Revenues at Townsquare Media jumped 8.8% to $120.3 million in the fourth quarter while earnings climbed 11%. But it is the company’s full year 2022 performance that has elicited high-fives among management. Revenue and earnings in 2022 both set new company records and were well above 2019 levels – with and without political ad sales from the midterm elections.
Digital, once again, was the largest growth propellant, rising 11.9% in Q4. Townsquare Interactive, the subscription-based digital marketing services division, had a 4.4% revenue lift to $22.4 million. Townquare Ignite – which includes digital advertising on its O&O digital properties, its first party data digital management platform, and digital programmatic advertising platform – shot up 16.9% to $37.0 million. For the full year, digital increased 16% to $231 million, with a 30% profit margin. Roughly half of Townsquare’s revenue and operating income now come from digital products.
Broadcast advertising in Q4 grew 4.0% to $59.4 million. The midterms delivered $1.7 million in Q4 revenue (and $4.0 million for the full year). If political were removed, total net revenue for the quarter increased 6.8%.
In a press release ahead of its Thursday morning earnings call with analysts, CEO Bill Wilson attributed the record 2022 results to “Townsquare’s transformation into a digital first local media company. In 2022, we drove net revenue and adjusted EBITDA [earnings] to new highs with strong net revenue growth of +11% year-over-year and adjusted EBITDA growth of +8% year over-year,” Wilson said.
The record numbers helped improve the company’s balance sheet. Thanks to $50 million in cash flow from operations, Townsquare ended the year with more than $43 million of cash, as its net leverage fell to an all-time low of 4.29-times. As such, the Townsquare board approved the initiation of a quarterly cash dividend to stockholders.
‘Unique And Differentiated Strategy’
Calling 2022 “a significant inflection point” for Townsquare, Wilson said it was “the first year where radio no longer comprised the majority of our revenue and profit, further separating Townsquare from our local media peers, and placing a spotlight on our world-class team and our unique and differentiated strategy, assets, platforms, and solutions.
“We believe Townsquare’s ability to drive profitable, sustainable digital growth is a key differentiator for our company,” Wilson continued. He said it remains on track for digital revenue to reach at least $275 million by 2024.
Townsquare positions itself as a digital first local media company focused on markets outside of the Top 50 markets. Its digital revenue firepower comes from two buckets – a recurring subscription digital marketing solutions business, and a digital advertising technology platform. “We believe that our business model and strategy position us to weather the current economic environment better than most,” Wilson said. “We will continue to grow and support our local teams during these periods of macroeconomic challenges so that we can continue to be a resource to our local clients and audiences and be well positioned to capture accelerated growth when economic tailwinds return.”
Townsquare says it expects first quarter 2023 revenue to finish in the -0.2% to +1.8% range, compared to Q1 2022, or between $100.0 million and $102.0 million with earnings between $17.5 million and $18.5 million.