iHeartMedia’s second quarter was met with a positive market reaction, reflecting the company’s ability to exceed revenue expectations despite flat sales compared to last year. Management pointed to strong performance in the Digital Audio Group, particularly in podcasting, which saw continued growth in both consumer and advertiser demand. CEO Bob Pittman emphasized the “growing flywheel effect” of iHeartMedia’s podcast leadership, adding that the company’s robust local sales force has become a significant driver for podcast ad revenue. Cost-saving initiatives and operational efficiency were also highlighted as contributing factors to maintaining margins amid a still uncertain macroeconomic environment.
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iHeartMedia (IHRT) Q2 CY2025 Highlights:
- Revenue: $933.7 million vs analyst estimates of $911.8 million (flat year on year, 2.4% beat)
- EPS (GAAP): -$0.54 vs analyst expectations of -$0.27
- Adjusted EBITDA: $156.1 million vs analyst estimates of $151.6 million (16.7% margin, 3% beat)
- Revenue Guidance for Q3 CY2025 is $982.9 million at the midpoint, roughly in line with what analysts were expecting
- EBITDA guidance for Q3 CY2025 is $200 million at the midpoint, below analyst estimates of $207.7 million
- Operating Margin: 3.8%
- Market Capitalization: $323.5 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From iHeartMedia’s Q2 Earnings Call
- Patrick William Sholl (Barrington Research) asked about consistency in advertising category growth into Q3. President and CFO Rich Bressler responded that the company is focusing more on trends among its top advertisers and agencies as indicators, rather than specific category projections.
- Patrick William Sholl (Barrington Research) followed up on differences between digital streaming and podcasting growth. CEO Bob Pittman emphasized that podcasting is the primary driver, with management “happy with the rest” of digital audio but viewing podcasting as delivering the outsized growth.
- Ken Silver (Stifel) questioned the wider EBITDA guidance range for Q3 despite specific revenue projections. Bressler explained that revenue mix and ongoing market uncertainty contributed to the broader range, with Pittman adding that the company is recognizing continued unpredictability in the environment.
- Ken Silver (Stifel) inquired about the sustainability of cost savings into future quarters. Bressler confirmed that $40 million in quarterly expense savings should continue, supporting the company’s $150 million annual target.
- Ken Silver (Stifel) asked for updates on the ad tech programmatic rollout following the hiring of Lisa Coffey. Pittman said Coffey will focus on bringing advertisers to the platform, completing the final development phases, and driving monetization through digital inventory integration.
Catalysts in Upcoming Quarters
In the quarters ahead, our team will watch (1) whether podcasting continues to drive digital revenue growth and margin expansion, (2) the pace of cost savings realization under modernization initiatives, and (3) the impact of ad tech investments and new leadership on advertiser engagement. The stabilization of Multiplatform Group trends and improvement in the broader advertising market will also be important markers.
iHeartMedia currently trades at $2.30, up from $1.60 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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