US broadcaster iHeartMedia has published its financial results for Q2 2022 (ended June 30).
Overall revenue in Q2 edged up 11% year-over-year to $954 million, in line with the group’s forecast of between a 10% and 14% revenue growth.
The figure, however, was slightly down from the average estimate of $955.9 million by seven analysts, according to Yahoo Finance.
Net income came in at $14.4 million, versus a net loss of $32.3 million in the year-ago period (see below).
Diluted earnings per share for the three-month period ended June 30 was $0.10, versus a loss per share of $0.22 last year.
The Q2 diluted EPS surpassed the $0.08 consensus estimate of eight analysts surveyed by Yahoo Finance.
That is despite the company recording a 14% increase in consolidated direct operating expenses to $365.4 million due to higher variable content costs, including profit sharing expenses, third-party digital costs, and production costs as local and national live events resumed.
The development signaled iHeartMedia’s continued recovery from the impact of the COVID-19 pandemic in 2020 when the company swung to a loss of $197.3 million in Q2 as revenues tanked 46.6% due to lower revenue from broadcasts, networks, sponsorship and events and audio and media services.
At the time, iHeartMedia’s digital segment was the only unit to record increased revenue as podcasting thrived when people were cooped up in their homes in the early days of the pandemic.
“We feel the increased relative size of our digital and podcasting businesses has fundamentally changed the makeup of the company, and it puts us in a stronger and more resilient position than we’ve ever been in to weather any advertising downturns.”
Bob Pittman, iHeartMedia
Most recently, the company’s podcast segment continues to grab a bigger share of the company’s revenue and income. Sales from podcasts surged 60.4% year over year in Q2 to $86 million, pushing the company’s overall digital audio group revenue up 28% to $253 million.
“We feel the increased relative size of our digital and podcasting businesses has fundamentally changed the makeup of the company, and it puts us in a stronger and more resilient position than we’ve ever been in to weather any advertising downturns,” iHeartMedia CEO Bob Pittman told analysts at an earnings call.
Back in the first quarter of 2020, digital revenues only made up 12% of the group’s revenues. The share of the unit expanded to 26% to date, with podcasting now representing almost 10% of the group’s overall revenues, Pittman revealed during the call.
However, the pace of increase in podcast revenue in Q2 slowed from the 152% jump in Q2 2021 and the 103% increase in Q2 2020 when podcasts boomed, suggesting a moderation in consumption amid the easing of pandemic restrictions and the normalization of social activities.
A survey by research firm Morning Consult last year found that 22% of consumer said they listed to podcasts more than usual during the pandemic.
“I expect when people go back to work, our social content might need to go up at different times if people aren’t constantly online anymore… Right now, people are listening to podcasts whenever then can, but we expect when people start going back to a commute, those numbers will fluctuate more throughout the day,” Jessica Cordova Kramer, co-founder and Chief Executive of women-run podcast network Lemonada Media, was quoted by Morning Consult as saying in April 2021.
For iHeartMedia, the company attributes its dominance in the podcast market to its strategy to build or partner with creators in building podcasts instead of buying content creators, as well as its broadcast radio assets that are able to reach 90% of US consumers, deputy CFO Mike McGuinness said during the company’s earnings call on Sunday (August 7).
“We believe we will continue to take share in this growing marketplace,” McGuinness added.
Data from podcast rankings provider Podtrac released August 4 showed that iHeartRadio remained the No. podcast publisher in the US in July with 29.5 million unique monthly audience and 678 active shows. The platform continued to beat Wondery, NPR, the New York Times and NBC News.
iHeartRadio expects the increased size of its digital and podcasting businesses to put the company in a stronger position in weathering any advertising downturns, Pittman said.
The executive acknowledged the “softness” in advertising in the first half of the year. Pittman said iHeartMedia started the year with the expectation that 2022 would be a robust advertising year. However, the unfolding of macro events including Russia’s invasion of Ukraine and associated effects have added uncertainty to the advertising marketplace, Pittman added.Music Business Worldwide