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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 0.05pp more bullish 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
-0.03pp
Flat
Net-tone change vs last year's 10-K.
MD&A
+0.13pp
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
harm+2
adverse+1
critical+1
disfavored+1
Positive rising
success+1
Risk Factors (Item 1A)
11,430 words
ITEM 1A. RISK FACTORS
An investment in Townsquare involves a variety of risks and uncertainties. The following factors and other factors discussed in this Annual Report could cause our actual results to differ materially from those contained in forward-looking statements made in this Annual Report or presented elsewhere in future SEC reports or statements made by our management from time to time. These factors may have a material effect on our business, financial condition, operating results and cash flows, and should be carefully considered. We may update these factors in our future periodic reports.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
impairment+1
decline+1
challenges+1
damages+1
Positive rising
gains+3
effective+1
MD&A (Item 7)
7,194 words
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Risks Related to Economic Conditions and Our Business
Macroeconomic factors such as high and sustained inflation and interest rates, enacted and proposed tariffs and changes in the economy have had, and may continue to have a material adverse effect on our business.
A substantial majority of our net revenue is generated from the sale of local, regional and national advertising on our digital properties and radio stations. In addition, our target clients for our digital marketing solutions business are SMBs. Periods of economic slowdown and uncertainty, recession or recessionary indicators, increases in unemployment rates, interest rates and inflation rates, prolonged supply chain disruptions or labor shortages, market volatility, political instability or a reduction in consumer confidence in the U.S. economy may have a material adverse impact on our business, financial condition and results of operations. Additionally, tariffs or other trade restrictions affecting imported broadcasting equipment, servers, computer hardware, or other technology infrastructure could significantly increase our capital expenditure requirements or limit our access to critical equipment, which could adversely affect our operations. Decisions by advertisers and subscribers to delay, reduce or cancel their advertising, or subscription spending on our platforms based on changes in economic conditions could also slow our revenue growth or reduce our revenues, and SMBs, who generally have less resources than larger companies, may limit their spending. Furthermore, because a substantial portion of our revenue is derived from local advertisers, our ability to generate advertising revenue in specific markets (including concentrations in and around the Northeast, Upper Midwest, Texas and the Mountain West) could be adversely affected by local or regional economic downturns. A downturn in the U.S. economy could also adversely affect our advertising revenue and our results of operations.
In addition, a significant percentage of our advertising revenue is generated from the sale of advertising and marketing solutions to the automotive, entertainment, and retail industries. These industries, among others, have been adversely affected by prior downturns in the economy, and may be adversely affected by any future downturns in the economy, and a significant decrease in advertising revenue from advertisers in these industries in the future could have a material adverse effect on our business, financial condition and results of operations. Decisions by SMBs targeted by Townsquare Interactive, our digital marketing services business, to delay or reduce their spending based on economic conditions could slow our subscriber growth or increase our subscriber attrition.
A decline in attendance at or reduction in the number of concerts and live events may have an adverse effect on revenue and operating income from our live events business. During periods of economic slowdown and recession, many consumers have historically reduced their discretionary spending. Consumer discretionary spending is sensitive to many factors such as employment, fuel and energy prices, inflation and general economic conditions, and as a result, the risks associated with our live events business may become more acute in periods of a slowing economy or recession, which may be accompanied by a decrease in attendance at our live events. The impact of economic slowdowns on our business is difficult to predict, but they may result in reductions in ticket sales, sponsorships and our ability to generate revenue from our live events business.
If we are unable to retain our digital audience, our business may be adversely affected.
The increasing number of digital media options available on the internet, through social networking platforms and through mobile and other devices distributing news and other content is expanding consumer choice significantly. Faced with a multitude of media choices and a dramatic increase in accessible information, consumers may place greater value on when, where, how and at what price they consume digital content than they do on the source or reliability of such content. The popularity of Artificial Intelligence (“AI”) driven news aggregation websites, customized news feeds
(often free to users), and AI driven content, including Chat GPT, Perplexity, and Google’s Gemini, has and may continue to reduce our traffic levels by creating a disincentive for the audience to visit our websites or use our mobile applications. In addition, the undifferentiated presentation of some of our content in aggregation with other content may lead audiences to fail to distinguish our content from the content of other providers. Our reputation for quality journalism and content are important in competing for revenue in this environment and are based on consumer and advertiser perceptions. If consumers fail to differentiate our content from other content providers in digital media, or if the quality of our journalism or content is perceived as less reliable, we may not be able to increase our online traffic sufficiently or retain a base of frequent visitors to our local and national digital properties.
Online traffic is also driven by internet search and social media referrals, including search results provided by Google, the primary search engine directing traffic to our websites, and links from Facebook, the primary social media platform directing traffic to our websites. Search engines and social platforms frequently update and change the methods and algorithms for directing traffic to websites, or change methodologies or metrics for valuing the quality and performance of internet traffic on delivering cost-per-click advertisements. Any such changes could decrease the amount of revenue that we generate from online advertisements. The failure to successfully manage search engine optimization efforts across our business could result in a significant decrease in traffic to our various websites, which could result in substantial decreases in conversion rates and repeat business, as well as increased costs if we were to replace free traffic with paid traffic, any or all of which would adversely affect our business, financial condition and results of operations.
We may not be able to create sufficient advertiser interest in our digital properties or to maintain or increase the advertising rates of the inventory on our digital properties. Even if we maintain traffic levels, the market position of our brands may not be enough to counteract a significant downward pressure on advertising rates.
Artificial intelligence presents new risks and challenges to our business.
We continue to develop and implement several AI initiatives, both internally and with external partners. Our efforts to develop, acquire or integrate these technologies involve time, costs, and other resources. Issues relating to the use of new and evolving technologies such as AI and machine learning may cause us to experience brand or reputational harm, competitive harm, legal liability, and new or enhanced governmental or regulatory scrutiny, and we may incur additional costs to resolve such issues. As with many innovations, AI presents risks and challenges that could undermine or slow adoption and therefore harm our business. Further, if our efforts to develop, acquire or integrate these technologies are unsuccessful, it may have a materially adverse impact on our business, future prospects and financial position.
The use of AI by our business partners and advertisers may lead to novel risks, which could have a material adverse effect on our operations and reputation as well as that of our business partners and advertisers. In addition, the legal and regulatory framework surrounding AI is developing rapidly, and new or changing standards may require significant resources to modify and maintain business practices to comply with United States federal and state laws, as well as international laws concerning the use of AI.
AI may also permit our competitors to be able to devote greater resources to the development, promotion, and sale of their software solutions and services. If our competitors’ products, services or platforms become more accepted than our solutions, or if our competitors are able to respond more quickly and effectively to new or changing opportunities, technologies, or customer requirements, or if their products or services are more technologically capable than ours, it may have a material adverse effect on our business, results of operations, and financial condition.
Our business, financial condition and results of operations may be adversely affected if we are unable to acquire certain broadcast rights or our broadcast rights contracts are not renewed on sufficiently favorable terms.
The acquisition of broadcast rights is highly competitive, and we may be adversely impacted by certain exclusive content rights held by our competitors. We sometimes enter into broadcast rights contracts in the ordinary course of business for both the acquisition and distribution of media content and products, including contracts for both the acquisition and distribution of content rights for sporting events and other programs, and contracts relating to content produced by third parties on our radio stations. If we are unable to renew these contracts, as they expire, on acceptable terms, we may lose these rights, the related content and the related revenue. Even if these contracts are renewed, the cost of obtaining content rights may increase (or increase at faster rates than in the past) or the revenue from distribution of content may be reduced (or increase at slower rates than in the past). The impact of broadcast rights contracts and the terms of the contracts on our results will depend on a number of factors beyond our control, including the strength of advertising markets, effectiveness of marketing efforts, the size of audiences, and the related contract expenses and costs. There can be no assurance that revenue from content based on these rights will exceed the cost of the rights plus the other costs of producing and distributing the content.
Our results are impacted by political advertising revenue, which can vary from even to odd-numbered years.
Approximately 1% and 3% of our net revenue for the years ended December 31, 2025 and 2024, respectively, consisted of political advertising revenue. Political advertising revenue from elections, which is generally greater in even-numbered years and especially the years in which the U.S. President is elected, has the potential to create fluctuations in our operating results on a year-to-year basis. For example, we had political advertising revenue of $2.2 million and $13.4 million, during 2025 and 2024, respectively. In addition, political advertising revenue is dependent on the level of political ad spend and competitiveness of local, state and national elections within each local market.
To remain competitive, we must respond to changes in technology, services and standards that characterize our industry.
The radio broadcasting and digital advertising industries are subject to technological change, evolving industry standards and the emergence of new media technologies and trends. We may not have the resources to acquire new technologies or to introduce new services that could compete with these new technologies and may allow us to adapt to new trends. Various media technologies and services have been or are being developed or introduced, including:
• satellite-delivered digital audio radio service, which resulted in subscriber-based satellite radio services with numerous niche formats;
• audio content by cable systems, direct-broadcast satellite systems, personal communications systems, content available over the internet and other digital audio broadcast formats;
• in-band on-channel digital radio, which provides multi-channel, multi-format digital radio services in the same bandwidth currently occupied by traditional AM and FM radio services;
• Low-Power FM radio stations, which are non-commercial FM radio broadcast outlets, that serve small, localized areas;
• applications that permit users to listen to programming on a time-delayed basis and to fast-forward through programming and/or advertisements (e.g., podcasts);
• iPhone/iPad and similar mobile devices, gaming consoles, in-home entertainment and enhanced automotive platforms, voice activated smart speakers, and streaming internet services such as Netflix, Spotify, and Pandora, all of which provide access to audio and other entertainment content to consumers.
In addition, some automobile manufacturers have removed AM radio functionality from their vehicles. Although Congress is considering legislation to maintain AM radio in vehicles, we cannot predict whether these legislative efforts will be successful, or their impact on our business.
Further, we cannot predict the effect, if any, that competition arising from new technologies may have on the radio broadcasting and digital advertising industries or on our business, financial condition and results of operations, some of which could result in the imposition of significant costs and expenses not previously part of our business operations.
The failure or destruction of transmitter and other facilities that we depend upon to distribute our content could materially adversely affect our business, financial condition and results of operations.
We use studios, satellite systems, transmitter facilities and the internet to originate and/or distribute our content. We rely on third-party contracts and services to operate our origination and distribution facilities. These third-party contracts and services include, but are not limited to, electrical power, satellite uplinks, telecom circuits and internet connectivity. Distribution may be disrupted due to one or more third parties losing their ability to provide particular services to us, which could adversely affect our distribution capabilities. A disruption can be caused as a result of any number of events such as local disasters (accidental or environmental), weather events, extreme weather or wildfires (which may increase in frequency due to climate change), various acts of terrorism, war or armed conflict, power outages, major telecom and internet connectivity failures or satellite failures. Our ability to distribute content to our radio station audience and/or network affiliates may be disrupted for an undetermined period of time until alternate facilities are engaged and put on-line. Furthermore, until we fix issues that arise or third-party services resume when applicable, the inability to originate or distribute content could have a material adverse effect on our business, financial condition and results of operations.
We are dependent on key personnel.
The leadership, skills and experience of our senior management team are critical to our operations, and the loss of one or more members of our senior management team could have a material adverse effect on our business, financial condition and results of operations, including impairing our ability to execute and evolve our business strategy. We believe that our future success will depend greatly on our continued ability to attract, retain and motivate highly skilled and qualified personnel.
Future success and growth in our digital businesses depends upon our continued ability to develop and maintain technology and identify, hire, develop, motivate and retain highly skilled technical and sales talent. Competition for employees with these skill sets is intense and our continued ability to compete effectively depends, in part, upon our ability to attract new employees. We will also need to be able to balance the costs of recruiting and retaining these employees with profitable growth. If we are unable to do so, our business, financial condition or results of operations may be adversely affected.
The success of our radio stations is significantly impacted by our on-air talent, and we compete for on-air talent with other radio stations and radio station groups, radio networks, and other providers of syndicated content and other media such as broadcast television, cable television, satellite television, the internet and satellite radio. Our employees and other on-air talent are subject to change and may be lost to competitors or for other reasons, and the contracts we have with certain talent generally are limited in duration. Any adverse changes in particular programs or on-air talent in a particular market could have a negative impact on our ratings and generally could have a material adverse effect on our ability to attract advertisers, which could negatively impact our business, financial condition or results of operations. In addition in April 2024, the FTC adopted rules to ban most post-termination non-compete clauses and require employers to rescind existing ones. Those rules were appealed by several parties and ultimately never went into effect. As a result, there is no FTC rule banning non-compete clauses. However, the FTC has signaled such clauses are disfavored and is pursuing them via other authority in some cases. To the extent these clauses are an enforcement priority for the FTC, it could have a material adverse impact on our ability to retain key personnel.
Increases in or new royalties could adversely impact our business, financial condition and results of operations.
We pay royalties to song composers and publishers through four performing rights organizations (“PROs”). Royalties are currently paid to Broadcast Music, Inc. (“BMI”), the American Society of Composers, Authors and Publishers (“ASCAP”), SESAC, Inc. (“SESAC”) and Global Music Rights, Inc. (“GMR”), for the performance of musical compositions on our radio stations and websites. We also pay royalties to SoundExchange for digital public performance of sound recordings in connection with the streaming of music. Royalty rates are subject to periodic adjustment and increased royalties. It is possible that our royalty rates associated with obtaining rights to use compositions and sound recordings in our programming content could increase as a result of private negotiations, regulatory rate-setting processes, or administrative and court decisions. In addition, should one or more new PRO establish that we use compositions to which they have the rights, the royalties we pay could increase.
From time to time, Congress considers legislation that could require that radio broadcasters pay sound recording performance royalties to record labels, recording artists, and other copyright holders for over-the-air broadcasting. That proposed legislation has been the subject of considerable debate and activity by the radio broadcast industry and other parties that could be affected. We cannot predict whether any proposed legislation will become law. The proposed legislation would add additional royalties to be paid for the benefit of record labels (or other sound recording copyright holders) and artists. If adopted, these royalties would increase the cost of music and other sound recordings. It is currently unknown what proposed legislation, if any, will become law. However, if adopted, such additional royalties could have an adverse effect on our business, financial condition and results of operations.
The DOJ, from time to time, considers whether to reform or terminate the long-standing antitrust consent decrees that govern music licensing by ASCAP and BMI. Any change to the consent decrees could lead to the increase of our royalty rates associated with obtaining rights to use musical compositions and sound recordings in our programming content.
The use of music other than in connection with our broadcast operations and the streaming of our broadcast programming is not covered by our broadcast licenses with ASCAP, BMI, SESAC, GMR and Sound Exchange. In most cases, rights to use music on digital platforms requires direct negotiations with the copyright holders. There is no guarantee that rights to such music uses can be obtained at reasonable costs, which could restrict our ability to monetize and grow our online operations.
Our substantial indebtedness could have an adverse impact on us.
We have a significant amount of indebtedness. As of December 31, 2025, we had $433.0 million of outstanding indebtedness, net of unamortized discount and deferred financing costs of $24.4 million, with annual 2026 cash interest expense requirement of approximately $40 million. On February 19, 2025 we entered into a credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent and collateral agent and the lenders and financial institutions party thereto, that provides for a five-year $470 million senior secured term loan facility (the “Term Loan Facility”) and a five-year $20 million senior secured revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Secured Credit Facility”). We the Senior Secured Credit Facility requires fixed quarterly repayments of the initial principal amount, which commenced on June 30, 2025, with the remaining balance payable upon maturity. We used the approximately $453 million of net proceeds from the Senior Secured Credit Facility (after giving effect to original issue discount, fees, expenses and the $10 million of the Revolving Credit Facility drawn at closing), together with cash on hand, to redeem $467.4 million aggregate principal amount outstanding of 6.875% senior secured notes due 2026. Our substantial level of indebtedness increases the risk that we may be unable to generate cash sufficient to pay amounts due in respect of our indebtedness. We may incur substantial additional amounts of indebtedness, as well as incur significant non-debt obligations, which could further exacerbate the risks associated with such indebtedness. Our substantial indebtedness could have other significant effects on our business.
For example, it could:
• increase our vulnerability to adverse changes in general economic, industry and competitive conditions;
• require us to dedicate a substantial portion of our cash flow from operations to make payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;
• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
• restrict us from taking advantage of opportunities to grow our business;
• make it more difficult to satisfy our financial obligations;
• place us at a competitive disadvantage compared to our competitors that have less debt obligations; and
• limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, debt service requirements, the execution of our own business strategy or other general corporate purposes on satisfactory terms or at all.
In addition, the agreements evidencing or governing our current indebtedness do contain, and the agreements evidencing or governing our future indebtedness may contain, restrictive covenants that will limit our ability to engage in activities that may be in our long-term best interest. Our ability to comply with those covenants depends on our future operating performance and cash flow, which are in turn subject to prevailing economic conditions, increases or decreases in advertising spending, changes in the highly competitive industry in which we operate, which may be rapid, and other factors, many of which are beyond our control. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our indebtedness, which would have a material adverse effect on our business.
The Senior Secured Credit Facility matures on February 19, 2030 and, under certain circumstances, will be subject to mandatory prepayments. Any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness. If we cannot make required payments on our indebtedness, we will be in default under one or more of the agreements governing our indebtedness, and, as a result, we could be forced into bankruptcy or liquidation.
Capital requirements necessary to operate our business or consummate acquisitions could pose risks.
Our business requires a certain level of capital expenditures. If our cash flows and capital resources are insufficient to fund our debt service obligations, we could be forced to reduce or delay investments and capital expenditures, adversely impacting our business, financial condition and results of operations. In addition, we may be required to increase our debt and/or issue equity securities in order to consummate an acquisition, and we may not have sufficient cash flows and capital resources to consummate one or more acquisitions. In addition, our ability to obtain financing depends on a number of other factors, many of which are also beyond our control, such as interest rates and national and local business conditions. If the cost of obtaining needed financing is too high or the terms of such financing are otherwise unacceptable in relation to the acquisition opportunity we are presented with, we may decide to forego that opportunity. Additional indebtedness could increase our leverage and make us more vulnerable to economic downturns and may limit our ability to withstand competitive pressures.
Risks Related to Our Industry and Competition
Our future revenue and earnings growth will be significantly impacted by our digital lines of business, which are subject to significant competition and rapidly changing technology.
We invest significant capital and employee resources in our digital businesses, including our subscription digital marketing solutions business, Townsquare Interactive, and our programmatic digital advertising business. These digital business lines are subject to significant competition, rapidly changing technology, and evolving standards. As we continue to grow these lines of business and expand into new markets, we will also face new sources of competition,
including, in certain of these markets, from companies with longer operating histories, established customer bases, greater brand recognition and more financial, technical, marketing, and related resources. We will need to cultivate new relationships with customers, third party providers and other partners in each of these markets. We may not be able to compete successfullyagainst current and future competitors, and our business, results of operations and financial condition will be harmed if we fail to meet these competitive pressures. In addition, there can be no assurance that our digital technologies we use or develop will be adequate, or that we will be able to establish our proprietary right to the technologies we rely upon.
The ability to grow Townsquare Interactive depends in large part on maintaining and expanding our subscriber base. To do so, we must convince prospective subscribers of the benefits of our technology platform and existing subscribers of the continuing value of our products and services. Most of our contracts with subscribers are terminable upon short or no notice. The digital marketing solutions sector is highly competitive. We believe our solutions are well positioned to serve the SMBs in markets outside the top 50 upon which we focus. However, if our subscriber base decreases, our business, financial condition and operating results will be adversely affected.
We may lose audience ratings, market share and advertising revenue to competing radio stations or other types of media competitors.
We operate in a highly competitive industry. Our radio operations compete for audiences and advertising market share with other radio stations and radio station groups, radio networks, other syndicated content and other media such as broadcast television, newspapers, magazines, cable television, satellite television, the internet, internet radio, digital platforms and applications, satellite radio, outdoor advertising, mobile devices and other portable digital audio players. We also compete for advertising dollars with other large digital companies, such as Meta, Google and Amazon. Any adverse change in a particular market or in the relative market positions of the radio stations located in a particular market, or any adverse change in audiences’ preferences could have a material adverse effect on our ratings or revenue. Other radio broadcasting companies may enter the markets in which we operate or may operate in the future, offer syndicated content that competes with our content, or try to acquire distribution rights of media content and products or on-air talent that we use or have under contract, and these companies may be larger and have more financial resources than we do.
In addition, from time to time, other radio stations may change their format or content, or a radio station may adopt a format to compete directly with us for audiences and advertisers. These tactics could result in lower ratings, lower market share and lower advertising revenue or increased promotion and other expenses and, consequently, lower earnings and cash flow for us. Audience preferences as to format or content may also shift due to demographic changes, personnel or other content changes, a decline in broadcast listening trends or other reasons. We may not be able to adapt to these changes or trends, any of which could have a material adverse impact on our business, financial condition and results of operations. If we elect to make significant changes to our format or content to respond to changes in audience preferences or competition in a number of markets, such changes could utilize significant management resources, capital and time to implement and our new format and content may not be successful.
Competition for advertising is generally based on audience levels and demographics, price, service and advertising results. It has intensified as a result of the continued development of digital media and in recent years, advertisers have shifted dollars toward digital, putting downward pressure on our broadcast revenue. If this trend continues, we may experience a decline in broadcast revenue as a result. In addition, competition from all of these media and services affects our ability to attract and retain advertisers and consumers and to maintain or increase our advertising rates.
Our success is dependent upon audience engagement with our content, which is difficult to predict.
Digital media and radio content production and distribution is an inherently risky business because the revenue derived from the production and distribution of digital media content or a radio program, and the licensing of rights to the intellectual property associated with the content or program, depend primarily upon their acceptance by the public, which is difficult to predict. The commercial success of content or a program also depends upon the quality and acceptance of other competing programs released into the marketplace at or near the same time, the availability of
alternative forms of entertainment and leisure time activities, general economic conditions and other tangible and intangible factors, all of which are difficult to predict.
Ratings for broadcast radio stations and traffic or visitors to a particular website are also factors that are weighed when advertisers determine which outlets to use and in determining the advertising rates that the outlet receives. Poor ratings or traffic levels can lead to a reduction in pricing and advertising revenue. For example, if there is an event causing a change of programming at one of our radio stations, there could be no assurance that any replacement programming would generate the same level of ratings, revenue or profitability as the previous programming. In addition, changes in ratings methodology and technology could adversely impact our ratings and negatively affect our advertising revenue. Because of the competitive factors we face, we cannot assure investors that we will be able to maintain or increase our current audience ratings and advertising revenue, which could have an adverse impact on our business, financial condition and results of operations.
Our live events business depends in part on our ability to anticipate the tastes of consumers and to offer events that appeal to them. Since we rely on unrelated parties to perform at certain of our live events, any lack of availability of popular artists could limit our ability to generate revenue. In addition, our live events business typically plans and makes certain commitments to future events up to 18 months in advance of the event, and often agrees to pay an artist or other service providers or venues a fixed guaranteed deposit prior to our receiving any revenue as is standard in the live events industry. Therefore, if the public is not receptive to the event, or we or an artist cancel the event, we may incur a loss for the event depending on the amount of the fixed guaranteed or incurred costs relative to any revenue earned, as well as revenue we could have earned at the event. For certain events, we have cancellation insurance policies in place to cover a portion of our losses but this coverage may not be sufficient and is subject to deductibles. Furthermore, consumer preferences change from time to time, and our failure to anticipate, identify or react to these changes could result in reduced demand for our live events, which would adversely affect our business, financial condition and results of operations.
Risks Related to Acquisitions
There are risks associated with our acquisition strategy.
We may continue to grow in part by acquiring radio stations, digital properties or other businesses in the future. We cannot predict whether we will be successful in pursuing these acquisitions or what the consequences of these acquisitions will be. Any acquisitions in the future may be subject to various conditions, such as compliance with FCC and antitrust regulatory requirements.
The FCC requirements include:
• approval of license assignments and transfers;
• limits on the number of radio stations a broadcaster may own in a given local market; and
• other rules and policies, such as the ownership attribution rules, that could limit our ability to acquire radio stations in certain markets where one or more of our stockholders, officers or directors have other media interests.
The antitrust regulatory requirements include:
• filings with the DOJ and the FTC under the HSR Act, where applicable;
• expiration or termination of any applicable waiting period under the HSR Act; and
• possible review by the DOJ or the FTC of antitrust issues under the HSR Act or otherwise.
Completion of any acquisition may be approved by regulatory authorities subject to our compliance with certain conditions. These conditions may be onerous, and may include the requirement that we divest certain assets, which may include radio stations we already own or we propose to acquire. We cannot be certain whether we would be willing to satisfy any of these conditions or whether they can be satisfied, the timing thereof, or the potential impact on us any such conditions may have. In addition, the FCC has in the past asserted the authority to review levels of local radio market concentration as part of its acquisition approval process, even where proposed assignments would comply with the numerical limits on local radio station ownership in the FCC’s rules and the Communications Act.
Our acquisition strategy involves numerous other risks, including risks associated with:
• identifying acquisition candidates, competing for such acquisitions and negotiating definitive purchase agreements on satisfactory terms, and the related costs of these activities;
• integrating operations, systems, and other internal controls, and managing a large and geographically diverse group of assets;
• unsatisfactory returns on investment or an inability to achieve anticipated synergies on a timely basis or at all;
• diverting our management’s attention from other business concerns;
• entry into new markets and geographic areas where we have limited or no experience;
• retaining key employees, customers, suppliers or other third-party relationships of the acquired businesses;
• assumption of known and unknown liabilities, some of which may be difficult or impossible to quantify;
• non-cash impairment charges or other accounting charges relating to the acquired assets;
• tax costs or inefficiencies; and
• a diminishing number of properties available for sale in appropriately sized and located markets.
We cannot be certain that we will be able to successfully integrate any future acquisitions or manage the resulting business effectively, or that any acquisition will achieve the benefits that we anticipate. In addition, we are not certain that we will be able to acquire properties at valuations as favorable as those of previous acquisitions. Depending upon the nature, size and timing of potential future acquisitions, we may be required to raise additional financing or issue additional securities in order to consummate additional acquisitions. Our debt agreements, as may be in place at any time, may not permit us to consummate an acquisition or access the necessary additional financing because of certain covenant restrictions. Furthermore, we cannot be certain that additional capital will be available to us or, if available, that capital would be on terms acceptable to our management team.
Due to various market and financial conditions, we may not be able to successfully complete future acquisitions or future dispositions of our radio stations, or achieve the related benefits we anticipate.
We pursue acquisitions when such acquisitions are strategic and financially additive and meet our overall business needs. We engage in strategic sales of our assets from time to time, as it makes financial sense to do so and meets our overall business needs. We have also been required by the FCC to divest radio stations. However, due to financial and economic market conditions, both in the radio industry and in the overall U.S. economy, as well as antitrust, FCC and other regulatory requirements, our consummation of future acquisitions or dispositions, including those requiring radio station divestitures, is uncertain and may be difficult. In addition, we cannot be certain that we will be able to successfully integrate any recent or future acquisitions or manage the resulting business effectively, or that any acquisition or disposition will achieve the benefits that we anticipate.
Risks Related to Our Financial Reporting and Accounting
We have remediated several material weaknesses in our internal control over financial reporting in prior years. If we experience additional material weaknesses in the future, our business may be harmed.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for evaluating and reporting on the effectiveness of our system of internal control. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. GAAP. As a public company, we are required to comply with the Sarbanes-Oxley Act and other rules that govern public companies. In particular, we are required to certify our compliance with Section 404 of the Sarbanes-Oxley Act, which requires us to annually furnish a report by management on the effectiveness of our internal control over financial reporting.
Remediation efforts, when necessary, place a significant burden on management and add increased pressure to our financial resources and processes. If we identify material weaknesses in our internal control over financial reporting in the future, our business may be harmed. Such harm may include: (i) failure to accurately report our financial results, to prevent fraud or to meet our SEC reporting obligations on a timely basis or at all; (ii) material misstatements in our Consolidated Financial Statements and harm to our operating results and investor confidence; and (iii) a material adverse effect on the trading price of our stock. In addition, the foregoing could subject us to sanctions or investigations by the NYSE, the SEC or other regulatory authorities, and result in the breach of covenants in our debt agreements, any of which could have a material adverse impact on our operations, financial condition, results of operations, liquidity and our stock’s trading price.
Further, there are inherent limitations in the effectiveness of any control system, including the potential for human error and the possible circumvention or overriding of controls and procedures. Additionally, judgments in decision-making can be faulty and breakdowns can occur because of a simple error or mistake. An effective control system can provide only reasonable, not absolute, assurance that the control objectives of the system are adequately met. Finally, projections of any evaluation or assessment of effectiveness of a control system to future periods are subject to the risks that, over time, controls may become inadequate because of changes in an entity’s operating environment or deterioration in the degree of compliance with policies or procedures.
Future losses could be caused by future asset impairment of our FCC licenses and/or goodwill.
Under Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 350, “Intangibles-Goodwill and Other,” goodwill and indefinite-lived intangibles, including FCC licenses, are not amortized but instead are tested for impairment at least annually, or more frequently if events or circumstances indicate that there may be an impairment. Impairment is measured as the excess of the carrying value of the goodwill or intangible asset over its fair value. Intangible assets that have finite useful lives continue to be amortized over their useful lives and are also measured for impairment if events or circumstances indicate that they may be impaired. Impairmentlosses are recorded as operating expenses.
As of December 31, 2025, our FCC licenses and goodwill comprised approximately 27.8% and 27.9% of our consolidated total assets, respectively. The valuation of intangible assets is subjective and based on estimates rather than precise calculations. If actual future results are not consistent with the assumptions and estimates used, we may be exposed to impairment charges in the future. The fair value measurements for both our goodwill and indefinite-lived intangible assets use significant unobservable inputs which reflect our own assumptions about the estimates that market participants would use in measuring fair value including assumptions about risk.
Given the current economic environment and the potential negative impact on our business, there can be no assurance that our estimates and assumptions regarding our forecasts, made for the purpose of our non-amortizable intangible fair value estimates, will prove to be accurate.
Interim and/or annual impairment testing, as applicable, could result in future impairmentlosses. The fair value of FCC licenses and goodwill is primarily dependent on the expected future cash flows of our business. If actual market
conditions and operational performance underlying the intangible assets were to deteriorate, or if facts and circumstances change that would more likely than not reduce the estimated fair value of the FCC licenses or goodwill below their adjusted carrying amounts, the Company may be required to recognize additional non-cash impairment charges in future periods, which could have a material impact on the Company’s business, financial condition and results of operations.
Refer to Note 5, Goodwill and Other Intangible Assets, Net for additional information.
Risks Related to Technology
New technologies could block our digital ads, and new restrictions on third-party cookies could harm our digital advertising business.
Technologies have been developed that can block the display of our ads and that provide tools to users to opt out of advertising products. Most of our revenue from our digital advertising businesses are derived from fees paid to us by advertisers in connection with the display of ads on web pages for consumers. As a result, such technologies and tools could adversely affect our operating results. In order to effectively target digital advertising campaigns, we use a combination of first and third-party data. Any restrictions that limit the use of third-party cookies could impact our ability to deliver effective digital advertising results which could adversely affect our operating results.
A disruption, compromise, or breach of our systems or data due to a cybersecurity threat or incident could adversely affect our business.
Our business depends on the availability, reliability, and security of our information systems, networks, data, and intellectual property. Any disruption, compromise, or breach of our systems could interrupt or damage our operations, harm our reputation, and adversely affect our competitive position. A security breach could occur both from external sources, including malicious attacks and third-party service provider vulnerabilities, as well as internal sources, such as employee error, failures in our security measures or vulnerabilities in our networks or code base. Any security breaches of our computer systems, including repeated or sustained attacks or disruptions, could interrupt delivery of services to customers, potentially increasing costs and reducing revenue. If third parties or our employees are able to penetrate our network security or otherwise misappropriate personal information or contact information of our customers, audience, business partners or advertisers, or if we give third parties or our employees improper access to such data, we could be subject to liability. This liability could include identity theft or other similar fraud-related claims as well as claims that we failed to uphold our contractual obligations or legal duties to protect the privacy and confidentiality of our business partners and other stakeholders. This liability could also include claims for other misuses or losses of personal information, including for unauthorized marketing purposes. Even in the absence of bad actors, unidentified vulnerabilities or glitches in our systems could result in the loss of business-critical data or otherwise compromise the confidentiality, integrity or availability of such data. Other liabilities could include claimsallegingmisrepresentation of our privacy and data security practices. We could also be subject to regulatory enforcement actions or private rights of action in certain jurisdictions.
The number and scale of cyber-attacks causing significant business disruptions, such as global ransomware attacks, are increasing and could pose a risk to our ability to deliver our services and operate our business. Any ransomware or other cyber-attack could disrupt our service delivery for an indeterminate period of time, as well as compromise or destroy personal and business-critical data and information within our control. Recovering from such an attack may require significant resources to restore business operations and our services, including personnel time and capital costs. In some cases, recovery of such data may not be possible. If a security breach results in the exposure or unauthorized disclosure of personal information, we could incur additional costs associated with data breach notification and remediation expenses, investigation costs, regulatory penalties and fines, and legal proceedings. Our insurance coverage may not comprehensively cover all the costs related to such breaches or attacks.
We rely on encryption and authentication technology licensed from third parties to provide the security and authentication necessary to effect secure online transmission of confidential consumer information. Advances in computer capabilities, new discoveries in the field of cryptography or other events or developments may result in a compromise or breach of the algorithms that we use to protect sensitive customer transaction data. A party who is able to
circumvent our security measures could misappropriate proprietary information or cause interruptions in our operations. We may be required to expend capital and other resources to protect against such security breaches or cyber-attacks or to alleviate problems caused by such breaches or attacks. Our security measures are designed to protect against security breaches and cyber-attacks but may not be expansive enough, implemented properly, or appropriately complied with to prevent a security breach or cyber-attack. No network or system can ever be completely secure. Our failure to prevent such security breaches and cyber-attacks could subject us to liability, adversely affect our results of operations and damage our reputation.
Our engagement of third-party service providers increases our exposure to security and data privacy risks.
Select business operations, including online advertising, analytics engines and data storage, rely on partnerships with third party service providers, the operations, practices, and processes of which may be outside our control. Despite due diligence in engaging these third parties and efforts to contractually protect our interests, we cannot guarantee that these third parties will adequately protect the personal information that we share with, or that is collected on our behalf by, such third parties or that such third parties will fully or sufficiently comply with all applicable data protection laws and contractual obligations. The failure of our third-party service providers to adequately protect the personal information we process could result in a security breach of such personal information, potentially exposing us to business interruption, lost revenue, ransom payments, remediation costs, liabilities to affected parties, cybersecurity protection costs, lost assets, litigation, regulatory scrutiny and actions, reputational harm, customer dissatisfaction, harm to our vendor relationships, or loss of market share. Even where personal information is not involved, a successful cyber-attack on one of our third-party service providers could result in a disruption to our operations and impact revenues.
There have been recent developments in U.S. federal and state data protection laws that we may be required to comply with and which may impact our business. For example, the California Consumer Privacy Act (the “CCPA”), among other things, allows California consumers the right to opt out of the “sale” or “sharing” of their personal information, which includes any data transferred for the purpose of cross-contextual behavioral advertising. This opt-out right, and similar opt-out rights in other effective and proposed state privacy laws, may have an adverse effect on our business by decreasing the availability of and increasing the cost of data. The CCPA and other state privacy laws also impose broader obligations on covered businesses such as transparency and information security requirements, and additional privacy rights such as rights to access and delete personal information. Enforcement of these laws may carry a variety of consequences, including civil penalties, litigation, private rights of action or damage to our reputation. In addition, if any of our third-party service providers fail to comply with applicable privacy laws, we may face additional exposure and liability on behalf of such providers. While we attempt to control against such outcomes through our vetting of third-party service providers and with appropriate contractual obligations, we cannot ensure our third-party service providers will fully comply with all such obligations. Moreover, the regulatory landscape is constantly evolving and subject to ongoing interpretations and guidance from regulatory authorities. The costs of compliance and other burdens imposed by CCPA and other privacy laws could have an adverse impact on our business, results of operations and financial condition.
We rely on third parties to provide the technologies necessary to deliver content, advertising and services, and adverse changes to these arrangements could harm our business.
Our success depends on the continued availability and evolution of technologies provided by third parties to deliver content, advertising and services. Changes to licensing terms, technology costs, or the availability of these formats could adversely affect our business. In addition, although we rely on widespread adoption of these technologies to reach audiences effectively, factors beyond our control, including changes in providers’ business models or fees, may limit user acceptance, reduce the performance of our digital platforms, or increase our costs, any of which could harm our business.
Risks Related to Governmental Regulation and Legislation
Our business depends upon licenses issued by the FCC, and if licenses are not renewed or we are out of compliance with FCC regulations and policies, our business could be materially impaired.
The radio industry is subject to extensive regulation by the FCC under the Communications Act. Our radio stations depend upon maintaining their broadcasting licenses issued by the FCC, which are currently issued for a maximum term of eight years and are renewable. Interested parties may challenge a renewal application. On rare occasions, the FCC has revoked licenses, not renewed them, or renewed them with significant qualifications, including renewals for less than a full term of eight years. In the last renewal cycle, the FCC granted all of the license renewal applications that were filed for our radio stations for full eight-year terms. The next license renewal cycle begins in 2027. We cannot be certain that our future license renewal applications will be approved, or that the renewals will not include conditions or qualifications that could adversely affect our business, financial condition and results of operations, result in material impairment or adversely affect our liquidity and financial condition. If any of our FCC licenses are not renewed, it would prevent us from operating the affected radio station and generating revenue from it. Further, the FCC has a general policy restricting the transferability of a radio station license while a renewal application for that radio station is pending. In addition, we must comply with extensive FCC regulations and policies governing the ownership and operation of our radio stations. FCC regulations currently limit the number of radio stations that a licensee can own in a market, which could restrict our ability to consummate future transactions. The FCC’s rules governing our radio station operations impose costs on our operations and changes in those rules could have an adverse effect on our business. The FCC also requires radio stations to comply with certain technical requirements to limit interference between two or more radio stations. If the FCC relaxes these technical requirements, it could impair the signals transmitted by our radio stations and could have a material adverse effect on our business. Moreover, governmental regulations and policies may change over time, and the changes may have a material adverse impact upon our business, financial condition and results of operations. For further details on federal regulation of radio broadcasting, see “Business-Federal Regulation of Radio Broadcasting.”
The FCC has been vigorous in its enforcement of its rules and regulations, including its indecency and sponsorship identification rules, violations of which could have a material adverse effect on our business.
The FCC’s rules prohibit the broadcast of obscene material at any time and indecent material between the hours of 6 a.m. and 10 p.m. Broadcasters risk violating the prohibition against broadcasting indecent material because of the vagueness of the FCC’s definition of indecent material, coupled with the spontaneity of live content. The FCC enforces its indecency rules against the broadcasting industry as a whole and violations of these rules may result in fines or, in some instances, revocation of an FCC license. The FCC’s historical focus on the indecency regulatory scheme, against the broadcast industry generally, may encourage third parties to oppose our license renewal applications.
Furthermore, in recent years the FCC has increased its enforcement of regulations requiring a radio station to include an on-air announcement which identifies the sponsor of all advertisements and other matter broadcast by any radio station for which any money, service or other valuable consideration is received. Fines for such violations can be substantial as they are dependent on the number of times a particular advertisement or other material is broadcast.
We cannot predict whether Congress will consider or adopt further legislation in this area. In the ordinary course of business, we or the FCC may receive complaints and we may become subject to FCC inquiries or proceedings related to our stations’ broadcasts or operations, and any resulting settlement with or fines from the FCC, revocation of any of our radio station licenses or denials of license renewal applications, could have a material adverse effect on our business, financial condition and results of operations.
We are required to obtain prior federal approval for each station acquisition, which approvals may be subject to our compliance with certain conditions, possibly including asset divestitures, which may be material.
Acquisitions have been and may continue to be an important component of our overall strategy. The acquisition of a radio station requires the prior approval of the FCC and may require approvals by other governmental agencies, such as the DOJ or the FTC. To obtain that approval, a proposed acquirer is required to file a transfer of control or assignment of license application with the FCC. The Communications Act and FCC rules allow members of the public and other interested parties to file petitions to deny or other objections to the FCC with respect to the grant of any transfer or assignment application. The FCC could rely on those objections or its own initiative to deny a transfer or assignment application or to require changes in the transaction, including the divestiture of radio stations and other assets, as a condition to having the application granted. Although we do not currently expect such divestitures to be material to our
financial position or results of operations, no assurances can be provided that we would not be required to divest additional radio stations in connection with obtaining such approval, or that any such required divestitures would not be material to our financial position or results of operations. The FCC could also change its existing rules and policies to reduce the number of radio stations that we would be permitted to acquire in some markets. For these and other reasons, there can be no assurance that the FCC will approve potential future acquisitions that we deem material to our business. See “ -There are risks associated with our acquisition strategy ” for additional information regarding FCC and other regulatory approvals required for acquisitions.
The information we collect and process is of increasing business importance and new or changing federal, state or international privacy legislation or regulation create uncertainty for our continued use of the information we collect and process.
In the course of our ordinary business operations, we may collect personal information and non-personal information that is critical or commercially-useful to our business, including personal information related to our employees, audience, advertisers, contractors, and customers. As a result of our digital expansion efforts and third-party partnerships, the volume, sensitivity, and business importance of the information we collect and use is increasing. We collect this information directly from individuals, through passive tracking technologies such as “cookies” and indirectly through third parties engaged to provide services on our behalf. In addition to the risk that a security breach may compromise this information, this information may include personal information such as names, contact information, credit card information, geolocation and demographic information that is subject to specific data protection and privacy laws. In addition, we face increasing litigation and business risks related to the use of such cookies and similar tracking technologies. For example, we and our customers face increasing litigation risks related to the recent increase in private litigationalleging that the use of cookies and similar tracking technologies without consent violates state laws governing “wiretapping,” “trap and trace,” “pen registers,” and similar laws.
We are subject to federal and state data protection and privacy laws and regulations that require us to comply with specific consumer protection, information security and data protection and privacy requirements. The legal and regulatory landscape continues to evolve, with new laws being enacted or coming into force. Additionally, we are required to comply with the CCPA and other equivalent state privacy laws, which requires us to update both our internal and external policies and procedures to meet our compliance obligations under CCPA. Compliance with CCPA may require that we change or amend activities that involve personal information, which may impact business operations or our ability to effectively use personal information in our control. Furthermore, as mentioned under “ Our engagement of third-party service providers increases our exposure to security and data privacy risks ” above, such requirements include allowing consumers to limit our use of their personal information, or delete it entirely.
Regulatory enforcement actions and interpretations of new data protection and privacy laws and regulations may change how these requirements apply to our business and collection, use, storage, and disclosure of personal information, creating uncertainty regarding the continued viability of information-reliant business activities. Certain interpretations or implementation of new data protection and privacy laws, as well as the evolving legal and regulatory landscape, could harm our business, including negatively impacting the cost of doing business or our ability to engage in certain business practices. Furthermore, recent disclosures of major data breaches and company data collection, use and disclosure practices to which large segments of the consumer population have objected may result in increased interest in U.S. state and federal enforcement actions and in passing U.S. federal data privacy legislation. Highly publicized data security and privacy incidents or lawsuits in even unrelated industries may result in changes to consumer privacy expectations and demands. Such shifts may restrict our ability to collect and/or process personal information in a particular way or derive economic value from personal, and even non-personal, information.
We have implemented and are implementing policies and procedures to comply with applicable data protection and privacy laws and regulations, but such measures may not always be effective, particularly as the legal landscape continues to evolve, and regulatory guidance is often ambiguous or inconsistent. Some of our internal processes are manual and rely on employees to follow and adhere to our policies and procedures, which can result in employee error and internal compliance failures. Any failure or perceived failure by us to comply with our policies or applicable data protection and privacy laws and regulations could result in regulatory enforcement actions against us, proceedings by governmental entities, consumers or others (including our contractual third parties), and loss in brand value and
reputation. Such results could possibly require us to incur costs defendingagainst proceedings or paying regulatory fines or penalties and responding to such outcomes could consume considerable management focus and internal resources, decrease demand for our services, or increase the costs of, or otherwise limit, our ability to do business.
New or changing privacy legislation or regulation could hinder the growth of our digital properties.
A variety of federal and state laws govern the collection, use, retention, sharing and security of consumer data that our digital properties use to operate certain services and to deliver certain advertisements to its customers, as well as the technologies used to collect such data. Not only are existing privacy-related laws in these jurisdictions evolving and subject to potentially disparate interpretation by governmental entities, new legislative proposals affecting privacy are now pending at both the federal and state level in the U.S. Changes to the interpretation of existing law or the adoption of new privacy-related requirements could hinder the growth of our digital presence. Also, a failure or perceived failure to comply with such laws or requirements or with our own policies and procedures could result in significant liabilities, including a possible loss of consumer or investor confidence or a loss of customers or advertisers, and could adversely affect our business, financial condition and results of operations. Furthermore, the oversight required to monitor and adapt to the ever-changing regulatory landscape could consume considerable management focus and internal resources, or increase the costs of, or otherwise limit, our ability to do business.
Risks Related to Our Smaller Reporting Company Status
We are a smaller reporting company and intend to avail ourselves of certain reduced disclosure requirements applicable to smaller reporting companies, which could make our common stock less attractive to investors.
We are a smaller reporting company, as defined in the Exchange Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not applicable to smaller reporting companies, including reduced disclosure obligations regarding executive compensation. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We intend to take advantage of certain of these reporting exemptions until we are no longer a smaller reporting company. We will remain a smaller reporting company until the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day of our most recently completed second fiscal quarter is $250 million or more.
General Risk Factors
The public market for our Class A Common Stock may be volatile.
We cannot assure you that the market price of our Class A common stock will not fluctuate significantly in response to a number of factors, many of which we cannot control, including those described under “Risks Related to Economic Conditions and Our Business” and the following:
• our announcement of earnings or operational guidance or changes to such guidance;
• changes in financial estimates by any securities analysts who follow our Class A common stock, our failure to meet these estimates or failure of those analysts to initiate or maintain coverage of our Class A common stock;
• publications of research reports about us or the industries in which we compete, and downgrades by any securities analysts who follow our Class A common stock or such industries;
• future sales or buybacks of our common stock by us, significant stockholders or our other affiliates;
• market conditions or trends in our industry or the economy as a whole and, in particular, in the advertising sales environment;
• investors’ perceptions of our prospects;
• announcements by us or our competitors of significant contracts, acquisitions, joint ventures or capital commitments; and
• changes in key personnel.
Many of the factors above are beyond our control and may cause the market price of our common stock to decline, regardless of our financial performance and condition and prospects. Declines in our stock price may limit our ability to use our common stock as consideration in acquisitions, or our interest or ability to consummate a public equity offering.
In addition, the stock market has experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were involved in securities litigation, we could incur substantial costs, and our resources and the attention of management could be diverted from our business.
We are subject to risks related to corporate social responsibility.
We are facing increasing scrutiny related to our environmental, social and governance (“ESG”) practices and requested disclosures by investors who are increasing their use of ESG screening criteria in making investment decisions. Our disclosures on these issues or a failure to satisfy evolving shareholder expectations for ESG practices and reporting may impact our reputation and relationships with investors. As ESG best practices, reporting standards, and disclosure requirements continue to evolve, we may incur increasing costs related to ESG monitoring and reporting.
Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, 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, subject to limited exceptions, the Court of Chancery of the State of Delaware will be 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 us arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our by-laws, or (iv) any other action asserting a claim against us that is governed by the internal affairs doctrine. This provision is not intended to apply to claims arising under the Securities Act and the Exchange Act. To the extent the provision could be construed to apply to such claims, there is uncertainty as to whether a court would enforce the provision in such respect, and our stockholders will not be deemed to have waived compliance with federal securities laws and the rules and regulations thereunder. 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 described above. This choice of forum provision 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 employees, 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 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.
We began paying quarterly cash dividends in 2023, however any future cash dividends will be at the discretion of our board of directors and other factors. You may not receive any return on investment unless you are able to sell your Class A common stock for a price greater than your purchase price.
On March 6, 2023, the board of directors approved a quarterly dividend of $0.1875 per share for holders of record as of March 27, 2023. On February 28, 2024, the board of directors increased the quarterly dividend to $0.1975 per share. On March 13, 2025, the board of directors increased the quarterly dividend to $0.20 per share. We previously
paid a quarterly dividend of $0.075 per share starting in 2018, which was ceased in 2020 as a result of uncertainty created by the COVID-19 pandemic. Any determination to continue to pay dividends in the future will be at the discretion of our board of directors and will depend upon results of operations, financial condition, contractual restrictions, including agreements governing our indebtedness, any potential indebtedness we may incur, restrictions imposed by applicable law and other factors our board of directors deems relevant. Accordingly, if you purchase shares, realization of a gain on your investment may depend on the appreciation of the price of our Class A common stock, which may never occur.
Anti-takeover provisions in our certificate of incorporation or bylaws may delay, discourage or prevent a change in control.
Our certificate of incorporation and bylaws contain provisions that may delay, discourage or prevent a merger or acquisition that a stockholder may consider favorable. As a result, stockholders may be limited in their ability to obtain a premium for their shares.
The following management’s discussion and analysis is intended to provide the reader with an overall understanding of our financial condition, results of operations, cash flows and sources and uses of cash. This section also includes general information about our business and a discussion of our management’s analysis of certain trends, risks and opportunities in our industry. In addition, we also provide a discussion of accounting policies that require critical judgments and estimates. This discussion should be read in conjunction with our Consolidated Financial Statements and related notes appearing elsewhere in this Annual Report. The following discussion contains forward-looking statements and our actual results could differ materially from those discussed in the forward-looking statements as a result of a number of factors, including those set forth in the sections entitled “Risk Factors” and “Forward-Looking Statements” and elsewhere in this Annual Report.
Note About Forward-Looking Statements
This report includes estimates, projections, statements relating to our business plans, objectives and expected operating results that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements often discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. See the section of this Annual Report titled, “Forward-Looking Statements” for further information regarding forward-looking statements.
OUR BUSINESS
Townsquare is a community-focused digital and broadcast media and marketing solutions company principally focused outside the top 50 markets in the U.S. Townsquare Ignite, our robust digital advertising division specializes in helping businesses of all sizes connect with their target audience through data-driven, results based strategies, by utilizing a) our proprietary digital programmatic advertising technology stack with an in-house demand and data management platform and b) our owned and operated portfolio of more than 400 local news and entertainment websites and mobile apps along with a network of leading national music and entertainment brands, collecting valuable first party data. Townsquare Interactive, our subscription digital marketing services business, partners with small and medium-sized businesses (“SMBs”) to help manage their digital presence by providing a SAAS business management platform, website design, creation and hosting, search engine optimization and other digital services. And through our portfolio of local radio stations strategically situated outside the Top 50 markets in the United States we provide effective advertising solutions for our clients and relevant local content for our audiences.
Our primary sources of net revenue are the sale of digital and broadcast advertising solutions on our owned and operated websites, radio stations’ online streams and mobile applications, radio stations, and on third party websites through our in-house digital programmatic advertising platform. Through our digital programmatic advertising platform, we are able to hyper-target audiences for our local, regional and national advertisers by combining first and third party audience and geographic location data, providing them the ability to reach a high percentage of their online audience. We deliver these solutions across desktop, mobile, connected TV, email, paid search and social media platforms utilizing display, video and native executions. We also offer subscription digital marketing solutions through Townsquare Interactive to small and medium-sized local and regional businesses in markets outside the top 50 across the United States, including, but not limited to the markets in which we operate radio stations. Our digital marketing solutions include a SAAS business management platform, traditional and mobile-enabled website development and hosting services, e-commerce platforms, search engine and online directory optimization services, online reputation monitoring and social media management.
Our sales of advertisements are primarily affected by the demand for advertising from local, regional and national advertisers and the advertising rates we charge. Advertising demand and rates are based primarily on our ability to attract audiences to our various products in the demographic groups targeted by advertisers, as measured principally by various services on a periodic basis. We endeavor to develop strong audience loyalty and believe that the original,
local content on our websites, and the employment of local personalities on our radio stations contribute to our ability to retain and grow our audience. In addition, we believe that the diversification of formats on our radio stations and websites helps to insulate our local media assets from the effects of changes in musical tastes of the public with respect to any particular format.
Advertising revenue is highly correlated to changes in gross domestic product (“GDP”) as dollars spent on advertising has historically trended in line with, and in our experience often lags, changes in GDP. According to the U.S. Department of Commerce estimate as of February 20, 2026, U.S. GDP increased 2.2% for the year ended December 31, 2025.
We strive to maximize our net revenue by managing our digital and broadcast advertising inventory and adjusting prices based on supply and demand and by broadening our base of advertisers and subscribers. Our selling and pricing activity is based on demand for our advertising inventory and, in general, we respond to this demand by varying prices rather than by varying our target inventory levels. The optimal number of advertisements available for sale depends on the platform and in the case of our radio stations, their online streams and mobile applications, the programming format of a particular radio station. Each of our advertising products has a general target level of available inventory. We seek to broaden our base of local advertisers in each of our markets by providing a wide array of digital and broadcast solutions to help clients grow their business and achieve their goals.
Our advertising contracts are generally short-term. In the media industry, companies, including ours, sometimes utilize barter agreements that exchange advertising time for goods or services such as travel or lodging, instead of cash.
Our most significant expenses are sales personnel, programming, digital, marketing and promotional, engineering, and general and administrative expenses. We strive to control these expenses by closely monitoring and managing each of our local markets and through efficienciesgained from the centralization of finance, accounting, legal, human resources functions and management information systems, and the implementation of AI. We also use our scale and diversified geographic portfolio to negotiate favorable rates with vendors where feasible.
A portion of our expenses are variable. These variable expenses primarily relate to sales costs, such as commissions and inventory costs, as well as certain programming costs, such as music license fees, and certain costs related to production. Marketing and promotions expenses are discretionary and are primarily incurred in an effort to maintain and/or increase our audience share. Other programming, digital, engineering and general and administrative expenses are primarily fixed costs.
Our business enjoysstrong cash flow generation owing to the relatively limited capital needs of our operations. During the year ended December 31, 2025, we recorded $15.2 million of capital expenditures, which represented 3.6% of net revenue during the same period. In addition, we benefit from certain tax attributes that generate tax deductions which have historically limited the amount of cash taxes we pay.
OVERVIEW OF OUR PERFORMANCE
Changes in our Business
Recent Developments
On February 19, 2025, the Company entered into a $490 million Credit Agreement with Bank of America, N.A., as administrative agent and collateral agent and the lenders and financial institutions party thereto. The Credit Agreement provides for a five-year, $470 million senior secured Term Loan Facility (the "Term Loan") and a five-year, $20 million Revolving Credit Facility (the "Revolver"), together the "Senior Secured Credit Facility."
The Company used the approximately $453 million of net proceeds from the Senior Secured Credit Facility (after giving effect to original issue discount, fees, expenses and $10 million of the Revolving Credit Facility that was drawn at closing), together with cash on hand, to redeem all of the Company’s outstanding 2026 Notes on February 19, 2025, and to pay fees and expenses related thereto.
The Company incurred approximately $5.5 million of fees and expenses in connection with the Senior Secured Credit Facility which were capitalized and are being amortized over the remaining term of the Senior Secured Credit Facility, along with an original issue discount of $23.5 million, using the effective interest method.
During 2025, the Company voluntarily repaid an aggregate $5.8 million principal amount of its Term Loan below par, plus accrued interest.
Refer to Note 7 , Long-Term Debt, in the Notes to Unaudited Consolidated Financial Statements for additional information related to the Credit Agreement.
Macroeconomic Indicators
Current economic challenges, including high and sustained inflation and interest rates, and proposed and enacted tariffs have caused and could continue to cause economic uncertainty and volatility. These factors could result in advertising and subscription digital marketing solutions cancellations, declines in the purchase of new advertising by our clients, declines in the addition of new digital marketing solutions subscribers, and increases to our operating expenses. We monitor economic conditions closely, and in response to observed or anticipated reductions in revenue, we may institute precautionary measures to address the potential impact to our consolidated financial position, consolidated results of operations, and liquidity, including wage reduction efforts and controlling non-essential capital expenditures.
The extent of the impact of current economic conditions will depend on future actions and outcomes, all of which remain fluid and cannot be predicted with confidence (including effects on advertising activity, consumer discretionary spending and our employees in the markets in which we operate).
Highlights of Our Financial Performance
Certain key financial developments in our business for the year ended December 31, 2025 as compared to 2024 are summarized below:
• Net revenue for the year ended December 31, 2025, decreased $23.6 million, or 5.2%, as compared to the year ended December 31, 2024. Our Broadcast Advertising net revenue decreased $26.5 million, or 12.6% and our Subscription Digital Marketing Solutions net revenue decreased $0.5 million, or 0.7% as compared to the year ended December 31, 2024. These decreases were partially offset by a $2.6 million, or 1.6%, increase in our Digital Advertising net revenue and a $0.8 million, or 11.8%, increase in our Other net revenue.
• Excluding revenue related to political advertising of $2.2 million and $13.4 million for the years ended December 31, 2025 and 2024, respectively, net revenue decreased $12.3 million, or 2.8% to $425.2 million. Broadcast Advertising net revenue decreased $15.8 million, or 8.0%, to $181.5 million and Digital Advertising net revenue increased $3.1 million, or 2.0%, to $160.9 million.
• Operating income increased $22.5 million to $44.2 million for the year ended December 31, 2025, as compared to operating income of $21.7 million for the year ended December 31, 2024. Operating income increased due to
a decrease in total non-cash impairment charges of $28.8 million, a decrease in direct operating expenses of $8.5 million, and a $8.1 million increase in net gains on the sales and retirement of assets. These variances were partially offset by the $23.6 million decrease in net revenue.
• Our Broadcast Advertising segment reported operating income of $39.3 million, an increase of $20.0 million compared to operating income of $19.3 million for the year ended December 31, 2024, due to a decrease in total non-cash impairment charges of $27.7 million, a decrease in direct operating expenses of $11.9 million and an increase in net gains on the sales and retirement of assets of $6.5 million. These increases were partially offset by the $26.5 million decrease in net revenue. Our Digital Advertising segment reported operating income of $27.7 million, a decrease of $8.5 million from 2024, primarily due to a $7.3 million increase in direct operating expenses and a $3.5 million increase in non-cash impairment charges, partially offset by the $2.6 million increase in net revenue. Our Subscription Digital Marketing Solutions segment reported operating income of $22.6 million, an increase of $4.6 million from 2024, primarily due to a $4.2 million decrease in direct operating expenses.
Consolidated Results of Operations
Year ended December 31, 2025 compared to year ended December 31, 2024
The following table summarizes our historical consolidated results of operations:
($ in thousands)
Year Ended December 31,
Statement of Operations Data:
$ Change
% Change
Net revenue
Operating costs and expenses:
Direct operating expenses, excluding depreciation, amortization, and stock-based compensation
Depreciation and amortization
Corporate expenses
Stock-based compensation
Transaction and business realignment costs
Impairment of intangible assets, goodwill, investments, and long-lived assets
Net gain on sales and retirement of assets
Total operating costs and expenses
Operating income
Other expense (income):
Interest expense, net
Loss on extinguishment, repayments and repurchases of debt
Other expense (income), net
Loss from operations before tax
Income tax provision
Net loss
The following table presents the Company's reportable segment net revenue, direct operating expenses, and profit for each of the years ended December 31, 2025 and 2024, respectively (in thousands):
Net Revenue
Direct Operating Expenses
Segment Profit (Loss)
For the Year Ended
December 31,
For the Year Ended
December 31,
For the Year Ended
December 31,
$ Change
% Change
$ Change
% Change
$ Change
% Change
Digital Advertising
Subscription Digital Marketing Solutions
Broadcast Advertising
Other
Total
Net Revenue
Net revenue for the year ended December 31, 2025 decreased by $23.6 million, or 5.2%, as compared to the same period in 2024. Our Broadcast Advertising net revenue decreased $26.5 million, or 12.6%, due to decreases in the purchases of advertising by our clients and political revenue. Our Subscription Digital Marketing Solutions net revenue decreased $0.5 million, or 0.7% as compared to the year ended December 31, 2024, due to reduced sales velocity as a result of lower headcount. These decreases were partially offset by a $2.6 million, or 1.6%, increase in our Digital
Advertising net revenue due to purchases of new advertising and a $0.8 million, or 11.8%, increase in our Other net revenue.
Direct Operating Expenses
Direct operating expenses for the year ended December 31, 2025 decreased by $8.5 million, or 2.6%, when compared with the same period in 2024. Our Broadcast Advertising direct operating expenses for the year ended December 31, 2025 decreased $11.9 million, or 8.1%, driven by lower compensation and sales expenses, partially offset by a higher provision for credit losses. Our Subscription Digital Marketing Solutions direct operating expenses decreased $4.2 million, or 7.8%, as compared to the same period in 2024 due to lower compensation. These decreases were partially offset by $7.3 million or 6.2%, increase in our Digital Advertising direct operating expenses primarily driven by higher inventory and compensation costs. Other direct operating expenses increased $0.3 million, or 3.6%.
Segment Profit
Segment profit for the year ended December 31, 2025 decreased by $15.1 million, or 12.2%, when compared with the same period in 2024. Our Broadcast Advertising segment profit for the year ended December 31, 2025 decreased $14.6 million, or 23.3%, as compared to 2024, primarily due to decline in traditional broadcast revenue, including the decline of political revenue. Our Digital Advertising segment profit decreased $4.8 million, or 11.7%, primarily due to the increase in compensation and inventory costs. Subscription Digital Marketing Solutions segment profit increased $3.7 million, or 17.4% as compared to the year ended December 31, 2024, due to the decrease in compensation.
Corporate Expenses
Corporate expenses for the year ended December 31, 2025 decreased $2.8 million, or 11.8%, as compared to 2024, primarily due to lower compensation costs.
Stock-based Compensation
Stock-based compensation expense for the year ended December 31, 2025 decreased $3.4 million, or 19.8%, as compared to 2024, due to $4.6 million of expense recognized for the cash settlement of options in 2024 that did not reoccur in 2025. This was partially offset by a $0.3 million increase in expense recognized for grants during 2025 and a $0.9 million increase in expense related to the stock bonus program. For further discussion, see Note 10, Stockholders' Deficit , in the Notes to the Consolidated Financial Statements.
Transaction and Business Realignment Costs
Transaction and business realignment costs for the year ended December 31, 2025 increased $6.7 million, or 137.5%, as compared to 2024, primarily due to costs associated with a change in the provider for listing management tools supporting the Subscription Digital Marketing Solutions segment and the August 2025 settlement between the Radio Music License Committee and performing rights organizations related to music license royalty payments from 2022 through June of 2025.
Impairment of Intangible Assets, Goodwill, Investments, and Long-Lived Assets
The Company recorded total impairment charges of $8.9 million related to intangible assets, goodwill, and long-lived assets during the year ended December 31, 2025. We recorded total impairment charges of $3.5 million related to FCC licenses in 5 of our 74 local markets during the year ended December 31, 2025, as compared to $30.9 million of impairment charges related to FCC licenses in 27 of our 74 local markets during the year ended December 31, 2024. The impairment charges were primarily driven by decreases in third-party forecasts of broadcast revenues and an increase in the estimate of initial capital costs due to rising prices.
Unfavorable changes in key assumptions utilized in the impairment assessment of our FCC licenses may affect future testing results. For example, keeping all other assumptions constant, a 100-basis point increase in the weighted average cost of capital as of the date of our last quantitative assessment performed as of December 31, 2025 would have caused the estimated fair values of our FCC licenses to decrease by $26.1 million which would have resulted in an additional impairment charge of $3.1 million. Further, a 100-basis point decline in the long-term revenue growth rate would cause the estimated fair values of our FCC licenses to further decrease by $16.1 million which would have resulted in a further impairment charge of $3.6 million as of December 31, 2025. Finally, a 100-basis point decline in operating profit margins would result in a decrease in the estimated fair values of our FCC licenses of $10.4 million which would result in an impairment charge of $4.2 million. Assumptions used to estimate the fair value of our FCC licenses are also dependent upon the expected performance and growth of our traditional broadcast operations. In the event broadcast revenue experiences actual or anticipated declines, such declines will have a negative impact on the estimated fair value of our FCC licenses, and the Company could recognize additional impairment charges, which could be material.
During the third quarter of 2025, the Company concluded that the carrying amount of the National Digital reporting unit exceeded its fair value, resulting in the recognition of a non-cash goodwill impairment charge of $3.0 million. Following the non-cash goodwill impairment charge, the National Digital reporting unit had $3.5 million of goodwill remaining as of December 31, 2025. Due to reductions in the commitments of its largest customers, the Company concluded that the carrying amount of the Analytical Services reporting unit exceeded its fair value as of December 31, 2025. As a result, the Company recognized a $2.3 million non-cash goodwill impairment charge in the fourth quarter of 2025, resulting in a total of $5.3 million of non-cash goodwill impairment charges during the year ended December 31, 2025. Following the non-cash goodwill impairment charge, the Analytical Services reporting unit had no goodwill remaining as of December 31, 2025.
The Local Advertising, Amped, and Live Events reporting units had no goodwill as of December 31, 2025.
The Company recorded total non-cash goodwill impairment charges of $4.4 million during the year ended December 31, 2024, of which $2.6 million related to the Live Events reporting unit and $1.8 million related to the National Digital reporting unit.
Unfavorable changes in certain key assumptions utilized in determining the fair values of each of our reporting units may affect future testing results. For example, keeping all other assumptions constant, a 100-basis point increase in the weighted average cost of capital assumption for each of our reporting units would cause the estimated fair values of our National Digital, Townsquare Ignite and Townsquare Interactive reporting units to decline, resulting in a decrease in the fair value in excess of their respective carrying values by approximately 3%, 4%, and 4%, respectively. Further, keeping all other assumptions constant, a 10% decline in the estimated fair value of each reporting unit, due to other changes in assumptions, including forecasted future cash flows, would not have resulted in incremental goodwill impairment charges to our reporting units.
For further discussion, see Note 5, Goodwill and Other Intangible Assets, Net in the Notes to Consolidated Financial Statements.
During the year ended December 31, 2024, the Company recorded an impairment charge of $2.0 million related to certain of its equity securities, which are measured at cost minus impairment. For further discussion, see Note 6, Investments, in the Notes to Consolidated Financial Statements.
Net Gain on Sales and Retirement of Assets
During the year ended December 31, 2025, the Company recognized $8.8 million in net gains on the sales of property and leased assets in several markets, including a $6.2 million gain on the sales of property in the Bismarck, ND and Boise, ID, markets and a $1.5 million gain on the sale of the Company’s aircraft.
Interest Expense, net
The following table illustrates the components of our interest expense, net for the periods indicated (in thousands):
Year Ended
December 31,
2026 Notes
Term Loan
Revolver
Capital leases and other
Deferred financing costs
Debt discount amortization
Interest income
Interest expense, net
Loss on extinguishment, repayments and repurchases of debt
During the year ended December 31, 2025, the Company recognized a $1.2 million net loss on the early extinguishment of debt, comprised of the write-off of $1.5 million of unamortized deferred financing fees previously capitalized in connection with the 2026 Notes, partially offset by approximately $0.2 million net gain on the voluntarily repayment of an aggregate $5.8 million principal amount of Term Loan below par, plus accrued interest. For further discussion, see Note 7, Long-Term Debt , in the Notes to Unaudited Consolidated Financial Statements.
During the year ended December 31, 2024, the Company voluntarily repurchased an aggregate $36.2 million principal amount of its 2026 Notes, plus accrued interest. The Company wrote-off approximately $0.2 million of unamortized deferred financing costs, recognizing an immaterial total net loss in connection with the voluntary repurchases of its 2026 Notes.
Other Expense (Income), Net
Realized Gain on Investment
In February of 2024, one of the Company’s investees announced the completion of its acquisition in a private transaction. The Company recognized a $4.0 million gain on the transaction. See Note 6, Investments, in the Notes to the Consolidated Financial Statements for further discussion related to this investment.
Insurance Recoveries
During the year ended December 31, 2025 and 2024, the Company recorded total insurance recoveries of $0.2 million and $0.5 million, respectively, primarily related to fire, construction and flood damages.
Unrealized (Gain) Loss on Investment
Other expense (income), net includes unrealized losses related to measuring the fair value of one of the Company's investees that was sold during 2024. Prior to its sale, the Company recognized a total unrealized net gain of $0.2 million as a result of changes in the fair value of the investee's common stock during 2024. See Note 6, Investments , in our Notes to Consolidated Financial Statements for further discussion related to this investment.
Income tax provision
We recognized an income tax provision of $4.7 million for the year ended December 31, 2025 as compared to $1.3 million for the same period in 2024. Our effective tax rate was approximately 94.1% for the year ended December 31, 2025 as compared to 13.6% for the year ended December 31, 2024. The increase in the effective tax rate is primarily driven by the valuation allowance for interest expense carryforwards and non-deductible compensation costs for the year ended December 31, 2025.
Our effective tax rate may vary significantly from period to period, and can be influenced by many factors. These factors include, but are not limited to, changes to statutory rates in the jurisdictions where we have operations and changes in the valuation of deferred tax assets and liabilities. The difference between the effective tax rate and the federal statutory rate of 21%, primarily relates to certain non-deductible items, state and local income taxes, and the valuation allowance for deferred tax assets.
Liquidity and Capital Resources
Year Ended
December 31,
(in thousands)
Cash and cash equivalents
Restricted cash
Cash provided by operating activities
Cash used in investing activities
Cash used in financing activities
Net decrease in cash and cash equivalents
Operating Activities
Net cash provided by operating activities was $30.6 million for the year ended December 31, 2025, as compared to $48.7 million for the same period in 2024. This decrease was primarily related to higher cash interest payments in 2025, partially offset by changes in working capital balances, particularly accounts receivable, accrued expenses and accounts payable.
Investing Activities
Net cash used in investing activities was $4.5 million for the year ended December 31, 2025, as compared to $9.9 million for the same period in 2024. The decrease in net cash used in investing activities was primarily due to a $3.5 million increase in proceeds from the sales of assets and investment related transactions and a $2.2 million decrease in purchases of property and equipment.
Financing Activities
Net cash used in financing activities was $54.3 million for the year ended December 31, 2025, as compared to $67.4 million for the same period in 2024. The primary differences in net cash used in financing activities in 2025 as compared to 2024 include:
• the repayment of $467.4 million of principal amount of the 2026 Notes, offset by proceeds from the Term Loan of $441.7 million, net of fees and expenses;
• total Term Loan repayments of $14.0 million, as compared to voluntary repurchases of 2026 Notes in the amount of $36.0 million in 2024;
• $2.0 million in net borrowings under the Revolver;
• a $7.0 million decrease in proceeds from stock option exercises for the year ended December 31, 2025 as compared to the same period a year ago; and
• $1.5 million of shares repurchased to cover employee tax withholdings on restricted stock that vested during the year ended December 31, 2025, as compared to $23.9 million for repurchases of common stock during the year ended December 31, 2024.
Sources of Liquidity and Anticipated Cash Requirements
We fund our working capital requirements through a combination of cash flows from our operating, investing, and financing activities. Based on current and anticipated levels of operations and conditions in our markets and industry, we believe that our cash on hand and cash flows from our operating, investing, and financing activities will enable us to meet our working capital, capital expenditures, debt service, dividend payments and other funding requirements for at least one year from the date of this report. Future capital requirements may be materially different than those currently planned in our budgeting and forecasting activities and depend on many factors, some of which are beyond our control. We have focused on and will continue to monitor our liquidity in response to current and future economic challenges and uncertainty.
As of December 31, 2025, we had $433.0 million of outstanding indebtedness, net of deferred financing costs of $24.4 million.
During the year ended December 31, 2025, the Company voluntarily repaid an aggregate $5.8 million principal amount of its Term Loan, below par plus accrued interest.
Term Loan and Revolving Credit Facility
On February 19, 2025 we entered into a five-year, $490 million Credit Agreement (the "Term Loan") and a five-year, $20 million Revolving Credit Facility (the "Revolver"), together the Senior Secured Credit Facility as discussed in Note 7, L ong-Term Debt. The net proceeds from the Credit Agreement, together with cash on hand, was used to repay all of the outstanding 2026 Notes on February 19, 2025, and to pay the fees and expenses related thereto.
As of December 31, 2025, the balance of the Term Loan was $455.4 million with a current interest rate of 8.90%, based on current SOFR levels and the applicable margin of 500 basis points. As of December 31, 2025, borrowings under the Revolving Credit Facility had an interest rate of approximately 7.80%, based on current SOFR levels and the applicable margin of 375 basis points.
The Company was in compliance with its covenants under the Senior Secured Credit Facility as of December 31, 2025.
Based on the terms of the Credit Agreement, as of December 31, 2025, we expect our mandatory debt service requirements to be approximately $51.3 million over the next twelve months. See Note 7, Long-Term Debt , in our Notes to Consolidated Financial Statements for additional information related to our Senior Secured Credit Facility.
As of December 31, 2025, we had $4.8 million of cash and cash equivalents, $52.0 million of receivables from customers, which historically have had an average collection cycle of approximately 50 days.
On October 29, 2025, the board of directors approved a quarterly cash dividend of $0.20 per share. The dividend of $3.3 million was paid to holders of record as of January 26, 2026, on February 2, 2026. On March 4, 2026, the board of directors approved a quarterly dividend of $0.20 per share. The dividend will be paid to holders of record as of April 27, 2026 on May 4, 2026.
Our anticipated uses of cash in the near term include working capital needs, interest payments, debt amortization payments, dividend payments, excess cashflow payments that may be required under the terms of the Credit Agreement, other obligations, and capital expenditures. The Company believes that the cash generated by its operations should be sufficient to meet its liquidity needs for at least the next 12 months. However, our ability to fund our working
capital needs, interest payments, debt payments, dividend payments, other obligations, capital expenditures, and to comply with financial covenants under our debt agreements, depends on our future operating performance and cash flow, which are in turn subject to prevailing economic conditions, increases or decreases in advertising spending, changes in the highly competitive industry in which we operate, which may be rapid, and other factors, many of which are beyond our control. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders, while the incurrence of debt financing would result in debt service obligations. Such debt instruments could introduce covenants that might restrict our operations. We cannot assure you that we could obtain additional financing on favorable terms or at all.
Additionally, on a continuing basis, we evaluate and consider strategic acquisitions and divestitures to enhance our strategic and competitive position as well as our financial performance. Any future acquisitions, joint ventures or other similar transactions may require additional capital, which may not be available to us on acceptable terms, if at all.
We closely monitor the impact of capital and credit market conditions on our liquidity and our ability to refinance in the future. We also routinely monitor the changes in the financial condition of our customers and the potential impact on our results of operations.
Other Liquidity Matters
Below is a summary of additional liquidity matters. See the indicated Notes to Consolidated Financial Statements for additional details related to these and other matters affecting our liquidity and commitments.
Long-Term Debt
Note 7
Lease and Other Commitments
Note 8
Critical Accounting Estimates
Our Consolidated Financial Statements have been prepared in conformity with Generally Accepted Accounting Principles (“GAAP”), which requires us to make estimates and assumptions that affect the amounts and disclosures reported in our Consolidated Financial Statements and accompanying notes. Accounting estimates and assumptions described in this section are those we consider to be the most critical to an understanding of our financial statements because they inherently involve significant judgments and uncertainties. For all of these estimates, we note that future events rarely develop exactly as forecasted, and the best estimates routinely require adjustment. Actual results could differ from such estimates. The following discussion summarizes our critical accounting estimates. Circumstances arising from economic conditions in the future may require our estimates to change, however, as new events occur and additional information is obtained, any such changes will be recognized in the consolidated financial statements. Actual results could differ from such estimates, and any such differences may be material to our financial statements. Significant accounting policies used in the preparation of our Consolidated Financial Statements are discussed in our Notes to Consolidated Financial Statements.
Acquisitions and Business Combinations
We allocate the total cost of acquisitions to the underlying identifiable net assets, based on their respective estimated fair values at the date of acquisition with limited exceptions allowed by GAAP. Acquisition costs are generally expensed as incurred and restructuring costs associated with a business combination are generally expensed subsequent to the acquisition date. Goodwill represents the excess of the purchase price over the fair value of net assets acquired, including the amounts assigned to identifiable intangible assets. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives and market multiples, among other items. In addition, we may establish liabilities related to acquired liabilities and qualifying restructuring costs and contingencies based on assumptions made at the time of acquisition. We evaluate these reserves on a regular basis to determine the adequacy of the amounts.
Goodwill arising from an acquisition is tested on an annual basis, or when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. We have elected to perform our annual goodwill impairment testing as of December 31st. Recoverability of goodwill is evaluated by comparison of the fair value of a reporting unit with its carrying value. For purposes of testing the carrying value of the Company's goodwill for impairment, the fair value of goodwill for each reporting unit contains significant assumptions incorporating variables that are based on past experiences and judgments about future performance using industry information. These variables would include, but are not limited to: (1) forecasted revenue growth; (2) profit margin; (3) estimated capital expenditures and working capital requirements during the projection period; (4) risk-adjusted discount rate; and (5) expected growth rates in perpetuity to estimate terminal values. These variables are susceptible to changes in estimates, which could result in significant changes to the fair value of the goodwill. Impairment of goodwill is calculated by comparing the fair value as described above to the carrying value of goodwill.
We continually monitor and evaluate business and competitive conditions that affect our operations and reflect the impact of these factors in our financial projections. If permanent or sustained changes in business or competitive conditions occur, they can lead to revised projections that could potentially give rise to impairment charges.
For further discussion of impairment charges, see Note 5, Goodwill and Other Intangible Assets, Net, in our Notes to Consolidated Financial Statements.
Indefinite-lived intangible assets
We test for impairment of our indefinite-lived intangible assets on an annual basis, as of December 31st, or when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. The most significant intangible asset we have is our FCC licenses, which have been deemed to have an indefinite life. The fair value of our FCC licenses is estimated to be the price that we would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date.
We evaluate the fair value of our FCC licenses at the unit of account level. Each market's broadcasting licenses are combined into a single unit of accounting, in our case geographic markets, for purposes of testing for impairments.
We utilize a discounted cash flow method to perform our impairment test. Under this method, the income that is attributable to each FCC license is isolated and is based upon modeling a hypothetical “Greenfield” build-up to a “normalized” enterprise that, by design, lacks inherent goodwill and assumes that the only asset of the hypothetical start-up business is the license. It is assumed that rather than acquiring indefinite-lived intangible assets as part of a going concern business, the buyer hypothetically develops 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 flow model which results in value that is directly attributable to the indefinite-lived intangible assets. The cash flows generated in the Greenfield method are presumed to emanate from the one asset, or the FCC license, that exists at time zero. This cash flow stream is discounted to arrive at a value for the FCC license.
The key assumptions using the Greenfield method are market revenue growth rates, market share, profit margin and the risk-adjusted discount rate. This data is populated using industry normalized information representing an average FCC license within a market. The projections incorporated into our license valuations take into consideration the then current economic conditions. Each of these assumptions may change in the future based upon changes in general economic conditions, audience behavior, consummated transactions, and numerous other variables that may be beyond our control.
For further discussion on key assumptions utilized in the Greenfield method, see Note 2, Summary of Significant Accounting Policies - Intangible Assets . For further discussion of impairment charges, see Note 5 , Goodwill and Other Intangible Assets, Net, in our Notes to Consolidated Financial Statements.
Stock-based Compensation
We measure and recognize stock-based compensation expense related to stock-based transactions, including employee awards and the Employee Stock Purchase Plan, (“ESPP,”) based on the fair value of the award on the grant date. The fair values of restricted stock awards are determined based on the fair market value of our common stock at the time of grant. We estimate the fair value of option awards using the Black-Scholes or Monte Carlo option-pricing models for service and market-based options, respectively. We estimate the fair value of the ESPP based on the estimated grant-date fair value determined using the Black-Scholes model. These models require assumptions including the fair value of our common stock, expected volatility, expected term of the award, exercise timing, expected dividend yield and risk-free interest rate. Stock-based compensation expense is recognized as the equity awards vest or on derived service period. We account for forfeitures as a reduction of compensation cost in the period when such forfeitures occur.
For further discussion on the fair value of option awards, see Note 10, Stockholders’ Deficit , in our Notes to Consolidated Financial Statements.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date.
We evaluate the need for valuation allowances to reduce the deferred tax assets to realizable amounts. Management evaluates all positive and negative evidence and uses judgment regarding past and future events, including operating results, to help determine when it is more likely than not that all or some portion of the deferred tax assets may not be realized. When appropriate, a valuation allowance is recorded against deferred tax assets to offset future tax benefits that may not be realized. As of December 31, 2025, the Company has recorded $39.1 million of valuation allowance against its deferred tax assets. Revisions to our forecasts or declining macroeconomic conditions could result in changes to our assessment of the realization of these deferred income tax assets.
We follow the provisions of ASC Topic 740, Accounting for Income Taxes . ASC Topic 740 clarifies the accounting for uncertainties in income taxes recognized in an enterprise’s financial statements. ASC Topic 740 also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 provides guidance on derecognition, classification, interest and penalties, disclosures and transition. As required by the uncertain tax position guidance in ASC Topic 740, we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant tax authority.
For further discussion of valuation allowances and uncertain tax positions, see Note 9 , Income Taxes, in our Notes to Consolidated Financial Statements.
Contingencies and Litigation
On an ongoing basis, we evaluate our exposure related to contingencies and litigation and record a liability when available information indicates that a liability is probable and estimable. We also disclose significant matters that are reasonably possible to result in a loss that is expected to be material to our operations or financial results or are probable but not estimable.
New Accounting Standards and Accounting Changes
For a discussion of accounting standards updates that have been adopted or will be adopted in the future, please refer to Note 2, Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements.
