What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-05 compared with 2025-05-08 · 109 added, 84 removed, 134 unchanged (59% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Entravision owns and operates one of the largest groups of Spanish language television and radio stations in the United States.

We own and operate one of the largest groups of Spanish language television and radio stations in the United States.

Our mission is to serve our Latino audience as a trusted provider of useful news, information and entertainment and to serve our advertisers by providing multi-channel marketing capabilities to engage our audience.

Entravision also owns and operates a smaller group of television stations that broadcast English language programming and has operations that provide programmatic advertising technology and services.

We also own and operate a smaller group of television stations that broadcast English language programming and have operations that provide programmatic advertising technology and services.

We have organized our operations into two reportable segments.

2 unchanged sentences

In 2024, we discontinued and divested a significant portion of our operations, which consisted primarily of several acquisitions that had been completed prior to 2024, and which operations comprised the majority of our former digital segment.

Our net revenue for the three-months period ended March 31, 2025 was $91.9 million.

Our net revenue for the three-months period ended June 30, 2025 was $100.7 million.

Of this amount, revenue generated by our media segment accounted for approximately 45%, and revenue generated by our advertising technology & services segment accounted for approximately 55% of total revenue.

During the first quarter of 2025, our revenue grew by double digits in the first quarter of 2025 compared to the comparable period of 2024, driven primarily by growth of our advertising technology & services segment, partially offset by a decrease in revenue in our media segment.

In addition, during the first quarter of 2025 we:

• entered into an LOI to sell two television stations located in Mexico;

• recorded an impairment charge of $23.7 million related to broadcast licenses and fixed assets of these two television stations;

• decided to vacate our previous corporate headquarters in Santa Monica, California and cease making further payments under the lease;

• recorded a loss on lease abandonment charges of $16.1 million related to the acceleration of amortization of the right of use asset associated with this lease, and $9.1 related to the acceleration of depreciation of the leasehold improvements associated with this lease;

• continued to reduce certain expenses, including a reduction in the base salary and cash bonus components of our three most senior executives' compensation.

During the second quarter of 2025, our revenue grew by double digits, driven primarily by revenue growth of 66% in our advertising technology & services segment, partially offset by a decrease in revenue in our media segment compared to the comparable period of 2024.

In addition, during the second quarter of 2025 we:

• continued to reduce certain expenses, consisting primarily of a reduction in the base salary and cash bonus components of our three most senior executives' compensation;

• continued to reduce our debt by making a voluntary prepayment of $10 million under our Credit Facility.

Relationship with TelevisaUnivision

10 unchanged sentences

For further information on recently issued accounting pronouncements, see Note 2 to Notes to Condensed Consolidated Financial Statements.

Three-Month Periods Ended March 31, 2025 and 2024

The following table sets forth selected data from our operating results for the three-month periods ended March 31, 2025 and 2024 (in thousands):

Three- and Six-Month Periods Ended June 30, 2025 and 2024

The following table sets forth selected data from our operating results for the three- and six-month periods ended June 30, 2025 and 2024 (in thousands):

Three-Month Period

Ended March 31,

Six-Month Period

Ended June 30,

Statements of Operations Data:

8 unchanged sentences

Foreign currency (gain) loss

Total expenses

Operating income (loss)

14 unchanged sentences

Consolidated Operations

Net revenue increased to $91.9 million for the three-month period ended March 31, 2025 from $78.2 million for the three-month period ended March 31, 2024.

Net revenue increased to $100.7 million for the three-month period ended June 30, 2025 from $82.7 million for the three-month period ended June 30, 2024.

This increase was primarily due to an increase of $21.9 million in net revenue from our advertising technology & services segment, partially offset by a decrease of $3.8 million in net revenue from our media segment.

Net revenue increased to $192.6 million for the six-month period ended June 30, 2025 from $160.8 million for the six-month period ended June 30, 2024.

This increase was primarily due to an increase of $40.4 million in net revenue from our advertising technology & services segment, partially offset by a decrease of $8.6 million in net revenue from our media segment.

Cost of revenue.

Cost of revenue increased to $33.5 million for the three-month period ended March 31, 2025 from $22.7 million for the three-month period ended March 31, 2024.

Cost of revenue increased to $38.0 million for the three-month period ended June 30, 2025 from $24.4 million for the three-month period ended June 30, 2024.

This increase was primarily due to an increase of $0.5 million in cost of revenue from our media segment, and an increase of $13.1 million in cost of revenue from our advertising technology & services segment.

Cost of revenue increased to $71.5 million for the six-month period ended June 30, 2025 from $47.1 million for the six-month period ended June 30, 2024.

This increase was primarily due to an increase of $0.9 million in cost of revenue from our media segment, and an increase of $23.5 million in cost of revenue from our advertising technology & services segment.

Effective July 1, 2024, with the realignment of our operations and reassignment of certain responsibilities, certain costs that were previously included as corporate expenses, primarily salaries, are now included in direct operating expenses and in selling, general and administrative expenses.

Direct Operating Expenses.

Direct operating expenses increased to $35.5 million for the three-month period ended March 31, 2025 from $31.8 million for the three-month period ended March 31, 2024.

This increase was primarily due to an increase of $3.8

million in direct operating expenses in our advertising technology & services segment, partially offset by a decrease of $0.1 million in direct operating expenses in our media segment.

Direct operating expenses increased to $37.7 million for the three-month period ended June 30, 2025 from $31.8 million for the three-month period ended June 30, 2024.

This increase was primarily due to an increase of $0.7 million in direct operating expenses in our media segment, and an increase of $5.3 million in direct operating expenses in our advertising technology & services segment.

Direct operating expenses increased to $73.2 million for the six-month period ended June 30, 2025 from $63.6 million for the six-month period ended June 30, 2024.

This increase was primarily due to an increase of $0.6 million in direct operating expenses in our media segment, and an increase of $9.1 million in direct operating expenses in our advertising technology & services segment.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased to $15.5 million for the three-month period ended March 31, 2025, from $14.3 million for the three-month period ended March 31, 2024.

Selling, general and administrative expenses increased to $16.5 million for the three-month period ended June 30, 2025, from $14.4 million for the three-month period ended June 30, 2024.

This increase was primarily due to an increase of $1.2 million in selling, general and administrative expenses in our media segment, and an increase of $0.8 million in selling, general and administrative expenses in our advertising technology & services segment.

Selling, general and administrative expenses increased to $32.0 million for the six-month period ended June 30, 2025, from $28.7 million for the six-month period ended June 30, 2024.

This increase was primarily due to an increase of $2.1 million in selling, general and administrative expenses in our media segment, and an increase of $1.2 million in selling, general and administrative expenses in our advertising technology & services segment.

Corporate Expenses.

Corporate expenses decreased to $7.8 million for the three-month period ended March 31, 2025 from $12.2 million for the three-month period ended March 31, 2024.

This decrease was primarily due to a decrease of $0.9 million in salaries and bonus expense, including a reduction in the base salary and cash bonus components of our three most senior executives' compensation, a decrease of $2.1 million in non-cash stock-based compensation, a decrease of $0.6 million in audit fees, and a decrease of $0.8 million in corporate expenses due to the realignment of our operations as noted above.

Depreciation and amortization decreased to $3.5 million for the three-month period ended March 31, 2025 compared to $4.7 million for the three-month period ended March 31, 2024, primarily due to fully amortized intangible assets.

Corporate expenses decreased to $6.4 million for the three-month period ended June 30, 2025 from $10.8 million for the three-month period ended June 30, 2024.

This decrease was primarily due to a decrease of $1.3 million in salaries, including a reduction in the base salary and cash bonus components of our three most senior executives' compensation, a decrease of $1.1 million in severance expenses that did not recur in the three-month period ended June 30, 2025, a decrease of $1.1 million in non-cash stock-based compensation, a decrease of $0.3 million in rent expense, and a decrease of $0.7 million in corporate expenses due to the realignment of our operations as noted above.

Corporate expenses decreased to $14.2 million for the six-month period ended June 30, 2025 from $23.1 million for the six-month period ended June 30, 2024.

This decrease was primarily due to a decrease of $2.6 million in salaries, including a reduction in the base salary and cash bonus components of our three most senior executives' compensation, a decrease of $3.2 million in non-cash stock-based compensation, a decrease of $0.6 million in audit fees, a decrease of $0.3 million in rent expense, a decrease of $1.5 million in corporate expenses due to the realignment of our operations as noted above, and other items which were individually immateri al.

Depreciation and amortization.

Depreciation and amortization decreased to $3.0 million for the three-month period ended June 30, 2025 compared to $4.4 million for the three-month period ended June 30, 2024, primarily due to fully depreciated assets and fully amortized intangible assets.

Depreciation and amortization decreased to $6.5 million for the six-month period ended June 30, 2025 compared to $9.2 million for the six-month period ended June 30, 2024, primarily due to fully depreciated assets and fully amortized intangible assets.

Change in fair value of contingent consideration.

As a result of the change in fair value of the contingent consideration, primarily related to earnouts of certain past acquisitions, we recognized income of $0.2 million for the three-month period ended March 31, 2024.

For the three-month period ended March 31, 2025, we incurred an impairment charge of $23.7 million related to broadcast licenses and fixed assets of the two television stations in Mexico that are held for sale (see Note 2 to Notes to Condensed Consolidated Financial Statements).

As a result of the change in fair value of the contingent consideration, primarily related to earnouts of certain past acquisitions, we recognized income of $0.2 million and a de minimis amount for the three- and six-month periods ended June 30, 2024, respectively.

During the first quarter of 2025, we incurred an impairment charge of $23.7 million related to broadcast licenses and fixed assets of the two television stations in Mexico that are held for sale.

See Note 2 to Notes to Condensed Consolidated Financial Statements.

Loss on lease abandonment.

For the three-month period ended March 31, 2025, we incurred a loss on lease abandonment of $25.2 million related to our previous Santa Monica lease (see Note 2 to Notes to Condensed Consolidated Financial Statements).

During the first quarter of 2025, we incurred a loss on lease abandonment of $25.2 million related to our previous Santa Monica lease.

See Note 2 to Notes to Condensed Consolidated Financial Statements.

Foreign currency (gain) loss.

We had a de minimis foreign currency loss for the three-month period ended March 31, 2025 compared to a foreign currency loss of $0.3 million for the three-month period ended March 31, 2024.

We had a de minimis foreign currency loss for the three-month period ended June 30, 2025 compared to a de minimis foreign currency gain for the three-month period ended June 30, 2024.

Foreign currency gains and losses are primarily due to currency fluctuations that affect our operations located outside the United States.

We had a de minimis foreign currency loss for the six-month period ended June 30, 2025 compared to a foreign currency loss of $0.2 million for the six-month period ended June 30, 2024.

Foreign currency gains and losses are primarily due to currency fluctuations that affect our operations located outside the United States.

Interest Expense, net.

Interest expense, net decreased to $3.1 million for the three-month period ended March 31, 2025 from $3.9 million for three-month period ended March 31, 2024.

This decrease was primarily due to lower interest rate on our debt and a lower principal balance due to prepayments totaling $20 million, which were made in the first half of 2024.

Gain (loss) on debt extinguishment.

We recorded a de minimis loss on debt extinguishment for the three-month period ended March 31, 2024 due to prepayment of $10.0 million of our 2023 Credit Facility.

Interest expense, net decreased to $3.4 million for the three-month period ended June 30, 2025 from $3.5 million for three-month period ended June 30, 2024.

This decrease was primarily due to lower interest rate on our debt and a lower principal balance due to prepayments on our Credit Facility totaling $20.0 million, which were made in the first half of 2024, and a prepayment of $10.0 million which was made in the second quarter of 2025.

Interest expense, net decreased to $6.5 million for the six-month period ended June 30, 2025 from $7.4 million for six-month period ended June 30, 2024.

This decrease was primarily due to lower interest rate on our debt and a lower principal balance due to prepayments totaling $20 million, which were made in the first half of 2024, and a prepayment of $10 million which was made in the second quarter of 2025.

Realized gain (loss) on marketable securities.

For the three-month period ended March 31, 2025 we recorded a de minimis realized gain, related to our available for sale securities.

For the three-month period ended March 31, 2024 we recorded $0.1 million of realized loss, related to our available for sale securities.

For each of the three-month periods ended June 30, 2025 and 2024 we recorded a de minimis amount of realized gain, related to our available for sale securities.

For the six-month period ended June 30, 2025 we recorded a de minimis amount of realized gain, related to our available for sale securities.

For the six-month period ended June 30, 2024 we recorded $0.1 million of realized loss, related to our available for sale securities.

Gain (loss) on debt extinguishment.

We recorded a de minimis amount of a loss on debt extinguishment for the three-and six-month periods ended June 30, 2025 due to a prepayment of $10.0 million of our Credit Facility.

We recorded a loss on debt extinguishment of $0.1 million for the three- and six-month periods ended June 30, 2024 due to prepayments of $10.0 million and $20.0 million, respectively, of our Credit Facility.

Income Tax Expense or Benefit.

Income tax benefit for the three-month period ended March 31, 2025 was $8.1 million, or 14% of our pre-tax loss.

The effective tax rate for the three-month period ended March 31, 2025 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non deductible executive compensation, share-based compensation from foreign employees, and transaction costs.

Income tax benefit for the three-month period ended March 31, 2024 was $4.1 million, or 36% of our pre-tax loss.

The effective tax rate for the three-month period ended March 31, 2024 was different from our statutory rate due to non deductible executive compensation, changes in the fair value of the contingent consideration liability, goodwill impairment, and non-taxable non-territorial income.

Income tax benefit for the three-month period ended June 30, 2025 was $0.8 million.

The effective tax rate for the three-month period ended June 30, 2025 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non-deductible executive compensation, share-based compensation from foreign employees, and transaction costs.

Income tax benefit for the three-month period ended June 30, 2024 was $10.7 million.

The effective tax rate for the three-month period ended June 30, 2024 was different from our statutory rate due to foreign and state taxes, change in valuation allowances on deferred tax assets, non-deductible executive compensation, changes in the fair value of the contingent consideration liability, goodwill impairment, and non-taxable non-territorial income.

Income tax benefit for the six-month period ended June 30, 2025 was $8.9 million.

The effective tax rate for the six-month period ended June 30, 2025 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non-deductible executive compensation, share-based compensation from foreign employees, and transaction costs.

Income tax benefit for the six-month period ended June 30, 2024 was $14.8 million.

The effective tax rate for the six-month period ended June 30, 2024 was different from our statutory rate due to foreign and state taxes, change in valuation allowances on deferred tax assets, non-deductible executive compensation, changes in the fair value of the contingent consideration liability, goodwill impairment, and non-taxable non-territorial income.

Our management periodically evaluates the realizability of the deferred tax assets and, if it is determined that it is more likely than not that the deferred tax assets are, or are not, realizable, adjusts the valuation allowance accordingly.

4 unchanged sentences

As a result of historical losses from our digital operations primarily in Uruguay, Mexico and Argentina, certain U.S.

Foreign Tax Credit carryovers, and capital loss, management has determined that it is more likely than not that deferred tax assets of $18.0 million at March 31, 2025 will not be realized and therefore we have established a valuation allowance in that amount on those assets.

Foreign Tax Credit carryovers, and capital loss, management has determined that it is more likely than not that deferred tax assets of $17.9 million at June 30, 2025 will not be realized and therefore we have established a valuation allowance in that amount on those assets.

The Organization for Economic Co-operation and Development (“OECD”) Pillar 2 guidelines address the increasing digitalization of the global economy, re-allocating taxing rights among countries.

The OECD, many other member states and various other governments have adopted, or are in the process of adopting, Pillar 2 which calls for a global minimum tax of 15% to be effective for tax years beginning in 2024.

The OECD guidelines published to date include transition and safe harbor rules around the

implementation of the Pillar 2, global minimum tax.

The OECD guidelines published to date include transition and safe harbor rules around the implementation of the Pillar 2, global minimum tax.

We are monitoring developments and evaluating the impacts these new rules will have on our tax rate, including eligibility to qualify for these safe harbor rules.

As of March 31, 2025 and December 31, 2024, we had unrecognized tax benefits of $18.0 million and $17.3 million.

The One Big Beautiful Bill Act (the “OBBBA”) was signed into law on July 4, 2025.

The OBBBA introduced certain changes to the U.S.

Since the OBBBA was enacted after the end of the period ended June 30, 2025, our financial statements for the period ended June 30, 2025 do not reflect the impact of the tax law changes as a result of the OBBBA.

We are evaluating the impact of the OBBBA on our business and financial condition.

Our preliminary assessment of the OBBBA’s impact on our business and financial condition is that it is not expected to be material.

As of June 30, 2025 and December 31, 2024, we had unrecognized tax benefits of $25.3 million and $17.3 million.

We will recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.

5 unchanged sentences

This review led to the decision to sell the enterprises comprising our EGP business -- the largest business unit of what was then our digital segment.

Following this decision, during the second quarter of 2024, we entered into a definitive agreement to sell substantially all of our EGP business to IMS.

Following this decision, during the second quarter of 2024, we entered into a definitive agreement to sell

substantially all of our EGP business to IMS.

The transaction was completed on June 28, 2024.

13 unchanged sentences

Our advertising technology & services segment consists of programmatic ad services through Smadex, our demand-side programmatic ad platform, and Adwake, our mobile growth solutions business.

Net revenue in our media segment decreased to $41.0 million for the three-month period ended March 31, 2025 from $45.8 million for the three-month period ended March 31, 2024.

This decrease was primarily due to a decrease of $3.7 million in broadcast advertising revenue, and a decrease of $1.1 million in retransmission consent revenue, partially offset by an increase of $0.1 million in digital advertising revenue.

Net revenue in our media segment decreased to $45.4 million for the three-month period ended June 30, 2025 from $49.2 million for the three-month period ended June 30, 2024.

This decrease was primarily due to a decrease of $3.2 million in broadcast advertising revenue, and a decrease of $1.1 million in retransmission consent revenue, partially offset by an increase of $0.3 million in digital advertising revenue, and an increase of $0.2 million in spectrum usage rights revenue.

Net revenue in our media segment decreased to $86.4 million for the six-month period ended June 30, 2025 from $95.0 million for the six-month period ended June 30, 2024.

This decrease was primarily due to a decrease of $7.0 million in broadcast advertising revenue, and a decrease of $2.2 million in retransmission consent revenue, partially offset by an increase of $0.4 million in digital advertising revenue and an increase of $0.2 million in spectrum usage rights revenue.

In general, many of our broadcast stations face declining audiences, which we believe is present across the traditional broadcast industry, competitive factors with the other major Spanish-language broadcasters, and changing demographics and preferences of audiences, particularly younger audiences, in terms of the media they prefer to consume, including streaming and social media.

5 unchanged sentences

Cost of revenue .

Cost of revenue in our media segment increased to $3.3 million for the three-month period ended March 31, 2025 from $2.9 million for the three-month period ended March 31, 2024, primarily due to the increase in digital advertising revenue and a decrease in gross margins.

Cost of revenue in our media segment increased to $4.7 million for the three-month period ended June 30, 2025 from $4.1 million for the three-month period ended June 30, 2024, primarily due to the increase in digital advertising revenue and a decrease in gross margins.

Cost of revenue in our media segment increased to $7.9 million for the six-month period ended June 30, 2025 from $7.0 million for the six-month period ended June 30, 2024, primarily due to the increase in digital advertising revenue and a decrease in gross margins.

Direct Operating Expenses.

Direct operating expenses in our media segment remained constant at $26.6 million for the three-month periods ended March 31, 2025 and 2024.

Direct operating expenses in our media segment increased to $26.8 million for the three-month period ended June 30, 2025 from $26.1 million for the three-month period ended June 30, 2024, primarily due to an increase of $0.3 million in salaries and other employee benefits, an increase of $0.1 million due to the realignment of our operations as noted above, and other items which were individually immateri al.

Direct operating expenses in our media segment increased to $53.4 million for the six-month period ended June 30, 2025 from $52.8 million for the six-month period ended June 30, 2024, primarily due to items which were individually immateri al.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses in our media segment increased to $10.8 million for the three-month period ended March 31, 2025 from $10.0 million for the three-month period ended March 31, 2024, primarily due to an increase of $1.0 million in salaries and other employee benefits, and an increase of $0.8 million in expenses due to the realignment of our operations as noted above.

Selling, general and administrative expenses in our media segment increased to $11.0 million for the three-month period ended June 30, 2025 from $9.8 million for the three-month period ended June 30, 2024,

primarily due to an increase of $0.6 million in expenses due to the realignment of our operations as noted above and other items which were individually immateri al.

Selling, general and administrative expenses in our media segment increased to $21.8 million for the six-month period ended June 30, 2025 from $19.7 million for the six-month period ended June 30, 2024, primarily due to an increase of $1.0 million in salaries and other employee benefits, and an increase of $1.3 million in expenses due to the realignment of our operations as noted above.

The increase was offset by a decrease of $0.5 million in bad debt expense and other items which were individually immateri al.

Advertising Technology & Services

Net revenue in our advertising technology & services segment increased to $50.9 million for the three-month period ended March 31, 2025 from $32.4 million for the three-month period ended March 31, 2024.

Net revenue in our advertising technology & services segment increased to $55.3 million for the three-month period ended June 30, 2025 from $33.4 million for the three-month period ended June 30, 2024.

The increase was primarily due to increases in advertising revenue from Smadex and Adwake.

Net revenue in our advertising technology & services segment increased to $106.2 million for the six-month period ended June 30, 2025 from $65.8 million for the six-month period ended June 30, 2024.

The increase was primarily due to increases in advertising revenue from Smadex and Adwake.

Cost of revenue .

Cost of revenue in our advertising technology & services segment increased to $30.2 million for the three-month period ended March 31, 2025 from $19.8 million for the three-month period ended March 31, 2024, primarily due to costs associated with the increase in digital advertising revenue.

Cost of revenue in our advertising technology & services segment increased to $33.4 million for the three-month period ended June 30, 2025 from $20.3 million for the three-month period ended June 30, 2024, primarily due to costs associated with the increase in digital advertising revenue.

Cost of revenue in our advertising technology & services segment increased to $63.6 million for the six-month period ended June 30, 2025 from $40.1 million for the six-month period ended June 30, 2024, primarily due to costs associated with the increase in digital advertising revenue.

We have previously noted a trend on a global basis in our advertising technology & services operations whereby revenue is shifting more to programmatic revenue.

6 unchanged sentences

Direct operating expenses .

Direct operating expenses in our advertising technology & services segment increased to $9.0 million for the three-month period ended March 31, 2025 from $5.2 million for the three-month period ended March 31, 2024, primarily due to an increase of $3.3 million in cloud infrastructure expenses and an increase of $0.5 million in salaries.

Direct operating expenses in our advertising technology & services segment increased to $10.9 million for the three-month period ended June 30, 2025 from $5.6 million for the three-month period ended June 30, 2024, primarily due to an increase of $1.9 million in cloud infrastructure expenses and an increase of $3.4 million in salaries and bonus expense.

Direct operating expenses in our advertising technology & services segment increased to $19.9 million for the six-month period ended June 30, 2025 from $10.8 million for the six-month period ended June 30, 2024, primarily due to an increase of $5.3 million in cloud infrastructure expenses and an increase of $3.8 million in salaries and bonus expense.

Selling, general and administrative expenses .

Selling, general and administrative expenses in our advertising technology & services segment increased to $4.7 million for the three-month period ended March 31, 2025, from $4.4 million for the three-month period ended March 31, 2024, primarily due to items which were individually immateri al.

Selling, general and administrative expenses in our advertising technology & services segment increased to $5.4 million for the three-month period ended June 30, 2025, from $4.6 million for the three-month period ended June 30, 2024, primarily due to an increase of $0.6 million in bad debt expense and $0.2 million of payroll tax expense.

Selling, general and administrative expenses in our advertising technology & services segment increased to $10.1 million for the six-month period ended June 30, 2025, from $9.0 million for the six-month period ended June 30, 2024, primarily due to salaries expense.

Liquidity and Capital Resources

2 unchanged sentences

We had positive cash flow from operations of $74.7 million, $75.2 million and $78.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.

We had negative cash flow from operations of $15.2 million for the three-month period ended March 31, 2025.

We had negative cash flow from operations of $7.4 million for the six-month period ended June 30, 2025.

For at least the next twelve months, we expect to fund our working capital requirements, capital expenditures and payments of principal and interest on outstanding indebtedness, with cash on hand and cash flows from operations.

We currently believe that our cash position is capable of meeting our operating and capital expenses and debt service requirements for at least the next twelve months from the issuance of this report.

We believe that our position is strengthened by cash and cash equivalents on hand, in the amount of $73.6 million, and available for sale marketable securities in the additional amount of $4.5 million, as of March 31, 2025.

We believe that our position is strengthened by cash and cash equivalents on hand, in the amount of $64.5 million, and available for sale marketable securities in the additional amount of $4.8 million, as of June 30, 2025.

Our liquidity is not materially affected by the amounts held in accounts outside the United States.

2 unchanged sentences

The disposition of our EGP business, the largest business unit of what was then our digital segment, has had, and will continue to have, a material effect on our results of operations in that total revenue from our advertising technology & services operations, and consolidated revenue, has been, and is expected to remain, significantly lower than it was prior to the disposition of our EGP business.

As a result, cash flow from operations will be materially adversely affected in future periods, which could also adversely affect our liquidity and, as discussed below, our ability to comply with financial covenants under the 2023 Credit Agreement.

The 2023 Credit Agreement contains various financial covenants (see Note 2 to Notes to Condensed Consolidated Financial Statements).

Under the terms of our 2023 Credit Agreement, consolidated EBITDA is a measure that governs several critical aspects of our 2023 Credit Facility, including, among other things, financial covenants with which we must comply and financial ratios which we must maintain in order to borrow funds needed for the operation of our business and with respect to the interest rates that we pay on our 2023 Credit Facility.

For example, our 2023 Credit Agreement contains a total net leverage ratio financial covenant.

The total net leverage ratio, or the ratio of consolidated total debt (net of up to $50.0 million of unrestricted cash) to trailing-twelve-month consolidated EBITDA, affects both our ability to borrow from our Revolving Credit Facility and our applicable margin for the interest

rate calculation.

Under our 2023 Credit Agreement, our maximum total leverage ratio may not exceed 3.25 to 1.00.

In addition, our 2023 Credit Agreement contains an interest coverage ratio financial covenant (calculated as set forth in the 2023 Credit Agreement), with a minimum permitted ratio of 3.00 to 1.00.Consolidated EBITDA is a non-GAAP measure.

The most directly comparable GAAP financial measure to consolidated EBITDA is net income (loss) attributable to common stockholders.

As of March 31, 2025, we were in compliance with the financial covenants in the 2023 Credit Agreement.

Compliance with these financial covenants is measured quarterly and our failure to meet the covenant requirements would constitute an event of default.

In such event, if we were unable to obtain the necessary waivers or amendments, all outstanding borrowings, together with accrued and unpaid interest and other amounts payable thereunder, would become immediately due and payable.

Additionally, the lenders would have the right to proceed against the collateral granted to them to secure that debt, which includes substantially all of our assets.

We have taken action to reduce certain expenses, including a reduction in the base salary and cash bonus components of our three most senior executives' compensation.

In addition, as discussed above, we have an aggregate $78.1 million of cash and marketable securities as of March 31, 2025, and management projects that we could prepay debt as necessary to remain in compliance with our financial covenants under the 2023 Credit Agreement should that become necessary.

Based on management’s current financial projections and our ability to prepay our debt, management believes that we will maintain compliance with our financial covenants under the 2023 Credit Agreement.

However, given the inherent uncertainty in financial projections, management has identified additional controllable cost reduction actions that can be taken, if necessary, to maintain sufficient liquidity to fund our business activities and maintain compliance with our financial covenants under the 2023 Credit Agreement.

Management further believes that our existing cash and projected operating cash flows are adequate to meet our operating needs, liabilities and commitments over the next twelve months from the issuance of the accompanying consolidated financial statements.

To the extent that our then-current liquidity is insufficient to fund our business activities or if we do not remain in compliance with our financial covenants under the 2023 Credit Agreement, as a result of not achieving financial projections or otherwise, we may be required to take additional actions which could include seeking additional equity or debt financing in the future to satisfy capital requirements.

As a result, cash flow from operations will be materially adversely affected in future periods, which could also adversely affect our liquidity.

To the extent that our then-current liquidity is insufficient to fund our business activities or if we do not remain in compliance with our financial covenants under the Amended 2023 Credit Agreement, whether as a direct or indirect result of the disposition of our EGP business or otherwise, we may be required to seek additional equity or debt financing in the future to satisfy capital requirements.

There is no guarantee that any such capital would be available to us on favorable terms, or at all.

1 unchanged sentence

Credit Facility

On March 17, 2023, we entered into the 2023 Credit Facility, pursuant to the 2023 Credit Agreement, by and among us, Bank of America, N.A., as Administrative Agent, and the other financial institutions party thereto as Lenders (collectively, the “Lenders” and individually each a “Lender”).

The 2023 Credit Agreement amended, restated and replaced in its entirety our previous credit agreement.

In March 2024, we made a prepayment of $10.0 million, of which $8.75 million was applied to the upcoming quarterly principal payments in 2024 under the Term A Facility (as defined in the 2023 Credit Agreement), and $1.25 million was applied to the Revolving Credit Facility (as defined in the 2023 Credit Agreement).

On March 17, 2023, we entered into the Credit Facility, pursuant to the Original 2023 Credit Agreement, by and among us, Bank of America, N.A., as Administrative Agent, and the Lenders.

The Original 2023 Credit Agreement amended, restated and replaced in its entirety our previous credit agreement.

The Original 2023 Credit Agreement was amended on July 15, 2025, effective as of June 30, 2025 with respect to certain financial covenants and certain other provisions of the Credit Facility.

In March 2024, we made a prepayment of $10.0 million, of which $8.75 million was applied to the upcoming quarterly principal payments in 2024 under the Term A Facility, and $1.25 million was applied to the Revolving Credit Facility.

In June 2024, we made an additional prepayment of $10.0 million, of which $4.9 million was a mandatory prepayment as a result of the EGP disposition.

The prepayment was applied to the quarterly principal payments in 2025 under the Term A Facility.

For more information, see Note 2 to Notes to Condensed Consolidated Financial Statements.

Net cash flow used in operating activities was $15.2 million for the three-month period ended March 31, 2025, compared to net cash flow provided by operating activities of $33.4 million for the three-month period ended March 31, 2024.

The decrease in cash flow from operating activities was primarily due to a decrease in net changes in our working capital of negative $20.9 million for the three-month period ended March 31, 2025 compared to positive $28.3 million for the three-month period ended March 31, 2024.

In June 2025, we made an additional prepayment of $10.0 million, which was applied to the principal due at maturity under the Term A Facility.

For more information, see Notes 2 and 8 to Notes to Condensed Consolidated Financial Statements.

Net cash flow used in operating activities was $7.4 million for the six-month period ended June 30, 2025, compared to net cash flow provided by operating activities of $51.1 million for the six-month period ended June 30, 2024.

The decrease in cash flow from operating activities was primarily due to a decrease in net changes in our working capital of negative $10.5 million for the six-month period ended June 30, 2025 compared to positive $29.9 million for the six-months periods ended June 30, 2024.

The net changes in working capital were primarily due to the timing of cash payments to publishers and collections from customers.

The decrease in cash flow from operating activities was also due to an increase in net loss after adjusting for non-cash items.

Significant non-cash items in the three-month period ended March 31, 2025 included impairment charges of $23.7 million, loss on lease abandonment charges of $25.2 million, depreciation and amortization expense of $3.5 million, deferred income taxes of $1.5 million, and non-cash stock based compensation of $2.6 million.

Significant non-cash items in the three-month period ended March 31, 2024 included impairment charges of $49.4 million, depreciation and amortization expense of $7.1 million, non-cash stock based compensation of $5.4 million, change in fair value of contingent consideration of $1.4 million, deferred income taxes of $4.2 million, and income attributable to redeemable noncontrolling interest of $2.8 million.

Significant non-cash items in the six-month period ended June 30, 2025 included impairment charges of $23.7 million, loss on lease abandonment charges of $25.2 million, depreciation and amortization expense of $6.5 million, deferred income taxes benefit of $6.9 million, and non-cash stock based compensation of $5.3 million.

Significant non-cash items in the six-month period ended June 30, 2024 included the loss on sale related to our former EGP business of $45.0 million, impairment charges of $49.4 million, depreciation and amortization expense of $13.1 million, non-cash stock based compensation of $8.7 million, and income related to the change in fair value of contingent consideration of $12.5 million.

We expect to have positive cash flow from operating activities for the full year 2025.

Net cash flow used in investing activities was $2.5 million for the three-month period ended March 31, 2025, compared to net cash flow provided by investing activities of $6.1 million for the three-month period ended March 31, 2024.

The decrease in net cash flow used in investing activities was primarily due to a reduction in proceeds from the sale of marketable securities to $0.4 million for the three-month period ended March 31, 2025 compared to $8.8 million for the three-month period ended March 31, 2024.

anticipate that our capital expenditures will be approximately $7.0 million during the full year 2025.

Net cash flow used in investing activities was $4.8 million for the six-month period ended June 30, 2025, compared to net cash flow used in investing activities of $26.9 million for the six-month period ended June 30, 2024.

The decrease in net cash flow used in investing activities was primarily due to cash divested of $43.0 million, partially offset by proceeds from loan receivable of $10.7 million for the six-month period ended June 30, 2024, related to the sale of our former EGP business, which did not recur in the six-month period ended June 30, 2025, and reduction in proceeds from the sale of marketable securities to $0.9 million for the six-month period ended June 30, 2025 compared to $10.0 million for the six-month period ended June 30, 2024.

We anticipate that our capital expenditures will be approximately $7.5 million during the full year 2025.

The amount of our anticipated capital expenditures may change based on future changes in business plans and our financial condition and general economic conditions.

We expect to fund capital expenditures with cash on hand and net cash flow from operations.

Net cash flow used in financing activities was $4.6 million for the three-month period ended March 31, 2025, compared to $16.8 million for the three-month period ended March 31, 2024.

The decrease in cash flow used in financing activities was primarily due to $10.3 million of payments on debt during the three-month period ended March 31, 2024, payments of contingent consideration of $0.9 million for the three-month period ended March 31, 2024, and distributions to noncontrolling interest of $1.1 million for the three-month period ended March 31, 2024, all of which did not recur in the three-month period ended March 31, 2025.

Net cash flow used in financing activities was $19.2 million for the six-month period ended June 30, 2025, compared to $44.7 million for the six-month period ended June 30, 2024.

The decrease in cash flow used in financing activities was primarily due to $10.0 million of payments on debt during the six-month period ended June 30, 2025 compared to $20.3 million of payments on debt during the six-month period ended June 30, 2024.

In addition, during the six-month period ended June 30, 2024 we had payments of contingent consideration of $14.3 million and distributions to noncontrolling interest of $1.1 million, which did not recur in the six-month period ended June 30, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis