0001628280-26-033532
SEC filingRevenue grew 9.6% driven by Digital Audio and trade revenue, but Adjusted EBITDA declined 11.4% due to higher operating expenses.
For the three months ended March 31, 2026, consolidated revenue increased 9.6% to $884.2 million, driven by growth in Digital Audio Group (18.0%) and non-cash trade revenue from strategic marketing initiatives. Operating income improved significantly to $1.5 million from a loss of $25.4 million, while net loss narrowed to $95.6 million from $280.9 million, largely due to a $135.1 million decrease in income tax expense. Adjusted EBITDA declined 11.4% to $92.6 million, as higher SG&A and direct operating expenses outpaced revenue growth. Free cash flow worsened to negative $114.5 million, primarily due to timing of receivable collections and interest payments.
The Multiplatform Group grew revenue 4.3% to $493.5 million, but Segment Adjusted EBITDA fell 32.9% to $47.0 million, with margin contracting from 14.8% to 9.5%. The decline was attributed to higher trade and barter expenses from strategic marketing initiatives. Digital Audio Group revenue rose 18.0% to $327.1 million, driven by podcast revenue (+26.9%) and digital advertising demand; Segment Adjusted EBITDA was nearly flat at $86.8 million as content costs and trade expenses increased. Audio & Media Services Group revenue increased 12.2% to $66.6 million, with Segment Adjusted EBITDA up 54.7% to $24.4 million, benefiting from modernization-driven cost reductions.
Management expects a challenging macroeconomic environment to persist, with advertiser uncertainty impacting broadcast radio. Strategic marketing initiatives (non-cash trade revenue) are expected to continue through Q2 2026 and then reduce significantly. A new cost reduction initiative announced in Q2 2026 is projected to generate an additional $50 million in annualized savings beginning in the second half of 2026, on top of previously announced $100 million in 2026 savings. The company believes its liquidity, including $494.6 million of total available liquidity as of March 31, 2026, is sufficient to fund operations for at least 12 months, though it is assessing refinancing options for its ABL Facility maturing in 2027. No specific revenue or EPS guidance was provided.
As of March 31, 2026, iHeartMedia held $135.1 million in cash and cash equivalents, a sharp decline from $270.9 million at December 31, 2025. Total liquidity, including the ABL Facility, stood at $494.6 million, with $359.5 million of borrowing base availability after $50.0 million in outstanding borrowings and $29.7 million in letters of credit. Total debt was $5.04 billion, essentially flat sequentially, with a weighted average interest rate of 9.0%. The company's stockholders' deficit widened to -$1.92 billion from -$1.83 billion, driven by a net loss of $95.6 million. Post-quarter, on April 28, 2026, iHeartCommunications borrowed an additional $75.0 million under the ABL Facility for short-term liquidity management, and on May 1, 2026, repaid $51.2 million of maturing debt (Term Loan due 2026, Incremental Term Loan due 2026, and 6.375% Senior Notes due 2026).
The Notes disclose $259.1 million in remaining performance obligations from contracts with customers with original expected durations greater than one year, substantially all to be recognized over the next five years. This figure excludes expected commissions from the media representation business, which are contingent on future sales. Additionally, the company had $9.8 million in outstanding surety bonds and $29.7 million in commercial standby letters of credit as of March 31, 2026, related to insurance, lease, and performance bonds. No other material purchase commitments or contractual obligations were detailed in the Notes.
No share repurchases or dividends were reported during the quarter. Capital expenditures totaled $21.9 million, representing 2.5% of revenue, up from $19.7 million in the prior-year quarter. Debt repayments were $16.9 million, primarily reflecting scheduled amortization on the Term Loan Facility due 2029. The company did not issue any new debt or equity during the period. Share-based compensation expense fell sharply to $0.4 million from $9.0 million in Q1 2025, driven by a decline in the company's stock price affecting cash-settled awards.
The company reports three segments: Multiplatform Group, Digital Audio Group, and Audio & Media Services Group. Segment Adjusted EBITDA, the primary profitability metric used by the CODM, declined 11.4% overall to $92.6 million. The Multiplatform Group saw a 32.9% drop in Segment Adjusted EBITDA to $47.0 million, despite 4.3% revenue growth, due to higher selling, general and administrative expenses. The Digital Audio Group's Segment Adjusted EBITDA was essentially flat at $86.8 million, with 18.0% revenue growth offset by increased direct operating and SG&A costs. The Audio & Media Services Group posted a 54.7% increase in Segment Adjusted EBITDA to $24.4 million, driven by 12.2% revenue growth and relatively stable expenses. No geographic mix data was provided in the segment footnote.
Operating cash flow (CFO) was -$92.5 million for Q1 2026, a significant deterioration from -$60.9 million in the prior year, despite a substantial improvement in net loss from -$280.9 million to -$95.6 million. The divergence between net income and CFO is primarily driven by large unfavorable working capital swings: a $72.5 million decrease in the net change in accounts receivable (from +$170.8M to +$98.4M), a $40.3 million increase in the net change in accrued expenses (from -$137.8M to -$97.5M), and a $42.3 million swing in accrued interest (from +$24.5M to -$17.8M). These were partially offset by a $50.9 million improvement in deferred taxes and a $14.2 million increase in barter and trade income.
Capital expenditures (capex) increased to $21.9 million from $19.7 million, representing a capex intensity of 23.7% of CFO (absolute basis). Free cash flow (not explicitly stated) would be negative given the negative CFO and capex outflows. No share repurchases or common dividends were paid; the only capital return was $0.9 million in dividends to noncontrolling interests. The company's cash balance declined by $135.9 million to $135.1 million, reflecting the negative cash generation across all three activities.