Greetings, and welcome to the Entravision Communications Corporation First Quarter 2025 Earnings Conference Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Roy Nir. Please go ahead..

Good afternoon, everyone. And welcome to Entravision Communications Corporation's first quarter 2025 earnings call. I am Roy Nir, Vice President of Financial Reporting and Investor Relations. Joining me today are Michael Christenson, our Chief Executive Officer, and Mark Boelke, our Chief Financial Officer.

Before we begin, I would like to inform you that this call will contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ. Please refer to Entravision Communications Corporation's SEC filings for a list of risks and uncertainties that could impact actual results.

The press release is available on the company's Investor Relations page and was filed with the SEC on Form 8-K. I will now turn the call over to Michael Christenson..

Media and Advertising Technology and Services, what we call ATS. For our media segment, our revenue declined 10% in 1Q 2025 compared to 1Q 2024. Some of our local advertisers reduced their ad spend in 1Q 2025 compared to 4Q 2024 and 1Q 2024. We had fewer active local advertisers in 1Q.

The average spend per active local advertiser increased slightly, but this was not enough to offset the decrease in the number of active local advertisers. Our smaller advertisers pulled back more than our larger advertisers in 1Q. We saw similar results in our national business.

What I can share with you on this call is that our revenue was lowest in January. February was better than January. March was better than February. And April was better than March. In terms of operating expenses and profitability, we are making a number of important investments in our media business in 2025.

We are adding capacity to our local sales teams, more sellers, and we are adding digital sales specialists and digital sales operations capabilities so we can do more digital. When we analyze our local markets and our local advertiser base, we see an opportunity to increase revenue by adding sales capacity.

In addition, virtually all our local advertising customers are also advertising in digital channels—search, social, streaming video, and streaming audio—and we believe we can serve their needs in these digital channels as well as our traditional broadcast video and audio channels.

The increase in operating expenses in our media segment due to these investments was a little less than $1 million in 1Q 2025 compared to 1Q 2024, so about $3 million on an annualized basis.

The combination of lower revenue and increased operating expenses produced an operating loss for our media segment of $2.6 million for 1Q 2025 compared to an operating profit of $3 million in 1Q 2024. Now for our advertising technology and services segment. ATS revenue was 57% higher in 1Q 2025 compared to 1Q 2024.

We had more customers, and we had higher spend per customer. We continued to invest in our ATS segment in 1Q 2025 to grow revenue and operating profits.

We are investing in our engineering team to continue to improve our technology, to build more powerful AI capabilities into our platform, and we are investing to increase the size of our sales organization for ATS. In addition, our infrastructure costs will grow as our revenue grows—not at the same pace, but they will grow.

The combination of these investments and increased operating expenses resulted in operating expenses that were $4.1 million higher in 1Q 2025 compared to 1Q 2024. That's $16 million higher on an annualized basis. ATS revenue grew faster than operating expenses, so our operating profit was $6.5 million in 1Q 2025, significantly higher than 1Q 2024.

We have funded these operating expense investments for both media and ATS in part by reducing our corporate expenses. We reduced our corporate expenses by $4.5 million in 1Q 2025 compared to 1Q 2024, nearly $18 million on an annualized basis.

So to summarize, in media, we are investing to increase our local sales capacity, and we are investing to expand our digital sales and digital sales operations capabilities—more sellers, more digital.

In ATS, we are investing to add more engineers, to advance our technology, and to increase our sales capacity—so more technology, better technology, and more sellers. We believe these investments will help us build a stronger company. Now I'll ask Mark to share with you more details of our financial results for the first quarter of 2025..

first, reduce debt and maintain low leverage; second, return capital to our shareholders, primarily through dividends. Consistent with that strategy, over the past year, we prepaid $20 million of our outstanding indebtedness, and we continue to maintain low leverage.

In addition, we paid $4.5 million in dividends to stockholders in the first quarter, or $0.05 per share. For the second quarter, our Board of Directors has approved a $0.05 dividend per share, which will be payable on June 30, to stockholders of record as of June 16, 2025, for a total dividend payment of approximately $4.5 million.

We'd like to thank you for joining our call today. We welcome our investors to connect with us through the Investor Relations page on our corporate website, entravision.com, where you will have access to a transcript of this call, the press release containing our financial results, and a copy of our Form 10-Q quarterly report filed with the SEC.

At this time, Mike and I would like to open the call for questions from the investment community. So operator, I will turn it back to you now..

Thank you so much for that. And ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star button followed by the number one on your telephone keypad. You will hear a prompt that your hand has been raised.

Should you wish to cancel the request, please press the star button followed by the number two. And if you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question..

Operator?.

Hello? Again, should you wish to ask a question, please press the star button followed by the number one on your telephone keypad..

Operator, while we wait for any questions to come through, I'd like to review a written question that we received.

The question is, how has Entravision Communications Corporation's business been impacted by recent changes in trade policy and tariffs?.

I believe that's a common question being asked by companies these days..

Our business primarily consists of selling advertising services, which are not directly subject to tariffs.

Media revenue is generated within the United States, and although our advertisers do include some manufacturers that could be impacted by tariffs, such as auto dealers or manufacturers, many advertisers are local services businesses that are not directly impacted by tariffs. That's largely for our media business.

Our ad tech and services revenue is generated primarily in Europe and the Middle East, followed as well by Asia and the United States. And our clients in the ad tech and services business are primarily services businesses, largely mobile app providers, for companies in gaming, entertainment, social media, financial services, etcetera.

And those businesses are not directly impacted by tariffs as a general matter. At this time, we have not changed any forecasts or strategic plans in response to changes in tariff or trade policies. Operator, I'll turn it back to you.

Any additional questions?.

Thank you so much for that, Mark. And since there are no further questions at this time, I'll be transferring the call over to Michael Christenson for our closing remarks..

Thank you all for joining us today. We look forward to seeing you and hearing from you again on our next quarterly results call. And in the meantime, as Mark mentioned, if there are any things that you'd like to discuss or questions that you have, you can connect with us through our investor relations website. We are happy to get back to you.

Thank you..

This concludes today's call. Thank you for participating. You may now disconnect. Thank you so much, everyone..