Friday, May 10, 2024
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 Q1 results. The company reported revenue of $99.6 million, modestly beating our estimate of $98.4 million by 1.3%. Adj. EBITDA in the quarter was $17.5 million, beating our estimate of $16.4 million by 6.8%. The quarter benefited from a swing toward growth in digital advertising (up 1.3%) and better than expected core broadcast advertising. Notably, Digital now accounts for 53% of total company revenues and cash flow, at least double that of its peers.
Interactive subs increase in March. The company added net subscribers in March, which continued in April, indicating that this business is on track to return toward revenue growth, likely in Q1 2025. Furthermore, Revenue Per Unit (RPU) for new sales appear to be increasing. We believe that new features such as Customer Relationship Management (CRM), Text and Email marketing, and integration into QuickBooks, all contribute to an enhanced revenue outlook.
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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
