Townsquare Media, Inc.: Form 10-Q for the period ended Jun 30, 2025

The following management’s discussion and analysis is intended to provide the reader with an overall understanding of our financial condition, results of operations, cash flows and sources and uses of cash. This section also includes general information about our business and a discussion of our management’s analysis of certain trends, risks and opportunities in our industry. In addition, we also provide a discussion of accounting policies that require critical judgments and estimates. This discussion should be read in conjunction with our Unaudited Consolidated Financial Statements and related notes appearing elsewhere in this quarterly report.

Note About Forward-Looking Statements

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 should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf. The forward-looking statements included in this report are made only as of the date hereof or as of the date specified herein. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Format of Presentation

Townsquare is a community-focused digital and broadcast media and 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.

We believe that our diversified product offering substantially differentiates us from our competition. This diversification allows us to provide superior solutions to our advertisers and engaging experiences for our audience, underpins our growth strategy and, we believe, helps to mitigate the risks associated with advertising revenue dependency.

The Company has identified three segments, which are Digital Advertising, Subscription Digital Marketing Solutions, and Broadcast Advertising, and the remainder of our business is reported in an Other category.

Digital Advertising

Our Digital Advertising segment, marketed externally as Townsquare Ignite, is a combination of our proprietary digital programmatic advertising platform and our owned and operated digital properties, and an in-house demand and data management platform collecting valuable first party data.

Subscription Digital Marketing Solutions

Our Subscription Digital Marketing Solutions segment encompasses Townsquare Interactive, our subscription digital marketing solutions business. Townsquare Interactive offers digital marketing solutions, on a subscription basis, to SMBs in markets outside the top 50 across the United States, including but importantly not limited to the markets in which we operate radio stations. We offer a variety of digital marketing solutions, which enables SMBs to choose the optimal features for their specific business.

Broadcast Advertising

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.

Other

We report the remainder of our revenue in the Other category, and it includes revenue from our live events, which includes concerts, expositions, and other experiential events. Our live events portfolio includes iconic local events such as WYRK’s Taste of Country, the Boise Music Festival, the Red Dirt BBQ & Music Festival and Taste of Fort Collins. Our primary source of live events net revenue is ticket sales. Our live events also generate revenue through the sale of sponsorships, food and other concessions, merchandise and other ancillary products and services.

Overall

We generate a majority of our advertising revenue by selling directly to local advertisers, as well as to local and regional advertising agencies which affords us the opportunity to better present our products, cross-sell products and more directly influence their advertising and marketing expenditure decisions. A significant percentage of our advertising revenue is generated from the sale of advertising to the automotive, financial services, health services, entertainment, and retail industries.

Our most significant expenses are sales personnel, programming, digital, marketing and promotional, engineering, and general and administrative expenses. We strive to control these expenses by closely monitoring and managing each of our local markets and through efficiencies gained from the centralization of finance, accounting, legal and human resources functions and management information systems. We also use our scale and diversified geographic portfolio to negotiate favorable rates with vendors where feasible.

A portion of our expenses are variable. These variable expenses primarily relate to sales costs, such as commissions and inventory costs, as well as certain programming costs, such as music license fees, and certain costs related to production. Other programming, digital, engineering and general and administrative expenses are primarily fixed costs.

Seasonality

Our revenue varies throughout the year. Typically, we expect that our first calendar quarter will produce the lowest net revenue for the year, as advertising expenditures generally decline following the winter holidays. During even-numbered years, net revenue generally includes increased advertising expenditures by political candidates, political parties and special interest groups. Political spending is typically highest during the fourth quarter. Our operating results in any period may be affected by the incurrence of advertising and promotion expenses that typically do not have an effect on net revenue generation until future periods, if at all.

Macroeconomic Indicators

Current economic challenges, including high and sustained inflation and interest rates, and proposed and enacted 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).

OVERVIEW OF OUR PERFORMANCE

Changes in Our Business

Recent Developments

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 a five-year, $470 million senior secured Term Loan Facility (the "Term Loan") and a five-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.

Refer to Note 7, Long-Term Debt, in the Notes to Unaudited Consolidated Financial Statements for additional information related to the Credit Agreement.

Highlights of Our Financial Performance

Certain key financial developments in our business for the three months ended June 30, 2025 as compared to the same period in 2024 are summarized below:

• Net revenue decreased $2.8 million, or 2.3%, primarily driven by a $4.9 million decrease in our Broadcast Advertising net revenue partially offset by a $1.0 million increase in our Digital Advertising net revenue, a $0.9 million increase in our Other net revenue, and a $0.3 million increase in Subscription Digital Marketing Solutions net revenue.
• Excluding political revenue of $0.6 million and $1.5 million for the three months ended June 30, 2025 and 2024, respectively, net revenue decreased $1.9 million, or 1.6%, to $114.9 million, Broadcast Advertising net revenue decreased $4.1 million, or 7.8%, to $48.2 million, and Digital Advertising net revenue increased $1.1 million, or 2.5%, to $42.4 million.
• Operating income increased $42.4 million for the three months ended June 30, 2025. The increase was primarily due to a $31.1 million decrease in non-cash impairment charges, a $5.9 million increase in net gains on the sales of assets and a $4.5 million decrease in stock-based compensation.
• Digital Advertising segment reported operating income of $10.6 million for the three months ended June 30, 2025, which represents an increase of $1.8 million, as compared to operating income of $8.8 million for the same period in 2024. The increase is primarily due to a $1.8 million non-cash goodwill impairment charge recorded during the three months ended June 30, 2024 that did not recur in 2025. Subscription Digital Marketing Solutions reported operating income of $5.8 million, an increase of $1.1 million from the three months ended June 30, 2024 due primarily to a $0.3 million increase in net revenue and a $0.6 million decrease in direct operating expenses. Broadcast Advertising reported operating income of $16.2 million for the three months ended June 30, 2025, which represents an increase of $31.7 million, as compared to operating loss of $15.4 million for the same period in 2024. The increase is primarily due to a $26.9 million decrease in non-cash impairment charges and a $5.9 million increase in net gain on sales of assets.

Certain key financial developments in our business for the six months ended June 30, 2025, as compared to the same period in 2024 are summarized below:

• Net revenue for the six months ended June 30, 2025 as compared to the same period in 2024, decreased $3.7 million, or 1.7%, primarily driven by a $9.1 million decrease in our Broadcast Advertising net revenue partially offset by a $3.6 million increase in our Digital Advertising net revenue, a $1.0 million increase in our Subscription Digital Marketing Solutions net revenue and a $0.7 million increase in Other net revenue.
• Excluding revenue related to political advertising of $1.1 million and $2.5 million for the six months ended June 30, 2025 and 2024, respectively, net revenue decreased $2.3 million, or 1.1% to $213.0 million. Broadcast Advertising net revenue decreased $7.8 million, or 8.0%, to $89.0 million, and Digital Advertising net revenue increased $3.7 million, or 4.9%, to $79.1 million.
• Operating income increased $42.9 million for the six months ended June 30, 2025, primarily due to a $32.8 million decrease in non-cash impairment charges, a $5.9 million increase in net gains on the sales of assets, a $3.8 million decrease in direct operating expenses and a $3.2 million decrease in stock-based compensation. These increases were partially offset by a $3.7 million decrease in net revenue.

Consolidated Results of Operations

Three months ended June 30, 2025 compared to three months ended June 30, 2024

The following table summarizes our historical consolidated results of operations:

($ in thousands)

** not meaningful

Segment Results

The following table presents the Company's reportable segment net revenue and direct operating expenses for the three months ended June 30, 2025 and 2024 (in thousands):

30

Net Revenue

Net revenue for the three months ended June 30, 2025 decreased $2.8 million, or 2.3%, as compared to the same period in 2024. Broadcast Advertising net revenue decreased $4.9 million, or 9.2%, due to decreases in the purchases of advertising by our clients. This decrease was partially offset by an increase in Digital Advertising net revenue of $1.0 million, or 2.4%, and a $0.3 million or 1.4% increase in Subscription Digital Marketing Solutions net revenue, each as compared to the same period in 2024, due to purchases of new advertising. Our Other net revenue increased $0.9 million, or 19.9%, due to the performance of certain events as compared to 2024.

Direct Operating Expenses

Direct operating expenses for the three months ended June 30, 2025 decreased by $2.7 million, or 3.1%, as compared to the same period in 2024. Broadcast Advertising direct operating expenses decreased by $3.6 million, or 9.6%, and Subscription Digital Marketing Solutions direct operating expenses decreased by $0.6 million, or 4.4%, each due to lower compensation as compared to the same period a year ago. These decreases were partially offset by a $1.1 million, or 3.7%, increase in Digital Advertising direct operating expenses due to higher inventory and compensation costs, partially offset by lower bad debt as compared to the same period in 2024.

Segment Profit

Segment profit for the three months ended June 30, 2025 decreased by $0.1 million, or 0.3%, when compared with the same period in 2024, essentially flat. Broadcast Advertising segment profit decreased $1.3 million, or 8.4%, as compared to the same period in 2024, primarily due to the decrease in net revenue, partially offset by an increase in Subscription Digital Marketing Solutions segment profit of $0.8 million, or 15.2% as compared to the same period in 2024, primarily due to the increase in revenue and decrease in compensation discussed above. Other segment profit increased $0.5 million, or 201.5%.

Stock-based Compensation

Stock-based compensation expense for three months ended June 30, 2025 decreased $4.5 million, or 54.5%, as compared to the same period in 2024, primarily due to $3.8 million of expense recognized for the cash settlement of options in 2024 that did not reoccur in 2025, and a $0.6 million decrease in expense related to the stock bonus program. For further discussion, see Note 9, Stockholders' Deficit, in the Notes to Unaudited Consolidated Financial Statements.

Impairment of Intangible Assets, Investments, Goodwill and Long-lived Assets

The Company incurred $1.5 million in impairment charges related to FCC licenses 4 of our 74 local markets during the three months ended June 30, 2025, as compared to impairment charges of $28.4 million in 26 of our 74 local markets in the same period a year ago. The impairment charges during the three months ended June 30, 2025 were primarily driven by decreases in third-party forecasts of broadcast revenues. For further discussion, see Note 5, Goodwill and Other Intangible Assets, in the Notes to Unaudited Consolidated Financial Statements.

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 $20.5 million which would have resulted in an incremental impairment charge of $3.2 million as of June 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 $10.4 million which would have resulted in an impairment charge of $3.9 million as of June 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 $20.2 million which would result in an incremental impairment charge of $6.0 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, 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.

During the second quarter of 2024, in connection with an interim goodwill impairment assessment, the Company concluded that the carrying amounts of the National Digital and Live Events reporting units exceeded their fair values, resulting in the recognition of a non-cash goodwill impairment charges of $1.8 million and $0.9 million, respectively, for the three months ended June 30, 2024. During the three months ended June 30, 2024, the Company recorded an impairment charge of $1.6 million related to certain of its equity securities, which are measured at cost minus impairment.

Net (Gain) Loss on Sale and Retirement of Assets

During the three months ended June 30, 2025, the Company recognized net gains on the sales of assets of $5.9 million, which includes a $5.6 million gain on the sale of land in the Boise, ID market.

Interest Expense, net

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

Provision for income taxes

We recognized provision for income taxes of $6.3 million for the three months ended June 30, 2025, as compared to $18.8 million for the same period in 2024. Our effective tax rate for the three months ended June 30, 2025 and 2024 was approximately 75.8% and 62.7%, respectively. The increase in the effective tax rate is driven by the valuation allowance for interest expense carryforwards during the three months ended June 30, 2025. The decrease in the income tax provision is primarily driven by the valuation allowance for interest expense carryforwards resulting from higher non-cash impairment charges and non-deductible compensation costs recorded during the three months ended June 30, 2024, as compared to the three months ended June 30, 2025.

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

Consolidated Results of Operations

Six months ended June 30, 2025 compared to six months ended June 30, 2024

The following table summarizes our historical consolidated results of operations:

($ in thousands)

** not meaningful

Segment Results

The following table presents the Company's reportable segment net revenue and direct operating expenses for the six months ended June 30, 2025 and 2024 (in thousands):

33

Net Revenue

Net revenue for the six months ended June 30, 2025, decreased $3.7 million, or 1.7%, as compared to the same period in 2024. Broadcast Advertising net revenue decreased $9.1 million, or 9.2%, due to decreases in the purchases of advertising by our clients. This decrease was partially offset by an increase in Digital Advertising net revenue of $3.6 million, or 4.8%, and an increase in Subscription Digital Marketing Solutions net revenue of $1.0 million, or 2.8%, each as compared to the same period in 2024. Other net revenue increased $0.7 million, or 11.5%, due to the performance of certain events as compared to 2024.

Direct Operating Expenses

Direct operating expenses for the six months ended June 30, 2025, decreased by $3.8 million, or 2.3%, as compared to the same period in 2024. Broadcast Advertising direct operating expenses decreased by $5.9 million, or 8.1%, primarily driven by lower compensation costs and music license fees. Subscription Digital Marketing Solutions direct operating expense decreased by $0.9 million or 3.5% due to lower compensation, partially offset by higher software costs. These decreases were partially offset by an increase in Digital Advertising direct operating expenses of $2.9 million, or 5.0%, due to higher inventory and compensation costs, partially offset by lower bad debt. Additionally, Other direct operating expenses increased $0.2 million, or 3.9%.

Segment Profit

Segment profit for the six months ended June 30, 2025, was essentially flat as compared with the same period in 2024. Subscription Digital Marketing Solutions segment profit increased $1.9 million, or 18.6%, Digital Advertising segment profit increased $0.7 million, or 4.1%, and Other segment profit increased $0.5 million, or 71.6%, each as compared to the same period in 2024, primarily due to the increases in net revenue discussed above. These increases were offset by a $3.2 million, or 12.0%, decrease in Broadcast Advertising segment profit, as compared to the same period in 2024, primarily due to the decrease in net revenue discussed above.

Stock-based Compensation

Stock-based compensation expense for the six months ended June 30, 2025, decreased $3.2 million, or 28.7%, as compared to the same period in 2024 due to $4.6 million of expense recognized for the cash settlement of options in 2024 that did not reoccur in 2025 and a $0.4 million decrease in expense related to the stock bonus program, partially offset by a $1.0 million increase in expense recognized for grants during the first half of 2025. For further discussion, see Note 9, Stockholders' Equity, in the Notes to Unaudited Consolidated Financial Statements.

Impairment of Intangible Assets, Investments, Goodwill and Long-Lived Assets

The Company incurred $1.5 million in impairment charges related to FCC licenses 4 of our 74 local markets during the six months ended June 30, 2025, as compared to impairment charges of $29.7 million related to FCC licenses in 26 of our 74 local markets during the six months ended June 30, 2024. The impairment charges during the six months ended June 30, 2025 were primarily driven by decreases in third-party forecasts of broadcast revenue. For further discussion, see Note 5, Goodwill and Other Intangible Assets, in the Notes to Unaudited Consolidated Financial Statements.

During the six months ended June 30, 2024, in connection with an interim goodwill impairment assessment, the Company concluded that the carrying amounts of the National Digital and Live Events reporting units exceeded their fair values, resulting in the recognition of total non-cash goodwill impairment charges of $2.7 million. During the six months ended June 30, 2024, the Company recorded an impairment charge of $1.6 million related to certain of its equity securities, which are measured at cost minus impairment.

Net (Gain) Loss on Sale and Retirement of Assets

During the six months ended June 30, 2025, the Company recognized net gains on the sales of assets of $5.9 million, which includes a $5.6 million gain on the sale of land in the Boise, ID market.

Interest Expense, net

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

Loss on Extinguishment of Debt

During the six months ended June 30, 2025, the Company recognized a $1.5 million loss on the early extinguishment of debt. The $1.5 million loss on the early extinguishment of debt is comprised of the write-off of $1.5 million of unamortized deferred financing fees previously capitalized in connection with the 2026 Notes. For further discussion, see Note 7, Long-Term Debt, in the Notes to Unaudited Consolidated Financial Statements.

Other expense (income), net

Realized Gain on Investment

In February of 2024, one of the Company’s investees announced the completion of its acquisition by a third-party. The Company recognized a $4.0 million gain on this transaction during the six months ended June 30, 2024.

Insurance Recoveries

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

Unrealized Gain on Investment

Other expense (income), net included unrealized gains related to measuring the fair value of one of the Company's former investees. During the six months ended June 30, 2024 the Company recorded an unrealized net gain of $0.2 million.

Provision for income taxes

We recognized a provision for income taxes of $3.3 million for the six months ended June 30, 2025, as compared to $19.0 million for the same period in 2024. Our effective tax rate for the period was approximately 86.7% for the six months ended June 30, 2025 as compared to 67.3% for the six months ended June 30, 2024. The increase in the effective tax rate for the six months ended June 30, 2025 is driven by the valuation allowance for interest expense carryforwards. The decrease in the income tax provision is primarily driven by the valuation allowance for interest expense carryforwards resulting from higher non-cash impairment charges and non-deductible compensation costs recorded during the six months ended June 30, 2024, as compared to the six months ended June 30, 2025.

Our effective tax rate may vary significantly from period to period and can be influenced by many factors. These factors include, but are not limited to, changes to statutory rates in the jurisdictions where we have operations and changes in the valuation of deferred tax assets and liabilities. The difference between the effective tax rate and the federal statutory rate of 21.0%, primarily relates to certain non-deductible items, state and local income taxes and the valuation allowance for deferred tax assets.

Liquidity and Capital Resources

The following table summarizes our change in cash and cash equivalents (in thousands):

Operating Activities

Net cash provided by operating activities was approximately $10.1 million for the six months ended June 30, 2025, as compared to $10.7 million for the same period in 2024. The decrease was primarily related to higher cash interest payments in 2025, due in part to the timing of the refinancing in February 2025 and the quarterly interest payment requirements for the Term Loan, partially offset by changes in working capital balances, particularly accrued expenses, accounts payable, and accounts receivable.

Investing Activities

Net cash used in investing activities was $1.9 million for the six months ended June 30, 2025 as compared $4.0 million for the same period in 2024. The decrease in net cash used in investing activities was primarily due to net cash proceeds of $5.8 million related to the sale of land in Boise, ID, as compared to cash proceeds of $4.0 million received in 2024 related to the acquisition of one of the Company's investments by a third party.

Financing Activities

Net cash used in financing activities was $37.7 million for the six months ended June 30, 2025, as compared to $39.2 million for the same period in 2024. The primary differences in net cash used in financing activities in 2025 as compared to 2024 include: $1.5 million of shares repurchased to cover employee tax withholdings on restricted stock that vested during the six months ended June 30, 2025, as compared to $22.1 million for repurchases of common stock during the six months ended June 30, 2024; the repayment of $467.4 million of principal amount of the 2026 Notes, offset by proceeds from the Term Loan of $441.7 million, net of fees and expenses in 2025, as compared to voluntary repurchases of 2026 Notes in the amount of $13.6 million in 2024, and a $4.1 million decrease in proceeds from stock option exercises for the six months ended June 30, 2025 as compared to the same period a year ago.

Sources of Liquidity and Anticipated Cash Requirements

We fund our working capital requirements through a combination of cash flows from our operating, investing, and financing activities. Based on current and anticipated levels of operations and conditions in our markets and industry, we believe that our cash on hand and cash flows from our operating, investing, and financing activities will enable us to meet our working capital, capital expenditures, debt service, and other funding requirements for at least one year from the date of this report. Future capital requirements may be materially different than those currently planned in our budgeting and forecasting activities and depend on many factors, some of which are beyond our control. We have focused on and will continue to monitor our liquidity in response to current and future economic challenges and uncertainty.

As of June 30, 2025, we had $439.7 million of outstanding indebtedness, net of unamortized discount and deferred financing costs of $27.3 million.

During the three months ended June 30, 2025, the Company repaid all amounts outstanding under the Revolving Credit Facility, with $20.0 million of available borrowing capacity as of June 30, 2025.

Based on the terms of our Senior Secured Credit Facility, as of June 30, 2025, we expect our debt service requirements to be approximately $54.9 million over the next twelve months. See Note 7, Long-Term Debt, in our Notes to Consolidated Financial Statements for additional information related to our Senior Secured Credit Facility.

As of June 30, 2025 we had $3.2 million of cash and cash equivalents, and $59.8 million of receivables from customers, which historically have had an average collection cycle of approximately 50 days.

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 will be payable on November 3, 2025 to shareholders of record as of the close of business on October 27, 2025.

Our anticipated uses of cash in the near term include working capital needs, interest payments, debt amortization payments, dividend payments, excess cashflow payments that may be required under the terms of the Credit Agreement, other obligations, and capital expenditures. The Company believes that the cash generated by its operations should be sufficient to meet its liquidity needs for at least the next 12 months. However, our ability to fund our working capital needs, debt payments, dividend payments, other obligations, capital expenditures, and to comply with financial covenants under our debt agreements, depends on our future operating performance and cash flow, which are in turn subject to prevailing economic conditions, increases or decreases in advertising spending, changes in the highly competitive industry in which we operate, which may be rapid, and other factors, many of which are beyond our control. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders, while the incurrence of debt financing would result in debt service obligations. Such debt instruments could introduce covenants that might restrict our operations. We cannot assure you that we could obtain additional financing on favorable terms or at all.

Additionally, on a continuing basis, we evaluate and consider strategic acquisitions and divestitures to enhance our strategic and competitive position as well as our financial performance. Any future acquisitions, joint ventures or other similar transactions may require additional capital, which may not be available to us on acceptable terms, if at all.

We closely monitor the impact of capital and credit market conditions on our liquidity and our ability to refinance in the future. We also routinely monitor the changes in the financial condition of our customers and the potential impact on our results of operations.

Off-Balance Sheet Arrangements

We have no material off-balance sheet arrangements or transactions.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, 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.

We believe the accounting policies and estimates discussed within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Annual Report on Form 10-K reflects our more significant judgments and estimates used in the preparation of the Consolidated Financial Statements. There have been no material changes to the critical accounting policies and estimates as filed in such report.

Recent Accounting Standards

For a discussion of accounting standards updates that have been adopted or will be adopted in the future, please refer to Note 2, Summary of Significant Accounting Policies of the Notes to Unaudited Consolidated Financial Statements included under Item 1.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), with the assistance of other members of management, have reviewed the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Our disclosure controls and procedures are intended to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Based on this review, our CEO and CFO have concluded that the disclosure controls and procedures were effective as of June 30, 2025.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect every misstatement. An evaluation of effectiveness is subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may decrease over time.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the three months ended June 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

There are inherent limitations in the effectiveness of any control system, including the potential for human error and the possible circumvention or overriding of controls and procedures. Additionally, judgments in decision-making can be faulty and breakdowns can occur because of a simple error or mistake. An effective control system can provide only reasonable, not absolute, assurance that the control objectives of the system are adequately met. Accordingly, the management of the Company, including its Chief Executive Officer and Chief Financial Officer, does not expect that the control system can prevent or detect all error or fraud. Finally, projections of any evaluation or assessment of effectiveness of a control system to future periods are subject to the risks that, over time, controls may become inadequate because of changes in an entity’s operating environment or deterioration in the degree of compliance with policies or procedures.

Please refer to Part I, Item 1A, “Risk Factors,” in our 2024 Annual Report on Form 10-K for information regarding known material risks that could affect our results of operations, financial condition and liquidity. In addition to these risks, other risks that we presently do not consider material, or other unknown risks, could materially adversely impact our business, financial condition and results of operations in a future period.