Urban One Q3 2025 Earnings Call: Contradictions Emerge on Debt Strategy, Cost Cuts, and M&A Amid Deregulation Hopes

Date of Call: November 4, 2025

Financials Results

• Revenue: $92.7M consolidated net revenue, down 16% YOY
• EPS: $0.06 loss per share, compared to $0.68 loss in Q3 2024

Guidance:

• Full-year adjusted EBITDA guidance lowered to $56M–$58M (prior guidance: $60M).
• Company expects a rebound in 2026 driven by a political ad year and operational changes (format adjustments, sales staffing improvements, repositioning Reach Media).
• Completed additional cost saves (~$3M annualized) on top of prior $5M reduction.
• Maintaining liquidity and pausing aggressive debt repurchases to evaluate deregulation-driven M&A / strategic opportunities.

Business Commentary:

* Decline in Revenue and EBITDA Guidance: - Urban One's consolidated net revenue was approximately $92.7 million, a 16% decrease year-over-year. - The company adjusted its EBITDA guidance for the year down to $56 million to $58 million from the previously guided $60 million. - The decline was due to softer business performance, particularly in the Radio Broadcasting segment, which faced 12.6% year-over-year decrease, and the Digital segment, which saw a 30.6% decline in revenue.

• Impact of Political Headwinds and Ad Categories:
• Radio Broadcasting segment revenue, excluding political, was down 8.1% year-over-year.
• Major ad categories, except for services and financial, experienced declines, including government (-12.4%), health (-17.5%), retail (-21.4%), and entertainment (-17.2%).

• This was attributed to significant political headwinds and a decrease in demand across various ad categories.

• Deterioration in Reach Media and Digital Segments:

• Reach Media segment revenue was $6.1 million, down 40% year-over-year, with adjusted EBITDA at a loss of approximately $200,000.
• Digital segment revenue declined by 30.6%, with adjusted EBITDA at approximately $0.8 million compared to $5.3 million last year.

• Performance in these segments was affected by lower network audio market, reduced DEI advertising, and overall softer client demand.

• Cost Savings and Restructuring Measures:

• Urban One completed a second reduction in force, resulting in $1.6 million of employee severance costs in Q3.
• The company achieved $3 million of annualized expense savings through cost-saving initiatives, adding to the $5 million saved earlier in the year.
• These measures were implemented to mitigate the impact of declining revenues and to improve operational efficiency.

Sentiment Analysis:

Overall Tone: Neutral

• Management: "Business came in a bit softer... adjusting our guide down to $56 million to $58 million of EBITDA"; noted cost actions: "$3 million of annualized expense savings"; and outlook: "we're feeling good about a rebound in 2026" while pausing buybacks to preserve liquidity amid potential deregulation.

Q&A:

• Question from Ben Briggs (StoneX Financial Inc.): I have a couple of questions here. So first of all, and I know we're looking forward a little ways, but -- and we're only part of the way through the fourth quarter. How are you guys thinking about 2026 and what demand looks like there and what listenership may be and kind of how the pieces of the puzzle are going to fit together then?
  Response: Management expects a rebound in 2026 driven by a political ad year and by operational fixes — repositioning Reach Media after advertiser concentration issues, format changes (eg, D.C. Hispanic launch), and strengthened sales/management.

• Question from Ben Briggs (StoneX Financial Inc.): Are you thinking of any kind of M&A activity or larger than usual kind of -- I know you guys swap radio stations here and there on a pretty regular basis. But are you thinking about anything more transformative in the future?
  Response: No transformative deals currently; company is monitoring potential deregulation opportunities, will consider opportunistic M&A if transactions strengthen the business and do not worsen leverage.

• Question from Ben Briggs (StoneX Financial Inc.): Are you expecting to continue to execute on those buybacks [debt buybacks]?
  Response: Temporarily pausing aggressive debt buybacks to build liquidity and evaluate near-term opportunities; remain focused on delevering but keeping powder dry.

Contradiction Point 1

Debt Reduction Strategy and Liquidity

It involves changes in the company's debt reduction strategy and its focus on liquidity, which are critical for financial management and investor confidence.

Will you continue with share repurchases? - Ben Briggs (StoneX Financial Inc.)

2025Q3: We are more focused on building liquidity due to potential deregulation and will assess opportunities as they arise. We've been acquisitive in the past and have always been focused on deleveraging. - Alfred Liggins(CEO, President, Treasurer & Director)

How are you evaluating debt buybacks? - Ben Briggs (StoneX Financial Inc.)

2025Q2: Yes. Look, I think that our focus continues to be debt reduction and expense management. So whether or not we're going to be back opportunistically buying debt at this level remains to be seen - Alfred C. Liggins (CEO, President, Treasurer & Director)

Contradiction Point 2

Cost Cutting and Financial Impact

It involves the expected timeline and impact of cost-cutting initiatives, which are crucial for financial performance and investor expectations.

How are you planning for 2026, including demand expectations, expected listenership, and how the various factors will align? - Ben Briggs (StoneX Financial Inc.)

2025Q3: We feel good about 2026. There are several reasons for optimism: entering a political year, changing operating strategies for better results at Reach Media and iOne, and improvements in radio markets. - Alfred Liggins(CEO, President, Treasurer & Director)

Can you provide specifics on expected outcomes and how these cuts will impact the financials in the second round? - Ben Briggs (StoneX Financial Inc.)

2025Q2: Not yet. We haven't started the process and -- but we're not finished - Alfred C. Liggins (CEO, President, Treasurer & Director)

Contradiction Point 3

Focus on Liquidity and Debt Repurchases

It involves a shift in strategic focus, from actively considering debt repurchases to prioritizing liquidity in anticipation of potential deregulation, which could have implications for future financial decisions and investor expectations.

Will you continue the buybacks? - Ben Briggs (StoneX Financial Inc.)

2025Q3: We are more focused on building liquidity due to potential deregulation and will assess opportunities as they arise. - Alfred Liggins(CEO, President, Treasurer & Director)

Should we expect further debt repurchases? - Aaron Watts (Deutsche Bank)

2025Q1: We're opportunistic and deliberate with debt repurchases. We've already repurchased tens of millions of dollars since the last call. - Peter Thompson(EVP & CFO)

Contradiction Point 4

Advertising Recovery and Market Conditions

It involves differing expectations regarding the Advertising recovery, with one quarter suggesting a full recovery is unlikely this year, while another quarter implies optimism about a rebound in 2026 due to political factors.

How are you projecting demand and listenership for 2026, and how do you expect the pieces to fit together? - Ben Briggs (StoneX Financial Inc.)

2025Q3: We feel good about 2026. There are several reasons for optimism: entering a political year. - Alfred Liggins(CEO, President, Treasurer & Director)

What other cost-control measures do you have moving forward? - Ben Briggs (StoneX Financial)

2025Q1: Advertisers need visibility into their expense profiles, but they don't share their ad strategies. Budget cuts are due to uncertainty, and a full recovery this year is unlikely. - Alfred Liggins(CEO)

Contradiction Point 5

Deregulation and M&A Opportunities

It involves the company's stance on potential deregulation opportunities and M&A activities in the broadcasting sector, which could substantially impact strategic growth and financial decisions.

Are you considering M&A activity or larger strategic initiatives beyond routine radio station swaps? - Ben Briggs (StoneX Financial Inc.)

2025Q3: We're focused on deregulation and potential opportunities it may bring... We're open to exploring transactions that could make us stronger. - Alfred Liggins(CEO, President, Treasurer & Director)

What opportunities does deregulation in broadcasting present for you in radio as a seller or buyer? Could material consolidation occur in the space following the FCC's new stance? - Aaron Watts (Deutsche Bank)

2024Q4: We have been both buyers and sellers... I think you'll see us continue with that... I think that we're probably in better shape than a number of other folks in the sector in terms of our leverage profile which I think gives us an advantage to be proactive in terms of opportunity. - Alfred Liggins(CEO, President, Treasurer & Director)