What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-04 compared with 2025-08-05 · 114 added, 97 removed, 146 unchanged (59% of the section changed)

2 unchanged sentences

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.

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 also own and operate a smaller group of television stations that broadcast English language programming.

In addition, we have operations that provide programmatic advertising technology and services.

We have organized our operations into two reportable segments.

Our media segment includes our television, radio and digital marketing operations.

Our advertising and technology services segment provides programmatic advertising and technology services through Smadex, our demand-side programmatic advertising purchasing platform, and Adwake, our performance-based media advertising agency.

Our advertising technology & services segment provides programmatic advertising and technology services through Smadex, our demand-side programmatic advertising purchasing platform, and Adwake, our performance-based media advertising agency.

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 June 30, 2025 was $100.7 million.

Our net revenue for the three-months period ended September 30, 2025 was $120.6 million.

Of this amount, revenue generated by our media segment accounted for approximately 37%, and revenue generated by our advertising technology & services segment accounted for approximately 63% of total revenue.

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.

During the third quarter of 2025, our revenue grew by double digits, driven primarily by revenue growth of 104% 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 third quarter of 2025:

• we amended our 2023 Credit Agreement to provide more financial flexibility and accelerate debt reduction.

• we continued to reduce our debt by making a scheduled amortization payment of $5 million under our Credit Facility.

• management began to implement an ongoing organization design plan (the "Plan") to support revenue growth and reduce expenses, primarily in our media operations.

As management continues to implement the Plan, and evaluate its early results, further changes may be made if management believes that is appropriate.

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

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- 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- and Nine-Month Periods Ended September 30, 2025 and 2024

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

Three-Month Period

Six-Month Period

Ended June 30,

Nine-Month Period

Ended September 30,

Statements of Operations Data:

7 unchanged sentences

Loss on lease abandonment

Restructuring costs

Foreign currency (gain) loss

16 unchanged sentences

Consolidated Operations

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.

Net revenue increased to $120.6 million for the three-month period ended September 30, 2025 from $97.2 million for the three-month period ended September 30, 2024.

This increase was primarily due to an increase of $38.8 million in net revenue from our advertising technology & services segment, partially offset by a decrease of $15.3 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.

Net revenue increased to $313.2 million for the nine-month period ended September 30, 2025 from $258.0 million for the nine-month period ended September 30, 2024.

This increase was primarily due to an increase of $79.1 million in net revenue from our advertising technology & services segment, partially offset by a decrease of $23.9 million in net revenue from our media segment.

Cost of revenue.

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.

Cost of revenue increased to $51.0 million for the three-month period ended September 30, 2025 from $26.8 million for the three-month period ended September 30, 2024.

This increase was primarily due to an increase of $0.1 million in cost of

revenue from our media segment, and an increase of $24.1 million in cost of revenue from our advertising technology & services segment.

Cost of revenue increased to $122.5 million for the nine-month period ended September 30, 2025 from $73.9 million for the nine-month period ended September 30, 2024.

This increase was primarily due to an increase of $1.0 million in cost of revenue from our media segment, and an increase of $47.5 million in cost of revenue from our advertising technology & services segment.

1 unchanged sentence

Direct Operating Expenses.

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.

Direct operating expenses increased to $41.2 million for the three-month period ended September 30, 2025 from $35.6 million for the three-month period ended September 30, 2024.

This increase was primarily due to an increase of $6.2 million in direct operating expenses in our advertising technology & services segment, partially offset by a decrease of $0.6 million in direct operating expenses in our media segment.

Direct operating expenses increased to $114.5 million for the nine-month period ended September 30, 2025 from $99.2 million for the nine-month period ended September 30, 2024.

This increase was primarily due to an increase of $15.8 million in direct operating expenses in our advertising technology & services segment, partially offset by a decrease of $0.5 million in direct operating expenses in our media segment.

Selling, General and Administrative Expenses.

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.

Selling, general and administrative expenses increased to $19.0 million for the three-month period ended September 30, 2025, from $17.1 million for the three-month period ended September 30, 2024.

This increase was primarily due to an increase of $0.7 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.

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.

Selling, general and administrative expenses increased to $51.0 million for the nine-month period ended September 30, 2025, from $45.8 million for the nine-month period ended September 30, 2024.

This increase was primarily due to an increase of $2.8 million in selling, general and administrative expenses in our media segment, and an increase of $2.4 million in selling, general and administrative expenses in our advertising technology & services segment.

Corporate Expenses.

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.

Corporate expenses decreased to $6.3 million for the three-month period ended September 30, 2025 from $6.9 million for the three-month period ended September 30, 2024.

This decrease was primarily due to a decrease of $0.3 million in audit fees, and a decrease of $0.3 million in rent expense.

Corporate expenses decreased to $20.5 million for the nine-month period ended September 30, 2025 from $30.0 million for the nine-month period ended September 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 $3.0 million in non-cash stock-based compensation, a decrease of $1.1 million in severance expense, a decrease of $0.9 million in audit fees, a decrease of $0.6 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.

Depreciation and amortization decreased to $3.1 million for the three-month period ended September 30, 2025 compared to $3.9 million for the three-month period ended September 30, 2024, primarily due to fully depreciated assets and fully amortized intangible assets.

Depreciation and amortization decreased to $9.6 million for the nine-month period ended September 30, 2025 compared to $13.0 million for the nine-month period ended September 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 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.

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 $0.7 million and $0.6 million for the three- and nine-month periods ended September 30, 2024, respectively.

We recorded an impairment charge of $5.7 million for the nine-month period ended September 30, 2025, primarily related to assets held for sale.

We recorded an impairment charge of $29.4 million for the nine-month period ended September 30, 2025, primarily related to assets held for sale.

See Note 2 to Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

See Note 2 to Notes to Condensed Consolidated Financial Statements.

Restructuring costs.

During the third quarter of 2025 our management began to implement the Plan, intended to support revenue growth and reduce expenses, primarily in our media operations.

As a result, we recorded $3.2 million in restructuring costs for the three- and nine-month periods ended September 30, 2025.

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 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.

We had a foreign currency loss of $0.1 million for the three-month period ended September 30, 2025 compared to a foreign currency gain of $0.1 million for the three-month period ended September 30, 2024.

We had a foreign currency loss of $0.1 million for each of the nine-month periods ended September 30, 2025 and 2024.

Interest Expense, net.

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.

Interest expense, net decreased to $3.2 million for the three-month period ended September 30, 2025 from $3.4 million for three-month period ended September 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.

Interest expense, net decreased to $9.7 million for the nine-month period ended September 30, 2025 from $10.8 million for nine-month period ended September 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 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.

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

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

For the nine-month period ended September 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.

We recorded a loss on debt extinguishment of $0.2 million for each of the three-and nine-month periods ended September 30, 2025 due to a prepayment of $10.0 million of our Credit Facility made in the second quarter of 2025 and the amendment of our Credit Agreement in the third quarter of 2025.

We recorded a loss on debt extinguishment of $0.1 million for the nine-month period ended September 30, 2024 due to prepayments totaling $20.0 million of our Credit Facility.

Income Tax Expense or Benefit.

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.

Income tax benefit for the three-month period ended September 30, 2025 was $2.8 million.

The effective tax rate for the three-month period ended September 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, Global Intangible Low-Taxed Income, and transaction costs.

Income tax expense for the three-month period ended September 30, 2024 was $15.0 million.

The effective tax rate for the three-month period ended September 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 nine-month period ended September 30, 2025 was $11.7 million.

The effective tax rate for the nine-month period ended September 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 expense for the nine-month period ended September 30, 2024 was $0.2 million.

The effective tax rate for the nine-month period ended September 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 $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.

Foreign Tax Credit carryovers, and capital loss, management has determined that it is more likely than not that deferred tax assets of $18.2 million at September 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.

4 unchanged sentences

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 recognized the tax effects of the OBBBA in the third quarter of 2025.

We determined that the OBBBA does

not have a material impact on our business and financial condition, and therefore, no material discrete tax adjustment was recorded in the third quarter of 2025.

In addition, the impact of the OBBBA did not result in a material change to the Company’s annual effective tax rate for 2025.

As of September 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.

4 unchanged sentences

Our reportable segments are the same as our operating segments.

Prior periods have been recast to conform to this presentation.

Our media segment consists of sales of advertising through various media, including television, radio and digital.

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

We own and/or operate 49 primary television stations and 44 radio stations (37 FM and 7 AM), reaching and engaging Latinos in the United States.

1 unchanged sentence

Latino markets.

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

We provide digital marketing operations in all of the U.S.

1 unchanged sentence

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 $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.

Net revenue in our media segment decreased to $44.5 million for the three-month period ended September 30, 2025 from $59.8 million for the three-month period ended September 30, 2024.

This decrease was primarily due to a decrease of $14.5 million in broadcast advertising revenue, a decrease of $0.6 million in retransmission consent revenue, a decrease of $0.4 million in spectrum usage rights revenue, and a decrease of $0.3 million in other revenue, partially offset by an increase of $0.6 million in digital advertising revenue.

Net revenue in our media segment decreased to $130.9 million for the nine-month period ended September 30, 2025 from $154.8 million for the nine-month period ended September 30, 2024.

This decrease was primarily due to a decrease of $21.5 million in broadcast advertising revenue, a decrease of $2.8 million in retransmission consent revenue, a decrease of $0.2 million in spectrum usage rights revenue, and a decrease of $0.3 million in other revenue, partially offset by an increase of $1.0 million in digital advertising 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.

4 unchanged sentences

No assurances can be given that such strategies will be successful.

We earn retransmission consent revenue on a paid subscriber basis.

We are aware of a dispute between Alphabet and TelevisaUnivision regarding the decision by Alphabet to cease carrying Univision- and UniMás-affiliated television stations as part of the primary “bundle” on YouTube TV, which is owned by Alphabet.

We derive retransmission consent revenue from this carriage, which could be adversely affected if Alphabet were not to restore TelevisaUnivision to the YouTube TV primary “bundle”.

Cost of revenue .

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.

Cost of revenue in our media segment increased to $5.0 million for the three-month period ended September 30, 2025 from $4.9 million for the three-month period ended September 30, 2024, primarily due to the increase in digital advertising revenue.

Cost of revenue in our media segment increased to $12.9 million for the nine-month period ended September 30, 2025 from $11.9 million for the nine-month period ended September 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 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.

Direct operating expenses in our media segment decreased to $28.6 million for the three-month period ended September 30, 2025 from $29.2 million for the three-month period ended September 30, 2024, primarily due to a decrease of $1.4 million in expenses associated with the decrease in revenue and a decrease of $1.0 million in non-cash stock-based compensation, partially offset by an increase of $1.6 million in music license fees and other items which were individually immateri al.

Direct operating expenses in our media segment decreased to $81.9 million for the nine-month period ended September 30, 2025 from $82.4 million for the nine-month period ended September 30, 2024, primarily due to a decrease of $1.5 million in expenses associated with the decrease in revenue and a decrease of $1.1 million in non-cash stock-based compensation, partially offset by an increase of $1.0 million in salaries and other employee benefits, an increase of $0.2 million in expenses due to the realignment of our operations as noted above, and an increase of $0.8 million in other items which were individually immateri al.

Selling, General and Administrative Expenses.

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.

Selling, general and administrative expenses in our media segment increased to $11.6 million for the three-month period ended September 30, 2025 from $10.9 million for the three-month period ended September 30, 2024, primarily due to an increase of $0.7 million in salaries and other employee benefits.

Selling, general and administrative expenses in our media segment increased to $33.4 million for the nine-month period ended September 30, 2025 from $30.6 million for the nine-month period ended September 30, 2024, primarily due to an increase of $1.7 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 $0.3 million in bad debt expense .

Advertising Technology & Services

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.

Net revenue in our advertising technology & services segment increased to $76.1 million for the three-month period ended September 30, 2025 from $37.4 million for the three-month period ended September 30, 2024.

The increase was primarily due to an increase in advertising revenue from Smadex, including a large new customer that was acquired recently;

i nvestments in the AI capabilities of our platform;

and increased sales capacity, which enabled increased monthly active advertisers and revenue per monthly active advertiser .

Net revenue in our advertising technology & services segment increased to $182.3 million for the nine-month period ended September 30, 2025 from $103.2 million for the nine-month period ended September 30, 2024.

The increase was primarily due to increase in advertising revenue from Smadex, including a large new customer that was acquired recently;

i nvestments in the AI capabilities of our platform;

and increased sales capacity, which enabled increased monthly active advertisers and revenue per monthly active advertiser, and increase in advertising revenue from Adwake.

Cost of 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.

Cost of revenue in our advertising technology & services segment increased to $46.0 million for the three-month period ended September 30, 2025 from $21.9 million for the three-month period ended September 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 $109.5 million for the nine-month period ended September 30, 2025 from $62.0 million for the nine-month period ended September 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 $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.

Direct operating expenses in our advertising technology & services segment increased to $12.7 million for the three-month period ended September 30, 2025 from $6.4 million for the three-month period ended September 30, 2024,

primarily due to an increase of $6.8 million in cloud infrastructure expenses, partially offset by a decrease of $0.6 million in salaries and bonus expense.

Direct operating expenses in our advertising technology & services segment increased to $32.5 million for the nine-month period ended September 30, 2025 from $16.8 million for the nine-month period ended September 30, 2024, primarily due to an increase of $12.0 million in cloud infrastructure expenses and an increase of $3.7 million in salaries and bonus expense.

Selling, general and administrative expenses .

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.

Selling, general and administrative expenses in our advertising technology & services segment increased to $7.4 million for the three-month period ended September 30, 2025, from $6.3 million for the three-month period ended September 30, 2024, primarily due to an increase of $0.9 million in salaries and an increase of $0.3 million in bad debt expense.

Selling, general and administrative expenses in our advertising technology & services segment increased to $17.6 million for the nine-month period ended September 30, 2025, from $15.2 million for the nine-month period ended September 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 $7.4 million for the six-month period ended June 30, 2025.

We had positive cash flow from operations of $0.9 million for the nine-month period ended September 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 $64.5 million, and available for sale marketable securities in the additional amount of $4.8 million, as of June 30, 2025.

We believe that our position is strengthened by cash and cash equivalents on hand, in the amount of $61.8 million, and available for sale marketable securities in the additional amount of $4.7 million, as of September 30, 2025.

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

10 unchanged sentences

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.

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.

In March 2024, we made a prepayment of $10.0 million under the Credit Facility.

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

In June 2025, we made an additional prepayment of $10.0 million under the Credit Facility.

On July 15, 2025, our lenders and we entered into the Amended 2023 Credit Agreement.

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

Net cash flow provided by operating activities was $0.9 million for the nine-month period ended September 30, 2025, compared to net cash flow provided by operating activities of $61.9 million for the nine-month period ended September 30, 2024.

The decrease in cash flow from operating activities was primarily due to a decrease in net changes in our working capital of positive $0.6 million for the nine-month period ended September 30, 2025 compared to positive $49.1 million for the nine-month period ended September 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 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.

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

Significant non-cash items in the nine-month period ended September 30, 2025 included impairment charges of $29.4 million, loss on lease abandonment charges of $25.2 million, depreciation and amortization expense of $9.6 million, deferred income tax benefit of $12.3 million, and non-cash stock based compensation of $8.1 million.

Significant non-cash items in the nine-month period ended September 30, 2024 included the loss on sale related to the EGP business of $45.1 million, impairment charges of $49.4 million, depreciation and amortization expense of $17.0 million, non-cash stock based compensation of $12.4 million, income related to the change in fair value of contingent consideration of $13.2 million, deferred income tax benefit of $3.3 million, and income attributable to redeemable noncontrolling interest of $2.8 million.

We expect to have positive cash flow from operating activities for 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.

Net cash flow used in investing activities was $5.9 million for the nine-month period ended September 30, 2025, compared to net cash flow used in investing activities of $28.1 million for the nine-month period ended September 30, 2024.

Additionally, the decrease in net cash flow used in investing activities was partially offset by purchase of marketable securities of $1.5 million for the nine-month period ended September 30, 2025, and reduction in proceeds from the sale of marketable securities to $1.6 million for the nine-month period ended September 30, 2025 compared to $10.4 million for the nine-month period ended September 30, 2024.

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

1 unchanged sentence

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

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.

Net cash flow used in financing activities was $29.1 million for the nine-month period ended September 30, 2025, compared to $49.3 million for the nine-month period ended September 30, 2024.

The decrease in cash flow used in financing activities was primarily due to $15.0 million of payments on debt, and $0.3 million of payments of debt issuance costs during the nine-month period ended September 30, 2025 compared to $20.3 million of payments on debt during the nine-month period ended September 30, 2024.

In addition, during the nine-month period ended September 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 nine-month period ended September 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