Friday, May 09, 2025
Townsquare is a community-focused digital media and digital marketing solutions company with market leading local radio stations, principally focused outside the top 50 markets in the U.S. Our assets include a subscription digital marketing services business, Townsquare Interactive, providing website design, creation and hosting, search engine optimization, social media and online reputation management as well as other digital monthly services for approximately 26,800 SMBs; a robust digital advertising division, Townsquare IGNITE, a powerful combination of a) an owned and operated portfolio of more than 330 local news and entertainment websites and mobile apps along with a network of leading national music and entertainment brands, collecting valuable first party data, and b) a proprietary digital programmatic advertising technology stack with an in-house demand and data management platform; and a portfolio of 321 local terrestrial radio stations in 67 U.S. markets strategically situated outside the Top 50 markets in the United States. Our portfolio includes local media brands such as WYRK.com, WJON.com, and NJ101.5.com and premier national music brands such as XXLmag.com, TasteofCountry.com, UltimateClassicRock.com and Loudwire.com.
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Solid first quarter results. Total company revenues were down a modest 1% to $98.7 million, in line with our $98.5 million estimate. Digital revenues increased 6.4%, nearly completely offsetting the weakness in legacy broadcast. Notably, Digital revenue in the quarter represented 57% of total revenue, but, more importantly, 62% of total company adj. EBITDA. Q1 adj. EBITDA of $18.1 million was better than our $17.0 million estimate.
Ignite continues to be on fire. Ignite, the company’s programmatic/advertising solutions business, increased revenues an attractive 7.6% in the quarter. Management indicated that the growth of Ignite will be enhanced by its white label initiative, which is expected to account for $10 million in revenue in 2025 and is expected to grow to $50 million in the next 3 to 5 years and with a 20% operating margin.
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