Townsquare Media, Inc.

Note 1. Organization and Basis of Presentation

Description of the Business

Townsquare is a community-focused digital and broadcast media and digital marketing solutions company principally focused outside the top 50 markets in the U.S. Townsquare Ignite, our robust digital advertising division, specializes in helping businesses of all sizes connect with their target audience through data-driven, results based strategies, by utilizing a) our proprietary digital programmatic advertising technology stack with an in-house demand and data management platform and b) our 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. Townsquare Interactive, our subscription digital marketing services business, partners with small and medium-sized businesses (“SMBs”) to help manage their digital presence by providing a SAAS business management platform, website design, creation and hosting, search engine optimization and other digital services. And through our portfolio of local radio stations strategically situated outside the Top 50 markets in the United States, we provide effective advertising solutions for our clients and relevant local content for our audiences.

Current economic challenges, including high and sustained inflation and interest rates, and enacted and proposed tariffs have caused and could continue to cause economic uncertainty and volatility. These factors could result in advertising and subscription digital marketing solutions cancellations, declines in the purchase of new advertising by our clients, declines in the addition of new digital marketing solutions subscribers, and increases to our operating expenses. We monitor economic conditions closely, and in response to observed or anticipated reductions in revenue, we may institute precautionary measures to address the potential impact to our consolidated financial position, consolidated results of operations, and liquidity, including wage reduction efforts and controlling non-essential capital expenditures.

The extent of the impact of current economic conditions will depend on future actions and outcomes, all of which remain fluid and cannot be predicted with confidence (including effects on advertising activity, consumer discretionary spending and our employees in the markets in which we operate).

Basis of Presentation

The accompanying Unaudited Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and related notes thereto included in the Company's Annual Report on Form 10-K (the "2024 Annual Report on Form 10-K"). The accompanying unaudited interim Consolidated Financial Statements include the consolidated accounts of the Company and its wholly-owned subsidiaries, with all significant intercompany balances and transactions eliminated in consolidation. These financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. All adjustments (consisting only of normal, recurring adjustments) necessary for a fair presentation of results of operations and financial condition as of the end of the interim periods have been included. The results of operations for the three and nine months ended September 30, 2025, cash flows for the nine months ended September 30, 2025, and the Company’s financial condition as of such date are not necessarily indicative of the results of operations or cash flows that can be expected for, or the Company’s financial condition as of, any other interim period or for the fiscal year ending December 31, 2025. The Consolidated Balance Sheet as of December 31, 2024 is derived from the audited Consolidated Financial Statements at that date.

The presentation of $0.2 million and $0.8 million of broadcast advertising revenue previously reported in the Other category for the three and nine months ended September 30, 2024, respectively, has been reclassified to the Broadcast Advertising segment to conform with the current period's presentation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, the Company evaluates its significant estimates, including those related to assumptions used in determining the fair value of assets and liabilities acquired in a business combination, impairment testing of intangible assets, valuation and impairment testing of long-lived tangible assets and investments, the present value of leasing arrangements, share-based payment expense and the calculation of allowance for credit losses and income taxes. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the result of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual amounts and results may differ materially from these estimates under different assumptions or conditions.

Note 2. Summary of Significant Accounting Policies

There have been no significant changes in the Company’s accounting policies since December 31, 2024. For the Company's detailed accounting policies please refer to the Consolidated Financial Statements and related notes thereto included in the Company's 2024 Annual Report on Form 10-K.

Recently Issued Standards That Have Not Yet Been Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires additional categories of information about federal and state income taxes in the rate reconciliation table and to provide more details about reconciling items in some categories if items meet a quantitative threshold. The guidance also requires the disclosure of income taxes paid, net of refunds, disaggregated by federal and state taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. As this update only requires additional disclosures, the adoption of this standard is not expected to have a significant impact on the Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, which requires the disclosure in the notes to financial statements, information about certain costs and expenses including, purchases of inventory, employee compensation, depreciation and intangible asset amortization. The guidance also requires a qualitative description of amounts remaining in certain expense captions that are not separately disaggregated on a quantitative basis, as well as the disclosure of the total amount of selling expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating this new standard, but does not expect it to have a significant impact on the Consolidated Financial Statements as its impact relates to additional disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The guidance moves away from phase-by-phase cost tracking to primarily focusing on how companies conclude when to count software development costs as an asset, particularly when there is uncertainty during development. Additionally, disclosure requirements outlined under ASC 360-10, Property, Plant, and Equipment — Overall, will apply to capitalized software costs. The guidance is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years and may be applied using a prospective, retrospective or modified transition approach. The Company is assessing the impact of the new standard on its Consolidated Financial Statements, if any.

Note 3. Revenue Recognition

The following tables present a disaggregation of our revenue by reporting segment and revenue from political sources and all other sources (in thousands) for the three and nine months ended September 30, 2025 and 2024:

Revenue from contracts with customers is recognized as an obligation until the terms of a customer contract are satisfied; this occurs with the transfer of control as we satisfy contractual performance obligations. Our contractual performance obligations include the performance of digital marketing solutions, placement of internet-based advertising campaigns, broadcast of commercials on our owned and operated radio stations, and the operation of live events. Revenue is measured at contract inception as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Our contracts are at a fixed price at inception and do not include any variable consideration or financing components by normal course of business practice. Sales, value add, and other taxes that are collected concurrently with revenue producing activities are excluded from revenue.

The primary sources of net revenue are the sale of digital and broadcast advertising solutions on our owned and operated websites, radio stations’ online streams, and mobile applications, radio stations, and on third-party websites through our in-house digital programmatic advertising platform. Through our digital programmatic advertising platform, we are able to hyper-target audiences for our local, regional and national advertisers by combining first and third-party audience and geographic location data, providing them the ability to reach a high percentage of their online audience. We deliver these solutions across desktop, mobile, connected TV, email, paid search and social media platforms utilizing display, video and native executions. We also offer subscription digital marketing solutions through Townsquare Interactive to small and medium-sized local and regional businesses in markets outside the top 50 across the United States, including, but not limited to the markets in which we operate radio stations. Our digital marketing solutions include offerings such as a SAAS business management platform, traditional and mobile-enabled website development and hosting services, e-commerce platforms, search engine and online directory optimization services, online reputation monitoring, and social media management.

Political net revenue includes the sale of advertising for political advertisers. Contracted performance obligations under political contracts consist of the broadcast and placement of digital advertisements. Management views political revenue separately based on the episodic nature of election cycles and local issues calendars.

Net revenue for digital advertisements are recognized as the contractual performance obligations for Townsquare services are satisfied over the duration of the campaigns based on impressions delivered or time elapsed. Net revenue for broadcast advertisements are recognized when the commercial is broadcast. Live events revenue and other non-broadcast advertising revenue is recognized as events are conducted. We measure progress towards the satisfaction of our contractual performance obligations in accordance with the contractual arrangement. We recognize the associated contractual revenue as delivery takes place and the right to invoice for services performed is met.

Net revenue from digital subscription-based contractual performance obligations is recognized ratably over time as our performance obligations are satisfied. Subscription-based service fees are typically billed in advance of the month of service at a fixed monthly fee that is contractually agreed upon at contract inception. The measure of progress in such arrangements is the number of days of successful delivery of the contracted service.

Our advertising contracts are short-term (less than one year) and payment terms are generally net 30-60 days for traditional customer contracts and net 60-90 days for national agency customer contracts. Our billing practice is to invoice customers on a monthly basis for services delivered to date (representing the right to invoice). Our contractual arrangements do not include rights of return and do not include any significant judgments by nature of the products and services.

For all customer contracts, we evaluate whether we are the principal (i.e., report revenue on a gross basis) or the agent (i.e., report revenue on a net basis). Generally, we report revenue for advertising placed on Townsquare properties on a gross basis (the amount billed to our customers is recorded as revenue, and the amount paid to our publishers is recorded as a cost of revenue). We are the principal because we control the advertising inventory before it is transferred to our customers. Our control is evidenced by our sole ability to monetize the advertising inventory, being primarily responsible to our customers, having discretion in establishing pricing, or a combination of these factors. We also generate revenue through agency relationships in which revenue is reported net of agency commissions. Agency commissions are calculated based on a stated percentage applied to gross billing revenue for advertisers that use agencies.

The following tables provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands):

We receive payments from customers based upon contractual billing schedules; contract receivables are recognized in the period the Company provides services when the Company’s right to consideration is unconditional. Payment terms vary by the type and location of our customer and the products or services offered. Payment terms for amounts invoiced are typically net 30-60 days.

Our contract liabilities include cash payments received or due in advance of satisfying our performance obligations and digital subscriptions in which payment is received in advance of the service and month. These contract liabilities are recognized as revenue as the related performance obligations are satisfied. As of September 30, 2025, and December 31, 2024, the balance in the contract liabilities was $8.2 million and $9.9 million, respectively. The decrease in the contract liabilities balance at September 30, 2025 is primarily driven by $0.8 million and $8.4 million of recognized revenue for the three and nine months ended September 30, 2025, offset by cash payments received or due in advance of satisfying our performance obligations. For the three and nine months ended September 30, 2024, we recognized $0.7 million and $7.8 million of revenue that was previously included in our deferred revenue balance. No significant changes in the time frame of the satisfaction of contract liabilities have occurred during the three and nine months ended September 30, 2025.

Our capitalized contract acquisition costs include amounts related to sales commissions paid for signed contracts with perceived durations exceeding one year. We defer the related sales commission costs and amortize such costs to expense in a manner that is consistent with how the related revenue is recognized over the duration of the related contracts. We have evaluated the average customer contract duration (initial term and any renewals) to determine the appropriate amortization period for these contractual arrangements. Capitalized contract acquisition costs are recognized in prepaid expenses and other current assets in the accompanying consolidated balance sheets. As of September 30, 2025 and December 31, 2024, we had a balance of $8.7 million and $7.3 million, respectively, in capitalized contract acquisition costs and recognized $1.3 million and $3.6 million of amortization for the three and nine months ended September 30, 2025, respectively. For the three and nine months ended September 30, 2024, we recognized $1.0 million and $3.2 million of amortization, respectively. No impairment losses have been recognized or changes made to the time frame for performance of the obligations related to deferred contract assets during the three and nine months ended September 30, 2025 and 2024.

Arrangements with Multiple Performance Obligations

In contracts with multiple performance obligations, we identify each performance obligation and evaluate whether the performance obligations are distinct within the context of the contract at contract inception. When multiple performance obligations are identified, we identify how control transfers to the customer for each distinct contract obligation and determine the period when the obligations are satisfied. If obligations are satisfied in the same period, no allocation of revenue is deemed to be necessary. In the event performance obligations within a bundled contract do not run concurrently, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers. Performance obligations that are not distinct at contract inception are combined.

Performance Obligations

We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. Amounts related to performance obligations with expected durations of greater than one year are at a fixed price per unit and do not include any upfront or minimum payments requiring any estimation or allocation of revenue.

Allowance for Credit Losses

The Company maintains an allowance for credit losses, which represents the portion of accounts receivable that is not expected to be collected over the duration of its contractual life. Credit losses are recorded when the Company believes a customer, or group of customers, may not be able to meet their financial obligations. Account balances are charged off against the allowance when it is probable the receivable will not be recovered.

The change in the allowance for credit losses for the nine months ended September 30, 2025 was as follows (in thousands):

Note 4. Property and Equipment, net

Property and equipment, net consisted of the following (in thousands):

Depreciation and amortization expense for property and equipment was $4.1 million and $4.3 million for the three months ended September 30, 2025 and 2024, respectively and $12.0 million and $13.1 million for the nine months ended September 30, 2025 and 2024, respectively.

During the three and nine months ended September 30, 2025, the Company recognized $0.1 million in impairment charges related to long-lived assets.

During the three and nine months ended September 30, 2025, the Company recognized net gains on the sales of assets of $1.6 million and $7.5 million, respectively, including a $0.7 million and $5.6 million gain on the sales of property in the Bismarck, ND and Boise, ID, markets, respectively.

During the nine months ended September 30, 2024, the Company recognized $0.3 million in impairment charges related to ROU assets associated with tower and land leases in 3 local markets and a $0.1 million impairment charge related to the sale of a station in Trenton, NJ.

The Company hadno material right of use assets related to its finance leases as of September 30, 2025 and December 31, 2024.

Note 5. Goodwill and Other Intangible Assets

Indefinite-lived intangible assets

Indefinite-lived assets consist of FCC broadcast licenses and goodwill.

FCC Broadcast Licenses

FCC licenses represent a substantial portion of the Company’s total assets. The FCC licenses are renewable in the ordinary course of business, generally for a maximum ofeight years. The fair value of FCC licenses is primarily dependent on the future cash flows of the radio markets and other assumptions, including, but not limited to, forecasted revenue growth rates, profit margins and a risk-adjusted discount rate. The Company has selected December 31 st as the annual testing date.

The Company evaluates its FCC licenses for impairment annually or more frequently if events or changes in circumstances indicate that the assets might be impaired. Due to changes in third-party forecasted traditional broadcast revenues and market share in the markets in which we operate, the Company quantitatively evaluated the fair value of its FCC licenses at September 30 and June 30, 2025.

The key assumptions used in applying the direct valuation method are summarized as follows:

• Market share assumption used when reliable third-party data is available. Otherwise, Company results and forecasts are utilized.

Based on the results of the interim impairment assessments of our FCC licenses, the Company incurredno impairment charges during the third quarter of 2025, and $1.5 million for FCC licenses in 4 of our 74 local markets for the nine months ended September 30, 2025. The impairment charges were primarily driven by decreases in third-party forecasts of broadcast revenues. The Company recorded an impairment charge of $29.7 million for FCC licenses in 26 of our 74 local markets for the nine months ended September 30, 2024.

The assumptions used to estimate the fair value of our FCC licenses are dependent upon the expected performance and growth of our traditional broadcast radio operations. In the event broadcast radio revenue experiences actual or anticipated declines, in excess of these assumptions, 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.

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 $26.5 million which would have resulted in an incremental impairment charge of $0.3 million as of September 30, 2025. 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 $13.8 million which would have resulted in an impairment charge of $0.4 million as of September 30, 2025. 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 $10.7 million which would result in an incremental impairment charge of $0.8 million.

Goodwill

For goodwill impairment testing, the Company has selected December 31 st as the annual testing date. In addition to the annual impairment test, the Company regularly assesses whether a triggering event has occurred, which would require interim impairment testing. As of December 31, 2024, the fair values of our National Digital, Townsquare Ignite, Analytical Services, and Townsquare Interactive reporting units were in excess of their respective carrying values by approximately 39%,59%,149%, and 128%, respectively. The Local Advertising, Amped, and Live Events reporting units hadno goodwill as of December 31, 2024.

The Company considered whether any events have occurred or circumstances have changed from the last quantitative analysis performed as of December 31, 2024 that would indicate that the fair value of the Company's reporting units may be below their carrying amounts. During the third quarter of 2025, the Company concluded that the carrying amount of the National Digital reporting unit exceeded its fair value, resulting in the recognition of a non-cash goodwill impairment charge of $3.0 million.

An interim impairment assessment was considered necessary as a result of declines in forecasted revenues and profit and increases in the weighted average cost of capital. The Company did not identify indicators of impairment related to any other reporting unit that would have required an interim impairment assessment during the three months ended September 30, 2025. Following the non-cash goodwill impairment charge recognized during the three and nine months ended September 30, 2025, the National Digital reporting unit had $3.5 million of goodwill remaining as of September 30, 2025.

The fair value of the National Digital reporting unit was determined using an income approach whereby the fair value was calculated utilizing discounted estimated future cash flows. The income approach requires several assumptions including future sales growth, EBITDA (earnings before interest, taxes, depreciation and amortization) margins, and capital expenditures and discount rates which are the basis for the information used in the discounted cash flow model. The weighted-average cost of capital used in testing the National Digital reporting unit for impairment was 18.4%, with a perpetual growth rate of -3.1%.

The following table presents changes in goodwill by segment during the nine months ended September 30, 2025:

Definite-lived intangible assets

The Company’s definite-lived intangible assets were acquired primarily in various acquisitions as well as in connection with the acquisition of software and music licenses.

The following tables present details of our intangible assets as of September 30, 2025 and December 31, 2024, respectively (in thousands):

Amortization of definite-lived intangible assets was $0.9 million and $1.8 million for the three months ended September 30, 2025 and 2024, respectively and $2.7 million and $5.5 million for the nine months ended September 30, 2025 and 2024, respectively.

Estimated future amortization expense for each of the five succeeding fiscal years and thereafter as of September 30, 2025 is as follows (in thousands):

Note 6. Investments

Long-term investments consist of minority holdings in various companies. As management does not exercise significant influence over operating and financial policies of the investees, the investments are not consolidated or accounted for under the equity method of accounting. The initial valuation of equity securities is based upon an estimate of market value at the time of investment, or upon a combination of valuation analyses using both observable and unobservable inputs categorized as Level 2 and Level 3 within the ASC 820 framework.

In accordance with ASC 321, Investments - Equity Securities, the Company measures its equity securities at cost minus impairment, as their fair values are not readily determinable and the investments do not qualify for the net asset value per share practical expedient. The Company monitors its investments for any subsequent observable price changes in orderly transactions for the identical or a similar investment of the same investee, at which time the Company would adjust the then current carrying values of the related investment. Additionally, the Company evaluates its investments for any indicators of impairment.

Equity securities measured at cost minus impairment

During the three and nine months ended September 30, 2025, there wereno impairment charges or observable price changes in orderly transactions for the Company's investees. During the three and nine months ended September 30, 2024, the Company recorded $0.2 million and $1.8 million of impairment charges for existing investments as the Company became aware of objective evidence to indicate that the fair value of the investments were below their carrying amounts.

In February of 2024, one of the Company’s investees announced the completion of its acquisition in a private transaction. The Company recognized a $4.0 million gain on the transaction during the nine months ended September 30, 2024, based on total cash consideration received in the amount of $4.0 million.

Equity securities measured at fair value

On July 2, 2021, one of the Company's investees completed its registration with the SEC and became a publicly traded company. During the three months ended September 30, 2024, the company sold the investment for $1.1 million, recognizing an immaterial gain on sale. During the nine months ended September 30, 2024, the Company recognized a total unrealized net gain of $0.2 million as a result of changes in the fair value of the investee's common stock during the period.

Unrealized gains and losses are included as a component of other expense (income) on the Unaudited Consolidated Financial Statements. The market price of the investee's common stock was categorized as Level 1 within the ASC 820 framework.

Note 7. Long-Term Debt

Total debt outstanding is summarized as follows (in thousands):

On February 19, 2025, the Company entered into a $490 million Credit Agreement with Bank of America, N.A., as administrative agent and collateral agent and the lenders and financial institutions party thereto. The Credit Agreement provides for afive-year, $470 million senior secured Term Loan Facility (the "Term Loan") and afive-year, $20 million Revolving Credit Facility (the "Revolver"), together the Senior Secured Credit Facility.

The Company used the approximately $453 million of net proceeds from the Senior Secured Credit Facility (after giving effect to original issue discount, fees, expenses and $10 million of the Revolving Credit Facility that was drawn at closing), together with cash on hand, to redeem all of the Company’s outstanding 2026 Notes on February 19, 2025, and to pay fees and expenses related thereto.

The Company incurred approximately $5.5 million of fees and expenses in connection with the Senior Secured Credit Facility, which were capitalized and are being amortized over the remaining term of the Senior Secured Credit Facility, along with an original issue discount of $23.5 million, using the effective interest method. The Company recognized a $1.5 million loss on the early extinguishment of debt during the nine months ended September 30, 2025, comprised of unamortized deferred financing fees previously capitalized in connection with the issuance of the 2026 Notes.

The Term Loan Facility and revolving loans incurred under the Revolving Credit Facility mature on February 19, 2030. The initial per annum interest rate applicable to the Term Loan Facility is based on current SOFR levels with a 0.50% per annum SOFR floor and an applicable margin of 500 basis points (or an alternative base rate and an applicable margin of 400 basis points). The per annum interest rate applicable to the Revolving Credit Facility is based on current SOFR levels and an applicable margin of 375 basis points (or an alternative base rate and an applicable margin of 275 basis points). As of September 30, 2025, the interest rate on the Term Loan was 9.20%, based on current SOFR levels and the applicable margin of 500 basis points. As of September 30, 2025, borrowings under the Revolving Credit Facility had an interest rate of approximately 7.80%, based on current SOFR levels and the applicable margin of 375 basis points.

Subject to certain exceptions, the Senior Secured Credit Facility will be subject to mandatory pre-payments in amounts equal to (1)100% of the net cash proceeds from issuances or incurrence of debt by the Company or any of the subsidiary guarantors (other than with respect to certain permitted indebtedness); (2)100% of the net cash proceeds from certain sales or other dispositions of assets by the Company or any of the subsidiary guarantors in excess of a certain amount and subject to customary reinvestment provisions and certain other exceptions; and (3)75% (with step-downs to 50%,25% and 0% based upon achievement of specified first lien net leverage ratios) of annual excess cash flow of the Company and its subsidiaries subject to exceptions and limitations.

The obligations of the Company under the Senior Secured Credit Facility are guaranteed by each of its direct and indirect, existing and future, domestic subsidiaries, subject to customary exceptions and limitations, pursuant to a security agreement, dated as of February 19, 2025 (the “Security Agreement”), by and between the Company, the guarantors party thereto and Bank of America, N.A., as collateral agent.

The Senior Secured Credit Facility is secured on a first priority basis by a perfected security interest in substantially all of the Company’s and each guarantor’s tangible and intangible assets (subject to certain exceptions).

The Senior Secured Credit Facility contains a number of customary affirmative and negative covenants that, among other things, limit or restrict the ability of the Company and the guarantors to: (1) incur additional indebtedness (including guarantee obligations); (2) incur liens; (3) engage in mergers or other fundamental changes; (4) sell certain property or assets; (5) pay dividends or other distributions; (6) make acquisitions, investments, loans and advances; (7) prepay certain indebtedness; (8) change the nature of their business; (9) engage in certain transactions with affiliates; and (10) incur restrictions on contractual obligations limiting interactions between the Company and its subsidiaries or limit actions in relation to the Senior Secured Credit Facility.

The Senior Secured Credit Facility contains customary events of default, including with respect to nonpayment of principal, interest, fees or other amounts; material inaccuracy of a representation or warranty when made; failure to perform or observe covenants; cross-default to other indebtedness in an amount equal to the greater of $15 million or 15% of the Company’s four quarter consolidated EBITDA; bankruptcy and insolvency events; inability to pay debts; monetary judgment defaults in an amount equal to the greater of $15 million or 15% of the Company’s four quarter consolidated EBITDA; actual or asserted invalidity or impairment of any definitive loan documentation; and change of control.

During the nine months ended September 30, 2025, the Company voluntarily repaid an aggregate $5.8 million principal amount of its Term Loan below par, plus accrued interest. The Company wrote-off approximately $0.2 million of the original issue discount and $0.1 million of unamortized deferred financing costs, recognizing a $0.2 million net gain for the three months ended September 30, 2025.

The Company was in compliance with its covenants under the Senior Secured Credit Facility as of September 30, 2025.

As of September 30, 2025, based on available market information, the estimated fair value of the Term Loan was $402.2 million. The Company used Level 2 measurements under the fair value measurement hierarchy established under Fair Value Measurement (Topic 820).

Annual maturities of the Company's long-term debt as of September 30, 2025 are as follows (in thousands):

Note 8. Income Taxes

The Company's effective tax rate for the three months ended September 30, 2025 and 2024 was approximately 16.2% and 82.6%, respectively. The Company's effective tax rate for the nine months ended September 30, 2025 and 2024 was approximately 78.0% and 63.0%, respectively.

The change in the effective tax rate for the three months ended September 30, 2025, is driven by a reduction in the valuation allowance for interest expense carryforwards resulting from an increase in the deductible interest expense pursuant to the One Big Beautiful Bill Act of 2025 ("OBBBA") tax law changes in the current year period.

The change in the effective tax rate for the nine months ended September 30, 2025 is driven by a reduction in the valuation allowance for interest expense carryforwards resulting from an increase in the amount of deductible interest expense and non-deductible compensation costs.

The OBBBA, enacted on July 4, 2025, includes a broad range of tax reform provisions, including extending and modifying various provisions of the Tax Cuts and Jobs Act and expanding certain incentives in the Inflation Reduction Act while accelerating the phase-out of other incentives. The legislation has multiple effective dates, with certain provisions effective in 2025 and other provisions effective in 2026 and subsequent years.

The Company has reflected the tax impact of the OBBBA relating to the interest expense limitation under Section 163(j) during the three months ended September 30, 2025. This has resulted in an increase to the current year interest expense deduction and a corresponding reduction to the valuation allowance for the deferred tax asset interest expense carryforward. The Company continues to evaluate the remaining provisions of the OBBBA, but does not expect a significant impact to its Consolidated Financial Statements.

The effective tax rate may vary significantly from period to period, and can be influenced by many factors. These factors include, but are not limited to, changes to the statutory rates in the jurisdictions where the Company has operations and changes in the valuation of deferred tax assets and liabilities. The difference between the effective tax rate and the federal statutory rate of 21% primarily relates to certain non-deductible items, state and local income taxes and the valuation allowance for deferred tax assets.

Note 9. Stockholders' Deficit

Stock Options

During the nine months ended September 30, 2025, eligible option holders tendered 127,686 options to purchase 127,686 shares of Townsquare common stock.

During the nine months ended September 30, 2025, the Company granted 72,521,149,573, and 54,049 options with grant date fair values of $1.03, $1.16 and $1.48, respectively, and vesting periods offour-years andthree-years, each withten-year terms. The Company also granted 148,528 options with grant date fair values of $1.09 to $1.27, respectively. These options contain market conditions whereby the options will vest and become exercisable subject to the achievement of a specified volume weighted average trading price ("VWAP") over a specified period and continued employment through the performance period each as observed and summarized below, respectively:

No portion of the grants will vest unless the VWAP targets are achieved during the respective performance period.

The grant date fair value of stock options with market conditions is estimated using the Monte Carlo option pricing model, while stock options containing only service conditions is estimated using the Black-Scholes option pricing model. Each model requires an estimate of the expected term of the option, the expected volatility of the Company’s common stock price, dividend yield and the risk-free interest rate. The below table summarizes the assumptions used to estimate the fair value of the equity options granted:

For options only containing service conditions, the expected term was calculated using the simplified method, defined as the midpoint between the vesting period and the contractual term of each award, due to the lack of sufficient and meaningful historical exercise data. For options with market-based conditions, the expected term was estimated based on when the options are expected to be exercised. The expected volatility was based on market conditions of the Company. The risk-free interest rate was based on the U.S. Treasury yield curve in effect on the date of grant which most closely corresponds to the expected term of the option.

The following table summarizes all option activity for the nine months ended September 30, 2025:

The maximum contractual term of stock options is 10 years.

Restricted Stock Awards

During the nine months ended September 30, 2025, the Company granted 130,449 shares, including 71,505 shares to non-employee directors, with vesting periods ofone tothree years. The fair value of the restricted stock awards is equal to the closing share price on the date of grant.

The following table summarizes restricted stock activity for the nine months ended September 30, 2025:

Restricted Stock Units

The following table summarizes restricted stock unit activity for the nine months ended September 30, 2025:

During the nine months ended September 30, 2025, the Company granted 266,153 stock units with vesting periods ranging from vested at grant date tothree years, and 479,749 stock units that vested at the grant date. The fair values of these restricted stock units were equal to the closing share price on the date of grant.

During the nine months ended September 30, 2025, the Company granted 331,087 restricted stock units with a vesting period ofthree years and grant date fair values ranging from $6.75 - $7.47. The stock units contain market conditions whereby the stock units will vest subject to the achievement of a specified VWAP, subject to continued employment or service through the end of the performance period as observed and summarized below:

The grant date fair value of the restricted stock units with market conditions is estimated using the Monte Carlo option pricing model. The below table summarizes the assumptions used to estimate the fair value of the restricted stock units granted:

The expected volatility was based on market conditions of the Company. The risk-free interest rate was based on the U.S. Treasury yield curve in effect on the date of grant which most closely corresponds to the vesting period of the restricted stock units.

Employee Stock Purchase Plan

During the nine months ended September 30, 2025, a total of 78,389 shares of Class A common stock were issued under the 2021 Employee Stock Purchase Plan (the "ESPP").

For the three months ended September 30, 2025 and 2024, the Company recognized approximately $1.7 million and $2.0 million, respectively, of stock-based compensation expense with respect to options, restricted stock awards, restricted stock units and the ESPP. For the nine months ended September 30, 2025 and 2024, the Company recognized approximately $7.6 million and $6.9 million, respectively, of stock-based compensation expense with respect to options, restricted stock awards, restricted stock units and the ESPP.

As of September 30, 2025, total unrecognized stock-based compensation expense related to our stock options and restricted stock was $2.2 million and $4.1 million, respectively, and is expected to be recognized over a weighted average period of 1.6 years and 1.7 years, respectively.

Dividends Declared

On April 29, 2025, the board of directors approved a quarterly cash dividend of $0.20 per share. The dividend of $3.3 million was paid to holders of record as of July 18, 2025, on August 1, 2025.

On August 4, 2025, the board of directors approved a quarterly cash dividend of $0.20 per share. The dividend of $3.3 million was paid to holders of record as of October 27, 2025, on November 3, 2025.

On October 29, 2025, the board of directors approved a quarterly cash dividend of $0.20 per share. The dividend will be payable on February 2, 2026 to shareholders of record as of the close of business on January 26, 2026.

Stock Repurchase Plan

On December 10, 2024, the Board of Directors authorized and approved a stock repurchase plan, pursuant to which the Company is authorized to repurchase up to $50 million of the Company’s issued and outstanding Class A common stock over athree-year period (the "Stock Repurchase Plan"). Repurchases of common stock under the repurchase plan may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations. Any such repurchases may be executed using open market purchases, privately negotiated agreements or other transactions, and may be funded from cash on hand, available borrowings or proceeds from potential debt or other capital markets sources. The Stock Repurchase Plan has substantially the same terms as, and was intended to replace, the 2021 Stock Repurchase Plan, which expired on December 16, 2024.

During the nine months ended September 30, 2025 there wereno shares of Class A common stock repurchased. As of September 30, 2025, a total of 2,491,022 shares were repurchased under the 2021 Stock Repurchase Plan.

Stock Bonus Program

In 2024, the Company implemented a stock bonus program that offered certain employees the option to receive their annual incentive compensation in the form of the Company's Class A common stock. The incentive compensation to be paid to each employee is fixed at the time of election to participate in the program and the number of shares to be issued is determined based on the closing price of the Company's Class A common stock on the settlement date, typically in the fourth quarter of the performance year or during the first quarter following each respective performance year. During the three and nine months ended September 30, 2025, a total of $1.4 million and $3.5 million of expense was recognized as a component of stock-based compensation in connection with the stock bonus program, respectively. During the three and nine months ended September 30, 2024, a total of $0.9 million and $2.6 million of expense was recognized as a component of stock-based compensation in connection with the stock bonus program, respectively. A total of 566,359 shares were granted under the Stock Bonus Program for the performance year ended December 31, 2024.

Option Settlement

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. During the nine months ended September 30, 2024, 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, a total of $4.6 million of expense was recognized as a component of stock-based compensation in connection with the cash settlement of the options.

Note 10. Net (Loss) Income Per Share

Basic earnings per common share (“EPS”) is generally calculated as income available to common shareholders divided by the weighted average number of common shares outstanding. Diluted EPS is generally calculated as income available to common shareholders divided by the weighted average number of common shares outstanding plus the dilutive effect of common share equivalents. Stock-based compensation awards that are out-of-the-money and stock options and restricted stock units in which the market-based performance criteria have not been met as of the end of the respective reporting period are omitted from the calculation of Diluted EPS.

The following table sets forth the computations of basic and diluted net (loss) income per share for the three and nine months ended September 30, 2025 and 2024 (in thousands, except per share data):

The Company had the following dilutive securities that were not included in the computation of diluted net (loss) income per share as they were considered anti-dilutive (in thousands):

Note 11. Commitments and Contingencies

The Company is involved in legal proceedings in which damages and claims have been asserted against us. The Company believes that we have valid defenses to such proceedings and claims and intends to vigorously defend the Company. Management does not believe that any such matters will have a material adverse effect on our financial position, results of operations, or liquidity. The Company records a loss contingency if the potential loss from a proceeding or claim is considered probable and the amount can be reasonably estimated or a range of loss can be determined. The Company provides disclosure when it is reasonably possible that a loss will be incurred in excess of any recorded provision. Significant judgment is required in these determinations. As additional information becomes available, the Company reassesses prior determinations and may change its estimates. Litigation is subject to many uncertainties, and the outcome of litigation is not predictable with assurance.

Note 12. Segment Reporting

Operating segments are organized internally by type of products and services provided. Based on the information reviewed by the Company's CEO in his capacity as Chief Operating Decision Maker ("CODM"), the Company has identified three segments: Digital Advertising, Subscription Digital Marketing Solutions, and Broadcast Advertising. The remainder of our business is reported in the Other category.

The Company operates inone geographic area. The Company's assets and liabilities are managed within markets outside the top 50 across the United States where the Company conducts its business and are reported internally in the same manner as the Consolidated Financial Statements; thus, no additional information regarding assets and liabilities of the Company’s reportable segments is produced for the Company's CEO or included in these Consolidated Financial Statements. Intangible assets consist principally of FCC broadcast licenses and other definite-lived intangible assets and primarily support the Company’s Broadcast Advertising segment. For further information see Note 5, Goodwill and Other Intangible Assets. The Company does not have any material inter-segment sales.

Segment profit is the primary measure the CODM utilizes in assessing segment performance and determining the allocation of resources. Segment Profit is defined as revenue less direct operating expenses, excluding depreciation, amortization, and stock-based compensation. The CODM is the primary individual in control of resource allocation, and the allocation determinations are made in consultation with each respective segment manager who is directly accountable to and maintains regular contact with the CODM to discuss operating activities, financial results, forecasts, or plans for the segment. The most significant allocation determinations made by the CODM pertain to sales accounts and support, capital spending and employee resource allocation. Segment profit is used to monitor budgeted versus actual results and is used in assessing performance of the segment and in establishing compensation. These determinations are made through regular reviews throughout the year, and on a weekly basis, the CODM considers actual results, as compared to budget and the prior period, when evaluating the allocation of resources.

Direct operating expenses represents our significant expense category and aligns with the segment level information that is regularly provided to the CODM. Segment profit excludes unallocated corporate expenses and the impact of certain items that are not directly attributable to the reportable segments' underlying operating performance, and primarily includes expenses related to corporate stewardship and administration activities, transaction related costs and non-cash impairment charges.

The following tables present the Company's reportable segment results for the three months ended September 30, 2025 (in thousands):

The following table presents the Company's reportable segment results for the three months ended September 30, 2024 (in thousands):

The following tables present the Company's reportable segment results for the nine months ended September 30, 2025 (in thousands):

The following tables present the Company's reportable segment results for the nine months ended September 30, 2024 (in thousands):