Digital revenue grew during the first quarter for Cumulus Media even as its broadcast revenue took a hit due to coronavirus-related advertising cancellations. Cumulus reported a 14.8% revenue decline to $227.9 million in first quarter. And while broadcast radio spot revenue decreased 7.7% on a same-station basis, digital revenue was a bright spot. It grew 36% to $21.8 million.
“While we tighten up and reduce cost in many areas, we also expect to be leaning into areas where we see opportunities,” CEO Mary Berner said. “We are also highly focused on leveraging the potential of our podcast business, which is proving to be especially resilient now, delivering substantial year-over-year revenue growth.” During a conference call with analysts on Monday she said first quarter podcast revenue had a strong finish, despite the coronavirus, soaring more than 60% during March. “That is continuing into Q2,” said Berner. She also pointed out digital revenue now makes up nearly ten percent of the company’s revenue overall compared to less than three percent three years ago.
Cumulus reported its podcast downloads were up more than 50% year-over-year during first quarter, with more than 260 million in the quarter. “This is supported by our very strong news podcast portfolio which, as of the end of April, had four of the top 20, and eight of the top 40 news podcasts on Apple,” said Berner.
Berner said the company has taken several “swift actions” that will help it “weather the adverse impacts of the pandemic.” Those steps include cutting $60 million in fixed costs from its 2020 ledger, with wide-ranging furloughs and pay cuts implemented across the company in early April. Cumulus has also curtailed capital expenditures by 40% and said it expects to realize $2.5 million in tax benefits from the federal government’s CARES Act, which aims to provide financial assistance to businesses and individuals affected by the COVID-19 pandemic. The company reported it had a cash balance of $106 million as of March 31 and has no funded debt coming due before 2026. To maintain financial flexibility, Cumulus in mid-March drew down $60 million from its $100 million revolving credit facility.
Cumulus, like most ad-supported businesses, said it’s too early to tell when and by how much things will turn around. “Our crystal ball is no clearer than anyone else’s,” Berner told investors Monday afternoon. “But we do know many things will be different in the future and those changes will generate both risks and opportunities for us.”