EVC 10-K & 10-Q changes, risk factors and insider trading
Entravision Communications Corp. · NYSE · Television Broadcasting Stations · CIK 1109116 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our use of certain third party platforms could be restricted.”
New heading “Our use of AI technologies may increase our cybersecurity risks and harm our business.”
New heading “Currently, our ATS business is dependent on one recently-acquired customer for a significant amount of our ATS revenue, as well as our consolidated revenue.”
New heading “Our single largest current customer is located in Hong Kong. We face certain risks doing business in Hong Kong and China, including the fact that our ability to enforce our rights in Hong Kong and China, should it be necessary, may be limited.”
New heading “Our ATS business is subject to various risks associated with the mobile gaming industry.”
New heading “Increased utilization and integration of AI technology into certain of our services and platforms, and issues raised by the use of, or failure to successfully use, AI in our services and platforms, may subject us to additional regulation with which failure to comply may adversely affect our business, reputation, or financial results.”
New heading “Development of new product offerings may subject us to new legislation and/or regulations, as well as industry standards, in respect of data privacy and consumer protection and any failure by us to comply with these regulations could result in loss of business, reputation and/or fines.”
Largest changes
“Development of new product offerings may subject us to new legislation and/or regulations, as well as industry standards, in respect of data privacy and consumer protection and any failure by us to comply with these regulations could result in loss of business, reputation and/or fines.”see in full comparison
“Increased utilization and integration of AI technology into certain of our services and platforms, and issues raised by the use of, or failure to successfully use, AI in our services and platforms, may subject us to additional regulation with which failure to comply may adversely affect our business, reputation, or financial results.”see in full comparison
“Moreover, laws or regulations that govern or restrict gaming activities could have a material adverse effect on our business and results of operations. The regulatory landscape governing the gaming industry is evolving and increasingly uncertain. In certain jurisdictions, we are required to register with gaming authorities to provide our services to advertisers in the gaming industry. Compliance with these varied and frequently changing regulations may impose additional costs and operational burdens. …”see in full comparison
“The United States has increased restrictions on certain personal sensitive data transfers to specific foreign countries through the Department of Justice’s final rule implementing Executive Order 14117. The final rule prohibits data transfer of certain sensitive information including personal identifiers and precise geolocation data over a certain bulk threshold to identified countries of concern. The rule also restricts certain agreements, including data brokerage agreements and vendor agreements involving such data and countries of concern. …”see in full comparison
“Our single largest current customer is located in Hong Kong. We face certain risks doing business in Hong Kong and China, including the fact that our ability to enforce our rights in Hong Kong and China, should it be necessary, may be limited.”see in full comparison
“The evolving regulatory landscape around AI and AI-enabled technologies may result in new or enhanced regulatory scrutiny, litigation, or other complications that could adversely affect our business, reputation, or financial results. AI technologies, including generative AI and the use of personally identifying information in machine learning models are subject to existing laws of various states and countries such as those regarding data privacy and consumer protection. …”see in full comparison
Full comparison: every changed paragraph (41)
Our emphasis on enhancing our local news programming as a means to increase advertising revenue may not produce the resultsintended we hope.results.
Our current network affiliation agreement, proxy agreement, and marketing and sales agreement with TelevisaUnivision are each due to expire by their respective terms on December 31, 2026. We intend to seek to extend these agreements or enter into new agreements with TelevisaUnivision; however, we cannot give any assurance as to when or whether TelevisaUnivision will respond to our requests, or whether any extension of the existing agreements or any new agreements will be on terms that are favorable to us. The termination of our network affiliation and other agreements with TelevisaUnivision would have a material adverse effect on our business, results of operations and financial condition.
Our use of certain third party platforms could be restricted.
In our ATS operations we sometimes purchase advertising for our customers through inventory on platforms owned by third party DSPs. If these DSPs prioritize their own demand over ours or were to restrict our access to their platforms, our ability to offer our advertising customers access to high quality users could be adversely affected which, in turn, could have an adverse effect on our business and results of operations.
Our use of AI technologies may increase our cybersecurity risks and harm our business.
We utilize AI technologies in our advertising solutions and in our business operations and may expand such use in the future. Use of AI technologies, and AI enabled third-party products and services, may create additional cybersecurity risks or increase cybersecurity risks, such as risks of security breaches and incidents. This could result in monetary liability and harm to our reputation and business.
Currently, our ATS business is dependent on one recently-acquired customer for a significant amount of our ATS revenue, as well as our consolidated revenue.
One recently-acquired customer in our ATS operations is our single largest customer. Unless and until we adequately diversify our customer base to mitigate this risk, the loss of this customer would have a material adverse impact on our results of operations and cash flow.
Our single largest current customer is located in Hong Kong. We face certain risks doing business in Hong Kong and China, including the fact that our ability to enforce our rights in Hong Kong and China, should it be necessary, may be limited.
One recently-acquired customer in our ATS operations is our single largest customer. Should that customer not pay us on time, or at all, or should there be other adverse matters between the two of us, our ability to pursue collection or our other rights successfully in Hong Kong or China could be limited due to, among other things, significant differences in substantive Chinese commercial and other laws compared to comparable laws in the United States, significant differences in procedural matters in the Chinese legal system compared to the U.S. legal system, significant costs in litigating in Hong Kong or China for a United States-based company, difficulties in participating meaningfully in adversarial proceedings due to language and cultural differences, uncertainties regarding predictable standards of liability, concerns about actual or perceived impartiality in the Chinese legal system, significant differences in enforcement of judgment practices between China and the United States, and uncertainties regarding the Chinese legal system in general, including but not limited to political overtones in many Chinese legal proceedings.
In addition, continuing tension between the U.S. and China may impact our business with this or other potential customers in China. The U.S. government has restricted the ability to send certain products and technology to China without an export license, which, in many cases, are subject to a policy of denial. While our current products and services are not restricted by these controls, such controls or future restrictions could impact our business in the future. It also is possible that the Chinese government could retaliate in ways that could impact our business.
Our ATS business is subject to various risks associated with the mobile gaming industry.
For the year ended December 31, 2025, the majority of our ATS revenue came from gaming clients, including our single largest ATS customer in Hong Kong. The success of our advertisers’ games plays a significant role in maintaining and increasing our revenue. Accordingly, we are susceptible to market conditions and risks associated with the mobile gaming industry, including the popularity, price and timing of release of games, changes in consumer demographics, the availability and popularity of other forms of entertainment and public tastes and preferences, and an evolving and uncertain regulatory landscape, all of which are difficult to predict and are beyond our control.
Our customers must also utilize effective marketing strategies for games; expand and enhance games after their initial release; attract experienced game designers, product managers and engineers; and adapt to an increasingly diverse set of new mobile devices as they emerge.
In addition, users may view games as a discretionary purchase. Subject to many factors beyond our control, including economic conditions, users may reduce their discretionary spending on games, and our customers, in turn, may see an adverse effect on their business, resulting in a reduction in their usage of, or spending on, our services. Based on our current reliance on this industry segment, that would have a material adverse effect on our business and results of operations.
Moreover, laws or regulations that govern or restrict gaming activities could have a material adverse effect on our business and results of operations. The regulatory landscape governing the gaming industry is evolving and increasingly uncertain. In certain jurisdictions, we are required to register with gaming authorities to provide our services to advertisers in the gaming industry. Compliance with these varied and frequently changing regulations may impose additional costs and operational burdens. If we fail to obtain or maintain necessary registrations, or if we or our advertisers violate applicable gaming regulations or advertising restrictions, we could face fines, penalties, or the loss of our ability to operate in specific markets. Furthermore, increased regulatory scrutiny or legislative restrictions on gaming activities could reduce user engagement or advertiser spend within this vertical, any of which could materially and adversely affect our business, financial condition, and results of operations.
We rely on various technologies in our business, including but not limited to our Smadex ad purchasing platform, and the aggregation and analysis of transaction data collected about online users in our advertising technology & services business. While much of this technology is proprietary, we have not determined the extent to which this technology is protectable. To the extent that such technology is not protectable, others could use the same, or similar, technology in competition with us. Such competition could have a material adverse effect on our business, revenue and results of operations.
The 2023Amended Credit Agreement contains various covenants that limit management’s discretion in the operation of our business.
The 2023Amended Credit Agreement contains certain covenants and ratios that limit the ability of us to, among other things:
If we fail to comply with any of the covenants or ratios under the 2023Amended Credit Agreement, or if we are unable to meet our debt service obligations, our lenders could elect to declare all amounts borrowed to be immediately due and payable, together with accrued and unpaid interest; and/or terminate their commitments, if any, to make further extensions of credit. Any such action by our lenders would have a material adverse effect on our overall business and financial condition.
TheOur failure to comply with the financial covenants under the 2023Amended Credit Agreement could have a material adverse effect on our operations and financial condition.
The 2023Amended Credit Agreement contains various financial covenants. Our failure to meet these covenants would constitute an event of default under the 2023 Credit Agreement.thereunder.
As a result of the sale of the EGP business, consolidated EBITDA (as defined in the 2023Amended Credit Agreement) has been significantly reduced. Due to this and other risks and uncertainties regarding forecasts and projections about our operations, industry, financial condition, performance, operating results and liquidity, we may not maintain compliance with the financial covenants in the 2023Amended Credit Agreement.
If an event of default were to occur and if we are unable to obtain waivers or amendments to the 2023Amended Credit Agreement, our lenders, among other actions, could elect to declare all amounts borrowed to be immediately due and payable, together with accrued and unpaid interest; and/or terminate their commitments, if any, to make further extensions of credit. Additionally, if an event of default were to occur, our lenders would have the right to proceed against the collateral granted to them to secure that debt, which consists of substantially all of our assets.
If the debt under the 2023Amended Credit Agreement were to be accelerated, among other things we could seek to mitigate the default by refinancing our debt or raising additional capital by issuing equity or debt. There is no guarantee that any such refinancing or capital would be available to us on favorable terms or at all. The failure to mitigate a default under the 2023Amended Credit Agreement would have a material adverse effect on our operations and financial condition.
Our advertising revenue can vary substantially from period to period based on many factors beyond our control, including but not limited to those discussed herein. This volatility affects our operating results and may reduce our ability to repay indebtedness or comply with any of the covenants or ratios under the 2023Amended Credit Agreement or reduce the market value of our securities.
We rely on sales of advertising time for most of our revenues and, as a result, our operating results are sensitive to the amount of advertising revenue we generate. Changes in the way we do business with various media companies could materially adversely affect our revenues and results of operations, alter or result in the termination of our relationship with such media company and/or result in our withdrawal from a given geographic market. If we generate less revenue, it may be more difficult for us to repay our indebtedness or comply with any of the covenants or ratios under the 2023Amended Credit Agreement, and the value of our business may decline.
We require significant capital for general working capital and debt service needs. Our ability to raise additional funds is limited by the terms of the 2023Amended Credit Agreement. Our failure to obtain any required new financing, if needed, could have a material adverse effect on our results of operations and financial condition. Additionally, if our then-current liquidity is insufficient to fund future activities, or we do not remain in compliance with our financial covenants under the 2023Amended Credit Agreement, we may be required to seek additional equity or debt financing in the future to satisfy capital requirements in response to these adverse developments or other changes in our circumstance or unforeseen events or conditions. In the event that additional financing is required from third party sources, we may not be able to raise it on favorable terms or at all. In such event, we may have to reduce or curtail certain existing operations. The failure to obtain any required capital could have a material adverse effect on our business and financial condition.
Our consolidated financial statements of our operations outside the United States are translated into U.S. Dollars at the average exchange rates in each applicable period. To the extent that the U.S. Dollar strengthens against foreign currencies, the translation of these foreign currencies denominated transactions will result in reduced revenue and operating expenses for our international operations. Similarly, to the extent that the U.S. Dollar weakens against foreign currencies, the translation of these foreign currency denominated transactions will result in increased revenue and operating expenses for our international operations. We are also exposed to foreign exchange rate fluctuations as we convert the financial statements of our foreign operations into U.S. Dollars in consolidation. In addition, we may have certain assets and liabilities that are denominated in currencies other than the relevant entity’s functional currency. Changes in the functional currency value of these assets and liabilities create fluctuations that will lead to a transaction gain or loss. Moreover, some of the countries in which our advertising technology & services business operates, including Mexico, Argentina and Brazil, have experienced significant and sometimes sudden devaluations of their currency over time, which could magnify these fluctuations, should they happen again in the future.
Our television and radio operations depend upon maintaining our broadcast licenses, which are issued by the FCC. The FCC has the authority to renew licenses, not renew them, renew them only with significant qualifications, including renewals for less than a full term or revoke them. Although a substantial majority of our radio station licenses and many of our television station licenses have been renewed for their full terms in the ordinary course, we cannot guarantee that our pending or future renewal applications will be approved, or that the renewals will not include conditions or qualifications that could materially and adversely affect our operations. If we fail to renew any of our stations’ main licenses, or if we renew our licenses with substantial conditions or modifications (including renewing one or more of our licenses for less than the standard term of eight years), it could have a material adverse effect on our business, results of operations and financial condition. In addition, ourthe 2023Amended Credit Agreement requires us to maintain our FCC licenses, and if the FCC were to revoke or place significant limitations on any of our material licenses, our lenders could declare us in default under the 2023Amended Credit Agreement, and any cancellation or acceleration thereof could have a material adverse effect on our financial condition.
Our television and radio operations are highly regulated by the FCC. We must comply with extensive current and any future laws and regulations, including but not limited to those concerning displacement of low-power stations, elimination or limitation on our MVPD carriage rights, ownership rules, broadcasting to serve the “public interest”, sponsorship identification, regulation of so-called “indecent” contentcontent, children's television, and equal opportunity in hiring requirements. We cannot predict what changes, if any, might be adopted, to existing regulations or what other matters might be considered by the FCC in the future, nor can we judge in advance what impact, if any, the implementation of any particular proposal or our compliance might have on our business. Our inability or failure to comply with all current and future regulatory requirements that apply to our operations could have a material adverse impact, among other things, on our ability to build a stronger or more efficient presence in select markets, our competitive position in certain markets, our ratings, our advertising rates and our results of operations.
U.S. and foreign governments have enacted, considered or are currently considering legislation or regulations that relate to digital advertising activities and the use of consumer data in digital advertising. Several states have enacted and continue to strengthen laws whichthat affect the collection, use, retention, protection, disclosure, transfer and other processing of personal data, particularly in relation to digital advertising services, which can limit the data available for use in Smadex and Adwake.Adwake services.
Privacy legislation in other jurisdictions also continues to evolve. Such legislation will require additional compliance measures, such as periodic risk assessments and implementation of cybersecurity controls, which can impose additional costs and expose us to increased regulatory scrutiny, which may increase the cost and complexity of delivering our services. We may also be required to change our current practices regarding the volume of personal data that can be collected and used for our businessadvertising purposes, including by our customers.
Our ability to optimize the delivery of digital advertisements depends on our ability to successfully leverage data, including data that we collect from advertisers, publishers and third parties, as well as our own operating history. Using cookies and non-cookie based mechanisms, we collect information about the interactions of online users with advertisers and publishers’ digital properties, including, for example, information about the placement of advertisements and users’ interactions with websites or advertisements. The handling and protection of personal information, including but not limited to PII, is regulated in many jurisdictions where we operate, including but not limited to the Delete ActCCPA in California, similar state privacy laws throughout the United States, and the GDPR in the E.U.E.U., and China's Personal Information Protection Law and Data Security Law. We are also subject to rapidly changing industry standards, consumer preferences, changes in technology, including changes in web browser technology, Global Privacy Control signals, increased visibility of consent or “do not track” mechanisms or “ad-blocking” software, and restrictions imposed by large software companies and platform providers, web browser developers or other software developers.
The United States has increased restrictions on certain personal sensitive data transfers to specific foreign countries through the Department of Justice’s final rule implementing Executive Order 14117. The final rule prohibits data transfer of certain sensitive information including personal identifiers and precise geolocation data over a certain bulk threshold to identified countries of concern. The rule also restricts certain agreements, including data brokerage agreements and vendor agreements involving such data and countries of concern. Violations of the rule may be punishable by criminal and/or civil sanctions and may result in exclusion from participation in federal and state programs. These data transfer restrictions may create operational challenges and legal risks for our business, particularly with regard to China.
Increased utilization and integration of AI technology into certain of our services and platforms, and issues raised by the use of, or failure to successfully use, AI in our services and platforms, may subject us to additional regulation with which failure to comply may adversely affect our business, reputation, or financial results.
The evolving regulatory landscape around AI and AI-enabled technologies may result in new or enhanced regulatory scrutiny, litigation, or other complications that could adversely affect our business, reputation, or financial results. AI technologies, including generative AI and the use of personally identifying information in machine learning models are subject to existing laws of various states and countries such as those regarding data privacy and consumer protection. In addition to existing laws, several states and jurisdictions have enacted or are in the processing of enacting specific legislation regulating the use of AI technologies.
In the EU, the EU AI Act subjects certain AI technologies to compliance obligations, including governance and risk management processes, transparency, conformity and risk assessment, documentation requirements, monitoring and human oversight requirements. Certain provisions of the EU AI Act could require us to alter or restrict our use of AI both in our services and platforms. In addition, certain U.S. states have proposed, enacted, or are considering laws governing the development and use of AI technologies, such as the Colorado Artificial Intelligence Act, and the CCPA regulations on automated decision-making technology. State and foreign AI regulatory frameworks continue to develop and frequently have extraterritorial reach, and, as a result may apply to our AI enabled services and platforms regardless of where they are developed or deployed.
The liability associated with generative AI technologies has not been fully addressed by U.S. courts or other federal or state laws or regulations. The use of generative AI technologies can expose us to intellectual property risks, including rights of ownership and copyright infringement, which may expose us to reputational harm, competitive harm, and/or legal liability.
Development of new product offerings may subject us to new legislation and/or regulations, as well as industry standards, in respect of data privacy and consumer protection and any failure by us to comply with these regulations could result in loss of business, reputation and/or fines.
The offering of a new offerwall product may be subject to different state and foreign regulatory requirements, including consumer protection and data privacy laws. For example, certain offerings may require compliance with financial incentive regulations under California’s CCPA and Colorado’s Privacy Act. Consumer protection laws may subject us to liability if we fail to administer the offerwall in a compliant manner.
Management's Discussion & Analysis (MD&A)
Removed heading “Consolidated EBITDA”
Removed heading “Share Repurchase Program”
Removed heading “Contingent Consideration”
Largest changes
“We use the term “consolidated EBITDA” because that term is defined in our 2023 Credit Agreement. Under the terms of our 2023 Credit Agreement, consolidated EBITDA is a measure that governs several critical aspects of our 2023 Credit Facility, including, among other things, financial covenants with which we must comply and financial ratios which we must maintain in order to borrow funds needed for the operation of our business and with respect to the interest rates that we pay on our 2023 Credit Facility. …”see in full comparison
“The 2023 Credit Agreement contains various financial covenants (see Note 10 to Notes to Consolidated Financial Statements). As of December 31, 2024, we were in compliance with the financial covenants in the 2023 Credit Agreement. Compliance with these financial covenants is measured quarterly and our failure to meet the covenant requirements would constitute an event of default. …”see in full comparison
“Based on management’s current financial projections and our ability to prepay our debt, management believes that we will maintain compliance with our financial covenants under the 2023 Credit Agreement. Given the inherent uncertainty in financial projections management has identified additional controllable cost reduction actions that can be taken, if necessary, to maintain sufficient liquidity to fund its business activities and to maintain compliance with its debt covenants. …”see in full comparison
“As a result of the sale of the EGP business, our consolidated EBITDA (as defined in the 2023 Credit Agreement and as discussed in more detail below under “Consolidated EBITDA”) has been, and is expected to remain, significantly reduced and, in response, we have taken action to reduce certain expenses to mitigate this fact. …”see in full comparison
“Impairment. For the year ended December 31, 2024, we incurred an impairment charge of $61.2 million, of which $43.3 million was related to goodwill impairment and $17.9 million was related to certain FCC licenses in our media segment. For the year ended December 31, 2023, we incurred an impairment charge of $13.3 million, of which $12.3 million related to certain FCC licenses in our media segment, and an impairment charge of $1.0 million, due to a termination of an agreement with a media company for which we acted as commercial partner in our then digital segment.”see in full comparison
“Impairment. For the year ended December 31, 2025, we incurred impairment charges of $55.4 million, of which $29.4 million was primarily related to assets held for sale, and $26.0 million was related to certain FCC licenses in our media segment. For the year ended December 31, 2024, we incurred impairment charges of $61.2 million, of which $43.3 million was related to goodwill impairment and $17.9 million was related to certain FCC licenses in our media segment.”see in full comparison
Full comparison: every changed paragraph (96)
We are a global media and advertising technology company. We have organized our operations into two reportable segments, media and ATS, and we manage and report our financial results through these two operating segments.
EntravisionOur Media business owns and operates one of the largest groups of Spanish languageSpanish-language television and radio stations in the United States. Our mission is to serve our Latino audience as a trusted provider of useful news, informationinformation, and entertainmententertainment. and toWe serve our advertisers by providing multi-channel marketing capabilities toacross engagebroadcast ourand audience.digital media.
Our ATS business empowers advertisers, primarily mobile app developers, to grow their businesses globally. We provide programmatic advertising solutions through two brands. Smadex is our demand-side platform, which uses proprietary AI to automate media buying. Adwake is our performance-based digital marketing agency.
Entravision also owns and operates a smaller group of television stations that broadcast English language programming and has 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.
In 20242024, we discontinued and divested a significant portion of Entravision’sour operations, which largelyconsisted consistedprimarily of a collection ofseveral acquisitions that had been completed prior to 2024.2024, and which operations comprised the majority of our former digital segment.
See "Item 1. Business" for andetailed overviewinformation ofabout our business, the industry in which we operate, certain industry trends and important recent business developments.
During the year ended December 31, 2025, our revenue grew by double digits, driven primarily by revenue growth of 90% in our advertising technology & services segment, partially offset by a decrease in revenue in our media segment compared to the year ended December 31, 2024. In addition, during the year ended December 31, 2025:
investments in the AI capabilities of our platform and increased sales capacity enabled ATS to increase monthly active advertisers and revenue per monthly active advertiser.
amended our original 2023 Credit Agreement, or the original 2023 Credit Agreement, to provide more financial flexibility and accelerate debt reduction.
we continued to reduce our debt by making a voluntary prepayment of $10 million and scheduled amortization payments of $10 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 Consolidated Financial Statements.
Our consolidated net revenue for the year ended December 31, 2024 increased 23% over the prior year period.
We achieved record political advertising revenue in 2024. In fact, 2024 marked the fifth election cycle in a row where we benefited from increased political advertising revenue compared to the previous election cycle.
Following a decision by Meta to terminate its ASP program globally, including us, and an evaluation of our business in light of that decision, we sold our EGP business in a series of transactions in the second quarter of 2024. The sale of our EGP business has allowed us to focus our operations on the products and services we sell instead of the type of advertising medium in which we sell them, which had been our historic operational approach. We have realigned our operational and management structure accordingly.
In 2024 we significantly enhanced our local news programming. We also made substantial investments in our news operations to capitalize on advertising inventory during our newscasts. We added early morning and midday news in all of our markets, whereas previously we broadcast early evening and late-night news. As a result of implementing this strategy, we added 107 new weekly newscasts on our TelevisaUnivision- affiliated television stations, delivering more than 400 hours of weekly news coverage across 415 newscasts. We now provide morning, midday, early evening and late news in all of our markets; and In late 2024 we increased the size of our media sales team and it is our current intention that this will continue in 2025. We also intend to focus on enhancements to our operations and sales support, training and leadership functions.
Acquisitions and Dispositions
See NotesNote 3 and 4 to Notes to Consolidated Financial Statements for details.
Net Revenue. Net revenue increased to $447.6 million for the year ended December 31, 2025 from $364.9 million for the year ended December 31, 2024 from $297.0 million for the year ended December 31, 2023.2024. This increase was primarily attributabledue to an increase of $25.8$128.0 million in advertising revenue from our media segment, and an increase of $42.1 million in advertisingnet revenue from our advertising technology & services segment, partially offset by a decrease of $45.4 million in net revenue from our media segment.
Cost of revenue. Cost of revenue increased to $184.1 million for the year ended December 31, 2025 from $102.2 million for the year ended December 31, 2024 from $77.2 million for the year ended December 31, 2023.2024. This increase was primarily attributabledue to an increase of $5.8$1.5 million in cost of revenue from our media segment, and an increase of $19.2$80.4 million in cost of revenue from our advertising technology & services segment.
Direct Operating Expenses. Direct operating expenses increased to $136.3 million for the year ended December 31, 2024 from $113.2 million for the year ended December 31, 2023. This increase was primarily attributable to an increase of $14.1 million in direct operating expenses in our media segment and an increase of $9.0 million in direct operating expenses in our advertising technology & services segment.
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $62.9 million for the year ended December 31, 2024 from $49.8 million for the year ended December 31, 2023. This increase was primarily attributable to an increase of $6.8 million in selling, general and administrative expenses in our media segment and an increase of $6.3 million in selling, general and administrative expenses in our advertising technology & services segment.
Depreciation and Amortization. Depreciation and amortization increased to $16.8 million for the year ended December 31, 2024 from $16.4 million for the year ended December 31, 2023. This increase was primarily attributable to an increase of $0.9 million in depreciation and amortization in our media segment, partially offset by a decrease of $0.5 million in depreciation and amortization in our advertising technology & services segment.
Corporate Expenses. Effective July 1, 2024, with the realignment of our operations and reassignment of certain responsibilities, certain costs that were previously included as corporate expenses, primarily salaries, are now included in direct operating expenses and in selling, general and administrative expenses.
CorporateDirect Operating Expenses. Direct operating expenses decreasedincreased to $37.5$156.8 million for the year ended December 31, 20242025 from $50.3$136.3 million for the year ended December 31, 2023.2024. This decreaseincrease was primarily due to aan decreaseincrease of $1.9$21.9 million in salariesdirect andoperating bonusexpenses expense,in our advertising technology & services segment, partially offset by a decrease of $3.9$1.4 million in non-cashdirect stock-basedoperating compensation, a decrease of $3.2 millionexpenses in professional services expense, and a decrease of $4.8 million in corporate expenses due to the realignment of our operationsmedia from three to two segments, as noted above. This decrease was partially offset by an increase of $1.1 million in severance expense.segment.
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $66.8 million for the year ended December 31, 2025 from $62.9 million for the year ended December 31, 2024. This increase was primarily due to an increase of $1.2 million in selling, general and administrative expenses in our media segment, and an increase of $2.7 million in selling, general and administrative expenses in our advertising technology & services segment.
Depreciation and Amortization. Depreciation and amortization decreased to $12.3 million for the year ended December 31, 2025 from $16.8 million for the year ended December 31, 2024, primarily due to fully depreciated assets and fully amortized intangible assets.
Corporate Expenses. Corporate expenses decreased to $27.0 million for the year ended December 31, 2025 from $37.5 million for the year ended December 31, 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 $2.9 million in non-cash stock-based compensation, a decrease of $1.1 million in severance expense, a decrease of $1.3 million in audit fees and other professional service, a decrease of $0.7 million in rent expense, a decrease of $0.3 million in cloud expense, and a decrease of $1.5 million in corporate expenses due to the realignment of our operations as noted above.
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 $0.6 million for the year ended December 31, 2024, and an expense of $0.8 million for the year ended December 31, 2023.2024.
Impairment. For the year ended December 31, 2025, we incurred impairment charges of $55.4 million, of which $29.4 million was primarily related to assets held for sale, and $26.0 million was related to certain FCC licenses in our media segment. For the year ended December 31, 2024, we incurred impairment charges of $61.2 million, of which $43.3 million was related to goodwill impairment and $17.9 million was related to certain FCC licenses in our media segment.
Loss on lease abandonment. During the first quarter of 2025, we incurred a loss on lease abandonment of $25.2 million related to our previous Santa Monica lease. See Note 7 to Notes to Consolidated Financial Statements.
Restructuring costs. During the third quarter of 2025 our management began to implement the Plan, which is intended to support revenue growth and reduce expenses, primarily in our media operations. As a result, we recorded $2.8 million in restructuring costs for the year ended December 31, 2025. See Note 2 to Notes to Consolidated Financial Statements.
Impairment. For the year ended December 31, 2024, we incurred an impairment charge of $61.2 million, of which $43.3 million was related to goodwill impairment and $17.9 million was related to certain FCC licenses in our media segment. For the year ended December 31, 2023, we incurred an impairment charge of $13.3 million, of which $12.3 million related to certain FCC licenses in our media segment, and an impairment charge of $1.0 million, due to a termination of an agreement with a media company for which we acted as commercial partner in our then digital segment.
Other operating (gain) loss. We had other operating loss of $0.6 million for the year ended December 31, 2023, primarily due to the sale of certain entities doing business as 365 Digital in our then digital segment, partially offset by gain on assets previously held for sale in our then audio segment.
Interest Expense, net. Interest expense, net increaseddecreased to $12.8 million for the year ended December 31, 2025 from $14.0 million for the year ended December 31, 2024 from $13.4 million for the year ended December 31, 2023.2024. This increasedecrease was primarily due to lower interest income, partially offset by a lower interest rate on our debt and a lower principal balance due to prepayments totaling $20.0 million, which were made in the first half of 2024.balance.
Gain (loss) on debt extinguishment. We recorded a loss on debt extinguishment of $0.2 million for the year ended December 31, 2025 due to a prepayment of $10.0 million of our Credit Facility made in the second quarter of 2025 and the amendment of the Original 2023 Credit Agreement in the third quarter of 2025. We recorded a loss on debt extinguishment of $0.1 million for the year ended December 31, 2024 due to prepayments totaling $20.0 million under our Credit Facility.
Gain (loss) on debt extinguishment. We recorded a loss on debt extinguishment of $0.1 million for the year ended December 31, 2024 due to prepayments totaling $20.0 million under our 2023 Credit Facility. We recorded a loss on debt extinguishment of $1.6 million for the year ended December 31, 2023 due to the refinancing of our previous credit facility with our 2023 Credit Facility.
Realized gain (loss) on marketable securities. We recorded a de minimis amount of realized gain on marketable securities for the year ended December 31, 2025. We recorded a realized loss on marketable securities of $0.1 million for each of the yearsyear ended December 31, 2024 and 2023.2024.
Income Tax Expense or Benefit. Income tax benefit for the year ended December 31, 2025 was $18.0 million. The effective tax rate for the year ended December 31, 2025 was different from our statutory rate due to foreign and state taxes, non-deductible executive compensation, differences in tax rates in foreign jurisdictions, and return to provision adjustments from certain foreign jurisdictions. Income tax expense for the year ended December 31, 2024 was $4.1 million. The effective tax rate for the year ended December 31, 2024 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non deductible executive compensation, changes in the fair value of the contingent consideration liability, capital loss on disposal of subsidiaries, changes in uncertain tax benefits, worthless stock deduction, and goodwill impairment. Income tax benefit for the year ended December 31, 2023 was $8.4 million. The effective tax rate for the year ended December 31, 2023 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non-deductible executive compensation, changes in the fair value of the contingent consideration liability and worthless stock deduction.
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. The OECD, many other member states and various other governments have adopted, or are in the process of adopting, Pillar 2 which calls for a global minimum tax of 15% to be effective for tax years beginning in 2024. The OECD guidelines published to date include transition and safe harbor rules around the implementation of the Pillar 22, global minimum tax. On January 5, 2026, the OECD released the “Side-by-Side” (SbS) Safe Harbor guidance, effective January 1, 2026. This guidance provides a framework for coordinating the U.S. tax system with Pillar 2 rules, potentially limiting top-up tax liabilities for qualifying periods. The Company isincluded monitoringthe developmentstax impact of Pillar 2 in the income tax for the year ended December 31, 2025, based on the rules effective for that period, and evaluatingcontinues to evaluate the impactsimpact theseof newthe rulesSide-by-Side will haveguidance on itsfuture tax rate, including eligibility to qualify for these safe harbor rules.periods.
On July 4, 2025, the President signed into law the One Big Beautiful Bill Act, which made certain changes to the current tax law and extended certain other tax provisions. We have analyzed the impact of these changes, noting that the main tax law changes that impacted us in 2025 are related to depreciation and Section 163(j) interest expense limitation. We have not taken bonus depreciation in 2025 since given our tax position, the impact on this is nil. Regarding the Section 163(j) limitation, we believe that this will result in less taxable income to us.
In our former EGP business, we acted as an intermediary between primarily global media companies and advertisers, which consisted of either the enterprise or its ad agency running the advertisement. Our customers were both these primarily global media companies and advertisers. On March 4, 2024, we received a communication from Meta that it intended to wind down its ASP program globally and end its relationship with all of its ASPs, including us, by July 1, 2024. As a result of this communication from Meta, our CEO, who is also our CODM, led a thorough review of our operations, cost structure, digital strategy and organization of our business. 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. The transaction was completed on June 28, 2024. The remaining parts of our EGP business, Jack of Digital and Adsmurai, were each sold back to their respective founders in separate transactions during the second quarter of 2024. See Note 2 to Notes to Consolidated Financial Statements.
Prior to the sale of the EGP business, for financial reporting purposes we reported in three segments – digital, television and audio, based on the type of medium in which we sold advertising. Our digital segment was the largest segment in terms of revenue and our EGP business was the largest component of our digital segment. The sale of the EGP business has allowed us to focus our operations on the products and services we sell instead of the type of advertising medium in which we sell them, which had been our historic operational approach. As a result of the sale of our EGP business, effective July 1, 2024, we have realigned our operating segments into two segments – media and advertising technology & servicesATS – consistent with our current operational and management structure, as well as the basis that is now used for internal management reporting and how our CEO evaluates our business. 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/or operate 49one primaryof the largest groups of Spanish-language television and radio stations in the United States. Our assets include 47 television stations and 44 radio stations (37 FM and 7 AM),. reachingThese andstations engagingare Latinosconcentrated in 13 of the 20 highest-density Latino markets in the United States. OurWe television operations compriseare the largest affiliate group of both the top-rankedSpanish-language Univision television network and TelevisaUnivision’s UniMás network,networks, withwhich TelevisaUnivision-affiliatedare stationsowned inby 15 of the nation’s top 50 U.S. Latino markets.TelevisaUnivision. We own and operate one of the largest groups of primarily Spanish-language radio stations in the United States. Wealso provide digital marketing solutionsservices infor allbusinesses oftargeting theLatino U.S. markets where we have broadcast operations.consumers.
Our ATS segment provides global performance marketing solutions primarily to mobile app developers. We operate this segment through two distinct business units: Smadex, our programmatic advertising platform, and Adwake, our performance-based marketing agency.
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. Net revenue in our media segment increaseddecreased to $176.7 million for the year ended December 31, 2025 from $222.1 million for the year ended December 31, 2024 from $196.3 million for the year ended December 31, 2023.2024. This increasedecrease was primarily due to ana increasedecrease of $18.8$39.8 million in broadcast advertising revenue, drivena by political advertising revenue, an increasedecrease of $8.7$4.4 million in digitalretransmission advertisingconsent revenue, a decrease of $0.7 million in spectrum usage rights revenue, and ana increasedecrease of $2.2$2.0 million in other revenue, partially offset by aan decreaseincrease of $1.3$1.6 million in spectrumdigital usage rights revenue and a decrease of $2.7 million in retransmission consentadvertising revenue.
In general, mostthe traditional broadcast industry is continuing to experience dramatic transformation. Most of our mediabroadcast operationsstations face declining audiences, which we believe is presentthe situation across the 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 view,consume, including streaming and social media. We anticipate that these changes in viewer habits and preferences will persist at least for the foreseeable future and possibly permanently. Additionally, we have previously noted a trend for advertising to move increasingly from traditional media, such as television and radio, to new media, such as digital media, and we expect this trend will also continue.continue at least for the foreseeable future and possibly permanently. While we believe that none of these new technologies and services can completely replace local broadcast stations due to the element of localism that traditional broadcasting offers, the challenges we face in our broadcast operations from new technologies and services will persist and continue to requirepresent attentionsignificant challenges, requiring attention, adaptability and action from management. We must continue to remain vigilant to meetaddress these changes, including the need to further adjust our business strategies accordingly. Among the steps we have taken so far has been an emphasis on increasing local news and digital offerings, and their integration with our broadcast offerings. No assurances can be given that suchthese or other strategies will be successful.successful in meeting the changes and challenges we face.
Cost of revenue. Cost of revenue in our media segment increased to $18.2 million for the year ended December 31, 2025 from $16.7 million for the year ended December 31, 2024 from $11.0 million for the year ended December 31, 2023,2024, primarily due to the increase in costs associated with the increase in digital advertising revenue.revenue and a decrease in gross margins.
Direct operating expenses. Direct operating expenses in our media segment increased to $111.0 million for the year ended December 31, 2024 from $96.9 million for the year ended December 31, 2023, primarily due to an increase of $6.9 million in salaries, primarily associated with the expansion of our news programming in anticipation of this year's election cycle, an increase of $3.7 million in other costs associated with the increase in revenue, an increase of $1.7 million in corporate expenses due to the realignment of our operations as noted above, an increase of $0.8 million in ratings services, and an increase of $0.6 million for repairs and maintenance. The remaining increase was due to other items which were individually immaterial.
Selling,Direct general and administrativeoperating expenses. Selling,Direct general and administrativeoperating expenses in our media segment increaseddecreased to $42.8$109.6 million for the year ended December 31, 20242025 from $36.0$111.0 million for the year ended December 31, 2023,2024, primarily due to a decrease of $2.6 million in expenses associated with the decrease in revenue and a decrease of $1.2 million in non-cash stock-based compensation, partially offset by an increase of $4.3$1.8 million in salaries and other employee benefits, andan increase of $0.2 million in ratings services, an increase of $3.1$0.2 million in corporate expenses due to the realignment of our operations as noted above.above, Theand an increase wasof offset$0.2 bymillion in other items which were individually immaterial.
Net Revenue. Net revenue in our advertising technology & services segment increased to $142.9 million for the year ended December 31, 2024 from $100.8 million for the year ended December 31, 2023. The increase was primarily due to increases in advertising revenue from Smadex and Adwake.
Cost of revenue. Cost of revenue in our advertising technology & services segment increased to $85.5 million for the year ended December 31, 2024 from $66.3 million for the year ended December 31, 2023, primarily due to 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. As a result, advertisers are demanding more efficiency and lower cost from intermediaries like us. In response to this trend, we have been offering our programmatic purchasing platform, Smadex, to advertisers. The digital advertising industry remains dynamic and is continuing to undergo rapid changes in technology, customer expectation and competition. We expect this trend to continue and possibly accelerate. We must continue to remain vigilant to meet these dynamic and rapid changes, including the need to further adjust our business strategies accordingly. No assurances can be given that such strategies will be successful.
Direct Operating Expenses. Direct operating expenses in our advertising technology & services segment increased to $25.3 million for the year ended December 31, 2024 from $16.3 million for the year ended December 31, 2023, primarily due to an increase of $5.9 million in cloud infrastructure expenses and an increase of $3.1 million in salaries.
Selling, Generalgeneral and Administrativeadministrative Expenses.expenses. Selling, general and administrative expenses in our advertising technology & servicesmedia segment increased to $20.1$44.0 million for the year ended December 31, 2025 from $42.8 million for the year ended December 31, 2024, from $13.8 million for the year ended December 31, 2023, primarily due to an increase of $3.8$1.0 million in salaries,salaries severanceand 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 partially offset by a decrease in rent expense of $1.3 million, cloud software expense of $0.8 million, and rent expense $0.5$1.0 million.
Net Revenue. Net revenue in our advertising technology & services segment increased to $270.9 million for the year ended December 31, 2025 from $142.9 million for the year ended December 31, 2024. The increase was primarily due to increase in advertising revenue from Smadex, including a large customer that we acquired in the second half of 2025; the results of investments we made 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 $165.9 million for the year ended December 31, 2025 from $85.5 million for the year ended December 31, 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 ATS operations whereby advertisers are demanding more efficiency and lower cost from intermediaries like us. In response to this general trend, we have been offering our programmatic purchasing platform, Smadex, to advertisers, which lowers cost to our advertising customers. Among other things, this has led to lower margins in the products and services we sell, which we anticipate will persist for at least the foreseeable future and possibly permanently. The digital advertising industry as a whole remains dynamic and continues to undergo rapid changes in technology, customer expectation and competition. We expect this trend to continue and possibly accelerate. We must continue to address these dynamic and rapid changes, including the need to further adjust our business strategies, make appropriate investments in our technology and offer new products and services as appropriate. No assurances can be given that the strategies we have pursued and investments we have made, and those we may pursue or make in the future will be successful.
Direct Operating Expenses. Direct operating expenses in our advertising technology & services segment increased to $47.2 million for the year ended December 31, 2025 from $25.3 million for the year ended December 31, 2024, primarily due to an increase of $17.0 million in cloud infrastructure expenses, an increase of $4.5 million in salaries and bonus expense, and an increase of $0.4 million in other items which were individually immaterial.
Selling, General and Administrative Expenses. Selling, general and administrative expenses in our advertising technology & services segment increased to $22.8 million for the year ended December 31, 2025, from $20.1 million for the year ended December 31, 2024, primarily due to salaries expense.
What changed in the latest 10-Q
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Management's Discussion & Analysis (MD&A)
Largest changes
Net cash flow provided by operating activities wassee in full comparison$21.8$45.6 million for thethree-monthsix-month period endedMarchJune31,30, 2026, compared to net cash flow used in operating activities of$15.2$7.4 million for thethree-monthsix-month period endedMarchJune31,30, 2025. The change in cash flow from operating activities was primarily due to an increase in net income after adjusting for non-cash items. Significant non-cash items in the six-month period ended June 30, 2026 included depreciation and amortization expense of $6.6 million, and non-cash stock based compensation of $7.6 million. 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. The increase in cash flow from operating activities was also due to an increase in net changes in our working capital ofpositivenegative$2.4$1.1 million for thethree-monthsix-month period endedMarchJune31,30, 2026 compared to negative$20.9$10.5 million for thethree-monthsix-month period endedMarchJune31,30, 2025. The net changes in working capital were primarily due to the timing of cash payments to publishers and collections from customers.The increase in cash flow from operating activities was also due to an increase in net income after adjusting for non-cash items. Significant non-cash items in the three-month period ended March 31, 2026 included depreciation and amortization expense of $3.0 million, and non-cash stock based compensation of $3.3 million. Significant non-cash items in the three-month period ended March 31, 2025 included impairment charges of $23.7 million, loss on lease abandonment charges of $25.2 million, depreciation and amortization expense of $3.5 million, deferred income taxes of $1.5 million, and non-cash stock based compensation of $2.6 million.We expect to have positive cash flow from operating activities for the full year 2026.
“We have previously noted a trend on a global basis in our ATS operations whereby advertisers are demanding more efficiency and lower cost from intermediaries like us. In response to this general trend, we have been offering our programmatic purchasing platform, Smadex, to advertisers, which lowers cost to our advertising customers. Among other things, this has led to lower margins in the products and services we sell, which we anticipate will persist for at least the foreseeable future and possibly permanently. …”see in full comparison
“We have previously noted a trend on a global basis in our ATS operations whereby advertisers are demanding more efficiency and lower cost from intermediaries like us. In response to this trend, we have been offering our programmatic purchasing platform, Smadex, to advertisers, which lowers cost to our advertising customers. Among other things, this has led to lower margins in the products and services we sell, which we anticipate will persist for at least the foreseeable future and possibly permanently. …”see in full comparison
“As noted below, the digital advertising industry is dynamic and our ATS operations are subject to rapid change as the underlying technology advances, client expectations vary, and we face increased competition for advertisers generally. In the second quarter of 2026 ATS revenue grew 230% compared to the second quarter of 2025 and 18% compared to the first quarter of 2026. …”see in full comparison
“Interest expense, net decreased to $5.5 million for the six-month period ended June 30, 2026 from $6.5 million for the six-month period ended June 30, 2025. This decrease was primarily due to lower interest rate on our debt and a lower principal balance.”see in full comparison
ATS revenue increased bysee in full comparison204%230% during thefirstsecond quarter of 2026 compared to thefirstsecond quarter of 2025, primarily due to a large customer in Asia that we acquired in the second half of 2025, and increases in monthly active advertisers and revenue per monthly activeadvertiser, which were driven by investments we made in the AI capabilities of our platform and increased sales capacity.advertiser.
Full comparison: every changed paragraph (68)
Our advertising technology & services (ATS) business empowers advertisers, primarily mobile app developers, to grow their businesses globally. We provide programmatic advertising solutions through two brands. Smadex is a programmatic demand-side platform, which uses proprietary AI to automate media buying. Adwake is a performance-based digital marketing agency.
We have organized our operations into two reportable segments. Our media segment includes its television, radio and digital marketing operations. Our ATS segment providesconsists programmatic advertising and technology services throughof Smadex and Adwake.
Our net revenue for the three-monthsthree-month period ended MarchJune 31,30, 2026 was $197.0$227.9 million. Of this amount, revenue generated by our media segment accounted for approximately 22%,20%, and revenue generated by our ATS segment accounted for approximately 78%80% of total revenue.
During the firstsecond quarter of 2026, our revenue grew by triple digits, driven primarily by revenue growth in our ATS segment, partially offset by a decrease in revenue in our media segment compared to the comparable period of 2025. In addition, during the firstsecond quarter of 2026:
ATS revenue increased by 204%230% during the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025, primarily due to a large customer in Asia that we acquired in the second half of 2025, and increases in monthly active advertisers and revenue per monthly active advertiser, which were driven by investments we made in the AI capabilities of our platform and increased sales capacity.advertiser.
we have continued to invest in the AI capabilities of our Smadex platform and our sales capacity.
we acquired Playback Rewards, a reward and loyalty platform to complement our Adwake business.
Our network affiliation agreement with TelevisaUnivision provides certain of our owned stations the exclusive right to broadcast TelevisaUnivision’s primary Univision network and UniMás network programming in their respective markets. We also generate revenue under a marketing and sales agreement with TelevisaUnivision, which gives us the right to manage the marketing and sales operations of TelevisaUnivision-owned Univision affiliates in three markets – Albuquerque, Boston and Denver. Under our proxy agreement with TelevisaUnivision, we grant TelevisaUnivision the right to negotiate the terms of retransmission consent agreements with multichannel video programming distributors, or MVPDs,MVPDs for our Univision- and UniMás-affiliated television station signals. Revenue generated from retransmission consent agreements represents payments from MVPDs for access to our television station signals so that they may rebroadcast our signals and charge their subscribers for this programming. We also generate revenue under a marketing and sales agreement with TelevisaUnivision, which gives us the right to manage the marketing and sales operations of TelevisaUnivision-owned Univision affiliates in three markets – Albuquerque, Boston and Denver. The term of each of these current agreements expires on December 31, 2026 for all of our Univision and UniMás network affiliate stations. TelevisaUnivision also owns approximately 10% of our common stock on a fully-converted basis. For more information regarding these agreements and the stock that TelevisaUnivision owns, see Note 2 to Notes to Condensed Consolidated Financial Statements.
Three-MonthThree- and Six-Month Periods Ended MarchJune 31,30, 2026 and 2025
The following table sets forth selected data from our operating results for the three-monththree- and six-month periods ended MarchJune 31,30, 2026 and 2025 (in thousands):
Net Revenue. Net revenue increased to $197.0 million for the three-month period ended March 31, 2026 from $91.9 million for the three-month period ended March 31, 2025. This increase was primarily due to an increase of $1.4 million in net revenue from our media segment, and an increase of $103.7 million in net revenue from our ATS segment.
CostNet ofRevenue. revenue. Cost ofNet revenue increased to $102.0$227.9 million for the three-month period ended MarchJune 31,30, 2026 from $33.5$100.7 million for the three-month period ended MarchJune 31,30, 2025. This increase was primarily due to an increase of $2.1$127.5 million in costnet revenue from our ATS segment, partially offset by a decrease of $0.3 million in net revenue from our media segment, and an increase of $66.4 million in cost of revenue from our ATS segment.
DirectNet Operating Expenses. Direct operating expensesrevenue increased to $44.8$424.9 million for the three-monthsix-month period ended MarchJune 31,30, 2026 from $35.5$192.6 million for the three-monthsix-month period ended MarchJune 31,30, 2025. This increase was primarily due to an increase of $1.6$1.1 million in directnet operatingrevenue expenses infrom our media segment, and an increase of $7.7$231.2 million in directnet operatingrevenue expenses infrom our ATS segment.
Selling,Cost Generalof andrevenue. AdministrativeCost Expenses.of Selling, general and administrative expensesrevenue increased to $18.1$117.9 million for the three-month period ended MarchJune 31,30, 2026,2026 from $15.5$38.0 million for the three-month period ended MarchJune 31,30, 2025. This increase was primarily due to an increase of $0.5$1.4 million in selling,cost generalof andrevenue administrative expenses infrom our media segment, and an increase of $2.1$78.5 million in selling,cost generalof andrevenue administrative expenses infrom our ATS segment.
CorporateCost Expenses.of Corporaterevenue expenses decreasedincreased to $7.2$219.9 million for the three-monthsix-month period ended MarchJune 31,30, 2026 from $7.8$71.5 million for the three-monthsix-month period ended MarchJune 31,30, 2025. This decreaseincrease was primarily due to a decrease of $1.4 million in audit fees and other professional services, a decrease of $0.2 million in rent expense, and a decrease of $0.2 million in cloud expense, partially offset by an increase of $0.8$3.5 million in bonuscost expenseof revenue from our media segment, and an increase of $0.5$144.9 million in non-cashcost stock-basedof compensation.revenue from our ATS segment.
DepreciationDirect andOperating amortization.Expenses. DepreciationDirect andoperating amortizationexpenses decreasedincreased to $3.0$50.6 million for the three-month period ended MarchJune 31,30, 2026 comparedfrom to $3.5$37.7 million for the three-month period ended MarchJune 31,30, 2025,2025. This increase was primarily due to fullyan depreciatedincrease assetsof $2.0 million in direct operating expenses in our media segment, and fullyan amortizedincrease intangibleof assets.$10.9 million in direct operating expenses in our ATS segment.
Direct operating expenses increased to $95.4 million for the six-month period ended June 30, 2026 from $73.2 million for the six-month period ended June 30, 2025. This increase was primarily due to an increase of $3.5 million in direct operating expenses in our media segment, and an increase of $18.7 million in direct operating expenses in our ATS segment.
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $19.0 million for the three-month period ended June 30, 2026, from $16.5 million for the three-month period ended June 30, 2025. This increase was primarily due to an increase of $2.9 million in selling, general and administrative expenses in our ATS segment, partially offset by a decrease of $0.3 million in selling, general and administrative expenses in our media segment.
Selling, general and administrative expenses increased to $37.2 million for the six-month period ended June 30, 2026, from $32.0 million for the six-month period ended June 30, 2025. This increase was primarily due to an increase of $0.2 million in selling, general and administrative expenses in our media segment, and an increase of $5.0 million in selling, general and administrative expenses in our ATS segment.
Corporate Expenses. Corporate expenses increased to $6.6 million for the three-month period ended June 30, 2026 from $6.4 million for the three-month period ended June 30, 2025. This increase was primarily due an increase of $0.6 million in non-cash stock-based compensation partially offset by a decrease of $0.3 million in salaries and benefits.
Corporate expenses decreased to $13.8 million for the six-month period ended June 30, 2026 from $14.2 million for the six-month period ended June 30, 2025. This decrease was primarily due to a decrease of $1.3 million in audit fees and other professional services, and a decrease of $0.3 million in cloud expense, partially offset by an increase of $1.1 million in non-cash stock-based compensation and an increase of $0.2 million in salaries and benefits.
Depreciation and amortization. Depreciation and amortization increased to $3.6 million for the three-month period ended June 30, 2026 compared to $3.0 million for the three-month period ended June 30, 2025, primarily due depreciation of newly purchased assets.
Depreciation and amortization increased to $6.6 million for the six-month period ended June 30, 2026 compared to $6.5 million for the six-month period ended June 30, 2025, primarily due depreciation of newly purchased assets.
Impairment. ForDuring the three-monthfirst periodquarter ended March 31,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.
Loss on lease abandonment. ForDuring the three-monthfirst periodquarter ended March 31,of 2025, we incurred a loss on lease abandonment of $25.2 million related to our previous Santa Monica lease.
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. For the three-monthsix-month period ended MarchJune 31,30, 2026, we recorded $1.0 million in restructuring costs.
We had a foreign currency loss of $0.2$0.3 million for the three-month period ended MarchJune 31,30, 2026, and a de minimis foreign currency loss for the three-month period ended MarchJune 31,30, 2025.
We had a foreign currency loss of $0.5 million for the six-month period ended June 30, 2026, and a de minimis foreign currency loss for the six-month period ended June 30, 2025.
Interest Expense, net. Interest expense, net decreased to $3.0$2.5 million for the three-month period ended MarchJune 31,30, 2026 from $3.1$3.4 million for three-month period ended MarchJune 31,30, 2025. This decrease was primarily due to lower interest rate on our debt and a lower principal balance.
Interest expense, net decreased to $5.5 million for the six-month period ended June 30, 2026 from $6.5 million for the six-month period ended June 30, 2025. This decrease was primarily due to lower interest rate on our debt and a lower principal balance.
Realized gain (loss) on marketable securities. For each of the three-month periods ended MarchJune 31,30, 2026 and 2025 we recorded a de minimis amount of realized gain related to our available for sale securities.
For each of the six-month periods ended June 30, 2026 and 2025 we recorded a de minimis amount of realized gain related to our available for sale securities.
Income Tax Expense or Benefit. Income tax expense for the three-month period ended MarchJune 31,30, 2026 was $5.4$7.8 million, or 30%28% of our pre-tax income. The effective tax rate for the three-month period ended MarchJune 31,30, 2026 was different from our statutory rate due to foreign and state taxes, non-deductible executive compensation, share-based compensation from foreign employees, and Net Controlled Foreign Corporation Tested Income. Income tax benefit for the three-month period ended MarchJune 31,30, 2025 was $8.1$0.8 million, or 14%19% of our pre-tax loss. The effective tax rate for the three-month period ended MarchJune 31,30, 2025 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non deductiblenon-deductible executive compensation, share-based compensation from foreign employees, and transaction costs.
Income tax expense for the six-month period ended June 30, 2026 was $13.2 million, or 29% of our pre-tax income. The effective tax rate for the six-month period ended June 30, 2026 was different from our statutory rate due to foreign and state taxes, non-deductible executive compensation, share-based compensation from foreign employees, and Net Controlled Foreign Corporation Tested Income. Income tax benefit for the six-month period ended June 30, 2025 was $8.9 million, or 15% of our pre-tax loss. 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.
Based on our analysis, we determined that it was more likely than not that our deferred tax assets would be realized for all jurisdictions with the exception of certain of our digital operations, certain U.S. Foreign Tax Credit carryovers and certain states deferred tax assets. As a result of historical losses from our digital operations primarily in Uruguay,certain Mexico and Argentina,jurisdictions, 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 $18.4$18.5 million at MarchJune 31,30, 2026 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. The OECD, many other member states and various other governments have adopted, or are in the process of adopting, Pillar 2 which calls for a global minimum tax of 15% to be effective for tax years beginning in 2024. The OECD guidelines published to date include transition and safe harbor rules around the implementation of the Pillar 2, global minimum tax. On January 5, 2026, the OECD released the “Side-by-Side” (SbS) Safe Harbor guidance, effective January 1, 2026. This guidance provides a framework for coordinating the U.S. tax system with Pillar 2 rules, potentially limiting top-up tax liabilities for qualifying periods. The CompanyWe included the tax impact of Pillar 2 in the income tax for the three-monththree- periodand six-month periods ended MarchJune 31,30, 2026, based on the rules effective for that period, and continues to evaluate the impact of the Side-by-SideSbS guidance on future periods.
On July 4, 2025, the President signed into law the One Big Beautiful Bill Act, which made certain changes to the current tax law and extended certain other tax provisions. We have analyzed the impact of these changes, noting that the main tax law changes that impactedare expected to impact us in 2026 are related to depreciation and Section 163(j) interest expense limitation. We will not take bonus depreciation in 2026 sincesince, given our tax position, the impact on this is nil. Regarding the Section 163(j) limitation, we believe that this will result in less taxable income to us.
As of MarchJune 31,30, 2026 and December 31, 2025, we had unrecognized tax benefits of $31.8$31.9 million and $31.7 million. We will recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.
Our ATS segment provides global performance marketing solutions primarily to mobile app developers. We operate this segment through two distinct business units: Smadex, our programmatic demand-side advertising platform; and Adwake, our performance-based digital marketing agency.
Net Revenue. Net revenue in our media segment increaseddecreased to $42.4$45.1 million for the three-month period ended MarchJune 31,30, 2026 from $41.0$45.4 million for the three-month period ended MarchJune 31,30, 2025. This increasedecrease was primarily due to an increase of $3.3 million in digital advertising revenue, an increase of $0.3 million in retransmission consent revenue, and an increase of $0.2 million in other revenue, partially offset by a decrease of $1.3$2.3 million in broadcast advertising revenue and a decrease of $1.0 million in spectrum usage rights revenue partially offset by an increase of $2.4 million in digital advertising revenue, and an increase of $0.5 million in retransmission consent revenue.
Net revenue in our media segment increased to $87.5 million for the six-month period ended June 30, 2026 from $86.4 million for the six-month period ended June 30, 2025. This increase was primarily due to an increase of $5.7 million in digital advertising revenue, an increase of $0.8 million in retransmission consent revenue, and an increase of $0.2 million in other revenue, partially offset by a decrease of $3.6 million in broadcast advertising revenue and a decrease of $2.0 million in spectrum usage rights revenue.
In general, the traditional broadcast industry is continuing to experience dramatic transformation. Most of our broadcast stations face declining audiences, which we believe is the situation across the 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. In particular, the radio broadcast industry remains in a general state of decline as a result of numerous factors, including technological advancements in how audiences consume audio content, such as podcasts overtaking talk radio, leading to fragmentation in radio audiences; changing consumer preferencespreferences, especially among younger audiences who tend to prefer interactive and on-demand experiences over the linear broadcast model; economic pressures in the form of certain high fixed operational costs; and competition with other forms of media, especially digital, for advertising revenue. We anticipate that these changes in viewer habits and preferences will persist at least for the foreseeable future and possibly permanently.
Cost of revenue. Cost of revenue in our media segment increased to $5.4 million for the three-month period ended March 31, 2026 from $3.3 million for the three-month period ended March 31, 2025, primarily due to the increase in costs associated with the increase in digital advertising revenue and a decrease in gross margins.
Direct Operating Expenses. Direct operating expenses in our media segment increased to $28.1 million for the three-month period ended March 31, 2026 from $26.6 million for the three-month period ended March 31, 2025, primarily due to an increase of $1.0 million in expenses associated with the increase in revenue, an increase of $0.1 million in salaries and other employee benefits, and an increase of $0.7 million in other items which were individually immaterial, partially offset by a decrease of $0.3 million in non-cash stock-based compensation.
Selling, General and Administrative Expenses. Selling, general and administrative expenses in our media segment increased to $11.4 million for the three-month period ended March 31, 2026 from $10.8 million for the three-month period ended March 31, 2025, primarily due to an increase of $0.3 million in salaries and other employee benefits, an increase of $0.5 million in bad debt expense, and an increase of $0.2 million in other items which were individually immaterial, partially offset by a decrease in rent expense of $0.4 million.
Net Revenue. Net revenue in our ATS segment increased to $154.6 million for the three-month period ended March 31, 2026 from $50.9 million for the three-month period ended March 31, 2025. The increase was primarily due to an increase in advertising revenue from Smadex, including a large customer in Asia that we acquired in the second half of 2025, and an increase in advertising revenue from Adwake.
Cost of revenue. Cost of revenue in our ATSmedia segment increased to $96.6$6.1 million for the three-month period ended MarchJune 31,30, 2026 from $30.2$4.7 million for the three-month period ended MarchJune 31,30, 2025, primarily due to the increase in costs associated with the increase in digital advertising revenue.
We have previously noted a trend on a global basis in our ATS operations whereby advertisers are demanding more efficiency and lower cost from intermediaries like us. In response to this general trend, we have been offering our programmatic purchasing platform, Smadex, to advertisers, which lowers cost to our advertising customers. Among other things, this has led to lower margins in the products and services we sell, which we anticipate will persist for at least the foreseeable future and possibly permanently. The digital advertising industry as a whole remains dynamic and continues to undergo rapid changes in technology, customer expectation and competition. We expect this trend to continue and possibly accelerate. We must continue to address these dynamic and rapid changes, including the need to further adjust our business strategies, make appropriate investments in our technology and offer new products and services, as appropriate. No assurances can be given that the strategies we have pursued and investments we have made, and those we may pursue or make in the future will be successful.
DirectCost operatingof expenses. Direct operating expensesrevenue in our ATSmedia segment increased to $16.7$11.4 million for the three-monthsix-month period ended MarchJune 31,30, 2026 from $9.0$7.9 million for the three-monthsix-month period ended MarchJune 31,30, 2025, primarily due to anthe increase ofin $4.5costs millionassociated with the increase in clouddigital infrastructureadvertising expenses,revenue anand increasea of $2.9 milliondecrease in salariesgross and bonus expense, and an increase of $0.3 million in other items which were individually immaterial.margins.
Direct Operating Expenses. Direct operating expenses in our media segment increased to $28.8 million for the three-month period ended June 30, 2026 from $26.8 million for the three-month period ended June 30, 2025, primarily due to an increase of $0.7 million in salaries and other employee benefits, an increase of $0.2 million in non-cash stock-based compensation, an increase of $0.1 million in rent expense, an increase of $0.1 million in music license fees, and an increase of $0.9 million in other items which were individually immaterial.
Selling,Direct general and administrative expenses. Selling, general and administrativeoperating expenses in our ATSmedia segment increased to $6.8$56.9 million for the three-monthsix-month period ended MarchJune 31,30, 2026,2026 from $4.7$53.4 million for the three-monthsix-month period ended MarchJune 31,30, 2025, primarily due to an increase of $1.8$0.9 million in expenses associated with the increase in revenue, an increase of $0.8 million in salaries and other employee benefits, an increase of $0.3 million in on-premisemusic softwarelicense expense.fees, an increase of $0.1 million in rent expense, and an increase of $1.4 million in other items which were individually immaterial.
Selling, General and Administrative Expenses. Selling, general and administrative expenses in our media segment decreased to $10.7 million for the three-month period ended June 30, 2026 from $11.0 million for the three-month period ended June 30, 2025, primarily due to a decrease of $0.2 million in bad debt expense, a decrease in rent expense of $0.2 million, and a decrease of $0.3 million in other items which were individually immaterial, partially offset by an increase of $0.4 million in salaries and other employee benefits.
Selling, general and administrative expenses in our media segment increased to $22.0 million for the six-month period ended June 30, 2026 from $21.8 million for the six-month period ended June 30, 2025, primarily due to an increase of $0.7 million in salaries and other employee benefits, and an increase of $0.3 million in bad debt expense, partially offset by a decrease in rent expense of $0.5 million and a decrease of $0.3 million in other items which were individually immaterial.
Net Revenue. Net revenue in our ATS segment increased to $182.8 million for the three-month period ended June 30, 2026 from $55.3 million for the three-month period ended June 30, 2025. The increase was primarily due to an increase in advertising revenue from Smadex, driven primarily by a large customer in Asia that we acquired in the second half of 2025, increases in monthly active advertisers and revenue per monthly active advertiser, and an increase in advertising revenue from Adwake.
Net revenue in our ATS segment increased to $337.4 million for the six-month period ended June 30, 2026 from $106.2 million for the six-month period ended June 30, 2025. The increase was primarily due to an increase in advertising revenue from Smadex, driven primarily by a large customer in Asia that we acquired in the second half of 2025, increases in monthly active advertisers and revenue per monthly active advertiser, and an increase in advertising revenue from Adwake.
As noted below, the digital advertising industry is dynamic and our ATS operations are subject to rapid change as the underlying technology advances, client expectations vary, and we face increased competition for advertisers generally. In the second quarter of 2026 ATS revenue grew 230% compared to the second quarter of 2025 and 18% compared to the first quarter of 2026. While we currently anticipate continuing growth in the third and fourth quarters of 2026 on a prior-year comparative basis, we expect a lower rate of quarterly growth on a prior-year comparative basis than we had in the second quarter of 2026. Additionally, we currently do not expect sequential ATS revenue growth in the third quarter of 2026.
Cost of revenue. Cost of revenue in our ATS segment increased to $111.9 million for the three-month period ended June 30, 2026 from $33.4 million for the three-month period ended June 30, 2025, primarily due to costs associated with the increase in digital advertising revenue.
Cost of revenue in our ATS segment increased to $208.5 million for the six-month period ended June 30, 2026 from $63.6 million for the six-month period ended June 30, 2025, primarily due to costs associated with the increase in digital advertising revenue.
We have previously noted a trend on a global basis in our ATS operations whereby advertisers are demanding more efficiency and lower cost from intermediaries like us. In response to this trend, we have been offering our programmatic purchasing platform, Smadex, to advertisers, which lowers cost to our advertising customers. Among other things, this has led to lower margins in the products and services we sell, which we anticipate will persist for at least the foreseeable future and possibly permanently. The digital advertising industry as a whole remains dynamic and continues to undergo rapid changes in technology, customer expectation and competition. We expect this trend to continue and possibly accelerate. We must continue to address these dynamic and rapid changes, including the need to further adjust our business strategies, continue to make investments in our technology and offer new products and services, as appropriate. No assurances can be given that the strategies we have pursued and investments we have made, and those we may pursue or make in the future, will be successful.
Direct operating expenses. Direct operating expenses in our ATS segment increased to $21.9 million for the three-month period ended June 30, 2026 from $10.9 million for the three-month period ended June 30, 2025, primarily due to an increase of $7.1 million in cloud infrastructure expenses, an increase of $1.7 million in salaries and bonus expense, an increase of $0.7 million in expenses for sales events, an increase of $0.8 million in non-cash stock-based compensation and $0.7 million in other items which were individually immaterial.
EVC insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 6 filings (3 insiders, 13 trade dates, 4,856,690 shares, about $39.4M). Net open-market shares: -4,856,690 (purchases minus sales); net value about -$39.4M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-16 | Christenson Michael J |
Option exercise | 200,000 | — | — |
| 2026-09-04 | Zevnik Paul A |
Open-market sale | 35,000 | $8.40 | $294.0K |
| 2026-07-25 | Boelke Mark |
Shares withheld for tax | 5,236 | $10.68 | $55.9K |
| 2026-07-21 | Boelke Mark |
Shares withheld for tax | 12,044 | $10.85 | $130.7K |
| 2026-06-17 | Boelke Mark |
Option exercise | 172,500 | — | — |
| 2026-06-17 | Boelke Mark |
Shares withheld for tax | 38,847 | $9.40 | $365.2K |
| 2026-06-17 | Boelke Mark |
Option exercise | 100,000 | — | — |
| 2026-06-17 | Christenson Michael J |
Option exercise | 200,000 | — | — |
| 2026-06-17 | Christenson Michael J |
Option exercise | 558,750 | — | — |
| 2026-06-17 | Christenson Michael J |
Option exercise | 600,000 | — | — |
| 2026-06-12 | Zevnik Paul A |
Open-market sale | 324,686 | $9.67 | $3.1M |
| 2026-05-28 | Zevnik Paul A |
Grant/award | 16,524 | — | — |
| 2026-05-28 | Strickler Thomas |
Grant/award | 16,524 | — | — |
| 2026-05-28 | Zeko Fehmi Alexander |
Grant/award | 16,524 | — | — |
| 2026-05-28 | Vasquez Gilbert R |
Grant/award | 16,524 | — | — |
| 2026-05-28 | Diaz Martha Elena |
Grant/award | 16,524 | — | — |
| 2026-05-28 | Bender Brad |
Grant/award | 16,524 | — | — |
| 2026-05-21 | Seros Alexandra |
Open-market sale | 427,991 | $9.17 | $3.9M |
| 2026-05-20 | Seros Alexandra |
Open-market sale | 378,050 | $7.85 | $3.0M |
| 2026-05-19 | Seros Alexandra |
Open-market sale | 278,163 | $7.80 | $2.2M |
| 2026-05-18 | Seros Alexandra |
Open-market sale | 468,583 | $7.99 | $3.7M |
| 2026-05-15 | Seros Alexandra |
Open-market sale | 259,848 | $8.05 | $2.1M |
| 2026-05-14 | Seros Alexandra |
Open-market sale | 338,976 | $9.03 | $3.1M |
| 2026-05-13 | Seros Alexandra |
Open-market sale | 685,111 | $8.71 | $6.0M |
| 2026-05-12 | Seros Alexandra |
Open-market sale | 160,282 | $8.33 | $1.3M |
| 2026-05-11 | Seros Ulloa Family Trust Of 1996 |
Open-market sale | 323,939 | $8.03 | $2.6M |
| 2026-05-08 | Seros Ulloa Family Trust Of 1996 |
Open-market sale | 166,415 | $6.60 | $1.1M |
| 2026-05-08 | Seros Ulloa Family Trust Of 1996 |
Open-market sale | 332,498 | $6.79 | $2.3M |
| 2026-05-07 | Seros Ulloa Family Trust Of 1996 |
Open-market sale | 333,585 | $6.97 | $2.3M |
| 2026-05-07 | Seros Ulloa Family Trust Of 1996 |
Open-market sale | 343,563 | $6.98 | $2.4M |
Well-known investors holding EVC (13F)
None of the 59 investors we track reported a position in their latest 13F.