an interim goodwill impairment assessment, the Company concluded that the carrying amount of the Live Events reporting unit exceeded its fair value, resulting in the recognition of a non-cash goodwill impairment charges of $1.7 million for the three months ended September 30, 2024. During the second quarter of 2024, in connection with an interim goodwill impairment assessment, the Company concluded that the carrying amounts of the National Digital and Live Events reporting units exceeded their fair values, resulting in the recognition of a non-cash goodwill impairment charges of $1.8 million and $0.9 million, respectively. In total, the company recorded $4.4 million of non-cash goodwill impairment charges for the nine months ended September 30, 2024. Interim impairment assessments were considered necessary as a result of declines in revenues and profit and increases in the weighted average cost of capital. For further discussion, see Note 5, Goodwill and Other Intangible Assets, in the Notes to Unaudited Consolidated Financial Statements.

Previous wording

During the six months ended June 30, 2024, the Company recorded an impairment charge of $1.6 million related to certain of its equity securities, which are measured at cost minus impairment. The Company recorded an impairment charges of $9.2 million related to one of its investment securities during the same period in 2023. For further discussion, see Note 6, Investments, in the Notes to Unaudited Consolidated Financial Statements.

Current wording

During the nine months ended September 30, 2024, the Company recorded total impairment charges of $1.8 million related to certain of its equity securities, which are measured at cost minus impairment. The Company recorded an impairment charge of $13.6 million related to certain of its investment securities during the same period in 2023. For further discussion, see Note 6, Investments, in the Notes to Unaudited Consolidated Financial Statements.

Previous wording

During the six months ended June 30, 2024, the Company voluntarily repurchased an aggregate $13.7 million principal amount of its 2026 Notes below par, plus accrued interest. The Company wrote-off approximately $0.1 million of unamortized deferred financing costs, recognizing an immaterial net gain for the three and six months ended June 30 2024. During the six months ended June 30, 2023, the Company voluntarily repurchased an aggregate $12.9 million principal amount of its 2026 Notes below par plus accrued interest. The Company wrote-off approximately $0.1 million of unamortized deferred financing costs, recognizing a total net gain of $0.8 million in connection with the voluntary repurchases of its 2026 Notes.

Current wording

During the nine months ended September 30, 2023, the Company voluntarily repurchased an aggregate $27.1 million principal amount of its 2026 Notes below par plus accrued interest. The Company wrote-off approximately $0.3 million of unamortized deferred financing costs, recognizing a total net gain of $1.2 million in connection with the voluntary repurchases of its 2026 Notes.

Previous wording

In February of 2024, one of the Company’s investees announced the completion of its acquisition. The Company recognized a $4.0 million gain on the transaction during the six months ended June 30, 2024. During the six months ended June 30, 2023, one of the Company's investments was acquired in a private transaction. The Company recognized a $5.2 million gain on the transaction, based on total consideration received in the amount of $6.0 million.

Current wording

In February of 2024, one of the Company’s investees announced the completion of its acquisition. The Company recognized a $4.0 million gain on this transaction during the nine months ended September 30, 2024. During the nine months ended September 30, 2023, one of the Company's investments was acquired in a private transaction. The Company recognized a $5.2 million gain on the transaction.

Previous wording

Other expense (income), net includes unrealized gains related to measuring the fair value of one of the Company's investees. During the six months ended June 30, 2024 the Company recorded an unrealized net gain of $0.2 million, as compared to $0.1 million during the six months ended June 30, 2023. See Note 6, Investments, in our Notes to Consolidated Financial Statements for further discussion related to this investment.

Current wording

Other expense (income), net includes unrealized gains related to measuring the fair value of one of the Company's investees. During the nine months ended September 30, 2024 the Company recorded an unrealized net gain of $0.2 million, as compared to an unrealized loss of $0.5 million during the nine months ended September 30, 2023. See Note 6, Investments, in our Notes to Consolidated Financial Statements for further discussion related to this investment.

Previous wording

During the three months ended June 30, 2024, the Company recorded total insurance recoveries of $0.3 million related to construction and flood damages in two of its local markets.

Current wording

During the nine months ended September 30, 2024, the Company recorded total insurance recoveries of $0.3 million related to construction and flood damages in two of its local markets, as compared to insurance recoveries of $0.7 million during the nine months ended September 30, 2023 related to hurricane damages incurred in the Shreveport, LA market.

Previous wording

We recognized a provision for income taxes of $19.0 million for the six months ended June 30, 2024, as compared to a benefit of $8.1 million for the same period in 2023. Our effective tax rate for the period was approximately (67.3)% for the six months ended June 30, 2024 as compared to 63.6% for the six months ended June 30, 2023. The effective tax rate and income tax provision for the six months ended June 30, 2024 is primarily driven by an increase in the valuation allowance for interest expense carryforwards resulting from the non-cash impairment charges and an increase in non-deductible compensation costs recorded during the three months ended June 30, 2024.

Current wording

We recognized a provision for income taxes of $13.9 million for the nine months ended September 30, 2024, as compared to $9.4 million for the same period in 2023. Our effective tax rate for the period was approximately 63.0% for the nine months ended September 30, 2024 as compared to 29.5% for the nine months ended September 30, 2023. The effective tax rate and income tax provision for the nine months ended September 30, 2024 is driven by the valuation allowance for interest expense carryforwards resulting from the non-cash impairment charges and an increase in certain non-deductible compensation costs recorded during the nine months ended September 30, 2024.

Previous wording

Net cash provided by operating activities was $10.7 million for the six months ended June 30, 2024, as compared to $31.4 million for the same period in 2023. This decrease was primarily due to changes in working capital balances, particularly prepaid and accrued expenses.

Current wording

Net cash provided by operating activities was $20.6 million for the nine months ended September 30, 2024, as compared to $39.0 million for the same period in 2023. This decrease was primarily due to changes in working capital balances, particularly prepaid and accrued expenses.

Previous wording

Net cash used in investing activities was $4.0 million for the six months ended June 30, 2024 as compared to net cash provided by investing activities of $2.4 million for the same period in 2023. The increase in net cash used in investing activities was primarily due to cash proceeds of $3.0 million related to the sales of digital assets in 2023 that did not reoccur in 2024, a $1.5 million increase in purchases of property and equipment and a $1.8 million decrease in proceeds from the sale of assets and investment related transactions.

Current wording

Net cash used in investing activities was $7.6 million for the nine months ended September 30, 2024 as compared to net cash used in investing activities of $0.4 million for the same period in 2023. The increase in net cash used in investing activities was primarily due to cash proceeds of $3.0 million related to the sales of digital assets in 2023 that did not reoccur in 2024, a $2.4 million increase in purchases of property and equipment and a $1.4 million decrease in proceeds from the sale of assets and investment related transactions.

Previous wording

Net cash used in financing activities was $39.2 million for the six months ended June 30, 2024, as compared to $27.6 million for the same period in 2023. The increase in net cash used in financing activities was primarily due to higher repurchases of common stock in the amount of $6.6 million, a $3.0 million increase in dividend payments and higher voluntary repurchases of our 2026 Notes in the amount of $1.6 million for the six months ended June 30, 2024, as compared to the same period a year ago. These increases were partially offset by a $0.5 million increase in proceeds from the exercise of stock options for the six months ended June 30, 2024, as compared to the same period in 2023.

Current wording

Net cash used in financing activities was $52.2 million for the nine months ended September 30, 2024, as compared to $44.0 million for the same period in 2023. The increase in net cash used in financing activities was primarily due to higher repurchases of common stock in the amount of $6.9 million and a $3.0 million increase in dividend payments for the nine months ended September 30, 2024, as compared to the same period a year ago. These increases were partially offset by a $1.8 million increase in proceeds from the exercise of stock options for the nine months ended September 30, 2024, as compared to the same period in 2023.

Previous wording

As of June 30, 2024, we had $487.1 million of outstanding indebtedness, net of deferred financing costs of $2.9 million.

Current wording

As of September 30, 2024, we had $476.7 million of outstanding indebtedness, net of deferred financing costs of $2.2 million.

Previous wording

Based on the terms of our 2026 Notes, as of June 30, 2024, we expect our debt service requirements to be approximately $33.7 million over the next twelve months. See Note 7, Long-Term Debt, in our Notes to Consolidated Financial Statements for additional information related to our 2026 Notes.

Current wording

Based on the terms of our 2026 Notes, as of September 30, 2024, we expect our debt service requirements to be approximately $32.9 million over the next twelve months. See Note 7, Long-Term Debt, in our Notes to Consolidated Financial Statements for additional information related to our 2026 Notes.

Previous wording

As of June 30, 2024 we had $28.5 million of cash and cash equivalents, and $60.5 million of receivables from customers, which historically have had an average collection cycle of approximately 55 days. We had restricted cash of $0.5 million at June 30, 2024 and December 31, 2023, that was held as collateral in connection with certain agreements. From time to time, such restricted funds could be returned to us or we could be required to pledge additional cash.

Current wording

As of September 30, 2024 we had $21.8 million of cash and cash equivalents, and $57.7 million of receivables from customers, which historically have had an average collection cycle of approximately 55 days. We had restricted cash of $0.5 million at September 30, 2024 and December 31, 2023, that was held as collateral in connection with certain agreements. From time to time, such restricted funds could be returned to us or we could be required to pledge additional cash.

Previous wording

On April 1, 2024, the Company repurchased 1.5 million shares of the Company’s Class A common stock in the aggregate amount of $14.6 million from MSG National Properties, LLC (“MSG”). The shares were retired upon repurchase.

Current wording

On April 1, 2024, the Company repurchased 1.5 million shares of the Company’s Class A common stock in the aggregate amount of $14.6 million from MSG National Properties, LLC (“MSG”). The shares were retired upon repurchase. Additionally, the company repurchased 0.8 million shares of Class A common stock for approximately $8.9 million during the nine months ended September 30, 2024.

Previous wording

In late March of 2024, the Company launched a program that offered certain holders a cash settlement of options that were granted in July 2014 following the completion of the Company's initial public offering. These options were approaching their expiration date in July 2024. The cash settlement amount paid to each holder was indexed to the closing price of the Company's Class A common stock, as reported on the New York Stock Exchange consolidated tape, as of the date prior to each respective cash settlement election date less the respective option grant price. A total of $11.4 million was paid in connection with the cash settlement of 3.2 million options during the first half of 2024.

Current wording

In late March of 2024, the Company launched a program that offered certain holders a cash settlement of options that were granted in July 2014 following the completion of the Company's initial public offering. These options were approaching their expiration date in July 2024. The cash settlement amount paid to each holder was indexed to the closing price of the Company's Class A common stock, as reported on the New York Stock Exchange consolidated tape, as of the date prior to each respective cash settlement election date less the respective option exercise price. A total of $11.5 million was paid in connection with the cash settlement of 3.2 million options during the nine months ended September 30, 2024.

Previous wording

During the first half of 2024, the Company voluntarily repurchased an aggregate $13.7 million in principal amount of its 2026 Notes, below par.

Current wording

During the nine months ended September 30, 2024, the Company voluntarily repurchased an aggregate $24.7 million in principal amount of its 2026 Notes, below par.