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Good morning and welcome to Townsquare Media's Fourth Quarter 2023 Conference Call. As a reminder, today's call is being recorded and your participation implies consent to such recording. At this time, all participants are in a listen-only mode. A brief question-and-answer will follow the formal presentation. [Operator Instructions] With that, I would like to introduce the first speaker for today's call, Claire Yenicay, Executive Vice President.

Thank you, operator, and good morning to everyone. Thank you for joining us today for Townsquare's fourth quarter and year-end financial update. With me on the call today are Bill Wilson, our CEO; and Stuart Rosenstein, our CFO and Executive Vice President. Please note that during this call, we may make statements that provide information other than historical information, including statements relating to the company's future expectations, plans and prospects. These statements are considered forward-looking statements under the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from these statements. These statements reflect the company's beliefs based on current conditions that are subject to certain risks and uncertainties, including those that are detailed in the company's annual report on Form 10-K filed with the SEC. We may also discuss certain non-GAAP financial measures including adjusted EBITDA, adjusted net income and adjusted operating income, which we may refer to as profit in our remarks. Such non-GAAP financial measures should be used in conjunction with all the information contained in the quarterly, year-end and current reports available on our website. I would also encourage all participants to go to our corporate website and download our investor presentation as Bill will reference some of those slides during our discussion this morning. In addition, we also issued our annual shareholder letter today, also available on our website, which we encourage you all to read. At this time, I would like to turn the call over to Bill Wilson.

Thank you, Claire, and thank you all for joining us this morning. It's great to reconnect with everybody today. We're very pleased to share with you that Townsquare's fourth quarter results met or exceeded our previously issued guidance and that our full year results met the guidance that we issued at the start of 2023. Although 2023 was a challenging year, I am proud of how the Townsquare team navigated the progressively challenging economic landscape. Macroeconomic headwinds were fierce. As rising interest rates, inflation and wage pressures weighed on consumer mindsets, and advertising budgets, causing an advertising recession. However, despite these challenges, we outperformed competitors and gained market share, primarily due to our local focus and our digital platform. We carefully manage the business as our cash flow from operations increased plus $18 million year-over-year or plus 35% to $68 million, and we initiated a high-yielding dividend due to our strong cash flow generation. I believe that our performance over the past several years has demonstrated the efficacy of our digital-first local media strategy validating our focus on local markets outside of the top 50 US cities and reinvigorating my confidence in our business model and our path forward. In fact, our confidence in our current capitalization, the strength of our balance sheet, our free cash flow generation and our business strategy has led us and the board to increase our dividend by plus 5.3% year-over-year, which we just announced this morning. In 2023, net revenue, excluding political, decreased just under 1% year-over-year and just under 2% in total to $454.2 million, the second highest revenue amount in Townsquare's history. Adjusted EBITDA, excluding political, decreased 9.1% year-over-year and negative 12.1% in total to $100 million. Impressively and worth noting, Townsquare is one of the only media companies that issued and met guidance for full year 2023 as macro conditions caused many others to either recent guidance or not even issue annual and at times even quarterly guidance. Townsquare is also among the only broadcasters with net revenue levels above 2019. We are at 105% of 2019 net revenue levels and very close to 2019 adjusted EBITDA levels at 98%. Our digital performance drives this differentiation as Townsquare's total 2023 digital net revenue is plus 47% above 2019's digital net revenue even with the recent setbacks we are overcoming in our digital marketing solutions business. Our digital business is a true differentiator for Townsquare. As highlighted on Slide 11, in 2023, approximately 51% of our company's total net revenue and 55% of our total adjusted operating income came from our digital solutions. This highlights the point we often make. Townsquare is no longer the radio broadcast company it was when it was founded in 2010. Townsquare has evolved into a digital-first local media company that is truly distinguished from other local media peers with a world-class team and a unique and differentiated strategy, assets, platforms and solutions. I'd like to take a brief moment to highlight one of the members of our world-class digital team. I'm proud to share with you this morning that Sun Sachs, our Senior Vice President of Products and Engineering was part of the Townsquare team from the beginning, a true Townsquare OG, will be receiving the NAB's Digital Leadership Award, a significant and well-deserved recognition. One of the numerous initiatives Sun and the team are working on is leveraging AI in numerous aspects of our business. Congratulations Sun and our entire tech and product team, he leads and inspires each day. Historically, for Townsquare in the overall advertising industry, digital advertising outperforms other forms of advertising during a downturn, and that was true for us again last year. In 2023, many agree that the advertising market was in a recession which had a larger impact on broadcast and digital, particularly in the national marketplace. Thankfully, our national exposure is limited, with less than 10% of our total revenue coming from the broadcast national marketplace. That, combined with the fact that we enjoy strong often long-term relationships with our local advertising clients, contributed to our broadcast advertising segment outperforming the industry. However, despite our outperformance, Townsquare's broadcast advertising net revenue, excluding political, still declined negative 3.6% year-over-year, in large part due to national, which declined last year negative 18% year-over-year. It is worth noting that national continues to put downward pressure on broadcast and is currently pacing down negative 7% in Q1, while local spot continues to outperform national, so that broadcast overall in Q1 is pacing down just a couple of points for us right now. But while broadcast remains significantly below 2019 levels, we have gained broadcast market share since 2019. I'm proud to say again, we did it in 2023. I am very proud of our team for achieving this market share growth as it demonstrates the benefits and importance of differentiated local content on our local radio broadcast. No better team of content contributors and sales teams. Where we really shined unsurprisingly was digital advertising. In a year of macro uncertainty, digital advertising was once again the fastest-growing segment of our company, differentiating Townsquare from local media peers and even national digital players at times. We owe our digital advertising success to our sophisticated digital products and solutions, which are entirely in-house, giving us 100% control of the client relationship, starting with the client pitch, then campaign design, media buying and optimization and ongoing reporting and insights, which we believe translates to a better customer experience and higher client retention rates. In addition, we have the unique ability to collect and analyze first-party data from our audience of over 75 million monthly unique visitors to our portfolio of over 400 local news and entertainment websites, 400 mobile apps and 10 leading national music and entertainment websites. Our large first-party data set allows us to provide detailed and unique insights about consumer behaviors, audience interest and purchase intent that drives real results with strong ROI for our clients, giving us a true strategic advantage over our local competition. Another key factor that drives our strong digital advertising success is our focus on markets outside the top 50 US cities, a significant, significant differentiator for our broadcast business and most importantly, for our digital businesses. Because we are not in large top 50 markets, we face significantly less competition from large media players, digital marketing solutions players and digital programmatic providers. And importantly, the competitors we do face rarely have in-house solutions and instead utilize out-of-house third-party vendors. Owning our own tech platforms in-house, combined with the breadth of our digital solutions, is a competitive advantage in any sized market. Yet in cities outside the top 50, it is a significant difference maker, driving our digital advertising to be the strongest growth engine in the company. In 2023, Townsquare's digital advertising net revenue and digital advertising profit each increased plus 7% year-over-year. S&P Global Market Intelligence latest forecast project that digital advertising in the United States will increase at a plus 8.5% CAGR through 2028, as digital advertising grows from 69% of all to advertising spend in 2023 to approximately 76% of all advertising spend in 2028. We are confident that these favorable industry trends, together with our in-house full suite of marketing solutions, investment in our original content strategy and our first-party data advantage will continue to drive strong digital advertising growth during that same period. Conversely, as I shared previously, 2023 was a reset year at Townsquare Interactive. Rising interest rates, inflation and wage pressures drove elevated churn rates and slower sales velocity. In addition, we started the year with higher customer attrition driven by internal customer service turnover that was a result of our return-to-work mandate at our Townsquare Interactive headquarters. We have been asked if we still believe in the growth strategy and addressable market of Townsquare Interactive given last year's challenge. And the answer is yes, without a doubt, unquestionably so. We are seeing numerous early signs of improvement. Customer churn peaked in Q2 2023, although still above historical levels today, the spike in employee attrition and the related customer churn is behind us and ARPU for new sales is increasing. The changes we made to our customer service model in response to the challenges we faced last year allowed us to capture cost efficiencies and importantly, set us up to scale more efficiently going forward. In 2023, Townsquare Interactive's net subscription revenue declined negative 9.1% compared to the prior year. However, we managed expenses such that Townsquare Interactive adjusted operating income margin only contracted 60 basis points to 28.3%. However, given the loss of over 6,500 subscribers in 2023, even though we are currently experiencing many positive signs at Townsquare Interactive, including improving subscriber trends, which I'll outline in a few moments, the impact of losing over 6,500 subscribers in 2023 put significant negative pressure on both revenue and profit year-over-year growth in 2024. For example, even with meaningfully lower subscriber losses in Q1 2024 versus Q4 2023, first quarter revenue for Townsquare Interactive will still be down 15% to 16%, which is a decline of over $3 million from Q1 2023. In the long-term, we are confident that we have a long sustainable runway ahead of us. With 24,000 subscribers at the end of 2023, which approximately 58% are outside of our local media footprint, and an addressable market of nearly 9 million target customers, we are only scratching the surface. With our existing subscriber base, superior product offering and a huge market opportunity of nearly 9 million target customers, as outlined on Slide 14, I am confident that Townsquare Interactive is geared up for long-term profitable growth and success. To that end, the first sign of the rebound in Townsquare Interactive will be the return to subscriber growth. The second sign of the rebound will be month-over-month revenue growth. And given our continued ongoing aggressive investment in Townsquare Interactive, the third sign of returning to strength will be month-over-month profit growth. In Q1 2024, I expect net subscriber losses to be materially improved over the rate we experienced in both Q3 and Q4 of 2023. My current expectation is we could return to net subscriber adds in Q2 and no later than Q3 2024. My expectation for month-over-month revenue growth is also in Q2 and no later than Q3 2024. And my expectation for month-over-month profit growth is dependent on how aggressive we can continue to invest in the business in Charlotte and Phoenix. Yet with that context provided, I do expect to return to month-over-month profit growth in Q3 or Q4 of 2024. As I already stated, I am very confident that Townsquare Interactive is back on track and set up a long-term profitable growth and success again. Thankfully, we strategically built a diverse product and service platform and the strength of digital advertising offset a difficult year in subscription digital marketing solutions. In total, our digital revenue grew approximately 1% year-over-year to $232.5 million, and importantly, generated $69.1 million of adjusted operating income representing a very strong 30% profit margin, a margin much higher than most local media competitors. We believe Townsquare's ability to drive profitable, sustainable digital growth is a key differentiator for our company. Digital is and will continue to be our growth engine, and we will continue to invest in our digital business to fuel further profitable growth. We view local radio as an extremely valuable asset with significant cash flow properties, unparalleled consumer reach and important local connection to our audience. In fact, we would have never achieved the success we have had in building an at-scale digital audience and the resulting digital advertising and digital marketing solutions businesses, if not for our continued strong local radio presence and performance. Our traditional AM/FM over-the-air broadcast continues to reach, on average, one out of every two adults in our markets where we operate radio stations, very, very powerful and very, very important. And because of the powerful connection and combination of Townsquare's digital plus radio plus live events plus local investment, we believe that our flywheel will continue to blaze forward and gain momentum. One very important characteristic of our business model that we like to highlight as often as possible is our significant cash flow generation. Although net revenue and adjusted EBITDA declined in 2023, we generated $68 million of cash flow from operations, up an impressive plus 35% year-over-year. We ended the year with $61 million of cash on hand and net leverage of 4.4 times. We remain very confident in our current capitalization and the strength of our balance sheet and are pleased that we can continue to deliver attractive current cash returns for our equity shareholders. And now I'd like to turn the call over to Stu, who will go through our results in even more detail as well as provide you our first quarter and full year guidance. Stu take it away.

Thank you, Bill, and good morning, everyone. It's great to speak to you all today. We're pleased to report that our fourth quarter results met our revenue and profit guidance and more importantly, that our full year results met the guidance that we set out at the beginning of this year, something that not many others managed to achieve given the difficult operating environment. Fourth quarter net revenue declined 4.6% year-over-year to $114.8 million, which exceeded our guidance range of $110.6 million to $112.6 million. Excluding political, fourth quarter net revenue declined 2.7%. Full year net revenue declined 0.9% year-over-year, excluding political, and 1.9% year-over-year in total to $454.2 million, which was within our guidance set at the beginning of the year. In addition, this was our second highest revenue year in the company's history with these assets and was achieved in a nonpolitical year. Fourth quarter adjusted EBITDA declined 6.5% year-over-year, excluding political and 12.7% in total to $24.8 million, also within our guidance range of $24.8 million to $25.8 million. Full year adjusted EBITDA declined 9.1% versus prior year, excluding political, and 12.1% year-over-year in total to $100 million, also within our guidance range. Fourth quarter broadcast advertising net revenue decreased 2.5% and increased 1.3%, excluding political revenue, which was a sequential improvement from third quarter declines. For the year, broadcast advertising net revenue declined in line with expectations at 3.6%, excluding political and 5.4% in total. Fourth quarter broadcast profit margins contracted slightly on a year-over-year basis when excluding political from 26% in Q4 of 2022 to 25% in Q4 of 2023. As we've outlined on previous calls, 2023 was a reset year for Townsquare Interactive, our subscription Digital Marketing Solutions segment. In the fourth quarter, net revenue decreased 14.5% as compared to the prior year and profit decreased 11.3% year-over-year. For the full year, net revenue decreased 9.1% and profit decreased 11%. Margins were strong at approximately 28% in 2023, only a slight decline from 2022's 29% profit margin. This was despite our continued investment in the business, including the ongoing ramp-up of our newly opened Phoenix location. Townsquare Ignite, our digital advertising segment was the largest growth driver of the company in 2023 with revenue and profit increasing 7.1% and 7.5% year-over-year, respectively. Fourth quarter digital advertising net revenue contracted slightly by approximately $500,000 or 1.5%. The main driver of the decline, which was our national digital business was down double-digits in revenue in the fourth quarter, offsetting growth in our programmatic in our local owned and operated digital advertising business lines. We're experiencing similar trends in Q1 of 2024 with national digital down double-digits, offset by solid programmatic growth. Additionally, our current pacing in Q2 digital advertising is stronger overall than in Q1 of 2024. In 2023, this segment's profit margin was approximately 31%. The other category, which is comprised of live events activity, generated $1.3 million of revenue in the fourth quarter, a decline of 15.7% year-over-year and a small loss of approximately $400,000. In the full year period, other revenue increased 18.6% to $10 million and was slightly profitable with $222,000 adjusted operating income. In 2024, we are focusing on refining the live event schedule to eliminate unprofitable or barely profitable events, so we expect to see a small revenue decline in 2024, but with profit and margin expansion. As a reminder, a lot of events activity should not be viewed as a growth driver or a revenue center for Townsquare or rather a marketing arm of our company. In the fourth quarter of 2023, we had noncash impairment charges of $24.9 million and $90.6 million for the full year. The majority of these charges were related to our FCC licenses. As I covered on previous calls, given the way these noncash impairments are mathematically determined, we expect the value of our FCC licenses to continue to be written down regularly over time. The 2023 impairments were caused by rising interest rates which caused a discount rate in our calculations to increase by approximately 190 basis points over the course of 2023 as well as decreases in third-party broadcast revenue forecast and a higher initial capital cost due to rising prices, all of which are inputs in our valuations. These write-downs of a decade-old purchase price calculations have no bearing on our cash position, our operating revenue, operating expenses, profitability or the company's future prospects. There are nothing more than noncash accounting charges affecting only the historical recorded purchase price allocations that we made when we bought these radio station assets roughly a decade or more ago. Our fourth quarter net income declined from $3.9 million in 2022 to a net loss of $1.9 million or $0.14 per share. The decline was largely due to the noncash impairment charges and the decline in revenue. Fourth quarter adjusted net income per share, which adds back certain items, including noncash impairments and adjustments for a normalized tax rate was $0.34 per diluted share. We'd like to remind you that any benefit or provision for income taxes included on the face of the income statement is for GAAP financial statement purposes only. We maintain significant tax attributes, including more than $100 million of federal NOL carryforwards and other substantial tax shields related to the tax amortization of our intangible assets. We continue to believe that we will not be a material cash taxpayer until approximately 2026. As Bill highlighted, and I'd like to again emphasize, we consistently have strong cash flow generation. We generated $68 million of cash flow from operations in 2023, that's up 35% year-over-year or $18 million and ended the year with $61 million of cash. At the end of the year, our net leverage was 4.43 times, down slightly from the third quarter. We repurchased $27.1 million of bonds below par during the year at an average price of $94, bringing our total bond repurchases to $46 million since issuance. In addition, we repurchased approximately 1.7 million shares in 2023 at an average price of $9.88 per share. As always, our number one priority is to invest in a local business through organic internal investments that support our revenue and profit growth, particularly our digital growth engine. We plan to continue to invest in our digital product technology, sales, content and support teams, specifically in our Townsquare Interactive and Townsquare Ignite businesses in order to maintain our strong competitive advantages in our markets outside the top 50 cities. In addition, we are highly focused on our balance sheet and feel extremely confident that we will be well positioned to refinance our February 2026 notes before they come due. As Bill mentioned earlier, our Board has approved a 5% increase in our dividend. The dividend of $0.1975 per share, which equates to $0.79 per share on an annualized basis implies an annual payment of approximately $13 million based on our current share plan and a dividend yield of approximately 7.5% based on our current share price. This higher dividend will be payable on May 1st to shareholders of record as of April 5th. We believe our strong cash flow characteristics will allow us to continue to invest in our business support our newly increased dividend and give us flexibility to opportunistically pursue debt and share repurchases as market circumstances allow. Turning to our first quarter and full year outlook. We expect first quarter net revenue to be between $98.5 million and $100 million. As Bill already detailed, baked into our revenue guide is a decline of over $3 million year-over-year at Townsquare Interactive. We expect first quarter adjusted EBITDA to be between $17.5 million and $18.5 million. For the full year, we currently expect that our revenue will be between $440 million and $460 million. This represents a year-over-year growth rate of 1% at the high end of the range and minus 3% at the low end of the range. Embedded in this guidance is a political revenue estimate of $14 million to $16 million as compared to our all-time high political revenue of $16 million in 2020. In addition, although as Bill outlined, we expect to return to month-over-month revenue growth at Townsquare Interactive. On a full year basis, we expect year-over-year revenue declines of over $8 million at Townsquare Interactive. We expect that our 2024 adjusted EBITDA will be between $100 million and $110 million. And with that, I will now turn the call back over to Bill.

Thank you, Stu, and thank you to everyone who joined us this morning. We greatly appreciate it. In closing, I want to highlight a few key takeaways. Number one, 2023 net revenue and adjusted EBITDA both met the guidance that we initiated at the start of last year. And importantly, net revenue represented the second highest that Townsquare has ever achieved with these assets. Number two, net revenue remains above 2019 levels and adjusted EBITDA is at 98% of 2019 levels, a rare achievement in our industry. Number three, approximately 51% of our company's total net revenue and 55% of our total adjusted operating income now come from our digital solutions. Number four, we're very well positioned for our upcoming refinancing with net leverage at 4.4 times. Number five, we generated $68 million of operating cash flow in 2023. And finally, number six, given our confidence in the long-term growth and success of Townsquare, we are raising our high-yielding dividend that will continue to deliver current cash returns for our shareholders. I am very proud of what our business model delivered in the face of rising interest rates and inflation and extreme and persistent national advertising weakness in 2023. Our differentiated digital advertising platform delivered high single-digit revenue and profit growth. And our mature cash cow broadcast advertising platform has and continues to generate a solid profit contributing to our strong cash generation. Our performance this year has reinforced our confidence in our digital-first local media strategy, our deliberate focus on markets outside the top 50 cities in the United States and the long-term profitable growth potential of our digital platform. And our success is owed to the Townsquare team focusing on what we do best, creating high-quality local original content for our audiences online and on air as well as delivering creative and cost-effective marketing and advertising solutions for our local clients with strong return on investment. If we continue to do this each day, we will achieve success and ultimately achieve our mission of becoming the number one local media company in the markets outside the top 50 in the United States and consequently drive long-term sustainable shareholder value. And again, thanks to each of you for taking the time to be updated on Townsquare's Q4 results this morning. We greatly appreciate it. Operator, at this time, please open the line for any and all questions.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from Michael Kupinski with Noble Capital Markets. Please go ahead.

Thank you. Good morning and thanks for taking my questions. First on Townsquare Interactive. As you mentioned last year, we saw businesses really struggle. What are you seeing now that kind of gives you the tone of optimism that you have with Townsquare Interactive? And then maybe if you can provide some color on how Phoenix is performing? Is most of your optimism being driven by Phoenix and what you're seeing west of the Mississippi or is it fairly broad-based? I was just wondering if you could just kind of give us some color there?

Sure. Good morning, Michael, and thank you for the question and joining us. Yes, we have tremendous optimism as we go through 2024 for Townsquare Interactive. It is definitely not limited to Phoenix, although we're very pleased with how Phoenix has been scaling and the management there and the hiring of talent, which was one of the main drivers of opening the office there. I'm very glad we did last year. But our optimism is really multiple fold. One is business is still, obviously, as you know, are dealing with high interest rates. We're at the highest interest rates in the last couple of decades, but everybody is expecting that to come down, but these businesses are still dealing with that today, but you're seeing some wage pressure decrease. You're seeing inflation starting to come down even though prices are up from a year ago, it's at a lower rate than where we were at a year ago. So that is definitely a positive tailwind, I call that minor right now. I think that picks up steam and more tailwind for us, particularly as interest rates come down. If that's June or if that's later in the summer, I think it's a question of when versus if. And I think that will actually give us more momentum than we've baked into our guidance because that's an unknown. What we're really excited about in terms of the optimism and the confidence for Townsquare Interactive is quite honestly, our own performance in terms of taking a step back, attacking ourselves and I believe building a better client service organization as a result. As I mentioned, last year, we lost over 6,500 subscribers, 6,650 to be exact, and we hit the highest level of churn in Q2, and that's decreased modestly but consistently as we sit here in March. As I mentioned in the prepared remarks, my expectation in Q1 is that we're less than half of the losses we experienced in Q4. So as you can calculate based on what we described in terms of losses. In Q4, we lost 1,750 subscribers. So as we sit here in Q1, my expectation is less than half of that, if not roughly half of that. So that's a material improvement. The other thing I noted, Michael, is as we look at subscriber growth, which to me is the first sign of a turnaround and a rebound at Townsquare Interactive, the second sign being month-over-month revenue growth and the third sign being proper month-over-month growth. I believe we're going to see subscriber growth in Q2. I'm quite confident of that right now. The latest would be Q3, but if I had to place money right now, my money would be on Q2. I also expect month-over-month revenue growth to occur in Q2, which is a significant change. If you look at our last year in 2023, we lost quarter-over-quarter revenue every quarter of 2023. So it was clearly a challenging year last year, but I'm very optimistic and quite confident we've turned that around. And then I believe we could even see flat revenue in March and then growth as soon as April in terms of revenue. But to just peg it into a quarter, I'd call it, Q2. And then as I described, we're continuing to invest heavily in the business based on the opportunity. So the profit growth will probably occur either in Q3 or Q4, really depending on how much hiring we can do and how much investment we can do in the business because we have so much confidence we're not slowing down in terms of the investment. So the optimism is definitely not tied to Phoenix. It's really -- I'm so proud of the Townsquare team from top to bottom, from our leaders to the people who are dealing with our clients every day. We really attacked ourselves. We took a major step back and said, we are not doing this as well as we can do. How do we improve that. And I know it's hard to see because as I said and Stu said, in Q1, our revenue is going to be down 15% to 16% over $3 million, you'll dig yourself a whole of losing 6,600 subscribers, you're going to see the financial impact of that throughout the year, even though there are so many positive signs of subscriber growth, month-over-month revenue growth and then profit growth month-over-month. But unless somebody takes the time to really dig into it, the headline is going to be revenue is declining and profit is declining year-over-year. But we have seen the turnaround. I'd say we've already turned it around, and we're seeing a dramatic rebound throughout 2024 in Townsquare Interactive. So I'll pause there, Michael, for follow-ups.

Thank you. One quick one, Bill. Thanks for that color by the way. Obviously, now Google is kind of implementing the deprecation of cookies and I was just wondering if you can kind of give us some visibility on what you're seeing in terms of any impact, anything that you're seeing from whether it be the programmatic side or other parts of your businesses related to that?

Yes. Thank you, Mike. I appreciate it. So one of the benefits for us is we're at-scale publisher. So we have a great large audience. We talked about the audience growth year-over-year on our network of local sites and national sites and mobile apps. And I couldn't be more proud of all of our content contributors on air and online driving that success. Quite honestly, if cookies go away and as they go away, it's a real advantage to be a publisher because we're still capturing first-party data. We currently utilize third-party data as well, but not a lot of people are at-scale publishers. So it impacts positively our O&O business, our owned and operated local and national websites. And it also helps us with our programmatic business. Obviously, we're quite proud of digital advertising growing 7% last year, increasing $10 million on a full year basis. Overall, programmatic was up low double-digits in 2023, which was really strong and our O&O local was up. We did definitely take a step back in our national O&O business. We haven't spoken a lot about this on previous calls, but we have leading brands in entertainment and music like XXL and HipHop and tasteofcountry.com and country and I won't name all 10 of them, but they are the leading platforms for each of their genre. That business has definitely been impacted, not from cookies because that hasn't happened yet. But there's been some significant change in algorithms for Google as well as Facebook referrals. You may have heard how many referrals to new sites has come down from social platforms. It's been pretty dramatic. And that's definitely impacted our national business, which what I would say is has muted our digital advertising growth. If it wasn't for that, we would have grown more than 7% last year. And as we look at Q1, we're seeing similar trends in Q4 in our digital advertising business. We're seeing sequential improvement from Q4 to Q1. National business that I just described, like XXL and tasteofcountry, still down over 25%, which is over $1 million in Q1. But thankfully, local websites and local owned and operated is up low to mid-single digits, and our programmatic continues to be up high single-digits, which is great. And Q2 today, having the benefit of being here March 15 with you, we obviously have a good look at Q2 right now and Q2 is pacing stronger than Q1 in digital advertising. And I believe I've noted this on the call also is pacing better for broadcast advertising Q2 over Q1. So a lot of positives for us. I see Q2 better than Q1 in digital advertising. I see Q2 better than Q1 in broadcast advertising. And as I just described, I believe Q2 will be a monumental turnaround event for us in terms of subscriber growth and revenue growth in Townsquare Interactive. So a lot of positives as we go into 2024.

Great. Thanks, Bill. I appreciate that. That's all I have.

Thank you, Michael. Have a great day.

[Operator Instructions] Your next question comes from Jim Goss with Barrington Research. Please go ahead.

Hey, thank you, and good morning. Stu, I'd like to ask you on first. I know you alluded to this, the fact that the calculation for the noncash charges had quite a bit to do with the rising interest rate trends we've been experiencing. If the rates tend to start to draw back after this long period of increases, do you think that will change the calculation? And I understand they are noncash, but there might be a little bit of a distraction and maybe you get rid of that element of noise?

Thanks, Jim. Yes. Well, obviously, if interest rates start falling back like we all hopefully expect them to, that will be less of a drain on the calculation. The other important factor that calculated into it this year was BIA's industry forecast came down for broadcast for '24. It really unfairly attaches itself to our company because it's mainly based upon large NFL city markets. Broadcast does a lot better in small local markets than it does in the bigger markets. So we think that those two things together, the rising interest rates and the industry forecast coming down for bigger cities majority, unfairly hurt us in that calculation. But yes, you are correct, assuming that broadcast forecasts hold steady or go up and interest rates come down, we shouldn't see as much of an FCC impairment on those licenses. But it really, I mean, I can't stress enough that these are noncash charges. They don't affect future revenues, future expenses, future cash flow generation. It really is just an academic GAAP calculation of how we allocated purchase price when we bought these markets in 2010 through 2012. It has no effect whatsoever on our business. And people should adjust those out and look at our adjusted earnings per share. They should not just look at flat bottom line earnings per share.

I think people probably do, but it is certain noise in the background. Is there any element to those write-downs that might make it more possible for you to buy some additional broadcast properties if you thought that might be worth it at any lower rates? Or is that going to be a completely separate issue?

I don't think impairment charges in anybody's company really has anything to do with how we would value a business. We look at markets and see what their current state of cash flow is, how much infrastructure they still have left, what we think we can add to those markets by rolling out our digital playbook. So looking at noncash charges for impairments really doesn't factor into our equation and we're looking at M&A.

All right. Thanks. And Bill, talking about TSI and the issues you've had with the staffing shortages for some time. It seems like you're dealing with a group of potential employees or existing employees who require a certain level of competence that they might also have attitudes toward workplace rules that might be different from the population as a whole. And there probably is some competition for those individuals who meet all the requirements you require. I'm just wondering if you might discuss a little bit more about the challenges of that strategy of maintaining that piece of employees and increasing it and restoring a growth element to it with the things you're facing that might see some headwinds as well.

Yes. Good morning. Good to hear from you, and thank you again for the question for Stu, because I think it's very astute because it is a distraction, it's noise as you characterize it because it's noncash impairment, as Stu described and people should look at adjusted EPS, which, as to your point, most investors do, but sometimes there's a headline out there that doesn't take that into account. So I'm glad you highlighted that noise. In terms of TSI staffing and the challenges we faced. Really going into 2023 when we had a back-to-work mandate, those are behind us at this point. They definitely hurt us throughout 2023. There was I think I've detailed it on the prior calls throughout last year that there was a large number of people who just rejected the return to work mandate and look for other employment and moved on from Townsquare Interactive. It was quite a percentage, particularly of our service organization who are used to working from home in essence from March of 2020 till the end of 2022. So obviously, a few years. I think what's happened is as people have come back to work, which were people who were already existing on our team as well as new hires, they definitely see the benefit of the culture and being a part of a team with a common goal to help local businesses in cities outside the top 50. To your point, it's our largest office in Charlotte. It's by far the largest office. So it's a lot of competition for roles, as you described, but we continue to be one of the best named employers and places to work in Charlotte. We actually just won that distinction for our Ignite digital advertising business as well, which we're quite proud of. So they were definitely issues. They were definitely part of the reason in addition to the macro headwinds and everything we've described in terms of inflation, wage pressures and interest rates throughout 2023. But we also had some self-inflicted wounds. And that's why I have so much confidence and I wish I could share all the data points we're seeing on a day-to-day basis and week-to-week. But that's why I can sit here today and tell our investor base and our shareholder base and our debt holders that the rebound has begun at Townsquare Interactive, will return to subscriber growth in Q2, return to revenue growth in Q2 and we'll return to profit growth in Q3 or Q4. And the team is the reason for that. It was definitely a setback to had people choose not to come back to work. And as I've described, Jim previously is you can earn the right to work remotely. If you are a high performer and you choose to want to work a few days in and a few days out of what I would call a hybrid model, we allow that. But you have to be a high performer to earn that, and we respect that and I couldn't be more proud of the Townsquare team. There's always going to be times where we take a step back, we fall down, but we get up every time, we attack ourselves and no one's done it better than the Townsquare Interactive team as we go into 2024. So appreciate the question, Jim.

Okay. Just a couple of other ones. One follow-up on the TSI. Are there any new service offerings you are introducing or you can introduce that can sort of raise the ARPU in that sector? And the other question would be with regard to Ignite. It seems like that's actually been the better performing digital element. I wonder if you might talk about the various specific growth components within Ignite that are really doing well right now.

Yes, I'd be happy to do that. So let me take those one at a time. So from a product and service and solutions offering at Townsquare Interactive, we have, over the past six months, introduced numerous new solutions for clients. And it wouldn't so much, Jim, raised the ARPU. But these new products, including a robust CRM including the ability to text and e-mail market, including the ability to hook into QuickBooks and provide invoicing, set up appointments for contractors without having to take a call. All of these, I'd say, important elements for small businesses that they may either lack that today. We see a lot of people who don't have any of these solutions or some of them have multiple providers for these solutions. And we've been able to come in and say, hey, we can make it a one-stop shop and make it much easier for you. So previously, if you had a great website and you were ranking very high in Google, we may not have been the best partner for you. Now I can tell you, you can continue with your great website, your great placement in Google and Bing and Yahoo! and the search engine, but there's a lot of other solutions we can provide your business so that you can operate more efficiently and more profitably by using Townsquare Interactive. So it's actually broadened the pool of target customers at Townsquare Interactive as we went into end of last year, and particularly, we actually rolled this out. We trained at the end of last year, but we rolled it out in February in full four. So I believe that's going to be part of the reason you see the rebound at Townsquare Interactive in Q2 and onward is because of the product and solutions we've offered. And it's a clear differentiator for us to integrate this all in-house with our tools. So again, I know it's been a tough year in '23 for Townsquare Interactive, but 2024 is the bounce back year. The headline numbers aren't going to look positive because of the subscriber loss but you're going to see subscriber growth return, revenue growth return and profit growth all return in 2024, which hopefully gives us much confidence to everybody on this call as it gives to me. And again props to Tim Pirrone and entire Townsquare Interactive team for taking that challenge running through walls and getting back to being a winning division of the company again. To your second question, Jim, which I appreciate is digital advertising has been for many years and will continue to be the growth engine for Townsquare overall, growing 7% last year. We're quite proud of that, growing $10 million full year revenue with our programmatic part, as you described, like, hey, can you kind of parse what's going on there and what's going well? Programmatic up year-over-year in the low double-digits for 2023 is quite strong. It's stronger than the industry average. In terms of that area, what we're seeing is social, streaming, television, those two are doing the best in terms of growth rates. I'm sure you're familiar, Jim, we've talked about it previously, streaming TV is the greatest growth area in digital advertising. Five years ago, we could not compete with cable and television brands. Today, not only are we competing with them, we're share shifting business and winning business. And I think as we took on more creative resources, it's one of the areas that I alluded to with Sun Sachs winning the NAB Digital Leadership Award. We've got a whole team focused on AI in the company. And one of the things we've already started deploying is artificial intelligence for our creative, for our audio broadcast spots, for our digital video spots, for our digital display spots all of those things. So the fact that we can now sell streaming TV, and I think in a differentiated way, is a real advantage for us. The other part of it that's doing quite well in Townsquare Ignite, our digital advertising division, is monetizing our owned and operated properties, particularly local. Local has been up low double-digits full year in 2023. I expect that to continue to be mid-single digits in 2024. I expect programmatic in 2024 to continue to be either high single-digits or low double-digits. Where we've struggled in the digital advertising front, and I was very transparent on the prepared remarks, is our national business like xxl.com or xxlmag.com and tasteofcountry.com, that was down over $4 million last year, over 25%. And we see that slightly improving in Q2, but still down 20%. So that will even itself out. We were confident just like as we face some obstacles in Townsquare Interactive last year. The reason national O&O is more challenged and having a setback while local continues to grow from an O&O perspective is really the change in algorithms from Google and others that has affected our national brands where there may be more plethora of content around hip-hop or country music, where as we've talked about in our local markets where we're completely differentiated outside the top 50 cities in the US, it's been quite sad as American citizens see the demise of newspapers and the investment in providing local news. And as we've alluded to and there was actually a keynote at Borel this past Monday that Jared Willig did for us, we stepped in many years ago and filled that void. And that is one of the reasons that our digital advertising continues to grow as strongly as it does outpacing many in the industry is we've got the benefit of our programmatic up last year, low double-digits and also our local website and apps up low double-digits in digital advertising, and I encourage everybody on this call to spend time on our local mobile apps and local websites. They, in essence, are what people would think of a newspaper 5, 10, 15, 20 years ago. And a) it's a great business for us. It's highly profitable. It's obviously increasing revenue quite nicely, as I said, in 2023, low double-digits, but it's also serving an incredibly important mission of helping our communities be informed and entertained. And that's one of the things we're proud of our broadcast business. We believe, as Stu said, being in the broadcast business outside of the top 50 markets is completely different in our view than being in the broadcast business in the top 50 markets. As I said on the call, we reached 50%, 5-0, one in two adults in the markets that we operate in, just simply over our AM/FM transmission. That is unlike the top 50 cities, which will be closer to maybe 25% for the number one market share. So couldn't be more excited about digital advertising on our Ignite business. It clearly was a stand out for us in 2023. But as we go into 2024, we see improvement in our broadcast business, Q1 over Q4, Q2 over Q1 currently pacing, see improvement in Townsquare Ignite digital advertising in terms of Q4 over, I'm sorry, Q1 over Q4 as well and then Q2 over Q1 in terms of pacing right now. And then clearly, huge bounce back with subscriber growth, revenue growth, profit growth in Townsquare Interactive. So although our guide, I'd say, is modest when you compare it to last year, we're going to have a standout year in each three of these divisions, and we're excited by that. And obviously, we've got the benefit of political. I'll just touch on that. It wasn't asked, but PQ Media, which is really a consultant in the space said that $14.6 billion of spend will happen in 2024. That is up more than 45% from 2020, which was $10 billion. They expect radio to get $769 million in political advertising. That's an increase of 35% for 2020 just for radio. That's an expected 35% increase in radio spend in political. For us, we're very well positioned. That's why Stu alluded in our guide is $14 million to $6 million of political revenue for the year. It's obviously going to be heavily back weighted because there really was no primaries this year, as everyone knew who the candidates would be. So the spend was much less and will be until we really get to August and Labor Day. But for Townsquare, for the Presidential, we've got important states like Michigan and Arizona. In the Senate, Michigan, Arizona, Montana. In the House, we've got multiple including Bangor and Presque Isle, Maine; Lansing and Flint, Michigan; Sierra Vista, Arizona, New Jersey, Hudson Valley, and then we've also got governor race in New Hampshire. So a lot of tailwinds for Townsquare overall in each of our divisions in 2024.

All right. Well that was very complete and I appreciate it very much. Thanks a lot.

I appreciate the question, Jim. Anything else?

No, that's for now. That's it for now.

Thank you, Jim.

There are no further questions at this time. I will now hand the conference over to Bill Wilson.

Thank you so much, operator, and thank you to each of you who joined this morning. We appreciate you taking the time. As Claire said at the top of the call, I would encourage all of our investors and shareholders and debt holders to read the shareholder letter, which is now available this morning. I encourage you to reach out if you have any questions. My e-mail is [email protected]. I'd love to hear from you. Couldn't be more proud of the Townsquare team. We feel, as you could hear through Stu's remarks and my remarks, quite optimistic for the year. We're proud of our cash flow generation last year, increasing $18 million by 35% to $68 million which allowed us to also reduce our net leverage to 4.4 times with $61 million of cash on hand. And we're proud of the Board supporting us in increasing the dividend by over 5% to $0.79 per annual share that today is at a 7.5% yield. So feeling quite bullish and optimistic as we go through this year, and I appreciate you taking the time to hear from us this morning. We have the benefit of reconnecting in less than two months. So I look forward to giving you an update in about two months again on the business. So thank you again. Have a great day and weekend.