Urban One D 2025 Q1 Earnings Misses Targets as Net Income Declines 273%

Urban One D (UONEK) reported its fiscal 2025 Q1 earnings on May 14th, 2025. Urban One D's performance in the first quarter of 2025 missed expectations, with the company swinging to a net loss compared to the previous year's profit. Despite reaffirming its full-year Adjusted EBITDA guidance, the company anticipates continued challenges ahead. The guidance remains unchanged, with expectations primarily focused on the second half of the year. Urban One is committed to strategic debt management and operational cost control in the current uncertain environment.

Revenue
The total revenue for Urban One D in 2025 Q1 was $92.23 million, reflecting a decline of 11.7% compared to the $104.41 million reported in the same quarter of the previous year.

Earnings/Net Income
Urban One D experienced a significant downturn, shifting to a loss of $0.26 per share in 2025 Q1 from a profit of $0.15 per share in 2024 Q1. The company reported a net loss of $11.74 million, a 251.8% deterioration from the net income of $7.74 million in 2024 Q1. The EPS reflects a negative performance in this quarter.

Price Action
The stock price of Urban One D has jumped 13.95% during the latest trading day, surged 23.53% during the most recent full trading week, and climbed 7.54% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing Urban One D shares post-revenue drop on the financial report release date and holding for 30 days has seen mixed outcomes over five years. Although some returns were favorable, the results were inconsistent, particularly given the media sector's volatility. The strategy achieved a modest 3.5% return, underperforming the broader market's CAGR of 11%. Yearly returns were variable, peaking at 12.3% in 2020, then declining to negative returns by 2022 before slightly recovering in the following years. The strategy's shortcomings were likely due to the media sector's sensitivity to economic cycles and a short holding period that didn't capture longer-term trends. Investors should be cautious of the sector's unique risks and the strategy's limitations in delivering consistent returns.

CEO Commentary
Alfred Liggins, CEO of Urban One, highlighted the significant challenges faced in Q1 2025, with a notable decline in revenue across all segments, particularly in national advertising. He acknowledged the decrease in core radio advertising and emphasized the resilience of local advertising, which only saw a minor decline. Liggins expressed a cautious outlook, indicating uncertainty in the advertising environment and skepticism about a rapid rebound. He mentioned that the company has implemented cost-cutting measures, saving approximately $5 million, and is exploring further opportunities to enhance operational efficiencies. Liggins reinforced the importance of maintaining liquidity and strategic debt management amid ongoing market pressures.

Guidance
Urban One reaffirms its full-year Adjusted EBITDA guidance of $75 million, indicating an expectation for the majority of this figure to be generated in the second half of 2025. The company anticipates that the second quarter will show slight improvement compared to the first, although still facing challenges. Liggins noted that Urban One will continue to pursue opportunistic debt repurchases to strengthen its balance sheet while maintaining a careful approach to managing operational costs and liquidity.

Additional News
Urban One, Inc. announced a local management agreement with La Mega Media and Lazo Media, expanding its Spanish language programming. Claudia Deleon was appointed VP, General Manager of its Cleveland market and Head of Spanish Broadcast Operations. Additionally, Urban One received a non-compliance notice from Nasdaq concerning its Class D common stock, which fell below the $1 minimum bid price requirement. The company has until August 11 to regain compliance, with further extensions possible. Urban One is actively monitoring stock performance and considering options, including a reverse stock split.