Cumulus Q1: Digital up. Total revenue down. “Considerable runway.”

Cumulus Media CEO Mary Berner began the company’s Q1 earnings conference call by announcing the company’s refinancing of its capital structure with what she called “very favorable terms.” Some detail around that: Debt is reduced by $33M, interest rates are reduced, and asset-based lending (ABL) is more available than previously.

The financial engineering has resulted in what Mary Berner calls “considerable additional runway with which to continue executing against our strategic, operational and financial priorities.”

Financial Touchpoints

Digital growth appears top among those priorities. Berner spoke of “accelerating digital growth through ongoing investment, particularly digital marketing services.” The financial results are shaped around that mandate: While total revenue lost ground by 2.7% ($200M) the Digital Marketing Services division increased revenue by an attention-getting 25%. Total digital revenue gained seven percent. 

One interesting aspect of the general analog-to-digital theme is the conversion of advertising from old-school to new-school: “The company achieved a 12% improvement in converting previously radio-only customers to digital marketing services buyers.” (This is a conversion which has been underway in the radio ecosystem for years.)

It’s not all roses. Cumulus lists five negative points:

  • Total company revenue was down 2.7% year over year, indicating a continued overall decline in revenue.
  • Political revenue for the quarter was down 55% from 2020, reflecting less competitive presidential primaries.
  • The recovery in national advertising remains uneven, with several key categories like mortgage banking and home improvement citing the interest rate environment as a significant obstacle.
  • Local spot revenue performance, although improved from Q4 2023, was still down, indicating ongoing challenges in local markets.
  • Total company revenue is currently pacing down low single digits for Q2, suggesting continued revenue challenges ahead.

Podcasting and Streaming

Both podcasting and streaming grew in Q1 — Berman mentions the expiration of a previous ad sales contract, and subsequent takeover of its own digital ad sales, comparing it to taking control of the NFL streaming inventory two years ago.

Podcasting is “pacing up,” Berman says. ONe milestone: 47 Cumulus podcasts were charting on Apple Podcasts — the most in Cumulus’ history. Of those, 12 are local podcasts. Berman referred to “national headwinds” last year, speaking for most podcast networks. “The podcast effort is up, both local and national,” she said. “And the revenue growth comes first from the listenership growth.”

Market Response

CMLS stock reflected generally favorable investor response to the earnings call. Below, we see a five-day view showing an uneven, but generally positive list.

Brad Hill