# Entravision Communications Corp: Form 10-Q for the period ended Mar 31, 2025

- Company: [Entravision Communications Corp](/companies/evc.md) (CIK 1109116)
- Form: 10-Q
- Filed: 2025-05-08
- Accepted by EDGAR: May 8, 2025, 16:10 ET
- Period: 2025-03-31
- Accession: 0000950170-25-066954
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1109116/000095017025066954/evc-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1109116/000095017025066954/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $91.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $33.5m | us-gaap:CostOfGoodsAndServicesSold |
| Selling, general and administrative | 3 months, 2025-01-01 to 2025-03-31 | $15.5m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$52.8m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $3.7m | us-gaap:InterestExpense |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | −$8.1m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$48.0m | us-gaap:ProfitLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.53 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.53 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 90,976,288 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$15.2m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $2.6m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2025-01-01 to 2025-03-31 | $4.5m | us-gaap:PaymentsOfDividends |
| Cash and equivalents | at 2025-03-31 | $73.6m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $191.0m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $435.8m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $65.3m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $340.2m | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $184.5m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-03-31 | $2.5m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-03-31 | $95.6m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 33,246 characters.

### Overview

Entravision owns and operates one of the largest groups of Spanish language television and radio stations in the United States. Our mission is to serve our Latino audience as a trusted provider of useful news, information and entertainment and to serve our advertisers by providing multi-channel marketing capabilities to engage our audience.

Entravision also owns and operates a smaller group of television stations that broadcast English language programming and has operations that provide programmatic advertising technology and services. We have organized our operations into two reportable segments. Our media segment includes our television, radio and digital marketing operations. Our advertising and technology services segment provides programmatic advertising and technology services through Smadex, our demand-side programmatic advertising purchasing platform, and Adwake, our performance-based media advertising agency.

In 2024, we discontinued and divested a significant portion of our operations, which consisted primarily of several acquisitions that had been completed prior to 2024, and which operations comprised the majority of our former digital segment.

Our net revenue for the three-months period ended March 31, 2025 was $91.9 million. Of this amount, revenue generated by our media segment accounted for approximately 45%, and revenue generated by our advertising technology & services segment accounted for approximately 55% of total revenue.

### Highlights

During the first quarter of 2025, our revenue grew by double digits in the first quarter of 2025 compared to the comparable period of 2024, driven primarily by growth of our advertising technology & services segment, partially offset by a decrease in revenue in our media segment. In addition, during the first quarter of 2025 we:

- entered into an LOI to sell two television stations located in Mexico;
- recorded an impairment charge of $23.7 million related to broadcast licenses and fixed assets of these two television stations;
- decided to vacate our previous corporate headquarters in Santa Monica, California and cease making further payments under the lease;
- recorded a loss on lease abandonment charges of $16.1 million related to the acceleration of amortization of the right of use asset associated with this lease, and $9.1 related to the acceleration of depreciation of the leasehold improvements associated with this lease;
- continued to reduce certain expenses, including a reduction in the base salary and cash bonus components of our three most senior executives' compensation.

### Relationship with TelevisaUnivision

Our network affiliation agreement with TelevisaUnivision provides certain of our owned stations the exclusive right to broadcast TelevisaUnivision’s primary Univision network and UniMás network programming in their respective markets. We also generate revenue under a marketing and sales agreement with TelevisaUnivision, which gives us the right to manage the marketing and sales operations of TelevisaUnivision-owned Univision affiliates in three markets – Albuquerque, Boston and Denver. Under our proxy agreement with TelevisaUnivision, we grant TelevisaUnivision the right to negotiate the terms of retransmission consent agreements with multichannel video programming distributors, or MVPDs, for our Univision- and UniMás-affiliated television station signals. Revenue generated from retransmission consent agreements represents payments from MVPDs for access to our television station signals so that they may rebroadcast our signals and charge their subscribers for this programming. The term of each of these current agreements expires on December 31, 2026 for all of our Univision and UniMás network affiliate stations. TelevisaUnivision also owns approximately 10% of our common stock on a fully-converted basis. For more information regarding these agreements and the stock that TelevisaUnivision owns, see Note 2 to Notes to Condensed Consolidated Financial Statements.

### Critical Accounting Policies

For a description of our critical accounting policies, please refer to “Application of Critical Accounting Policies and Accounting Estimates” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 10-K.

### Recent Accounting Pronouncements

For further information on recently issued accounting pronouncements, see Note 2 to Notes to Condensed Consolidated Financial Statements.

### Three-Month Periods Ended March 31, 2025 and 2024

The following table sets forth selected data from our operating results for the three-month periods ended March 31, 2025 and 2024 (in thousands):

| Statements of Operations Data: | Three-Month Period Ended March 31,% 2025 | 2024 | Change |
| --- | ---: | ---: | ---: |
| Net Revenue | $91,851 | $78,176 | 17% |
| Cost of revenue | 33,472 | 22,658 | 48% |
| Direct operating expenses | 35,502 | 31,801 | 12% |
| Selling, general and administrative expenses | 15,506 | 14,334 | 8% |
| Corporate expenses | 7,788 | 12,248 | (36)% |
| Depreciation and amortization | 3,477 | 4,739 | (27)% |
| Change in fair value of contingent consideration | - | (220) | (100)% |
| Impairment charge | 23,673 | - | \* |
| Loss on lease abandonment | 25,191 | - | \* |
| Foreign currency (gain) loss | 12 | 265 | (95)% |
|  | 144,621 | 85,825 | 69% |
| Operating income (loss) | (52,770) | (7,649) | 590% |
| Interest expense | (3,663) | (4,443) | (18)% |
| Interest income | 605 | 578 | 5% |
| Dividend income | - | 10 | (100)% |
| Realized gain (loss) on marketable securities | 1 | (113) | \* |
| Loss on debt extinguishment | - | (40) | (100)% |
| Income before income (loss) taxes | (55,827) | (11,657) | 379% |
| Income tax benefit (expense) | 8,052 | 4,147 | 94% |
| Net income (loss) from continuing operations | (47,775) | (7,510) | 536% |
| Net income (loss) from discontinued operations, net of tax | (191) | (41,380) | (100)% |
| Net income (loss) attributable to common stockholders | $(47,966) | $(48,890) | (2)% |
| **Other Data:** |  |  |  |
| Capital expenditures | $2,384 | $2,070 |  |
| Net cash provided by (used in) operating activities | (15,244) | 33,375 |  |
| Net cash provided by (used in) investing activities | (2,475) | 6,099 |  |
| Net cash provided by (used in) financing activities | (4,582) | (16,797) |  |

### Consolidated Operations

*Net Revenue.* Net revenue increased to $91.9 million for the three-month period ended March 31, 2025 from $78.2 million for the three-month period ended March 31, 2024. This increase was primarily due to an increase of $18.5 million in net revenue from our advertising technology & services segment, partially offset by a decrease of $4.8 million in net revenue from our media segment.

*Cost of revenue.* Cost of revenue increased to $33.5 million for the three-month period ended March 31, 2025 from $22.7 million for the three-month period ended March 31, 2024. This increase was primarily due to an increase of $0.4 million in cost of revenue from our media segment, and an increase of $10.4 million in cost of revenue from our advertising technology & services segment.

Effective July 1, 2024, with the realignment of our operations and reassignment of certain responsibilities, certain costs that were previously included as corporate expenses, primarily salaries, are now included in direct operating expenses and in selling, general and administrative expenses.

*Direct Operating Expenses.* Direct operating expenses increased to $35.5 million for the three-month period ended March 31, 2025 from $31.8 million for the three-month period ended March 31, 2024. This increase was primarily due to an increase of $3.8 million in direct operating expenses in our advertising technology & services segment, partially offset by a decrease of $0.1 million in direct operating expenses in our media segment.

*Selling, General and Administrative Expenses.* Selling, general and administrative expenses increased to $15.5 million for the three-month period ended March 31, 2025, from $14.3 million for the three-month period ended March 31, 2024. This increase was primarily due to an increase of $0.8 million in selling, general and administrative expenses in our media segment, and an increase of $0.3 million in selling, general and administrative expenses in our advertising technology & services segment.

*Corporate Expenses.* Corporate expenses decreased to $7.8 million for the three-month period ended March 31, 2025 from $12.2 million for the three-month period ended March 31, 2024. This decrease was primarily due to a decrease of $0.9 million in salaries and bonus expense, including a reduction in the base salary and cash bonus components of our three most senior executives' compensation, a decrease of $2.1 million in non-cash stock-based compensation, a decrease of $0.6 million in audit fees, and a decrease of $0.8 million in corporate expenses due to the realignment of our operations as noted above.

Depreciation and amortization decreased to $3.5 million for the three-month period ended March 31, 2025 compared to $4.7 million for the three-month period ended March 31, 2024, primarily due to fully amortized intangible assets.

*Change in fair value of contingent consideration.* As a result of the change in fair value of the contingent consideration, primarily related to earnouts of certain past acquisitions, we recognized income of $0.2 million for the three-month period ended March 31, 2024.

*Impairment.* For the three-month period ended March 31, 2025, we incurred an impairment charge of $23.7 million related to broadcast licenses and fixed assets of the two television stations in Mexico that are held for sale (see Note 2 to Notes to Condensed Consolidated Financial Statements).

*Loss on lease abandonment.* For the three-month period ended March 31, 2025, we incurred a loss on lease abandonment of $25.2 million related to our previous Santa Monica lease (see Note 2 to Notes to Condensed Consolidated Financial Statements).

*Foreign currency (gain) loss.* We had a de minimis foreign currency loss for the three-month period ended March 31, 2025 compared to a foreign currency loss of $0.3 million for the three-month period ended March 31, 2024. Foreign currency gains and losses are primarily due to currency fluctuations that affect our operations located outside the United States.

*Interest Expense, net.* Interest expense, net decreased to $3.1 million for the three-month period ended March 31, 2025 from $3.9 million for three-month period ended March 31, 2024. This decrease was primarily due to lower interest rate on our debt and a lower principal balance due to prepayments totaling $20 million, which were made in the first half of 2024.

*Gain (loss) on debt extinguishment.* We recorded a de minimis loss on debt extinguishment for the three-month period ended March 31, 2024 due to prepayment of $10.0 million of our 2023 Credit Facility.

*Realized gain (loss) on marketable securities.* For the three-month period ended March 31, 2025 we recorded a de minimis realized gain, related to our available for sale securities. For the three-month period ended March 31, 2024 we recorded $0.1 million of realized loss, related to our available for sale securities.

*Income Tax Expense or Benefit.* Income tax benefit for the three-month period ended March 31, 2025 was $8.1 million, or 14% of our pre-tax loss. The effective tax rate for the three-month period ended March 31, 2025 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non deductible executive compensation, share-based compensation from foreign employees, and transaction costs. Income tax benefit for the three-month period ended March 31, 2024 was $4.1 million, or 36% of our pre-tax loss. The effective tax rate for the three-month period ended March 31, 2024 was different from our statutory rate due to non deductible executive compensation, changes in the fair value of the contingent consideration liability, goodwill impairment, and non-taxable non-territorial income.

Our management periodically evaluates the realizability of the deferred tax assets and, if it is determined that it is more likely than not that the deferred tax assets are, or are not, realizable, adjusts the valuation allowance accordingly. Valuation allowances are established and maintained for deferred tax assets on a “more likely than not” threshold. The process of evaluating the need to maintain a valuation allowance for deferred tax assets and the amount maintained in any such allowance is highly subjective and is based on many factors, several of which are subject to significant judgment calls.

Based on our analysis, we determined that it was more likely than not that our deferred tax assets would be realized for all jurisdictions with the exception of certain of our digital operations, certain U.S. Foreign Tax Credit carryovers and certain states deferred tax assets. As a result of historical losses from our digital operations primarily in Uruguay, Mexico and Argentina, certain U.S. Foreign Tax Credit carryovers, and capital loss, management has determined that it is more likely than not that deferred tax assets of $18.0 million at March 31, 2025 will not be realized and therefore we have established a valuation allowance in that amount on those assets.

The Organization for Economic Co-operation and Development (“OECD”) Pillar 2 guidelines address the increasing digitalization of the global economy, re-allocating taxing rights among countries. The OECD, many other member states and various other governments have adopted, or are in the process of adopting, Pillar 2 which calls for a global minimum tax of 15% to be effective for tax years beginning in 2024. The OECD guidelines published to date include transition and safe harbor rules around the implementation of the Pillar 2, global minimum tax. We are monitoring developments and evaluating the impacts these new rules will have on our tax rate, including eligibility to qualify for these safe harbor rules.

As of March 31, 2025 and December 31, 2024, we had unrecognized tax benefits of $18.0 million and $17.3 million. We will recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.

### Segment Operations

In our former EGP business, we acted as an intermediary between primarily global media companies and advertisers, which consisted of either the enterprise or its ad agency running the advertisement. Our customers were both these primarily global media companies and advertisers. On March 4, 2024, we received a communication from Meta that it intended to wind down its ASP program globally and end its relationship with all of its ASPs, including us, by July 1, 2024. As a result of this communication from Meta, our CEO, who is also our CODM, led a thorough review of our operations, cost structure, digital strategy and organization of our business. This review led to the decision to sell the enterprises comprising our EGP business -- the largest business unit of what was then our digital segment. Following this decision, during the second quarter of 2024, we entered into a definitive agreement to sell substantially all of our EGP business to IMS. The transaction was completed on June 28, 2024. The remaining parts of our EGP business, Jack of Digital and Adsmurai, were each sold back to their respective founders in separate transactions during the second quarter of 2024.

Prior to the sale of the EGP business, for financial reporting purposes we reported in three segments – digital, television and audio, based on the type of medium in which we sold advertising. The sale of the EGP business has allowed us to focus our operations on the products and services we sell instead of the type of advertising medium in which we sell them, which had been our historic operational approach. As a result of the sale of our EGP business, effective July 1, 2024, we have realigned our operating segments into two segments – media and advertising technology & services – consistent with our current operational and management structure, as well as the basis that is now used for internal management reporting and how our CEO evaluates our business. Our reportable segments are the same as our operating segments. Prior periods have been recast to conform to this presentation.

Our media segment consists of sales of advertising through various media, including television, radio and digital. We own and/or operate 49 primary television stations and 44 radio stations (37 FM and 7 AM), reaching and engaging Latinos in the United States. Our television operations comprise the largest affiliate group of both the top-ranked Univision television network and TelevisaUnivision’s UniMás network, with TelevisaUnivision-affiliated stations in 15 of the nation’s top 50 U.S. Latino markets. We own and operate one of the largest groups of primarily Spanish-language radio stations in the United States. We provide digital marketing operations in all of the U.S. markets where we have broadcast operations.

Our advertising technology & services segment consists of programmatic ad services through Smadex, our demand side programmatic ad platform, and Adwake, our mobile growth solutions business.

### Media

*Net Revenue.* Net revenue in our media segment decreased to $41.0 million for the three-month period ended March 31, 2025 from $45.8 million for the three-month period ended March 31, 2024. This decrease was primarily due to a decrease of $3.7 million in broadcast advertising revenue, and a decrease of $1.1 million in retransmission consent revenue, partially offset by an increase of $0.1 million in digital advertising revenue.

In general, many of our broadcast stations face declining audiences, which we believe is present across the traditional broadcast industry, competitive factors with the other major Spanish-language broadcasters, and changing demographics and preferences of audiences, particularly younger audiences, in terms of the media they prefer to consume, including streaming and social media. We anticipate that these changes in viewer habits will persist at least for the foreseeable future and possibly permanently. Additionally, we have previously noted a trend for advertising to move increasingly from traditional media, such as television and radio, to new media, such as digital media, and we expect this trend will also continue. While we believe that none of these new technologies and services can completely replace local broadcast stations due to the element of localism that broadcasting offers, the challenges we face in our broadcast operations from new technologies and services will continue to require attention from management. We must continue to remain vigilant to meet these changes, including the need to further adjust our business strategies accordingly, including through an emphasis on local news and increased digital offerings, and their integration with our broadcast offerings. No assurances can be given that such strategies will be successful.

*Cost of revenue*. Cost of revenue in our media segment increased to $3.3 million for the three-month period ended March 31, 2025 from $2.9 million for the three-month period ended March 31, 2024, primarily due to the increase in digital advertising revenue and a decrease in gross margins.

*Direct Operating Expenses.* Direct operating expenses in our media segment remained constant at $26.6 million for the three-month periods ended March 31, 2025 and 2024.

*Selling, General and Administrative Expenses.* Selling, general and administrative expenses in our media segment increased to $10.8 million for the three-month period ended March 31, 2025 from $10.0 million for the three-month period ended March 31, 2024, primarily due to an increase of $1.0 million in salaries and other employee benefits, and an increase of $0.8 million in expenses due to the realignment of our operations as noted above. The increase was offset by a decrease of $0.5 million in bad debt expense and other items which were individually immaterial.

### Advertising Technology & Services

*Net Revenue.* Net revenue in our advertising technology & services segment increased to $50.9 million for the three-month period ended March 31, 2025 from $32.4 million for the three-month period ended March 31, 2024. The increase was primarily due to increases in advertising revenue from Smadex and Adwake.

*Cost of revenue*. Cost of revenue in our advertising technology & services segment increased to $30.2 million for the three-month period ended March 31, 2025 from $19.8 million for the three-month period ended March 31, 2024, primarily due to costs associated with the increase in digital advertising revenue.

We have previously noted a trend on a global basis in our advertising technology & services operations whereby revenue is shifting more to programmatic revenue. As a result, advertisers are demanding more efficiency and lower cost from intermediaries like us. In response to this trend, we have been offering our programmatic purchasing platform, Smadex, to advertisers. The digital advertising industry remains dynamic and is continuing to undergo rapid changes in technology, customer expectation and competition. We expect this trend to continue and possibly accelerate. We must continue to remain vigilant to meet these dynamic and rapid changes, including the need to further adjust our business strategies accordingly. No assurances can be given that such strategies will be successful.

*Direct operating expenses*. Direct operating expenses in our advertising technology & services segment increased to $9.0 million for the three-month period ended March 31, 2025 from $5.2 million for the three-month period ended March 31, 2024, primarily due to an increase of $3.3 million in cloud infrastructure expenses and an increase of $0.5 million in salaries.

*Selling, general and administrative expenses*. Selling, general and administrative expenses in our advertising technology & services segment increased to $4.7 million for the three-month period ended March 31, 2025, from $4.4 million for the three-month period ended March 31, 2024, primarily due to items which were individually immaterial.

### Liquidity and Capital Resources

While we have a history of operating losses in some periods and operating income in other periods, we also have a history of generating significant positive cash flows from our operations. We had net loss attributable to common stockholders of $148.9 million and $15.4 million for the years ended December 31, 2024 and 2023, respectively, and net income attributable to common stockholders of $18.1 million for the year ended December 31, 2022. We had positive cash flow from operations of $74.7 million, $75.2 million and $78.9 million for the years ended December 31, 2024, 2023 and 2022, respectively. We had negative cash flow from operations of $15.2 million for the three-month period ended March 31, 2025. For at least the next twelve months, we expect to fund our working capital requirements, capital expenditures and payments of principal and interest on outstanding indebtedness, with cash on hand and cash flows from operations.

We currently believe that our cash position is capable of meeting our operating and capital expenses and debt service requirements for at least the next twelve months from the issuance of this report. We believe that our position is strengthened by cash and cash equivalents on hand, in the amount of $73.6 million, and available for sale marketable securities in the additional amount of $4.5 million, as of March 31, 2025. Our liquidity is not materially affected by the amounts held in accounts outside the United States.

On March 4, 2024, we received a communication from Meta that it intended to wind down its authorized sales partner, or ASP, program globally and end its relationship with all of its ASPs, including us, by July 1, 2024. As a result, we conducted a thorough review of our digital strategy, operations and cost structure, and during the second quarter of 2024 made the decision to dispose of the operations of EGP, our digital commercial partnerships business, which was completed during the second quarter of 2024.

The disposition of our EGP business, the largest business unit of what was then our digital segment, has had, and will continue to have, a material effect on our results of operations in that total revenue from our advertising technology & services operations, and consolidated revenue, has been, and is expected to remain, significantly lower than it was prior to the disposition of our EGP business. As a result, cash flow from operations will be materially adversely affected in future periods, which could also adversely affect our liquidity and, as discussed below, our ability to comply with financial covenants under the 2023 Credit Agreement.

The 2023 Credit Agreement contains various financial covenants (see Note 2 to Notes to Condensed Consolidated Financial Statements). Under the terms of our 2023 Credit Agreement, consolidated EBITDA is a measure that governs several critical aspects of our 2023 Credit Facility, including, among other things, financial covenants with which we must comply and financial ratios which we must maintain in order to borrow funds needed for the operation of our business and with respect to the interest rates that we pay on our 2023 Credit Facility. For example, our 2023 Credit Agreement contains a total net leverage ratio financial covenant. The total net leverage ratio, or the ratio of consolidated total debt (net of up to $50.0 million of unrestricted cash) to trailing-twelve-month consolidated EBITDA, affects both our ability to borrow from our Revolving Credit Facility and our applicable margin for the interest rate calculation. Under our 2023 Credit Agreement, our maximum total leverage ratio may not exceed 3.25 to 1.00. In addition, our 2023 Credit Agreement contains an interest coverage ratio financial covenant (calculated as set forth in the 2023 Credit Agreement), with a minimum permitted ratio of 3.00 to 1.00.Consolidated EBITDA is a non-GAAP measure. The most directly comparable GAAP financial measure to consolidated EBITDA is net income (loss) attributable to common stockholders.

As of March 31, 2025, we were in compliance with the financial covenants in the 2023 Credit Agreement. Compliance with these financial covenants is measured quarterly and our failure to meet the covenant requirements would constitute an event of default. In such event, if we were unable to obtain the necessary waivers or amendments, all outstanding borrowings, together with accrued and unpaid interest and other amounts payable thereunder, would become immediately due and payable. Additionally, the lenders would have the right to proceed against the collateral granted to them to secure that debt, which includes substantially all of our assets.

We have taken action to reduce certain expenses, including a reduction in the base salary and cash bonus components of our three most senior executives' compensation. In addition, as discussed above, we have an aggregate $78.1 million of cash and marketable securities as of March 31, 2025, and management projects that we could prepay debt as necessary to remain in compliance with our financial covenants under the 2023 Credit Agreement should that become necessary.

Based on management’s current financial projections and our ability to prepay our debt, management believes that we will maintain compliance with our financial covenants under the 2023 Credit Agreement. However, given the inherent uncertainty in financial projections, management has identified additional controllable cost reduction actions that can be taken, if necessary, to maintain sufficient liquidity to fund our business activities and maintain compliance with our financial covenants under the 2023 Credit Agreement. Management further believes that our existing cash and projected operating cash flows are adequate to meet our operating needs, liabilities and commitments over the next twelve months from the issuance of the accompanying consolidated financial statements.

To the extent that our then-current liquidity is insufficient to fund our business activities or if we do not remain in compliance with our financial covenants under the 2023 Credit Agreement, as a result of not achieving financial projections or otherwise, we may be required to take additional actions which could include seeking additional equity or debt financing in the future to satisfy capital requirements. There is no guarantee that any such capital would be available to us on favorable terms or at all. The failure to obtain any required capital could have a material adverse effect on our operations and financial condition.

### Credit Facility

On March 17, 2023, we entered into the 2023 Credit Facility, pursuant to the 2023 Credit Agreement, by and among us, Bank of America, N.A., as Administrative Agent, and the other financial institutions party thereto as Lenders (collectively, the “Lenders” and individually each a “Lender”). The 2023 Credit Agreement amended, restated and replaced in its entirety our previous credit agreement.

In March 2024, we made a prepayment of $10.0 million, of which $8.75 million was applied to the upcoming quarterly principal payments in 2024 under the Term A Facility (as defined in the 2023 Credit Agreement), and $1.25 million was applied to the Revolving Credit Facility (as defined in the 2023 Credit Agreement).

In June 2024, we made an additional prepayment of $10.0 million, of which $4.9 million was a mandatory prepayment as a result of the EGP disposition. The prepayment was applied to the quarterly principal payments in 2025 under the Term A Facility.

For more information, see Note 2 to Notes to Condensed Consolidated Financial Statements.

### Cash Flow

Net cash flow used in operating activities was $15.2 million for the three-month period ended March 31, 2025, compared to net cash flow provided by operating activities of $33.4 million for the three-month period ended March 31, 2024. The decrease in cash flow from operating activities was primarily due to a decrease in net changes in our working capital of negative $20.9 million for the three-month period ended March 31, 2025 compared to positive $28.3 million for the three-month period ended March 31, 2024. The net changes in working capital were primarily due to the timing of cash payments to publishers and collections from customers. The decrease in cash flow from operating activities was also due to an increase in net loss after adjusting for non-cash items. Significant non-cash items in the three-month period ended March 31, 2025 included impairment charges of $23.7 million, loss on lease abandonment charges of $25.2 million, depreciation and amortization expense of $3.5 million, deferred income taxes of $1.5 million, and non-cash stock based compensation of $2.6 million. Significant non-cash items in the three-month period ended March 31, 2024 included impairment charges of $49.4 million, depreciation and amortization expense of $7.1 million, non-cash stock based compensation of $5.4 million, change in fair value of contingent consideration of $1.4 million, deferred income taxes of $4.2 million, and income attributable to redeemable noncontrolling interest of $2.8 million. We expect to have positive cash flow from operating activities for the full year 2025.

Net cash flow used in investing activities was $2.5 million for the three-month period ended March 31, 2025, compared to net cash flow provided by investing activities of $6.1 million for the three-month period ended March 31, 2024. The decrease in net cash flow used in investing activities was primarily due to a reduction in proceeds from the sale of marketable securities to $0.4 million for the three-month period ended March 31, 2025 compared to $8.8 million for the three-month period ended March 31, 2024. We anticipate that our capital expenditures will be approximately $7.0 million during the full year 2025. The amount of our anticipated capital expenditures may change based on future changes in business plans and our financial condition and general economic conditions. We expect to fund capital expenditures with cash on hand and net cash flow from operations.

Net cash flow used in financing activities was $4.6 million for the three-month period ended March 31, 2025, compared to $16.8 million for the three-month period ended March 31, 2024. The decrease in cash flow used in financing activities was primarily due to $10.3 million of payments on debt during the three-month period ended March 31, 2024, payments of contingent consideration of $0.9 million for the three-month period ended March 31, 2024, and distributions to noncontrolling interest of $1.1 million for the three-month period ended March 31, 2024, all of which did not recur in the three-month period ended March 31, 2025.

## Market risk

As filed, 3,226 characters.

### General

Market risk represents the potential loss that may affect our financial position, results of operations and/or cash flows due to adverse changes in the financial markets. We are also exposed to market risk from changes in the base rates on our 2023 Credit Facility.

### Interest Rates

As of March 31, 2025, we had $187.8 million of variable rate bank debt outstanding under our 2023 Credit Facility. Our borrowings bear interest on the outstanding principal amount thereof from the date when made at a rate per annum equal to either: (i) the Term SOFR (as defined in the 2023 Credit Agreement) plus a margin between 2.50% and 3.00%, depending on the Total Net Leverage Ratio (as defined in the 2023 Credit Agreement) or (ii) the Base Rate (as defined in the 2023 Credit Agreement) plus a margin between 1.50% and 2.00%, depending on the Total Net Leverage Ratio. In addition, the unused portion of the Revolving Credit Facility is subject to a rate per annum between 0.30% and 0.40%, depending on the Total Net Leverage Ratio.

Because our debt is subject to interest at a variable rate, our earnings will be affected in future periods by changes in interest rates. If the SOFR were to increase or decrease by a hypothetical 100 basis points, or one percentage point, from its March 31, 2025 level, our annual interest expense would increase or decrease, respectively, and cash flow from operations would decrease or increase, respectively, by $1.9 million based on the outstanding balance of our term loan as of March 31, 2025.

### Foreign Currency

We have certain foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar. Historically, our revenues have primarily been denominated in U.S. dollars, and the majority of our current revenues continue to be, and are expected to remain, denominated in U.S. dollars. However, we have operations in countries other than the United States, primarily related to our advertising technology & services operations, and we expect a portion of our future revenues will be denominated in currencies other than the U.S. dollar, primarily the Euro. The effect of an immediate and hypothetical 10% adverse change in foreign exchange rates on foreign-denominated accounts receivable at March 31, 2025 would not be material to our consolidated results of operations or overall financial condition.

Our operating expenses are primarily denominated in U.S. dollars. In addition, certain of our operating expenses are denominated in the currencies of the countries in which our operations are located, primarily Spain. Currency fluctuations or a weakening U.S. dollar can increase the amount of operating expense of our international operations, which are primarily related to our advertising technology & services operations. Increases and decreases in foreign-denominated revenue from movements in foreign exchange rates are partially offset by corresponding decreases or increases in foreign-denominated operating expenses.

To date, we have not entered into any foreign currency hedging contracts, since exchange rate fluctuations historically have not had a material effect on our operating results and cash flows.

## Controls and procedures

As filed, 2,014 characters.

We conducted an evaluation, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this quarterly report. Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of the evaluation date, our disclosure controls and procedures were effective.

Our disclosure controls and procedures are designed to ensure that the information relating to our company, including our consolidated subsidiaries, required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow for timely decisions regarding required disclosure.

Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

There have not been any changes in our internal control over financial reporting during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### PART II.

### OTHER INFORMATION

Filed May 8, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-066954. Last ingested by Listed: Nov 5, 2026, 17:39 ET. No prices; not investment advice.