Title

Presentation

Townsquare Media, Inc. misses on earnings expectations. Reported EPS is $-0.16 EPS, expectations were $-0.12.

Operator: Good morning, and welcome to the Townsquare Media First Quarter 2026 Earnings Call. As a reminder, today’s call is being recorded, and your participation implies consent to such recording. [Operator Instructions] With that, I would like to introduce the first speaker for today’s call, Claire Yenicay, Executive Vice President.

Claire Messner: Thank you, operator, and good morning to everyone. Thank you for joining us today. With me on the call 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 but 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.

During this call, we may make certain non-GAAP financial measures, including adjusted EBITDA. 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. At this time, I would like to turn the call over to Bill Wilson.

Bill Wilson: Thank you, Claire, and thank you all for joining us today. It’s great to speak with you this morning. We’re pleased to share our first quarter results with you today, which demonstrate the strength of our digital advertising platform and validate our digital-first local media strategy with a focus on local markets outside of the Top 50. We are proud to share that our first quarter results met the guidance that we provided on our last call and that we’re currently seeing ongoing improvement in digital advertising trends and pacing in Q2 and the back half of 2026. And as a result of our digital-first strategy, we are also reaffirming the full year net revenue and adjusted EBITDA guidance that we provided on our last earnings call.

By now, it should be very clear that Townsquare has transformed from a legacy broadcast company into a Digital First Local Media Company and that our digital platform and digital execution sets us apart from others in local media. In 2025, approximately 55% of our company’s total net revenue and 56% of our total segment profit was generated from our digital solutions. In the first quarter of 2026, our digital revenue grew to be a very significant 59% of our total net revenue in the quarter, an all-time high. And as highlighted on Slide 10, is roughly 2x our competitors, as on average they have only 30% of their revenue coming from digital sources. Even more importantly, our digital profit contributed a very significant 63% of our total profit in the first quarter, also an all-time high.

As we have consistently stated for many years, digital is and digital will continue to be Townsquare’s growth engine and the area where we focus the bulk of our investment capital going forward, consistent with our strategy of being a Digital First Local Media Company focusing on markets outside the Top 50 in the United States and further differentiating us from others in local media. Now let’s dive into our fastest-growing business, digital advertising, which we call Townsquare Ignite, the larger of our 2 digital segments. As I stated what happened on our last call, our digital advertising net revenue increased high single digits in the first quarter, with revenue increasing plus 7% over the prior year, a significant improvement from 2025’s digital advertising growth of approximately plus 2%.

Our first quarter digital advertising revenue growth of plus 7% was driven by the same trends that we have seen for the past several quarters and have also discussed at length previously. Strong digital advertising related to our direct-to-client sales and declines in our indirect revenue, also known as remnant revenue, which will moderate in Q3. The strong growth of our direct-to-client sales is made up of two revenue streams: number one, our programmatic digital advertising platform; and number two, the direct local sales of our owned and operated or O&O digital properties, both of which are performing quite well. First, our digital programmatic business, which make up approximately 65% of the Digital Advertising segment’s 2025 revenue, delivered a very impressive and strong first quarter revenue results of plus 21% year-over-year.

We believe that this part of our business has very strong organic growth opportunities, supported by our best-in-class digital offering, strong industry tailwinds and a great and excellent leadership team. We expect it will continue to be our primary growth driver in 2026 and beyond. Our third-party media partnership model, which is a component of our programmatic business, has been progressing quite well since its beta launch in early 2024. This strategy will be a meaningful component of our digital advertising growth in future years. In 2025, media partnership revenue was approximately $6 million, and we had 6 local media partners. In Q1, we roughly doubled revenue from Q1 2025 and for the full year are on track to approximately double the $6 million we generated in 2025.

As a reminder, through this capital-light model, we partner with other local media companies and handle all the major components of their digital advertising campaigns, including managing the creative, buying and optimizing the inventory, providing customer support of the digital campaigns and importantly, training our partner sales teams to sell our solutions. Therefore, we can enter new markets to offer programmatic digital advertising solutions without having to acquire radio broadcast assets to do so, freeing up our capital for other purposes. I expect that in 4 years, this division will grow to be $50 million in revenue for Townsquare at an approximately 20% profit margin. Ultimately, our goal with this initiative is to become the chosen provider of digital programmatic advertising to broadcasters and digital agencies in local markets outside of major cities.

On our last earnings call, we announced that we are up to 11 partners to start 2026, and I’m pleased to share that since then, we have added 2 more partners. Looking ahead to the second quarter, our programmatic digital advertising business continues to fire on all cylinders with revenue expected to be up over 20% year-over-year again. Our local teams are selling digital advertising better than ever, while at the same time, our media partnership division is performing extremely well, and as I noted previously, is on pace to nearly double revenue in 2026. Second, the direct sales of our local O&O digital assets, which includes our local salespeople selling the inventory of our own 400-plus local websites and mobile apps, was up plus 10% in Q1 2026 as expected and continues to show consistent and strong growth in Q2.

We owe our success here to the sophisticated digital advertising solutions that have been developed by our skilled digital product and engineering team. The hard work of our local content teams is continuing to drive our audience even in the face of AI search traffic-related headwinds, and of course, the dedication of our local sales teams. Revenue generated from remnant inventory on our own mobile apps and websites, as I outlined on numerous previous earnings calls, declined negative 40% year-over-year to $12 million approximately in 2025 from approximately $20 million in 2024. Our expectation remains the same as we shared on our last call for the full year. Remnant indirect revenue will decline from approximately $12 million in 2025 to approximately $9 million in 2026, with most of the year-over-year decline occurring in the first 7 months of 2026.

As a reminder, this approximately $3 million year-over-year revenue decline is close to 100% profit margin for Townsquare. I’d like to emphasize that Remnant revenue represents a small portion, approximately 8% of our total digital advertising revenue today. In the first quarter of 2026, indirect remnant digital advertising revenue declined negative 37% year-over-year, but importantly, very importantly, grew sequentially over Q4 2025, a very positive and important development. Thankfully, our strong direct digital advertising revenue growth more than offset the declines in this quarter. Looking ahead to Q2, we expect similar year-over-year remnant revenue declines to Q1, yet important, stability, if not slight growth quarter-over-quarter in Q2.

I’d like to take the time to highlight why we are seeing our digital audience stabilizing even in the face of lower search engine referrals. A meaningful portion of our audience and traffic is driven by social media as well as direct visits to our websites from our loyal audience as well as traffic from our local e-mail newsletters and our mobile app alerts and other sources of organic traffic. And we’re leaning into this, developing new traffic strategies, new audience strategies, building new content publishing tools and reinvigorating our team. We shared early promising signs on our last call that in January, unique visitors increased month-over-month, reaching our highest audience level since July of 2025. That trend, I’m happy to report continued through the first quarter as our audience of 25 million unique visitors on average per month in Q1 was larger than our audience in Q4, which was approximately 20 million.

This is early proof point that even with the impact of AI on search engine traffic, we are in a very differentiated position given our focus on hyperlocal content, coupled with the power of social media platforms to stop the decline and we believe grow our online audience once more, just like we have in Q1. As I highlighted earlier, the majority of our digital advertising segment is our programmatic business. In addition to directly selling of our owned and operated properties, which continues to deliver very strong and healthy profitable revenue margins, and therefore, we expect Q2 digital advertising revenue overall will continue to perform incredibly well with growth accelerating from Q1’s plus 7%, all due to the strength of the results from our direct local sales teams as we are still very confident in our full year digital advertising revenue forecast of high single digits growth given our momentum today.

At Townsquare Interactive, our Subscription Digital Marketing Solutions business, we once again delivered very strong profit margins in the first quarter despite anticipated revenue declines. In the first quarter, Townsquare Interactive revenue declined exactly as I expected and outlined on our last call at negative 8% year-over-year, driven by slower overall sales velocity due to a smaller sales force. However, first quarter segment profit margins expanded by 1.5 percentage points year-over-year, driven largely by three factors: one, the restructuring of our customer service model in 2023 that allows us to grow more efficiently; two, changes to our sales structure at the end of 2024 and early 2025 that have led both to a temporary smaller sales team, but very importantly, a more productive sales team with much higher ROI; and three, efficiencies gained from AI.

We are very proud of how our Townsquare Interactive team has embraced AI and leveraged its usage for meaningful cost savings and improvements in efficiency across the business from helping to create websites to assisting with customer service. In the meantime, we remain committed to our plan to rebuild our sales team to prior level, but acknowledge that it will take some time to do so. We expect Q2 revenue at Townsquare Interactive will decline in line with Q1’s performance at approximately negative 8% year-over-year. Yet importantly, quarter-over-quarter, the results of the revenue will decline be — much smaller and expected to be in the low single digits at approximately negative 2% quarter-over-quarter. We are also restating our belief that based on our current forecast, we may see a return to month-over-month revenue growth as early as Q3 2026, which I shared on our last call as well.

In the meantime, we expect that strong profit margins will continue throughout 2026, just as we delivered in 2025. Importantly, we believe the addressable market for Townsquare Interactive, which in our estimation is nearly 9 million target customers remains as attractive as ever. Now turning to our third and final business segment, Broadcast Radio. As you are all aware, at Townsquare, we view local radio as an extremely valuable asset with significant cash flow properties, unparalleled consumer reach and an important local connection to our audience and our clients. However, radio is not a growth driver for Townsquare. And in 2025, broadcast advertising net revenue, excluding political, declined negative 8% year-over-year. We saw a slight moderation in those declines in the first quarter with broadcast net revenue declining negative 6.9%, excluding political and negative 6.6% in total.

In Q2 2026, we are currently forecasting similar year-over-year declines for ex-political broadcast revenue. Despite broadcast revenue declines, we outperformed the industry in our broadcast business again in the first quarter, gaining local and national broadcast market share according to Miller Kaplan estimates. With our differentiated local content and strong local brands, we believe that we will continue to gain broadcast and total market share across our market footprint, while also generating a solid profit as we carefully manage expenses to maintain a strong broadcast profit margin. In the long term, it is our belief that our differentiated digital platform will deliver strong growth to offset future core broadcast revenue declines. And now I’ll hand it over to Stu to discuss our financial results and guidance in more detail.

All yours, Stu, take it away.

Stuart Rosenstein: Thank you, Bill, and good morning, everyone. It’s great to speak to you today. We’re very pleased to report that our first quarter results met our revenue and adjusted EBITDA guidance. And as Bill highlighted, in Q1, 63% of our segment profit was generated from our two digital divisions, the highest profit percentage ever for Townsquare. First quarter net revenue declined 1.9% year-over-year to net revenue of $96.8 million within our guidance range of $96 million to $98 million. First quarter adjusted EBITDA declined 9.7% year-over-year to $16.4 million, which was also within our guidance range of $16 million to $17 million. We had a very impressive quarter at Townsquare Ignite, our digital advertising segment, where revenue growth rates rebounded sequentially very significantly from a slight year-over-year decline in Q4 2025 to strong year-over-year revenue growth of 6.8% in Q1 of 2026.

As Bill noted, looking ahead to the second quarter, we expect digital advertising revenue growth to further strengthen and be even higher than Q1’s growth rate. As expected and we previously projected, Townsquare Interactive, our Subscription Digital Marketing Solutions segment’s Q1 net revenue declined 7.9% year-over-year. We are pleased to share that as expected and consistent with recent performance, Townsquare Interactive segment profit margins increased year-over-year to 33.7%. We remain very confident in our expectation that profit margins will be in line with 2025 profit margins for the remainder of 2026 due to the efficiencies and cost savings that have been implemented. Broadcast advertising net revenue declines moderated slightly in the first quarter as we foreshadowed our last earnings call.

In the first quarter, total broadcast revenue declined 6.6% and 6.9%, excluding political revenue, each as compared to the prior year. We believe that this trend will continue in the second quarter as well. This is compared to the consistent negative 8% ex-political broadcast revenue declines we experienced in each quarter of 2025. Broadcast segment profit margins dipped to approximately 19% in the first quarter, in part due to revenue declines and in part due to seasonality. Our first quarter broadcast profit margins are typically the lowest for the year. We expect that our Broadcast segment profit margins will return to the mid- to high 20s for the remainder of the year, averaging out to the mid-20s for the full year, consistent with 2025 profit margins.

Our first quarter net income was $3 million or $0.16 per diluted share as compared to a net loss of $0.12 per diluted share in the prior year period. We’d like to remind you that any benefit or provision for income taxes included in the face of the income statement is for GAAP financial statement purposes only. We maintained significant tax attributes, including approximately $121 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 the end of 2028. One of our business model’s strongest attributes is our consistent cash flow generation. In the first quarter, we generated $4.2 million of cash flow from operations, more than the cash flow from operations generated in the first quarters of both 2025 and 2024.

We ended the quarter with $457 million of debt outstanding and $2 million of cash on our balance sheet. As of March 31, our net leverage was 5.27x. and I’d like to remind you that since our term loan is a floating rate instrument, each 0.25 point interest cut translates to roughly $1.1 million of annualized interest reduction based on our current debt balance. As always, our #1 priority is to invest in our local businesses 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 business to maintain our strong competitive advantage in markets outside the Top 50 cities.

In addition, we plan to use our excess cash flow to reduce our debt through both mandatory and voluntary debt repayments and, of course, support our high-yielding dividend. Our Board has approved our next quarterly dividend payable on August 3 to shareholders of record as of July 27. The dividend of $0.20 per share equates to $0.80 per share on an annualized basis and implies an annual payment of approximately $14 million based on the share count and a dividend yield of approximately 12% based on our current share price. As we mentioned on our last earnings call, it is both management and the Board’s belief that our current share price does not reflect the inherent value of Townsquare. Therefore, we are not concerned about the implied dividend yield as we believe it will come down as and when our business is better understood by investors and our business returns to growth.

Turning now to the second quarter. We expect second quarter net revenue to be between $114 million and $116 million, which at the midpoint is approximately flat on a year-over-year basis. We expect second quarter adjusted EBITDA to be between $24 million and $25 million. For the full year, we are reaffirming our expectations that our revenue will be between $420 million and $440 million. And that adjusted EBITDA will be between $87 million and $93 million. Embedded in this guidance is forecasted political revenue of approximately $8 million, which is in line with the $7.5 million of political revenue we received during the 2022 election cycle. And with that, I will now turn the call back over to Bill.

Bill Wilson: Thank you, Stu, and thanks to everyone for taking the time to be updated on Townsquare’s first quarter results this morning. We greatly appreciate it. Each and every year, our business mix continues to shift to be a greater percentage of both digital profit and revenue, as I highlighted earlier. In Q1, 59% of our total revenue was generated from our differentiated digital solutions and importantly, 63% of our total profit was digital profit, each our highest percentages ever. And we want to reiterate that we are very confident in the future success of our differentiated digital platform, including the following highlights to start 2026. Number one, our digital advertising revenue has returned to high single-digit revenue growth in Q1 and will only strengthen throughout the year due to the consistent strength of our programmatic offering and the success of our media partnership division as well as the strong revenue growth of the direct sales of our local digital O&O properties and the stabilization of our online audience and remnant revenue that I outlined earlier.

Number two, Townsquare Interactive’s very strong profit margins, coupled with our current forecast of sequential revenue improvement in the back half of the year. And number three, lastly and most importantly, we are confident in our ability to build shareholder value for our investors through long-term net revenue, profit and cash flow growth, net leverage reduction and consistent future quarterly dividend payments at the current rate. Our success is a direct result of the passion, creativity and relentless execution of our team members across the company. From our local market teams who continue to build deep connections with their communities and deliver results for our clients to our digital product and engineering teams who are driving innovation and advancing our platform forward each day.

I am continually impressed by what this team accomplishes together. We remain confident in our strategy, focused on execution and are very excited about the opportunities ahead. With that, operator, at this time, please open the line for any and all questions.

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Operator: [Operator Instructions] Your first question comes from Patrick Sholl with Barrington Research.

Patrick Sholl: I was just wondering if you could dive into a little bit more on some of the drivers that you see contributing to potentially improving month-over-month revenue in Interactive starting, I guess, in the second half of the year.

Bill Wilson: Patrick, thank you for the question. Yes, I actually just spent a week down with the team in Charlotte for Townsquare Interactive, where they’re headquartered along with their secondary office in Phoenix. And as I talked about 8 weeks ago on our prior call for year-end ’25, we’re seeing continued improvement in our churn. So our churn, as I mentioned on our last call, was returning to our historical low levels and has only improved in Q1 from last year. And as we’re sitting here today in Q2, it’s pacing even better than Q1. So that’s extremely well. As we outlined on our last call, the team is deploying a lot of tools, internal tools for efficiency that are utilizing AI, so that’s helping our profit margin. As I said earlier, our profit margin in Q1 expanded to 33.7% versus Q1 of ’25 of 32.5%.

So we’re able to scale more effectively. We’re really serving our customers better than we ever have. Therefore, the churn is coming down. Our really only hurdle, which I’ve outlined really over the last several calls, is getting back to the level of our sales personnel in terms of size of sales team at Townsquare Interactive. We outlined the changes we made in the beginning of ’25 which created a lot more revenue per salesperson, but we shrunk our sales team over the course of 2025. We’re now building that up, but it is going to take time. So the combination of lower churn, greater efficiency in utilizing a lot of AI tools and growing back our sales team, we expect to see month-over-month revenue growth in the back half of ’26. As I outlined on the prepared remarks, in Q2, we expect to decline again about negative 8% year-over-year as we did in Q1 from a revenue perspective.

But on a sequential quarter-over-quarter basis, you’ll see improvement to about negative 2% revenue decline quarter-over-quarter. So hopefully, that gives you a sense, Patrick, why we’re so confident. I definitely walked away from that trip last week, incredibly confident not only about the back half of this year, but more importantly, as we look over the next 3 to 5 years for Townsquare Interactive. So I’ll turn it back to you for any follow-up questions.

Patrick Sholl: Sure. I was just kind of curious on like the reduction in churn that you mentioned, maybe just talk about like some of what you’re seeing with regards to the macro environment with the increase in energy prices. And also, I realize that you’re utilizing AI tools in the selling process, but maybe just the ability of the potential client base to utilize AI tools for some of the services and just how that’s contributing to churn as well?

Bill Wilson: Yes. So I think we — as you know, but for the benefit of everybody on the call, we redid our entire customer service model starting in ’23 that really bled into and continued in 2024. So our satisfaction rate from our customers, how quickly we’re able to — quickly any task that they call up and ask us to do. The marketing we’re doing, I think we’ve outlined on these calls. We’re doing a lot more outbound marketing, e-mail marketing, text-based marketing, even digital advertising marketing, utilizing the data that they’re capturing in the CRM that we deployed a few years ago. So all of those components are helping customer satisfaction, which is bringing down churn. We moved from a one-to-one model to a pooled model.

So that’s created a lot more customer satisfaction. It was very disruptive in the beginning as we outlined, and churn spiked as a result of that in ’23 and ’24, but now we’re back to historically low levels. And as I just mentioned, Q1 churn better than 2025 and as we’re sitting here in May, Q2 is pacing from a churn perspective to be even lower than Q1. Then you asked about the macro environment. And clearly, that’s having an impact, particularly in advertising. We’re seeing advertising being placed later in month or shorter runs. That’s definitely apparent to us in the broadcast side as well as our digital advertising side. Even though our digital advertising is going incredibly well, I would say it’s on fire from a direct sold perspective, which we could talk more about.

But clearly, as energy prices are impacting particularly small- and medium-sized businesses, we’re seeing that. With all of that said, we mentioned on the broadcast side, we had very slight moderation in the decline. Last year, we declined negative 8% ex-political throughout the year and full year ’25, that moderated to negative 7% ex-political in Q1. But we clearly are hearing from our customers, particularly as the conflict in the Middle East continues and gas prices continue to go up month-over-month, that’s a strain on them, and they’re obviously watching their advertising budget and their expenses overall. They’re still spending. But as I just noted, they may be spending quicker to the flight time, not booking as far in advance, and we’re seeing that.

And I think as hopefully, the conflict resolves over the coming months, that will be a tailwind if and when that occurs, particularly for our advertising segment. It really hasn’t bled over to Townsquare Interactive. I think the advertising component is very different than the digital marketing solutions component. But obviously, we expect hopefully a resolution and that will even be a greater tailwind for our advertising business for not only digital but broadcast as well. So I’ll turn it back to you, Patrick.

Operator: [Operator Instructions] Your next question comes from Michael Kupinski with NOBLE Capital Markets.

Michael Kupinski: A couple of questions here. Your white label digital media partnership business seems to have gained some traction. But so far, it’s been with some smaller operators. And I was just wondering, do you believe that the service could be attractive to larger station groups? Or do you think it’s more likely that you will see more singles and doubles from that partnership arrangement?

Bill Wilson: Thank you, Michael. Yes, we couldn’t be more proud of our programmatic business. As we outlined, our digital advertising, 65% now of our total digital advertising is programmatic. In Q1, that grew 21% year-over-year. Even stripping out the success of media partnerships, we would be close to 20% growth year-over-year in Q1 as well without that. But that said, this division is on fire. Shaun, who’s been leading that with Todd, has been doing an amazing job. We had 6 partners in 2025. As we outlined previously, we grew from $1 million in 2024 in revenue to $6 million in revenue last year. And I expect that to, if not double, get close to it. But based on our current pacing, I think we’ll more than double the $6 million in revenue, and we operate that at a 20% profit margin.

And as you know, Michael, but for the benefit of everybody on the call, we expect that to be in 4 years or less, $50 million in revenue at a 20% profit margin. So last year, we had 6 media partners, now we have 13. I think the success we’ve had with each one of our partners, and we’re proud and honored to be partnered with them has become really well known in the industry. We’re close to doubling everybody’s revenue in terms of what we forecast for ’26 for the existing partners versus what they did in ’25. So they’re obviously quite pleased. We’re quite pleased. And getting to your specific question, the majority of these are small operators. One thing I would highlight is some of them are in the Top 50 markets, which are not the footprint of our owned radio stations and digital footprints.

And we’ve had great success actually in the Top 50 markets with those partners, and that’s a testament to them as well as utilizing our platform. Confidentially, we obviously can’t discuss who we’ve been speaking to, but our pipeline is literally dozens and dozens of local media companies, primarily radio, but there’s also some television, outdoor, print and other legacy media companies who have seen what we’ve done for ourselves, now have heard from partners what we’re doing for them. And therefore, our inbound queue of media partners has grown quite nicely and continues to do so. Some of those, to your question is, “Hey, are there opportunities if you’re a larger media company?” The answer is yes. Obviously, we’re a large media company. Our programmatic division in Q1 is up over 20%.

And as I said, in Q2, it is pacing above 20% again. So clearly, the solutions we have are tremendous for all size operators. And although we haven’t announced any larger ones that have, say, 70, 80, 90-plus properties or either radio stations or television stations, that is clearly an opportunity. If those conversations continue and result in a partnership, I can’t say with certainty, but I can tell you with certainty that the solutions we’re deploying for these smaller operators clearly work for larger operators as well. And we’re quite excited that our Q2 pacing in programmatic up over 20% again like it was in Q1 and that our direct sold owned and operated, which was up 10% in Q1 is again trending quite nicely in Q2 at that level as well.

So our digital advertising, for all intents and purposes, is firing on all cylinders, and we couldn’t be more excited about media partnerships as well as our own organic efforts in that space. So Michael, I’ll turn it back to you.

Michael Kupinski: Yes. Bill, you indicated that you’re in the Top 50 markets now in that business. And historically, you’ve always said that, that wasn’t the area that you would play in. And so it seems like a big opportunity for you. Can you just kind of tell us about the opportunities that you’re seeing in some of the Top 50 markets? Is that now an area that you feel comfortable in playing in at this point?

Bill Wilson: Yes. I don’t think — from where we — thank you, Michael, you are correct. But the partners that we’re having like Steel City and others in the Top 50 markets, we’re seeing real strong penetration in those markets. We’re seeing shifting market share for those companies in terms of digital growth in the programmatic space. And in the larger markets, at times, we do see larger revenue spends — client spends per month on average than maybe outside of the Top 100 markets. So clearly, the good news is our solutions work in the Top 50 markets. From an acquisition standpoint, our stance still is that we’d be more interested in markets outside the Top 50. I think we’re more highly differentiated across the board in local radio, in our owned and operated content for our digital websites and mobile apps as well as our Townsquare Interactive solutions.

So as it relates to potential acquisitions, be it swaps or incremental markets or incremental stations, our viewpoint is still to focus outside the Top 50. But as we’re talking to media partners, there are many who have properties in the Top 50, and we put them in touch with our existing partners, and they’re hearing how well our solutions are working. So we are quite confident playing in the digital advertising space in the Top 50. We know it’s working quite well for our partners. Yet I don’t think at this point in time, we’d be interested in acquiring properties in the Top 50. So hopefully, that gives you some color, but I’ll turn it back to you, Michael.

Michael Kupinski: Yes. I mean first of all, congratulations on executing your digital strategy. On your O&O digital advertising in Q1 and outlook is pretty impressive, given the reports out there that digital advertising is kind of slowing for some radio operators, how much visibility do you have into the second half on digital advertising demand trends, particularly from your local advertisers?

Bill Wilson: Yes. I appreciate that, Michael. I appreciate you using the word impressive because we’re quite pleased and proud of our digital advertising growth. So in terms of the back half, we’re seeing even actually greater strength in Q2 than Q1. That’s true in our programmatic space. That’s true in our owned and operated space. And as I mentioned, it was great in Q1 that our online audience grew from $20 million in Q4 to $25 million in Q1 this year. So a nice improvement in our audience. And that, as I said, also helped us from a remnant standpoint, although it’s only 8% of our digital advertising, that was obviously a headwind and there was a lot of concern from investors if that would continue. That’s why we outlined that we expect that $12 million last year to go to $9 million in revenue this year and that be lapped in August.

So it’s really the first 7 months. So as we lap that, our owned and operated digital growth is projected to be actually nicely higher, quite higher in the back half of the year than the front half of the year. So that also bleeds into the calculation of overall digital advertising. We expect to be stronger in Q2 and the back half of the year than Q1, although we grew obviously plus 7% in Q1, which was nice after growing on average 2% full year last year. So real acceleration and improvement in our digital advertising business. And as your question is, we expect the back half to be even stronger than how we’re starting this year with all the momentum that we’re seeing.

Michael Kupinski: And if I could slip one more in. On your Townsquare Interactive, where are you in terms of getting your sales force to your steady-state sales force level, like what percent of your goal are you at this point?

Bill Wilson: We still have quite a ways to go. We’ve actually just started beefing up or increasing the size of our recruiting team. The recruiters we do have are doing quite nicely and bringing in talent. But as we said, I think we said it on the year-end call or maybe the Q4 call, our sales force was down 40% in terms of size of sales team. So that is going to take us — we will not get back to those levels until 2027. That said, based on the lowering of churn and based on the fact that we are incrementally quarter-over-quarter growing our sales team, we have the opportunity in the back half of 2026 to see month-over-month revenue growth. And combining that with the performance of customer service and the lower churn, we’re seeing really strong profit margins as well.

So I don’t expect us to get back to our goal until 2027. That said, with our trajectory right now of churn and adding salespeople as well as we’re still seeing higher revenue per sales rep than we historically have, I believe we have an opportunity in the back half of ’26 to grow month-over-month revenue. So as I said, I just spent the week in Charlotte. I couldn’t be more confident, more energized. Sometimes, obviously, the internal view may not always be apparent on the outside. But as we look at the next 3 to 5 years for Townsquare Interactive, I’m very confident they’re getting back to their mojo of the early 2020, 2021, 2022 type of financial performance, and that will be more evident, I think, as we go into 2027 and beyond. So feeling quite good.

Obviously, the fact that 63% of our total profit is driven by our 2 digital businesses is the highest ever for the company. And the 59% of total revenue coming from these 2 digital divisions is the highest ever as well. We’re feeling quite well positioned. As you know, Michael, we don’t operate this on a quarter-over-quarter or year-to-year basis. But as we look at the next 5-year, we feel like we’re incredibly well situated from an organic standpoint. And then to your questions about media partnership and our success with the 13 current partners, the pipeline that we have, coupled with — we’re playing in some of the Top 50 markets through these partners, couldn’t be more excited about the momentum we have right now. So thank you for the question, and I’ll turn it back to you in case you have any others.

Operator: There are no further questions at this time. I will now turn the call over to Bill for closing remarks.

Bill Wilson: Thank you, operator, and thank you all for joining us this morning to hear about not only our Q1 results, but importantly, how we’re looking at the full year as well as the next few years. As Stu said, we had more cash flow from operations in Q1 2026 than we did in Q1 ’25 or Q1 ’24. We’re feeling quite confident about how well we’re situated for not only this year but the next several years. And I’m really proud of our Townsquare team. The innovation, the momentum, the excitement that the team is building is remarkable. And I just want to thank them and thank you for joining us this morning and look forward to regrouping in a few months and updating you on the back half of the year and how that’s coming together for us. Feeling quite confident. I hope everybody has a great day.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

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