Townsquare Media, Inc.

Previous wording

This report includes estimates, projections, statements relating to our business plans, objectives and expected operating results that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements often discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “aim,” “anticipate,” “estimate,” “expect,” “forecast,” “outlook,” “potential,” “project,” “projection,” “plan,” “intend,” “seek,” “believe,” “may,” “could,” “would,” “will,” “should,” “can,” “can have,” “likely,” the negatives thereof and other words and terms. Actual events or results may differ materially from the results anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors that could cause actual results to differ materially from those estimated by us include the impact of general economic conditions in the United States, or in the specific markets in which we currently do business including supply chain disruptions, inflation, labor shortages, tariffs, and the effect on advertising activity, industry conditions, including existing competition and future competitive technologies, the popularity of radio as a broadcasting and advertising medium, cancellations, disruptions or postponements of advertising schedules in response to national or world events, our ability to develop and maintain digital technologies and hire and retain technical and sales talent, our dependence on key personnel, our capital expenditure requirements, our continued ability to identify suitable acquisition targets, and consummate and integrate any future acquisitions, legislative or regulatory requirements, risks and uncertainties relating to our leverage and changes in interest rates, our ability to obtain financing at times, in amounts and at rates considered appropriate by us, our ability to access the capital markets as and when needed and on terms that we consider favorable to us and other factors discussed in this section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report and under “Risk Factors” in our 2024 Annual Report on Form 10-K, as well as other risks discussed from time to time in our filings with the SEC. Many of these factors are beyond our ability to predict or control. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. The cautionary statements referred to in this section also…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This report includes estimates, projections, statements relating to our business plans, objectives and expected operating results that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements often discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “aim,” “anticipate,” “estimate,” “expect,” “forecast,” “outlook,” “potential,” “project,” “projection,” “plan,” “intend,” “seek,” “believe,” “may,” “could,” “would,” “will,” “should,” “can,” “can have,” “likely,” the negatives thereof and other words and terms. Actual events or results may differ materially from the results anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors that could cause actual results to differ materially from those estimated by us include the impact of general economic conditions in the United States, or in the specific markets in which we currently do business including supply chain disruptions, inflation, labor shortages, tariffs, and the effect on advertising activity, industry conditions, including existing competition and future competitive technologies, including artificial intelligence, the popularity of radio as a broadcasting and advertising medium, cancellations, disruptions or postponements of advertising schedules in response to national or world events, our ability to develop and maintain digital technologies, including artificial intelligence, and hire and retain technical and sales talent, our dependence on key personnel, our capital expenditure requirements, our continued ability to identify suitable acquisition targets, and consummate and integrate any future acquisitions, legislative or regulatory requirements, risks and uncertainties relating to our leverage and changes in interest rates, our ability to obtain financing at times, in amounts and at rates considered appropriate by us, our ability to access the capital markets as and when needed and on terms that we consider favorable to us and other factors discussed in this section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report and under “Risk Factors” in our 2025 Annual Report on Form 10-K, as well as other risks discussed from time to time in our filings with the SEC. Many of these factors are beyond our ability to predict or control. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Our Broadcast Advertising segment includes our portfolio of 341 local terrestrial radio stations. Our primary source of Broadcast Advertising net revenue is the sale of advertising on our local radio stations primarily to local and regional spot advertisers and, to a lesser extent, national spot and national network advertisers. We believe we are the largest and best-capitalized owner and operator of radio stations focused solely on markets outside the top 50 markets in the United States. Given the stability of radio’s audience, its broad reach and its relatively low cost as compared to competing advertising media such as television, we believe radio continues to offer an attractive value proposition to advertisers. The price point for radio advertising on a cost per thousand basis is lower than most other local media that deliver similar scale. This makes radio more affordable and accessible for the type of small and mid-sized businesses typically found in our local markets outside the top 50 markets in the U.S.

Current wording

Our Broadcast Advertising segment includes our portfolio of 337 local terrestrial radio stations. Our primary source of Broadcast Advertising net revenue is the sale of advertising on our local radio stations primarily to local and regional spot advertisers and, to a lesser extent, national spot and national network advertisers. We believe we are the largest and best-capitalized owner and operator of radio stations focused solely on markets outside the top 50 markets in the United States. Given the stability of radio’s audience, its broad reach and its relatively low cost as compared to competing advertising media such as television, we believe radio continues to offer an attractive value proposition to advertisers. The price point for radio advertising on a cost per thousand basis is lower than most other local media that deliver similar scale. This makes radio more affordable and accessible for the type of small and mid-sized businesses typically found in our local markets outside the top 50 markets in the U.S.

Previous wording

•Net revenue decreased $8.6 million, or 7.4%, primarily driven by a $7.5 million decrease in our Broadcast Advertising net revenue, a $0.6 million decrease in our Digital Advertising net revenue and a $0.4 million decrease in Subscription Digital Marketing Solutions net revenue.

Current wording

•Net revenue decreased $1.9 million, or 1.9%, primarily driven by a $2.7 million decrease in our Broadcast Advertising net revenue and a $1.5 million decrease in Subscription Digital Marketing Solutions net revenue, partially offset by a $2.5 million increase in our Digital Advertising net revenue.

Previous wording

•Excluding political revenue of $0.2 million and $3.7 million for the three months ended September 30, 2025 and 2024, respectively, net revenue decreased $5.0 million, or 4.5%, to $106.6 million, Broadcast Advertising net revenue decreased $4.1 million, or 8.1%, to $46.8 million, and Digital Advertising net revenue decreased $0.5 million, or 1.2%, to $40.2 million.

Current wording

•Excluding political revenue of $0.6 million for each of the three months ended March 31, 2026 and 2025, respectively, net revenue decreased $2.0 million, or 2.0%, to $96.1 million, Broadcast Advertising net revenue decreased $2.8 million, or 6.9%, to $38.0 million, and Digital Advertising net revenue increased $2.5 million, or 6.9%, to $39.2 million.

Previous wording

•Operating income decreased $9.2 million for the three months ended September 30, 2025. The decrease was primarily due to the $8.6 million decrease in net revenue and a $6.2 million increase in transaction and business realignment costs, partially offset by a $5.0 million decrease in operating expenses.

Current wording

•Operating income decreased $8.4 million for the three months ended March 31, 2026. The decrease was primarily due to an $8.6 million non-cash impairment charge and the $1.9 million decrease in net revenue, partially offset by a $1.3 million decrease in transaction and business realignment costs.

Previous wording

•Digital Advertising segment reported operating income of $5.3 million for the three months ended September 30, 2025, which represents a decrease of $5.1 million, as compared to operating income of $10.4 million for the same period in 2024. The decrease is primarily due to a $3.0 million non-cash goodwill impairment charge and a $2.2 million decrease in segment profit for the three months ended September 30, 2025, as compared to the same period in 2024. Subscription Digital Marketing Solutions reported operating income of $5.7 million, an increase of $1.3 million from the three months ended September 30, 2024, primarily due to a $1.1 million increase in segment profit. Broadcast Advertising reported operating income of $12.0 million for the three months ended September 30, 2025, which represents a decrease of $0.9 million, as compared to $12.9 million for the same period in 2024. The decrease is primarily due to a $2.6 million decrease in segment profit, partially offset by a $1.5 million increase in net gain on sales and retirements of assets.

Current wording

•Broadcast Advertising reported an operating loss of $4.1 million for the three months ended March 31, 2026, which represents a decrease of $9.4 million, as compared to operating income of $5.3 million for the same period in 2025. The decrease is primarily due to an $8.6 million non-cash impairment charge and a $1.0 million decrease in segment profit, partially offset by a $0.5 million increase in net gain on sales and retirements of assets. Digital Advertising reported operating income of $6.8 million for the three months ended March 31, 2026, a decrease of $0.5 million, as compared to operating income of $7.2 million for the same period in 2025 due to a $0.4 million decrease in segment profit. Subscription Digital Marketing Solutions reported operating income of $5.0 million, a decrease of $0.5 million from the three months ended March 31, 2025, primarily due to a $0.3 million decrease in segment profit and higher depreciation and amortization.

Previous wording

Net revenue for the three months ended September 30, 2025 decreased $8.6 million, or 7.4%, as compared to the same period in 2024. Broadcast Advertising net revenue decreased $7.5 million, or 13.8%, Digital Advertising net revenue decreased $0.6 million, or 1.5%, due to decreases in the purchases of advertising by our clients and political revenue. Subscription Digital Marketing Solutions net revenue decreased $0.4 million, or 2.3%, due to reduced sales velocity as a result of lower headcount.

Current wording

Net revenue for the three months ended March 31, 2026 decreased $1.9 million, or 1.9%, as compared to the same period in 2025. Broadcast Advertising net revenue decreased $2.7 million, or 6.6%, due to decreases in the purchases of advertising by our clients and Subscription Digital Marketing Solutions net revenue decreased $1.5 million, or 7.9%, due to reduced sales velocity as a result of lower sales headcount. These decreases were partially offset by an increase in Digital Advertising net revenue of $2.5 million, or 6.8%, due to increases in the purchases of advertising by our clients.

Previous wording

Direct operating expenses for the three months ended September 30, 2025 decreased by $5.0 million, or 6.0%, as compared to the same period in 2024. Broadcast Advertising direct operating expenses decreased by $4.9 million, or 12.8%, and Subscription Digital Marketing Solutions direct operating expenses decreased by $1.5 million, or 10.8%, each due to lower compensation as compared to the same period a year ago. These decreases were partially offset by a $1.5 million, or 5.1%, increase in Digital Advertising direct operating expenses due to higher compensation and inventory costs, partially offset by lower bad debt as compared to the same period in 2024.

Current wording

Direct operating expenses for the three months ended March 31, 2026 decreased by $0.2 million, or 0.3%, as compared to the same period in 2025. Broadcast Advertising direct operating expenses decreased by $1.8 million, or 5.4%, primarily due to lower compensation and bad debt expense as compared to the same period in 2025. Subscription Digital Marketing Solutions direct operating expenses decreased by $1.2 million, or 9.6%, due to lower compensation as compared to the same period a year ago. These decreases were partially offset by a $2.9 million, or 10.1%, increase in Digital Advertising direct operating expenses due to higher inventory and compensation costs as compared to the same period in 2025.

Previous wording

Segment profit for the three months ended September 30, 2025 decreased by $3.5 million, or 11.2%, when compared with the same period in 2024. Broadcast Advertising segment profit decreased $2.6 million, or 16.3%, primarily due to the decrease in net revenue, including the loss of political net revenue. Digital Advertising segment profit decreased $2.2 million, or 20.1%, as compared to the same period in 2024, primarily due to the increase in compensation and inventory costs. These decreases were partially offset by an increase in Subscription Digital Marketing Solutions segment profit of $1.1 million, or 21.1% as compared to the same period in 2024, primarily due to the decrease in compensation. Other segment profit increased $0.2 million, or 45.8%.

Current wording

Segment profit for the three months ended March 31, 2026 decreased by $1.7 million, or 7.2%, when compared with the same period in 2025. Broadcast Advertising segment profit decreased $1.0 million, or 11.4%, primarily due to the decrease in net revenue. Digital Advertising segment profit decreased $0.4 million, or 5.0%, as compared to the same period in 2025, primarily due to the increase in inventory and compensation costs. Subscription Digital Marketing Solutions segment profit decreased $0.3 million, or 4.5% as compared to the same period in 2025, primarily due to lower revenue.

Previous wording

The Company incurred no impairment charges related to FCC licenses during the three months ended September 30, 2025, and 2024. For further discussion, see Note 5, Goodwill and Other Intangible Assets, in the Notes to Unaudited Consolidated Financial Statements.

Current wording

The Company incurred $8.6 million of non-cash impairment charges related to FCC licenses during the three months ended March 31, 2026, as compared to no impairment for the same period in 2025. The impairment charges were primarily driven by increases in the discount rate applied in the valuation of our FCC licenses due to an increase in the weighted average cost of capital, caused by an increase in industry bond yields. For further discussion, see Note 5, Goodwill and Other Intangible Assets, in the Notes to Unaudited Consolidated Financial Statements.

Previous wording

Unfavorable changes in key assumptions utilized in the impairment assessment of our FCC licenses may affect future testing results. For example, keeping all other assumptions constant, a 100-basis point increase in the weighted average cost of capital as of the date of our last quantitative assessment would cause the estimated fair values of our FCC licenses to decrease by $26.5 million which would have resulted in an incremental impairment charge of $0.3 million as of September 30, 2025. Further, a 100-basis point decline in the long-term revenue growth rate would cause the estimated fair values of our FCC licenses to further decrease by $13.8 million which would have resulted in an impairment charge of $0.4 million as of September 30, 2025. Finally, a 100-basis point decline in operating profit margins would result in a decrease in the estimated fair values of our FCC licenses of $10.7 million which would result in an incremental impairment charge of $0.8 million. Assumptions used to estimate the fair value of our FCC licenses are also dependent upon the expected performance and growth of our traditional broadcast radio operations. In the event broadcast radio revenue experiences actual or anticipated declines, in excess of these assumptions, such declines will have a negative impact on the estimated fair value of our FCC licenses, and the Company could recognize additional impairment charges, which could be material.

Current wording

Unfavorable changes in key assumptions utilized in the impairment assessment of our FCC licenses may affect future testing results. For example, keeping all other assumptions constant, a 100-basis point increase in the weighted average cost of capital as of the date of our last quantitative assessment would cause the estimated fair values of our FCC licenses to decrease by $19.9 million which would have resulted in an incremental impairment charge of $10.3 million as of March 31, 2026. 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 $11.3 million which would have resulted in an incremental impairment charge of $8.9 million as of March 31, 2026. 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 $8.9 million which would result in an incremental impairment charge of $7.2 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 radio operations. In the event broadcast radio revenue experiences actual or anticipated declines in excess of these assumptions, 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.

Previous wording

We recognized benefit for income taxes of $1.1 million for the three months ended September 30, 2025, as compared to $5.1 million for the same period in 2024. Our effective tax rate for the three months ended September 30, 2025 and 2024 was approximately 16.2% and 82.6%, respectively. The decrease in the effective tax rate and tax benefit for the three months ended September 30, 2025 is primarily driven by the decrease in the valuation allowance for interest expense carryforwards resulting from an increase in deductible interest expense pursuant to the OBBBA tax law change and non-deductible compensation costs.

Current wording

We recognized a benefit for income taxes of $15.7 million for the three months ended March 31, 2026, as compared to $3.0 million for the same period in 2025. Our effective tax rate for the three months ended March 31, 2026 and 2025 was approximately 123.3% and 66.8%, respectively. The increase in the effective tax rate and tax benefit for the three months ended March 31, 2026 is driven by the valuation allowance for interest expense carryforwards, non-deductible compensation and the effects of non-cash impairment charges recognized in the first quarter of 2026.

Previous wording

Net cash provided by operating activities was approximately $18.0 million for the nine months ended September 30, 2025, as compared to $20.6 million for the same period in 2024. The decrease was primarily related to higher cash interest payments in 2025, partially offset by changes in working capital balances, particularly accounts receivable, accounts payable and accrued expenses.

Current wording

Net cash provided by operating activities was approximately $4.2 million for the three months ended March 31, 2026, as compared to net cash used in operating activities of $0.1 million for the same period in 2025. The increase was primarily related to lower cash interest payments in 2026 and net changes in working capital balances, particularly accrued expenses and accounts receivable.

Previous wording

Net cash used in investing activities was $3.4 million for the nine months ended September 30, 2025 as compared $7.6 million for the same period in 2024. The decrease in net cash used in investing activities was primarily due to an increase of $2.6 million in net proceeds from sales of assets and investment related transactions and a $2.0 million decrease in purchases of property and equipment.

Current wording

Net cash used in investing activities was $2.9 million for the three months ended March 31, 2026, as compared to $4.3 million for the same period in 2025. The decrease in net cash used in investing activities was primarily due to a $0.8 million decrease in purchases of property and equipment and a $0.6 million increase in net proceeds from sales of assets.

Previous wording

Net cash used in financing activities was $44.1 million for the nine months ended September 30, 2025, as compared to $52.2 million for the same period in 2024. The primary differences in net cash used in financing activities in 2025 as compared to 2024 include:

Current wording

Net cash used in financing activities was $3.6 million for the three months ended March 31, 2026, as compared to $22.7 million for the same period in 2025. The primary differences in net cash used in financing activities include:

Previous wording

•$5.0 million in net borrowings under the Revolver;

Current wording

•$3.0 million in net borrowings under the Revolver during the three months ended March 31, 2026, as compared to $7.0 million during the same period in 2025;

Previous wording

•total Term Loan repayments of $11.1 million, as compared to voluntary repurchases of 2026 Notes in the amount of $24.5 million in 2024;

Current wording

•Fixed term loan repayments of $2.9 million in 2026;

Previous wording

•$1.5 million of shares repurchased to cover employee tax withholdings on restricted stock that vested during the nine months ended September 30, 2025, as compared to $23.6 million for repurchases of common stock during the nine months ended September 30, 2024, and

Current wording

•$1.4 million of shares repurchased to cover employee tax withholdings on restricted stock that vested during the three months ended March 31, 2025, which did not recur in 2026; and

Previous wording

As of September 30, 2025, we had $437.6 million of outstanding indebtedness, net of unamortized discount and deferred financing costs of $25.8 million.

Current wording

As of March 31, 2026, we had $434.2 million of outstanding indebtedness, net of unamortized discount and deferred financing costs of $23.3 million.

Previous wording

Based on the terms of our Senior Secured Credit Facility, as of September 30, 2025, we expect our mandatory debt service requirements to be approximately $53.7 million over the next twelve months. See Note 7, Long-Term Debt, in our Notes to Consolidated Financial Statements for additional information related to our Senior Secured Credit Facility.

Current wording

Based on the terms of our Senior Secured Credit Facility, as of March 31, 2026, we expect our mandatory debt service requirements to be approximately $50.7 million over the next twelve months. See Note 6, Long-Term Debt, in our Notes to Consolidated Financial Statements for additional information related to our Senior Secured Credit Facility.

Previous wording

As of September 30, 2025 we had $3.2 million of cash and cash equivalents, and $55.5 million of receivables from customers, which historically have had an average collection cycle of approximately 50 days.

Current wording

As of March 31, 2026 we had $2.2 million of cash and cash equivalents, and $49.1 million of receivables from customers, which historically have had an average collection cycle of approximately 50 days. As of March 31, 2026, the Company had $15.0 million available under its revolving credit facility. Amounts borrowed under the revolving credit facility above an aggregate $6.0 million as of the end of each fiscal quarter requires compliance with a net leverage ratio covenant, which could limit the Company’s ability to access the full amount of the facility.

Previous wording

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our significant estimates, including those related to 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 doubtful accounts and income taxes. We base our estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the result of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our estimates may change, however, as new events occur and additional information is obtained, and any such changes will be recognized in the Consolidated Financial Statements. Actual results could differ from such estimates, and any such differences may be material to our financial statements.

Current wording

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our significant estimates, including those related to 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 doubtful accounts and income taxes. We base our estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the result of which forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our estimates may change, however, as new events occur and additional information is obtained, and any such changes will be recognized in the Consolidated Financial Statements. Actual results could differ from such estimates, and any such differences may be material to our financial statements.