Entravision Q3 2026 earnings swing to $19M profit
The ATS segment generated $177.2 million in third-quarter revenue, a 133% increase from the year-earlier quarter.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Entravision Communications Corporation (EVC) reported third-quarter 2026 revenue of $226.3 million, up 88% from $120.6 million a year earlier, and net income attributable to common stockholders of $19.0 million, compared with a $9.7 million loss. For the nine months, revenue was $651.2 million, up 108%, and net income was $51.1 million versus a $61.0 million loss.
Nine-month operating cash flow was $61.7 million, compared with $0.9 million. The two largest advertisers represented 30% and 8% of third-quarter revenue, and 35% and 6% for the nine-month period. The sale of EVC’s two Mexico television stations closed in September at the revised $3.0 million purchase price. TelevisaUnivision extended its current agreements with EVC through March 31, 2027; each renews automatically for successive three-month periods unless either party gives 30 days’ notice. Cash and cash equivalents were $87.3 million as of September 30, 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Major pointThird-quarter revenue rose 88% year over year to $226.3 million.
- Major pointNet income attributable to common stockholders was $19.0 million, versus a $9.7 million loss.
- Moderate pointNine-month operating cash flow was $61.7 million, versus $0.9 million.
Negative
- Moderate pointTop two advertisers: 30% and 8% of third-quarter revenue.
Filing Explained
Share issuance from the awards depends on vesting conditions; separately, a landlord’s at-least $31.5 million claim remains unresolved, with trial tentatively set for June 2027.
As of
The RSUs have not vested, and the CEO award depends on performance and service conditions; any resulting share issuance would increase the share count and reduce existing holders’ ownership percentages.
RSUs generally vest over one to four years; the CEO award has four tranches tied to share-price targets of
Separately, the former Santa Monica headquarters landlord’s suit seeks at least
Key Figures
Key Terms
programmatic demand-side platform technical
Simple Agreement for Future Equity financial
retransmission consent regulatory
Term SOFR financial
First Lien Net Leverage Ratio financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was EVC's revenue in the third quarter of 2026?
Did EVC make a profit in the third quarter of 2026?
When do EVC's agreements with TelevisaUnivision expire?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(MARK ONE)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
As of November 2, 2026, there were
ENTRAVISION COMMUNICATIONS CORPORATION
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2026
TABLE OF CONTENTS
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Page Number |
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PART I. FINANCIAL INFORMATION |
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ITEM 1. |
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FINANCIAL STATEMENTS |
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4 |
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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) AS OF SEPTEMBER 30, 2026 AND DECEMBER 31, 2025 |
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4 |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2026 AND SEPTEMBER 30, 2025 |
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5 |
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) FOR THE THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2026 AND SEPTEMBER 30, 2025 |
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6 |
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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) FOR THE THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2026 AND SEPTEMBER 30, 2025 |
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7 |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2026 AND SEPTEMBER 30, 2025 |
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9 |
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
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10 |
ITEM 2. |
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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25 |
ITEM 3. |
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
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32 |
ITEM 4. |
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CONTROLS AND PROCEDURES |
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32 |
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PART II. OTHER INFORMATION |
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ITEM 1. |
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LEGAL PROCEEDINGS |
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33 |
ITEM 1A. |
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RISK FACTORS |
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33 |
ITEM 2. |
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UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
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33 |
ITEM 3. |
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DEFAULTS UPON SENIOR SECURITIES |
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33 |
ITEM 4. |
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MINE SAFETY DISCLOSURES |
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33 |
ITEM 5. |
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OTHER INFORMATION |
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33 |
ITEM 6. |
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EXHIBITS |
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34 |
Forward-Looking Statements
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.
Forward-looking statements may include the words “may,” “could,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect”, “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing obligation to disclose material information as required by the federal securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.
Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. Some of the key factors impacting these risks and uncertainties include, but are not limited to:
2
For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see the section entitled “Risk Factors,” of our 2025 10-K.
3
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ENTRAVISION COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share and per share data)
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September 30, |
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December 31, |
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2026 |
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2025 |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Restricted cash |
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Trade receivables, (including related parties of $ |
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Prepaid expenses and other current assets (including related parties of $ |
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Assets held for sale |
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Total current assets |
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Property and equipment, net of accumulated depreciation of $ |
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Intangible assets subject to amortization, net of accumulated amortization of $ |
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Intangible assets not subject to amortization |
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Goodwill |
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Deferred income taxes |
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Operating leases right of use asset |
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Other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities |
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Current maturities of long-term debt |
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$ |
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$ |
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Accounts payable and accrued expenses (including related parties of $ |
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Operating lease liabilities |
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Total current liabilities |
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Long-term debt, less current maturities, net of unamortized debt issuance costs of $ |
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Long-term operating lease liabilities |
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Other long-term liabilities |
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Deferred income taxes |
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Total liabilities |
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Commitments and contingencies (Note 6) |
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Stockholders' equity |
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Class A common stock, $ |
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Class U common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
) |
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( |
) |
Accumulated other comprehensive income (loss) |
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( |
) |
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( |
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Total stockholders' equity |
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Total liabilities and equity |
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$ |
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$ |
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See Notes to Condensed Consolidated Financial Statements
4
ENTRAVISION COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except share and per share data)
|
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Three-Month Period |
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Nine-Month Period |
|
||||||||||
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Ended September 30, |
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Ended September 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Net Revenue |
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$ |
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$ |
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$ |
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$ |
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Expenses: |
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Cost of revenue |
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Direct operating expenses (including related parties of $ |
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Selling, general and administrative expenses |
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Corporate expenses (including non-cash stock-based compensation of $ |
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Depreciation and amortization (including related parties of $ |
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Impairment charge |
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Loss on lease abandonment |
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Restructuring costs |
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||||
Foreign currency (gain) loss |
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( |
) |
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|||
Other operating (gain) loss |
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( |
) |
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|||
Operating income (loss) |
|
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( |
) |
|
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( |
) |
||
Interest expense |
|
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( |
) |
|
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( |
) |
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( |
) |
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( |
) |
Interest income |
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||||
Dividend income |
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Realized gain (loss) on marketable securities |
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Gain (loss) on debt extinguishment |
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( |
) |
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( |
) |
||
Income (loss) from continuing operations before income taxes |
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( |
) |
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( |
) |
||
Income tax benefit (expense) |
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( |
) |
|
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( |
) |
|
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||
Net income (loss) from continuing operations |
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( |
) |
|
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( |
) |
||
Net income (loss) from discontinued operations, net of tax |
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|
|
|
|
|
|
|
|
( |
) |
|||
Net income (loss) attributable to common stockholders |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Basic and diluted earnings per share: |
|
|
|
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|
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||||
Net income (loss) per share from continuing operations, basic |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Net income (loss) per share from continuing operations, diluted |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
|
|
|
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||||
Net income (loss) per share from discontinued operations, basic and diluted |
|
$ |
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$ |
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$ |
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$ |
( |
) |
|||
|
|
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||||
Net income (loss) per share attributable to common stockholders, basic |
|
$ |
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$ |
( |
) |
|
$ |
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|
$ |
( |
) |
||
Net income (loss) per share attributable to common stockholders, diluted |
|
$ |
|
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$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
|
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||||
Cash dividends declared per common share |
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$ |
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$ |
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$ |
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$ |
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||||
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||||
Weighted average common shares outstanding, basic |
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||||
Weighted average common shares outstanding, diluted |
|
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|
||||
See Notes to Condensed Consolidated Financial Statements
5
ENTRAVISION COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(In thousands)
|
|
Three-Month Period |
|
|
Nine-Month Period |
|
||||||||||
|
|
Ended September 30, |
|
|
Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net income (loss) attributable to common stockholders |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Other comprehensive income (loss), net of tax: |
|
|
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|
||||
Change in fair value of marketable securities |
|
|
( |
) |
|
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( |
) |
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Total other comprehensive income (loss) |
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( |
) |
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( |
) |
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Comprehensive income (loss) attributable to common stockholders |
|
$ |
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$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
See Notes to Condensed Consolidated Financial Statements
6
ENTRAVISION COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share and per share data)
|
|
Number of Common Shares |
|
Common Stock |
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Additional |
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Accumulated |
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Accumulated Other |
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||||||||||||
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Class A |
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Class U |
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Class A |
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Class U |
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Capital |
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Deficit |
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Income (Loss) |
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Total |
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||||||||
Balance, December 31, 2025 |
|
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
||||||
Issuance of common stock upon exercise of awards of restricted stock units |
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Tax payments related to shares withheld for share-based compensation plans |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Stock-based compensation expense |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||
Dividends paid |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
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|
( |
) |
Dividends equivalents payable |
|
|
- |
|
|
- |
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|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Change in fair value of marketable securities |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
( |
) |
OCI release due to realized gain (loss) on marketable securities |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
( |
) |
Net income (loss) attributable to common stockholders |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
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- |
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||
Balance, March 31, 2026 |
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( |
) |
|
( |
) |
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||||||
Issuance of common stock upon exercise of awards of restricted stock units |
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Tax payments related to shares withheld for share-based compensation plans |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Stock-based compensation expense |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||
Dividends paid |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Dividends equivalents payable |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Change in fair value of marketable securities |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
||
OCI release due to realized gain (loss) on marketable securities |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
( |
) |
Net income (loss) attributable to common stockholders |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
|
||
Balance, June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
( |
) |
|
|
||||||
Issuance of common stock upon exercise of awards of restricted stock units |
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Tax payments related to shares withheld for share-based compensation plans |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Stock-based compensation expense |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||
Dividends paid |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Dividends equivalents payable |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Change in fair value of marketable securities |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
( |
) |
OCI release due to realized gain (loss) on marketable securities |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
( |
) |
Net income (loss) attributable to common stockholders |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
|
||
Balance, September 30, 2026 |
|
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
||||||
7
|
|
Number of Common Shares |
|
Common Stock |
|
Additional |
|
Accumulated |
|
Accumulated Other |
|
|
|
||||||||||||
|
|
Class A |
|
Class U |
|
Class A |
|
Class U |
|
Capital |
|
Deficit |
|
Income (Loss) |
|
Total |
|
||||||||
Balance, December 31, 2024 |
|
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
||||||
Stock-based compensation expense |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||
Dividends paid |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Dividends equivalents payable |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Change in fair value of marketable securities |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
||
OCI release due to realized gain (loss) on marketable securities |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
( |
) |
Net income (loss) attributable to common stockholders |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
( |
) |
Balance, March 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
( |
) |
|
|
||||||
Stock-based compensation expense |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||
Dividend paid |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Dividends equivalents payable |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Change in fair value of marketable securities |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
||
OCI release due to realized gain (loss) on marketable securities |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
( |
) |
Net income (loss) attributable to common stockholders |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
( |
) |
Balance, June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
( |
) |
|
|
||||||
Stock-based compensation expense |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
|
||
Dividends paid |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Dividends equivalents payable |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
- |
|
|
( |
) |
Change in fair value of marketable securities |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
||
OCI release due to realized gain (loss) on marketable securities |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
( |
) |
Net income (loss) attributable to common stockholders |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
( |
) |
|
- |
|
|
( |
) |
Balance, September 30, 2025 |
|
|
|
|
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
||||||
See Notes to Condensed Consolidated Financial Statements
8
ENTRAVISION COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
|
Nine-Month Period |
|
|||||
|
Ended September 30, |
|
|||||
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
||
Net income (loss) attributable to common stockholders |
$ |
|
|
$ |
( |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
||
Impairment charge |
|
|
|
|
|
||
Loss on lease abandonment |
|
|
|
|
|
||
Deferred income taxes |
|
( |
) |
|
|
( |
) |
Non-cash interest |
|
|
|
|
|
||
Amortization of syndication contracts |
|
|
|
|
|
||
Payments on syndication contracts |
|
( |
) |
|
|
( |
) |
Non-cash stock-based compensation |
|
|
|
|
|
||
(Gain) loss on marketable securities |
|
( |
) |
|
|
( |
) |
(Gain) loss on disposal of property and equipment |
|
( |
) |
|
|
|
|
(Gain) loss on debt extinguishment |
|
|
|
|
|
||
Changes in assets and liabilities: |
|
|
|
|
|
||
(Increase) decrease in accounts receivable |
|
( |
) |
|
|
( |
) |
(Increase) decrease in prepaid expenses and other current assets, operating leases right of use asset and other assets |
|
( |
) |
|
|
|
|
Increase (decrease) in accounts payable, accrued expenses and other liabilities |
|
|
|
|
|
||
Net cash provided by (used in) operating activities |
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
||
Proceeds from sale of assets |
|
|
|
|
|
||
Purchases of property and equipment |
|
( |
) |
|
|
( |
) |
Purchases of marketable securities |
|
|
|
|
( |
) |
|
Proceeds from sale of marketable securities |
|
|
|
|
|
||
Net cash provided by (used in) investing activities |
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
||
Tax payments related to shares withheld for share-based compensation plans |
|
( |
) |
|
|
|
|
Payments on debt |
|
( |
) |
|
|
( |
) |
Dividends paid |
|
( |
) |
|
|
( |
) |
Principal payments under finance lease obligation |
|
( |
) |
|
|
( |
) |
Payments for debt issuance costs |
|
|
|
|
( |
) |
|
Net cash provided by (used in) financing activities |
|
( |
) |
|
|
( |
) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
|
|
( |
) |
|
Cash, cash equivalents and restricted cash: |
|
|
|
|
|
||
Beginning |
|
|
|
|
|
||
Ending |
$ |
|
|
$ |
|
||
Supplemental disclosures of cash flow information: |
|
|
|
|
|
||
Cash payments (net refunds) for: |
|
|
|
|
|
||
Interest |
$ |
|
|
$ |
|
||
Income taxes |
$ |
( |
) |
|
$ |
|
|
Supplemental disclosures of non-cash investing and financing activities: |
|
|
|
|
|
||
Capital expenditures financed through accounts payable, accrued expenses and other liabilities |
$ |
|
|
$ |
|
||
Dividends equivalents payable |
$ |
|
|
$ |
|
||
See Notes to Condensed Consolidated Financial Statements
9
ENTRAVISION COMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
Presentation
The condensed consolidated financial statements included herein have been prepared by Entravision Communications Corporation (the “Company”), pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. These condensed consolidated financial statements and the notes thereto should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2025 included in the Company’s 2025 Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 10-K"). The unaudited information contained herein has been prepared on the same basis as the Company’s audited consolidated financial statements and, in the opinion of the Company’s management, includes all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information for the periods presented. The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2026 or any other future period.
2. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The Company is a media and advertising technology company.
The Company's media business owns and operates one of the largest groups of Spanish-language television and radio stations in the United States. Its mission is to serve its Latino audience as a trusted provider of news, information, and entertainment. The Company serves its advertisers by providing marketing capabilities across broadcast and digital media.
The Company's advertising technology & services (ATS) business empowers advertisers, primarily mobile app developers, to grow their businesses globally. The Company provides advertising solutions through two brands. Smadex is a programmatic demand-side platform, which uses proprietary artificial intelligence (AI) to automate media buying. Adwake is a performance-based digital marketing agency.
The Company has organized its operations into
In 2024 the Company discontinued and divested a significant portion of its operations, which largely consisted of a collection of acquisitions that had been completed prior to 2024. The Company had a de minimis net loss from discontinued operations, net of tax for the nine-month period ended September 30, 2025.
Assets Held for Sale
In March 2025, the Company entered into a letter of intent to sell the assets of its
As part of ongoing negotiations, during the third quarter of 2025, the purchase price was reduced by $
In June 2025, the Company’s management decided to sell
In June 2026, the Company completed the sale of the office building in El Centro, California, which had a carrying value of $
10
The carrying amounts of the Corpus Christi, Texas and Midland, Texas buildings totaling $
Restricted Cash
As of September 30, 2026 and December 31, 2025, the Company’s balance sheet includes $
The Company's cash and cash equivalents and restricted cash, as presented in the Condensed Consolidated Statements of Cash Flows, was as follows (in thousands):
|
As of September 30, |
|
|||||
|
2026 |
|
|
2025 |
|
||
Cash and cash equivalents |
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
||
Total as presented in the Condensed Consolidated Statements of Cash Flows |
$ |
|
|
$ |
|
||
Related Parties
Substantially all of the Company’s television stations are Univision- or UniMás-affiliated television stations. On October 2, 2017, the Company entered into the current affiliation agreement which superseded and replaced its prior affiliation agreements with TelevisaUnivision. Additionally, on the same date, the Company entered into a proxy agreement and marketing and sales agreement with TelevisaUnivision, each of which superseded and replaced the prior comparable agreements with TelevisaUnivision. The term of each of these current agreements was scheduled to expire on December 31, 2026 for all of the Company’s Univision and UniMás network affiliate stations. On October 5, 2026, TelevisaUnivision and the Company extended each of these agreements on their respective current terms for three months, until March 31, 2027. The extension term of each agreement renews automatically for successive three-month periods unless either party gives 30 days' notice that the agreements will not be further renewed.
The network affiliation agreement with TelevisaUnivision provides certain of the Company’s owned stations the exclusive right to broadcast TelevisaUnivision’s primary Univision network and UniMás network programming in their respective markets. Under the network affiliation agreement, the Company retains the right to sell no less than four minutes per hour of the available advertising time on stations that broadcast Univision network programming, and the right to sell approximately four and a half minutes per hour of the available advertising time on stations that broadcast UniMás network programming, subject to adjustment from time to time by TelevisaUnivision.
Under the network affiliation agreement, TelevisaUnivision acts as the Company’s exclusive third-party sales representative for the sale of certain national advertising on the Univision- and UniMás-affiliate television stations, and the Company pays certain sales representation fees to TelevisaUnivision relating to sales of all advertising for broadcast on its Univision- and UniMás-affiliate television stations.
During the three-month periods ended September 30, 2026 and 2025, the amount the Company paid TelevisaUnivision in this capacity was $
Under the Company’s current proxy agreement with TelevisaUnivision, the Company grants TelevisaUnivision the right to negotiate the terms of retransmission consent agreements for its Univision- and UniMás-affiliated television station signals. Among other things, the proxy agreement provides terms relating to compensation to be paid to the Company by TelevisaUnivision with respect to retransmission consent agreements entered into with multichannel video programming distributors (“MVPDs”). As of September 30, 2026, the amount due to the Company from TelevisaUnivision was $
The Company also generates revenue under two marketing and sales agreements with TelevisaUnivision, which give it the right to manage the marketing and sales operations of TelevisaUnivision-owned Univision affiliates in three markets – Albuquerque, Boston and Denver.
TelevisaUnivision currently owns approximately
11
liquidate the Company or dispose of any interest in any FCC license with respect to television stations which are affiliates of TelevisaUnivision, among other things.
On February 1, 2026, the Company entered into a Simple Agreement for Future Equity ("SAFE") with LATV Networks, LLC ("LATV"), a related party in which the Company has held
Stock-Based Compensation
The Company measures all stock-based awards using a fair value method and recognizes the related stock-based compensation expense in the condensed consolidated financial statements over the requisite service period. As stock-based compensation expense recognized in the Company’s condensed consolidated financial statements is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures.
Restricted Stock Units
Stock-based compensation expense related to restricted stock units ("RSUs") is based on the fair value of the Company’s stock price on the date of grant and is amortized over the vesting period, generally between
During the nine-month period ended September 30, 2026, the Company had the following non-vested RSU activity (in thousands, except grant date fair value data):
|
|
Number of RSUs |
|
|
Weighted-Average Grant Date Fair Value |
|
||
Nonvested balance at December 31, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Vested |
|
|
( |
) |
|
|
|
|
Forfeited or cancelled |
|
|
( |
) |
|
|
|
|
Nonvested balance at September 30, 2026 |
|
|
|
|
|
|
||
Stock-based compensation expense related to RSUs was $
Stock-based compensation expense related to RSUs was $
As of September 30, 2026, there was $
Performance Stock Units
In connection with the annual grant of performance stock units (“PSUs”) in January 2026, the Company has granted PSUs to its Chief Executive Officer ("CEO"), which PSUs are subject to both time-based vesting conditions and market-based conditions. Both the service and market conditions must be satisfied for the PSUs to vest. The PSUs consist of four equal tranches, based on achievement of a share price condition if the Company achieves share price targets of $
The Company recognizes compensation expense related to the PSUs using the accelerated attribution method over the requisite service period. Stock-based compensation expense for PSUs is based on a performance measurement of
Stock-based compensation expense related to PSUs was $
12
Stock-based compensation expense related to PSUs was $
As of September 30, 2026, there was $
The grant date fair value for each PSU was estimated using a Monte-Carlo simulation model that incorporates option-pricing inputs covering the period from the grant date through the end of the performance period.
|
|
2026 PSUs |
|
|
Stock price at issuance |
|
$ |
|
|
Expected volatility |
|
|
% |
|
Risk-free interest rate |
|
|
% |
|
Expected term |
|
|
|
|
Expected dividend yield |
|
|
% |
|
During the nine-month period ended September 30, 2026, the Company had the following non-vested PSU activity (in thousands, except grant date fair value data):
|
|
Number of PSUs |
|
|
Weighted-Average Grant Date Fair Value |
|
||
Nonvested balance at December 31, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Vested |
|
|
( |
) |
|
|
|
|
Forfeited or cancelled |
|
|
( |
) |
|
|
|
|
Nonvested balance at September 30, 2026 |
|
|
|
|
|
|
||
13
Income (Loss) Per Share
The following table illustrates the reconciliation of the basic and diluted income (loss) per share (in thousands, except share and per share data):
|
|
Three-Month Period |
|
|
Nine-Month Period |
|
||||||||||
|
|
Ended September 30, |
|
|
Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) from continuing operations |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Net income (loss) from discontinued operations, net of tax |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Net income (loss) attributable to common stockholders |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) per share from continuing operations |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Income (loss) per share from discontinued operations, net of tax |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Net income (loss) per share attributable to common stockholders |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted earnings per share: |
|
|
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|
|
|
|
|
|
||||
Denominator: |
|
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|
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|
|
||||
Weighted average common shares outstanding |
|
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|
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|
|
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|
||||
Dilutive securities: |
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|
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|
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|
||||
Restricted stock units |
|
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|
||||
Diluted shares outstanding |
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|
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|
||||
|
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|
||||
Per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) per share from continuing operations |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Income (loss) per share from discontinued operations, net of tax |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Net income (loss) per share attributable to common stockholders |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
For the three- and nine-month periods ended September 30, 2026, a total of
For the three- and nine-month periods ended September 30, 2025, all dilutive securities have been excluded as their inclusion would have had an antidilutive effect on loss per share. The number of securities whose conversion would result in an incremental number of shares that would be included in determining the weighted average shares outstanding for diluted earnings per share if their effect was not antidilutive was
Impairment
The carrying values of the Company's reporting units are determined by allocating all applicable assets (including goodwill) and liabilities based upon the unit in which the assets are employed and to which the liabilities relate, considering the methodologies utilized to determine the fair value of the reporting units.
Goodwill and indefinite life intangibles are not amortized but are tested annually for impairment, or more frequently, if events or changes in circumstances indicate that the assets might be impaired. The annual testing date is October 1.
As discussed above under Assets held for sale, in March 2025, the Company entered into an agreement to sell the assets of its
Loss on Lease Abandonment
At the time of a lease termination, the operating lease right-of-use ("ROU") asset is derecognized, while the corresponding lease liability is evaluated and derecognized by the Company based any remaining contractual obligations as of the lease termination date.
14
The Company’s corporate headquarters and main operational offices for its audio operations are currently located in Burbank, California. The Company's corporate headquarters and main operational offices for its audio operations were previously located in Santa Monica, California. The Company occupied approximately
In addition, the Company has abandoned six additional leased facilities, with impacted employees transitioning to remote work. See more details under "Restructuring" below. The Company does not expect to incur additional liabilities related to these abandoned leases.
Restructuring
During the third quarter of 2025, the Company's management began to implement an ongoing organization design plan (the "Plan") intended to support revenue growth and reduce expenses, primarily in the Company’s media operations.
Key components of the Plan that have been implemented include a reduction of approximately
The Company accounts for its restructuring charges as a liability when the obligations are incurred and records such charges at fair value. As a result of the implementation of the Plan and the actions described above, the Company recorded total charges of $
The following table rolls forward the activity in the restructuring liability:
(in thousands) |
|
|
|
|
|
Beginning balance at December 31, 2025 |
|
$ |
|
|
|
Additional restructuring and related costs |
|
|
|
|
|
Non-cash charge |
|
|
( |
) |
|
Cash payments |
|
|
( |
) |
|
Ending balance September 30, 2026 |
|
$ |
|
|
|
Credit Facility
The Company entered into the Credit Facility, pursuant to the Credit Agreement dated as of March 17, 2023 (the "Original 2023 Credit Agreement"), by and among the Company, Bank of America, N.A., as Administrative Agent, and the other financial institutions party thereto as Lenders (collectively the “Lenders” and individually each a “Lender”). The Original 2023 Credit Agreement amended, restated and replaced in its entirety the Company's previous credit agreement. The Original 2023 Credit Agreement was amended as of July 15, 2025, effective as of June 30, 2025 (the “2025 Amendment”), with respect to certain financial covenants and certain other provisions of the Credit Facility, and was further amended as of March 18, 2026 (the “2026 Amendment”), with respect to a certain administrative clarification of the calculation of financial covenants. The Original 2023 Credit Agreement, the 2025 Amendment and the 2026 Amendment are collectively referred to as the “Amended Credit Agreement”.
As provided in the Amended Credit Agreement, the Credit Facility consists of (i) a $
The Credit Facility is guaranteed on a senior secured basis by certain of the Company’s existing and future wholly-owned domestic subsidiaries, and secured on a first priority basis by the Company’s and those subsidiaries’ assets.
The Company’s borrowings under the Credit Facility bear interest on the outstanding principal amount thereof from the date when made at a rate per annum equal to either: (i) the Term SOFR (as defined in the Amended Credit Agreement) plus a margin
15
between
As of September 30, 2026, the interest rate on the Company's Term A Facility and the drawn portion of the Revolving Credit Facility was
The amounts outstanding under the Credit Facility may be prepaid at the option of the Company without premium or penalty, provided that certain limitations are observed, and subject to customary breakage fees in connection with the prepayment of a Term SOFR loan. The principal amount of the Term A Facility shall be paid in installments on the dates and in the respective amounts set forth in the Amended Credit Agreement, with the final balance due on the Maturity Date.
The Company incurred debt issuance costs of $
The Company paid the lenders consenting to the 2025 Amendment a fee equal to
The Company incurred additional debt issuance costs of $
The covenants of the Amended Credit Agreement include customary negative covenants that, among other things, restrict the Company’s ability to incur additional indebtedness, grant liens and make certain acquisitions, investments, asset dispositions and restricted payments. In addition, the Amended Credit Agreement requires compliance with financial covenants related to Total Net Leverage Ratio, not to exceed
In addition, the Amended Credit Agreement:
The Amended Credit Agreement also includes customary events of default, as well as the following events of default, that are specific to the Company:
The Amended Credit Agreement further includes customary rights and remedies upon the occurrence of any event of default thereunder, including rights to accelerate the loans, terminate the commitments thereunder and realize upon the collateral securing the obligations under the Amended Credit Agreement.
There is a security agreement in effect with respect to the Credit Facility.
The carrying amount of the Term Loan A Facility as of September 30, 2026 approximated its fair value and was $
Concentrations of Credit Risk and Trade Receivables
The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. The Company has bank deposits in excess of Federal Deposit Insurance Corporation insurance limits. As of September 30, 2026, the majority of all U.S. deposits are maintained in three financial institutions. The Company has not experienced any losses in such accounts and believes that it is not currently exposed to significant credit risk on cash and cash equivalents. In addition, to the Company's knowledge, all or substantially all of the bank deposits held in banks outside the United States, primarily Spain and Singapore, are not insured.
16
The Company’s credit risk is spread across a large number of advertisers, thereby spreading the trade receivable credit risk. The Company routinely assesses the financial strength of its customers and, as a consequence, believes that it is managing its trade receivable credit risk effectively. Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables, based on a review of all outstanding amounts on a monthly basis. An allowance for doubtful accounts is provided for known and anticipated credit losses, as determined by management in the course of regularly evaluating individual customer receivables. This evaluation takes into consideration a customer’s financial condition and credit history, as well as current economic conditions. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. No interest is charged on customer accounts.
Trade receivables from the two largest advertisers represented
Revenue from the two largest advertisers represented
Revenue from the largest advertiser represented 9% of the Company's total revenue for the three-month period ended September 30, 2025.
These advertisers pay on a current basis and therefore management believes that it is managing this risk.
Allowance for Credit Losses
The accounts receivable consist of a homogeneous pool of relatively small dollar amounts from a large number of customers. The Company evaluates the collectability of its trade accounts receivable based on a number of factors. When the Company is aware of a specific customer’s inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of potential bad debts, bad debt charges are recorded based on the Company's recent past loss history and an overall assessment of past due trade accounts receivable amounts outstanding.
Estimated losses for bad debts are provided for in the consolidated financial statements through a charge that aggregated $
Fair Value Measurements
The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date.
Accounting Standards Codification ("ASC") 820, “Fair Value Measurements and Disclosures”, defines and establishes a framework for measuring fair value and expands disclosures about fair value measurements. In accordance with ASC 820, the Company has categorized its financial assets and liabilities, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below.
Level 1 – Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the company has the ability to access at the measurement date.
Level 2 – Assets and liabilities whose values are based on quoted prices for similar attributes in active markets; quoted prices in markets where trading occurs infrequently; and inputs other than quoted prices that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 – Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.
If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
17
The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring and nonrecurring basis in the condensed consolidated balance sheets (in millions):
|
|
September 30, 2026 |
|
||||||||||||||||
|
|
Total Fair Value and Carrying Value on Balance Sheet |
|
|
Fair Value Measurement Category |
|
|
|
|
||||||||||
Recurring fair value measurements |
|
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total Gains (Losses) |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market account |
|
$ |
|
|
$ |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Corporate bonds and notes |
|
$ |
|
|
|
— |
|
|
$ |
|
|
|
— |
|
|
|
|
||
|
|
December 31, 2025 |
|
||||||||||||||||
|
|
Total Fair Value and Carrying Value on Balance Sheet |
|
|
Fair Value Measurement Category |
|
|
|
|
||||||||||
Recurring fair value measurements |
|
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total Gains (Losses) |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market account |
|
$ |
|
|
$ |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Corporate bonds and notes |
|
$ |
|
|
|
— |
|
|
$ |
|
|
|
— |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonrecurring fair value measurements: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FCC licenses |
|
$ |
|
|
|
— |
|
|
|
— |
|
|
|
|
$ |
( |
) |
||
The Company’s money market account is comprised of cash and cash equivalents, which are recorded at their fair market value within Cash and cash equivalents in the Condensed Consolidated Balance Sheets.
The Company’s available for sale debt securities are comprised of corporate bonds and notes, asset-backed securities, and U.S. Government securities. These securities are valued using quoted prices for similar attributes in active markets (Level 2). Since these investments are classified as available for sale, they are recorded at their fair market value within Marketable securities in the Consolidated Balance Sheets and their unrealized gains or losses are included in other comprehensive income. Realized gains and losses from the sale of available for sale securities are included in the Consolidated Statements of Operations and were determined on a specific identification basis.
As of September 30, 2026, the following table summarizes the amortized cost and the unrealized gains (losses) of the available for sale securities (in thousands):
|
|
|
|
|||||
|
|
Corporate Bonds and Notes |
|
|||||
|
|
Amortized Cost |
|
|
Unrealized gains (losses) |
|
||
Due within a year |
|
$ |
|
|
$ |
( |
) |
|
Due after one year |
|
|
|
|
|
( |
) |
|
Total |
|
$ |
|
|
$ |
( |
) |
|
The Company’s available for sale debt securities are considered for credit losses under the guidance of Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326). As of September 30, 2026 and December 31, 2025, the Company determined that a credit loss allowance is not required.
18
Income Taxes
Income taxes for interim periods are determined based on the Company’s estimated annual effective tax rate, which is applied to year-to-date operating results, adjusted for the tax effect of discrete items that are recognized entirely in the interim period in which they occur.
For the three-month period ended September 30, 2026, the Company recorded an income tax expense of $
The Company’s effective tax rate for both the three- and nine-month periods ended September 30, 2026 differed from the U.S. federal statutory rate of
The Company’s effective tax rate for both the three- and nine-month periods ended September 30, 2025 differed from the U.S. federal statutory rate of
Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss) ("AOCI") includes foreign currency translation adjustments and changes in the fair value of available for sale securities.
The following table provides a roll-forward of accumulated other comprehensive income (loss) (in thousands):
|
|
Foreign |
|
|
Marketable |
|
|
Total |
|
|||
Accumulated other comprehensive income (loss) as of December 31, 2025 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Other comprehensive income (loss) |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Income tax (expense) benefit |
|
|
- |
|
|
|
|
|
|
|
||
Amounts reclassified from AOCI |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Other comprehensive income (loss), net of tax |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive income (loss) as of March 31, 2026 |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Other comprehensive income (loss) |
|
|
- |
|
|
|
|
|
|
|
||
Income tax (expense) benefit |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Amounts reclassified from AOCI |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Other comprehensive income (loss), net of tax |
|
|
- |
|
|
|
|
|
|
|
||
Accumulated other comprehensive income (loss) as of June 30, 2026 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Other comprehensive income (loss) |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Income tax (expense) benefit |
|
|
- |
|
|
|
|
|
|
|
||
Amounts reclassified from AOCI |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Other comprehensive income (loss), net of tax |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive income (loss) as of September 30, 2026 |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Foreign Currency
The Company’s reporting currency is the U.S. dollar. All transactions initiated in foreign currencies, primarily the Euro, are translated into U.S. dollars in accordance with ASC 830, “Foreign Currency Matters” and the related rate fluctuation on transactions is included in the Condensed Consolidated Statements of Operations.
Cost of Revenue
Cost of revenue consists of the costs of online media acquired from third-parties in both the Company's media and ATS segments.
Recent Accounting Pronouncements
There were no new accounting pronouncements that were issued or became effective since the issuance of the Company's 2025 10-K that had, or are expected to have, a material impact on the Company’s condensed consolidated financial statements.
19
Newly Adopted Accounting Standards
There were no new accounting standards that were adopted since the issuance of the Company's 2025 10-K.
3. REVENUES
Revenue Recognition
Revenues are recognized when control of the promised services is transferred to the Company’s customers, in an amount equal to the consideration the Company expects to be entitled to in exchange for those services.
Broadcast Advertising. Revenue related to the sale of advertising on the Company's television and radio stations is recognized at the time of broadcast. Revenue for contracts with advertising agencies is recorded at an amount that is net of the commission retained by the agency. Revenue from contracts directly with the advertisers is recorded as gross revenue and the related commission or national representation fee is recorded in operating expense.
Digital Advertising. Revenue related to digital advertising, in both our media and ATS segments, is recognized when display or other digital advertisements record impressions on the websites and mobile and Internet-connected television apps of media companies on whose digital platforms the advertisements are placed or as the advertiser’s previously agreed-upon performance criteria are satisfied. The Company has concluded that it is the principal in the transaction and therefore recognizes revenue on a gross basis, because (i) the Company is responsible for fulfillment of the contract, including customer support, resolving customer complaints, and accepting responsibility for the quality or suitability of the product or service; (ii) the Company has pricing discretion over the transaction; and (iii) the Company carries inventory risk for all inventory purchased regardless of whether the Company is able to collect on a transaction.
Retransmission Consent. The Company generates revenue from retransmission consent agreements that are entered into with MVPDs. The Company grants the MVPDs access to its television station signals so that they may rebroadcast the signals and charge their subscribers for this programming. Revenue is recognized as the television signal is delivered to the MVPDs.
Spectrum Usage Rights. The Company generates revenue from agreements associated with its television stations’ spectrum usage rights. Revenue is recognized in accordance with the contractual fees over the term of the agreement or when the Company has relinquished all or a portion of its spectrum usage rights for a station or have relinquished its rights to operate a station on the existing channel free from interference.
The Company does not disclose the value of unsatisfied performance obligations when (i) contracts have an original expected length of one year or less, which applies to essentially all of the Company's advertising contracts; and (ii) variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property, which applies to retransmission consent revenue.
The Company expenses contract acquisition costs, such as sales commissions generated either by internal direct sales employees or through third party advertising agency intermediaries, when such costs are incurred because the amortization period is one year or less. These costs are recorded within direct operating expenses.
The Company records deferred revenues within Accounts payable and accrued expenses in the Consolidated Balance Sheets, when cash payments are received or due in advance of its performance, including amounts which are refundable. The change in the deferred revenue balance is primarily driven by cash payments received or due in advance of satisfying the Company’s performance obligations, offset by revenues recognized that were included in the deferred revenue balance in the prior period.
The Company’s payment terms vary by the type and location of customer and the products or services offered. The term between invoicing and when payment is due is typically 30 days. For certain individual customers and customer types, the Company generally requires payment before the services are delivered to the customer.
Disaggregated Revenue
The following table presents our revenues disaggregated by major source (in thousands):
|
|
Three-Month Period |
|
|
Nine-Month Period |
|
||||||||||
|
|
Ended September 30, |
|
|
Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Digital advertising |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Broadcast advertising |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Spectrum usage rights |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Retransmission consent |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
20
Contracts are entered into directly with customers or through an advertising agency that represents the customer. Sales of advertising to customers or agencies within a station’s designated market area (“DMA”) are referred to as local revenue, whereas sales from outside the DMA are referred to as national revenue.
|
|
Three-Month Period |
|
|
Nine-Month Period |
|
||||||||||
|
|
Ended September 30, |
|
|
Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Local direct |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Local agency |
|
|
|
|
|
|
|
|
|
|
|
|
||||
National agency |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following table further disaggregates the Company’s revenue by geographical region, based on the location of the sales office (in thousands):
|
|
Three-Month Period |
|
|
Nine-Month Period |
|
||||||||||
|
|
Ended September 30, |
|
|
Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Asia |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Europe |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rest of the World |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Deferred Revenue
(in thousands) |
December 31, 2025 |
|
Increase |
|
Decrease |
|
|
September 30, 2026 |
|
||
Deferred revenue |
$ |
|
|
( |
|
|
$ |
|
|||
4. LEASES
The Company’s leases are considered operating leases and primarily consist of real estate such as office space, broadcasting towers, land and land easements. The operating leases are reflected within the consolidated balance sheet as Operating leases right of use asset with the related liability presented as Operating lease liabilities and Long-term operating lease liabilities. Lease expense is recognized on a straight-line basis over the lease term. Generally, lease terms include options to renew or extend the lease. Unless the renewal option is considered reasonably certain, the exercise of any such options has been excluded from the calculation of lease liabilities.
The following table summarizes the expected future payments related to lease liabilities as of September 30, 2026:
(in thousands) |
|
|
|
|
Remainder of 2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total minimum payments |
|
$ |
|
|
Less amounts representing interest |
|
|
( |
) |
Present value of minimum lease payments |
|
|
|
|
Less current operating lease liabilities |
|
|
( |
) |
Long-term operating lease liabilities |
|
$ |
|
|
21
The Company’s corporate headquarters and main operational offices for its audio operations are currently located in Burbank, California. The Company's corporate headquarters and main operational offices for its audio operations were previously located in Santa Monica, California. The Company occupied approximately
The following table summarizes lease payments and supplemental non-cash disclosures:
|
|
Nine-Month Period Ended September 30, |
|||||
(in thousands) |
|
2026 |
|
|
2025 |
||
Cash paid for amounts included in lease liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash flows from operating leases |
|
$ |
|
|
$ |
||
Non-cash additions to operating lease assets |
|
$ |
|
|
$ |
||
The following table summarizes the components of lease expense:
|
|
Three-Month Period |
|
|
Nine-Month Period |
|
||||||||||
|
|
Ended September 30, |
|
|
Ended September 30, |
|
||||||||||
(in thousands) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Operating lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Variable lease cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Short-term lease cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
For the three-month period ended September 30, 2026, lease cost of $
For the three-month period ended September 30, 2025, lease cost of $
As discussed above, in February 2025 the Company's management decided to vacate its previous corporate headquarters in Santa Monica, California and cease making further payments under the lease, as amended, which lease was scheduled to expire
5. SEGMENT INFORMATION
The Company has organized its operations into
Segment operating profit (loss) is defined as operating profit (loss) before corporate expenses, impairment charge, loss on lease abandonment, restructuring costs, other operating (gain) loss, and foreign currency (gain) loss. The Company generated
22
The accounting policies applied to determine the segment information are generally the same as those described in the summary of significant accounting policies (see Note 2). The Company evaluates the performance of its operating segments based on separate financial data for each operating segment as provided below (in thousands):
|
|
Three-Month Period |
|
|
|
|
|
Nine-Month Period |
|
|
|
|
||||||||||||
|
|
Ended September 30, |
|
|
% |
|
|
Ended September 30, |
|
|
% |
|
||||||||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|
2026 |
|
|
2025 |
|
|
Change |
|
||||||
Net revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Media |
|
$ |
|
|
$ |
|
|
|
% |
|
$ |
|
|
$ |
|
|
|
% |
||||||
ATS |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
% |
||||||
Consolidated |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Media |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
% |
||||||
ATS |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
% |
||||||
Consolidated |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Direct operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Media |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
% |
||||||
ATS |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
% |
||||||
Consolidated |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Media |
|
|
|
|
|
|
|
|
( |
)% |
|
|
|
|
|
|
|
|
% |
|||||
ATS |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
% |
||||||
Consolidated |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Media |
|
|
|
|
|
|
|
|
( |
)% |
|
|
|
|
|
|
|
|
( |
)% |
||||
ATS |
|
|
|
|
|
|
|
|
( |
)% |
|
|
|
|
|
|
|
|
( |
)% |
||||
Consolidated |
|
|
|
|
|
|
|
|
( |
)% |
|
|
|
|
|
|
|
|
( |
)% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Segment operating profit (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Media |
|
|
|
|
|
( |
) |
|
* |
|
|
|
( |
) |
|
|
( |
) |
|
|
% |
|||
ATS |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
% |
||||||
Consolidated |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Corporate expenses |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
% |
||||||
Impairment charge |
|
|
|
|
|
|
|
|
( |
)% |
|
|
|
|
|
|
|
|
( |
)% |
||||
Loss on lease abandonment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
)% |
||||||
Restructuring costs |
|
|
|
|
|
|
|
|
( |
)% |
|
|
|
|
|
|
|
|
( |
)% |
||||
Foreign currency (gain) loss |
|
|
( |
) |
|
|
|
|
* |
|
|
|
|
|
|
|
|
|
% |
|||||
Other operating (gain) loss |
|
|
|
|
|
|
|
* |
|
|
|
( |
) |
|
|
|
|
* |
|
|||||
Operating income (loss) |
|
|
|
|
|
( |
) |
|
* |
|
|
|
|
|
|
( |
) |
|
* |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest expense |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
( |
)% |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
( |
)% |
Interest income |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
( |
)% |
|||||
Dividend income |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
% |
||||||
Realized gain (loss) on marketable securities |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
% |
||||||
Gain (loss) on debt extinguishment |
|
|
|
|
|
( |
) |
|
|
( |
)% |
|
|
|
|
|
( |
) |
|
|
( |
)% |
||
Income (loss) before income taxes |
|
|
|
|
|
( |
) |
|
* |
|
|
|
|
|
|
( |
) |
|
* |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Capital expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Media |
|
$ |
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
|
|
||||||
Advertising Technology & Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated |
|
$ |
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
* Percentage not meaningful.
23
6. COMMITMENTS AND CONTINGENCIES
The Company is subject to various outstanding claims and other legal proceedings that may arise from time to time in the ordinary course of business. In the opinion of management, any liability of the Company that may arise out of or with respect to any such matters will not materially adversely affect the financial position, results of operations or cash flows of the Company.
7. SUBSEQUENT EVENT
The Company entered into a purchase agreement with Sunset Boulevard Broadcasting Corporation (“SBBC”) on November 3, 2026, pursuant to which the Company will sell WFTT-TV, serving the Tampa-St. Petersburg, Florida market, for $
24
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are a media and advertising technology company.
Through our media business we own and operates one of the largest groups of Spanish-language television and radio stations in the United States. Our mission is to serve our Latino audience as a trusted provider of news, information, and entertainment. We serve our advertisers by providing marketing capabilities across broadcast and digital media.
Our advertising technology & services (ATS) business empowers advertisers, primarily mobile app developers, to grow their businesses globally. We provide advertising solutions through two brands. Smadex is a programmatic demand-side platform, which uses proprietary AI to automate media buying. Adwake is a performance-based digital marketing agency.
We have organized our operations into two reportable segments. Our media segment consists of our television, radio and digital marketing operations. Our ATS segment consists of Smadex and Adwake.
Our net revenue for the three-month period ended September 30, 2026 was $226.3 million. Of this amount, revenue generated by our media segment accounted for approximately 22%, and revenue generated by our ATS segment accounted for approximately 78% of total revenue.
Highlights
During the third quarter of 2026, our revenue grew by 88%, driven by revenue growth in our ATS segment and an increase in revenue in our media segment, compared to the comparable period of 2025. In addition, during the third quarter of 2026:
Relationship with TelevisaUnivision
Our network affiliation agreement with TelevisaUnivision provides certain of our owned stations the exclusive right to broadcast TelevisaUnivision’s primary Univision network and UniMás network programming in their respective markets. Under our proxy agreement with TelevisaUnivision, we grant TelevisaUnivision the right to negotiate the terms of retransmission consent agreements with MVPDs for our Univision- and UniMás-affiliated television station signals. Revenue generated from retransmission consent agreements represents payments from MVPDs for access to our television station signals so that they may rebroadcast our signals and charge their subscribers for this programming. We also generate revenue under a marketing and sales agreement with TelevisaUnivision, which gives us the right to manage the marketing and sales operations of TelevisaUnivision-owned Univision affiliates in three markets – Albuquerque, Boston and Denver. The term of each of these current agreements was scheduled to expire on December 31, 2026 for all of our Univision and UniMás network affiliate stations. On October 5, 2026, TelevisaUnivision and we extended each of these agreements on their respective current terms for three months, until March 31, 2027. The extension term of each agreement renews automatically for successive three-month periods unless either party gives 30 days' notice that the agreements will not be further renewed.
Management is anticipating the possibility that our contractual arrangements with TelevisaUnivision will terminate after the initial extension period ends on March 31, 2027 and is beginning to explore alternatives, which may include the disposition of our television assets and is likely to result in fundamental adjustments to our television operations as a whole. See Part II, Item 1A, “Risk Factors”.
TelevisaUnivision also owns approximately 10% of our common stock on a fully-converted basis. For more information regarding these agreements and the stock that TelevisaUnivision owns, see Note 2 to Notes to Condensed Consolidated Financial Statements.
25
Critical Accounting Policies
For a description of our critical accounting policies, please refer to “Application of Critical Accounting Policies and Accounting Estimates” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2025 10-K.
Recent Accounting Pronouncements
For further information on recently issued accounting pronouncements, see Note 2 to Notes to Condensed Consolidated Financial Statements.
Three- and Nine-Month Periods Ended September 30, 2026 and 2025
The following table sets forth selected data from our operating results for the three- and nine-month periods ended September 30, 2026 and 2025 (in thousands):
|
|
Three-Month Period |
|
|
|
|
|
Nine-Month Period |
|
|
|
|
||||||||||||
|
|
Ended September 30, |
|
|
% |
|
|
Ended September 30, |
|
|
% |
|
||||||||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|
2026 |
|
|
2025 |
|
|
Change |
|
||||||
Statements of Operations Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net Revenue |
|
$ |
226,310 |
|
|
$ |
120,630 |
|
|
|
88 |
% |
|
$ |
651,182 |
|
|
$ |
313,216 |
|
|
|
108 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost of revenue |
|
|
112,547 |
|
|
|
50,986 |
|
|
|
121 |
% |
|
|
332,435 |
|
|
|
122,468 |
|
|
|
171 |
% |
Direct operating expenses |
|
|
54,695 |
|
|
|
41,247 |
|
|
|
33 |
% |
|
|
150,115 |
|
|
|
114,461 |
|
|
|
31 |
% |
Selling, general and administrative expenses |
|
|
20,984 |
|
|
|
19,028 |
|
|
|
10 |
% |
|
|
58,136 |
|
|
|
50,987 |
|
|
|
14 |
% |
Corporate expenses |
|
|
6,770 |
|
|
|
6,340 |
|
|
|
7 |
% |
|
|
20,540 |
|
|
|
20,503 |
|
|
|
0 |
% |
Depreciation and amortization |
|
|
2,859 |
|
|
|
3,130 |
|
|
|
(9 |
)% |
|
|
9,434 |
|
|
|
9,634 |
|
|
|
(2 |
)% |
Impairment charge |
|
|
- |
|
|
|
5,705 |
|
|
|
(100 |
)% |
|
|
- |
|
|
|
29,378 |
|
|
|
(100 |
)% |
Loss on lease abandonment |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
25,191 |
|
|
|
(100 |
)% |
|
Restructuring costs |
|
|
382 |
|
|
|
3,188 |
|
|
|
(88 |
)% |
|
|
1,365 |
|
|
|
3,188 |
|
|
|
(57 |
)% |
Foreign currency (gain) loss |
|
|
(216 |
) |
|
|
92 |
|
|
* |
|
|
|
328 |
|
|
|
110 |
|
|
|
198 |
% |
|
Other operating (gain) loss |
|
|
- |
|
|
|
- |
|
|
* |
|
|
|
(116 |
) |
|
|
- |
|
|
* |
|
||
Total expenses |
|
|
198,021 |
|
|
|
129,716 |
|
|
|
53 |
% |
|
|
572,237 |
|
|
|
375,920 |
|
|
|
52 |
% |
Operating income (loss) |
|
|
28,289 |
|
|
|
(9,086 |
) |
|
* |
|
|
|
78,945 |
|
|
|
(62,704 |
) |
|
* |
|
||
Interest expense |
|
|
(3,055 |
) |
|
|
(3,803 |
) |
|
|
(20 |
)% |
|
|
(9,516 |
) |
|
|
(11,503 |
) |
|
|
(17 |
)% |
Interest income |
|
|
662 |
|
|
|
574 |
|
|
|
15 |
% |
|
|
1,626 |
|
|
|
1,798 |
|
|
|
(10 |
)% |
Dividend income |
|
|
7 |
|
|
|
1 |
|
|
|
600 |
% |
|
|
36 |
|
|
|
2 |
|
|
|
1700 |
% |
Realized gain (loss) on marketable securities |
|
|
4 |
|
|
|
2 |
|
|
|
100 |
% |
|
|
15 |
|
|
|
6 |
|
|
|
150 |
% |
Loss on debt extinguishment |
|
|
- |
|
|
|
(176 |
) |
|
|
(100 |
)% |
|
|
- |
|
|
|
(214 |
) |
|
|
(100 |
)% |
Income before income (loss) taxes |
|
|
25,907 |
|
|
|
(12,488 |
) |
|
* |
|
|
|
71,106 |
|
|
|
(72,615 |
) |
|
* |
|
||
Income tax benefit (expense) |
|
|
(6,880 |
) |
|
|
2,829 |
|
|
* |
|
|
|
(20,033 |
) |
|
|
11,681 |
|
|
* |
|
||
Net income (loss) from continuing operations |
|
|
19,027 |
|
|
|
(9,659 |
) |
|
* |
|
|
|
51,073 |
|
|
|
(60,934 |
) |
|
* |
|
||
Net income (loss) from discontinued operations, net of tax |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
(28 |
) |
|
|
(100 |
)% |
|
Net income (loss) attributable to common stockholders |
|
$ |
19,027 |
|
|
$ |
(9,659 |
) |
|
* |
|
|
$ |
51,073 |
|
|
$ |
(60,962 |
) |
|
* |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Capital expenditures |
|
$ |
2,628 |
|
|
$ |
1,187 |
|
|
|
|
|
|
9,695 |
|
|
|
5,571 |
|
|
|
|
||
Net cash provided by (used in) operating activities |
|
|
|
|
|
|
|
|
|
|
|
61,691 |
|
|
|
861 |
|
|
|
|
||||
Net cash provided by (used in) investing activities |
|
|
|
|
|
|
|
|
|
|
|
(3,560 |
) |
|
|
(5,940 |
) |
|
|
|
||||
Net cash provided by (used in) financing activities |
|
|
|
|
|
|
|
|
|
|
|
(30,216 |
) |
|
|
(29,071 |
) |
|
|
|
||||
26
Consolidated Operations
Net Revenue. Net revenue increased to $226.3 million for the three-month period ended September 30, 2026 from $120.6 million for the three-month period ended September 30, 2025. This increase was primarily due to an increase of $4.6 million in net revenue from our media segment, and an increase of $101.1 million in net revenue from our ATS segment.
Net revenue increased to $651.2 million for the nine-month period ended September 30, 2026 from $313.2 million for the nine-month period ended September 30, 2025. This increase was primarily due to an increase of $5.7 million in net revenue from our media segment, and an increase of $332.3 million in net revenue from our ATS segment.
Cost of revenue. Cost of revenue increased to $112.6 million for the three-month period ended September 30, 2026 from $51.0 million for the three-month period ended September 30, 2025. This increase was primarily due to an increase of $0.1 million in cost of revenue from our media segment, and an increase of $61.5 million in cost of revenue from our ATS segment.
Cost of revenue increased to $332.4 million for the nine-month period ended September 30, 2026 from $122.5 million for the nine-month period ended September 30, 2025. This increase was primarily due to an increase of $3.6 million in cost of revenue from our media segment, and an increase of $206.4 million in cost of revenue from our ATS segment.
Direct Operating Expenses. Direct operating expenses increased to $54.7 million for the three-month period ended September 30, 2026 from $41.2 million for the three-month period ended September 30, 2025. This increase was primarily due to an increase of $1.2 million in direct operating expenses in our media segment, and an increase of $12.3 million in direct operating expenses in our ATS segment.
Direct operating expenses increased to $150.1 million for the nine-month period ended September 30, 2026 from $114.5 million for the nine-month period ended September 30, 2025. This increase was primarily due to an increase of $4.7 million in direct operating expenses in our media segment, and an increase of $30.9 million in direct operating expenses in our ATS segment.
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $21.0 million for the three-month period ended September 30, 2026, from $19.0 million for the three-month period ended September 30, 2025. This increase was primarily due to an increase of $2.1 million in selling, general and administrative expenses in our ATS segment, partially offset by a decrease of $0.1 million in selling, general and administrative expenses in our media segment.
Selling, general and administrative expenses increased to $58.1 million for the nine-month period ended September 30, 2026, from $51.0 million for the nine-month period ended September 30, 2025. This increase was primarily due to an increase of $0.1 million in selling, general and administrative expenses in our media segment, and an increase of $7.1 million in selling, general and administrative expenses in our ATS segment.
Corporate Expenses. Corporate expenses increased to $6.8 million for the three-month period ended September 30, 2026 from $6.3 million for the three-month period ended September 30, 2025. This increase was primarily due an increase of $0.5 million in non-cash stock-based compensation.
Corporate expenses remained constant at $20.5 million for the nine-month period ended September 30, 2026 compared to the nine-month period ended September 30, 2025.
Depreciation and amortization. Depreciation and amortization decreased to $2.9 million for the three-month period ended September 30, 2026 compared to $3.1 million for the three-month period ended September 30, 2025, primarily due to fully depreciated assets and fully amortized intangible assets.
Depreciation and amortization decreased to $9.4 million for the nine-month period ended September 30, 2026 compared to $9.6 million for the nine-month period ended September 30, 2025, primarily due to fully depreciated assets and fully amortized intangible assets.
Impairment. We recorded impairment charges of $5.7 million and $29.4 million for the three- and nine-month period ended September 30, 2025, respectively, primarily related to broadcast licenses and fixed assets of the two television stations in Mexico that are held for sale.
Loss on lease abandonment. During the first quarter of 2025, we incurred a loss on lease abandonment of $25.2 million related to the previous Santa Monica lease for our then corporate headquarters.
Restructuring costs. During the third quarter of 2025 our management began to implement the Plan, intended to support revenue growth and reduce expenses, primarily in our media operations. For the three- and nine-month period ended September 30, 2026, we recorded $0.4 million and $1.4 million in restructuring costs, respectively. For the three- and nine-month period ended September 30, 2025, we recorded $3.2 million in restructuring costs.
Foreign currency (gain) loss. Foreign currency gains and losses are primarily due to currency fluctuations that affect our operations located outside the United States.
We had a foreign currency gain of $0.2 million for the three-month period ended September 30, 2026, compared to foreign currency loss of $0.1 million for the three-month period ended September 30, 2025.
27
We had a foreign currency loss of $0.3 million for the nine-month period ended September 30, 2026, compared to foreign currency loss of $0.1 million for the nine-month period ended September 30, 2025.
Interest Expense, net. Interest expense, net decreased to $2.4 million for the three-month period ended September 30, 2026 from $3.2 million for three-month period ended September 30, 2025. This decrease was primarily due to lower interest rate on our debt and a lower outstanding principal balance.
Interest expense, net decreased to $7.9 million for the nine-month period ended September 30, 2026 from $9.7 million for the nine-month period ended September 30, 2025. This decrease was primarily due to lower interest rate on our debt and a lower outstanding principal balance.
Realized gain (loss) on marketable securities. For each of the three-month periods ended September 30, 2026 and 2025 we recorded a de minimis amount of realized gain related to our available for sale securities.
For each of the nine-month periods ended September 30, 2026 and 2025 we recorded a de minimis amount of realized gain related to our available for sale securities.
Income Tax Expense or Benefit. Income tax expense for the three-month period ended September 30, 2026 was $6.9 million, or 27% of our pre-tax income. The effective tax rate for the three-month period ended September 30, 2026 was different from our statutory rate due to foreign and state taxes, non-deductible executive compensation, share-based compensation from foreign employees, and Net Controlled Foreign Corporation Tested Income. Income tax benefit for the three-month period ended September 30, 2025 was $2.8 million. The effective tax rate for the three-month period ended September 30, 2025 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non-deductible executive compensation, share-based compensation from foreign employees, Global Intangible Low-Taxed Income, and transaction costs.
Income tax expense for the nine-month period ended September 30, 2026 was $20.0 million, or 28% of our pre-tax income. The effective tax rate for the nine-month period ended September 30, 2026 was different from our statutory rate due to foreign and state taxes, non-deductible executive compensation, share-based compensation from foreign employees, and Net Controlled Foreign Corporation Tested Income. Income tax benefit for the nine-month period ended September 30, 2025 was $11.7 million. The effective tax rate for the nine-month period ended September 30, 2025 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non-deductible executive compensation, share-based compensation from foreign employees, and transaction costs.
Our management periodically evaluates the realizability of the deferred tax assets and, if it is determined that it is more likely than not that the deferred tax assets are, or are not, realizable, adjusts the valuation allowance accordingly. Valuation allowances are established and maintained for deferred tax assets on a “more likely than not” threshold. The process of evaluating the need to maintain a valuation allowance for deferred tax assets and the amount maintained in any such allowance is highly subjective and is based on many factors, several of which are subject to significant judgment calls.
Based on our analysis, we determined that it was more likely than not that our deferred tax assets would be realized for all jurisdictions with the exception of certain of our digital operations, certain U.S. Foreign Tax Credit carryovers and certain states deferred tax assets. As a result of historical losses from our digital operations primarily in certain jurisdictions, certain U.S. Foreign Tax Credit carryovers, and capital loss, management has determined that it is more likely than not that deferred tax assets of $18.0 million at September 30, 2026 will not be realized and therefore we have established a valuation allowance in that amount on those assets.
The Organization for Economic Co-operation and Development (“OECD”) Pillar 2 guidelines address the increasing digitalization of the global economy, re-allocating taxing rights among countries. The OECD, many other member states and various other governments have adopted, or are in the process of adopting, Pillar 2 which calls for a global minimum tax of 15% to be effective for tax years beginning in 2024. The OECD guidelines published to date include transition and safe harbor rules around the implementation of the Pillar 2, global minimum tax. On January 5, 2026, the OECD released the “Side-by-Side” (SbS) Safe Harbor guidance, effective January 1, 2026. This guidance provides a framework for coordinating the U.S. tax system with Pillar 2 rules, potentially limiting top-up tax liabilities for qualifying periods. We included the tax impact of Pillar 2 in the income tax for the three- and nine-month periods ended September 30, 2026, based on the rules effective for that period, and continues to evaluate the impact of the SbS guidance on future periods.
On July 4, 2025, the President signed into law the One Big Beautiful Bill Act, which made certain changes to the current tax law and extended certain other tax provisions. We have analyzed the impact of these changes, noting that the main tax law changes that are expected to impact us in 2026 are related to depreciation and Section 163(j) interest expense limitation. We will not take bonus depreciation in 2026 since, given our tax position, the impact on this is nil. Regarding the Section 163(j) limitation, we believe that this will result in less taxable income to us.
As of September 30, 2026 and December 31, 2025, we had unrecognized tax benefits of $32.1 million and $31.7 million. We will recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.
28
Segment Operations
Our media segment consists of sales of advertising through various media, consisting of television, radio and digital. We own and/or operate one of the largest groups of Spanish-language television and radio stations in the United States. Our assets include 47 television stations and 44 radio stations (37 FM and 7 AM). These stations are concentrated in 13 of the 20 highest-density Latino markets in the United States. We are the largest affiliate group of the Spanish-language Univision and UniMás networks, which are owned by TelevisaUnivision. We also provide digital marketing services for businesses targeting Latino consumers.
Our ATS segment provides global performance marketing solutions primarily to mobile app developers. We operate this segment through two brands. Smadex, our programmatic demand-side advertising platform; and Adwake, our performance-based digital marketing agency.
Media
Net Revenue. Net revenue in our media segment increased to $49.1 million for the three-month period ended September 30, 2026 from $44.5 million for the three-month period ended September 30, 2025. This increase was primarily due to an increase of $4.7 million in broadcast advertising revenue, which was primarily political advertising revenue, and an increase of $0.5 million in retransmission consent revenue, partially offset by a decrease of $0.6 million in spectrum usage rights revenue.
Net revenue in our media segment increased to $136.6 million for the nine-month period ended September 30, 2026 from $130.9 million for the nine-month period ended September 30, 2025. This increase was primarily due to an increase of $5.6 million in digital advertising revenue, an increase of $1.1 million in broadcast advertising revenue, and an increase of $1.3 million in retransmission consent revenue, partially offset by a decrease of $2.5 million in spectrum usage rights revenue.
In general, the traditional broadcast industry is continuing to experience dramatic transformation. Most of our broadcast stations face declining audiences, which we believe is the situation across the industry, competitive factors with the other major Spanish-language broadcasters, and changing demographics and preferences of audiences, particularly younger audiences, in terms of the media they prefer to consume, including streaming and social media. In particular, the radio broadcast industry remains in a general state of decline as a result of numerous factors, including technological advancements in how audiences consume audio content, such as podcasts overtaking talk radio, leading to fragmentation in radio audiences; changing consumer preferences, especially among younger audiences who tend to prefer interactive and on-demand experiences over the linear broadcast model; economic pressures in the form of certain high fixed operational costs; and competition with other forms of media, especially digital, for advertising revenue. We anticipate that these changes in viewer habits and preferences, and in the broadcast industry as a whole, will persist at least for the foreseeable future and possibly permanently.
Additionally, we have previously noted a trend for advertising to move increasingly from traditional media, such as television and radio, to new media, such as digital media, and we expect this trend will also continue at least for the foreseeable future and possibly permanently. While we believe that none of these new technologies and services can completely replace local broadcast stations due to the element of localism that traditional broadcasting offers, the challenges we face in our broadcast operations from new technologies and services will persist and continue to present significant challenges, requiring attention, adaptability and action from management. We must continue to address these changes, including the need to further adjust our business strategies accordingly. No assurances can be given that these or other strategies will be successful in meeting the changes and challenges we face.
Cost of revenue. Cost of revenue in our media segment increased to $5.1 million for the three-month period ended September 30, 2026 from $5.0 million for the three-month period ended September 30, 2025.
Cost of revenue in our media segment increased to $16.5 million for the nine-month period ended September 30, 2026 from $12.9 million for the nine-month period ended September 30, 2025, primarily due to the increase in costs associated with the increase in digital advertising revenue and a decrease in gross margins.
Direct Operating Expenses. Direct operating expenses in our media segment increased to $29.8 million for the three-month period ended September 30, 2026 from $28.6 million for the three-month period ended September 30, 2025, primarily due to an increase of $0.9 million in costs associated with the increase in advertising revenue, an increase of $0.4 million in salaries and other employee benefits, an increase of $0.3 million in non-cash stock-based compensation, an increase of $0.1 million in rent expense, and an increase of $1.1 million in other items which were individually immaterial, partially offset by a decrease of $1.6 million in music license fees.
Direct operating expenses in our media segment increased to $86.7 million for the nine-month period ended September 30, 2026 from $81.9 million for the nine-month period ended September 30, 2025, primarily due to an increase of $1.9 million in expenses associated with the increase in revenue, an increase of $1.4 million in salaries and other employee benefits, an increase of $0.2 million in non-cash stock-based compensation, an increase of $0.2 million in rent expense, and an increase of $2.4 million in other items which were individually immaterial, partially offset by a decrease of $1.3 million in music license fees.
29
Selling, General and Administrative Expenses. Selling, general and administrative expenses in our media segment decreased to $11.4 million for the three-month period ended September 30, 2026 from $11.6 million for the three-month period ended September 30, 2025, primarily due to a decrease in rent expense of $0.3 million, and a decrease of $0.2 million in other items which were individually immaterial, partially offset by an increase of $0.3 million in salaries and other employee benefits.
Selling, general and administrative expenses in our media segment increased to $33.5 million for the nine-month period ended September 30, 2026 from $33.4 million for the nine-month period ended September 30, 2025, primarily due to an increase of $0.9 million in salaries and other employee benefits, and an increase of $0.3 million in bad debt expense, partially offset by a decrease in rent expense of $0.9 million and a decrease of $0.2 million in other items which were individually immaterial.
Advertising Technology & Services
Net Revenue. Net revenue in our ATS segment increased to $177.2 million for the three-month period ended September 30, 2026 from $76.1 million for the three-month period ended September 30, 2025. The increase was primarily due to an increase in advertising revenue from Smadex, driven primarily by a few large customers, primarily in Asia; increases in monthly active advertisers and revenue per monthly active advertiser; and an increase in advertising revenue from Adwake.
Net revenue in our ATS segment increased to $514.6 million for the nine-month period ended September 30, 2026 from $182.3 million for the nine-month period ended September 30, 2025. The increase was primarily due to an increase in advertising revenue from Smadex, driven primarily by a few large customers, primarily in Asia; increases in monthly active advertisers and revenue per monthly active advertiser; and an increase in advertising revenue from Adwake.
As noted below, the digital advertising industry is dynamic and our ATS operations are subject to rapid change as the underlying technology advances, advertiser expectations vary, and we face increased competition for advertisers generally. One of our priorities is to secure larger advertisers. Ad spend on our platforms by our largest advertisers can be variable for various reasons, and that could lead to variability in ATS quarterly results and on a comparative basis in future periods.
Cost of revenue. Cost of revenue in our ATS segment increased to $107.5 million for the three-month period ended September 30, 2026 from $46.0 million for the three-month period ended September 30, 2025, primarily due to costs associated with the increase in digital advertising revenue.
Cost of revenue in our ATS segment increased to $315.9 million for the nine-month period ended September 30, 2026 from $109.5 million for the nine-month period ended September 30, 2025, primarily due to costs associated with the increase in digital advertising revenue.
We have previously noted a trend on a global basis in our ATS operations whereby advertisers are demanding more efficiency and lower cost from intermediaries like us. In response to this trend, we have been offering our programmatic purchasing platform, Smadex, to advertisers, which lowers cost to our advertising customers. Among other things, this has led to lower margins in the products and services we sell, which we anticipate will persist for at least the foreseeable future and possibly permanently. The digital advertising industry as a whole remains dynamic and continues to undergo rapid changes in technology, customer expectation and competition. We expect this trend to continue and possibly accelerate. We must continue to address these dynamic and rapid changes, including the need to further adjust our business strategies, continue to make investments in our technology and offer new products and services, as appropriate. No assurances can be given that the strategies we have pursued and investments we have made, and those we may pursue or make in the future, will be successful.
Direct operating expenses. Direct operating expenses in our ATS segment increased to $24.9 million for the three-month period ended September 30, 2026 from $12.7 million for the three-month period ended September 30, 2025, primarily due to an increase of $6.4 million in salaries, bonus and commission expense, an increase of $3.7 million in cloud infrastructure expenses, an increase of $1.4 million in expenses for sales events, travel and marketing and an increase of $1.2 million in non-cash stock-based compensation, partially offset by a decrease of $0.4 million in bad debt expense and a decrease of $0.1 million in other items which were individually immaterial.
Direct operating expenses in our ATS segment increased to $63.4 million for the nine-month period ended September 30, 2026 from $32.5 million for the nine-month period ended September 30, 2025, primarily due to an increase of $13.7 million in cloud infrastructure expenses, an increase of $12.0 million in salaries, bonus and commission expense, an increase of $2.8 million in expenses for sales events, travel and marketing, an increase of $2.5 million in non-cash stock-based compensation and an increase of $0.2 million in other items which were individually immaterial, partially offset by a decrease of $0.3 million in software expense.
Selling, general and administrative expenses. Selling, general and administrative expenses in our ATS segment increased to $9.5 million for the three-month period ended September 30, 2026, from $7.4 million for the three-month period ended September 30, 2025, primarily due to an increase of $0.7 million in salaries, payroll tax and benefits expense, an increase in bad debt expense of $0.3 million, an increase in professional services of $0.2 million, an increase in rent expense of $0.2 million, and an increase of $0.7 million in other items which were individually immaterial.
Selling, general and administrative expenses in our ATS segment increased to $24.7 million for the nine-month period ended September 30, 2026, from $17.6 million for the nine-month period ended September 30, 2025, primarily due to an increase of $4.2
30
million in salaries, payroll tax and benefits expense, an increase of $0.7 million in software expense, an increase of $0.8 million in professional services, an increase in rent expense of $0.3 million, an increase in operating taxes of $0.2 million, and an increase of $0.9 million in other items which were individually immaterial.
Liquidity and Capital Resources
While we have a history of operating income in some periods and operating losses in other periods, we also have a history of generating significant positive cash flows from our operations. We had net loss attributable to common stockholders of $79.2 million, $148.9 million and $15.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. We had positive cash flow from operations of $10.6 million, $74.7 million and $75.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. We had positive cash flow from operations of $61.7 million for the nine-month period ended September 30, 2026. For at least the next twelve months, we expect to fund our working capital requirements, capital expenditures and payments of principal and interest on outstanding indebtedness, with cash on hand and cash flows from operations.
We currently believe that our cash position is sufficient to meet our operating and capital expenses and debt service requirements for at least the next twelve months from the issuance of this report. We believe that our position is strengthened by cash and cash equivalents on hand, in the amount of $87.3 million, and available for sale marketable securities in the additional amount of $2.4 million, as of September 30, 2026. Our liquidity is not materially affected by the amounts held in accounts outside the United States.
To the extent that our then-current liquidity is insufficient to fund our business activities or if we do not remain in compliance with our financial covenants under the Amended Credit Agreement, we may be required to seek additional equity or debt financing in the future to satisfy capital requirements. There is no guarantee that any such capital would be available to us on favorable terms, or at all. The failure to obtain any required capital could have a material adverse effect on our operations and financial condition.
Credit Facility
On March 17, 2023, we entered into our Credit Facility, pursuant to the Original 2023 Credit Agreement, by and among us, Bank of America, N.A., as Administrative Agent, and the Lenders. The Original 2023 Credit Agreement amended, restated and replaced in its entirety our previous credit agreement. The Original 2023 Credit Agreement was amended as of July 15, 2025, effective as of June 30, 2025, with respect to certain financial covenants and certain other provisions of our Credit Facility and was further amended as of March 18, 2026, with respect to a certain administrative clarification of the calculation of financial covenants.
For more information, see Note 2 to Notes to Condensed Consolidated Financial Statements.
Cash Flow
Net cash flow provided by operating activities was $61.7 million for the nine-month period ended September 30, 2026, compared to net cash flow provided by operating activities of $0.9 million for the nine-month period ended September 30, 2025. The change in cash flow from operating activities was primarily due to an increase in net income after adjusting for non-cash items. Significant non-cash items in the nine-month period ended September 30, 2026 included depreciation and amortization expense of $9.4 million, and non-cash stock based compensation of $12.4 million. Significant non-cash items in the nine-month period ended September 30, 2025 included impairment charges of $29.4 million, loss on lease abandonment charges of $25.2 million, depreciation and amortization expense of $9.6 million, deferred income tax benefit of $12.3 million, and non-cash stock based compensation of $8.1 million. The increase in cash flow from operating activities was partially offset by a decrease in net changes in working capital of negative $11.6 million for the nine-month period ended September 30, 2026 compared to positive $0.6 million for the nine-month period ended September 30, 2025. The net changes in working capital were primarily due to the timing of cash payments to publishers and collections from customers. We expect to have positive cash flow from operating activities for the full year 2026.
Net cash flow used in investing activities was $3.6 million for the nine-month period ended September 30, 2026, compared to net cash flow used in investing activities of $5.9 million for the nine-month period ended September 30, 2025. The change in net cash flow used in investing activities was primarily due to proceeds from sale of assets of $4.9 million for the nine-month period ended September 30, 2026, which we did not have in the nine-month period ended September 30, 2025, and purchases of marketable securities of $1.5 million for the nine-month period ended September 30, 2025, which we did not have in the nine-month period ended September 30, 2026, partially offset by purchases of property and equipment of $9.8 million for the nine-month period ended September 30, 2026 compared to $6.0 million for the nine-month period ended September 30, 2025.
We anticipate that our capital expenditures will be approximately $10 million during the full year 2026. The amount of our anticipated capital expenditures may change based on future changes in business plans and our financial condition and general economic conditions. We expect to fund capital expenditures with cash on hand and net cash flow from operations.
Net cash flow used in financing activities was $30.2 million for the nine-month period ended September 30, 2026, compared to $29.1 million for the nine-month period ended September 30, 2025. The change in cash flow used in financing activities was primarily due to $1.3 million of tax payments related to shares withheld for share-based compensation during the nine-month period ended September 30, 2026, which did not occur in the nine-month period ended September 30, 2025.
31
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
General
Market risk represents the potential loss that may affect our financial position, results of operations and/or cash flows due to adverse changes in the financial markets. We are also exposed to market risk from changes in the base rates on our Credit Facility.
Interest Rates
As of September 30, 2026, we had $152.7 million of variable rate bank debt outstanding under our Credit Facility. Our borrowings bear interest on the outstanding principal amount thereof from the date when made at a rate per annum equal to either: (i) the Term SOFR (as defined in the Amended Credit Agreement) plus a margin between 2.50% and 3.00%, depending on the Total Net Leverage Ratio (as defined in the Amended Credit Agreement) or (ii) the Base Rate (as defined in the Amended Credit Agreement) plus a margin between 1.50% and 2.00%, depending on the Total Net Leverage Ratio. In addition, the unused portion of the Revolving Credit Facility is subject to a rate per annum between 0.30% and 0.40%, depending on the Total Net Leverage Ratio.
Because our debt is subject to interest at a variable rate, our earnings will be affected in future periods by changes in interest rates. For example, if the SOFR were to increase or decrease by a hypothetical 100 basis points, or one percentage point, from its September 30, 2026 level, our annual interest expense would increase or decrease, respectively, and cash flow from operations would decrease or increase, respectively, by $1.5 million based on the outstanding balance of our term loan as of September 30, 2026.
Foreign Currency
We have certain foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar. Historically, our revenues have primarily been denominated in U.S. dollars, and the majority of our current revenues continue to be, and are expected to remain, denominated in U.S. dollars. However, we have operations in countries other than the United States, primarily related to our ATS operations, and we expect a portion of our future revenues will be denominated in currencies other than the U.S. dollar, primarily the Euro. The effect of an immediate and hypothetical 10% adverse change in foreign exchange rates on foreign-denominated accounts receivable at September 30, 2026 would not be material to our consolidated results of operations or overall financial condition.
Our operating expenses are primarily denominated in U.S. dollars. In addition, certain of our operating expenses are denominated in the currencies of the countries in which our operations are located, primarily Spain, which uses the Euro. Currency fluctuations or a weakening U.S. dollar can increase the amount of operating expense of our international operations, which are primarily related to our ATS operations. Increases and decreases in foreign-denominated revenue from movements in foreign exchange rates are partially offset by corresponding decreases or increases in foreign-denominated operating expenses.
To date, we have not entered into any foreign currency hedging contracts, since exchange rate fluctuations historically have not had a material effect on our operating results and cash flows.
ITEM 4. CONTROLS AND PROCEDURES
We conducted an evaluation, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this quarterly report. Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of the evaluation date, our disclosure controls and procedures were effective.
Our disclosure controls and procedures are designed to ensure that the information relating to our company, including our consolidated subsidiaries, required to be disclosed in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow for timely decisions regarding required disclosure.
Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
There have not been any changes in our internal control over financial reporting during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
32
PART II.
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are subject to various outstanding claims and other legal proceedings that may arise in the ordinary course of business. In the opinion of management, any liability that may arise out of or with respect to these matters will not materially adversely affect our financial position, results of operations or cash flows.
On or about July 22, 2025, our now former landlord of our former headquarters in Santa Monica, California commenced litigation against us in Los Angeles County Superior Court. The plaintiff alleges that we breached our lease and the plaintiff seeks at least $31.5 million in damages. The plaintiff filed an amended complaint on or about August 26, 2025 and we filed an answer on or about September 25, 2025, denying the plaintiff's allegations. Discovery has commenced and the court has tentatively set a trial date in June 2027. We intend to vigorously defend against the claims brought by the plaintiff and assert defenses to the claims raised.
ITEM 1A. RISK FACTORS
If our contractual arrangements with TelevisaUnivision terminate or expire, we anticipate fundamental adjustments to our television operations and business operations as a whole.
If our network affiliation agreement, proxy agreement and sales and marketing agreement currently in effect with TelevisaUnivision terminate or expire, we would be required to undertake a fundamental adjustment to our television operations, which in turn would affect our business operations as a whole. Such adjustments could include, among other things, entering into an affiliation arrangement with a third party; operating our television stations on our own; or disposing of some, most or all of our television assets. It is likely that some alternatives we pursue could result in significant decreases in revenue and/or significant increases in cost.
In light of this possible development, we have initiated a review of our operating strategy and cost structure, but there can be no assurances that we will be able to address and manage timely and effectively our costs and infrastructure to offset, in whole or in part, the lost revenue from any significant reduction or termination of our television operations. In addition, we may incur significant costs associated with any efforts we may take, including but not limited to severance costs. Addressing operating strategy and cost reduction measures in light of such a development, were it to occur, including any related charges and the impact of any related workforce reduction, could have a material adverse effect on our business, operating results and financial condition.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
On March 1, 2022, our Board of Directors approved a share repurchase program of up to $20 million of our Class A common stock. Under this share repurchase program, we are authorized to purchase shares of our Class A common stock from time to time through open market purchases or negotiated purchases, subject to market conditions and other factors.
We did not repurchase any shares of our Class A common stock during three- and nine-month periods ended September 30, 2026 and 2025. As of September 30, 2026, we have repurchased a total of 1.8 million shares of our Class A common stock under this share repurchase program for an aggregate purchase price of $11.3 million, or an average price per share of $6.43. All such repurchased shares were retired as of September 30, 2026.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Insider Trading Arrangements
During the quarter ended September 30, 2026, none of our directors or officers informed us of the
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ITEM 6. EXHIBITS
10.1(1) |
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Amendment, effective as of September 30, 2026, by and among Entravision Communications Corporation, The Univision Network Limited Partnership, UniMás Network, and the other parties thereto. |
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31.1* |
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Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934. |
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31.2* |
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Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934. |
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32* |
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Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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101.INS* |
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Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
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101.SCH* |
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Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents. |
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104 |
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Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101). |
* Filed herewith.
(1) Incorporated by reference from our Current Report on Form 8-K, filed with the SEC on October 6, 2026.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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ENTRAVISION COMMUNICATIONS CORPORATION |
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By: |
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/s/ MARK BOELKE |
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Mark Boelke Chief Financial Officer, Chief Operating Officer and Treasurer |
Date: November 5, 2026
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