0001193125-26-206399
SEC filingQ1 2026 revenue surged 114% YoY to $197M, driven by 204% growth in ATS segment, offsetting media decline and non-recurring charges from prior year.
For the three months ended March 31, 2026, Entravision reported net revenue of $197.0 million, a 114% increase from $91.9 million in the same period of 2025. This growth was primarily driven by the ATS segment, which contributed $154.6 million, up 204% year-over-year. The media segment posted a modest 3.4% increase to $42.4 million.
Operating income swung from a loss of $52.8 million in Q1 2025 to a profit of $20.7 million in Q1 2026. The prior year included significant non-recurring charges: a $23.7 million impairment on broadcast licenses and fixed assets, and a $25.2 million loss on lease abandonment. Excluding these items, operating income would have been -$3.9 million in Q1 2025, indicating underlying improvement. Net income attributable to common stockholders was $12.4 million, compared to a loss of $48.0 million in the prior year.
Cost of revenue rose 205% to $102.0 million, largely due to increased ATS advertising costs. Direct operating expenses increased 26% to $44.8 million, with ATS driving most of the increase (cloud infrastructure, salaries). SG&A rose 17% to $18.1 million, while corporate expenses declined 8% to $7.2 million. Depreciation and amortization decreased 14% to $3.0 million. Restructuring costs of $1.0 million were recorded in Q1 2026.
Media Segment: Revenue increased to $42.4 million from $41.0 million. Digital advertising revenue grew $3.3 million, retransmission consent added $0.3 million, and other revenue rose $0.2 million, partially offset by a $1.3 million decline in broadcast advertising and a $1.0 million drop in spectrum usage rights revenue. Cost of revenue rose to $5.4 million from $3.3 million due to higher digital costs. Direct operating expenses increased $1.6 million to $28.1 million, and SG&A rose $0.6 million to $11.4 million. The segment faces ongoing challenges from declining broadcast audiences and competitive pressures.
ATS Segment: Revenue surged to $154.6 million from $50.9 million, driven by strong performance at Smadex (including a large Asian customer acquired in H2 2025) and Adwake. Cost of revenue increased to $96.6 million from $30.2 million, reflecting higher advertising costs. Direct operating expenses rose to $16.7 million from $9.0 million, led by a $4.5 million increase in cloud infrastructure and $2.9 million in salaries. SG&A increased to $6.8 million from $4.7 million. The ATS segment now accounts for 78% of total revenue, up from 55% a year ago, underscoring a significant mix shift toward digital performance marketing.
Management did not provide specific numerical guidance for future periods. However, they expressed confidence in maintaining positive operating cash flow for the full year 2026, supported by cash on hand of $68.2 million and marketable securities of $3.0 million. Capital expenditures are anticipated to be approximately $9.0 million for the full year. The company continues to reduce debt, having made a $5 million scheduled amortization payment in Q1 2026. Strategic priorities include investing in AI capabilities and sales capacity for the ATS platform, and addressing structural declines in the broadcast business through digital integration and local news offerings. The acquisition of Playback Rewards in Q1 2026 aims to complement the Adwake business. Management acknowledges ongoing risks from competitive dynamics, technological change, and potential need for external financing if liquidity or covenant compliance becomes strained.
As of March 31, 2026, Entravision reported cash and cash equivalents of $68.2M, up from $59.4M at December 31, 2025. Marketable securities totaled $3.0M, and restricted cash was $0.8M. Total debt stood at $162.2M, comprising $20.0M current and $142.2M long-term (net of unamortized issuance costs of $0.6M). Shareholders' equity increased to $65.0M from $55.4M, driven by net income of $12.4M partially offset by dividends. The company's credit facility requires quarterly amortization of $5.0M and compliance with a Total Net Leverage Ratio not exceeding 4.00x and an Interest Coverage Ratio of at least 2.00x; management believes it is in compliance.
The Notes disclose operating lease liabilities with total future minimum payments of $59.0M, including $10.7M for the remainder of 2026 and $18.9M beyond 2030. A significant lease abandonment loss of $25.2M was recorded in Q1 2025 related to the former Santa Monica headquarters. The landlord has initiated litigation seeking at least $31.5M; the company is defending. No other material purchase commitments or contractual obligations are disclosed.
Dividends: $0.05 per common share quarterly were declared, with $4.6M paid in Q1 2026. No share buybacks were reported. Debt reduction: $5.0M was repaid on the Term Loan A Facility. Capital expenditures totaled $3.9M, split between Media ($2.9M) and ATS ($1.0M). The company also invested $0.4M in a SAFE agreement with LATV Networks.
Revenue grew 114% to $197.0M, driven by the Advertising Technology & Services segment, which surged 204% to $154.6M (79% of total). The Media segment increased only 4% to $42.4M, but its operating loss deepened to -$5.2M from -$2.6M. Segment operating profit for ATS was $34.3M (22.2% margin), while Media posted a loss. Geographically, 60% of revenue came from outside the U.S. (primarily Asia and Europe), reflecting ATS's international footprint.
Overall, the Notes reveal a company transitioning toward higher-growth digital advertising technology while its legacy media operations continue to struggle. The balance sheet remains manageable with ample liquidity, though litigation and lease liabilities pose contingent risks.
Operating cash flow (CFO) of $21.8M contrasts sharply with net income of $12.4M, indicating solid cash generation despite non-cash charges (depreciation $3.0M, stock comp $3.3M) and a significant working capital inflow ($39.6M increase in payables/accruals). The large swing in accounts receivable (-$32.7M) was more than offset by payables, leading to positive CFO. Capex of $3.6M is moderate relative to CFO (16.7% intensity), suggesting manageable reinvestment. Free cash flow (CFO less capex) would be $18.2M, but is not explicitly stated in the filing. Capital returns consisted solely of dividends ($4.6M), which were fully covered by CFO. There were no share repurchases. Prior-year CFO was negative (-$15.2M) due to a $23.7M impairment and $25.2M loss on lease abandonment, making the year-over-year improvement of $37.0M noteworthy. Investing activities included $0.8M proceeds from marketable securities. Financing activities also included $5.0M debt repayment. Overall, cash flow quality improved significantly, driven by operational turnaround and favorable working capital changes.