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DATE
Tuesday, November 4, 2025 at 10:00 a.m. ET
CALL PARTICIPANTS
- Chief Executive Officer — Alfred C. Liggins
- Chief Financial Officer — Peter Thompson
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RISKS
- Consolidated net revenue declined 16%, driven by weakness in Radio Broadcasting, Reach Media, and Digital segments.
- Peter Thompson reported, "Digital adjusted EBITDA was approximately $800,000 compared to $5.3 million last year," indicating a sharp drop in digital profitability.
- Adjusted full-year adjusted EBITDA guidance was reduced to $56 million-$58 million from the previously guided $60 million, directly reflecting revenue shortfalls.
- Retroactive royalty costs of $3.1 million were recorded due to a royalty rate increase, impacting Q3 radio segment expenses.
TAKEAWAYS
- Revenue -- Consolidated net revenue was $92.7 million, representing a 16% decline.
- Radio Broadcasting Revenue -- The segment posted $34.7 million, down 12.6%.
- Local Ad Sales Performance -- Local ad sales in radio decreased 6.5%, outperforming a 10.1% market drop, while national underperformed versus a 21.5% market decline.
- Reach Media Revenue -- Segment revenue fell 40% to $6.1 million, attributed to reduced network audio demand and lower DEI dollars.
- Digital Segment Decline -- Digital sales fell by approximately $4.4 million, citing weaker demand across DEI, back-to-school, and political advertising.
- Cable Television Revenue -- Cable TV revenue totaled approximately $39.8 million, down 7%.
- Affiliate Revenue and Subscribers -- Cable affiliate revenue was down 9.1% due to churn; TV One and Clio TV had 34.1 million and 33.5 million subscribers, respectively.
- Adjusted EBITDA -- Consolidated adjusted EBITDA was $14.2 million, falling 44.1%.
- Net Loss -- Net loss was $2.8 million or $0.06 per share, improved against a $31.8 million loss last year.
- Expense Management -- $3 million in additional annualized expense savings achieved via a Q3 reduction in force, totaling $8 million for the year.
- Royalty Rate Increase Impact -- Q3 includes a $3.1 million retroactive royalty expense from the August RMLC settlement with ASCAP and BMI.
- Debt Repurchase Activity -- $4.5 million of 2028 notes were repurchased at an average price of 52%, reducing gross debt to $487.8 million.
- Equity Repurchases -- 106,591 shares of Class A and 592,822 shares of Class D common stock were repurchased during the quarter, totaling $700,000.
- Net Debt and Leverage -- Ending unrestricted cash was $79.3 million with net debt of $408.5 million and net leverage ratio of 6.02.
- EBITDA Guidance Reduction -- Full-year EBITDA guidance lowered to $56 million-$58 million.
- Cable TV Audience -- Cable TV advertising revenue dropped 5.4%, and total day delivery declined 29.4%.
SUMMARY
Urban One (UONE 0.24%) reported significant revenue and EBITDA declines across all operating segments, prompting reduced full-year EBITDA guidance from $60 million to $56-$58 million and highlighting ongoing market headwinds. Management directly attributed Digital and Reach Media declines to diminished DEI and network audio demand, while specifying that cost reduction initiatives drove $3 million in new annualized savings in Q3. The company’s Q3 results also reflect a one-time retroactive royalty expense of $3.1 million following a negotiated settlement, and the impact of cable subscriber churn resulting in a 9.1% affiliate revenue drop. Liquidity remains in focus as Urban One paused opportunistic debt repurchase activity to monitor regulatory developments, maintaining an unrestricted cash balance of $79.3 million at quarter-end.
- Alfred C. Liggins described Urban One's 2026 outlook as "good" and noted strategic operating adjustments aimed at strengthening underperforming markets and segments.
- Liggins said, "there's no M&A deal that we are currently working on that's transformative as we speak," but indicated the company is monitoring potential deregulation for future asset alignment opportunities.
- The company attributed the 40% Reach Media decline to advertiser concentration and loss, specifically referencing prior overexposure to "two particular advertisers" and the transition following the exit of David Kantor.
- Management clarified that cable advertising losses were partially mitigated by increased connected TV (CTV) and third-party platform revenue share.
INDUSTRY GLOSSARY
- DEI: Diversity, Equity, and Inclusion advertising revenue, usually reflecting brands' targeted spending on diverse media platforms.
- RMLC: Radio Music License Committee, representing radio broadcasters in music licensing negotiations with performance rights organizations such as ASCAP and BMI.
- P2554: Nielsen demographic category denoting persons aged 25-54, commonly used for media-buying and audience measurement.
- CTV: Connected TV, referring to internet-enabled television streaming platforms generating advertising revenue.
Full Conference Call Transcript
Alfred C. Liggins, Chief Executive Officer of Urban One, who is joined by Peter Thompson, Chief Financial Officer. Mr. Liggins, please go ahead.
Alfred C. Liggins: Thank you very much, operator, and welcome, everybody. And as usual, we're joined by other team members here, Jody Drewer, our Chief Financial Officer for TV One and Clio, in case we have any questions now on the cable business. Karen Wishart, our Chief Administrative Officer, Chris Simpson, our Chief Legal Officer, and also Ronnie Takis, who is our Chief Accounting Officer. And you know, so thank you very much again for joining us this quarter. You've seen the press release, hopefully, that we put out. You know, business came in a bit softer, you know, up for the quarter than we, you know, had immediately conducted across the board.
Our core radio, the pacings going forward, are facing big political headwinds. Yeah. So looking about, you know, minus 30, right now. However, ex-political, you know, we're down to almost mid-single digits, 6.4%, which is better. It's an improvement. But because the revenues have come in lighter with Q3, we are adjusting our guide for the year. Last quarter, we guided to a $60 million EBITDA number. We generally give a range. We gave a hard number last quarter. We're adjusting that guide down to $56 to $58 million of EBITDA for the full year as we, you know, come to the close.
Within our third quarter, and last quarter, I said that we were gonna look to do another round of cost saves, and we actually did that in Q3, which resulted in about $3 million of annualized expense savings. This is in addition to the $5 million that we had done earlier in the year. Peter's gonna talk about the impact of the numbers in Q3 of that in terms of severance. And so with that, gonna turn it over to Peter so he can go into the details of the numbers, and then we'll come back to Q&A.
Peter Thompson: Thank you, Alfred. So consolidated net revenue is approximately $92.7 million, which was down 16% year over year. Revenue for the Radio Broadcasting segment was $34.7 million, a decrease of 12.6% year over year. Excluding political, net radio revenues were down 8.1% year over year. And according to Miller Kaplan, our local ad sales were down 6.5% against the market that was down 10.1%, so we outperformed on local. And on national ad sales, against the market that was down 21.5%, so we underperformed on national. Our largest ad category was services, which was up 22.9%, driven by legal services. But all the other major categories were down, including government, health, retail, entertainment, auto, telecoms, food, and beverage.
Net revenue for the Reach Media segment was $6.1 million in the third quarter, down 40% from the prior year. And adjusted EBITDA reach was a loss of, and that was really a lower overall network audio market, lower national sales renewals, and probably a drying up of DEI that drove the decline at REACH. Net earnings for the 30.6% in Q3 at $12.7 million. Direct and indirect digital sales were down by approximately $4.4 million. The decline was the result of decreases in DEI money, back to school, political, and overall softer client demand. Audio streaming was down by $1.3 million year over year. Adjusted EBITDA was approximately $800,000 compared to $5.3 million last year.
We recognized approximately $39.8 million of revenue from our Cable Television segment during the quarter, a decrease of 7%. Cable TV advertising revenue was down by 5.4%. Total day delivery declined by 29.4%. The P2554, which was partially offset by an increase in CTV and third-party platform revenue share. Cable TV affiliate revenue was down by 9.1%, driven by subscriber churn. Cable subscribers to TV One, as measured by Nielsen, finished Q3 at 34.1 million compared to 34.3 million at the end of Q2. Clio TV had 33.5 million subs.
Operating expenses excluding depreciation and amortization, stock-based compensation, and impairment of goodwill and intangible assets decreased to approximately $83.7 million for the quarter, a decrease of 4.2% from the prior year. There was some noise in the expenses. We had a notable expense decrease in corporate and professional fees and overall payroll expenses. Also, cable television content amortization was down. But we had the August RMLC settlement with ASCAP and BMI that resulted in an average royalty rate increase of 20% retroactive to January 2022, and so we recorded approximately $3.1 million of retroactive royalties in Q3, and you see that in the program and in technical expense in the radio segment. We did add that back to adjusted EBITDA.
The company, as Alfred said, completed a second reduction in force in October as part of the ongoing cost reduction efforts. And as a result, we had $1.6 million of employee severance costs, which we recorded in the third quarter. Operating expenses in the digital segment were down 2.6%, and that was driven by lower employee compensation. Operating expenses in the Cable TV segment, again, 2.4% year over year, driven by lower program and content amortization due to fewer premier hours compared to last year. Operating expenses in corporate were down by approximately $1.5 million. The third-party finance and accounting professional fees were down significantly year over year. Consolidated adjusted EBITDA was $14.2 million for the third quarter, down 44.1%.
And consolidated Broadcast and Digital operating income was approximately $20 million, a decrease of 43.6%. Interest and investment income was approximately $500,000 in the third quarter compared to $1.1 million last year. The decrease was due to lower cash balances and interest-bearing investment accounts. Interest expense decreased to approximately $9.4 million in Q3 from $11.6 million last year due to lower overall debt balances as a result of the company's debt repurchase efforts.
The company made cash interest payments of approximately $18.2 million in the quarter, and during the quarter, the company repurchased $4.5 million of its 2028 notes at an average price of 52%, bringing down the gross balance on the debt to $487.8 million as of September 30, 2025. Our depreciation and amortization expense increased $4.9 million as a result of the company's change to the useful life of TV One trade names and our FCC licenses, which we moved from indefinite lives to finite lives. The benefit from income taxes was approximately $1.1 million for the third quarter, and the company paid cash income taxes net of refunds in the amount of $100,000. Capital expenditures were approximately $3.1 million.
Our net loss was approximately $2.8 million or $0.06 per share compared to a net loss of $31.8 million or $0.68 per share for 2024. During the three months ended 09/30/2025, the company repurchased 106,591 shares of Class A common stock in the amount of approximately $300,000 at an average price of $1.75 per share. And the company also repurchased 592,822 shares of Class D common stock in the amount of approximately $400,000 at an average price of 73¢ a share. As of 09/30/2025, total gross debt was approximately $487.8 million.
Our ending unrestricted cash balance was $79.3 million, resulting in net debt of approximately $408.5 million, compared to $67.9 million of LTM reported adjusted EBITDA, giving a total net leverage ratio of 6.02. And with that, I'll hand back to Alfred.
Alfred C. Liggins: Thank you very much, Peter. Operator, can we go to the lines for questions, please? Thank you. At this time, we would like to take as many questions as we have time for.
Operator: Our first question comes from the line of Ben Briggs with Stonex Financial. Your line is open.
Ben Briggs: Hi. Good morning, guys. Thank you for doing the call. So first of all, and I know we're looking forward a little ways, but are you guys thinking about 2026 and what demand looks like there and what listenership may be, kinda how the pieces of the puzzle are going to fit together then?
Alfred C. Liggins: Yeah. We feel good about 2026 for a number of reasons. One, not yeah. Obviously, we're going into a political year. But two, a number of the places that we've had challenges this year, we, you know, have changed our operating strategy to address that. You know? I would say, you know, most notably, you know where, you know, Reach Media has had a very tough year because we got caught flat-footed with a big, big decline in our largest advertiser, yeah, in the company, with unexpected cancellations. And these were cancellations across the board. When I say across the board, across, yeah, across the whole audio sector.
And, quite frankly, we weren't, you know, able to replace those ad dollars once, you know, we have committed that inventory. So we're able to get ahead of that. You know, we saw, you know, Reach Media and I One had contributed probably, excuse me, had benefited the most from the rise in DEI advertising and just got way too concentrated at Reach Media with two particular advertisers. One of those actually stood out, you know, more than the other. So we'll be more prepared, you know, for that going forward. This is also like, the first year navigating Reach without our former, you know, president of the audio division, David Cantor, who actually founded and created Reach. You know?
So trying to make that transition was also, you know, was difficult even though we knew it was coming, we prepared for it. And so I think we're better positioned there. Also, there have been a number of things that we're doing in our radio markets where we, you know, think that we will, you know, perform better, in particular, RCC. We just, you know, rearranged some of our format there, and we launched a new format targeting the Hispanic, you know, community, which is, yeah, has become, you know, a very, very large segment in the DC area. It's almost close to 20% of the marketplace. I mean, it's like 18% of the marketplace.
And we positioned ourselves, you know, recently as a major player there, which is gonna broaden our offering. I think, in the DC market, in addition to some changes that we've made in terms of management and beefing up our sales staff, etcetera. And so, you know, gotta figure out the changes that we've made in some of the markets where, you know, we think it's gonna improve performance in a meaningful way, yeah, as well. And TV One's been holding in there, you know, this year. And so we think that, you know, given those things I just outlined, we're feeling good about a rebound in 2026.
Ben Briggs: Okay. Okay. That's good to hear, and that's great color. Thank you. Next thing from me, and I guess this is kinda focused on post-fourth quarter plans as well. But are you thinking of any kind of M&A activity or, you know, larger than usual kind of, I know you guys swap radio stations here and there on a pretty regular basis. But are you thinking about anything more transformative for the future? I know every now and then things get kicked around. I'm just curious if there's anything else.
Alfred C. Liggins: I think everybody in the industry is focused on dereg and what's gonna happen. You've seen a number of deals that have been filed already in the radio space looking for waivers to exceed the current ownership caps. The FCC has signaled, you know, that they think the ownership rules are antiquated. And people in TV and in radio have submitted deals to be approved for waivers.
There is also a notice for proposed rulemaking, you know, out that I know that the, you know, the industry is gonna comment on if they haven't already, about dereg and, you know, I think everybody in the industry is gonna be, you know, pro-dereg when I say everybody, and I'm sure it's not necessarily gonna be 100%. That's gonna create some opportunities for people to align assets in markets in a much more efficient manner. And, yes, we're looking at that. There's nothing, you know, that is large and transformative that we're working on now because this is all very new. But we tend to try to think ahead and be intellectually creative in what the next move is.
And so all along, you know, we've had conversations and thoughts and conversations with people about the art of the possible. Because historically, you know, we haven't been up against the ownership cap, so we probably had the ability, you know, to grow or do M&A that others haven't, even though in a dereg environment, that will be enhanced. But what, you know, is a governor is leverage. And is any transaction going to be delevering. Right? You know? And even when you look at these transactions, you gotta, you know, think about it against a backdrop, you know, just because you have dereg doesn't, you know, solve necessarily your top line, you know, secular trajectory. Right?
So you just gotta be careful, you know, about how you underwrite, you know, and in M&A transactions. But with that said, I do think it's gonna create some significant opportunities to build stability in these businesses. At the end of the day, these are the radio businesses largely a local business. So you've got the opportunity to provide more different demographic targets to advertisers, local advertisers. I think that makes you a stronger player. We've seen that in our Indianapolis market, our Houston market, our Charlotte market where we've spread out in different format demographics. And, you know, that's one of the things that we just did, like I articulated earlier in DC.
That I think is gonna, you know, help significantly. So, you know, there's no M&A deal that we are currently working on that's transformative as we speak. I'm sure that we will explore opportunities to be able to rearrange the deck chairs in order to make us a stronger entity.
Ben Briggs: Okay. Okay. That's all very, very helpful. And then the next thing I wanna ask about is, I think, at the top of a lot of investors' minds, is your debt buyback activity. Obviously, you stated in the press release this morning that you did a little bit of buybacks in the third quarter. Are you expecting to continue to execute on those debt buybacks?
Alfred C. Liggins: Yeah. That's, look. I thought I figured we would get that question because of, yeah. Yep. Yep. Because we've been more acquisitive in the past. But because of this heat up, you know, in potential dereg and stuff moving around, we decided, you know, to sit pat and build a little liquidity as we get to the end of the year, see how that all shapes up. And figure out also how that is going to play out. You know, we are always focused on, yeah, delevering in the best way to delever. So we, you know, one way to delever is to buy back debt at a discount.
Another way to delever, yeah, and we've done it, you know, a number of times, including in Houston, is through delevering M&A activity. So we've decided to keep our powder dry a little bit here to see what opportunities are going to present themselves in the near term.
Ben Briggs: Okay. Alright. That's extraordinarily helpful. Thank you guys for taking the questions. And good luck on the fourth quarter and going forward.
Alfred C. Liggins: Thank you.
Operator: And there are no further questions at this time. I'd like to hand the call back over to Alfred Liggins.
Alfred C. Liggins: Thank you very much, operator, and again, as always, Peter and I are available for calls afterwards. Now emails or calls, you know, directed to us, you know, thank you for your support, and we'll talk to you next quarter.
Operator: This concludes today's call. You may now disconnect.