The third quarter closed with better than expected results at iHeartMedia. The company reports revenue grew 25% year over year to $928 million. That was five points better than management had been predicting for the quarter. That boost came as digital revenue in particular soared, posting a 77% gain versus a year ago. Gains were also recorded at iHeart’s Multiplatform Group, which includes its 850 radio stations. The company says revenue at that unit was up 19% during the third quarter, continuing a sequential quarterly improvement from pre-pandemic 2019.
“Our strong results this quarter are further evidence of the success of our company’s continuing transformation – data-led, digital and podcast focused, along with the unparalleled audience reach of our broadcast radio assets, and supported by the largest sales force and the only unified ad tech stack in audio advertising – all with the strong flywheel effect of our scale and leadership position,” said CEO Bob Pittman in a statement. “These results highlight both the strong growth and potential of our digital business, including podcasting, and the strong recovery and growth potential of our radio business.”
Revenue in iHeart’s Multiplatform Group increased $103.9 million, or 18.7% versus 2020, primarily as a result of the continued recovery from the negative impact of the COVID pandemic last year. Broadcast revenue grew 20% while network revenue ticked up 8%. iHeart also says revenue from sponsorship and events increased by 48% with the return of live events. The increases were partially offset by a $15.1 million decrease in political revenue compared to the same period in 2020, which was a presidential election year.
Podcast business was especially robust as iHeart says its podcast ad revenue increased 184% during the third quarter. But even without that tailwind, digital revenue overall would have been up 51% compared to a year earlier.
Revenue from its Digital Audio Group, which includes podcasting, streaming, websites and other digital assets, increased 77% year over year driven by increased demand for digital advertising, and podcast revenue which increased by $41.6 million, thanks to higher revenues from the development of new podcasts as well as growth from existing podcasts.
And while political revenue was not on par with last year’s record take during the 2020 presidential race, iHeart shook off the impact, posting operating income of $80 million for the quarter, compared to $39 million last year when the pandemic’s impact was more significant.
COO/CFO Rich Bressler noted that the company had adjusted earnings of $230 million during the latest quarter and expressed confidence that earnings will be back to 2019 pre-pandemic levels by the end of this year. “We will continue to grow beyond that as our investments in high growth areas and strict cost discipline continue to generate profit and free cash flow,” said Bressler.
Despite a comparison to last year’s flurry of political ad dollars as well as an advertising market that began to recover late last year, iHeartMedia says it expects fourth quarter revenue to grow 10% compared to a year ago. If it were not for the impact of political ad spending, it pegs that projected year-over-year growth at 22% for the quarter. The forecast suggests an accelerating business as the company says its October revenue was flat versus a year ago, although it notes without the political impact revenue was up about 22% last month.