Townsquare Media, Inc.

Note 1. Organization and Basis of Presentation

Nature of 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).

Note 2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation: The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries that it controls. All intercompany accounts and transactions have been eliminated in consolidation.

Segment Reporting: The Company’s operating segments are organized internally by the types of products and services provided, represented bythree segments: Digital Advertising, which includes digital advertising on its digital programmatic advertising platform and its owned and operated digital properties; Subscription Digital Marketing Solutions, which includes the results of the Company’s subscription digital marketing solutions business, Townsquare Interactive; and Broadcast Advertising, which includes our local, regional and national advertising products and solutions delivered via terrestrial radio broadcast, and other miscellaneous revenue that is associated with its broadcast advertising platform. The remainder of the Company’s business is reported in the Other category, which includes owned and operated live events.

The presentation of $2.2 million of stock-based compensation expense previously reported in the Corporate category for the year ended December 31, 2024 has been reclassified to conform with the current period's presentation. The reclassification resulted in a $1.2 million, $0.4 million, $0.6 million increase in stock-based compensation for the Digital Advertising, Subscription Digital Marketing Solutions and Broadcast Advertising segments, respectively, for the year ended December 31, 2024.

The presentation of $0.9 million of broadcast advertising revenue previously reported in the Other category for the year ended December 31, 2024 has been reclassified to conform with the current period's presentation.

The Company’s activities are predominately within the United States, which representsone geographic region for segment reporting. The Company does not have any material inter-segment sales. See Note 12, Segment Information, in our Notes to Consolidated Financial Statements for further information.

Use of Estimates: The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates inherent in the preparation of the accompanying consolidated financial statements include 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, the present value of leasing arrangements, share-based payment expense and the calculation of allowance for credit losses and income taxes.

Concentrations of Credit Risk: Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable. The credit risk is limited due to the large number of customers comprising the Company’s customer base and their dispersion across several different geographic areas of the country. No single customer accounts for more than 1% of revenue for the years ended December 31, 2025 and 2024.

Cash and cash equivalents: The Company maintains its cash balances principally at large financial institutions throughout the United States. Accounts at the institutions are insured by the Federal Deposit Insurance Corporation. Balances in these accounts may at times exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company considers only those investments which are highly liquid, readily convertible to cash, and that mature within three months from date of purchase to be cash equivalents. As of December 31, 2025 and 2024, cash equivalents were comprised of money market funds of $3.9 million and $29.6 million, valued using Level 1 inputs.

Restricted cash: Restricted cash includes the collateral account for the Company’s corporate credit cards and a stand-by letter of credit issued in favor of a landlord for one of our leases, and are classified in non-current assets in the Consolidated Balance Sheets. From time to time, such restricted funds could be returned to us or we could be required to pledge additional cash. We had restricted cash of $0.1 million as of December 31, 2025. As of December 31, 2024, the Company hadno restricted cash.

Accounts Receivable and Allowance for Credit Losses: Accounts receivable are recorded at the invoiced amount. 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. A considerable amount of judgment is required in determining expected credit losses. Relevant factors include prior collection history with customers, the related aging of past due balances, projections of credit losses based on historical trends or past events, and the consideration of forecasts of future economic conditions. Allowances for credit losses are based on facts available and are re-evaluated and adjusted on a regular basis. Negative macroeconomic trends could result in an increase in credit losses if delays in the payment of outstanding receivables are observed or if future economic conditions differ from those considered in our forecasts. The Company has not elected the practical expedient described in ASC 326-20, Financial Instruments—Credit Losses, that permits entities to assume that current conditions at the balance sheet date will persist for the remaining contractual life of the asset. 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 years ended December 31, 2025 and 2024 was as follows (in thousands):

Property and Equipment: Property and equipment are recorded at cost and depreciated over their estimated useful life. Property and equipment acquired in a business combination are recorded at their estimated fair value at the date of acquisition under the acquisition method of accounting. Major additions or improvements are capitalized, while repairs and maintenance are charged to expense.

Depreciation expense on property and equipment is recorded using the straight-line method. The estimated useful lives for property and equipment are as follows:

The above depreciable lives are used for new property and equipment. Used property and equipment may have a useful life that is less than that of an acquired fixed asset that is new, depending on its condition. Upon sale or disposition of an asset, the cost and related accumulated depreciation are removed from the accounts and any loss or gain is recognized in net loss (gain) on sale and retirement of assets in the Consolidated Statements of Operations.

During each year ended December 31, 2025 and 2024, the Company received total insurance recoveries of $0.2 million and $0.5 million, respectively, related to fire, construction and flood damages. Insurance recoveries are included as a component of Other expense (income), net in the Consolidated Statements of Operations.

Software Development Costs: In accordance with Accounting Standards Codification (“ASC”) Topic 350, Internally Developed Software, we incurred and capitalized software development costs of $7.2 million and $7.0 million during each of the years ended December 31, 2025 and 2024, respectively. Certain costs incurred for software development during the application development stage are capitalized while costs incurred during the preliminary and post-implementation stages are expensed in the period incurred. Capitalized costs are amortized over the project’s estimated useful life. Software development costs consist primarily of salary and benefits for the Company’s development and technical support staff, contractors’ fees and other costs associated with the development and localization of products and services.

Intangible Assets: Intangible assets consist principally of Federal Communication Commission (“FCC”) broadcast licenses and other definite-lived intangible assets. FCC broadcast licenses are granted to radio stations for up toeight years under the Telecommunications Act of 1996 (the “Act”). The Act requires the FCC to renew a broadcast license if the FCC finds that the station has served the public interest, convenience and necessity, there have been no serious violations of either the Communications Act of 1934 or the FCC’s rules and regulations by the licensee, and there have been no other serious violations which taken together constitute a pattern of abuse. The licenses may be renewed indefinitely at minimal cost. Costs incurred to renew FCC broadcast licenses are expensed as incurred. The weighted average time to renewal of our FCC licenses is 3.7 years as of December 31, 2025. FCC licenses, which have been recorded at their estimated fair value as of the date of acquisition, have an indefinite useful life and therefore are not amortized. The fair value of our FCC licenses is estimated to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Costs associated with other definite-lived intangible assets are being amortized using the straight-line method over their estimated remaining useful lives, which range from 1 to 7 years, as of December 31, 2025.

We have selected December 31st as the annual testing date for impairment of FCC licenses. We evaluate our FCC licenses annually or more frequently if events or changes in circumstances indicate that the assets might be impaired. We evaluated the fair value of our FCC licenses at the unit of account level. Each market's broadcasting licenses were combined into a single unit of accounting for purposes of testing for impairments, which was geographic market.

We utilized a discounted cash flow method to perform our impairment test. Under this method, the income that is attributable to each FCC license is isolated and is based upon modeling a hypothetical “Greenfield” build-up to a “normalized” enterprise that, by design, lacks inherent goodwill and assumes that the only asset of the hypothetical start-up business is the license. It is assumed that rather than acquiring indefinite-lived intangible assets as part of a going concern business, the buyer hypothetically develops indefinite-lived intangible assets and builds a new operation with similar attributes from scratch. Thus, the buyer incurs start-up costs during the build-up phase which are normally associated with going concern value. Initial capital costs are deducted from the discounted cash flow model which results in value that is directly attributable to the indefinite-lived intangible assets. The cash flows generated in the Greenfield method are presumed to emanate from the one asset, or the FCC license, that exists at time zero. This cash flow stream is discounted to arrive at a value for the FCC license.

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, profit margins and a risk-adjusted discount rate. This data is populated using industry normalized information representing an average FCC license within a market. The projections incorporated into our license valuations take into consideration the then current economic conditions. Each of these assumptions may change in the future based upon changes in general economic conditions, audience behavior, consummated transactions, and numerous other variables that may be beyond our control.

Below are some of the key assumptions used in our 2025 impairment assessments:

Below are some of the key assumptions used in our 2024 impairment assessments:

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

Based on the results of the Company’s impairment evaluations of its FCC licenses performed at June 30, 2025 and December 31, 2025, we incurred total impairment charges of $3.5 million for FCC licenses in 5 of our 74 local markets for the year ended December 31, 2025.

Based on the results of the Company’simpairment evaluations of its FCC licenses performed at March 31, 2024, June 30, 2024, September 30, 2024, and December 31, 2024, we incurred total impairment charges of $30.9 million, respectively, for FCC licenses in 27 of our 74 local markets for the year ended December 31, 2024.

Assumptions used to estimate the fair value of our FCC licenses are dependent upon the expected performance and growth of our traditional broadcast operations. In the event broadcast revenues experience actual or anticipated declines, such declines will have a negative impact on the estimated fair value of our FCC licenses, and it is possible the Company will recognize additional impairment charges.

Goodwill: The acquisition method of accounting requires that the excess of purchase price paid over the estimated fair value of identifiable tangible and intangible net assets of acquired businesses be recorded as goodwill. Under the provisions of ASC Topic 350, Intangibles-Goodwill and Other, goodwill is not amortized, but is reviewed for impairment at least on an annual basis at December 31 st, or when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable.

The Company evaluates goodwill for impairment at the reporting unit level and has determined appropriate reporting units. The most significant reporting unit is comprised of the components representing the local broadcast advertising businesses of all geographic markets, “Local Advertising”, which are aggregated intoone reporting unit for testing. Our other reporting units include: (i) national digital assets, “National Digital”, which consists of music and entertainment focused national websites, (ii) Townsquare Ignite, our digital programmatic advertising platform, (iii) Amped, which is our owned and operated network of digital brands, made up of more than 400 websites and 380 mobile applications (iv) Analytical Services, which is an attribution and analytics platform dedicated to tracking broadcast media, (v) Townsquare Interactive, which is our subscription based digital marketing solutions offered to small and mid-sized local and regional businesses in markets outside the top 50 in the United States, and (vi) Live Events, which includes the operations of our national events including other expos, lifestyle and active events which occur outside of our 74 distinct markets.

Recoverability of goodwill is evaluated by comparison of the fair value of a reporting unit with its carrying value. For purposes of testing the carrying value of the Company's goodwill for impairment, the fair value of goodwill for each reporting unit contains significant assumptions incorporating variables that are based on past experiences and judgments about future performance using industry information. These variables would include, but are not limited to: (1) forecasted revenue growth; (2) profit margin; (3) estimated capital expenditures and working capital requirements during the projection period; (4) risk-adjusted discount rate; and (5) expected growth rates in perpetuity to estimate terminal values. These variables are susceptible to changes in estimates, which could result in significant changes to the fair value of the goodwill. Impairment of goodwill is calculated by comparing the fair value as described above to the carrying value of goodwill.

The Company also performs a reasonableness test on the fair value results for goodwill by comparing the fair value of the Company’s reporting units to the Company’s enterprise value based on its market capitalization.

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 year ended December 31, 2025. Following the non-cash goodwill impairment charge recognized during the third quarter of 2025, the National Digital reporting unit had $3.5 million of goodwill remaining as of December 31, 2025.

Due to reductions in the commitments of its largest customers, the Company concluded that the carrying amount of the Analytical Services reporting unit exceeded its fair value as of December 31, 2025. As a result, the Company recognized a $2.3 million non-cash goodwill impairment charge in the fourth quarter of 2025, resulting in a total of $5.3 million of non-cash goodwill impairment charges during the year ended December 31, 2025. Following the non-cash goodwill impairment charge, the Analytical Services reporting unit had no goodwill remaining as of December 31, 2025.

The Local Advertising, Amped, and Live Events reporting units hadno goodwill as of December 31, 2025.

The Company recorded total interim non-cash goodwill impairment charges of $4.4 million during the year ended December 31, 2024, of which $2.6 million related to the Live Events reporting unit and $1.8 million related to the National Digital reporting unit.

In assessing whether goodwill was impaired in connection with its annual impairment testing performed as of December 31st, the Company performed a quantitative assessment for each of its reporting units. The Company compared the fair value of each of its reporting units, determined based upon discounted estimated future cash flows, to the carrying amount at December 31, 2025, including goodwill. Based upon such assessment, we determined that the fair value of the following reporting units exceeded their respective carrying amounts. The fair values of our National Digital, Townsquare Ignite and Townsquare Interactive reporting units were in excess of their respective carrying values by approximately 47%,106% and 152%, respectively. The fair values of each of our reporting units were determined using the income approach. The income approach requires several assumptions including future sales growth, EBITDA (earnings before interest, taxes, depreciation and amortization) margins, 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 our reporting units for impairment ranged from 13.4% to 18.5% with perpetual growth rates ranging from 1.3% to 6.7%.

For 2024, in assessing whether goodwill was impaired in connection with its annual impairment testing performed as of December 31st, the Company performed a quantitative assessment for each of its reporting units. The Company compared the fair value of each of its reporting units, determined based upon discounted estimated future cash flows, to the carrying amount at December 31, 2024, including goodwill. Based upon such assessment, we determined that the fair value of each of our reporting units exceeded their respective carrying amounts. 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 fair values of each of our reporting units were determined using the income approach. The income approach requires several assumptions including future sales growth, EBITDA (earnings before interest, taxes, depreciation and amortization) margins, 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 our reporting units for impairment ranged from 13.5% to 18.0% with perpetual growth rates ranging from 0.8% to 5.0%.

The key assumptions used to determine the estimated fair value of each reporting unit are predicated on our market positioning and the ability to provide diversified and integrated product and service offerings. In the event our operating strategy faces challenges in the business environments in which each of our reporting units operate, a resulting change in the key assumptions (e.g., long-term financial projections) could have a negative impact on the estimated fair value of our reporting units, and it is possible the Company could recognize additional impairment charges.

See Note 5, Goodwill and Other Intangible Assets, Net, for further details related to the results of our impairment testing for each of the years ended December 31, 2025 and 2024, respectively.

Investments: Long-term investments consists 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, respectively.

In accordance with ASC 321, Investments - Equity Securities, the Company measures its equity securities at cost minus impairment, as their fair value is 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 adjusts the then current carrying values of the related investment. Additionally, the Company evaluates its investments for any indicators of impairment. For the year ended December 31, 2025, there wereno impairment charges or observable price changes in orderly transactions for the Company's investees. There were $2.0 million impairment charges recorded for the year ended December 31, 2024.

See Note 6, Investments, for further details related to the Company's investments.

Deferred Financing Costs: Deferred financing costs related to the issuance of debt are capitalized and are amortized over the life of the instrument in such a way as to result in a constant rate of interest when applied to the amount outstanding at the beginning of any given period (the interest method). The amortization of these costs is recorded as interest expense, net in the Consolidated Statements of Operations. Unamortized deferred financing costs as of December 31, 2025 and 2024 have been deducted from the long-term debt balance in the Consolidated Balance Sheets.

Impairment of Long-Lived Assets: Long-lived assets (including property, equipment and intangible assets subject to amortization) to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset group may not be recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposal of the asset group. If it were determined that the carrying amount of an asset was not recoverable, an impairment loss would be recorded. The Company determines the fair value of its long-lived assets based upon the market value of similar assets, if available, or independent appraisals, if necessary. Long-lived assets to be disposed of and/or held for sale are reported at the lower of carrying amount or fair value, less cost to sell. The fair value of assets held for sale is determined in the same manner as described for assets held and used. There were a total of $0.1 million non-cash impairment charges related to long-lived assets for each of the years ended December 31, 2025 and 2024, respectively. Long-lived asset impairment charges are included in caption Impairment of intangible assets, goodwill, investments and long-lived and intangible assets, in the Company’s Consolidated Statements of Operations.

Transaction and Business Realignment Costs: The Company recorded the following transaction and business realignment costs for the years ended December 31, 2025 and 2024 (in thousands):

Self-Insurance Liabilities: The Company is self-insured for medical liability. In addition, the Company has stop loss coverage in excess of certain defined limits. Liabilities associated with the risks that are retained by the Company are estimated, in part, by considering claims experience, severity factors and other assumptions. For any legal costs expected to be incurred in connection with a loss contingency, the Company recognizes the expense as incurred.

Revenue Recognition: Broadcast revenue for commercial broadcasting advertisements is recognized over time when the commercial is broadcast. 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. Subscription digital marketing solutions revenue, under the brand name Townsquare Interactive, is recognized as a contract liability until the terms of a customer contract are satisfied, which generally occurs with the transfer of control as the Company satisfies its contractual performance obligation over time. Digital revenue is derived primarily from the sale of internet-based advertising campaigns to local, regional, and national advertisers and is recognized over the duration of the campaigns based on impressions delivered or time elapsed, depending upon the terms of the contract. Live events revenue and other non-broadcast advertising revenue are recognized as events are conducted. Deferred revenue consists primarily of digital subscriptions in which payment is received in advance of the service month and advance ticket sales of events scheduled to take place at dates in the future.

Trade and Barter Advertising: Trade and Barter Advertising (advertising provided in exchange for goods and services) are reported at the estimated fair value of the products or services received, unless this is not reasonably estimable, in which case the consideration is measured based on the standalone selling price of the advertising promised or delivered. Revenue from trade and barter advertising is recognized when advertisements are broadcast. Merchandise or services received is charged to expense when received or utilized. If merchandise or services are received prior to the broadcast of the advertising, a liability is recorded. If advertising is broadcast before the receipt of the goods or services, a receivable is recorded. Total revenues recognized related to trade and barter advertising were $14.5 million and $13.8 million for the years ended December 31, 2025 and 2024, respectively. Total expense recognized related to trade and barter advertising were $12.2 million and $12.5 million for the years ended December 31, 2025 and 2024, respectively.

Leases: The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities, current and operating lease liability, net of current portion on our Consolidated Balance Sheets. Finance leases are included in property and equipment, net, accrued expenses and other current liabilities and other long-term liabilities on our Consolidated Balance Sheets.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. ROU assets may also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less lease incentives received.

Our lease arrangements may contain lease and non-lease components. We elected to combine lease and non-lease components. In determining the present value of the future lease payments, we consider only payments that are fixed and determinable at commencement date, including non-lease components. Variable components such as utilities and maintenance costs are expensed as incurred. As our leases do not provide an implicit rate in determining the net present value of lease payments, management used judgment in order to estimate the appropriate incremental borrowing rate, which is the rate incurred to borrow equivalent funds on a collateralized basis over a similar term in a similar economic environment. Lease terms include periods under options to extend or terminate the lease when we are reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term.

We also elected to apply the short-term lease measurement and recognition exemption in which ROU assets and lease liabilities are not recognized for leases with a term of 12 months or less.

ROU assets for operating leases are periodically reviewed for impairment losses. The Company uses the long-lived assets impairment guidance to determine whether a ROU asset is impaired, and if so, the amount of the impairment loss to recognize. We monitor for events or changes in circumstances that require a reassessment of one of our leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. There wereno non-cash impairment charges related to ROU assets for the twelve months ended December 31, 2025. There were a total of $0.3 million non-cash impairment charges related to ROU assets for the twelve months ended December 31, 2024 associated with tower and land leases in 3 local markets.

Local Marketing Agreements: At times, the Company enters into Local Marketing Agreements (“LMAs”), also known as Time Brokerage Agreements (“TBAs”). In a typical LMA, the licensee of a radio station makes available, for a fee, airtime on its radio station to a party which supplies content to be broadcast during that airtime and collects revenue from advertising aired during such content. LMAs are subject to compliance with the antitrust laws and the Communications Act of 1934, as amended, and relevant FCC rules and published policies (“Communication Laws”), including the requirement that the licensee must maintain independent control over the radio station and, in particular, its personnel, content and finances. The FCC has held that such agreements do not violate the Communications Laws as long as the licensee of the radio station receiving content from another station maintains ultimate responsibility for, and control over radio station operations and otherwise ensures compliance with the Communications Laws. As of December 31, 2025, the Company does not operate any radio stations under an LMA.

Financial Instruments: ASC 825, Disclosures about Fair Value of Financial Instruments, requires the Company to disclose estimated fair values for its financial instruments. Management has reviewed its cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued expenses and has determined that their carrying values approximate their fair value due to the short maturity of these instruments. The fair value of the Company’s long-term debt is disclosed in Note 7, Long-Term Debt.

Fair Value Measurements: ASC 820, Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements.

The fair value framework under ASC 820 provides for a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows:

•Level 1: Inputs are quoted prices (unadjusted) in active markets for identified assets or liabilities that the Company has the ability to access at the measurement date.

•Level 2: Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 assets include quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets that are not active; and inputs other than quoted prices that are observable such as models.

•Level 3: Inputs are unobservable inputs for the asset or liability. Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

Advertising and Promotion Costs: Costs of media advertising (including barter) and associated production costs are expensed to direct operating expenses the first time the advertising takes place. The Company recorded advertising expenses of $0.4 million and $0.5 million, for the years ended December 31, 2025 and 2024, respectively.

Income Taxes: Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date.

The Company also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts. Management evaluates all positive and negative evidence and uses judgment regarding past and future events, including operating results, to help determine when it is more likely than not that all or some portion of the deferred tax assets may not be realized. When appropriate, a valuation allowance is recorded against deferred tax assets to offset future tax benefits that may not be realized.

The Company follows the provisions of ASC Topic 740, Accounting for Income Taxes. ASC Topic 740 clarifies the accounting for uncertainties in income taxes recognized in an enterprise’s financial statements. ASC Topic 740 also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 provides guidance on derecognition, classification, interest and penalties, disclosures and transition. As required by the uncertain tax position guidance in ASC Topic 740, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company’s policy is to recognize interest and penalties accrued on unrecognized tax benefits as part of income tax expense. The Company’s Federal income tax returns and various state tax returns remain subject to examination by taxing authorities for all years after 2021.

Stock-based compensation: Stock-based compensation expense related to stock-based transactions, including employee awards and the Employee Stock Purchase Plan (the “ESPP”), is measured and recognized in the Consolidated Financial Statements based on the fair value of the award on the grant date. The fair values of restricted stock awards are determined based on the fair market value of our common stock at the time of grant. The fair value of time-based and performance-based option awards is estimated using the Black-Scholes and Monte Carlo option-pricing models. The models require assumptions including the fair value of the Company’s common stock, expected volatility, expected term of the award, exercise timing, expected dividend yield and risk-free interest rate. Stock-based compensation expense is recognized as the equity awards vest and ESPP expense is based on the estimated grant-date fair value determined using the Black-Scholes valuation model with a straight-line amortization method. Share-based awards may be subject to forfeiture if certain employment conditions are not met. The Company accounts for forfeitures as they occur.

Employee benefit plans: The Company’s 401(k) Plan is a defined contribution plan covering the employees of the Company and is subject to the provisions of the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 ("IRC"). The Company's U.S. employees participate in a defined contribution plan. Under the provisions of the plan, an employee is fully vested with respect to Company contributions after four years of service. The Company matches employee contributions of 25% up to a maximum of 4% of qualified compensation and may, at its discretion, make voluntary contributions. The Company's matching contributions were $0.9 million and $1.0 million, for each of the years ended December 31, 2025, and 2024, respectively.

Contingencies: In accordance with ASC Topic 450, Contingencies, 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 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 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. Although such matters are subject to many uncertainties and outcomes are not predictable with assurance, as of December 31, 2025 and 2024, management does not believe any such matters are material to the Company’s consolidated results of operations or financial condition.

Accounting Developments

Recently Adopted Accounting Standards

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 became 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 did not have a significant impact on the Consolidated Financial Statements. The additional disclosures are included in Note 9, Income Taxes.

Recently Issued Standards That Have Not Yet Been Adopted

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 its adoption to have a significant impact on the Consolidated Financial Statements as it relates to additional disclosure.

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 on its Consolidated Financial Statements, if any.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, to clarify interim disclosure requirements, the form and content of interim financial statements, and when Topic 270 applies. The update primarily provides clarity about current interim reporting requirements. The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, and may be applied using a prospective or retrospective transition approach. The Company is evaluating the update, but does not expect its adoption to have a significant impact on the Consolidated Financial Statements.

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):

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, 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 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 are 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 table provides information about receivables, contract acquisition costs and contract liabilities from contracts with customers (in thousands):

We receive payments from customers based upon contractual billing schedules. Accounts receivable 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 December 31, 2025, and December 31, 2024, the balance in the contract liabilities was $8.7 million and $9.9 million, respectively. The decrease in our contract liabilities balance from December 31, 2024 is primarily driven by $9.0 million of recognized revenue for the year ended December 31, 2025, offset by cash payments received or due in advance of satisfying our performance obligations. For the year ended December 31, 2024, we recognized $8.1 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 year ended December 31, 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 December 31, 2025 and 2024, we had a balance of $8.5 million and $7.3 million in capitalized contract acquisition costs and recognized $5.0 million and $4.1 million of amortization during the years ended December 31, 2025 and 2024, 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 years ended December 31, 2025 or 2024, respectively.

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 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.

Note 4. Property and Equipment, Net

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

Depreciation and amortization expense for property and equipment was $16.3 million and $17.2 million for the years ended December 31, 2025 and 2024, respectively.

For the year ended December 31, 2025, the Company recognized net gains on the sales of assets of $8.8 million, including a $6.2 million gain on the sales of property in the Bismarck, ND and Boise, ID, markets and a $1.5 million gain on the sale of the Company’s aircraft. For the year ended December 31, 2024, the Company recognized a total gain of $0.8 million related to the sales of assets in various markets.

For the year ended December 31, 2025, the Company recognized $0.1 million inimpairment charges related to long-lived assets. For the year ended December 31, 2024, the company recognized $0.1 million in impairment charges primarily related to the sale of a station in Trenton, NJ.

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

Note 5. Goodwill and Other Intangible Assets, Net

Indefinite-lived intangible assets

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

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, 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 forecasted traditional broadcast revenue and market share in the markets in which we operate in and an increase in the estimate of initial capital costs due to rising prices, the Company quantitatively evaluated the fair value of its FCC licenses at June 30, 2025, September 30, 2025, and December 31, 2025.

Based on the results of the Company’s impairment evaluations of its FCC licenses performed at June 30, 2025, September 30, 2025, and December 31, 2025, we incurred total impairment charges of $3.5 million for FCC licenses in 5 of our 74 local markets for the year ended December 31, 2025. The $3.5 million impairment charges recorded during the year were primarily driven by decreases in third-party forecasts of broadcast revenues and an increase in the estimate of initial capital costs due to rising prices.

Based on the results of the Company’s impairment evaluations of its FCC licenses performed at March 31, 2024, June 30, 2024, September 30, 2024, and December 31, 2024, we incurred total impairment charges of $30.9 million for FCC licenses in 27 of our 74 local markets for the year ended December 31, 2024.

Charges related to the impairment of the Company’s FCC licenses are included in the Broadcast Advertising segment results.

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 $26.1 million which would have resulted in an additional impairment charge of $3.1 million as of December 31, 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 $16.1 million which would have resulted in a further impairment charge of $3.6 million as of December 31, 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 $10.4 million which would result in an incremental impairment charge of $4.2 million.

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.

Goodwill

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 year ended December 31, 2025. Following the non-cash goodwill impairment charge recognized during the third quarter of 2025, the National Digital reporting unit had $3.5 million of goodwill remaining as of December 31, 2025.

Due to reductions in the commitments of its largest customers, the Company concluded that the carrying amount of the Analytical Services reporting unit exceeded its fair value as of December 31, 2025. As a result, the Company recognized a $2.3 million non-cash goodwill impairment charge in the fourth quarter of 2025, resulting in a total of $5.3 million of non-cash goodwill impairment charges during the year ended December 31, 2025. Following the non-cash goodwill impairment charge, the Analytical Services reporting unit had no goodwill remaining as of December 31, 2025.

For its annual impairment testing performed as of December 31, 2025, the Company performed a quantitative assessment for each of its reporting units. Based upon such assessment, the Company determined that the fair value of the following reporting units exceeded their respective carrying amounts as of December 31, 2025. The fair values of our National Digital, Townsquare Ignite and Townsquare Interactive reporting units were in excess of their respective carrying values by approximately 47%,106% and 152%, respectively. The Local Advertising, Amped, and Live Events reporting units hadno goodwill as of December 31, 2025.

The Company recorded total interim non-cash goodwill impairment charges of $4.4 million during the year ended December 31, 2024, of which $2.6 million related to the Live Events reporting unit and $1.8 million related to the National Digital reporting unit. For its annual impairment testing performed as of December 31 2024, in assessing whether goodwill was impaired in connection with its annual impairment testing performed as of December 31st, the Company performed a quantitative assessment for each of its reporting units. Based upon such assessment, the Company determined that the fair value of the following reporting units exceeded their respective carrying amounts 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 unit hadno goodwill as of December 31, 2024.

As of December 31, 2025 and 2024, the goodwill balances remaining for each of our reporting units were as follows (amounts in thousands):

The fair values of each of our reporting units were 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 our reporting units for impairment ranged from 13.4% to 18.5% with perpetual growth rates ranging from 1.3% to 6.7%.

Due to the inherent uncertainties involved in making these estimates, assumptions may change in future periods. Estimates and assumptions made for purposes of goodwill impairment testing may prove to be inaccurate predictions of the future, and other factors used in assessing fair value, such as the weighted average cost of capital, are outside the control of management. Unfavorable changes in certain of these key assumptions may affect future testing results. For example, keeping all other assumptions constant, a 100-basis point increase in the weighted average cost of capital assumption for each of our reporting units would cause the estimated fair values of our National Digital, Townsquare Ignite and Townsquare Interactive reporting units to decline, resulting in a decrease in the fair value in excess of their respective carrying values by approximately 3%,4% and 4%, respectively. Further, keeping all other assumptions constant, a 10% decline in the estimated fair value of each reporting unit, due to other changes in assumptions, including forecasted future cash flows, would not have resulted in incremental goodwill impairment charges to our reporting units for the year ended December 31, 2025.

The following table presents changes in goodwill by segment during each of the two years ended December 31, 2025 and 2024, respectively (in thousands):

(1) The aggregate goodwill balance as of December 31, 2023 is net of (i) a $69.0 million non-cash goodwill impairment charge related to the local advertising businesses reporting unit in the fourth quarter of 2019; (ii) $48.9 million of accumulated impairment charges incurred in 2017, of which $39.9 million was included as a component of discontinued operations and $9.1 million of which related to the 2017 strategic review and restructuring of our entertainment business; (iii) a $4.1 million write-off of goodwill was recorded in 2017 in connection with business realignments within the entertainment business; and (iv) $2.8 million and $1.4 million non-cash goodwill impairment charges related to the local advertising and live events/other reporting units in the third and fourth quarters of 2023, respectively.

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.

Content Rights

The Company enters into multi-year content licensing agreements pursuant to which the Company is required to make payments over the term of the license agreement. These licensing agreements are accounted for as a license of program material in accordance with ASC 920-350, Broadcasters - Intangibles - Goodwill and Other. The Company capitalizes the content licenses and records a related liability at fair value, which includes a discount, on the effective date of the respective license agreement. Amortization of capitalized content licenses is included as a component of direct operating expenses in the Consolidated Statement of Operations. The difference between the gross and net liability is amortized over the term of the license agreements and reflected as a component of interest expense.

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

Amortization expense for definite-lived intangible assets for each of the years ended December 31, 2025 and 2024 was $3.6 million and $7.3 million, respectively.

Estimated future amortization expense for each of the five succeeding fiscal years and thereafter as of December 31, 2025 is as follows (in thousands):

Note 6. Investments

Long-term investments primarily consists of minority holdings in various companies. As management does not exercise significant control 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 the equity securities was based upon an estimate of market value at the time of investment or upon a combination of a valuation analysis using observable 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 year ended December 31, 2025, there wereno impairment charges or observable price changes in orderly transactions for the Company's investees. During the year ended December 31, 2024, the Company recorded $2.0 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, based on total cash consideration received in the amount of $4.0 million.

A total of $14.5 million in cumulative impairment charges have been recorded for the Company’s existing equity securities that are measured at cost minus impairment.

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 2024, the company sold the investment for $1.1 million, recognizing an immaterial gain on sale. Prior to its sale, 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 2024.

Unrealized gains and losses are included as a component of other expense (income) on the Consolidated Financial Statements. The market price of the investee's common stock as of December 31, 2025 is 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 year ended December 31, 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 December 31, 2025, the interest rate on the Term Loan was 8.90%, based on current SOFR levels and the applicable margin of 500 basis points. As of December 31, 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 year ended December 31, 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 year ended December 31, 2025.

During the year ended December 31, 2024, the Company voluntarily repurchased an aggregate $36.2 million principal amount of its 2026 Notes, plus accrued interest. The Company wrote-off approximately $0.2 million of unamortized deferred financing costs, recognizing a total immaterial net loss in connection with the voluntary repurchases of its 2026 Notes. The repurchased notes were canceled by the Company.

The Company was in compliance with its covenants under the Senior Secured Credit Facility as of December 31, 2025.

As of December 31, 2025, based on available market information, the estimated fair value of the Term Loan was $323.1 million. As of December 24, 2024, the estimated fair value of the 2026 Notes was $465.1 million. The Company used Level 2 measurements under the fair value measurement hierarchy established under Fair Value Measurement (Topic 820).

The following table illustrates the components of our interest expense, net (in thousands):

Annual maturities of the Company's long-term debt as of December 31, 2025 are as follows (in thousands):

Note 8. Lease and Other Commitments

Our lease agreements are primarily for facilities, land, radio towers and other equipment used in our operations and contain renewal options through 2124, escalating rent provisions and/or cost of living adjustments. The majority of our leases are operating leases, although we have several finance leases for equipment as the lease term represents a significant portion of the useful life. In several cases, we have lease arrangements where the lease payment is based upon the consumer price index. Our lease agreements generally do not contain guarantees of the residual value at the end of the lease term or restrictive financial or other covenants.

Total rental expense, including costs incurred for live events such as venue and equipment rentals, for our operating leases was $12.8 million and $13.8 million for the years ended December 31, 2025 and 2024, respectively, and is included in Income from operations.

In September 2015, the Company closed on the sale of 43 towers located on 41 sites in 28 markets to a subsidiary of Vertical Bridge, LLC ("Vertical Bridge") (the "Tower Sale"). The divested towers house antenna that broadcast certain of the Company’s radio stations. As part of this transaction, the Company leased a portion of the space on the sold towers that house certain of the Company's antenna. The lease is for a period of 35 years, including an initial term oftwenty years andthree optional 5-year renewal periods. The Company pays $41 of rent per annum ($1 per site per annum) to Vertical Bridge for the right to house its existing antenna on the divested towers. In addition, the Company determined that the lease is an operating lease and is amortizing the long-term prepaid rent asset and deferred gain on the sale of towers as offsetting amounts over the lease term. The ending balances of the prepaid rent asset and deferred gain, including the current portion of $0.2 million, as of December 31, 2025 and 2024 were $5.2 million and $5.4 million, respectively. The Company will continue to amortize these balances over the remaining lease term.

Weighted-average remaining lease term (in years) and discount rate related to leases were as follows:

Maturities of lease liabilities for operating leases are as follows as of December 31, 2025 (in thousands):

Maturities of lease liabilities for financing leases are as follows as of December 31, 2025 (in thousands):

Finance leases are included inproperty and equipment, net, accrued expenses and other current liabilities and other long-term liabilities on our Consolidated Balance Sheets.

The components of lease costs recorded to operating and corporate expenses where the short-term lease measurement and recognition exemption was not applied are as follows (dollars in thousands):

Other Commitments: The radio broadcast industry’s principal ratings service is Nielsen Holdings N.V. (“Nielsen”), which publishes surveys for domestic radio markets. The Company’s remaining aggregate fixed obligation under the agreements with Nielsen as of December 31, 2025 is approximately $14.3 million and is expected to be paid in accordance with the agreements through June 2028. In addition, the Company has aggregate commitments of $1.7 million for a business management platform through October 2026.

Future expected payments under these agreements as of December 31, 2025 are as follows (in thousands):

Total payments made under these agreements were $8.5 million and $9.1 million for the years ended December 31, 2025 and 2024, respectively.

Note 9. Income Taxes

Income tax expense from operations for the years ended December 31, 2025 and 2024 consisted of the following (in thousands):

Total income tax expense from operations differed from the amount computed by applying the federal statutory tax rate of 21% for the years ended December 31, 2025 and 2024, due to the following (in thousands):

(1) For the years ended December 31, 2025 and 2024 the jurisdictions making up the majority of state and local income taxes were:

2025: Texas, Iowa, New Jersey, Louisiana, and New York.

2024: Louisiana, Texas, Iowa and Kentucky.

Income taxes paid (net of refunds received) for the years ended December 31, 2025 and 2024 were as follows (in thousands):

On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act of 2025 (“OBBBA”). The OBBBA 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), which resulted in an increase to the current year interest expense deduction. The impact of the increased current year business interest deduction resulted in a lower utilization of definite lived net operating loss carryforwards as well as a corresponding reduction of the current year amount of interest expense carryforward and related valuation allowances.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2025 and 2024 are presented below (in thousands):

As of December 31, 2025, the Company has federal net operating loss carryforwards of approximately $93.6 million available to offset future income which will expire in the years 2026 through 2037, of which $45.7 million has an indefinite life. Approximately $14.8 million is applicable to Townsquare Radio, Inc. and can only be utilized against its future earnings (subject to further limitations under Section 382 of the Internal Revenue Code), and $33.1 million applicable to post IPO operations of the Company and can be utilized against future earnings without limitation through 2037. Additionally, the Company has various amounts of state net operating loss carry forwards expiring through 2045.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income in making this assessment. At December 31, 2025 and 2024, management believes it is not more likely than not that the Company will realize the benefits of these deductible differences.

The table below presents the changes in the Company’s valuation allowance:

The increase in the valuation allowance of $3.3 million during the year ended December 31, 2025 is primarily due to an increase in the valuation allowance for interest expense carryforwards of $3.7 million and a $0.4 million increase in state valuation allowances, partially offset by the utilization of net operating loss carryforwards of $0.8 million. The decrease in the valuation allowance of $2.7 million during the December 31, 2024 period, is primarily due to the utilization of net operating loss carryforwards in excess of interest expense carryforwards.

A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits for the years ended December 31, 2025 and 2024 is as follows (in thousands):

As of December 31, 2025, the Company had unrecognized tax benefits of $13.0 million, all of which if recognized, would result in additional federal and state net operating loss carryforwards, with $5.5 million impacting the effective tax rate, and $7.5 million fully offset by a valuation allowance. It is not expected that unrecognized tax benefits will materially change in the next 12 months.

Note 10. Stockholders’ Deficit

The table below presents a summary, as of December 31, 2025, of our authorized and outstanding common stock, and securities convertible into common stock, excluding options issued under our 2014 Omnibus Incentive Plan.

The foregoing share totals include 138,235 shares of restricted Class A common stock, subject to vesting terms, but excludes 6,097,130 of Class A common stock and 762,191 of Class B common stock issuable upon exercise of stock options, which options have an exercise price of between $4.79 and $10.71 per share and 1,120,393 of non-vested restricted Class A common stock units. Additionally, the Company is authorized to issue 50,000,000 shares of undesignated preferred stock.

Dividend Rights

Each holder of shares of our common stock will be entitled to receive equally, on a per share basis, such dividends and other distributions in cash, securities or other property of the Company as may be declared thereon by our Board of Directors from time to time out of assets or funds of the Company legally available therefor; provided, however, that in the event that such dividend is paid in the form of shares of common stock or rights to acquire common stock, the holders of Class A common stock shall receive Class A common stock or rights to acquire Class A common stock, as the case may be, the holders of Class B common stock shall receive Class B common stock or rights to acquire Class B common stock, as the case may be, and the holders of Class C common stock shall receive Class C common stock or rights to acquire Class C common stock, as the case may be.

Other Rights

Each holder of common stock is subject to, and may be adversely affected by, the rights of the holders of any series of preferred stock that we may designate and issue in the future.

Liquidation Rights

If our company is involved in a consolidation, merger, recapitalization, reorganization, or similar event, each holder of common stock will participate pro rata in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding.

Equal Status

Except as expressly provided in our certificate of incorporation, the Class A common stock, Class B common stock and Class C common stock shall have the same rights and privileges and rank equally, share ratably and be identical in all respects as to all matters. Without limiting the generality of the foregoing, (i) in the event of a merger or consolidation requiring the approval of the holders of the Company’s common stock entitled to vote thereon (whether or not the Company is the surviving entity), the holders of each class of common stock have the right to receive, or the right to elect to receive, the same form and amount of consideration, if any, as the holders of each other class of common stock on a per share basis, and (ii) in the event of (x) any tender or exchange offer to acquire any shares of common stock by any third party pursuant to an agreement to which the Company is a party or (y) any tender or exchange offer by the Company to acquire any shares of common stock, pursuant to the terms of the applicable tender or exchange offer, the holders of each class of common stock shall have the right to receive, or the right to elect to receive, the same form and amount of consideration on a per share basis as the holders of each other class of common stock, provided that if the consideration to be received by the holders of common stock in connection with any such transaction is in the form of shares of stock of the surviving or resulting corporation (or any parent corporation), such shares received by the holders of Class A common stock, Class B common stock or Class C common stock may have varying voting powers or other rights as are equivalent to those of the Class A common stock, Class B common stock and Class C common stock, respectively.

Holders of shares of Class A common stock, Class B common stock and Class C common stock vote together as a single class on all matters presented to the Company’s stockholders for their vote or approval, except as otherwise required by applicable law. Each holder of the Company’s Class A common stock is entitled toone vote per share on each matter submitted to a vote of stockholders. The Company’s Class A common stock is neither convertible nor redeemable. Each holder of the Company’s Class B common stock is entitled toten votes per share on each matter submitted to a vote of stockholders. The Company’s Class B common stock is not redeemable, but is convertible 1:1 (including automatically upon certain transfers) into Class A common stock. Holders of shares of Class C common stock are not entitled to any voting rights with respect to such shares. The Company’s Class C common stock is not redeemable, but is convertible 1:1 (including automatically upon certain transfers) into Class A common stock.

The Company’s 2014 Omnibus Incentive Plan (the “2014 Incentive Plan”) provides grants of stock options, stock appreciation rights, restricted stock, other stock-based awards and other cash-based awards. Directors, officers and other employees of the Company and its subsidiaries, as well as others performing consulting or advisory services for the Company, are eligible for grants under the 2014 Incentive Plan. The purpose of the 2014 Incentive Plan is to provide incentives that will attract, retain and motivate high performing officers, directors, employees and consultants by providing them with appropriate incentives and rewards either through a proprietary interest in our long-term success or compensation based on their performance in fulfilling their personal responsibilities. The aggregate number of shares of common stock which may be issued or used for reference purposes under the 2014 Incentive Plan or with respect to which awards may be granted may not exceed 27,000,000 shares. As of December 31, 2025,10,181,082 shares were available for grant. Shares issued under the 2014 Incentive Plan are generally issued from common stock authorized for issuance.

Employee Stock Purchase Plan

The ESPP constitutes a sub-plan under the Townsquare Media, Inc. 2014 Omnibus Incentive Plan. Under the ESPP, eligible employees may authorize payroll deductions of at least 3% but no more than 15% of their current compensation of each payday during six month offering periods which commence on January 1 and July 1. Contributions are subject to an annual limitation of $25,000, and are used to purchase shares of Class A common stock at 90% of the fair market value of the Class A common stock on either the first or last day of an offering period, whichever is lower. The total number of shares purchased during each offering period may not exceed 2,000 shares per eligible participant and the total aggregate discount price for any calendar year may not exceed an annual limitation of $600,000. During the years ended December 31, 2025 and 2024, the total amount of common stock issued under the ESPP totaled 78,389 and 75,846 shares, respectively.

Dividends Declared

On March 13, 2025, the board of directors approved a quarterly dividend of $0.20 per share. The dividend of $3.2 million was paid to holders of record as of April 17, 2025, on May 1, 2025.

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 of $3.3 million was paid to holders of record as of January 26, 2026, on February 2, 2026.

On March 4, 2026, the board of directors approved a quarterly dividend of $0.20 per share. The dividend will be paid to holders of record as of April 27, 2026 on May 4, 2026.

Stock Repurchase Agreement

On April 1, 2024, the Company repurchased 1.5 million shares of the Company’s Class A common stock from MSG National Properties, LLC (“MSG”) for total consideration in the aggregate amount of $14.6 million, or $9.76 per share. The shares were retired upon repurchase.

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 a three-year period (the "2024 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 2024 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 year ended December 31, 2025 there wereno shares of Class A common stock repurchased under the 2024 Stock Repurchase Plan. During the year ended December 31, 2024 a total of 2,281,631 shares were repurchased. In total,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 year ended December 31, 2025, a total of $4.7 million of expense was recognized as a component of stock-based compensation in connection with the stock bonus program, respectively. During the year ended December 31, 2024, a total of $3.8 million of expense was recognized as a component of stock-based compensation in connection with the stock bonus program. 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 to be 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. 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 during the year ended December 31, 2024.

Stock Option Activity

During the year ended December 31, 2025, eligible option holders tendered 127,686 options to purchase 127,686 shares of Townsquare common stock.

During the year ended December 31, 2025, the Company granted 292,298 options with grant date fair values ranging from $0.86 to $1.48 and vesting periods of one tofour-years, each withten-year terms. The Company also granted 148,528 options with grant date fair values of $1.09 to $1.27, respectively. The 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 periods.

During the year ended December 31, 2024, the Company granted 124,093 options with grant date fair values ranging from $2.30 to $2.95 and vesting periods from three tofive-years, each withten-year terms. The Company also granted 73,738 options with grant date fair values of $2.68 to $2.86, respectively. These options contain market conditions whereby the options will vest and become exercisable subject to the achievement of a specified 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 periods.

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 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 option activity for the year ended December 31, 2025:

The maximum contractual term of stock options is 10 years.

Restricted Stock Awards

During the year ended December 31, 2025, the Company granted 150,661 shares, including 71,505 shares to non-employee directors, with a vesting period ofone tothree years.

The following table summarizes restricted stock activity for the year ended December 31, 2025:

The fair value of the restricted stock award is equal to the closing share price on the date of grant. The vesting terms of shares of restricted stock vary from 1 to 3 years.

Restricted Stock Units

The following table summarizes restricted stock unit activity for the year ended December 31, 2025:

During the year ended December 31, 2025, the Company granted 286,874 stock units with a vesting periods ranging from vested at grant date tothree years, and 479,749 stock units under the Stock Bonus Program that vested at the grant date. The fair value of the restricted stock awards is equal to the closing share price on the date of grant.

During the year ended December 31, 2024, the Company granted 86,610 stock units that vested at the grant date and had a grant date fair value of $10.07 per share, respectively. The fair value of the restricted stock awards is equal to the closing share price on the date of grant.

During the year ended December 31, 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, respectively. 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.

For the years ended December 31, 2025 and 2024, the Company recognized $9.1 million and $8.8 million, respectively, of stock-based compensation expense with respect to options, restricted stock awards, restricted stock units and the ESPP. As of December 31, 2025, total unrecognized stock-based compensation expense related to our stock options and restricted stock was $1.7 million and $3.2 million, respectively, and is expected to be recognized over a weighted average period of 1.4 and 1.7 years, respectively. The income tax benefit derived for the year ended December 31, 2025 and December 31, 2024 as a result of stock option exercises and other stock-based compensation was approximately $0.4 million and $1.0 million, respectively, of which approximately $9.0 thousand and $0.2 million represented excess tax benefits, respectively.

Note 11. Net Loss Per Common Share

Net Loss Per Common 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.

The calculation of basic and diluted EPS for the years ended December 31, 2025 and 2024, was as follows (in thousands, except per share data):

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

Note 12. Segment Information

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: Subscription Digital Marketing Solutions, Digital Advertising 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, Net. 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 account and sales 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 table presents the Company's reportable segment information, and includes the calculation of segment profit to operating income for the year ended December 31, 2025, (in thousands):

The following table presents the Company's reportable segment information, and includes the calculation of segment profit to operating income for the year ended December 31, 2024, (in thousands):