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YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.07pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.02pp
Flat
Net-tone change vs last year's 10-K.
MD&A
-0.12pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
adverse+2
disadvantage+2
failure+1
lose+1
negatively+1
Positive rising
best+1
Risk Factors (Item 1A)
10,750 words
ITEM 1A. RISK FACTORS
Risks Related to Our Business
Our results have been in the past, and could be in the future, adversely affected by economic or political uncertainty or deterioration in economic conditions and corresponding reduced spending by advertisers.
We derive revenues from the sale of advertising. As is common in the audio entertainment industry, advertisers do not have long-term advertising commitments with us and can terminate their contracts at any time. Expenditures by advertisers tend to be cyclical, reflecting economic and political conditions and budgeting and buying patterns. Periods of a slowing economy or recession, or periods of economic uncertainty, may be accompanied by a decrease in advertising. Macroeconomic uncertainty continued to impact our advertising revenues during the year ended December 31, 2025. This impact in advertising revenues has had an adverse effect on our profit margins, cash flow and liquidity. If macroeconomic uncertainty continues or increases, or if economic conditions deteriorate, we may continue to experience an adverse impact on our revenue, profit margins, cash flow and liquidity as a result. In addition, inflation has the potential to affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure, particularly if we are to commensurate increases in the prices we charge our customers. Similarly, political conditions, including new and changing laws or tariffs, regulations, executive orders and enforcement priorities, may impact customer budgets and create uncertainty about how such laws and regulations will be interpreted and applied, which may impact advertising customer demand and impact our business. Furthermore, because a significant portion of our revenue is derived from local advertisers, our ability to generate revenues in specific markets is directly affected by local and regional conditions, and regional economic conditions also may impact our results. In addition, even in the of a in general economic conditions, an individual business sector or market may experience a , causing it to reduce its advertising expenditures, which also may impact our results.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
impairment+9
loss+2
decline+2
against+2
closed+2
Positive rising
improved+3
strength+2
profitability+1
benefiting+1
beautiful+1
MD&A (Item 7)
9,695 words
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Format of Presentation
Management’s discussion and analysis of our financial condition and results of operations (“MD&A”) should be read in conjunction with the consolidated financial statements and related footnotes contained in Part II, Item 8 of this Annual Report on Form 10-K of iHeartMedia, Inc. (the "Company," "iHeartMedia," "we," "our," or "us").
We report based on three reportable segments:
▪ the Multiplatform Group, which includes our Broadcast radio, Networks and Sponsorships and Events businesses;
▪ the Digital Audio Group, which includes our Digital businesses, including Podcasting; and
▪ the Audio & Media Services Group, which includes Katz Media Group ("Katz Media"), our full-service media representation business, and RCS Sound Software ("RCS"), a provider of scheduling and broadcast software and services.
These reporting segments reflect how senior management operates the Company. This structure provides visibility into the underlying performance, results, and margin profiles of our distinct businesses and enables senior management to monitor trends at the operational level and address opportunities or issues as they arise via regular review of segment-level results and forecasts with operational leaders.
Our segment profitability metric is Segment Adjusted EBITDA, which is reported to the Company's Chief Operating Decision Maker ("CODM") for purposes of making decisions about allocation of resources to, and assessing performance of, each reportable segment. The Company’s CODM is our Chief Executive Officer. Segment Adjusted EBITDA is calculated as Revenue less operating expenses, excluding expenses (as defined below) and share-based compensation expenses.
We are required to evaluate our goodwill, indefinite-lived and definite-lived intangible assets for impairment. We perform our annual impairment test on our goodwill and FCC licenses as of July 1 of each year. In addition, we test for impairment of intangible assets whenever events and circumstances indicate that such assets might be impaired. While we believe we have made reasonable estimates and utilized appropriate assumptions to calculate the estimated fair value of our reporting units and FCC licenses, it is possible a material change could occur. We have taken material impairment charges in recent periods and if future results are not consistent with our assumptions and estimates, including as a result of increased economic uncertainty or deterioration in economic conditions, we may be exposed to impairment charges in the future.
The success of our business is dependent upon advertising revenues, which are seasonal, cyclical, and may fluctuate as a result of a number of factors, some of which are beyond our control.
Our main source of revenue is the sale of advertising. Our ability to sell advertising depends on, among other things:
• economic conditions;
• national and local demand for radio and digital advertising;
• the popularity of our programming;
• local and national advertising price fluctuations, which can be affected by the availability of programming and the relative supply of and demand for commercial advertising;
• the capability and effectiveness of our sales organization;
• our competitors' activities, including increased competition from other advertising-based mediums;
• decisions by advertisers to withdraw or delay planned advertising expenditures for any reason;
• keeping pace with changes in technology and our competitors;
• maintaining and growing our relationships with marketers, agencies, and other demand sources who purchase advertising inventory from us;
• continuing to develop and diversify our advertising platform and offerings; and
• other factors beyond our control.
In addition, disruptions to our operations and our customers’ operations from pandemics or public health crises may reduce demand for advertising, reduce our advertising revenue and adversely impact our business, results of operations and financial position.
Our operations and revenues also tend to be seasonal in nature, with generally lower revenue generated in the first quarter of the year and generally higher revenue generated in the fourth quarter of the year. This seasonality causes and will likely continue to cause a variation in our quarterly operating results. Such variations could have a material effect on the timing of our cash flows. In addition, our revenues tend to fluctuate between years, consistent with, among other things, increased advertising expenditures in even-numbered years by political candidates, political parties and special interest groups.
We face intense competition in our business.
We operate in a highly competitive industry, and we may not be able to maintain or increase our current audience ratings, listener engagement and advertising revenues. Our business competes for audiences and advertising revenues with other radio businesses, as well as with other media, entertainment and digital platforms, such as streaming audio services, satellite radio, podcasts, other Internet-based streaming music services, ad tech, television, live entertainment, large scale online advertising platforms, and social media. Audience ratings and market shares are subject to change for various reasons, including through consolidation of our competitors through processes such as mergers and acquisitions, which could have the effect of reducing our revenues in a specific market.
Our competitors may develop technology, services or advertising media that are equal or superior to those we provide or that achievegreater market acceptance and brand recognition than we achieve. For example, our competitors may develop analytic products for programmatic advertising, and data and research tools that are superior to those that we provide or that achievegreater market acceptance. Additionally, many customers rely on audience measurement data to make advertising decisions. An inability to obtain audience measurement data that is acceptable to customers can lead to a reduction of advertising revenue, and our business, financial condition, and results of operations could be adversely impacted. It also is possible that new competitors may emerge and rapidly acquire significant market share in our business or make it more difficult for us to increase our share of advertising partners’ budgets. The advertiser/agency ecosystem is diverse and dynamic, with advertiser/agency relationships subject to change. This could have an adverse effect on us if an advertiser client shifts its relationship to an agency with whom we do not have as good a relationship. An increased level of competition for advertising dollars may lead to lower advertising rates as we attempt to retain customers or may cause us to lose customers to our competitors who offer lower rates that we are unable or unwilling to match.
Our ability to compete effectively depends in part on our ability to achieve a competitive cost structure. If we cannot do so, then our business, financial condition and operating results would be adversely affected.
Alternative media and entertainment platforms and technologies may continue to increase competition with our operations.
The audio entertainment industry is characterized by rapid technological change, frequent product and feature innovations, changes in customer requirements and expectations, evolving standards and new entrants offering products and services. Our terrestrial radio broadcasting and digital operations face increasing competition from alternative media and
entertainment platforms and technologies, such as broadband wireless, satellite radio, television and streaming services, other podcast platforms, internet-based music streaming services, and social media, as well as mobile and other connected devices, such as portable digital audio players, smart phones, wearable devices, tablets, gaming consoles, in-home entertainment and enhanced automotive platforms. These technologies and alternative media and entertainment platforms, including those used by us, compete with our platforms and content for listeners and advertising revenues. We are unable to predict the long-term effect that such technologies and related services and products will have on our broadcasting and digital operations. The capital expenditures necessary to implement these or other technologies could be substantial, and we cannot assure you that we will continue to have the resources to acquire new technologies or to introduce new services to compete with other new technologies or services, or that our investments in new technologies or services will provide the desired returns. Other companies employing new technologies or services could more successfully implement such new technologies or services or otherwise increase competition with our businesses and make our products less competitive in the marketplace.
Our business is dependent upon the performance of on-air talent, program hosts, and acquisition of programming.
We employ or independently contract with many on-air personalities and hosts of radio programs, podcasts and other audio platforms and contract for certain programming, including podcasts, with significant loyal audiences. Although we have entered into long-term agreements with some of our key talent and programming to protect our interests in those relationships, we can give no assurance that all or any of these persons or programs will remain with us, will retain their audiences or will continue to be profitable. Competition for talent and programming is intense and many of these individuals and programs are under no legal obligation to remain with us. Our competitors may choose to extend offers to any talent or programs on terms that we may be unwilling to meet. Furthermore, the popularity and audience loyalty of our key talent and programs are highly sensitive to rapidly changing public tastes. A loss of such popularity or audience loyalty is beyond our control and could have a material adverse effect on our ability to attract local and/or national advertisers and on our revenue and/or listenership and could result in increased expenses. Our investments in talent and programming have been and may continue to be significant and involve complex negotiations with numerous third parties. These costs may not be recouped and higher costs may lead to decreased profitability or potential write-downs.
Emerging industry trends may adversely impact our ability to generate revenue from our digital advertising inventory and materially adversely affect our business, operations, and financial condition.
There are no uniform methods by which our advertiser clients measure advertising effectiveness. As a result, new methods are regularly created and used by different advertiser clients. We cannot integrate with all possible technological standards to measure advertising effectiveness and there is no guarantee that the standards with which we choose to integrate will be the standards ultimately selected by the majority of our advertiser clients. There is also no guarantee that such standards will accurately reflect the true effectiveness of our advertising. Finally, as discussed in “ Compliance with ever evolving regulations, third-party restrictions, and consumer concerns or litigation regarding data privacy and data protection involves significant expenditure and resources, and any failure by us or our vendors to comply may result in significant liability, negative publicity, and/or an erosion of trust, which could materially adversely affect our business, operations, and financial condition ”, our ability to integrate with technological standards may be limited by both emerging laws and third parties. If we fail to integrate with the technological standards preferred by our clients, or if those methodologies are inaccurate, our revenue may be adversely affected.
If events occur that damage our reputation and brand, our ability to grow our user base, advertiser relationships, and partnerships may be impaired and our business may be harmed.
We have developed a brand that we believe has contributed to our success. We also believe that maintaining and enhancing our brand is critical to growing our user base, advertiser relationships and partnerships. The iHeartRadio brand ties together our radio stations, digital platforms, social media, podcasts, and events in a unified manner that reflects the quality and compelling nature of our listener experiences. Maintaining and enhancing our brand depends on many factors, including factors that are not entirely within our control. If we fail to successfully promote and maintain our brand or if we sufferdamage to the public perception of our brand, our business may be harmed.
Our business is dependent on our management team and other key individuals.
Our business is dependent upon the performance of our management team and other key individuals. Although we have entered into agreements with members of our senior management team and certain other key individuals, we can give no assurance that any or all of them will remain with us, or that we will not continue to make changes to the composition of, and the roles and responsibilities of, our management team. Competition for these individuals is intense and many of our key employees are at-will employees who are under no obligation to remain with us, and may decide to leave for a variety of
personal or other reasons beyond our control. If members of our management or key individuals decide to leave us in the future, if we decide to make further changes to the composition of, or the roles and responsibilities of, these individuals, or if we are not successful in attracting, motivating and retaining other key employees, our business could be adversely affected.
Our financial performance may be adversely affected by many factors within or beyond our control.
Certain factors that could adversely affect our financial performance by, among other things, decreasing overall revenues, the numbers of advertising customers, advertising fees or profit margins, include:
• unfavorable fluctuations in operating costs, which we may be unwilling or unable to pass through to our customers;
• our inability to successfully adopt or our being late in adopting technological changes and innovations that offer more attractive advertising or listening alternatives than what we offer, which could result in a loss of advertising customers or lower advertising rates, which could have a material adverse effect on our operating results and financial performance;
• a loss of advertising customers or lower advertising rates, which could have a material adverse effect on our operating results and financial performance;
• the impact of potential new or increased royalties or license fees charged for terrestrial radio broadcasting or the provision of our digital services, which could materially increase our expenses;
• technological developments, including new uses for generative AI;
• unfavorable shifts in population and other demographics, which may cause us to lose advertising customers as people migrate to markets where we have a smaller presence or which may cause advertisers to be willing to pay less in advertising fees if the general population shifts into a less desirable age or geographical demographic from an advertising perspective;
• continued dislocation of advertising agency operations from new technologies and media buying trends;
• adverse political effects and acts or threats of terrorism or military conflicts;
• natural catastrophes such as earthquakes, hurricanes, tornados, wildfires, and floods, which could damage our facilities, interrupt our services and harm our business (including to the extent climate change increases the frequency or intensity of such events, or results in chronic changes to meteorological or hydrological patterns that pose similar risks); and
• unfavorable changes in labor conditions, which may impair our ability to operate or require us to spend more to retain and attract key employees.
Acquisitions, dispositions and other strategic investments or transactions could pose risks.
We frequently evaluate strategic opportunities both within and outside our existing lines of business. We expect from time to time to pursue acquisitions of certain businesses as well as strategic dispositions. These acquisitions or dispositions could be material. Acquisitions, dispositions and other strategic initiatives involve numerous risks, including:
• our acquisitions may prove unprofitable and fail to generate anticipated cash flows;
• to successfully manage our business, we may need to:
◦ recruit additional senior management because we cannot be assured that senior management of acquired businesses will continue to work for us and we cannot be certain that our recruiting efforts will succeed, and
◦ expand corporate infrastructure to facilitate the integration of our operations with those of acquired businesses, because failure to do so may cause us to lose the benefits of any expansion that we decide to undertake by leading to disruptions in our ongoing businesses or by distracting our management;
• we may enter into markets and geographic areas where we have limited or no experience;
• we may encounter difficulties in the integration of new management teams, operations and systems;
• our management’s attention may be diverted from other business concerns;
• our dispositions may negatively impact revenues from our national, regional and other sales networks; and
• our dispositions may make it difficult to generate cash flows from operations sufficient to meet our anticipated cash requirements, including debt service requirements.
Acquisitions and dispositions of media and entertainment businesses may require antitrust review by U.S. federal antitrust agencies and may require review by foreign antitrust agencies under the antitrust laws of foreign jurisdictions. We can give no assurances that the DOJ, the U.S. Federal Trade Commission (“FTC”) or foreign antitrust agencies will not seek to bar
us from acquiring or disposing of media and entertainment businesses or impose stringent undertakings on our business as a condition to the completion of an acquisition in any market where we already have a significant position.
Further, radio acquisitions are subject to FCC approval. Such transactions must comply with the Communications Act and FCC regulatory requirements and policies. The FCC’s media ownership rules remain subject to ongoing agency proceedings. Future changes could restrict our ability to dispose of or acquire new radio assets or businesses. See Regulation of our Business in Part I, Item 1, Business, included elsewhere in this Annual Report on Form 10-K.
If we or our third-party providers fail to protect confidential information and/or experience data security incidents, we could losevaluable information, sufferdisruptions to our business, and/or incur material expenses and liabilities in the investigation and remediation of such incidents, as well as damages to our relationships with listeners, consumers, business partners, employees and advertisers, which would materially adversely affect our business, results of operations, and financial condition.
We rely on computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business (“IT Systems”). We own and operate some of these IT Systems ourselves, but we also rely on third-party providers for various IT Systems and related products and services, including but not limited to cloud computing services, across both our internal and external-facing operations. We and certain of our third-party providers collect, maintain and process data about customers, employees, business partners and others, including personal information, as well as proprietary information belonging to our business such as trade secrets (collectively, “Confidential Information”). We face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of our IT Systems and Confidential Information. Cyberattacks are expected to accelerate on a global basis in frequency and magnitude and, as a result, we may be unable to anticipate, investigate, remediate, or recover from future cyberattacks and other security incidents, or to avoid a material adverse impact to our IT Systems, Confidential Information, or business. We and certain of our third-party providers have experienced from time to time in the past cyberattacks and other incidents, and we expect to experience these in the future. Our IT Systems and Confidential Information are vulnerable to a range of cybersecurity risks and threats, including software bugs, computer viruses, internet worms, break-ins, phishing and social engineering attacks, attempts to overload servers with denial-of-service, or other attacks and similar disruptions (for example, due to ransomware), any of which could lead to system interruptions, delays, shutdowns, or theft or loss of Confidential Information. Our remote and hybrid working arrangements for employees (and employees of third-party providers) also present additional risks due to the prevalence of social engineering and other cyberattacks that are launched in relation to non-corporate and home networking environments and remote access into our computer networks.
A security breach could occur due to the actions of outside parties, employee error, malfeasance or a combination of these or other actions. Any failure to maintain performance, reliability, security, and availability of our services and technical infrastructure to the satisfaction of our listeners may harm our reputation and our ability to retain existing listeners and attract new listeners. We or third parties we rely on may not be able to implement security controls as intended for various reasons, including if we do not recognize or underestimate a particular risk. We cannot assure you that our cybersecurity risk management program or the policies, controls, and/or processes that we or our third-party providers have designed to protect our Confidential Information and IT Systems will be effective. In addition, security controls, no matter how well designed or implemented, may only mitigate and not fully eliminate risks and events and, when detected by security tools or third parties, risks and events may not always be immediately understood or acted upon. Cyberattacks that disrupt or result in unauthorized access to third party IT Systems can materially impact our operations and financial results. If there is an actual or perceived adverse impact to the availability, integrity, or confidentiality of our IT Systems or Confidential Information, we may incur significant response and remediation costs in protecting against or remediating cyber-attacks and we may face regulatory or civil liability, lose Confidential Information, personal information, or sufferdisruptions to our business operations, information processes and internal controls. In addition, the public perception of the effectiveness of our security measures or services could be harmed and we could lose listeners, consumers, business partners and advertisers. In the event of a security breach, we could suffer financial exposure in connection with penalties, remediation and restoration efforts, investigations and legal proceedings (such as class action lawsuits) and changes in our security and system protection measures.
We may be subject to rapidly evolving data security frameworks and/or laws that require us to maintain a certain level of security. For example, the Federal Trade Commission expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. In the event a regulator or court were to determine we had not adequately complied with the security requirements under U.S. state privacy laws, the EU/UK General Data Protection Regulation (“GDPR”), and/or other international, federal, or state data privacy, cybersecurity, consumer protection or related rules or regulations, we may be subject to regulatory and litigation proceedings, financial fines and penalties, injunctive requirements that negatively affect our business model, and/or costly remediation requirements. We may also be required to
notify affected individuals and authorities in the event of a personal information breach. For example, the California Consumer Privacy Act provides for per-violationfines, as well as a private right of action to individuals and statutory damages for certain types of data breaches, and the GDPR provides potential fines up to EUR 20 million or 4% of worldwide annual turnover of the preceding financial year, whichever is greater. We expect these and other developing rules and regulations to increase both upfront compliance costs and liability exposure in the event of a cyberattack or security incident.
Additionally, as we accept debit and credit cards for payment, we are subject to the Payment Card Industry Data Security Standard (“PCI DSS”), issued by the Payment Card Industry Security Standards Council. PCI DSS contains compliance guidelines with regard to our security surrounding the physical and electronic storage, processing and transmission of cardholder data. If we or our service providers are unable to comply with the security standards established by banks and the payment card industry, we may be subject to fines, restrictions and expulsion from card acceptance programs, which could materially and adversely affect our business.
Furthermore, any losses, costs and/or liabilities directly or indirectly related to cyberattacks or other security incidents may not be covered by, or may exceed the coverage limits of, any of our insurance policies.
We use artificial intelligence ("AI") in our business, and challenges in managing its use could result in reputational harm, competitive disadvantage, legal liability, and adverse effects on our results of operations.
AI solutions are increasingly integrated into our business operations and are expected to become even more important to our operations over time. Our competitors or other third parties may adopt AI more quickly or more effectively than we do, which could impair our ability to compete and negatively impact our results of operations. Additionally, if our AI-generated content, analyses, search results, or recommendations are, or are alleged to be, inaccurate, biased, infringing, harmful, or otherwise deficient, our business, reputation, financial condition, and results of operations could be adversely affected.
AI also raises emerging ethical and legal challenges, including issues related to the use of copyrighted material and potential violations of name, image, and likeness rights. If our use of AI becomes controversial, we could face brand or reputational harm, competitive disadvantage, or legal liability. In addition, the rapid evolution of AI will require significant resources to develop, test and maintain our platforms, offerings, services, and features to help us ensure responsible implementation and to minimize unintended, harmful impacts.
The legal and regulatory framework for AI technologies is also evolving rapidly. Federal, state, and foreign governments and authorities have introduced or are currently considering laws and regulations governing AI. Existing laws and regulations may be interpreted in ways that impact our use of AI, and industry standards and best practices remain unsettled. As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future. We cannot predict the impact that future laws, regulations, standards, or market expectations may have on our business. Compliance costs could be significant and may increase our operating expenses, including through imposing additional AI reporting obligations. Any such increase in operating expenses, as well as any actual or perceived failure to comply with such laws and regulations, could adversely affect our business, financial condition and results of operations.
We have engaged in restructuring activities in the past and may implement further restructurings in the future and our restructuring efforts may not be successful or generate expected cost savings.
We actively seek to adapt our cost structure to the changing economics of the industry and to take advantage of the investments we have made in new technologies to build an operating infrastructure that provides better quality and newer products and delivers new cost efficiencies. There can be no assurance that we will be successful in upgrading our systems and processes effectively or on the timetable and at the costs contemplated, or that we will achieve the expected long-term cost savings.
We may implement further restructuring activities and make additions, reductions or other changes to our management or workforce based on other cost reduction measures or changes in the markets and industry in which we compete. Restructuring activities can create unanticipated consequences and negative impacts on the business, and we cannot be sure that any ongoing or future restructuring efforts will be successful or generate expected cost savings.
Risks Related to our Indebtedness
Our substantial indebtedness may adversely affect our financial health and operating flexibility.
Our subsidiary, iHeartCommunications currently has a $450.0 million senior secured asset-based revolving credit facility with $50.0 million outstanding that matures in 2027, approximately $4.7 billion in principal amount of secured debt, of which approximately $28.2 million matures in 2026, approximately $71.5 million matures in 2027, approximately $298.4 million matures in 2028, approximately $2.8 billion matures in 2029, approximately $1.3 billion matures in 2030, and approximately $180.8 million has various subsequent maturity dates, and approximately $125.2 million in principal amount of unsecured debt, of which approximately $45.2 million matures in 2026, approximately $79.8 million matures in 2027, and approximately $0.2 million matures in 2028. This substantial amount of indebtedness could have important consequences to us, including:
◦ increasing our vulnerability to adverse general economic, industry, or competitive developments;
◦ requiring us to dedicate a more substantial portion of our cash flows from operations to payments on our indebtedness, thereby reducing the availability of our cash flows to fund working capital, investments, acquisitions, capital expenditures, and other general corporate purposes;
◦ limiting our ability to make required payments under our existing contractual commitments, including our existing long-term indebtedness;
◦ requiring us to sell certain assets;
◦ restricting us from making strategic investments, including acquisitions, or causing us to make non-strategic divestitures;
◦ limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
◦ placing us at a competitive disadvantage compared to our competitors that have less debt;
◦ causing us to incur substantial fees from time to time in connection with debt amendments or refinancings;
◦ increasing our exposure to rising interest rates because a substantial portion of our borrowings is at variable interest rates; and
◦ limiting our ability to borrow additional funds or to borrow on terms that are satisfactory to us.
If we are unable to generate sufficient cash flow to repay or refinance our debt on favorable terms, it could significantly adversely affect our financial condition and the value of our outstanding debt. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.
The agreements governing iHeartCommunications' secured indebtedness contain covenants that limit iHeartCommunications' and its subsidiaries’ ability to, among other things (and subject to certain exceptions): incur additional indebtedness; pay dividends on, or make distributions in respect of, their capital stock or repurchase their capital stock; make certain investments or other restricted payments; sell certain assets; create liens; merge, consolidate or transfer or dispose of all or substantially all of their assets; repay certain indebtedness prior to maturity thereof; restrict the ability of subsidiaries that are not guarantors to pay dividends or cash distributions, or repay indebtedness owed, to iHeartCommunications or its subsidiaries or make or repay loans or advances to the guarantors, or restrict the ability of any guarantor to create liens on its property for the benefit of the holders of such debt; permit the subsidiaries that hold FCC licenses to engage in other businesses; transfer FCC licenses; transfer material assets to non-guarantors; engage in transactions with affiliates; and change lines of business. Although the covenants in such debt agreements are subject to various exceptions, we cannot assure you that these covenants will not adversely affect our ability to finance future operations, capital needs, or to engage in other activities that may be in our best interest. In addition, in certain circumstances, our long-term debt may require us to maintain specified financial ratios, which may require that we take action to reduce our debt or to act in a manner contrary to our business objectives. For example, certain of our debt agreements include total net leverage ratio covenants (which fall away upon certain conditions being met) tested 30 days prior to the maturity dates of iHeartCommunications’ 5.25% senior notes due 2027, 8.375% senior notes due 2027 and 4.75% senior secured notes due 2028 to the extent the aggregate outstanding principal amount of such notes to which such maturity date applies exceeds $50 million on such date. A breach of any of these covenants could result in a default under our debt agreements and the exercise of remedies by the lenders thereunder. In addition, we may be able to incur additional indebtedness in the future. To the extent we incur additional indebtedness, the risks associated with our leverage described above would increase.
Regulatory, Legislative and Litigation Risks
Extensive current government regulation, and future regulation, may limit our radio broadcasting and other operations or adversely affect our business and financial results.
The domestic radio industry is heavily regulated by federal laws and regulations of several agencies, including the FCC. For example, the FCC could impact our profitability by imposing large fines on us if, in response to pending or future complaints, it finds that we violated FCC regulations. The FCC’s enforcement priorities are subject to change, and we cannot predict which areas of legal compliance the FCC will focus on in the future. We have received, and may receive in the future, letters of inquiry and other notifications from the FCC concerning compliance with the Communications Act and FCC rules, and we cannot predict the outcome of any outstanding or future letters of inquiry and notifications from the FCC or the nature or extent of future FCC enforcement actions.
The FCC grants broadcast licenses for a term of up to eight years. Although the FCC renewed each of our broadcast licenses during the most recent renewal cycle for a full term and without material conditions, we cannot be sure that the FCC will approve renewal of the licenses we must have in order to operate our stations in all subsequent renewal cycles. The non-renewal, or conditioned renewal, of a substantial number of our FCC licenses in a subsequent renewal cycle could have a materially adverse impact on our operations. Furthermore, possible changes in interference protections, spectrum allocations and other technical rules may negatively affect the operation of our stations. In addition, Congress, the FCC and other regulatory agencies have considered, and may in the future consider and adopt, new laws, regulations and policies that could, directly or indirectly, have an adverse effect on our business operations and financial performance.
Legislation and royalty audits may require us to pay additional royalties, including to additional parties such as record labels or recording artists.
We currently pay royalties to composers and music publishers, including through BMI, ASCAP, SESAC and GMR. We also pay royalties to record companies and their representative, SoundExchange, for digital music transmissions. Currently, Congress does not require that broadcasters pay royalties associated with the public performance of sound recordings for over-the-air transmissions. From time to time, however, Congress considers legislation that could change this.
Moreover, our licensing fees and related costs for rights to use musical compositions and sound recordings in our programming could materially increase as a result of private negotiations, rate-setting processes, or administrative and judicial decisions. While we are not currently engaged in active negotiations with major performing rights organizations, our existing agreements have limited durations, and future negotiations could result in significantly higher royalty obligations. In addition, there is no assurance that direct licenses will be renewed or that future licenses will be available on terms comparable to those under our current agreements.
In addition, the rates for the royalties that we pay to SoundExchange for certain types of digital music transmissions are periodically the subject of rate-setting proceedings before the Copyright Royalty Board to determine statutory rates and terms for the public performance and ephemeral reproduction of sound recordings by various non-interactive webcasters, including us. The outcome of these proceedings may result in an increase to our licensing costs.
From time-to-time, SoundExchange and various record labels and other music licensors notify us that certain calendar years are subject to routine audits of the royalty payments that we make to them in connection with our various uses of music. The results of such audits could result in us having to make higher royalty payments for the subject years.
Increased royalty rates could significantly increase our expenses, which could adversely affect our business and results of operations. Various other regulatory matters relating to our business are now, or may become, the subject of court litigation, and we cannot predict the outcome of any such litigation or its impact on our business.
Compliance with ever evolving regulations, third-party restrictions, and consumer concerns or litigation regarding data privacy and data protection involves significant expenditure and resources, and any failure by us or our vendors to comply may result in significant liability, negative publicity, and/or an erosion of trust, which could materially adversely affect our business, operations, and financial condition.
We collect, receive, store, handle, transmit, use and otherwise process personal, demographic and other information related to individuals, including from and about our listeners, consumers, employees, business partners and advertisers as they interact with us. For example: (1) our broadcast radio station websites and our iHeartRadio digital platform collect personal information as users use our services, register for our services, fill out their listener profiles, post comments, participate in polls
and contests and sign-up to receive email newsletters; (2) we use tracking technologies, such as “cookies,” to automatically manage and track our listeners’ interactions with us so that we can deliver relevant music content and advertising; (3) we accept credit cards as a method of payment from consumers, business partners and advertisers; and (4) we collect precise location data in limited circumstances about certain of our platform users for analytics, attribution and advertising purposes. We also depend on a number of third-party vendors in relation to the operation of our business, a number of which process data on our behalf.
We are subject to limitations imposed by third parties that control the devices or platforms on which our users access our services. Changes to the policies promulgated by these third parties may adversely impact our advertising revenue. For example, Apple has updated its products and services to make it more difficult to track its users and has indicated they may impose additional restrictions in the future and other companies may impose similar restrictions. These changes have reduced and may in the future further reduce the quality and quantity of tracking data available to us and our clients. Some web browsers have begun to limit the use of third-party cookies or have announced an intention to do so or have enabled the "global privacy control" opt-out of targeted advertising by default. These changes may increase the cost of the data we use to target advertisements, reduce our ability to effectively deliver relevant ads to our users and impact our ability to demonstrate to our business partners and advertisers the value of the advertisements we are able to deliver.
Further, we and our vendors are subject to a variety of federal, state and foreign data privacy laws, rules, regulations, industry standards and other requirements, including those that apply generally to the handling of information about individuals, and those that are specific to certain industries, sectors, contexts, or locations. For additional information on applicable laws, rules and regulations, see Privacy, Data Protection and Consumer Protection in Part I, Item 1, Business, included elsewhere in this Annual Report on Form 10-K.
These requirements, and their application, interpretation and amendment, are constantly evolving and developing and have increased upfront compliance costs and liability exposure in the event of a cyberattack or security incident, which costs are likely to further increase in the future. In some cases, these requirements may be either unclear in their interpretation and application or they may have inconsistent or conflicting requirements with each other. Further, there has been a substantial increase in legislative activity and regulatory focus on data privacy and security in the United States and elsewhere, including in relation to cybersecurity incidents .
We are party to a letter of agreement (the “LOA”) with the DOJ in its capacity as a representative of The Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector, an interagency federal government group that analyzes certain transactions for national security, law enforcement, and public safety issues. The LOA requires us, among other things, to obtain consent from the DOJ prior to allowing certain third parties to act as custodians of certain data about our subscribers or to process payments on our behalf. Should the DOJ choose not to approve, or revoke approval of, certain third party vendors, our business and operations could be materially adversely affected.
Moreover, further changes in consumer rights, expectations and demands regarding privacy and data protection could restrict our ability to collect, use, disclose and derive economic value from demographic and other information related to our listeners, consumers, business partners and advertisers, or to transfer employee data within the corporate group. New consumer rights, including the right for consumers to opt out of the use or sharing of their personal information for targeted advertising purposes, to opt out of the sale of their personal information, or to have their personal information deleted could lead to a depletion of our consumer database. Such new consumer rights and restrictions on our use of consumer data could limit our ability to provide customized music content to our listeners, interact directly with our listeners and consumers and offer targeted advertising opportunities to our business partners and advertisers and otherwise hinder our ability to grow our business by extracting value from our data assets.
Although we have implemented and are implementing policies and procedures designed to comply with these laws and regulations, these laws are in some cases relatively new and the interpretation and application of these laws are uncertain. Any failure or perceived failure by us or our vendors to comply with applicable laws, rules, and regulation related to consumer protection, information security, data protection and privacy could result in a loss of confidence in us, damage to our brands, the loss of listeners, consumers, business partners and advertisers, as well as proceedings or actions against us by individuals, consumer rights groups, governmental authorities or others. We could incur significant costs in investigating and defending such claims and, if found liable, pay significant damages or fines or be required to make changes to our business. If any of these events were to occur, our operations and financial condition could be materially adversely affected.
Environmental, health, safety and land use laws and regulations may limit or restrict some of our operations.
As the current or former owner or operator of various real properties and facilities, we must comply with various foreign, federal, state and local environmental, health, safety and land use laws and regulations. We and our properties are subject to such laws and regulations relating to the use, storage, disposal, emission and release of hazardous and non-hazardous substances and employee health and safety as well as zoning restrictions. Historically, we have not incurred significant expenditures to comply with these laws and regulations. However, additional laws or other requirements which may be passed in the future, or a finding of a violation of or liability under existing laws or other requirements, could require us to make significant expenditures and otherwise limit or restrict some of our operations.
We may face lawsuits, incur liability or suffer reputational harm as a result of content published or made available through our services.
The nature of our business could expose us to claims or public criticism related to defamation, illegal content, misinformation, and content regulation. We could incur costs investigating and defending any such claims. In addition, some stakeholders may disagree with content provided through our services, and negative public criticism of this content could damage our reputation and brands. If we incur material costs, liability, or negative consumer reaction as a result of these occurrences, our business, financial condition and operating results could be adversely impacted.
We are subject to a series of risks regarding scrutiny and regulation of environmental, social, and governance matters.
Companies across industries continue to face scrutiny from a variety of stakeholders, including government officials and other policymakers, related to their sustainability or environmental, social, and governance (“ESG”) practices, such as climate change and human capital, among others. Unfavorable perceptions of our approach to or performance regarding such matters could negatively impact our business, whether from a reputational perspective, through a reduction in interest in purchasing our stock or products, issues in attracting/retaining employees, customers and business partners, or otherwise. As with other companies, our approach to such matters is expected to continue to evolve over time, and we cannot guarantee that our approach will align with the preferences or expectations of any particular stakeholder. Stakeholder expectations vary and, increasingly different stakeholder groups have divergent (or conflicting) views on ESG matters, which increases the risk that any action, or lack thereof, with respect to ESG matters will be perceived negatively by at least some stakeholders and adversely impact our reputation and business. Both advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including legislation, regulation, media campaigns and litigation, to advance their perspectives. To the extent we are subject to such activism, it may require us to incur material costs and any failure to successfully navigate such stakeholder expectations may harm our reputation, including our relationships with various stakeholders, or result in other adverse impacts.
While we have engaged, and expect to continue to engage in, certain voluntary initiatives (such as voluntary disclosures, certifications, and/or goals) to address sustainability matters or respond to stakeholder concerns, such initiatives may be costly and may not have the desired effect. For example, actions or statements that we may take based on expectations, assumptions, or third-party information that we currently believe to be reasonable may subsequently be determined, or perceived, to be erroneous or not in keeping with best practice. We may also modify or terminate certain initiatives or targets, or may be unable to complete them, either on timelines/costs initially anticipated or at all. If we fail to, or are perceived to fail to, comply with or advance certain ESG initiatives (including the manner in which we complete such initiatives), we may be subject to various adverse impacts, including reputational damage and potential stakeholder engagement and/or litigation, even if such initiatives are currently voluntary.
There are also increasing and changing regulatory expectations for ESG matters. Various policymakers are imposing domestic and international laws and regulations relating to climate change and sustainability that might require additional investments, disclosure, and the attention of our management team, in connection with implementation and oversight of new practices and reporting processes. These requirements are not always uniform across jurisdictions, and other policymakers have sought to constrain companies' consideration of such matters. Both of these developments, particularly when combined with other stakeholder expectations, will likely lead to increased costs as well as scrutiny that could heighten all of the risks identified in this risk factor. Additionally, many of our customers, business partners, and suppliers may be subject to similar expectations, which may augment or create additional risks, including risks that may not be known to us.
Risks Related to our Class A Common Stock
We do not intend to pay dividends on our Class A common stock for the foreseeable future.
We currently have no intention to pay dividends on our Class A common stock at any time in the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of our Board and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that our Board may deem relevant.
We are a holding company and rely on dividends, distributions and other payments, advances and transfers of funds from our subsidiaries to meet our obligations.
We are a holding company that does not conduct any business operations of our own. As a holding company, our investments in our operating subsidiaries constitute all of our operating assets. Our subsidiaries conduct all of our consolidated operations and own substantially all of our consolidated assets. As a result, we must rely on dividends and other advances, distributions and transfers of funds from our subsidiaries to meet our obligations. The ability of our subsidiaries to pay dividends or make other advances, distributions and transfers of funds will depend on their respective results of operations and may be restricted by, among other things, applicable laws limiting the amount of funds available for payment of dividends and certain restrictive covenants contained in the agreements of those subsidiaries. The deterioration of income from, or other available assets of, our subsidiaries for any reason could limit or impair their ability to pay dividends or other distributions to us.
Conversion of shares of our Class B common stock and Special Warrants into our Class A common stock would cause significant dilution to our shareholders and may adversely impact the market price of our Class A common stock.
As of February 25, 2026, we had 129,552,146 shares of Class A common stock, 21,090,196 shares of Class B common stock and 5,038,369 Special Warrants outstanding. Each Special Warrant is currently exercisable for one share of Class A common stock or Class B common stock and each share of Class B common stock is currently convertible into one share of Class A common stock, in each case subject to the media ownership rules and alien ownership restrictions described in Part I, Item 1, Business, included elsewhere in this Annual Report on Form 10-K. Upon the exercise of any Special Warrants or the conversion of any shares of Class B common stock, your voting rights as a holder of Class A common stock will be proportionately diluted. The issuance of additional shares of Class A common stock would increase the number of our publicly traded shares, which could depress the market price of our Class A common stock.
Delaware law and certain provisions in our certificate of incorporation may prevent efforts by our stockholders to change the direction or management of our company.
Our certificate of incorporation and our by-laws contain provisions that may make the acquisition of our company more difficult without the approval of our Board, including, but not limited to, the following:
• action by stockholders may only be taken at an annual or special meeting duly called by or at the direction of a majority of our Board; and
• advance notice for all stockholder proposals is required.
We are also subject to the anti-takeover provisions contained in Section 203 of the General Corporation Law of the State of Delaware ("DGCL"). Under these provisions, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its voting stock unless the holder has held the stock for three years or, among other exceptions, the board of directors has approved the business combination or the transaction by which the person became an interested stockholder.
These and other provisions in our certificate of incorporation, bylaws and Delaware law could make it more difficult for stockholders or potential acquirers to obtain control of our Board or initiate actions that are opposed by our Board, including actions to delay or impede a merger, tender offer or proxy contest involving our company. The existence of these provisions could negatively affect the price of our common stock and limit opportunities for you to realize value in a corporate transaction.
Our certificate of incorporation designates the Court of Chancery of the State of Delaware, subject to certain exceptions, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders and our bylaws designate the federal district courts of the United States as the exclusive forum for actions arising under the Securities Act of 1933, as amended, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our certificate of incorporation provides that the Court of Chancery of the State of Delaware, subject to certain exceptions, is the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (iii) any action asserting a claim against the company or any director or officer or employee of the company arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws or (iv) any other action asserting a claim against us that is governed by the internal affairs doctrine. In addition, our bylaws provide that the federal district courts of the United States are the exclusive forum for any complaint raising a cause of action arising under the Securities Act of 1933, as amended. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our certificate of incorporation and bylaws described above. These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employee, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively, if a court were to find these provisions of our certificate of incorporation or bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.
Regulations imposed by the Communications Act and the FCC limit the foreign individuals or entities that may invest in our capital stock without FCC approval.
The Communications Act and FCC regulations prohibit foreign entities or individuals from indirectly (i.e., through a parent company) owning or voting more than 25 percent of the equity in a corporation controlling the licensee of a radio broadcast station unless the FCC determines greater indirect foreign ownership is in the public interest. The FCC generally will not make such a determination absent favorable executive branch review.
The FCC calculates foreign voting rights separately from equity ownership, and both must be at or below the 25 percent threshold absent a foreign ownership declaratory ruling. To the extent that our aggregate foreign ownership or voting percentages exceed 25 percent, any individual foreign holder of our common stock whose ownership or voting percentage would exceed 5 percent or 10 percent (with the applicable percentage determined pursuant to FCC rules) will additionally be required to obtain the FCC’s specific approval. The FCC has issued declaratory rulings that permit us to be up to 100% foreign-owned and specifically approve certain of our foreign shareholders, subject to certain conditions. We also have pending a petition for declaratory ruling seeking approval for one of our existing, approved foreign investors to reorganize its ownership interest. The acquisition of a significant amount of our stock by a new foreign holder could require us to request additional or modified declaratory rulings from the FCC and to take actions under our certificate of incorporation to ensure our compliance with the Communications Act and FCC regulations until such rulings are granted.
Direct or indirect ownership of our securities could result in the violation of the FCC’s media ownership rules by investors with “attributable interests” in other radio stations or in the same market as one or more of our broadcast stations.
Under the FCC’s media ownership rules, a direct or indirect owner of our securities could violate and/or cause us to violate the FCC’s structural media ownership limitations if that person owns or acquires an “attributable” interest in other radio stations in the same market as one or more of our radio stations. Under the FCC’s “attribution” policies the following relationships and interests generally are cognizable for purposes of the substantive media ownership restrictions: (1) ownership of 5 percent or more of a media company’s voting stock (except that, for a narrowly defined class of passive investors, the attribution threshold is 20 percent ); (2) officers and directors of a media company and its direct or indirect parent(s); (3) any general partnership or limited liability company manager interest; (4) any limited partnership interest or limited liability company member interest that is not “insulated,” pursuant to FCC-prescribed criteria, from material involvement in the management or operations of the media company; (5) certain same-market time brokerage agreements; (6) certain same-market joint sales agreements; and (7) under the FCC’s “equity/debt plus” standard, otherwise non-attributable equity or debt interests in a media company if the holder’s combined equity and debt interests amount to more than 33 percent of the “total asset value” of the media company and the holder has certain other interests in the media company or in another media property in the same market. Under the FCC’s rules, discrete ownership interests under common ownership, management, or control must be aggregated to determine whether or not an interest is “attributable.”
Our certificate of incorporation grants us broad authority to comply with FCC Regulations.
To the extent necessary to comply with the Communications Act and FCC rules, policies, and orders, and in accordance with our certificate of incorporation, we may request information from any stockholder or proposed stockholder to determine whether such stockholder’s ownership of shares of capital stock may result in a violation of the Communications Act, FCC rules and policies, or any FCC declaratory ruling. We may further take the following actions, among others, to help ensure compliance with and to remedy any actual or potential violation of the Communications Act, FCC rules and policies, or any FCC declaratory ruling, or to prevent the loss or impairment of any of our FCC licenses: (i) prohibit, suspend or rescind the ownership, voting or transfer of any portion of our outstanding capital stock; (ii) redeem capital stock; and (iii) exercise any and all appropriate remedies, at law or in equity, in any court of competent jurisdiction, against any stockholder, to cure any such actual or potential violation or impairment.
The price of our Class A common stock has been and may in the future be volatile.
The price of our Class A common stock has fluctuated and may fluctuate in the future due to a variety of factors, including:
• changes in the industries in which we and our customers operate;
• developments involving our competitors;
• changes in laws and regulations affecting our business;
• variations in our operating performance and the performance of our competitors in general;
• actual or anticipated fluctuations in our quarterly or annual operating results;
• publication of research reports by securities analysts about us or our competitors or our industry;
• changes in financial estimates and recommendations by securities analysts;
• issuances of shares of our Class A common stock, including upon conversion of our Class B common stock;
• short sellers manipulating our stock, resulting in a price decrease;
• "short squeezes" of our Class A common stock or the common equity of companies in our industry;
• the public’s reaction to our press releases, our other public announcements and our filings with the SEC;
• actions by stockholders, including the sale of their shares of our Class A common stock;
• additions and departures of key personnel;
• commencement of, or involvement in, litigation involving our Company;
• changes in our capital structure, such as future issuances of securities or the incurrence of additional debt or equity;
• the volume of shares of our Class A common stock available for public sale; and
• general economic and political conditions.
Information available in public media that is published by third parties, including blogs, articles, message boards and social and other media may include statements not attributable to the Company and may not be reliable or accurate.
We have received, and may continue to receive, media coverage that is published or otherwise disseminated by third parties, including blogs, articles, message boards and social and other media. This includes coverage that is not attributable to statements made by our officers or employees. Information provided by third parties may not be reliable or accurate and could materially impact the trading price of our Class A common stock, which could cause stockholders to lose their investments.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this report are forward-looking statements. Forward-looking statements give 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 “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “commit,” “believe,” “may,” “will,” “should,” “can have,” “dedicated to,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, growth rates and financial results, our plans and objectives for future operations, growth or initiatives, strategies, potential impacts from inflation and economic trends, or the expected outcome or impact of pending or threatenedlitigation are forward-looking statements. All
forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including:
• risks associated with weak or uncertain global economic conditions and their impact on the level of expenditures for advertising;
• risks related to advertising revenue fluctuations;
• intense competition including increased competition from alternative media and entertainment platforms and technologies;
• dependence upon the performance of on-air talent, program hosts and management as well as maintaining or enhancing our brand;
• fluctuations in operating costs and other factors within or beyond our control;
• technological changes and innovations;
• shifts in population and other demographics;
• the impact of our substantial indebtedness;
• the impact of acquisitions, dispositions and other strategic transactions;
• legislative or regulatory requirements;
• the impact of legislation, ongoing litigation or royalty audits on music licensing and royalties;
• regulations and consumer concerns regarding privacy and data protection, and breaches of information security measures;
• risks related to scrutiny of environmental, social, and governance matters;
• risks related to our Class A common stock;
• regulations impacting our business and the ownership of our securities; and
• other factors disclosed in the section entitled “Risk Factors” and elsewhere in this report.
We derive many of our forward-looking statements from our operating budgets and forecasts, which are based on many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under the sections entitled “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements as well as other cautionary statements that are made from time to time in our other SEC filings and public communications. You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties.
We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this report are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. Additionally, our discussion of certain sustainability assessments, goals and related issues in this or other disclosures is informed by various sustainability standards and frameworks (including standards for the measurement of underlying data) and the interests of various stakeholders. As such, such information may not, and should not be interpreted as necessarily being, “material”; any references to “materiality” in the context of such discussions and any related assessment of sustainability “materiality” may differ from the definition of “materiality” under the federal securities laws for SEC reporting purposes. Furthermore, much of this information is subject to assumptions, estimates or third-party information that is still evolving and subject to change. Similarly, we cannot guarantee strict adherence to standard recommendations, and our disclosures based on any standards may change due to revisions in framework or legal requirements, availability of information, changes in our business or applicable government policies, or other factors, some of which may be beyond our control.
Restructuring
We believe the presentation of our results by segment provides insight into our broadcast radio business and our digital business. We believe that our ability to generate cash flow from operations from our businesses and our current liquidity will provide sufficient resources to fund and operate our business, fund capital expenditures and other obligations and make interest payments on our long-term debt for at least the next twelve months.
Certain prior period amounts have been reclassified to conform to the 2025 presentation.
Description of our Business
Our strategy centers on delivering entertaining and informative content where our listeners want to find it across our various platforms.
Multiplatform Group
The primary source of revenue for our Multiplatform Group is from selling local and national advertising time on our radio stations, with contracts typically less than one year in duration. The programming formats of our radio stations are designed to reach audiences with targeted demographic characteristics. We work closely with our advertising and marketing partners to develop tools and leverage data to enable advertisers to effectively reach their desired audiences. Our Multiplatform Group also generates revenue from network syndication, nationally recognized events and other miscellaneous transactions.
Management looks at our Multiplatform Group's operations’ overall revenue as well as each revenue stream including Broadcast Radio, Networks, and Sponsorship and Events. We periodically review and refine our selling structures in all regions and markets in an effort to maximize the value of our offering to advertisers and, therefore, our revenue.
Management also looks at Multiplatform Group's revenue by region and market size. Typically, larger markets can reach larger audiences with wider demographics than smaller markets. Additionally, management reviews our share of audio advertising revenues in markets where such information is available, as well as our share of target demographics listening in an average quarter hour. This metric gauges how well our formats are attracting and retaining listeners.
Management also monitors revenue generated through our programmatic ad-buying platform, and our data analytics advertising product, to measure the success of our enhanced marketing optimization tools. We have made significant investments so we can provide the same ad-buying experience that once was only available from digital-only companies and enable our clients to better understand how our assets can successfully reach their target audiences.
Management monitors average advertising rates and cost per mille, the cost of every 1,000 advertisement impressions, which are principally based on the length of the spot and how many people in a targeted audience listen to our stations, as measured by an independent ratings service. In addition, our advertising rates are influenced by the time of day the advertisement airs, with morning and evening drive-time hours typically priced the highest. Our price and yield information systems enable our station managers and sales teams to adjust commercial inventory and pricing based on local market demand, as well as to manage and monitor different commercial durations in order to provide more effective advertising for our customers at what we believe are optimal prices given market conditions. Yield is measured by management in a variety of ways, including revenue earned divided by minutes of advertising sold.
A portion of our Multiplatform Group segment’s expenses vary in connection with changes in revenue. These variable expenses primarily relate to costs in our programming and sales departments, including profit sharing fees and commissions.
Digital Audio Group
The primary source of revenue in the Digital Audio Group segment is the sale of advertising on our podcast network, iHeartRadio mobile application and website, and station websites. Revenues for digital advertising are recognized over time based on impressions delivered or time elapsed, depending upon the terms of the contract. Digital Audio Group’s contracts with advertisers are typically a year or less in duration and are generally billed monthly upon satisfaction of the performance obligations.
Through our Digital Audio Group, we continue to expand the choices for listeners. We derive revenue in this segment by developing and delivering our content and selling advertising across multiple digital distribution channels, including via our iHeartRadio mobile application, our station websites and other digital platforms that reach national, regional and local audiences.
Our strategy has enabled us to extend our leadership in the growing podcasting sector, and iHeartMedia is the number one podcast publisher in America. Our reach now extends across more than 500 platforms and thousands of different connected devices, and our digital business is comprised of streaming, subscription, display advertisements, and other content that is disseminated over digital platforms.
A portion of our Digital Audio Group segment’s expenses vary in connection with changes in revenue. These variable expenses primarily relate to our content costs including profit sharing fees and third-party content costs, as well as sales commissions. Certain of our content costs, including digital music performance royalties, vary with the volume of listening hours on our digital platforms.
Audio & Media Services Group
Audio & Media Services Group revenue is generated by services provided to broadcast industry participants through our Katz Media and RCS businesses. As a media representation firm, Katz Media generates revenue via commissions on media sold on behalf of the radio and television stations that it represents, while RCS generates revenue by providing broadcast software and media streaming and research services for radio stations, broadcast television stations, cable channels, record labels, ad agencies and Internet stations worldwide.
Economic Conditions
Our advertising revenue, cash flows, and cost of capital are impacted by changes in economic conditions. Higher interest rates and inflation have continued to contribute to a challenging macroeconomic environment. This environment has led to broader market uncertainty which has impacted our revenues and cash flows. We are monitoring ongoing developments surrounding international trade that may pressure the advertising budgets of our customers and could impact our financial results in future periods. The current market uncertainty and macroeconomic conditions, a recession, or a downturn in the U.S. economy could have a significant impact on our ability to generate revenue and cash flows.
Modernization Initiatives
We implemented operating expense savings initiatives during 2024 to streamline our organization and increase automation and the use of technology. These modernization efforts included headcount reductions and other cost saving actions, which resulted in approximately $150 million of net savings for full year 2025. We implemented additional initiatives in the fourth quarter of 2025, primarily headcount reductions, that are expected to generate approximately $50 million of additional annual savings beginning in 2026. We are also implementing $50 million of new in-year cost savings initiatives that are expected to begin benefiting us in the second quarter of 2026, bringing total in-year 2026 savings to approximately $100 million. We continue to explore opportunities for further efficiencies.
Impairment Charges
We perform our annual impairment test on our goodwill and indefinite-lived Federal Communication Commission ("FCC") licenses as of July 1 of each year. As discussed above, macroeconomic uncertainty, including persistent inflation and elevated interest rates, has contributed to slowing broadcast revenue growth and declines in margins. These factors have negatively impacted the key assumptions used in the discounted cash flow models which are utilized to value our FCC licenses, particularly the industry profit margins used in estimating the market profitability.
Our FCC licenses are valued using a combination of direct and market valuation approaches. Key assumptions in the direct valuation approach include market revenue growth rates, profit margin, and the risk-adjusted discount rate as well as other assumptions including market share, duration and profile of the build-up period, estimated start-up costs and capital expenditures. This data is populated using industry normalized information representing an average asset within a market. We obtained the most recent broadcast radio industry revenue projections as well as various other sources of data in developing the assumptions used for purposes of performing impairment testing on our FCC licenses as of July 1, 2025.
FCC licenses valued using a market approach estimate the fair value by referencing recent transactions involving comparable spectrum assets. This method considers observable market data, adjusted for differences in signal strength and market size.
Considerations in developing these assumptions included the expected impact on advertising revenues given the current market uncertainty, ranges of expected timing of recovery, discount rates and other factors. Based on our testing, the estimated fair value of our FCC licenses was below their carrying values. As a result, we recognized a non-cash impairment charge of $208.5 million on our FCC licenses as a result of our July 1, 2025 annual testing.
Additionally, we recognized non-cash impairment charges of $304.1 million to our FCC license balances as a result of our June 30, 2024 interim testing.
The goodwill impairment test requires us to measure the fair value of our reporting units and compare the estimated fair value to the carrying value, including goodwill. Each of our reporting units is valued using a discounted cash flow model which requires estimating future cash flows expected to be generated from the reporting unit, discounted to their present value using a risk-adjusted discount rate. Terminal values were also estimated and discounted to their present value. Assessing the recoverability of goodwill requires us to make estimates and assumptions about sales, operating margins, growth rates and discount rates based on our budgets, business plans, economic projections, anticipated future cash flows and marketplace data. There are inherent uncertainties related to these factors and in management’s judgment in applying these factors.
The fair values of our reporting units were measured as of July 1, 2025 as part of our annual impairment assessment and no goodwill impairment was recorded as the estimated fair values of our reporting units exceeded the carrying values of the reporting units’ net assets, including goodwill. No impairment was required as part of the 2024 annual impairment testing. For more information, see Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill for a further description of the impairment charges and annual impairment tests. Additionally, we recognized non-cash impairment charges of $616.1 million to our goodwill balance as a result of our June 30, 2024 interim testing.
While we believe we have made reasonable estimates and utilized reasonable assumptions to calculate the fair values of our indefinite-lived FCC licenses and reporting units, it is possible a material change could occur to the estimated fair value of these assets as a result of the uncertainty regarding the impact of current market conditions, as well as the timing of any recovery. If our actual results are not consistent with our estimates, we could be exposed to future impairmentlosses that could be material to our results of operations.
Executive Summary
Consolidated revenues for the year ended December 31, 2025 increased primarily due to an increase in digital and podcast advertising revenue driven by a continued increase in demand for digital advertising and an increase in non-cash trade revenue resulting from strategic marketing initiatives, partially offset by a decrease in political revenues in our Multiplatform Group and Audio and Media Service Group as 2024 was a presidential election year, as well as lower spending on radio advertising as a result of continued uncertain market conditions.
The key developments in our business for the year ended December 31, 2025 are summarized below:
• Consolidated Revenue of $3,865.0 million increased $10.5 million, or 0.3%, during 2025 compared to Consolidated Revenue of $3,854.5 million in 2024.
• Multiplatform Group Revenue decreased $99.4 million, or 4.2%, and Segment Adjusted EBITDA decreased $47.0 million, or 10.2%, compared to 2024.
• Digital Audio Group Revenue increased $164.9 million, or 14.2%, and Segment Adjusted EBITDA increased $77.8 million, or 20.5%, compared to 2024.
• Audio & Media Services Group Revenue decreased $54.5 million, or 16.7%, and Segment Adjusted EBITDA decreased $47.2 million, or 33.6%, compared to 2024.
• Operating loss of $20.6 million improved $742.5 million from Operating loss of $763.1 million in 2024. 2025 included $213.9 million of non-cash impairment charges primarily related to our FCC licenses. 2024 included $922.7 million of non-cash impairment charges primarily related to our goodwill and FCC licenses balances.
• Net loss of $471.9 million improved $537.6 million compared to Net loss of $1,009.5 million in 2024.
• Cash flows provided by operating activities of $92.6 million increased $21.2 million from $71.4 million in 2024.
• Adjusted EBITDA (1) of $685.8 million decreased $19.9 million from $705.6 million in 2024.
• Free cash flow (2) of $10.9 million increased $37.1 million from $(26.2) million in 2024.
The table below presents a summary of our historical results of operations for the periods presented:
(In thousands)
Year Ended December 31,
Change
Revenue
Operating loss
Net loss
Cash provided by operating activities
Adjusted EBITDA (1)
Free cash flow (2)
(1) For a definition of Adjusted EBITDA, and a reconciliation to Operating loss, the most closely comparable U.S. generally accepted accounting principles ("GAAP") measure, and to Net loss, please see “Reconciliation of Operating loss to Adjusted EBITDA” and “Reconciliation of Net loss to EBITDA and Adjusted EBITDA” in this MD&A.
(2) For a definition of Free cash flow and a reconciliation to Cash provided by operating activities, the most closely comparable GAAP measure, please see “Reconciliation of Cash provided by operating activities to Free cash flow” in this MD&A.
Results of Operations
For a discussion of our results of operations for the year ended December 31, 2023, including a year-to-year comparison between 2024 and 2023, refer to Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024.
The table below presents the comparison of our historical results of operations:
(In thousands)
Year Ended December 31,
Revenue
Operating expenses:
Direct operating expenses (excludes depreciation and amortization)
Selling, general and administrative expenses (excludes depreciation and amortization)
Depreciation and amortization
Impairment charges
Other operating expense, net
Operating loss
Interest expense, net
Gain (loss) on investments, net
Equity in loss of nonconsolidated affiliates
Loss on extinguishment of debt and exchange costs
Other income (expense)
Loss before income taxes
Income tax benefit
Net loss
Less amount attributable to noncontrolling interest
Net loss attributable to the Company
The table below presents the comparison of our revenue streams:
(In thousands)
Year Ended
December 31,
Change
Broadcast Radio
Networks
Sponsorship and Events
Other
Multiplatform Group
Digital, excluding Podcast
Podcast
Digital Audio Group
Audio & Media Services Group
Eliminations
Revenue, total
Consolidated results for the year ended December 31, 2025 compared to the consolidated results for the year ended December 31, 2024 were as follows:
Revenue
Consolidated revenue increased $10.5 million during the year ended December 31, 2025 compared to 2024. Multiplatform Group revenue decreased $99.4 million, primarily resulting from a decrease in broadcast advertising in connection with continued uncertain market conditions and lower political revenues, as 2024 was a presidential election year, partially offset by an increase in non-cash trade revenue resulting from strategic marketing initiatives. Digital Audio Group revenue increased $164.9 million, driven primarily by continuing increases in demand for digital and podcast advertising as well as increased non-cash trade revenue resulting from strategic marketing initiatives. Audio & Media Services revenue decreased $54.5 million largely due to lower political revenues, as 2024 was a presidential election year, as well as nonrecurring contract termination fees earned by Katz Media in 2024, partially offset by an increase in demand for digital advertising.
Direct operating expenses
Consolidated direct operating expenses increased $24.5 million during the year ended December 31, 2025 compared to 2024. The increase was primarily driven by higher variable content costs, including higher podcast profit share and third-party digital costs related to the increase in digital revenues, partially offset by a decrease in employee compensation cost in connection with modernization initiatives taken in 2024.
Selling, general and administrative (“SG&A”) expenses
Consolidated SG&A expenses decreased $6.1 million during the year ended December 31, 2025 compared to 2024. The decrease was driven primarily by a decrease in costs incurred in connection with executing on our cost savings initiatives, including decreased employee compensation cost due to our modernization initiatives, and lower sales commissions related to the decline in broadcast revenue, partially offset by increases in non-cash trade and barter expense related to strategic marketing initiatives, employee benefit expense related to the reestablishment of the 401(k) match program during the first quarter of 2025, bonus expense, and cash-settled share-based compensation expense driven by the increase in our stock price.
Depreciation and amortization
Depreciation and amortization decreased $49.5 million during 2025 compared to 2024, primarily as a result of a lower fixed asset base due to lower levels of capital expenditures.
Impairment charges
During the year ended December 31, 2025, we recorded non-cash impairment charges of $213.9 million to primarily reduce the carrying values of our indefinite-lived FCC licenses to their estimated fair values as a result of the annual impairment assessment. No impairment related to our goodwill was recorded during the year ended December 31, 2025. We perform our annual impairment test on our goodwill and FCC licenses as of July 1 of each year. See Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill , to our consolidated financial statements located in Part II, Item 8 of this Annual Report on Form 10-K for more information.
During the year ended December 31, 2024, we recorded non-cash impairment charges of $922.7 million, to primarily reduce the carrying values of our indefinite-lived FCC licenses and our goodwill to their estimated fair values as a result of the interim impairment assessments performed in the second quarter of 2024. The impairment charges resulted from the economic uncertainty due to inflation and higher interest rates that has had an adverse impact on our results and has resulted in a significant decrease in the trading values of our debt and equity securities for a sustained period. No impairment was required for our goodwill and FCC licenses as part of the 2024 annual impairment testing.
Interest expense, net
Interest expense, net increased $23.1 million during 2025 compared to 2024 primarily as a result of an increase in contractual interest rates in connection with the debt exchange transaction that closed in the fourth quarter of 2024.
Gain (loss) on investments, net
During the year ended December 31, 2025, we recognized a loss on investments, net of $43.0 million related to declines in the value of certain investments. During the year ended December 31, 2024, we recognized a gain on investments, net of $75.5 million primarily due to the $101.4 million gain recognized on the sale of our investment in Broadcast Music, Inc. ("BMI") in the first quarter of 2024, partially offset by declines in the value of certain investments.
Loss on extinguishment of debt and exchange costs
In connection with the debt exchange transaction that closed in the fourth quarter of 2024, we recognized costs of $1.6 million and $97.3 million during the years ended December 31, 2025 and 2024, respectively, primarily related to exchange fees incurred to facilitate the Debt Exchange Transaction.
Income tax benefit
Our effective tax rate for the year ended December 31, 2025 was 0.4%. The effective tax rate was primarily impacted by the valuation allowance adjustments recorded during the year against certain federal and state deferred tax assets for disallowed interest expense carryforwards and state net operating losses due to the uncertainty regarding our ability to utilize those assets in future periods. The valuation allowance build was partially reduced due to the enactment of the One Big Beautiful Bill Act ("OBBBA") tax provisions discussed in Note 8, Income Taxes .
Our effective tax rate for the year ended December 31, 2024 was 13.6%. The effective tax rate was primarily impacted by the valuation allowance adjustments recorded during the year against certain federal and state deferred tax assets for disallowed interest expense carryforwards and state net operating losses due to the uncertainty regarding our ability to utilize those assets in future periods. The valuation build for the year was offset fully by the tax impact of the debt transaction discussed in Note 6, Long-term Debt and Note 8, Income Taxes , that resulted in excluded cancellation of debt income and capital loss carryforward attribute reductions and the reduction of valuation allowances against those capital loss carryforwards. In addition, we recorded a GAAP impairment charge to our non-deductible goodwill as discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill .
Net loss attributable to the Company
Net loss attributable to the Company of $472.9 million for the year ended December 31, 2025 improved $537.1 million compared to Net loss attributable to the Company of $1,009.9 million during the year ended December 31, 2024. The improvement was due to the non-cash impairment charges of $922.7 million recognized in 2024 compared to the $213.9 million recognized in 2025, partially offset by the $101.4 million gain recognized on the sale of our investment in BMI in the first quarter of 2024.
Multiplatform Group Results
(In thousands)
Year Ended
December 31,
Change
Revenue
Operating expenses (1)
Segment Adjusted EBITDA
Segment Adjusted EBITDA margin
(1) Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring expenses.
Revenue from our Multiplatform Group decreased $99.4 million compared to 2024, primarily due to a decrease in broadcast advertising in connection with continued uncertain market conditions, as well as lower political revenues as 2024 was a presidential election year, partially offset by an increase in non-cash trade revenue resulting from strategic marketing initiatives. Broadcast revenue decreased $93.5 million, or 5.4%, year-over-year driven by lower spot and political revenues. Networks revenue increased $2.6 million or 0.6% year-over-year. Revenue from Sponsorship and Events decreased $5.3 million, or 2.8%, year-over-year.
Operating expenses decreased $52.3 million, driven primarily by a decrease in employee compensation cost due to our modernization initiatives, as well as lower sales commissions related to the decline in broadcast revenue, partially offset by higher trade and barter expenses, and an increase in bonus expense.
Digital Audio Group Results
(In thousands)
Year Ended
December 31,
Change
Revenue
Operating expenses (1)
Segment Adjusted EBITDA
Segment Adjusted EBITDA margin
(1) Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring expenses.
Revenue from our Digital Audio Group increased $164.9 million compared to the prior year, driven by Podcast revenue which increased by $114.9 million, or 25.6% year-over-year, primarily due to a continued increase in demand for podcasting from advertisers, and Digital, excluding Podcast revenue, which increased $50.0 million, or 7.0% year-over-year, primarily due to an increase in demand for digital advertising, as well as increased non-cash trade revenue resulting from strategic marketing initiatives.
Operating expenses increased $87.2 million primarily driven by higher variable content costs, including higher podcast profit share and third-party digital costs related to the increase in revenues, and higher non-cash trade expense.
Audio & Media Services Group Results
(In thousands)
Year Ended
December 31,
Change
Revenue
Operating expenses (1)
Segment Adjusted EBITDA
Segment Adjusted EBITDA margin
(1) Operating expenses consist of Direct operating expenses and Selling, general and administrative expenses, excluding Restructuring expenses.
Revenue from our Audio & Media Services Group decreased $54.5 million compared to the prior year, primarily due to lower political revenues as 2024 was a presidential election year, a decrease in broadcast advertising in connection with uncertain market conditions, and contract termination fees earned by Katz Media in 2024, partially offset by increased demand for digital advertising.
Operating expenses decreased $7.3 million primarily due to a decrease in employee compensation cost due to our modernization initiatives and lower commissions as revenue declined.
Non-GAAP Financial Measures
Reconciliations of Operating loss to Adjusted EBITDA
(In thousands)
Year Ended December 31,
Operating loss
Depreciation and amortization
Impairment charges
Other operating expense, net
Share-based compensation expense
Restructuring expenses
Adjusted EBITDA (1)
Reconciliations of Net loss to EBITDA and Adjusted EBITDA
(In thousands)
Year Ended December 31,
Net loss
Income tax benefit
Interest expense, net
Depreciation and amortization
EBITDA
(Gain) loss on investments, net
Loss on extinguishment of debt and exchange costs
Other (income) expense, net
Equity in loss of nonconsolidated affiliates
Impairment charges
Other operating expense, net
Share-based compensation expense
Restructuring expenses
Adjusted EBITDA (1)
(1) We define Adjusted EBITDA as consolidated Operating loss adjusted to exclude restructuring expenses included within Direct operating expenses and SG&A expenses, and share-based compensation expenses included within SG&A expenses, as well as the following line items presented in our Statements of Operations: Depreciation and amortization, Impairment charges and Other operating expense, net. Alternatively, Adjusted EBITDA is calculated as Net loss, adjusted to exclude Income tax benefit, Interest expense, net, Depreciation and amortization, (Gain) loss on investments, net, Loss on extinguishment of debt and exchange costs, Other (income) expense, net, Equity in loss of nonconsolidated affiliates, Impairment charges, Other operating expense, net, Share-based compensation expense, and restructuring expenses. Restructuring expenses primarily include expenses incurred in connection with cost-saving initiatives, as well as certain expenses, which, in the view of management, are outside the ordinary course of business or otherwise not representative of the Company's operations during a normal business cycle. We use Adjusted EBITDA to evaluate the Company’s operating performance. This measure is among the primary measures used by management for the planning and forecasting of future periods, as well as for measuring performance for compensation of executives and other members of management. We believe this measure is an important indicator of our operational strength and performance of our business because it provides a link between operational performance and Operating loss. We believe the presentation of this measure is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by management. We believe it helps improve investors’ ability to understand our operating performance and makes it easier to compare our results with other companies that have different capital structures or tax rates. In addition, we believe this measure is also among the primary measures used externally by our investors, analysts and peers in our industry for purposes of valuation and comparing our operating performance to other companies in our industry. Since Adjusted EBITDA is not a measure calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, Operating loss or Net loss as an indicator of operating performance and may not be comparable to similarly titled measures employed by other companies. Adjusted EBITDA is not necessarily a measure of our ability to fund our cash needs. Because it excludes certain financial information compared with Operating loss and compared with consolidated Net loss, the most directly comparable GAAP financial measures, users of this financial information should consider the types of events and transactions which are excluded.
Reconciliations of Cash provided by operating activities to Free cash flow
(In thousands)
Year Ended December 31,
Cash provided by operating activities
Purchases of property, plant and equipment
Free cash flow (1)
(1) We define Free cash flow as Cash provided by operating activities less capital expenditures, which is disclosed as Purchases of property, plant and equipment in the Company's Consolidated Statements of Cash Flows. We use Free cash flow to evaluate the Company’s liquidity and its ability to generate cash flow. We believe that Free cash flow is meaningful to investors because we review cash flows generated from operations after taking into consideration capital expenditures due to the fact that these expenditures are considered to be a necessary component of ongoing operations. In addition, we believe that Free cash flow helps improve investors' ability to compare our liquidity with other companies. Since Free cash flow is not a measure calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, Cash provided by operating activities and may not be comparable to similarly titled measures employed by other companies. Free cash flow is not necessarily a measure of our ability to fund our cash needs.
Share-Based Compensation Expense
On April 21, 2021, our 2021 Long-Term Incentive Award Plan (the "2021 Plan") was approved by stockholders and replaced the prior plan. On February 23, 2023, our Board adopted an amendment to the 2021 Plan, which provided for an increase to the shares authorized for issuance under the 2021 Plan. At our 2023 Annual Meeting of Stockholders, the amendment was approved. Pursuant to our 2021 Plan, we may grant restricted stock units and options to purchase shares of the Company's Class A common stock to certain key individuals.
Share-based compensation expenses are recorded in the statement of comprehensive loss as Selling, general and administrative expenses and were $44.1 million and $32.3 million for the years ended December 31, 2025 and 2024, respectively.
As of December 31, 2025 there was $14.2 million of unrecognized compensation cost related to unvested share-based compensation arrangements with vesting based solely on service conditions. This cost is expected to be recognized over a weighted average period of approximately 1.5 years and assumes Performance RSUs will be fully earned at target. See Note 9, Stockholders' Deficit , for more information.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
The following discussion highlights cash flow activities during the periods presented:
(In thousands)
Year Ended December 31,
Cash provided by (used for):
Operating activities
Investing activities
Financing activities
Free Cash Flow (1)
(1) For a definition of Free cash flow and a reconciliation to Cash provided by operating activities, the most closely comparable GAAP measure, please see “Reconciliation of Cash provided by operating activities to Free cash flow” in this MD&A.
Operating Activities
Cash provided by operating activities was $92.6 million in 2025 compared to $71.4 million of cash provided by operating activities in 2024. The increase was primarily due to the timing of interest payments as accrued interest was paid in the fourth quarter of 2024 upon closing of the debt exchange transaction that would have been paid in 2025 under the old debt terms, and an increase in deferred revenues based on the timing of payments received, partially offset by the decrease in political revenues.
Investing Activities
Cash used for investing activities of $66.2 million during the year ended December 31, 2025 primarily reflects $81.7 million in cash used for capital expenditures and $21.5 million of proceeds received from the sale of certain land assets. For capital expenditures, we spent $39.1 million in our Multiplatform Group segment primarily related to our IT infrastructure and real estate optimization initiatives, $19.9 million in our Digital Audio Group segment primarily related to IT infrastructure, $14.6 million in our Audio & Media Services Group segment, primarily related to software, and $8.1 million in Corporate primarily related to equipment and software purchases.
Cash provided by investing activities of $0.5 million during the year ended December 31, 2024 primarily reflects $101.4 million of proceeds received from the sale of our investment in BMI, partially offset by $97.6 million in cash used for capital expenditures. For capital expenditures, we spent $52.2 million in our Multiplatform Group segment primarily related to our IT infrastructure and real estate optimization initiatives, $22.5 million in our Digital Audio Group segment primarily related to IT infrastructure, $10.4 million in our Audio & Media Services Group segment, primarily related to software, and $12.5 million in Corporate primarily related to equipment and software purchases.
Financing Activities
Cash used for financing activities totaled $15.3 million during the year ended December 31, 2025 primarily due to the quarterly amortization payments on the Term Loan Facility due 2029 and payments reducing our debt premium recorded in connection with the debt exchange transaction completed in the fourth quarter of 2024 and the $50.0 million repayment towards the outstanding balance on the $450.0 million ABL Facility (as defined below), largely offset by the $100.0 million borrowed under the $450.0 million ABL Facility.
Cash used for financing activities totaled $158.3 million during the year ended December 31, 2024 primarily relates to $150.5 million of cash paid as partial principal repayment in connection with the Debt Exchange Transaction.
Sources of Liquidity and Anticipated Cash Requirements
Our primary sources of liquidity are cash on hand, which consisted of cash and cash equivalents of $270.9 million as of December 31, 2025, and cash flows from operations. During the year ended December 31, 2025, iHeartCommunications, Inc. (“iHeartCommunications”), our indirect wholly-owned subsidiary, borrowed $100.0 million under the $450.0 million senior secured asset-based revolving credit facility entered into on May 17, 2022 (as amended, the "ABL Facility"). This borrowing was executed as a short-term liquidity management strategy to provide financial flexibility in response to recent market uncertainty. During the fourth quarter of 2025, we repaid $50.0 million of the outstanding balance. The remaining funds outstanding are available to support working capital requirements and general corporate purposes. As of December 31, 2025, the ABL Facility had a facility size of $450.0 million, and $31.1 million in outstanding letters of credit, resulting in $368.9 million available for borrowing following the $50.0 million of outstanding borrowings. Our total available liquidity 1 as of December 31, 2025 was $639.8 million.
We regularly evaluate the impact of economic conditions on our business. A challenging macroeconomic environment has led to market uncertainty which has continued to negatively impact our revenues and cash flows. For the year ended December 31, 2025, our consolidated revenues increased slightly compared to the year ended December 31, 2024 primarily due to revenue growth in our Digital Audio Group, partially offset by lower political revenue as 2024 was a presidential election year, which primarily impacted our Multiplatform Group and Audio and Media Service Group, as well as lower broadcast revenue in our Multiplatform Group, among other factors discussed in the Results of Operations section of this MD&A. Although we cannot predict future economic conditions or the impact of any potential contraction of economic growth on our business, we believe that we have sufficient liquidity to continue to fund our operations for at least the next twelve months.
We are a party to many contractual obligations involving commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the Consolidated Balance Sheet as of December 31, 2025, while others are considered future commitments. Our contractual obligations primarily consist of long-term debt and related interest payments, commitments under non-cancelable operating lease agreements, employment and talent contracts, and music license fees. In addition to our contractual obligations, we expect that our primary anticipated uses of liquidity in 2026 will be to fund working capital, make tax payments, fund capital expenditures, make voluntary debt repayments and pursue other strategic opportunities, and maintain operations.
Assuming the current level of borrowings and interest rates in effect at December 31, 2025, we anticipate cash payments to service our debt of approximately $508.5 million in 2026. These debt service cash payments include principal amounts maturing in 2026, interest, quarterly term loan amortization payments and payments related to the debt premium. Future increases in interest rates could have a significant impact on our cash interest payments. For a description of the Company's future maturities of long-term debt, see Note 6, Long-Term Debt , and for a description of the Company's non-cancelable operating lease agreements and other contractual commitments, see Note 7, Commitments and Contingencies .
We acknowledge the challenges posed by the market uncertainty as a result of global economic weakness and other macroeconomic and political trends, however, we remain confident in our business, our employees and our strategy. Further, we believe our available liquidity will allow us to fund capital expenditures and other obligations and make interest and debt maturity payments on our long-term debt for at least the next twelve months. If these sources of liquidity need to be augmented, additional cash requirements would likely be financed through the issuance of debt or equity securities; however, there can be no assurances that we will be able to obtain additional debt or equity financing on acceptable terms or at all in the future.
We frequently evaluate strategic opportunities. We expect from time to time to pursue other strategic opportunities such as acquisitions or disposals of certain businesses, which may or may not be material.
1 Total available liquidity defined as cash and cash equivalents plus available borrowings under the ABL Facility. We use total available liquidity to evaluate our capacity to access cash to meet obligations and fund operations.
Sources of Capital
As of December 31, 2025 and 2024, we had the following debt outstanding:
(In thousands)
December 31,
Asset-based Revolving Credit Facility due 2027 (1)
Term Loan Facility due 2026
Incremental Term Loan Facility due 2026
Term Loan Facility due 2029 (2)
6.375% Senior Notes due 2026
5.25% Senior Notes due 2027
8.375% Senior Unsecured Notes due 2027
4.75% Senior Secured Notes due 2028
9.125% First Lien Notes due 2029
7.75% First Lien Notes due 2030
7.00% First Lien Notes due 2031
10.875% Second Lien Notes due 2030
Other subsidiary debt
Long-term debt fees
Debt Premium (3)
Total Debt
Less: Debt Premium
Less: Cash and cash equivalents
Net Debt (4)
(1) During the quarter ended December 31, 2025, iHeartCommunications repaid $50.0 million of the outstanding $100.0 million previously borrowed under the ABL Facility during 2025.
(2) Quarterly amortization payments of $5.4 million (equal to 0.25% of the original principal amount) are required per the terms of the Term Loan Facility due 2029.
(3) The difference between the carrying value of the exchanged 5.25% Senior Notes, 4.75% Senior Secured Notes, and 8.375% Senior Unsecured Notes and the principal amount of the 7.75% First Lien Notes due 2030, 7.00% First Lien Notes due 2031 and the 10.875% Second Lien Notes due 2030 was recorded as debt premium and will be reduced as contractual interest payments are made.
(4) Net Debt is a non-GAAP financial metric that is used by management and investors to assess our ability to meet financial obligations.
Our ABL Facility contains a springing fixed charge coverage ratio that is effective if certain triggering events related to borrowing capacity under the ABL Facility occur. As of December 31, 2025, no triggering event had occurred and, as a result, we were not required to comply with any fixed charge coverage ratio as of or for the period ended December 31, 2025. Other than our ABL Facility, none of our long-term debt includes maintenance covenants that could trigger early repayment. As of December 31, 2025, we were in compliance with all covenants related to our debt agreements. For additional information regarding our debt, refer to Note 6, Long-Term Debt .
Our subsidiaries have from time to time repurchased certain debt obligations of iHeartCommunications, and may in the future, as part of various financing and investment strategies, refinance, retire, exchange or purchase additional outstanding indebtedness of iHeartCommunications or its subsidiaries or our outstanding equity securities, in tender offers, open market purchases, privately negotiated transactions or otherwise. Such refinancings, repayments, exchanges or purchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. We or our subsidiaries may also sell certain assets, securities, or properties. These purchases or sales, if any, could have a material positive or negative impact on our liquidity available to repay outstanding debt obligations or on our consolidated results of operations. These transactions could also require or result in amendments to the agreements governing outstanding debt obligations or changes in our leverage or other financial ratios, which could have a material positive or negative impact on our ability to comply with the covenants contained in iHeartCommunications’ debt agreements. These transactions, if any, will depend on
prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
For additional information regarding our debt, including the terms of the governing documents, refer to Note 6, Long-Term Debt , to our consolidated financial statements located in Part II, Item 8 of this Annual Report on Form 10-K.
Supplemental Financial Information under Debt Agreements
Pursuant to iHeartCommunications' material debt agreements, iHeartMedia Capital I, LLC ("Capital I"), the parent guarantor and a subsidiary of iHeartMedia, is permitted to satisfy its reporting obligations under such agreements by furnishing iHeartMedia’s consolidated financial information and an explanation of the material differences between iHeartMedia’s consolidated financial information, on the one hand, and the financial information of Capital I and its consolidated restricted subsidiaries, on the other hand. Because neither iHeartMedia nor iHeartMedia Capital II, LLC, a wholly-owned direct subsidiary of iHeartMedia and the parent of Capital I, have any operations or material assets or liabilities, there are no material differences between iHeartMedia’s consolidated financial information for the year ended December 31, 2025, and Capital I’s and its consolidated restricted subsidiaries’ financial information for the same period. Further, as of December 31, 2025, we were in compliance with all covenants related to our debt agreements.
Uses of Capital
Capital Expenditures
Capital expenditures for the years ended December 31, 2025 and 2024 are discussed in the Cash Flows section above.
Dividends
Holders of shares of our Class A common stock are entitled to receive dividends, on a per share basis, when and if declared by our Board out of funds legally available therefor and whenever any dividend is made on the shares of our Class B common stock subject to certain exceptions set forth in our certificate of incorporation. See Note 9, Stockholders' Deficit , to our consolidated financial statements located in Part II, Item 8 of this Annual Report on Form 10-K.
Commitments, Contingencies and Guarantees
We are currently involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued our estimate of the probable costs for resolution of those claims for which the occurrence of loss is probable and the amount can be reasonably estimated. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to these proceedings. Please refer to Item 3. Legal Proceedings within Part I of this Annual Report on Form 10-K.
Certain agreements relating to acquisitions provide for purchase price adjustments and other future contingent payments based on the financial performance of the acquired companies generally over a one to five-year period. The aggregate of these contingent payments, if performance targets are met, would not significantly impact our financial position or results of operations.
We have future cash obligations under various types of contracts. We lease office space, certain broadcast facilities and equipment. Some of our lease agreements contain renewal options and annual rental escalation clauses (generally tied to the consumer price index), as well as provisions for our payment of utilities and maintenance. We also have non-cancellable contracts in our radio broadcasting operations related to program rights and music license fees. In the normal course of business, our broadcasting operations have minimum future payments associated with employee and talent contracts. These contracts typically contain cancellation provisions that allow us to cancel the contract with good cause.
SEASONALITY
Typically, our businesses experience their lowest financial performance in the first quarter of the calendar year. We expect this trend to continue in the future. Due to this seasonality and certain other factors, the results for the interim periods may not be indicative of results for the full year. In addition, we are impacted by political cycles and generally experience higher revenues in congressional election years, and particularly in presidential election years. This may affect comparability of results between years.
MARKET RISK
We are exposed to market risks arising from changes in market rates and prices, including movements in interest rates, foreign currency exchange rates and inflation.
Interest Rate Risk
A significant amount of our long-term debt bears interest at variable rates. Additionally, certain assumptions used within management's estimates are impacted by changes in interest rates. Accordingly, our earnings will be affected by changes in interest rates. As of December 31, 2025, approximately 45% of our aggregate principal amount of long-term debt bore interest at floating rates. Assuming the current level of borrowings and assuming a 100 bps change in floating interest rates, it is estimated that the interest expense for the twelve months ended December 31, 2025 would change by $22.1 million.
In the event of an adverse change in interest rates, management may take actions to mitigate our exposure. However, due to the uncertainty of the actions that would be taken and their possible effects, the preceding interest rate sensitivity analysis assumes no such actions. Further, the analysis does not consider the effects of the change in the level of overall economic activity that could exist in such an environment.
Inflation
Inflation is a factor in our business and we continue to seek ways to mitigate its effect. Inflation has affected our performance in terms of higher costs for employee compensation, equipment, and third party services. Although we are unable to determine the exact impact of inflation, we believe the impact will continue to be immaterial considering the actions we may take in response to these higher costs that may arise as a result of inflation.
NEW ACCOUNTING PRONOUNCEMENTS
For information regarding new accounting pronouncements, refer to Note 1, Summary of Significant Accounting Policies , to our consolidated financial statements located in Part II, Item 8 of this Annual Report on Form 10-K.
CRITICAL ACCOUNTING ESTIMATES
The preparation of our financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. On an ongoing basis, we evaluate our estimates that are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of expenses that are not readily apparent from other sources. Because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such difference could be material. Our significant accounting policies are discussed in the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Management believes that the following accounting estimates are the most critical to aid in fully understanding and evaluating our reported financial results, and they require management’s most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. The following narrative describes these critical accounting estimates, the judgments and assumptions and the effect if actual results differ from these assumptions.
Indefinite-lived Intangible Assets
Indefinite-lived intangible assets, such as our FCC licenses, are reviewed for impairment using a combination of the direct and market valuation methods. Under the direct valuation method, the estimated fair value of the indefinite-lived intangible assets was calculated at the market level as prescribed by ASC 350-30-35. Under the direct valuation method, it is assumed that rather than acquiring indefinite-lived intangible assets as a part of a going concern business, the buyer hypothetically obtains indefinite-lived intangible assets and builds a new operation with similar attributes from scratch. Thus, the buyer incurs start-up costs during the build-up phase which are normally associated with going concern value. Initial capital costs are deducted from the discounted cash flows model, which results in value that is directly attributable to the indefinite-lived intangible assets.
Our key assumptions using the direct valuation method are market revenue growth rates, profit margin, and the risk-adjusted discount rate as well as other assumptions including market share, duration and profile of the build-up period, estimated start-up costs and capital expenditures. This data is populated using industry normalized information representing an average asset within a market.
We performed our annual impairment test as of July 1, 2025 in accordance with ASC 350-30-35 and we concluded that a $208.5 million impairment of the indefinite-lived intangible assets was required. In determining the fair value of our FCC licenses, the following key assumptions were used:
• Revenue forecasts published by BIA Financial Network, Inc. (“BIA”), varying by market;
• 2.0% over-the-air revenue growth and 3.0% digital revenue growth was assumed beyond the initial five-year period and 1.0% revenue growth was assumed in the terminal period;
• Revenue was grown proportionally over a build-up period, reaching market revenue forecast by year 3;
• Operating margins of 8.0% in the first year gradually climb to the industry average margin in year 3 of up to 14.1%, depending on market size; and
• Assumed discount rates of 9.5% for large markets and 10.0% for small markets.
FCC licenses were valued using a market approach to estimate the fair value by referencing recent transactions involving comparable spectrum assets. This method considers observable market data, adjusted for differences in signal strength and market size.
While we believe we have made reasonable estimates and utilized appropriate assumptions to calculate the fair value of our indefinite-lived intangible assets, it is possible a material change could occur. If future results are not consistent with our assumptions and estimates, we may be exposed to impairment charges in the future. The following table shows the decrease in the fair value of our indefinite-lived intangible assets that would result from a 100 basis point decline in our discrete and terminal period revenue growth rate and profit margin assumptions and a 100 basis point increase in our discount rate assumption:
Impact on the Fair Value of our FCC Licenses due to 100 bps Change in:
Revenue Growth Rate
Profit Margin
Discount Rate
(in thousands)
At December 31, 2025, the carrying value of our FCC licenses was $601.4 million after the impairment of $208.5 million. An increase in discount rates, a decrease in revenue growth rates or profit margins, or a decrease in BIA revenue forecasts could result in additional impairment to our FCC licenses.
Goodwill
We test goodwill at interim dates if events or changes in circumstances indicate that goodwill might be impaired. The fair value of our reporting units is used to apply value to the net assets of each reporting unit. To the extent that the carrying amount of net assets would exceed the fair value, an impairment charge may be required to be recorded. Based on the impairment testing performed as of July 1, 2025, no impairment was identified for any of our reporting units. Fair values increased or remained flat across the reporting units, primarily driven by stronger debt and equity market performance .
The valuation methodology we use for valuing goodwill involves considering the implied fair values of our reporting units based on market factors including the trading prices of our debt and equity securities, and estimating future cash flows expected to be generated from the related assets, discounted to their present values using a risk-adjusted discount rate. Terminal values are also estimated and discounted to their present values.
We performed our annual impairment test as of July 1, 2025 in accordance with ASC 350-30-35, resulting in no impairment of goodwill. In determining the fair value of our reporting units, we considered industry and market factors including trading multiples of similar businesses and the trading prices of our debt and equity securities. For purposes of assessing the discounted future cash flows of our reporting units, we used the following assumptions:
• Expected cash flows underlying our business plans for the periods 2025 through 2029. Our cash flow assumptions are based on detailed, multi-year forecasts performed by each of our operating reporting units and reflect the current advertising outlook across our businesses.
• Revenues beyond 2029 are projected to grow at a perpetual growth rate, which we estimated at 1.0% for our Multiplatform Reporting unit (beyond 2034), 3.0% for our Digital Audio Reporting unit (beyond 2033), and 2.0% for our RCS and Katz Media Reporting units.
• Profit margins beyond 2029 utilize the 2029 margin implied in the multi-year forecasts.
• In order to risk adjust the cash flow projections in determining fair value, we utilized discount rates between 15% and 16% for each of our reporting units.
While we believe we have made reasonable estimates and utilized appropriate assumptions to calculate the estimated fair value of our reporting units, it is possible a material change could occur. If future results are not consistent with our assumptions and estimates, we may be exposed to additional impairment charges in the future. The following table shows the decline in the fair value of each of our reporting units that would result from a 100 basis point decline in our discrete and terminal period revenue growth rate and profit margin assumptions and a 100 basis point increase in our discount rate assumption:
(In thousands)
Impact on the Fair Value of our Goodwill due to 100bps Change in:
Reporting Unit
Revenue Growth Rate
Profit Margin
Discount Rate
Multiplatform
Digital
Katz Media
RCS
An increase in discount rates or a decrease in revenue growth rates or profit margins could result in additional impairment charges being required to be recorded for one or more of our reporting units.
Tax Provisions
Our estimates of income taxes and the significant items giving rise to the deferred tax assets and liabilities are shown in the notes to our consolidated financial statements and reflect our assessment of actual future taxes to be paid on items reflected in the financial statements, giving consideration to both timing and probability of these estimates. Actual income taxes could vary from these estimates due to future changes in income tax law or results from the final review of our tax returns by federal, state or foreign tax authorities.
We use our judgment to determine whether it is more likely than not that our deferred tax assets will be realized. Deferred tax assets are reduced by valuation allowances if the Company believes it is more likely than not that some portion or the entire asset will not be realized.
We use our judgment to determine whether it is more likely than not that we will sustain positions that we have taken on tax returns and, if so, the amount of benefit to initially recognize within our financial statements. We regularly review our uncertain tax positions and adjust our unrecognized tax benefits ("UTBs") in light of changes in facts and circumstances, such as changes in tax law, interactions with taxing authorities. developments in case law and significant transactions. These adjustments to our UTBs may affect our income tax expense. Settlement of uncertain tax positions may require use of our cash.
