Greetings, and welcome to Audacy, Inc.'s first quarter 2022 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, David Field, Chairman, President, and Chief Executive Officer. Please go ahead. Hi. Good morning. This is Richard Schmaeling. Welcome to Audacy's first quarter earnings conference call. This call is being recorded. A replay will be available shortly after the conclusion of today's call at the replay link or number noted in our release. During this call, the company may make forward-looking statements which are based upon the company's current expectations and involve risks and uncertainties. The company's actual results could differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause actual results to differ materially are described in the Risk Factors section of the company's annual report on Form 10-K. As such, risks and uncertainties may be updated from time to time in the company's SEC filings. We assume no obligation to update any forward-looking statements except as may be required by law. During this call, we may reference certain non-GAAP financial measures. We refer you to the Investors page of our website at audacyinc.com for the reconciliations of such measure, measures and other pro forma financial information. With that, I'll turn it over to David Field. Thanks, Rich. Good morning, everybody. Thanks for joining Audacy's first quarter earnings call. I'm pleased to report that Audacy had a great first quarter, posting strong top line and bottom line financial performance. We also made excellent strategic progress as we work to transform the organization in order to enhance our competitive position, accelerate our future growth, and capitalize on the compelling opportunities in the dynamic audio marketplace. We continue to move with great purpose and urgency to drive strategic transformation and innovation across the company. Over the past couple of years, through a number of strategic acquisitions, organic growth initiatives, structural improvements, talent additions, and premium content development, Audacy has evolved into a scaled leadership position across broadcasting, podcasting and digital audio. We have established ourselves as the number one creator of original premium audio content, which includes our lineup of critically acclaimed podcasts, our exclusive digital audio content, and our unrivaled leadership position in local sports and news radio. We are the flagship home of 38 pro teams, plus dozens of college programs, and are also now the exclusive podcasting and digital audio sales partner of Major League Baseball. With the addition of AmperWave, we are accelerating the development of our ad tech and streaming capabilities in order to control our product roadmap and better serve our customers and the 200 million Americans who listen and engage with our content. During the first quarter, we posted top line growth of 14%, with digital growing by 16% and spot radio up 14%. In fact, our local radio revenues were up 18%, underlining the strong ongoing recovery in our local radio markets. Adjusted EBITDA grew 152%, reflecting significant margin improvement. It is interesting to note that roughly half of our markets posted EBITDA that exceeded their 2019 level. Total revenues and EBITDA lagged somewhat farther behind 2019 in most of our larger and our coastal markets, which have been most impacted by the pandemic disruption. The progress is clear, and we are on our way. I'd like to share some additional color on some of the highlights of our strategic progress since the start of the year. In first quarter, we launched the Audacy Digital Audience Network, or ADAN, an addressable aggregate of over 60 million listeners across our app, streaming content and podcast lineup, enabling precision targeting at scale, coupled with real-time optimization and reporting. ADAN is fully integrated into our emerging tech stack, bringing actionable brand insights and detailed campaign reporting for our customers. ADAN enables our entire sales organization across the country, local, regional, and national, to connect our customers with our audiences across all of our digital distribution platforms simply and seamlessly. ADAN should be a meaningful contributor to our future growth, providing a highly appealing, effective vehicle for advertisers to reach our large and expanding addressable audiences. Towards the end of April, we announced an affiliate partnership with Fox News Audio. Under this agreement, Fox News Audio will migrate their linear audio stream to AmperWave as a customer of our cloud-based distribution and monetization platform. We will also be enabling Audacy's patented rewind technology to make Fox News Audio's live streams fully interactive. Audacy will also be the exclusive third-party ad sales representative for all of Fox News Audio's streaming inventory. AmperWave is emerging as an important addition to our capabilities. As we noted when we made this acquisition in the fall of 2021, AmperWave gives us control of our end-to-end product roadmap, enabling us to enhance and accelerate the development of our Audacy platform capabilities and features. That will become increasingly visible over the course of the next year as we will be rolling out a series of new releases to our Audacy digital platform that will incorporate new product features to enhance the listener and advertiser experience by enabling more personalized interactive audio. We will also be adding a great deal of new original content available exclusively on our digital platform. We believe these enhancements will drive significant audience growth on the Audacy digital platforms, enabling high margin revenue opportunities in 2023 and beyond. As I mentioned earlier, digital revenues grew 16% during the quarter, led by strong performances in our podcasting and streaming businesses. Podcast revenues were up 37%. We also grew margins nicely in the business as we continue to execute our strategy of driving a higher margin mix of products across our podcast business. Podcast growth was supported by strong double-digit growth in downloads and unique listeners. The Audacy Podcast Network reached an average of 32 million American listeners each month during the quarter according to Triton, which is just about a third of all U.S. podcast listeners. Importantly, our high margin local podcasts are now one of the fastest-growing areas of the business, with downloads up over 50% and strong growth in CPMs and RPMs. We also had a strong contribution from our industry-leading premium branded podcast business, as well as our podcast content licensing business. We continue to be the podcast partner of choice for leading brands such as Nike, HBO Max, Netflix, and others. In addition, during the quarter, we announced a podcast slate deal with Amazon, in which they will purchase a slate of at least four podcast series from our Pineapple Street Studios. This deal marks the first time Amazon had done a content slate deal with any podcast studio. We delivered the first show, Will Be Wild, a few weeks back, and it launched as the number one podcast in the country on the Apple charts. The year is already off to a great start with Fly on the Wall, the breakout hit featuring former SNL stars Dana Carvey and David Spade, with a guest list that includes most of the regular rotation of SNL stars who appeared over the years. We also produced the companion podcast for Netflix film Don't Look Up and HBO Max's Winning Time: The Rise of the Lakers Dynasty. Podcorn, the largest native advertising marketplace for podcasts, which we acquired last year, continues to grow by triple digits, albeit off of a very small base. We see great opportunity to continue scaling this business into a material contributor, particularly when we are able to fully integrate Podcorn into our ad tech platform in the future. Streaming revenues were up 21%, and the underlying metrics of our streaming business accelerated during the quarter with solid growth in MAUs and PLH, particularly across mobile and connected devices. The weak link for our digital group this quarter was our digital marketing solutions business, which was flattish, as a couple large customers from 2021 were inactive during the period, dragging down our overall digital growth. In sum, it was a strong quarter of financial performance and strategic progress across our company, and we're very excited about what lies ahead. Audacy today is a fundamentally enhanced and stronger organization than ever before. Our work is far from done, but we are excited about what we are building to establish an enriched offering for listeners and customers, enabling us to participate fully in what we believe is a very bright future for scaled multi-platform audio companies with outstanding exclusive premium content that listeners love. Our team is hard at work executing on this opportunity to complete our transformation from a leading radio broadcaster to a leading multi-platform audio content and entertainment brand with an elevated national platform and profile, full participation in digital advertising, and substantially larger shares of ad spending. With that, I'll turn it over to Rich and then your questions. Thanks. Thanks, David. Good morning, everyone. Our total net revenues for the first quarter came in at $275.3 million, up 14% year-over-year. Our core spot revenues were also up 14% in the first quarter, driven by local, which increased by 18%. During the first quarter, we saw significant recovery and growth in most of our markets and in quite a few of our top spot advertising categories. For the first time since the outset of the pandemic, we saw significant year-over-year growth across many of our largest markets, including Chicago, San Francisco, Philadelphia, Washington, D.C., and Baltimore. We are seeing a growing roster of markets where revenues have e xceeded 2019, including a few of our largest markets like Chicago and Detroit. Sports betting, which in the first quarter was our second largest spot advertising category, was up over 50% year-over-year and is currently pacing up even stronger in the second quarter. Hospitals and clinics, our third-largest category, was up over 20% year-over-year and is also currently pacing up even stronger in the second quarter. We saw that spot advertising categories that are about getting out and going, such as concerts, sporting events, gyms, travel, movie theaters, and transit systems, were in the aggregate, up over 180% year-over-year in 1Q. These categories, 12 in total pre-pandemic, accounted for 10% of our core spot revenues. Last year, they accounted for 3% of our first quarter revenues, and this year they accounted for 7%. These get out and go categories are currently pacing up over 90% in the second quarter. I believe, we believe these examples are great evidence that as we move past the pandemic and when the economy gets back on track, that our spot revenues, led by local, will continue to strongly recover. Our largest spot advertising category, automotive, remains significantly disrupted and was down mid-single digits year-over-year in Q1 and was down about 40% in Q1 versus 2019. This category is currently pacing in the second quarter about the same as the first quarter, which is inconsistent with our prior expectations. We expected that the automotive category would get better in 2022 as supply chain issues were resolved, and so far it hasn't, and the outlook for the remainder of this year is now clearly more uncertain. Our digital revenues in the first quarter were up 16%. Although our streaming advertising revenues grew by 21%, our growth rate remains constrained by supply. This is why we are looking forward to the release of the first version of our new audio streaming platform within the next 90 days, and we expect to make several other point releases to enhance the listener experience over the remainder of this year. This new platform will provide consumers with a personalized and interactive radio listening experience with unprecedented control. We believe this experience will drive increased listening and enable us to accelerate the growth of monthly active users, increasing our supply and allowing us to accelerate our streaming advertising revenue growth. We expect this new platform will be an important driver of our growth in 2023 and beyond. Turning to the outlook for the second quarter, based on our current pacing, we project that our total revenues will be up mid- to upper-single digits year-over-year. The pace of business coming on the books has slowed versus the first quarter and since the outset of the war in Ukraine. Moving to our operating expense performance. Our total operating expenses for the first quarter came in at $266.8 million and excluding one-time and unusual items and adjusting out non-cash costs, our total cash operating expenses were $249.3 million or up 8% year-over-year. In the second quarter, we expect that our cash operating expenses will grow at about one half the rate of our revenue growth. Our adjusted EBITDA margin for the first quarter was 9.4%, up five percentage points from the prior year. Turning to our financial position, our compliance basis first lien net leverage was 3.4 at quarter end compared to our covenant of 4x. We continue to expect to make significant further progress deleveraging over the remainder of this year. During the first quarter, we received a $15 million federal income tax refund. For 2022, we expect that our cash income tax payments will be less than $10 million. Our net capital expenditures for the first quarter were $14.45 million, and we continue to project about $75 million in CapEx for the full year. With that, we'll now go to your questions. Operator? Thank you. At this time, we'll be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question today comes from Steven Cahall of Wells Fargo. Please proceed with your question. Thank you and good morning. Maybe first, Rich, you said the pace of business has slowed down. Could you maybe give a little more insight as to the categories that slowed? You know, we know that auto's been slowed in inventories. We know about some other inventory impacted. This one seems more like a macro reaction. Would love to get your color on some of the categories that sort of incrementally slowed, that it more feels like were based on the macro. Yeah, Steven, it's David. I'll take that. Hey, David. I think it's a little more the national area that has slowed a bit. Yeah, good morning. I think it's a little more the national area that has slowed a bit. We're still growing, but it's definitely slowed a bit. I'm not sure it's category specific. I think it tends to be more you have some advertisers who are just pausing a bit given all the disruption around. Again, it's important to underline that we're still growing. You know, business conditions remain good. It's just the trajectory of the growth has dampened from where we were before. That's what we're seeing. Great. You've invested a lot in digital over the last few years. I think one of the things we're trying to figure out is as digital grows and just becomes a bigger part of the portfolio, what do kind of steady-state margins start to look like? So if we assume that spot kind of gets back to that recovery level that you've talked about that would kind of put you back on more of a normal run rate, how should we kind of think about where EBITDA margins start to settle, as you kind of get through the spot recovery? Yeah. Our model projects that as we get back to the 2019 levels of EBITDA, that our EBITDA margin at that point would be about consistent with where we were in 2019, about 23%. Longer term, we see our digital growth as accretive to our overall EBITDA margin. The company's longer-term projections show our EBITDA margin expanding by several points over time. Got it. With the Audacy Digital Audience Network, is that something that, you know, it seems like it's kind of comprised of a lot of the investments and acquisitions you've made over the last couple of years. When do you think we could see a material amount of revenue that's generated from it? Or is it more of like a catalyst that helps generate revenue in other businesses within the company? I think both, right? It's you know, we're a work in progress, and if you think about all the pieces that we've been building in terms of the strength of our broadcast business and our differentiated content there, our strong podcast platform, our streaming audio, and now what we expect will be an acceleration of the growth of our supply on our digital platform as Rich alluded to, because of the investments we're making there and the releases that are coming up. You know, we're now at 60 million. We expect that to grow. What we know is that we can monetize far more effectively across the audio you know, with the addition of the Audacy Digital Audience Network. It makes us a lot easier to buy, and I think for a lot of advertisers, Audacy is still the pieces that we've assembled. This is an important step in bringing it together to make us that much more compelling and easy to access for some of the larger holdcos and ad agencies and brands across the country. We think that'll make a material difference in the appeal of our products to those customers going forward. Great. Finally for me. I think a couple of years ago, or maybe it was last year, there were some considerations around covenant. I know that growth has slowed a little bit this year. Are we totally through now the covenant considerations or just anything we need to be aware of there? Thank you. Yeah. We expect to continue to build cushion against our covenant as this year progresses. We think it would be unlikely that we'd have any issues with our covenant. We think we'll be very comfortably compliant, and we'll get increasingly so as this year progresses. Great. Thanks, team. Thank you. The next question is from Dan Day of B. Riley Securities. Please proceed with your question. Yeah. Morning, guys. Thanks for taking my questions. So first one on the costs in the quarter, looks like they actually, you know, came in a little below what you had guided to. You've been typically guiding to, you know, half of revenue growth year-over-year. So just any commentary on what led to the sort of better than expected costs in the quarter, how sustainable that might be moving forward? Yeah. I think that we are absolutely, you know, being very judicious about our expense investments and have moderated some of our investments as this year unfolds. That's why in 2Q, we do expect that our costs will come in about one half of revenue growth, and we're gonna try to keep that relationship through the rest of this year. As a result, of course, we expect our EBITDA margin to expand meaningfully versus prior year. Yeah. Great. Then I appreciate the commentary around the different ad categories. One I don't think I heard was on the political side, just any updated thoughts on the back half of the year in particular, maybe a year expectations relative to past midterm years and even I know it's gonna be a contentious one, so maybe even approaching presidential years. That's what we believe. I think all of us recognize that given the nature of the political climate in this country, it will be a robust ad cycle and a robustly contentious election, and we would expect our level of political advertising to reflect that. Great. Last one for me, just kind of on the model. If we take out, it looks like you got the income tax refund during the quarter. If we put that to the side for a minute, just expectations for cash taxes for this year? Yeah. The outlook for our cash taxes this year is less than $10 million. Okay, great. Thanks. Thanks, Rich. Thanks, David. Thanks, Dan. I appreciate you taking my questions, and I'll turn it over. The next question is from Avi Steiner of JP Morgan. Please proceed with your question. Thanks. I have a couple here. First off, you have a unique view of the small and medium-sized business advertiser, and I guess away from the slowing national you called out, I'm wondering if you can talk about what you're seeing there on the local side in light of the volatile economic backdrop and then concern around an economic pullback more broadly. Thank you. Sure, Avi. I mean, Look, we're in constant touch, as you might imagine, with our sales and market leadership all around the country. They report that the pipeline of business that we have today is very solid and in fact that it is probably a little stronger than it was three or four weeks ago. That's about as good a barometer as I can give you in terms of the tone and tenor of what we're hearing from the field on the front lines on that matter. Okay, great. Then, if I missed this in the remarks, I apologize, but the Pineapple Street deal with Amazon looks interesting. I'm wondering if there's any economics or any help you can give us in terms of how to think about that, for the company. Thanks. I have one more. Sure. I mean, we have not disclosed that amount or the nature of the deal, but yes, we're being compensated by Amazon for that. Again, I wanna underline what it says about the caliber of work that our podcasting team does. The fact that Amazon, this is the only time they've ever done a deal with an outside podcast studio, and they chose our Pineapple Street folks who are the best in the business. I also think, you know, the fact that we are continuing to be the branded content or the partner on companion podcasts of choice for the Netflix and HBOs and Nikes of the world, again, speaks to that critically acclaimed work that we're doing, and I think bodes very well for our continued growth in this space. Great. The last one, and I appreciate the time and all the comments on the call. Just following up on audio and what was said about the second quarter and kind of the backdrop. I'm wondering how you think about 2022. I think you previously said that EBITDA would be about the same level as 2019, and I'm wondering if you can help triangulate maybe current thoughts. Again, appreciate the time. Thanks, all. Sure. So look, first quarter was great. We were right on track. In fact, we're running better in first quarter against our EBITDA goals than we had internally built in our models. We all know the world is being disrupted in Q2 to some extent with all the litany of you know, inflation, Ukraine, stock market, et cetera. That has had some impact on ad conditions. As I noted earlier, and as Rich noted, we are still growing and growing nicely, but the rate of growth has slowed. It also has caused less visibility on the second half at this time in terms of where things are going. Now what do we know? We know that so far the business is looking pretty good for the second half of the year, and we're growing nicely. We feel really good about the work we're doing that we can control to drive revenue opportunities and control our performance, but we are not immune to global events, and so we are subject to some extent to market conditions out of our control, and so we'll have to see how things play out. I would say that you know all of that said, we are confident that we will get back to 2019 levels and grow from there nicely given where our business is and how we're looking. As conditions are more uncertain than we had anticipated, the timing of getting back to 19 and beyond, you know, that I think could be affected here, of course, by what's happening outside of our control. Appreciate all the comments. Thank you. Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question is from Craig Huber of Huber Research Partners. Please proceed with your question. Great. Thank you. I got a few questions here. Earlier on in the call, you guys talked about some of your larger markets, how they're performing, you know, Washington, D.C., Baltimore, Philly, et cetera. I didn't hear you say anything on New York City, obviously important market for you guys. Maybe you could touch on that, what's going on there, just for starters. Sure. New York's doing really well. We have a terrific team there, and they are doing really good work, and we are growing nicely and seeing solid recovery in New York. You know, again, New York, L.A., San Francisco, these are markets that were disproportionately impacted by COVID in terms of shutdowns and et cetera. Those markets are recovering. As I mentioned earlier, they're behind their counterparts in smaller markets and Midwestern markets and southern markets, and that has dampened our performance over the last couple of years. We see really nice progress in those markets, and they're doing great work, and we're growing. Then also a couple of categories I'd love to hear a little more detail on, local services for ad revenues and also restaurants. How did that do in the quarter? What's the sort of outlook there for the second quarter? I don't know what the first one is, Craig. When you say local services. We look at restaurants through the lens of fast food and casual dining and we still see those categories as recovering. They both were, you know, making progress. Casual dining was up actually quite significantly, year-over-year, in the first quarter, over 80%. That category was quite strong. Fast food, not nearly as strong as casual dining. On your point about local services, I know there's a lot of stuff that we break out and look at probably separately. We still see that, you know, categories like hardware stores and contractors, builders, they're doing well and recovering, year-over-year. If you look at just scanning down our list, looking at things that are kinda local services, they're up year-over-year for the most part and are getting better. We saw, as we mentioned, very rapid growth in what we've called get out and go categories like concerts and movie theaters, 12 of them in total, up 180% year-over-year. Look, we see a lot of opportunity for the local advertising spend to recover strongly and, you know, we think that's likely to continue recovering. As we said, the get out and go categories are pacing up over 90% in the second quarter. My other question I wanted to ask you, and I'm not trying to be derogatory about this at all, but when you look at your first quarter spot ad revenue and compare it to 1Q of 2019, it looks like it was down about 23%. Obviously, just tough environment going through COVID. Right When you look at local television, you know, that's down, call it 0%-5%, versus, you know, call it 1Q18 on an apples-to-apples basis or even 1Q19. Why do you think, I've asked you this before, why do you think radio is still lagging in the recovery here on the traditional legacy business? Well, we have spoken about before, Craig, and it really goes to the composition of the advertising base, right? If you look at, as Rich referred to a moment ago, sort of get up and go categories and other sort of activation, these are areas that recovered, are recovering or have recovered, what have you, slower than I think the composition of business that a television operator might have. I think that's been a factor for us. I think also our geographic profile is probably another reason why, you know, we're still why we're working our way back. Then lastly would be of course, auto, which as Rich mentioned, is still down about 40% or so from 2019. Trend lines are good. I mean, again, we're up 18% in first quarter versus last year locally. We see good signs going forward for that to continue to recover, and we're working hard at it. I just wanna tack on to that, Craig, because, you know, being formerly a CFO of a local television operator, the composition of the advertising base is really quite different. Yes, we overlap in auto for sure, but the length of a radio group in a given market, the length of its customer list, is three times that of a local TV station. What you see is like categories we talked about get up and go, like gyms and movie theaters, you don't typically see that on television. These are categories that you see on radio, you do not see on television. Look, we are different. These categories were more severely impacted by COVID. They are recovering nicely, up 180% year-over-year in 1Q. We look at it and believe that as things get better, they're gonna continue to get better, and it's just a question of time. Then maybe just ask a little bit further, and that was a good response. I appreciate that. The get up and go categories, what percentage of your spot ad revenue maybe did that represent in the first quarter? Same question for auto, please. Those categories were 7% of our first quarter 2022 revenues. Historically, they were about 10%. I mentioned in my prepared remarks that in the first quarter of 2021, they comprised 3%. They were 7% this year. Historically, they were 10%. We feel pretty confident they're gonna get back to 10%. The auto category, you know, as I'm sure you appreciate, the auto category is somewhat seasonal, and it's typically a lesser% of our total spot revenues in Q1 than it is in Q2 through rest of year. Coming off the holidays, it's a little bit less typically. Typically, we see the automotive category in the low double digits, about 11 or 12%, in the first quarter historically. This year it was about 8%. It's still meaningfully off what it's been historically as a percentage of our total spot revenues. I would add, yeah, the same seasonality on the get up and go stuff first quarter would be the lightest, so we would expect that to be an even more significant driver going forward. Okay, my last question, if I could sneak this in. What is your outlook for the podcast margins for the year? If you could isolate that versus all of digital, what's your best sense how or maybe how the first quarter was? How do you think that's gonna track? Yep. We're pretty excited to see great progress in our podcast business, building our EBITDA margin for that business on a marginal basis. We're on track to get to about a low 20s% EBITDA margin, call it a contribution margin this year. You know, that team's doing an excellent job executing the plan to improve the profitability of that business. We see a ton of headroom for growth in podcasting. We see a lot of upside and there's some things that have to get done to enable that growth. We're on our way, and we're excited about the outlook. You might have saw this morning that IAB PwC projected that the podcast segment would grow by 47% this year. We think we're gonna be a full participant in that growth, and we look forward to, you know, over time, seeing that accelerated growth show up in our books. That's great. Thank you, guys. Thank you. There are no additional questions at this time. I'd like to turn the call back to David Field for closing remarks. Great. Thank you all. Appreciate you joining the call this morning, and we all look forward to reporting back to you at the end of second quarter. Bye-bye. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.