Yahoo Finance

Thanks, Caroline, and good morning, everyone. As mentioned, total net revenue for the first quarter was $48.9 million, down 10.1% on an as reported basis, but down 8.5% on the same station basis.
As a reminder, we report our pacing data on a same station basis. With that in mind, this result modestly exceeded the trend of a 10% year-over-year decline we reported in our Q4 earnings call, reflecting early progress in stabilizing revenue trends amid continued market volatility.
As we received a number of investor questions following our Q4 earnings release on our same station performance, we've added those reconciliation reconciliation tables back to our release, and we'll continue to provide details of reported versus same station performance.
The first quarter reflected the ongoing challenges of a cautious advertising environment. With softness across most major categories. Overall demand remained under pressure and year-over-year declines were consistent with broader industry trends.
With that context, I'll walk through performance by category beginning with consumer services. Consumer services remained our largest revenue category in Q1, accounting for 30% of total revenue. While dollars from the category declined 15% year over year, there were bright spots within consumer services, including legal and HVAC in particular.
Legal has continued to build momentum, growing nearly 5% year over year. A key driver of this success has been the expanded deployment of Q visual billboards and sponsorships. Which delivers synchronized in-car messaging during on-air commercials.
When an advertiser's spot airs, a matching visual appears on the car's dashboard. As a full visual ad on HD radio or as a dynamic text messaging on standard radio displays. This real-time ad synchronization dramatically enhances brand visibility and drives deeper audience engagement.
Law firms in particular have been highly responsive to this format, recognizing the power of having their brand front and center at precisely the moment of message delivery. As a result, Q has helped us secure incremental spend from existing accounts while accelerating new business wins. Reinforcing legal is one of our most stable and scalable verticals.
We also saw meaningful growth in HVAC growing 12% year over year. Our focus on targeted outreach and digital integration resulted in several new advertiser wins. This category is becoming an increasingly dependable contributor, and we believe we have additional upside as we expand our footprint and refine campaign offerings for the remainder of the year.
Shifting to automotive, overall category revenue declined slightly in Q1, with domestic softness outweighing strength in foreign auto. Foreign Auto was up 7.5% for the quarter, down from the plus 15% year over year growth we saw in Q4, primarily due to advertiser caution tied to potential tariffs on imported vehicles.
This uncertainty emerged late in the quarter and weighed on both campaign planning and co-op spending. Domestic auto declined 5% despite early strength in January placements as broader market concerns and shifting inventory dynamics impacted budgets across several key accounts.
While the category was down overall, we did see bright spots in markets like Boston and Tampa, where our team secured tier two program commitments and developed new local partnerships. That said, given the macro environment and auto sector volatility, we expect these headwinds to continue into Q2, particularly on the national side.
Altogether, national revenue, excluding political, declined 12.7%, driven in part by a broad pullback across all verticals. As well as continued softness in categories such as home improvement and healthcare. These results reflected heightened macroeconomic caution and ongoing pressure across agency channels.
Local agency revenue declined 19.9% year over year, with all markets experiencing some level of contraction. That said, several of our markets limited local agency losses to the single digits, underscoring the strength of local relationships and effective sales execution.
In contrast, local direct revenue increased by 0.3% year over year and now represents 55% of our total local business. A testament to the resilience of our direct advertiser base and the continued performance of our in-market sales teams.
This year over year growth, even in a challenging economic environment, reflects the enduring value of our local sales strategy and the strength of our client relationships. As with others in our industry, the majority of our overall revenue decline was concentrated in agency-driven business, amplified by broader macroeconomic headwinds.
Looking ahead, we are taking deliberate steps to deepen collaboration with our local agency partners, focus on streamlining the buying process, and offering multi-platform solutions that align with the client's evolving needs.
New business declined 19.5% in the quarter, largely due to agency churn and tough comparisons to Q1 2024, which included several one-time high value campaigns in healthcare and sports betting that now fall into a recurring base.
Despite this, we saw positive year over year new business comps in some of our largest markets, including Boston, Tampa, Charlotte, and Philadelphia. Amid macroeconomic challenges, we remain focused on value creation, with our sales team focused on building sustainable advertiser relationships and strengthening conversion across priority verticals.
Now turning to expenses. Total operating expenses for the quarter were $45.2 million, down nearly $4 million or 8.1% compared to the prior year. On a same station basis, operating expenses were down $2.6 million or 5.4% compared to the prior year.
Audio operating expenses declined 5.3% or 5% on the same station basis, while digital operating expenses saw an 18.2% reduction or a 6.8% reduction on the same station basis due to the divestiture of guaranteed digital and the outlaws.
As a result, station operating income for the quarter was $3.7 million compared to $5.1 million in Q1 2024. On an adjusted basis excluding non-recurring and severance expenses and stock-based compensation, adjusted SOI was $4.6 million.
The decline in SOI reflects the impact of lower revenues that outpaced our cost reductions, despite strong underlying expense discipline. Corporate G&A expenses decreased 8.8% or (388,000) compared to the same quarter a year ago to $4 million.
Excluding non-recurring severance costs and stock-based compensation, adjusted corporate GNA expenses declined approximately 20%, or $575,000 to $3.4 million. These results reflect our broader commitment to financial rigor and a sustained focus on align aligning our expense base with current revenue trends.
Operating income for the first quarter of 2025 was a loss of $2 million compared to a loss of $1.1 million in the prior year period.
The reported decline was primarily the result of a $5.5 million year over year reduction in net revenue, which outpaced the $4.6 million decrease in total operating expenses, corporate expenses, and depreciation and amortization.
However, when excluding one-time charges, including severance, One-time costs related to our financial systems implementation and go live and expenses associated with our debt transactions, our adjusted operating loss was $0.6 million.
On this basis, underlying operating performance improved by approximately (500,000) compared to the same period last year. This improvement underscores the continued impact of our cost containment efforts and highlights the operational progress we've made despite a softer revenue environment.
Interest expense declined $2.2 million year over year from $5.6 million to $3.4 million, reflecting the benefit of debt reduction activities in Q4 2024. We ended Q1 2025 with total principal outstanding of $220 million.
Adjusted EBITDA after the first quarter of 2025 was $1.1 million, up 28% from $0.9 million in the prior year period, despite a challenging revenue environment.
This performance reflects the benefits of our strategic cost initiative and disciplined operational execution. Adjusted EBITDA includes $0.1 million in non-cash stock-based compensation, $495,000 in non-recurring advisory expenses associated with our financial systems go live and the debt transaction, and $890,000 in one-time severance expenses.
Excluding non-cash trade adjustments, property and franchise taxes, and pro forma cost savings totaling $0.5 million altogether, EBITDA as defined by our indenture was even stronger at $1.7 million. Following our Q4 earnings call, we had a number of conversations with our lenders, and we have refocused our earnings release around adjusted EBITDA as that continues to be their metric they are most interested in.
While revenue declined by $5.5 million year over year due to broader market sockets, we believe our improved profitability profile positions us to capitalize on future top line recovery. Our proactive cost discipline, combined with investments in core growth areas provides a strong foundation for margin expansion and sustainable long-term value creation.
We ended the quarter with $12.2 million in cash on hand, down from $13.8 million at the end of fiscal year 2024. Capital expenditures were $800,000 in the quarter. Compared to $900,000 in the prior year. And with that, let me turn it back to Caroline.

Caroline Beasley

Thank you, Lauren. Before I turn to our ratings performance and updated outlook, I want to spend a few minutes on one of the most exciting and fast moving areas of our business, our digital segment. This is not just a growth vertical for us.
It's a key part of how we are futureproofing Beasley and creating. Value across platforms, audiences, and advertisers. Our progress in Q1 continues to validate that strategy, demonstrating that our digital transformation is gaining traction, accelerating margin expansion, and positioning the Beasley at the business for scalable, sustainable growth.
Q1 '25 marked a continuation of this trajectory. Total digital revenue grew 6.4% year over year on the same station basis. In our same station, digital segment operating income increased by $1.3 million compared to the prior period.
On the same station basis, digital segment operating margin expanded. Significantly from 6.1% to 17.8%, reflecting strong operating leverage and disciplined execution. This exceptional margin improvement underscores the scalability of our digital platform and affirms the effectiveness of our strategic investments in content, technology, and audience development.
It is a clear demonstration of how our digital business is not only growing but maturing into a high margin value accretive engine within our portfolio.
We've been intentional in driving more predictable and sustainable digital outcomes. In Q1, we've launched a focused effort to optimize our product portfolio and backend infrastructure. These initiatives include Enhancements to our owned and operated platforms, expanded newsletter and content distribution capabilities, and continued investment in advertising technology, particularly around campaign automation and monetization.
We're also advancing our audio and video offerings to create more integrated cross-platform experiences and at the same time we're aligning our sales organization to focus on higher margin, proprietary inventory, and simplifying the by-side experience. Taken together, these efforts are enabling us to deliver greater value per listener, improve yield, and build a more scalable, diversified digital business.
As a result, revenue from our digital owned and operated inventory grew by $1 million year over year, while CPMs on our streaming platform increased by 13%. These gains paired with stronger cross platform engagement and improving digital margins underscore the progress we're making in unlocking greater value per listener and building a more scalable, diversified digital business.
At the heart of our digital growth is a strong and differentiated foundation, one that's difficult to replicate. We combined the reach and credibility of beloved local brands with national scale execution across platforms and channels. In short, our foundation is not just about content, it's about connection.
We're combining editorial integrity, distribution breadth, and monetization depth to create a digital business that is growing, durable and highly aligned with where media consumption is headed. One of the clearest expressions of this strategy and one of the most exciting areas of transformation is our streaming products.
This year in digital, we are focused on product optimization across our entire digital portfolio, and we began that process with streaming. We've consolidated our offerings into a single unified streaming solution, audio plus.
This product simplifies our go to market strategy and significantly enhances performance for both listeners and advertisers. Previously, sales teams were pitching both owned and operated in third party platforms, but limited inventory on our side often led clients to choose third party platforms.
Now with back-end optimization efforts completed in late Q1, we've increased streaming inventory availability by nearly three times, making audio Plus a far more scalable and competitive product. All targeting is now prioritized through our ONO channels and audience targeting waterfalls intelligently from our direct inventory to programmatic and only then to third party when needed.
And this is just the beginning. Display is the next product we'll optimize, followed by video and pre-roll, as we continue transforming our digital product portfolio for growth and efficiency. As advertisers continue to shift more dollars into digital, we're capturing a growing share thanks to high quality brand safe environments and a scalable data driven approach to audio monetization.
Our digital transformation is a long term engine for value creation, and we're just getting started with audio plus and market, more products queued for optimization and a robust pipeline of innovation. We're confident in our ability to continue unlocking sustainable growth and margin expansion across digital.
With that, let's shift back to our ratings performance, where we will continue to see strength in key markets and day parts. I'll then walk through our updated guidance for Q2. Beasley brands continue to maintain their premium status in the radio industry by dominating in Nielsen ratings and growing audience.
Six of our radio stations are currently number one in their market among the key adults 25,54 demo, and our overall audio cu is up 5.6%. In our PPM markets, we saw a 20% quarter to quarter increase in Nielsen and a 10% increase year over year. The largest ratings gains came from Charlotte, which was up 33%, as was Detroit also up 33%, and then Philadelphia up 24%.
With our increased focus on engaging with audiences on digital platforms, we're happy to report that our social media audience has grown by over 20% year over year.
In addition to the Landmark partnership with the University of Michigan highlighted earlier, we launched several high impact initiatives in the first quarter that we expect will contribute to future growth. In Las Vegas, we debuted Maxima, a new bilingual music format on KOAS FM designed to better serve the region's rapidly expanding Hispanic population.
We also partnered with PRN and NASCAR icon Kyle Petty to launch a nationally syndicated radio show, which is now airing on more than 180 stations across the country. Each of these initiatives will drive incremental revenue and deepen advertiser engagement in the second half of '25 and beyond.
As always, serving our community is a core value of Beasley Media Group, and many of our stations hosted and sponsored events to help people in need. These events not only unite the community with a common goal but also strengthens our brands and create a more personal connection with listeners.
Beasley is widely known for our work in the community and is being recognized by the NAB with the prestigious 2025 NAB Service to America award in June of this year. Now looking ahead to Q2 in the remainder of the year, we're maintaining a disciplined and focused approach to performance management across the organization.
Revenue is currently pacing down 10% in Q2, primarily driven by continued macroeconomic pressure in select categories. However, we've moved swiftly to offset these headwinds through a combination of targeted expense reductions and strategic product realignment.
These actions are already helping to protect margin performance. We remain committed to thoughtful cost management while continuing to fund the initiatives, particularly in digital content and technology that we believe will drive long-term shareholder value.
As we move through the year, we'll stay focused on execution, delivering for our clients, growing our audience, optimizing our digital portfolio, and continuing to unlock operating leverage across the business. I thank you for your continued support and will now address questions that were submitted to us this morning. Ilana.

Question and Answer Session

Operator

We have several questions submitted ahead of today's call.
Could you please provide an update on the current status of the cost savings initiatives? Specifically, how much of the projected savings have been realized to date and what additional impact is expected to be reflected in the 2025 financials?

Caroline Beasley

All right.

Thanks for the question. At this point we should see the full amount of the cost reductions that we implemented in 2024 in Q1.
And I think to reiterate what I said in the prepared remarks, we continue to be laser focused on aligning our expense base with current revenue trends and our Q1 results are evidence of this. In addition, we made $1.3 million in incremental cuts in Q1 of which roughly let's say 200,000 showed up in the numbers.
So, we'll see the balance of that impact in Q2. But we continue to evaluate our cost structure relative to our revenue performance and have made additional cuts, quarter to date.

Operator

Thank you, Lauren. Now for the second question. Is National feeling stronger or weaker in 2024? I see that National was 14% of revenue in Q1. How much was National down year over year? How is National performing in Philadelphia and Boston?

So. As we addressed, previously in the call, National is weaker this year than in 2024, but as we look at the market specifically, Boston was down consistent with the overall declines in the segment and its pacing in line with this trend, this quarter.
On the bright side, Philly and New Jersey, were, up double digits year over year in Q1. So that was a real bright spot, and these markets continue to pace positively in Q2.

Operator

Now for the last question. Has there been any increase in M&A discussions given potential regulatory loosening? Do you see an opportunity for swaps?

Caroline Beasley

So I'll take that. Yes, I will say that earlier in the year there were discussions, multiple discussions. However, given the uncertainty in the economy today due to tariffs, it seems that some of these discussions have softened.
However, I will also say that we are always open to evaluating swaps if they're beneficial to the company.

Operator

Thank you, Caroline. This concludes today's earnings conference call. A replay of this call will be available on the company's investor relations website. If you have any further questions, please contact investor relations at IR@bbgi.com. We appreciate your continued interest in Beasley Broadcast Group, and we thank you for joining us. Have a great day.