Beasley Broadcast Group Q2 2026 Earnings Call Transcript

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August 12, 2026

Key Takeaways

  • Negative Sentiment: Revenue declined 9.6% year over year to approximately $44.1 million, as national and local agency revenue fell 21% and 12%, respectively. Management expects third-quarter same-station revenue to remain down in the mid-single-digit range.
  • Positive Sentiment: Cost reductions helped drive adjusted EBITDA to approximately $5.3 million, up from $4.7 million a year ago, despite lower revenue. May expense actions are expected to generate approximately $10.5 million in annualized savings, with a larger benefit in the second half of 2026.
  • Positive Sentiment: The May 1 balance-sheet restructuring reduced reported long-term debt to approximately $129 million from $235.3 million at year-end and lowered quarterly interest expense to $1.5 million from $3.3 million. The company plans to use proceeds from an announced $8 million station sale to further reduce debt.
  • Positive Sentiment: Digital audience growth continued, with digital exceeding half of the company’s total audience for the first time; same-station digital revenue grew about 7%, while owned-and-operated digital revenue rose approximately 10%. Management said programmatic sell-through improved to above 80% and enterprise sales programs generated nearly $6 million in closed business.
  • Neutral Sentiment: Management reported early signs of stabilization in September and strong fourth-quarter pacing, with limited political exposure, while political revenue booked so far represents more than 25% of the full-year budget. Execution remains the key risk as the company seeks to rebuild local direct sales and improve digital monetization.
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Earnings Conference Call
Beasley Broadcast Group Q2 2026
00:00 / 00:00

There are 4 speakers on the call.

Operator

Hello everyone, and welcome. I will now turn the call over to Ilana Goldstein.

Speaker 1

Good morning, and welcome to Beasley Media Group's second quarter 2026 earnings call. Before proceeding, I would like to emphasize that today's conference call and webcast will contain forward-looking statements about our future performance and results of operations that involve risks and uncertainties described in the Risk Factors section of our most recent annual report on Form 10-K, as supplemented by our subsequent filings with the Securities and Exchange Commission. Today's webcast will also include a discussion of certain non-GAAP financial measures within the meaning of Item 10 of Regulation S-K. Reconciliations of these non-GAAP measures to their most directly comparable financial measures calculated and presented in accordance with GAAP can be found in this morning's news announcement on the company's website. I would also remind listeners that following its completion, a replay of today's call can be accessed for 5 days on the company's website at www.bbgi.com.

Speaker 1

A copy of today's press release is also available in the Investors and Press Room section of the site. At this time, I would like to turn the conference over to Beasley Media Group Chief Executive Officer, Caroline Beasley.

Speaker 2

Thank you, Ilana, and good evening, everyone. Thank you for joining us. My apologies for the delay in our earnings release, but we still had an outstanding item regarding the tax accounting treatment resulting from the restructure that has since been resolved. When we spoke with you last quarter, we described Beasley as a company in transition with three priorities: stabilizing and rebuilding our core revenue base, scaling a higher margin and more controllable digital business, and strengthening our balance sheet through disciplined deleveraging. During the second quarter, we made meaningful progress against two of those priorities, materially improving our cost structure and transforming our balance sheet. At the same time, the advertising environment remained challenging, and our revenue performance makes clear that we still have work ahead of us.

Speaker 2

Ilana will cover the detailed revenue and EBITDA results shortly, but at a high level, the quarter showed year-over-year adjusted EBITDA improvement, reflecting the early impact of our cost actions, even as revenue remains below where it needs to be. in May, we executed an expense reduction program spanning voluntary retirements, market-level operating changes, digital restructuring, technology costs, and vendor expenses. We currently expect these actions to generate approximately $10.5 million of annualized run rate savings with an estimated benefit of approximately $5 million during 2026. Because the majority of these actions were implemented during May, the second quarter includes only a partial benefit. We expect the impact to become more visible during the second half of the year and to be fully reflected in our ongoing cost structure as we move into 2027. Our objective is not simply to reduce expenses.

Speaker 2

It's to establish a more efficient operating model that can convert revenue into EBITDA and free cash flow at a higher rate. As a result of this, we are protecting investment in the areas where we see the greatest opportunity for growth, particularly local direct advertising, owned and operated digital products, integrated client solutions, and the tools and talent required to support those priorities. The most consequential financial event of the quarter was the completion of our balance sheet restructuring on May 1. The transaction meaningfully reduced our debt burden and lowered near-term cash interest, creating a stronger financial foundation while we continue to pursue additional deleveraging actions. While the restructuring represents a significant step forward, it does not complete our deleveraging strategy. We remain focused on refinancing or retiring the remaining obligations well ahead of their maturity.

Speaker 2

Our operating plan, portfolio strategy, liquidity management, and capital allocation decisions are all being managed with that objective in mind. We continue to evaluate deleveraging sales of non-core assets while focusing our resources on the highest value components of the portfolio. With this in mind, I'm pleased to announce that we entered into an APA with EMF on July 31 to sell two radio stations, one in Charlotte and one in Las Vegas, for a total of $8 million. We expect closing on these stations within the next 60 to 90 days. Proceeds from the sale will be used to reduce debt from our 1L lenders. We do not expect these sales to impact our EBITDA on a go-forward basis. In June, we set up an at-the-market equity program.

Speaker 2

We view the ATM as a supplemental capital management tool, not as a substitute for operating performance or free cash flow generation. The program gives us the flexibility to access capital opportunistically and in measured amounts when market conditions are constructive. Our intention is to use the program selectively and responsibly with a focus on actions that we believe improve long-term value for shareholders. In early June, prior to entering into our quarterly blackout period, we began utilizing our ATM and raised approximately $635,000 in gross proceeds. As for operations, the quarter reinforced the urgency of our revenue transformation. Traditional agency revenue remained under pressure. Local direct, spot revenue showed signs of stabilization during the quarter. We remain focused on rebuilding direct client relationships, improving sales activity, and strengthening the pipeline required to return the business to sustainable growth.

Speaker 2

At the same time, the expense actions we have taken are beginning to improve the underlying economics of the business. While audio revenue remained under pressure during the quarter, the reduction in our operating cost base helped preserve station operating income and mitigate the impact of the revenue decline. This gives us a more efficient foundation from which to rebuild. Digital remains central to our strategy. While same-station digital revenue grew approximately 7% during the quarter, and digital accounted for approximately 26% of total company revenue, profitability was below our expectations. Ilana will discuss the reasons why we incurred additional costs in the second quarter, and Kevin will review the actions underway to close that monetization gap. Let me reiterate that our work is not complete. Revenue remains below where it used to be.

Speaker 2

The traditional agency environment continues to be difficult, and performance remains inconsistent across our markets. However, we ended the quarter with a substantially stronger balance sheet, a meaningfully lower cost base, and a clearer operating structure. The next phase of the turnaround is execution, improving the productivity of our end-market sellers, rebuilding local direct revenue, developing a stronger pipeline of sales talent, and capturing more value from the digital audience and inventory we already own. Now I am going to hand it over to Kevin to discuss the actions we are taking across the sales org and digital business to address these opportunities. Kevin?

Speaker 3

Thank you, Caroline. Last quarter, I told you we were building the machine. Common processes, pipeline visibility, accountability in every market. Those foundational pieces are now largely in place. The machine is built. This quarter, we started producing. The work this quarter has been much less about building infrastructure and more about, as Caroline spoke of, improving execution. We run this business with brutal objectivity, which is the easiest thing to say and the hardest thing to do. We know exactly where we are winning and where we are falling short, and where we have to change. That objectivity means naming the headwinds plainly. National agency demand remains under pressure. During the quarter, we saw reduced advertising spend from Diversity, Equity, and Inclusion-focused campaigns across several categories. We do not control those currents. We control how we sell into them, which is why we build our own demand.

Speaker 3

I will come back to that in a minute. Let us talk about our brands and our audience. Beasley's brands continued to dominate their leadership position in the second quarter across audience growth, digital engagement, and community impact. The quarter marked an important milestone in this company's digital transformation. During the second quarter, Beasley's total audience increased 1% year-over-year, driven by continued growth across our digital platforms. Over the trailing 12 months, our digital audience grew 7%, while traditional over-the-air audience declined 5%. As a result, digital now represents more than half of Beasley's total audience footprint. The first time in this company's history that digital has surpassed broadcast. A year ago, digital was 47% of our total audience. Digital transformation is no longer an aspiration at Beasley. It is simply who we are.

Speaker 3

Radio will be our core, and digital is the driver of our future. Website traffic and podcast consumption delivered the strongest year-over-year growth, a direct return on our continued investment in those platforms. According to the latest Nielsen data, our combined PPM market rating share declined 5% quarter-over-quarter in average quarter hour among adults 25 to 54, primarily reflecting a deliberate decision to optimize investment in ratings-supporting initiatives while improving operating efficiency. As the advertising marketplace continues to shift to digital platforms, integrated marketing solutions, endorsements, and other performance-driven opportunities, we believe our investment strategy should evolve accordingly while continuing to protect the competitive strength of our brands. In the marketplace, that matters. According to Edison's latest Share of Ear study, AM/FM radio still commands 62% of all ad-supported audio, nearly three times podcasting at 22%, and roughly eight times Spotify at 8%.

Speaker 3

Radio is not a declining medium fighting for relevance. It is a dominant platform in ad-supported audio, and we pair it with the fastest-growing one, digital. Our strategic actions, Beasley remained a strong position in all of our key markets, with top three rated stations in Boston, Detroit, Philadelphia and Tampa, and at least one top five station in Charlotte and Las Vegas. The biggest opportunity in that audience is not growing it further. It is monetizing it, as Caroline spoke of earlier. Our digital audience continues to perform well. Engagement remains healthy across streaming, podcasting, websites, newsletters, and our own digital platform. The issue is not that we are not growing those audiences, it's that we're not monetizing these as efficiently as we can.

Speaker 3

I'm going to give you three proof points, revenue created that didn't exist a year ago, across political cycle, across digital business, and across our value chain that is deliberately helping us fill the gap between agency business and direct business. Proof point number one: We created demand, we didn't wait for it. In the second quarter, we launched two enterprise sales programs across nine markets simultaneously. Summer of Influence, a talent-led endorsement campaign spanning broadcast, streaming, digital, and social. America 250, a premium sponsorship product capped at five sponsors per market and sold at full rate, no discounting. When each market sells its five, that inventory's gone. Those two programs have generated nearly $6 million in closed business. None of that revenue existed a year ago. We didn't inherit it. We didn't wait for an agency to send it.

Speaker 3

We built the product, priced it with discipline, and our sellers closed it direct. That is the operating model going forward. Productize, package, price, sell direct, and hold the ring. Proof point number two: We got to political first. I ran political revenue operations at a national scale, and I'll tell you how the market works. The money goes to whoever is organized earliest. We organized early. We dedicated agency, issue advertising, and PAC coverage. We had rate and inventory discipline locked in before the demand arrived and direct outreach across our battleground footprint. The result, we've already booked more than 25% of our full-year political budget and our booking cadence is tracking with the last presidential cycle of 2024 in a midterm year. One concrete example is in Detroit.

Speaker 3

We identified and won a major PAC weeks before conventional buying started, and that account is still placing weekly orders. As a reminder, political builds through third quarter and peaks in fourth, and we are capturing the digital and streaming dollars, not just over-the-air dollars. We anticipate and have planned for robust opportunities in Michigan, Nevada, Georgia, North Carolina, and Florida, which align perfectly with our portfolio. We didn't wait for the cycle to come to us. We went and took our share early, and we will continue through Election Day. Proof point number 3: We didn't have an audience problem. We had a monetization gap, and we're closing it. Our digital audience is large and engaged in the majority of our footprint. The work is converting that audience into higher quality revenue. Here's the scoreboard on that conversion.

Speaker 3

Owned and operated digital on a same station basis, our highest margin digital revenue grew approximately 10% in second quarter and approximately 18% in the first half of 2026. It is now our largest digital revenue line. Third-party resold products declined by design. We are pulling seller efforts out of low-margin resale and pointing it at inventory we own, where economics are structurally better. We fixed a real problem. Our programmatic sell-through was underperforming. We restructured our demand relationships, signed a significant bulk deal with a major audio platform, and rebuilt sell-through to above 80%. Programmatic is now growing at double digits on the same audience we already had. Same audience, better monetization. It's not a strategy doc, you know, it's what happened in the quarter. Every market now runs one operating framework, one CRM standard, one pipeline review, one performance bar.

Speaker 3

We coach from data, not on platitudes. This quarter, we launched internal sales development program, so we build our own sellers instead of renting the industry's. It's early, and I'll report back on its contributions as it ramps up. All of this is organized around one purpose every person in this company understands: Serve our clients with return on advertising spend a little better each and every day. Lastly, beyond the numbers, the second quarter showed that Beasley brands mean a ton in their local communities. Our stations executed numerous charity events across our nine markets, raising over $700,000 for local charities. That community connection is not a side story. It is why our brands command the local relationships with listeners and advertisers that everything else I've described is built upon.

Speaker 3

Looking ahead, we are seeing early signs of stabilization and growth in September and fourth quarter pacing, independent of political demand. We are cautiously optimistic about the back half of the year. The first half was about building the machine. The second half is about what the machine produces. Enterprise programs are already generating closed revenue. A political cycle we got in front of and we will continue to execute against. A digital business shifting towards the revenue we control and margins we keep. A brand footprint that is now the majority of it coming from digital for the first time in our history. Transformation is hard. Change is hard. Irrelevance is worse. This company chose transformation, and we will execute leading into the back half of the year. With that, I will turn it over to Alana.

Speaker 1

Thanks, Kevin. For the second quarter, as Caroline mentioned, revenue was approximately $44.1 million, compared with approximately $49.1 million in the prior year quarter, representing a decline of approximately 9.6% on a same station basis. Reported digital revenue was approximately $11.7 million, compared with $13.2 million in the second quarter of 2025. The reported comparison includes approximately $1.9 million of prior year revenue from the digital direct business that we exited and approximately $400,000 of prior year revenue from Fort Myers. On a same station basis, digital operating expenses increased modestly compared with the prior year period. This increase was intentional and reflects targeted investments in areas where we believe we can generate the highest long-term returns rather than a broad increase in our underlying cost structure.

Speaker 1

Over the last year, we continued investing in our digital commercial organization, including centralized digital sales leadership, digital sales development resources, and enhancements to our digital marketing and lead generation capabilities. We also incurred higher expenses associated with increased programmatic activity and certain internally developed content and audience development initiatives, including our expanded Coffee Press program. Importantly, these investments were partially offset by the digital expense reductions implemented during May, the majority of which will not be fully reflected until the second half of the year. As a result, we expect digital operating expenses to better align with our long-term cost structure as we move through the balance of 2026. Our approach remains consistent with what we've communicated over the past year.

Speaker 1

We continue to aggressively reduce costs across the organization while selectively investing in the parts of the business that we believe have the greatest opportunity to drive sustainable revenue growth and long-term shareholder value. Turning back to consolidated revenue performance. From a customer's perspective, the story this quarter continues to be one of mixed performance across our revenue channels. On a same station basis, local direct revenue increased approximately 9% year-over-year. This represents a meaningful improvement from recent quarters and reflects the progress we've made in reducing client churn and expanding relationships with existing advertisers. As Kevin discussed, improving customer retention and increasing wallet share within our existing client base has been a key commercial priority. While new business generation remained below prior year levels during the quarter, the strength of our existing customer relationships more than offset that decline and resulted in overall growth within this category.

Speaker 1

That growth, however, was more than offset by continued pressure in our agency channels. On a same station basis, national revenue, excluding political, declined approximately 21%, while local agency revenue declined approximately 12% versus prior year period, reflecting the continued softness in traditional agency spending that has affected the industry over the past several quarters. Looking at advertiser categories, we were encouraged by several areas of strength. The gaming category increased approximately $1.1 million year-over-year after experiencing declines over the past several quarters, representing our largest dollar increase among major advertising categories. This was driven by large buys from gaming platforms as a result of the World Cup. We also continued to see momentum within home improvement, where revenue increased approximately 13% year-over-year and continued to improve on a sequential basis as well.

Speaker 1

These gains were partially offset by continued weakness in the automotive category, where revenue declined approximately 22% year-over-year. It is important to note, however, that this comparison is not on a same station basis as the prior year period included revenues from WPBB FM in Tampa, the Fort Myers market, and the digital direct business. Political revenue remained relatively modest during the second quarter, totaling approximately $400,000 through the end of the quarter. Turning to expenses. Operating expenses, excluding corporate expenses, depreciation, and amortization, were approximately $38.8 million, compared with roughly $44.8 million in the prior year period. This represents a reduction of approximately $5.9 million or 13.3%. On a same station basis, operating expenses declined approximately 5.8%. The reduction reflects the structural expense actions implemented over the last 18 months, which Caroline previously mentioned, and the decline in revenue.

Speaker 1

Reported station operating income, or SOI, was approximately $5.3 million, compared with approximately $8.2 million in the prior year quarter. Adjusted for $1.9 million in severance and $8,000 in stock-based compensation, SOI would have been $7.2 million for the quarter. Prior year period adjusted SOI on a same station basis, so excluding $200,000 of severance, $20,000 of stock-based compensation and net SOIs from WPBB digital direct in Fort Myers would have been $8.1 million. Corporate expenses were approximately $2.4 million, compared with approximately $3.8 million in the prior year period, representing a reduction of approximately $1.4 million or 37%. Corporate expenses included approximately $350,000 of transaction, restructuring, and other non-recurring costs, $23,000 of corporate severance, and $45,000 of stock-based compensation, all of which have been excluded from our adjusted EBITDA.

Speaker 1

Adjusted EBITDA was approximately $5.3 million, compared with approximately $4.7 million in the second quarter of 2025 and negative $0.4 million in the first quarter of 2026. Moving below adjusted EBITDA, depreciation and amortization expense was approximately $1.6 million, consistent with the prior year period. Interest expense was approximately $1.5 million, compared with approximately $3.3 million in the second quarter of 2025. The decline primarily reflects the May 1 restructuring and the conversion of the interest on the new second lien obligation from cash pay to payment in kind. The restructuring produced a gain on debt restructuring of approximately $91.8 million, principally reflecting the reduction in the company's recorded debt obligation resulting from the debt exchange. Our taxes for the quarter as a result of the transaction were $7.3 million, with $3.1 million as current.

Speaker 1

Net income was approximately $84.3 million or approximately $45.95 per diluted share, compared with a net loss of approximately $154,000 or $0.09 per diluted share in the second quarter of 2025. Capital expenditures for the second quarter were approximately $800,000. Turning to the balance sheet, we ended the quarter with approximately $6.7 million of cash and cash equivalents. Long-term debt, net of unamortized debt issuance costs and other applicable accounting adjustments, was approximately $129 million of June 30, compared with approximately $235.3 million at December 31, 2025. With that, I will turn it back to Caroline.

Speaker 2

Thank you, Ilana. As you heard from both Kevin and Ilana, the second quarter was an important step in our transformation. We ended the quarter with a stronger balance sheet, a leaner cost structure, and clear operating priorities. Just as important, the actions we took during the quarter are beginning to create a more efficient foundation for EBITDA and free cash flow generation. The progress is meaningful, but we also know that there is more work to do. We are not satisfied with our revenue performance. That is why the next phase of our turnaround is focused squarely on execution. Based on current pacing, we expect third quarter same station revenue to be down in the mid-single digit range year over year. However, as Kevin mentioned, fourth quarter pacings are looking very strong as of now, with only minimal political risk.

Speaker 2

As we enter the second half of the year, we expect the May expense reductions to provide a more substantial benefit to our results, which should help offset some of the pressure while we continue to rebuild revenue. As we look ahead, our focus for the remainder of 2026 is on four measurable priorities. Number one, improving local direct sales execution. Number two, increasing the revenue and margin contribution from owned and operated digital products. Number three, converting the full benefit of our cost actions into EBITDA and free cash flow. And number four, continuing to reduce debt and advance our refinancing strategy. As Kevin discussed, digital is a central part of that opportunity. We have the audience, and we have the inventory. Our job now is to convert that strength into digital revenue, stronger digital margins, and more consistent cash flow.

Speaker 2

That is why we believe Beasley's investment story is beginning to be viewed through a broader lens. The challenges facing traditional radio remain real, but so does the progress we are making in digital, operating efficiency, and balance sheet repair. To reiterate today, our balance sheet is stronger, our cost structure is leaner, and our operating priorities are clear. Now we will translate those changes into more consistent financial results. With that concludes our remarks today, and we really appreciate you all joining in. There were no questions submitted. Thank you all very much.

Speaker 1

Thank you for attending. You may now disconnect.

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