0001193125-26-206399
SEC filingRevenue surged 114% YoY to $197.0M, driven by ATS segment growth of 204%, partially offset by media decline.
Net revenue for Q1 2026 was $197.0 million, a 114% increase from $91.9 million in Q1 2025. The growth was overwhelmingly driven by the ATS segment, which contributed $103.7 million of the $105.1 million increase. Gross profit rose to $95.0 million (48.2% margin) from $58.4 million (63.6% margin), as cost of revenue grew faster (205% YoY) due to ATS's lower-margin programmatic revenue mix. Operating income swung to a profit of $20.7 million from a loss of $52.8 million, largely because the prior year included $23.7 million in impairment charges and $25.2 million in lease abandonment costs. Net income attributable to common stockholders was $12.4 million compared to a net loss of $48.0 million. EPS was not disclosed.
Media Segment: Revenue increased modestly to $42.4 million (+3.4% YoY) driven by digital advertising (+$3.3M) and retransmission consent (+$0.3M), partially offset by declines in broadcast advertising (-$1.3M) and spectrum usage rights (-$1.0M). Cost of revenue rose to $5.4 million (from $3.3M), and direct operating expenses increased to $28.1 million (from $26.6M), reflecting higher digital ad costs and labor. The segment continues to face headwinds from declining linear TV/radio audiences and shifting advertiser preferences toward digital.
ATS Segment: Revenue soared 204% to $154.6 million, fueled by strong performance from Smadex and Adwake, including a large Asian customer acquired in H2 2025. Cost of revenue grew to $96.6 million (from $30.2M), consistent with the revenue surge but compressing margins. Direct operating expenses jumped to $16.7 million (from $9.0M) due to increased cloud infrastructure and personnel costs. The segment benefits from investments in AI and sales capacity, though management notes a trend of lower margins as advertisers demand efficiency.
Management expects positive operating cash flow for full-year 2026 and projects capital expenditures of approximately $9.0 million. No explicit revenue or earnings guidance was provided. The company believes its cash position ($68.2M) and marketable securities ($3.0M) are sufficient to meet obligations for at least 12 months. Strategic priorities include investing in ATS technology (AI capabilities) and debt reduction, with a scheduled $5 million amortization in Q1 2026. The advertising technology landscape remains dynamic, with ongoing margin pressure and rapid technological change.
As of March 31, 2026, Entravision held $68.2M in cash and cash equivalents, plus $3.0M in marketable securities (corporate bonds and notes). Restricted cash was $0.8M. Total current assets were $230.3M, up from $183.5M at year-end 2025, driven by a $33.2M increase in trade receivables. Total debt stood at $162.2M ($20.0M current maturities + $142.2M long-term debt, net of $0.6M unamortized issuance costs). The company's credit facility includes a $200.0M Term A Facility and a $30.0M Revolving Credit Facility, with $11.5M drawn on the revolver. The interest rate on borrowings was 6.73% as of March 31, 2026. Shareholders' equity improved to $65.0M from $55.4M at December 31, 2025, primarily due to net income of $12.4M.
The company disclosed operating lease obligations totaling $59.0M in undiscounted future payments, with $10.7M due in the remainder of 2026. The present value of lease liabilities was $47.9M. A significant contingent liability exists from the Santa Monica lease abandonment litigation, where the landlord seeks at least $31.5M in damages; the company is unable to estimate possible costs. No other material purchase commitments or contractual obligations were disclosed in the Notes.
During Q1 2026, the company paid $4.6M in dividends ($0.05 per share quarterly), consistent with the prior year. Debt repayments totaled $5.0M (quarterly amortization on the Term A Facility). Capital expenditures were $3.9M (2.0% of revenue), split $2.9M in Media and $1.0M in ATS. No share buybacks were reported. The company also paid $0.5M in tax withholdings on share-based compensation.
The ATS segment generated $154.6M in revenue (78.5% of total), up 204% YoY, with segment operating profit of $34.3M (22.2% margin). The Media segment contributed $42.4M (21.5% of total), up 4% YoY, but reported a segment operating loss of $5.2M (-12.3% margin). Geographically, 60% of revenue came from outside the U.S. in Q1 2026 (vs. 36% in Q1 2025), driven by ATS growth in Asia ($75.9M) and Rest of World ($42.7M, primarily Europe). U.S. revenue was $78.3M.
Operating cash flow (CFO) of $21.8M significantly exceeded net income of $12.4M, indicating strong cash generation relative to earnings. The primary driver was a $39.6M increase in accounts payable and accrued liabilities, partially offset by a $32.7M rise in accounts receivable. Capex of $3.6M was modest relative to CFO, representing a 16.5% capex intensity. Free cash flow (CFO minus capex) was $18.1M, comfortably covering dividends of $4.6M and debt payments of $5.0M. The prior-year period included $23.7M in impairment charges and $25.2M in lease abandonment losses, which depressed net income but were non-cash. The working capital swing in Q1 2026 was a notable anomaly, with a large increase in payables boosting CFO. Overall, cash flow quality is solid, with operating cash flows providing ample coverage for capital returns and debt reduction.