What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-11 compared with 2025-05-20 · 52 added, 41 removed, 175 unchanged (35% of the section changed)

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In addition, it is our general policy not to preempt advertising spots paid for in cash with advertising spots paid for in trade.

The following table summarizes the sources of our revenues for the three months ended March 31, 2025 and 2024.

The following table summarizes the sources of our revenues for the three and six months ended June 30, 2025 and 2024.

The category “Other” includes, among other items, revenues related to network revenues and barter.

(dollars in thousands) Three Months Ended March 31,

2025 % of Total 2024 % of Total

(dollars in thousands) Three Months Ended June 30, Six Months Ended June 30,

2025 % of Total 2024 % of Total 2025 % of Total 2024 % of Total

Net revenues:

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As part of the Estrella Acquisition integration, we developed a plan to close and relocate certain studio and marketing operations.

In fulfilling this plan, we incurred involuntary termination costs of $0.2 million in the three months ended March 31, 2025, included in operating expenses on our condensed consolidated statements of operations included elsewhere in this report.

In fulfilling this plan, we incurred involuntary termination costs of $0.2 million and $0.5 million in the three and six months ended June 30, 2025, respectively, included in operating expenses on our condensed consolidated statements of operations included elsewhere in this report.

MediaCo has been impacted by the rising interest rate environment in the financial markets, driving the interest accrued and paid on the Emmis Convertible Promissory Note to increase prior to its maturity in November 2024 as well as providing uncertainty on our First Lien Term Loan and Second Lien Term Loan, which have variable interest rates.

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CRITICAL ACCOUNTING ESTIMATES

During the three months ended March 31, 2025, there were no material changes to our critical accounting policies and estimates from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on April 15, 2025.

During the six months ended June 30, 2025, there were no material changes to our critical accounting policies and estimates from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on April 15, 2025.

We have considered information available to us as of the date of issuance of these financial statements and are not aware of any specific e vents or circumstances that would require an update to our estimates or judgments, or a revision to the carrying value of our assets or liabilities.

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and its consolidated subsidiaries should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere herein.

The key developments in our business for the three months ended March 31, 2025 are summarized below:

• Net revenues of $28.0 million increased $21.3 million, or 318%, during the three months ended March 31, 2025 compared to net revenues of $6.7 million during the three months ended March 31, 2024.

• Operating loss of $4.7 million increased $1.2 million, or 35%, during the three months ended March 31, 2025 compared to operating loss of $3.5 million during the three months ended March 31, 2024.

• Net loss of $8.6 million increased $4.9 million, or 134%, during the three months ended March 31, 2025 compared to net loss of $3.7 million during the three months ended March 31, 2024.

• Cash flows provided by operating activities increased by $1.6 million, or 399%, during the three months ended March 31, 2025 to $2.1 million compared to cash flows provided by operating activities of $0.4 million during the three months ended March 31, 2024.

• Adjusted EBITDA for the three months ended March 31, 2025 was $1.4 million increasing 55% compared to Adjusted EBITDA of $0.9 million for the three months ended March 31, 2024.

The key developments in our business for the three and six months ended June 30, 2025 are summarized below:

• Net revenues of $31.2 million increased $5.0 million, or 19%, during the three months ended June 30, 2025 compared to net revenues of $26.2 million during the three months ended June 30, 2024.

• Net revenues of $59.3 million increased $26.4 million, or 80%, during the six months ended June 30, 2025 compared to net revenues of $32.9 million during the six months ended June 30, 2024.

• Operating loss of $6.8 million decreased $6.5 million, or 49%, during the three months ended June 30, 2025 compared to operating loss of $13.3 million during the three months ended June 30, 2024.

• Operating loss of $11.5 million decreased $5.3 million, or 32%, during the six months ended June 30, 2025 compared to operating loss of $16.8 million during the six months ended June 30, 2024.

• Net loss of $8.8 million decreased $39.5 million, or 82%, during the three months ended June 30, 2025 compared to net loss of $48.3 million during the three months ended June 30, 2024.

• Net loss of $17.4 million decreased $34.6 million, or 67%, during the six months ended June 30, 2025 compared to net loss of $52.0 million during the six months ended June 30, 2024.

• Cash flows used in operating activities decreased by $23.8 million, or 96%, during the six months ended June 30, 2025 to $0.9 million compared to cash flows used in operating activities of $24.7 million during the six months ended June 30, 2024.

• Adjusted EBITDA for the three months ended June 30, 2025 was $1.8 million increasing 134% compared to Adjusted EBITDA of $(5.2) million for the three months ended June 30, 2024.

• Adjusted EBITDA for the six months ended June 30, 2025 was $2.9 million increasing 165% compared to Adjusted EBITDA of $(4.5) million for the six months ended June 30, 2024.

Consolidated Operating Data

The following table sets forth a summary of each of the Company’s components of operating expense as a percentage of net revenue for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

(Dollars in thousands) Amount % Amount %

The following table sets forth a summary of each of the Company’s components of operating expense as a percentage of net revenue for the three months and six months ended June 30, 2025 and 2024:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(Dollars in thousands) Amount % Amount % Amount % Amount %

NET REVENUES $ 31,245 100 $ 26,202 100 $ 59,275 100 $ 32,908 100

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OPERATING LOSS $ (6,785) $ (13,326) $ (11,468) $ (16,793)

Three-Month Period Ended March 31, 2025 compared to March 31, 2024

Three Months Ended March 31, Change

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

Three Months Ended June 30, Change Six Months Ended June 30, Change

(Dollars in thousands) 2025 2024 $ % 2025 2024 $ %

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Interest expense, net (3,855) (3,782) (73) 2 (7,609) (3,918) (3,691) 94

Change in fair value of warrant shares liability — (31,027) 31,027 N/A — (31,027) 31,027 N/A

Other income 2,119 10 2,109 21090 2,230 20 2,210 11050

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Net revenues:

Net revenues increased during the three months ended March 31, 2025 primarily due to the new assets acquired in the Audio and Video segments as part of the Estrella Acquisition in April 2024.

Net revenues increased during the three and six months ended June 30, 2025 primarily due to the new assets acquired in the Audio and Video segments as part of the Estrella Acquisition in April 2024.

Operating expenses:

Operating expenses increased during the three months ended March 31, 2025 primarily due to the new assets acquired in the Audio and Video segments as part of the Estrella Acquisition.

Operating expenses decreased during the three months ended June 30, 2025 primarily due to decreases in employee costs, events, computer, security and general insurance expenses partially offset, by increases in bad debt and TV expenses.

Operating expenses increased during the six months ended June 30, 2025 primarily due to the new assets acquired in the Audio and Video segments as part of the Estrella Acquisition.

Corporate expenses:

Corporate expenses decreased for the three months ended March 31, 2025 primarily due to lower professional service fees driven by work related to the Estrella Acquisition in the prior year.

Corporate expenses decreased for the three and six months ended June 30, 2025 primarily due to lower professional service fees driven by work related to the Estrella Acquisition in the prior year.

Depreciation and amortization:

Depreciation and amortization expense increased during the three months ended March 31, 2025 primarily related to the Estrella Acquisition.

Depreciation and amortization expense increased during the three and six months ended June 30, 2025 primarily related to the Estrella Acquisition.

Depreciation and amortization expenses excluding expenses related to the Estrella Acquisition, remained relatively flat due to certain assets becoming fully depreciated in the prior year offset by new assets placed into service in 2025.

Loss on disposal of assets:

Loss on disposal of assets increased for the three months ended March 31, 2025 primarily due to the disposal of certain fixed assets during that three-month period, while there were no such disposals in 2024.

The loss on disposal of assets remained consistent quarter over quarter for the three months ended June 30, 2025, compared to the same period in 2024.

Loss on disposal of assets increased for the six months ended June 30, 2025 primarily due to the disposal of certain fixed assets, while there were no such disposals in 2024.

Operating loss:

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Interest expense, net:

Interest expense increased during the three months ended March 31, 2025 due to the additional long-term debt related to the Estrella Acquisition.

Interest expense increased during the three and six months ended June 30, 2025 due to the additional long-term debt related to the Estrella Acquisition.

Other income:

Other income increased during the three months ended March 31, 2025 compared to the prior year primarily because we began subleasing one of our facilities in this first quarter.

Other income increased during the three and six months ended June 30, 2025 compared to the prior year primarily because of a one-time employee retention tax credit received, income from managed services agreements where the Company is providing accounting and other services, and subleasing income from one of our facilities which began in the first quarter of 2025.

Provision for income taxes:

Provision for income taxes increased during the three months ended March 31, 2025 compared to the prior year due to tax amortization of the Company’s historical and newly acquired indefinite-lived intangibles, along with the impact of filing in additional state jurisdictions as a result of the Estrella Acquisition.

Provision for income taxes increased during the three and six months ended June 30, 2025 compared to the prior year due to tax amortization of the Company’s historical and newly acquired indefinite-lived intangibles, along with the impact of filing in additional state jurisdictions as a result of the Estrella Acquisition.

See Note 8 — Income Taxes in our condensed consolidated financial statements included elsewhere in this report for additional details.

Consolidated net loss:

The increase in consolidated net loss was primarily due to the Estrella Acquisition.

The decrease in consolidated net loss was primarily due to the Estrella Acquisition.

See “Net revenues,” “Operating expenses,”, “Corporate expenses,” “Depreciation and amortization,” “Loss on disposal of assets,” “Interest expense, net,” “ Provision for income taxes,” and “Other income” above for additional details.

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Audio Segment

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Dollars in thousands) 2025 2024 2025 2024

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Operating Expenses 16,785 19,499 29,782 26,282

Segment Operating Income (Loss) $ 695 $ (77)

Revenue and operating expenses from our Audio Segment increased $7.0 million and $6.2 million, respectively, during the three months ended March 31, 2025 compared to the same period in 2024, driven primarily as a result of the new assets acquired in the Audio segment as part of the Estrella Acquisition.

Segment Operating Loss $ (1,549) $ (2,286) $ (854) $ (2,363)

Revenue and operating expenses from our Audio Segment decreased $2.0 million and $2.7 million, respectively, during the three months ended June 30, 2025 compared to the same period in 2024, driven primarily as a result of the decrease in event revenue and decreases in payroll and event expenses.

Revenue and operating expenses from our Audio Segment increased $5.0 million and $3.5 million, respectively, during the six months ended June 30, 2025 compared to the same period in 2024, driven primarily as a result of the new assets acquired in the Audio segment as part of the Estrella Acquisition.

Video Segment

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Video Segment

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Dollars in thousands) 2025 2024 2025 2024

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Segment Operating Loss (3,682) (7,595) (7,467) (7,595)

All Revenue and Operating expenses from our Video Segment in the three months ended March 31, 2025 were due to the new assets acquired as part of the Estrella Acquisition.

Revenue and operating expenses from our Video Segment increased $7.0 million and $3.1 million, respectively, during the three months ended June 30, 2025 compared to the same period in 2024, were due to increases in digital revenue and increases in impression expense, partially offset by decreases in payroll expense.

Revenue and operating expenses from our Video Segment increased $21.4 million and $21.2 million, respectively, during the six months ended June 30, 2025 compared to the same period in 2024, were due to the new assets acquired as part of the Estrella Acquisition.

Corporate and other

Operating expenses related to Corporate and other decreased to $1.6 million for the three months ended March 31, 2025 compared to $3.4 million for the three months ended March 31, 2024, primarily due to lower professional service fees driven by work related to the Estrella Acquisition in the prior year.

Operating expenses related to Corporate and other decreased to $1.6 million for the three months ended June 30, 2025 compared to $3.4 million for the three months ended June 30, 2024, primarily due to lower professional service fees driven by work related to the Estrella Acquisition in the prior year.

Operating expenses related to Corporate and other decreased to $3.1 million for the six months ended June 30, 2025 compared to $6.8 million for the six months ended June 30, 2024, primarily due to lower professional service fees driven by work related to the Estrella Acquisition in the prior year.

Non-GAAP Financial Measures

Reconciliations of Net Loss to EBITDA and Adjusted EBITDA (1)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Dollars in thousands) 2025 2024 2025 2024

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Our primary uses of capital have been, and are expected to continue to be, capital expenditures, working capital, and acquisitions.

Management anticipates the Company will be able to meet its liquidity needs for the next twelve months with cash and cash equivalents on hand, additional draws on its First Lien Term Loan, and projected cash flows from operations.

At March 31, 2025 , the Company had cash, cash equivalents and restricted ca sh of $8.8 million an d negative working capital of $22.3 million.

Management anticipates the Company will be able to meet its liquidity needs for the next twelve months with cash and cash equivalents on hand, and projected cash flows from operations.

At June 30, 2025 , the Company had cash, cash equivalents and restricted ca sh of $5.4 million an d negative working capital of $32.3 million.

At December 31, 2024, the Company had cash, cash equivalents and restricted cash of $6.9 million and negative working capital of $18.0 million.

The increase in negative working capital was driven by the cancellation of certain programming rights contracts reducing the current portion of programming rights as well as increased accounts payable and accrued expenses, accrued salaries and commissions, and deferred revenue, partially offset by increased accounts receivable and cash and cash equivalents.

As part of its business strategy, the Company continually evaluates potential acquisitions of businesses that it believes hold promise for long-term appreciation in value and leverage our strengths.

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Operating Activities

Cash flows provided by operating activities were $2.1 million for the three months ended March 31, 2025, compared to $0.4 million for the three months ended March 31, 2024 .

The increase in cash provided by operating activities was mainly attributable to increases in deferred revenue driven by timing of cash receipts.

Cash flows used in operating activities were $0.9 million for the six months ended June 30, 2025, compared to $24.7 million for the six months ended June 30, 2024 .

The decrease in cash used in operating activities was mainly attributable to improved operating income driven by transaction costs incurred in the prior year that were not incurred in the current year and focus on cash management.

Investing Activities

Cash flows used in investing activities were $0.1 million for the three months ended March 31, 2025, primarily attributable to cash paid for various capital projects primarily related to the continued development of our digital platforms.

C ash flo ws used in investing activities were $0.2 million for the three months ended March 31, 2024 , primarily attributable to capital expenditures related to a new digital platform project and the build out of our new space for corporate offices.

Cash flows used in investing activities were $0.3 million for the six months ended June 30, 2025, primarily attributable to cash paid for various capital projects.

Cash flows used in investing activities were $7.0 million for the six months ended June 30, 2024, primarily attributable to the Estrella acquisition, capital expenditures related to a new digital platform project, and the build out of our new space for corporate offices.

Financing Activities

Cash fl ows used in financ ing activities were $0.2 million for the three months ended March 31, 2025, attributable to finance lease principal payments and settlement of tax withholding obligations.

Cash flows used in financing activities were $0.1 million for the three months ended March 31, 2024, attributable to repurchases of our Class A common stock and settlement of tax withholding obligations.

Cash fl ows used in financi ng activities were $0.3 million f or the six months ended June 30, 2025, attributable to finance lease principal payments and settlement of tax withholding obligations.

Cash flows provided by financing activities were $37.0 million for the six months ended June 30, 2024, attributable to proceeds from the First Lien Term Loan, partially offset by payments of debt issuance costs and settlement of tax withholding obligations.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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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