Townsquare Media (NYSE: TSQ) hit by FCC license impairments and swings to Q2 loss
Townsquare Media, Inc. reported net revenue of approximately $115.4 million for the three months ended June 30, 2026, essentially flat year over year, but swung to a net loss of about $41.8 million, or $2.36 per share, from $2.0 million of net income in the prior-year period. The shift was driven mainly by $26.6 million of non-cash FCC license impairment charges, lower Broadcast Advertising revenue and the absence of prior-year asset sale gains.
Digital Advertising revenue grew, while Subscription Digital Marketing Solutions and Broadcast Advertising declined, leading to a 5.4% drop in total segment profit. For the first six months of 2026, revenue was $212.1 million with a net loss of $38.8 million, including $35.2 million of FCC license impairments. Operating cash flow was $7.8 million, total debt was $440.0 million against assets of $494.7 million, and stockholders’ deficit widened to $79.2 million. The company continued its quarterly cash dividend of $0.20 per share.
Positive
- None.
Negative
- Q2 2026 net loss of ~$41.8 million (vs. $2.0 million income a year earlier) reflects a sharp deterioration in bottom-line results despite essentially flat revenue.
- $35.2 million of FCC license impairment in the first half of 2026, including $26.6 million in Q2, underscores pressure on broadcast asset values and heavily impacted earnings.
- Townsquare ended June 30, 2026 with a stockholders’ deficit of $79.2 million, as total liabilities exceeded total assets, highlighting a leveraged capital structure.
Filing Explained
By August 3, 18,231,639 common shares were outstanding after first-half share issuance increased the share base for existing holders.
Townsquare Media’s Form 10-Q is an unaudited quarterly report for the period ended
Class A shares issued and outstanding rose from 16,180,932 at
The filing identifies a specific watch item for FCC broadcast licenses: a 100-basis-point increase in the weighted average cost of capital would have produced an incremental
Key Figures
Net revenue Q2 2026: $115,353 thousand
Net (loss) Q2 2026: $(41,806) thousand
Impairment of intangible assets H1 2026: $35,231 thousand
+5 more
8 metrics
Net revenue Q2 2026
$115,353 thousand
Three months ended June 30, 2026 consolidated net revenue
Net (loss) Q2 2026
$(41,806) thousand
Three months ended June 30, 2026 consolidated net (loss) income
Impairment of intangible assets H1 2026
$35,231 thousand
Six months ended June 30, 2026 non-cash FCC license impairment charges
Net cash from operating activities H1 2026
$7,779 thousand
Six months ended June 30, 2026 consolidated operating cash flow
Total debt
$440,037 thousand
Total debt outstanding as of June 30, 2026 after discounts and financing costs
Stockholders’ deficit
$(79,210) thousand
Consolidated stockholders’ deficit as of June 30, 2026
Term Loan interest rate
8.59 %
Per annum interest rate on Term Loan as of June 30, 2026
Digital Advertising revenue H1 2026
$86,485 thousand
Six months ended June 30, 2026 Digital Advertising segment net revenue
Key Terms
FCC licenses, weighted average cost of capital, Senior Secured Credit Facility, volume weighted average trading price, +1 more
5 terms
FCC licenses regulatory
"Indefinite-lived assets consist of FCC broadcast licenses and goodwill."
FCC licenses are government permissions issued by the U.S. Federal Communications Commission that allow companies to use specific radio frequencies or operate broadcast and wireless services, similar to a deed for a piece of airspace or a driver’s license for a vehicle. For investors, these licenses matter because they are often required to run telecom, broadcast, satellite or wireless networks, can be limited in number, carry resale or renewal value, and create regulatory risks that affect a company’s revenue and asset worth.
weighted average cost of capital financial
"due to an increase in the weighted average cost of capital, caused by"
Weighted average cost of capital (WACC) is the average annual price a company pays for the money it uses, combining the cost of borrowed funds (debt) and the cost of owners’ funds (equity), with each source weighted by its share of the company’s financing. Investors use it as a benchmark to judge whether projects or a stock are likely to earn more than that blended price—think of it as a household’s combined interest rate on a mortgage and credit cards; a lower WACC usually makes future cash flows and valuation more attractive.
Senior Secured Credit Facility financial
"together the Senior Secured Credit Facility."
A senior secured credit facility is a loan or revolving line of credit where lenders have first legal claim on specific company assets (collateral) and the debt ranks above other obligations for repayment. For investors it signals where a lender sits in the repayment pecking order and how much protection creditors have if the company struggles, affecting credit costs, the company’s ability to borrow more, and potential recoveries in a default — like a mortgage taking priority over other claims on a house.
volume weighted average trading price financial
"achievement of a specified volume weighted average trading price ("VWAP")"
Volume weighted average trading price (VWAP) is the average price of a security over a set period, calculated by giving more weight to prices where more shares were traded — in other words, prices with higher volume count more. Investors use VWAP as a benchmark to judge trade execution and market activity: it helps tell whether a buy or sell occurred at a better or worse price than the market’s typical traded level, like comparing your purchase to the crowd’s average.
Monte Carlo option pricing model financial
"estimated using the Monte Carlo option pricing model, while stock options"
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FAQ
How did Townsquare Media (TSQ) perform for the quarter ended June 30, 2026?
Townsquare Media reported Q2 2026 net revenue of $115.4 million, essentially flat year over year, and a net loss of about $41.8 million. The loss was mainly driven by non-cash FCC license impairments and lower Broadcast Advertising profitability.
What drove the net loss at Townsquare Media (TSQ) in Q2 2026?
The Q2 2026 net loss was driven primarily by $26.6 million of FCC license impairment charges, a $6.0 million swing from prior-year gains on asset sales, and lower Broadcast Advertising revenue, partially offset by growth in Digital Advertising revenue.
How did Townsquare Media’s (TSQ) business segments perform in Q2 2026?
In Q2 2026, Digital Advertising revenue rose by $4.7 million, while Broadcast Advertising fell by $2.7 million and Subscription Digital Marketing Solutions declined by $1.6 million. Overall segment profit decreased 5.4% to $30.8 million versus the prior year.
What is Townsquare Media’s (TSQ) debt position and interest cost as of June 30, 2026?
As of June 30, 2026, Townsquare had total debt of $440.0 million, including a $449.6 million Term Loan and $12.0 million drawn on the Revolver. The Term Loan bore interest at 8.59%, while Revolver borrowings accrued at about 7.42%.
What were Townsquare Media’s (TSQ) cash flows for the six months ended June 30, 2026?
For the first half of 2026, Townsquare generated $7.8 million of net cash from operating activities, used $6.1 million in investing activities, and used $5.0 million in financing activities. Cash, cash equivalents and restricted cash ended at $1.5 million.
Is Townsquare Media (TSQ) paying dividends in 2026?
Yes. Townsquare’s board approved quarterly cash dividends of $0.20 per share on several dates in 2026, including payments in February, May and August, and declared another $0.20 dividend payable November 2, 2026 to shareholders of record on October 26, 2026.
How is the digital business of Townsquare Media (TSQ) performing in 2026?
Digital Advertising net revenue reached $47.2 million in Q2 2026 and $86.5 million for the first half, up 11.0% and 9.1% respectively year over year, reflecting continued growth in Townsquare Ignite’s digital advertising solutions.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2026
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 001-36558
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of Principal Executive Offices, including Zip Code) | ||||||||
(203 ) 861-0900
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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. Yes ☒ No ☐
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). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See 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 | ☐ | ☒ | |||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||||||||
| Emerging growth company | |||||||||||||||||
| 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 August 3, 2026, the registrant had 18,231,639 outstanding shares of common stock consisting of: (i) 16,916,343 shares of Class A common stock, par value $0.01 per share and (ii) 815,296 shares of Class B common stock, par value $0.01 per share; and (iii) 500,000 shares of Class C common stock, par value $0.01 per share.
TOWNSQUARE MEDIA, INC.
INDEX
PART I FINANCIAL INFORMATION | |||||||||||
Item 1. | Financial Statements (Unaudited) | ||||||||||
Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 | 2 | ||||||||||
Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025 | 3 | ||||||||||
Consolidated Statements of Stockholders' Deficit for the three and six months ended June 30, 2026 and 2025 | 4 | ||||||||||
Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025 | 6 | ||||||||||
Notes to Unaudited Consolidated Financial Statements | 8 | ||||||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 25 | |||||||||
Item 4. | Controls and Procedures | 37 | |||||||||
PART II OTHER INFORMATION | |||||||||||
Item 1. | Legal Proceedings | 38 | |||||||||
Item 1A. | Risk Factors | 38 | |||||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 38 | |||||||||
Item 3. | Defaults upon Senior Securities | 38 | |||||||||
Item 4. | Mine Safety Disclosures | 38 | |||||||||
Item 5. | Other Information | 38 | |||||||||
Item 6. | Exhibits | 39 | |||||||||
Signatures | 40 | ||||||||||
1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TOWNSQUARE MEDIA, INC.
CONSOLIDATED BALANCE SHEETS
(in Thousands, Except Share and Per Share Data)
(unaudited)
| June 30, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance for credit losses of $ | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Intangible assets, net | |||||||||||
| Goodwill | |||||||||||
| Investments | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Other assets | |||||||||||
| Restricted cash | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Current portion of long-term debt | |||||||||||
Deferred revenue | |||||||||||
Accrued compensation and benefits | |||||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Operating lease liabilities, current | |||||||||||
| Accrued interest | |||||||||||
| Total current liabilities | |||||||||||
Long-term debt, net of discount and deferred finance costs of $ | |||||||||||
| Deferred tax liability | |||||||||||
| Operating lease liability, net of current portion | |||||||||||
| Other long-term liabilities | |||||||||||
| Total liabilities | |||||||||||
| Stockholders’ deficit: | |||||||||||
Class A common stock, par value $ | |||||||||||
Class B common stock, par value $ | |||||||||||
Class C common stock, par value $ | |||||||||||
| Total common stock | |||||||||||
Treasury stock, at cost; | ( | ( | |||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Non-controlling interest | |||||||||||
Total stockholders’ deficit | ( | ( | |||||||||
| Total liabilities and stockholders’ deficit | $ | $ | |||||||||
See Notes to Unaudited Consolidated Financial Statements
2
TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in Thousands, Except Per Share Data)
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net revenue | $ | $ | $ | $ | |||||||||||||||||||
| Operating costs and expenses: | |||||||||||||||||||||||
| Direct operating expenses, excluding depreciation, amortization, and stock-based compensation | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Corporate expenses | |||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||
| Transaction and business realignment costs | |||||||||||||||||||||||
Impairment of intangible assets | |||||||||||||||||||||||
| Net loss (gain) on sales and retirement of assets | ( | ( | ( | ||||||||||||||||||||
| Total operating costs and expenses | |||||||||||||||||||||||
| Operating (loss) income | ( | ( | |||||||||||||||||||||
| Other expense: | |||||||||||||||||||||||
| Interest expense, net | |||||||||||||||||||||||
| Loss on extinguishment of debt | |||||||||||||||||||||||
| Other expense, net | |||||||||||||||||||||||
| (Loss) income from operations before tax | ( | ( | |||||||||||||||||||||
| Income tax provision | |||||||||||||||||||||||
| Net (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Net (loss) income attributable to: | |||||||||||||||||||||||
| Controlling interests | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Non-controlling interests | $ | $ | $ | $ | |||||||||||||||||||
| Basic (loss) income per share | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Diluted (loss) income per share | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See Notes to Unaudited Consolidated Financial Statements
3
TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(in Thousands, Except Share Data)
(unaudited)
| Shares of Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A | Class B | Class C | Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Shares | Shares | Shares | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Non- Controlling Interest | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2026 | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued under exercise of stock options | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| ESPP shares issued | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock(1) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued under exercise of stock options | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock(1) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Excise tax adjustment | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash distributions to non-controlling interests | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Refer to Note 8, Stockholders' Deficit, in the accompanying Notes to Unaudited Consolidated Financial Statements for additional information related to shares issued.
See Notes to Unaudited Consolidated Financial Statements
4
| Shares of Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A | Class B | Class C | Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Shares | Shares | Shares | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Non- Controlling Interest | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2025 | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued under exercise of stock options | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ESPP shares issued | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock(1) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares withheld to satisfy tax withholdings | ( | — | — | — | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares withheld to satisfy tax withholdings | ( | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash distributions to non-controlling interests | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Refer to Note 8, Stockholders' Deficit, in the accompanying Notes to Unaudited Consolidated Financial Statements for additional information related to restricted stock issued.
See Notes to Unaudited Consolidated Financial Statements
5
TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in Thousands)
(unaudited)
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net (loss) income | $ | ( | $ | ||||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Amortization of debt discount and deferred financing costs | |||||||||||
| Non-cash lease income | ( | ( | |||||||||
| Net deferred taxes and other | |||||||||||
| Allowance for credit losses | |||||||||||
| Stock-based compensation expense | |||||||||||
| Loss on extinguishment of debt | |||||||||||
| Trade and barter activity, net | ( | ( | |||||||||
| Impairment of intangible assets | |||||||||||
| Net gain on sales and retirements of assets | ( | ( | |||||||||
| Amortization of content rights | |||||||||||
| Change in content rights liabilities | ( | ( | |||||||||
| Other | |||||||||||
| Changes in assets and liabilities | |||||||||||
| Accounts receivable | ( | ( | |||||||||
| Prepaid expenses and other assets | ( | ( | |||||||||
| Accounts payable | |||||||||||
| Accrued expenses | ( | ( | |||||||||
| Accrued interest | ( | ( | |||||||||
| Other long-term liabilities | ( | ||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property and equipment | ( | ( | |||||||||
| Net proceeds from sales of assets | |||||||||||
| Proceeds from insurance recoveries | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Repayment and repurchases of 2026 Notes | ( | ||||||||||
| Proceeds from Term Loan | |||||||||||
| Fixed quarterly repayments of Term Loan | ( | ( | |||||||||
| Deferred financing costs | ( | ||||||||||
| Borrowings under the revolving credit facility | |||||||||||
| Repayment of borrowings under the revolving credit facility | ( | ||||||||||
| Dividend payments | ( | ( | |||||||||
| Proceeds from stock options exercised | |||||||||||
| Shares withheld in lieu of employee tax withholding | ( | ||||||||||
| Withholdings for shares issued under the ESPP | |||||||||||
| Cash distribution to non-controlling interests | ( | ( | |||||||||
| Repayments of capitalized obligations | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Cash and cash equivalents and restricted cash: | |||||||||||
| Net decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
| Beginning of period | |||||||||||
| End of period | $ | $ | |||||||||
See Notes to Unaudited Consolidated Financial Statements
6
TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in Thousands)
(unaudited)
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Supplemental Disclosure of Cash Flow Information: | |||||||||||
Cash payments: | |||||||||||
| Interest | $ | $ | |||||||||
| Income and Franchise taxes | |||||||||||
| Supplemental Disclosure of Non-cash Activities: | |||||||||||
| Dividends declared, but not paid during the period | $ | $ | |||||||||
| Accrued financing costs | |||||||||||
Property and equipment acquired in exchange for advertising (1) | |||||||||||
| Accrued capital expenditures | |||||||||||
| Financed equipment purchases | |||||||||||
| Supplemental Disclosure of Cash Flow Information relating to Leases: | |||||||||||
Cash paid for amounts included in the measurement of operating lease liabilities, included in operating cash flows | $ | $ | |||||||||
Right-of-use assets obtained in exchange for operating lease obligations | |||||||||||
| Reconciliation of cash, cash equivalents and restricted cash | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
| $ | $ | ||||||||||
(1) Represents total advertising services provided by the Company in exchange for property and equipment during each of the six months ended June 30, 2026 and 2025, respectively.
See Notes to Unaudited Consolidated Financial Statements
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TOWNSQUARE MEDIA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Organization and Basis of Presentation
Description of the Business
Townsquare is a community-focused digital and broadcast media and digital marketing solutions company principally focused outside the top 50 markets in the U.S. Townsquare Ignite, our robust digital advertising division, specializes in helping businesses of all sizes connect with their target audience through data-driven, results-based strategies, by utilizing a) our proprietary digital programmatic advertising technology stack with an in-house demand and data management platform and b) our owned and operated portfolio of more than 400 local news and entertainment websites and mobile apps along with a network of leading national music and entertainment brands, collecting valuable first party data. Townsquare Interactive, our subscription digital marketing services business, partners with small and medium-sized businesses (“SMBs”) to help manage their digital presence by providing a SAAS business management platform, website design, creation and hosting, search engine optimization and other digital services. And through our portfolio of local radio stations strategically situated outside the Top 50 markets in the United States, we provide effective advertising solutions for our clients and relevant local content for our audiences.
Current economic challenges, including high and sustained inflation and interest rates, and enacted and proposed tariffs have caused and could continue to cause economic uncertainty and volatility. These factors could result in advertising and subscription digital marketing solutions cancellations, declines in the purchase of new advertising by our clients, declines in the addition of new digital marketing solutions subscribers, and increases to our operating expenses. We monitor economic conditions closely, and in response to observed or anticipated reductions in revenue, we may institute precautionary measures to address the potential impact to our consolidated financial position, consolidated results of operations, and liquidity, including wage reduction efforts and controlling non-essential capital expenditures.
The extent of the impact of current economic conditions will depend on future actions and outcomes, all of which remain fluid and cannot be predicted with confidence (including effects on advertising activity, consumer discretionary spending and our employees in the markets in which we operate).
Basis of Presentation
The accompanying Unaudited Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and related notes thereto included in the Company's Annual Report on Form 10-K (the "2025 Annual Report on Form 10-K"). The accompanying unaudited interim Consolidated Financial Statements include the consolidated accounts of the Company and its wholly-owned subsidiaries, with all significant intercompany balances and transactions eliminated in consolidation. These financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. All adjustments (consisting only of normal, recurring adjustments) necessary for a fair presentation of results of operations and financial condition as of the end of the interim periods have been included. The results of operations for the three and six months ended June 30, 2026, cash flows for the six months ended June 30, 2026, and the Company’s financial condition as of such date are not necessarily indicative of the results of operations or cash flows that can be expected for, or the Company’s financial condition as of, any other interim period or for the fiscal year ending December 31, 2026. The Consolidated Balance Sheet as of December 31, 2025 is derived from the audited Consolidated Financial Statements at that date.
Stock-based compensation expense of $0.7 million and $1.3 million, previously reported in the Corporate category for the three and six months ended June 30, 2025, respectively, has been reclassified to conform with the current period's presentation. This reclassification increased stock-based compensation expense for the three months ended June 30, 2025, by $0.4 million, $0.1 million, and $0.2 million for the Digital Advertising, Subscription Digital Marketing Solutions, and Broadcast Advertising segments, respectively. For the six months ended June 30, 2025, the reclassification increased stock-based compensation expense by $0.7 million, $0.2 million, and $0.4 million, respectively, for those same segments.
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Broadcast advertising revenue of $0.5 million and $0.6 million, previously reported in the Other category for the three and six months ended June 30, 2025, has been reclassified to the Broadcast Advertising segment to conform with the current period's presentation.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, the Company evaluates its significant estimates, including those related to assumptions used in determining the fair value of assets and liabilities acquired in a business combination, impairment testing of intangible assets, stock-based compensation expense and income taxes. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the result of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
Actual amounts and results may differ materially from these estimates under different assumptions or conditions.
Note 2. Summary of Significant Accounting Policies
There have been no significant changes in the Company’s accounting policies since December 31, 2025. For the Company's detailed accounting policies please refer to the Consolidated Financial Statements and related notes thereto included in the Company's 2025 Annual Report on Form 10-K.
Recently Issued Standards That Have Not Yet Been Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, which requires the disclosure in the notes to financial statements, information about certain costs and expenses including, purchases of inventory, employee compensation, depreciation and intangible asset amortization. The guidance also requires a qualitative description of amounts remaining in certain expense captions that are not separately disaggregated on a quantitative basis, as well as the disclosure of the total amount of selling expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company continues to evaluate this new standard, but does not expect its adoption to have a significant impact on the Consolidated Financial Statements as its impact relates to additional disclosure.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The guidance moves away from phase-by-phase cost tracking to primarily focusing on how companies conclude when to count software development costs as an asset, particularly when there is uncertainty during development. Additionally, disclosure requirements outlined under ASC 360-10, Property, Plant, and Equipment — Overall, will apply to capitalized software costs. The guidance is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years and may be applied using a prospective, retrospective or modified transition approach. The Company continues to assess the impact on its Consolidated Financial Statements, if any.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, to clarify interim disclosure requirements, the form and content of interim financial statements, and when Topic 270 applies. The update primarily provides clarity about current interim reporting requirements. The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, and may be applied using a prospective or retrospective transition approach. The Company is evaluating the update, and does not expect its adoption to have a significant impact on the Consolidated Financial Statements.
Note 3. Revenue Recognition
The following tables present a disaggregation of our revenue by reporting segment and revenue from political sources and all other sources (in thousands) for the three and six months ended June 30, 2026 and 2025:
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Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Digital Advertising | Subscription Digital Marketing Solutions | Broadcast Advertising | Other | Total | Digital Advertising | Subscription Digital Marketing Solutions | Broadcast Advertising | Other | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Revenue (ex Political) | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Political | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Revenue | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Digital Advertising | Subscription Digital Marketing Solutions | Broadcast Advertising | Other | Total | Digital Advertising | Subscription Digital Marketing Solutions | Broadcast Advertising | Other | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Revenue (ex Political) | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Political | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Revenue | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from contracts with customers is recognized as an obligation until the terms of a customer contract are satisfied; this occurs with the transfer of control as we satisfy contractual performance obligations. Our contractual performance obligations include the performance of digital marketing solutions, placement of internet-based advertising campaigns, broadcast of commercials on our owned and operated radio stations, and the operation of live events. Revenue is measured at contract inception as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Our contracts are at a fixed price at inception and do not include any variable consideration or financing components by normal course of business practice. Sales, value add, and other taxes that are collected concurrently with revenue producing activities are excluded from revenue.
The primary sources of net revenue are the sale of digital and broadcast advertising solutions on our owned and operated websites, radio stations’ online streams and mobile applications, radio stations, and on third-party websites through our in-house digital programmatic advertising platform. Through our digital programmatic advertising platform, we are able to hyper-target audiences for our local, regional and national advertisers by combining first and third-party audience and geographic location data, providing them the ability to reach a high percentage of their online audience. We deliver these solutions across desktop, mobile, connected TV, email, paid search and social media platforms utilizing display, video and native executions. We also offer subscription digital marketing solutions through Townsquare Interactive to small and medium-sized local and regional businesses in markets outside the top 50 across the United States, including, but not limited to the markets in which we operate radio stations. Our digital marketing solutions include offerings such as a SAAS business management platform, traditional and mobile-enabled website development and hosting services, e-commerce platforms, search engine and online directory optimization services, online reputation monitoring, and social media management.
Political net revenue includes the sale of advertising for political advertisers. Contracted performance obligations under political contracts consist of the broadcast and placement of digital advertisements. Management views political revenue separately based on the episodic nature of election cycles and local issues calendars.
Net revenue for digital advertisements is recognized as the contractual performance obligations for Townsquare services are satisfied over the duration of the campaigns based on impressions delivered or time elapsed. Net revenue for broadcast advertisements are recognized when the commercial is broadcast. Live events revenue and other non-broadcast advertising revenue is recognized as events are conducted. We measure progress towards the satisfaction of our contractual performance obligations in accordance with the contractual arrangement. We recognize the associated contractual revenue as delivery takes place and the right to invoice for services performed is met.
Net revenue from digital subscription-based contractual performance obligations is recognized ratably over time as our performance obligations are satisfied. Subscription-based service fees are typically billed in advance of the month of service at a fixed monthly fee that is contractually agreed upon at contract inception. The measure of progress in such arrangements is the number of days of successful delivery of the contracted service.
Our advertising contracts are short-term (less than one year) and payment terms are generally net 30 -60 days for traditional customer contracts and net 60 -90 days for national agency customer contracts. Our billing practice is to invoice
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customers on a monthly basis for services delivered to date (representing the right to invoice). Our contractual arrangements do not include rights of return and do not include any significant judgments by nature of the products and services.
For all customer contracts, we evaluate whether we are the principal (i.e., report revenue on a gross basis) or the agent (i.e., report revenue on a net basis). Generally, we report revenue for advertising placed on Townsquare properties on a gross basis (the amount billed to our customers is recorded as revenue, and the amount paid to our publishers is recorded as a cost of revenue). We are the principal because we control the advertising inventory before it is transferred to our customers. Our control is evidenced by our sole ability to monetize the advertising inventory, being primarily responsible to our customers, having discretion in establishing pricing, or a combination of these factors. We also generate revenue through agency relationships in which revenue is reported net of agency commissions. Agency commissions are calculated based on a stated percentage applied to gross billing revenue for advertisers that use agencies.
The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands):
June 30, 2026 | December 31, 2025 | |||||||||||||
| Accounts Receivable | $ | $ | ||||||||||||
| Short-term contract liabilities (deferred revenue) | $ | $ | ||||||||||||
| Contract Acquisition Costs | $ | $ | ||||||||||||
We receive payments from customers based upon contractual billing schedules; contract receivables are recognized in the period the Company provides services when the Company’s right to consideration is unconditional. Payment terms vary by the type and location of our customer and the products or services offered. Payment terms for amounts invoiced are typically net 30 -60 days.
Our contract liabilities include cash payments received or due in advance of satisfying our performance obligations and digital subscriptions in which payment is received in advance of the service and month. These contract liabilities are recognized as revenue as the related performance obligations are satisfied. As of June 30, 2026, and December 31, 2025, the balance in the contract liabilities was $8.4 million and $8.7 million, respectively. The decrease in the contract liabilities balance at June 30, 2026 is primarily driven by $1.1 million and $6.9 million of recognized revenue for the three and six months ended June 30, 2026, offset by cash payments received or due in advance of satisfying our performance obligations. For the three and six months ended June 30, 2025, we recognized $1.3 million and $7.6 million of revenue that was previously included in our deferred revenue balance. No significant changes in the time frame of the satisfaction of contract liabilities have occurred during the three and six months ended June 30, 2026.
Our capitalized contract acquisition costs include amounts related to sales commissions paid for signed contracts with perceived durations exceeding one year. We defer the related sales commission costs and amortize such costs to expense in a manner that is consistent with how the related revenue is recognized over the duration of the related contracts. We have evaluated the average customer contract duration (initial term and any renewals) to determine the appropriate amortization period for these contractual arrangements. Capitalized contract acquisition costs are recognized in prepaid expenses and other current assets in the accompanying consolidated balance sheets. As of June 30, 2026 and December 31, 2025, we had a balance of $8.6 million and $8.5 million, respectively, in capitalized contract acquisition costs and recognized $1.5 million and $2.9 million of amortization for the three and six months ended June 30, 2026. For the three and six months ended June 30, 2025, we recognized $1.2 million and $2.3 million of amortization. No
Arrangements with Multiple Performance Obligations
In contracts with multiple performance obligations, we identify each performance obligation and evaluate whether the performance obligations are distinct within the context of the contract at contract inception. When multiple performance obligations are identified, we identify how control transfers to the customer for each distinct contract obligation and determine the period when the obligations are satisfied. If obligations are satisfied in the same period, no allocation of revenue is deemed to be necessary. In the event performance obligations within a bundled contract do not run concurrently, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine
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standalone selling prices based on the prices charged to customers. Performance obligations that are not distinct at contract inception are combined.
Performance Obligations
Allowance for Credit Losses
The Company maintains an allowance for credit losses, which represents the portion of accounts receivable that is not expected to be collected over the duration of its contractual life. Credit losses are recorded when the Company believes a customer, or group of customers, may not be able to meet their financial obligations. Account balances are charged off against the allowance when it is probable the receivable will not be recovered.
The change in the allowance for credit losses for the six months ended June 30, 2026 was as follows (in thousands):
| Balance at December 31, 2025 | $ | |||||||
| Provision for credit losses | ||||||||
| Amounts written off against allowance, net of recoveries | ( | |||||||
| Balance at June 30, 2026 | $ | |||||||
Note 4. Property and Equipment, net
Property and equipment, net consisted of the following (in thousands):
June 30, 2026 | December 31, 2025 | ||||||||||
Land and improvements | $ | $ | |||||||||
Buildings and leasehold improvements | |||||||||||
Broadcast equipment | |||||||||||
Computer and office equipment | |||||||||||
Furniture and fixtures | |||||||||||
Transportation equipment | |||||||||||
Software development costs | |||||||||||
Total property and equipment, gross | |||||||||||
Less accumulated depreciation and amortization | ( | ( | |||||||||
Total property and equipment, net | $ | $ | |||||||||
Depreciation and amortization expense for property and equipment was $4.3 million and $4.0 million for the three months ended June 30, 2026 and 2025, respectively, and $8.5 million and $7.9 million for the six months ended June 30, 2026 and 2025, respectively.
During the six months ended June 30, 2026, the Company recognized a $0.5
During the three and six months ended June 30, 2025, the Company recognized net gains on the sales of assets of $5.9 million, including a $5.6 million gain on the sale of land in the Boise, ID market.
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The Company had no
Note 5. Goodwill and Other Intangible Assets
Indefinite-lived intangible assets
Indefinite-lived assets consist of FCC broadcast licenses and goodwill.
FCC Broadcast Licenses
FCC licenses represent a substantial portion of the Company’s total assets. The FCC licenses are renewable in the ordinary course of business, generally for a maximum of eight years . The fair value of FCC licenses is primarily dependent on the future cash flows of the radio markets and other assumptions, including, but not limited to, forecasted revenue growth rates, profit margins and a risk-adjusted discount rate. The Company has selected December 31st as the annual testing date.
The Company evaluates its FCC licenses for impairment annually or more frequently if events or changes in circumstances indicate that the assets might be impaired. Due to changes in third-party forecasted traditional broadcast revenues in the markets in which we operate, the Company quantitatively evaluated the fair value of its FCC licenses at June 30, 2026.
The key assumptions used in applying the direct valuation method are summarized as follows:
| June 30, 2026 | ||||||||
| Discount Rate | ||||||||
| Long-term Revenue Growth Rate | ( | |||||||
| Low | High | |||||||
| Mature Market Share* | ||||||||
| Operating Profit Margin | ||||||||
| March 31, 2026 | ||||||||
| Discount Rate | ||||||||
| Long-term Revenue Growth Rate | ( | |||||||
| Low | High | |||||||
| Mature Market Share* | ||||||||
| Operating Profit Margin | ||||||||
* Market share assumption used when reliable third-party data is available. Otherwise, Company results and forecasts are utilized.
Based on the results of the interim impairment assessments of our FCC licenses, the Company incurred $26.6 million and $35.2 million of impairment charges for FCC licenses in 19 and 20 of our 74 local markets for the three and six months ended June 30, 2026, and incurred $1.5 4 74 local markets for the three and six months ended June 30, 2025. The impairment charge realized during the three months ended June 30, 2026 was primarily driven by decreases in third-party forecasts of broadcast revenues, while the impairment charge realized during the three months ended March 31, 2026 was primarily driven by increases in the discount rate applied in the valuation of our FCC licenses due to an increase in the weighted average cost of capital, caused by an increase in industry bond yields.
The assumptions used to estimate the fair value of our FCC licenses are dependent upon the expected performance and growth of our traditional broadcast radio operations. In the event broadcast radio revenue experiences actual or anticipated declines in excess of these assumptions, such declines will have a negative impact on the estimated fair value of our FCC licenses, and the Company could recognize additional impairment charges, which could be material.
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Unfavorable changes in key assumptions utilized in the impairment assessment of our FCC licenses may affect future testing results. For example, keeping all other assumptions constant, a 100 -basis point increase in the weighted average cost of capital as of the date of our last quantitative assessment would cause the estimated fair values of our FCC licenses to decrease by $16.5 million which would have resulted in an incremental impairment charge of $10.0 million as of June 30, 2026. Further, a 100 -basis point decline in the long-term revenue growth rate would cause the estimated fair values of our FCC licenses to further decrease by $8.4 million which would have resulted in an incremental impairment charge of $5.6 million as of June 30, 2026. Finally, a 100 -basis point decline in operating profit margins would result in a decrease in the estimated fair values of our FCC licenses of $8.0 million which would result in an incremental impairment charge of $6.8 million.
Goodwill
For goodwill impairment testing, the Company has selected December 31st as the annual testing date. In addition to the annual impairment test, the Company regularly assesses whether a triggering event has occurred, which would require interim impairment testing. As of December 31, 2025, the fair values of our National Digital, Townsquare Ignite, and Townsquare Interactive reporting units were in excess of their respective carrying values by approximately 47 %, 106 %, and 152 %, respectively. The Local Advertising, Amped, Analytical Services and Live Events reporting units had no
The Company considered whether any events have occurred or circumstances have changed from the last quantitative analysis performed as of December 31, 2025 that would indicate that the fair value of the Company's reporting units may be below their carrying amounts. Based on such analysis the Company determined that there have been no indicators that the fair value of its reporting units may be below their carrying amounts as of June 30, 2026.
Definite-lived intangible assets
The Company’s definite-lived intangible assets were acquired primarily in various acquisitions as well as in connection with the acquisition of software and music licenses.
The following tables present details of our intangible assets as of June 30, 2026 and December 31, 2025, respectively (in thousands):
June 30, 2026 | |||||||||||||||||||||||
| Weighted Average Useful Life (in Years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||
| Intangible Assets: | |||||||||||||||||||||||
FCC licenses | Indefinite | $ | $ | — | $ | ||||||||||||||||||
| Content rights and other intangible assets | ( | ||||||||||||||||||||||
Total | $ | $ | ( | $ | |||||||||||||||||||
December 31, 2025 | |||||||||||||||||||||||
| Weighted Average Useful Life (in Years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||
| Intangible Assets: | |||||||||||||||||||||||
FCC licenses | Indefinite | $ | $ | — | $ | ||||||||||||||||||
| Content rights and other intangible assets | ( | ||||||||||||||||||||||
Total | $ | $ | ( | $ | |||||||||||||||||||
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Amortization of definite-lived intangible assets was $0.8 million and $0.9 million for the three months ended June 30, 2026 and 2025, respectively, and $1.7 million and $1.8 million for the six months ended June 30, 2026 and 2025, respectively.
Estimated future amortization expense for each of the five succeeding fiscal years and thereafter as of June 30, 2026 is as follows (in thousands):
| 2026 (remainder) | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| $ | |||||
Note 6. Long-Term Debt
Total debt outstanding is summarized as follows (in thousands):
| June 30, 2026 | December 31, 2025 | ||||||||||
| Term Loan | $ | $ | |||||||||
| Revolver | |||||||||||
| Vendor Financing Obligation | — | ||||||||||
| Debt before unamortized discount and deferred financing costs | $ | $ | |||||||||
| Unamortized discount and deferred financing costs | ( | ( | |||||||||
| Total Debt | $ | $ | |||||||||
| Less: current portion of long-term debt | ( | ( | |||||||||
| Total long-term debt | $ | $ | |||||||||
On February 19, 2025, the Company entered into a $490 million Credit Agreement with Bank of America, N.A., as administrative agent and collateral agent and the lenders and financial institutions party thereto. The Credit Agreement provides for a five-year , $470 million senior secured Term Loan Facility (the "Term Loan") and a five-year , $20 million Revolving Credit Facility (the "Revolver"), together the Senior Secured Credit Facility.
The Term Loan Facility and revolving loans incurred under the Revolving Credit Facility mature on February 19, 2030. The per annum interest rate applicable to the Term Loan Facility is based on current SOFR levels with a 0.50 % per annum SOFR floor and an applicable margin of 500 basis points (or an alternative base rate and an applicable margin of 400 basis points). The per annum interest rate applicable to the Revolving Credit Facility is based on current SOFR levels and an applicable margin of 375 basis points (or an alternative base rate and an applicable margin of 275 basis points). As of June 30, 2026, the interest rate on the Term Loan was 8.59 %, based on current SOFR levels and the applicable margin of 500 basis points. As of June 30, 2026, borrowings under the Revolving Credit Facility had an interest rate of approximately 7.42 %, based on current SOFR levels and the applicable margin of 375 basis points.
Subject to certain exceptions, the Senior Secured Credit Facility will be subject to mandatory pre-payments in amounts equal to (1) 100 % of the net cash proceeds from issuances or incurrence of debt by the Company or any of the subsidiary guarantors (other than with respect to certain permitted indebtedness); (2) 100 % of the net cash proceeds from certain sales or other dispositions of assets by the Company or any of the subsidiary guarantors in excess of a certain amount and subject to customary reinvestment provisions and certain other exceptions; and (3) 75 % (with step-downs to 50 %, 25 % and 0 % based upon achievement of specified first lien net leverage ratios) of annual excess cash flow of the Company and its subsidiaries subject to exceptions and limitations.
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The obligations of the Company under the Senior Secured Credit Facility are guaranteed by each of its direct and indirect, existing and future, domestic subsidiaries, subject to customary exceptions and limitations, pursuant to a security agreement, dated as of February 19, 2025 (the “Security Agreement”), by and between the Company, the guarantors party thereto and Bank of America, N.A., as collateral agent.
The Senior Secured Credit Facility is secured on a first priority basis by a perfected security interest in substantially all of the Company’s and each guarantor’s tangible and intangible assets (subject to certain exceptions).
The Senior Secured Credit Facility contains a number of customary affirmative and negative covenants that, among other things, limit or restrict the ability of the Company and the guarantors to: (1) incur additional indebtedness (including guarantee obligations); (2) incur liens; (3) engage in mergers or other fundamental changes; (4) sell certain property or assets; (5) pay dividends or other distributions; (6) make acquisitions, investments, loans and advances; (7) prepay certain indebtedness; (8) change the nature of their business; (9) engage in certain transactions with affiliates; and (10) incur restrictions on contractual obligations limiting interactions between the Company and its subsidiaries or limit actions in relation to the Senior Secured Credit Facility.
The Senior Secured Credit Facility contains customary events of default, including with respect to nonpayment of principal, interest, fees or other amounts; material inaccuracy of a representation or warranty when made; failure to perform or observe covenants; cross-default to other indebtedness in an amount equal to the greater of $15 million or 15 % of the Company’s four-quarter consolidated EBITDA; bankruptcy and insolvency events; inability to pay debts; monetary judgment defaults in an amount equal to the greater of $15 million or 15 % of the Company’s four-quarter consolidated EBITDA; actual or asserted invalidity or impairment of any definitive loan documentation; and change of control.
The Company was in compliance with its covenants under the Senior Secured Credit Facility as of June 30, 2026.
As of June 30, 2026, based on available market information, the estimated fair value of the Term Loan was $328.2 million. The Company used Level 2 measurements under the fair value measurement hierarchy established under Fair Value Measurement (Topic 820).
Annual maturities of the Company's long-term debt as of June 30, 2026 are as follows (in thousands):
| 2026 (remainder) | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| $ | |||||
Note 7. Income Taxes
The Company's effective tax rate for the three months ended June 30, 2026 and 2025 was approximately 75.9 % and 75.8 %, respectively. The Company's effective tax rate for the six months ended June 30, 2026 and 2025 was approximately 6.5 % and 86.7 %, respectively.
The effective tax rate for the three and six months ended June 30, 2026, is driven by the valuation allowance for interest expense carryforwards, non-deductible compensation and the effects of non-cash impairment charges recognized in 2026.
The effective tax rate may vary significantly from period to period, and can be influenced by many factors. These factors include, but are not limited to, changes to the statutory rates in the jurisdictions where the Company has operations and changes in the valuation of deferred tax assets and liabilities. The difference between the effective tax rate and the federal statutory rate of 21% primarily relates to certain non-deductible items, state and local income taxes and the valuation allowance for deferred tax assets.
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Note 8. Stockholders' Deficit
Stock Options
During the six months ended June 30, 2026, eligible option holders tendered 70,876 options to purchase 70,876 shares of Townsquare common stock.
During the six months ended June 30, 2026, the Company granted 250,000 and 83,340 options with grant date fair values of $1.00 and $1.10 , respectively, and vesting periods of three years ten-year 280,129 options with grant date fair values of $0.82 to $0.97 . These options contain market conditions whereby the options will vest and become exercisable subject to the achievement of a specified volume weighted average trading price ("VWAP") over a specified period and continued employment through the performance period each as observed and summarized below, respectively:
VWAP over 20 consecutive trading days of the three-year performance period | ||||||||||||||||||||||||||||||||
| VWAP | Number of Options that Vest | |||||||||||||||||||||||||||||||
| $ | ||||||||||||||||||||||||||||||||
| $ | ||||||||||||||||||||||||||||||||
| $ | ||||||||||||||||||||||||||||||||
No portion of the grants will vest unless the VWAP targets are achieved during the respective performance period.
The grant date fair value of stock options with market conditions is estimated using the Monte Carlo option pricing model, while stock options containing only service conditions is estimated using the Black-Scholes option pricing model. Each model requires an estimate of the expected term of the option, the expected volatility of the Company’s common stock price, dividend yield and the risk-free interest rate. The below table summarizes the assumptions used to estimate the fair value of the equity options granted:
| Monte Carlo Model | Black-Scholes Model | ||||||||||||||||
| Expected volatility | |||||||||||||||||
| Expected term | |||||||||||||||||
| Risk free interest rate | |||||||||||||||||
| Expected dividend yield | |||||||||||||||||
For options only containing service conditions, the expected term was calculated using the simplified method, defined as the midpoint between the vesting period and the contractual term of each award, due to the lack of sufficient and meaningful historical exercise data. For options with market-based conditions, the expected term was estimated based on when the options are expected to be exercised. The expected volatility was based on market conditions of the Company. The risk-free interest rate was based on the U.S. Treasury yield curve in effect on the date of grant which most closely corresponds to the expected term of the option.
The following table summarizes all option activity for the six months ended June 30, 2026:
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| Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
| Outstanding at December 31, 2025 | $ | $ | |||||||||||||||||||||
| Granted - service conditions | |||||||||||||||||||||||
| Granted - market conditions | |||||||||||||||||||||||
| Exercised | ( | ||||||||||||||||||||||
| Forfeited and expired | ( | ||||||||||||||||||||||
| Outstanding at June 30, 2026 | $ | $ | |||||||||||||||||||||
| Exercisable at June 30, 2026 | $ | $ | |||||||||||||||||||||
The maximum contractual term of stock options is 10 years.
Restricted Stock Awards
During the six months ended June 30, 2026, the Company granted 140,911 restricted stock awards, including 120,150 shares to non-employee directors, with vesting periods of one to three years . The fair value of the restricted stock awards is equal to the closing share price on the date of grant.
The following table summarizes restricted stock activity for the six months ended June 30, 2026:
| Number of Shares | Weighted Average Fair Value | ||||||||||||||||||||||||||||
| Non-vested balance at January 1, 2026 | $ | ||||||||||||||||||||||||||||
| Shares granted | |||||||||||||||||||||||||||||
| Shares vested | ( | ||||||||||||||||||||||||||||
| Non-vested balance at June 30, 2026 | $ | ||||||||||||||||||||||||||||
Restricted Stock Units
The following table summarizes restricted stock unit activity for the six months ended June 30, 2026:
| Number of Shares | Weighted Average Fair Value | ||||||||||||||||||||||||||||
| Non-vested balance at January 1, 2026 | $ | ||||||||||||||||||||||||||||
| Shares granted - service conditions | |||||||||||||||||||||||||||||
| Shares granted - market conditions | |||||||||||||||||||||||||||||
| Bonus shares granted | |||||||||||||||||||||||||||||
| Shares vested | ( | ||||||||||||||||||||||||||||
| Shares canceled - market conditions | ( | ||||||||||||||||||||||||||||
| Non-vested balance at June 30, 2026 | $ | ||||||||||||||||||||||||||||
During the six months ended June 30, 2026, the Company granted 582,482 stock units with vesting periods ranging from vested at grant date to three years , and 871,452 bonus stock units that were vested at the grant date. The fair values of these restricted stock units were equal to the closing share price on the date of grant.
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During the six months ended June 30, 2026, the Company granted 890,030 restricted stock units with a vesting period of three years and grant date fair values ranging from $2.06 - $3.63 . The stock units contain market conditions whereby the stock units will vest subject to the achievement of a specified VWAP, subject to continued employment or service through the end of the performance period as observed and summarized below:
VWAP over a period of | ||||||||||||||||||||
| VWAP | Number of Shares that Vest | |||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
The grant date fair value of the restricted stock units with market conditions is estimated using the Monte Carlo option pricing model. The below table summarizes the assumptions used to estimate the fair value of the restricted stock units granted:
| Monte Carlo Model | |||||||||||
| Expected volatility | |||||||||||
| Risk free interest rate | |||||||||||
| Expected dividend yield | |||||||||||
The expected volatility was based on market conditions of the Company. The risk-free interest rate was based on the U.S. Treasury yield curve in effect on the date of grant which most closely corresponds to the vesting period of the restricted stock units.
Employee Stock Purchase Plan
During the six months ended June 30, 2026, a total of 37,671 shares of Class A common stock were issued under the 2021 Employee Stock Purchase Plan (the "ESPP").
Stock Bonus Program
In 2024, the Company implemented a stock bonus program that offered certain employees the option to receive their annual incentive compensation in the form of the Company's Class A common stock. The incentive compensation to be paid to each employee is fixed at the time of election to participate in the program and the number of shares to be issued is determined based on the closing price of the Company's Class A common stock on the settlement date, primarily in the fourth quarter of the performance year or during the first quarter following each respective performance year. During the three and six months ended June 30, 2026 a total of $1.3 million and $2.3 million of expense was recognized as a component of stock-based compensation in connection with the stock bonus program, respectively. During the three and six months ended June 30, 2025 a total of $1.2 million and $2.1 million of expense was recognized as a component of stock-based compensation in connection with the stock bonus program, respectively.
During the six months ended June 30, 2026, and 2025 a total of 871,452 and 566,359
For the three months ended June 30, 2026 and 2025, the Company recognized approximately $3.3 million and $3.8 million, respectively, of stock-based compensation expense with respect to options, restricted stock awards, restricted stock units and the ESPP. For the six months ended June 30, 2026 and 2025, the Company recognized approximately $7.0 million and $8.0 million, respectively, of stock-based compensation expense with respect to options, restricted stock awards, restricted stock units, the stock bonus program and the ESPP.
As of June 30, 2026, total unrecognized stock-based compensation expense related to our stock options and restricted stock was $1.5 million and $5.5 million, respectively, and is expected to be recognized over a weighted average period of 3.6 years and 1.7 years, respectively.
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Dividends Declared
On October 29, 2025, the board of directors approved a quarterly cash dividend of $0.20 per share. The dividend of $3.3 million was paid to holders of record as of January 26, 2026, on February 2, 2026.
On March 4, 2026, the board of directors approved a quarterly dividend of $0.20 per share. The dividend of $3.6 million was paid to holders of record as of April 27, 2026, on May 4, 2026.
On May 1, 2026, the board of directors approved a quarterly cash dividend of $0.20 per share. The dividend of $3.6 million was paid to holders on record as of July 27, 2026, on August 3, 2026.
On August 4, 2026, the board of directors approved a quarterly cash dividend of $0.20 per share. The dividend will be payable on November 2, 2026 to shareholders of record as of the close of business on October 26, 2026.
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Note 9. Net (Loss) Income Per Share
Basic earnings per common share (“EPS”) is generally calculated as income available to common shareholders divided by the weighted average number of common shares outstanding. Diluted EPS is generally calculated as income available to common shareholders divided by the weighted average number of common shares outstanding plus the dilutive effect of common share equivalents. Stock-based compensation awards that are out-of-the-money and stock options and restricted stock units in which the market-based performance criteria have not been met as of the end of the respective reporting period are omitted from the calculation of Diluted EPS.
The following table sets forth the computations of basic and diluted net (loss) income per share for the three and six months ended June 30, 2026 and 2025 (in thousands, except per share data):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Net income from non-controlling interest | |||||||||||||||||||||||
| Net (loss) income attributable to controlling interest | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average shares of common stock outstanding | |||||||||||||||||||||||
| Effect of dilutive common stock equivalents | |||||||||||||||||||||||
| Weighted average diluted common shares outstanding | |||||||||||||||||||||||
| Basic (loss) income per share | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Diluted (loss) income per share | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
The Company had the following dilutive securities that were not included in the computation of diluted net (loss) income per share as they were considered anti-dilutive (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Stock options | |||||||||||||||||||||||
| Stock options with unsatisfied market conditions | |||||||||||||||||||||||
| Restricted stock units | |||||||||||||||||||||||
| Restricted stock units with unsatisfied market conditions | |||||||||||||||||||||||
| Restricted stock awards | |||||||||||||||||||||||
| Shares to be issued under stock bonus program | |||||||||||||||||||||||
| Shares expected to be issued under the 2021 Employee Stock Purchase Plan | |||||||||||||||||||||||
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Note 10. Commitments and Contingencies
Note 11. Segment Reporting
Operating segments are organized internally by type of products and services provided. Based on the information reviewed by the Company's CEO in his capacity as Chief Operating Decision Maker ("CODM"), the Company has identified three
The Company operates in one geographic area. The Company's assets and liabilities are managed within markets outside the top 50 across the United States where the Company conducts its business and are reported internally in the same manner as the Consolidated Financial Statements; thus, no additional information regarding assets and liabilities of the Company’s reportable segments is produced for the Company's CEO or included in these Consolidated Financial Statements. Intangible assets consist principally of FCC broadcast licenses and other definite-lived intangible assets and primarily support the Company’s Broadcast Advertising segment. For further information see Note 5, Goodwill and Other Intangible Assets. The Company does not have any material inter-segment sales.
Segment profit is the primary measure the CODM utilizes in assessing segment performance and determining the allocation of resources. Segment Profit is defined as revenue less direct operating expenses, excluding depreciation, amortization, and stock-based compensation. The CODM is the primary individual in control of resource allocation, and the allocation determinations are made in consultation with each respective segment manager who is directly accountable to and maintains regular contact with the CODM to discuss operating activities, financial results, forecasts, or plans for the segment. The most significant allocation determinations made by the CODM pertain to sales accounts and support, capital spending and employee resource allocation. Segment profit is used to monitor budgeted versus actual results and is used in assessing performance of the segment and in establishing compensation. These determinations are made through regular reviews throughout the year, and on a weekly basis, the CODM considers actual results, as compared to budget and the prior period, when evaluating the allocation of resources.
Direct operating expenses represents our significant expense category and aligns with the segment level information that is regularly provided to the CODM. Segment profit excludes unallocated corporate expenses and the impact of certain items that are not directly attributable to the reportable segments' underlying operating performance, and primarily includes expenses related to corporate stewardship and administration activities, transaction related costs and non-cash impairment charges.
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The following tables present the Company's reportable segment results for the three months ended June 30, 2026 (in thousands):
| Digital Advertising | Subscription Digital Marketing Solutions | Broadcast Advertising | Other | Corporate and Other Reconciling Items | Total | ||||||||||||||||||||||||||||||
| Net revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Direct operating expenses, excluding depreciation, amortization and stock-based compensation | |||||||||||||||||||||||||||||||||||
| Segment Profit | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||||||||
| Corporate expenses | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||
| Transaction and business realignment costs | |||||||||||||||||||||||||||||||||||
Impairment of intangible assets | |||||||||||||||||||||||||||||||||||
| Net loss (gain) on sale and retirement of assets | ( | ||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||
The following table presents the Company's reportable segment results for the three months ended June 30, 2025 (in thousands):
| Digital Advertising | Subscription Digital Marketing Solutions | Broadcast Advertising | Other | Corporate and Other Reconciling Items | Total | ||||||||||||||||||||||||||||||
| Net revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Direct operating expenses, excluding depreciation, amortization and stock-based compensation | |||||||||||||||||||||||||||||||||||
| Segment Profit | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||||||||
| Corporate expenses | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||
| Transaction and business realignment costs | |||||||||||||||||||||||||||||||||||
Impairment of intangible assets | |||||||||||||||||||||||||||||||||||
| Net gain on sale and retirement of assets | ( | ( | |||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
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The following tables present the Company's reportable segment results for the six months ended June 30, 2026 (in thousands):
| Digital Advertising | Subscription Digital Marketing Solutions | Broadcast Advertising | Other | Corporate and Other Reconciling Items | Total | ||||||||||||||||||||||||||||||
| Net revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Direct operating expenses, excluding depreciation, amortization and stock-based compensation | |||||||||||||||||||||||||||||||||||
| Segment Profit | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||||||||
| Corporate expenses | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||
| Transaction and business realignment costs | |||||||||||||||||||||||||||||||||||
Impairment of intangible assets | |||||||||||||||||||||||||||||||||||
| Net loss (gain) on sale and retirement of assets | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||
The following tables present the Company's reportable segment results for the six months ended June 30, 2025 (in thousands):
| Digital Advertising | Subscription Digital Marketing Solutions | Broadcast Advertising | Other | Corporate and Other Reconciling Items | Total | ||||||||||||||||||||||||||||||
| Net revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Direct operating expenses, excluding depreciation, amortization and stock-based compensation | |||||||||||||||||||||||||||||||||||
| Segment Profit | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||||||||
| Corporate expenses | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||
| Transaction and business realignment costs | |||||||||||||||||||||||||||||||||||
Impairment of intangible assets | |||||||||||||||||||||||||||||||||||
| Net gain on sale and retirement of assets | ( | ( | |||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following management’s discussion and analysis is intended to provide the reader with an overall understanding of our financial condition, results of operations, cash flows and sources and uses of cash. This section also includes general information about our business and a discussion of our management’s analysis of certain trends, and risks and opportunities in our industry. In addition, we also provide a discussion of accounting policies that require critical judgments and estimates. This discussion should be read in conjunction with our Unaudited Consolidated Financial Statements and related notes appearing elsewhere in this quarterly report.
Note About Forward-Looking Statements
This report includes estimates, projections, statements relating to our business plans, objectives and expected operating results that are “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 and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements often discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “aim,” “anticipate,” “estimate,” “expect,” “forecast,” “outlook,” “potential,” “project,” “projection,” “plan,” “intend,” “seek,” “believe,” “may,” “could,” “would,” “will,” “should,” “can,” “can have,” “likely,” the negatives thereof and other words and terms. Actual events or results may differ materially from the results anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors that could cause actual results to differ materially from those estimated by us include the impact of general economic conditions in the United States, or in the specific markets in which we currently do business including supply chain disruptions, inflation, labor shortages, tariffs, and the effect on advertising activity, industry conditions, including existing competition and future competitive technologies, including artificial intelligence, the popularity of radio as a broadcasting and advertising medium, cancellations, disruptions or postponements of advertising schedules in response to national or world events, our ability to develop and maintain digital technologies, including artificial intelligence, and hire and retain technical and sales talent, our dependence on key personnel, our capital expenditure requirements, our continued ability to identify suitable acquisition targets, and consummate and integrate any future acquisitions, legislative or regulatory requirements, risks and uncertainties relating to our leverage and changes in interest rates, our ability to obtain financing at times, in amounts and at rates considered appropriate by us, our ability to access the capital markets as and when needed and on terms that we consider favorable to us and other factors discussed in this section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report and under “Risk Factors” in our 2025 Annual Report on Form 10-K, as well as other risks discussed from time to time in our filings with the SEC. Many of these factors are beyond our ability to predict or control. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. The cautionary statements referred to in this section also should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf. The forward-looking statements included in this report are made only as of the date hereof or as of the date specified herein. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Format of Presentation
Townsquare is a community-focused digital and broadcast media and marketing solutions company principally focused outside the top 50 markets in the U.S. Townsquare Ignite, our robust digital advertising division, specializes in helping businesses of all sizes connect with their target audience through data-driven, results-based strategies, by utilizing a) our proprietary digital programmatic advertising technology stack with an in-house demand and data management platform and b) our owned and operated portfolio of more than 400 local news and entertainment websites and mobile apps along with a network of leading national music and entertainment brands, collecting valuable first party data. Townsquare Interactive, our subscription digital marketing services business, partners with small and medium-sized businesses (“SMBs”) to help manage their digital presence by providing a SAAS business management platform, website design, creation and hosting, search engine optimization and other digital services. And through our portfolio of local radio stations strategically situated outside the Top 50 markets in the United States, we provide effective advertising solutions for our clients and relevant local content for our audiences.
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We believe that our diversified product offering substantially differentiates us from our competition. This diversification allows us to provide superior solutions to our advertisers and engaging experiences for our audience, underpins our growth strategy and, we believe, helps to mitigate the risks associated with advertising revenue dependency.
The Company has identified three segments, which are Digital Advertising, Subscription Digital Marketing Solutions, and Broadcast Advertising, and the remainder of our business is reported in an Other category.
Digital Advertising
Our Digital Advertising segment, marketed externally as Townsquare Ignite, is a combination of our proprietary digital programmatic advertising platform and our owned and operated digital properties, and an in-house demand and data management platform collecting valuable first party data.
Subscription Digital Marketing Solutions
Our Subscription Digital Marketing Solutions segment encompasses Townsquare Interactive, our subscription digital marketing solutions business. Townsquare Interactive offers digital marketing solutions, on a subscription basis, to SMBs in markets outside the top 50 across the United States, including but importantly not limited to the markets in which we operate radio stations. We offer a variety of digital marketing solutions, which enables SMBs to choose the optimal features for their specific business.
Broadcast Advertising
Our Broadcast Advertising segment includes our portfolio of 336 local terrestrial radio stations. Our primary source of Broadcast Advertising net revenue is the sale of advertising on our local radio stations primarily to local and regional spot advertisers and, to a lesser extent, national spot and national network advertisers. We believe we are the largest and best-capitalized owner and operator of radio stations focused solely on markets outside the top 50 markets in the United States. Given the stability of radio’s audience, its broad reach and its relatively low cost as compared to competing advertising media such as television, we believe radio continues to offer an attractive value proposition to advertisers. The price point for radio advertising on a cost per thousand basis is lower than most other local media that deliver similar scale. This makes radio more affordable and accessible for the type of small and mid-sized businesses typically found in our local markets outside the top 50 markets in the U.S.
Other
We report the remainder of our revenue in the Other category, and it includes revenue from our live events, which includes concerts, expositions, and other experiential events. Our live events portfolio includes iconic local events such as WYRK’s Taste of Country, the Boise Music Festival, the Red Dirt BBQ & Music Festival and Taste of Fort Collins. Our primary source of live events net revenue is ticket sales. Our live events also generate revenue through the sale of sponsorships, food and other concessions, merchandise and other ancillary products and services.
Overall
We generate a majority of our advertising revenue by selling directly to local advertisers, as well as to local and regional advertising agencies which affords us the opportunity to better present our products, cross-sell products and more directly influence their advertising and marketing expenditure decisions. A significant percentage of our advertising revenue is generated from the sale of advertising to the automotive, financial services, health services, entertainment, and retail industries.
Our most significant expenses are sales personnel, programming, digital, marketing and promotional, engineering, and general and administrative expenses. We strive to control these expenses by closely monitoring and managing each of our local markets and through efficiencies gained from the centralization of finance, accounting, legal and human resources functions and management information systems. We also use our scale and diversified geographic portfolio to negotiate favorable rates with vendors where feasible.
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A portion of our expenses are variable. These variable expenses primarily relate to sales costs, such as commissions and inventory costs, as well as certain programming costs, such as music license fees, and certain costs related to production. Other programming, digital, engineering and general and administrative expenses are primarily fixed costs.
Seasonality
Our revenue varies throughout the year. Typically, we expect that our first calendar quarter will produce the lowest net revenue for the year, as advertising expenditures generally decline following the winter holidays. During even-numbered years, net revenue generally includes increased advertising expenditures by political candidates, political parties and special interest groups. Political spending is typically highest during the fourth quarter. Our operating results in any period may be affected by the incurrence of advertising and promotion expenses that typically do not have an effect on net revenue generation until future periods, if at all.
Macroeconomic Indicators
Current economic challenges, including high and sustained inflation and interest rates, and proposed and enacted tariffs have caused and could continue to cause economic uncertainty and volatility. These factors could result in advertising and subscription digital marketing solutions cancellations, declines in the purchase of new advertising by our clients, declines in the addition of new digital marketing solutions subscribers, and increases to our operating expenses. We monitor economic conditions closely, and in response to observed or anticipated reductions in revenue, we may institute precautionary measures to address the potential impact to our consolidated financial position, consolidated results of operations, and liquidity, including wage reduction efforts and controlling non-essential capital expenditures.
The extent of the impact of current economic conditions will depend on future actions and outcomes, all of which remain fluid and cannot be predicted with confidence (including effects on advertising activity, consumer discretionary spending and our employees in the markets in which we operate).
OVERVIEW OF OUR PERFORMANCE
Highlights of Our Financial Performance
Certain key financial developments in our business for the three months ended June 30, 2026 as compared to the same period in 2025 are summarized below:
•Net revenue decreased $0.1 million, or 0.1%, primarily driven by a $2.7 million decrease in our Broadcast Advertising net revenue and a $1.6 million decrease in Subscription Digital Marketing Solutions net revenue, largely offset by a $4.7 million increase in our Digital Advertising net revenue.
•Excluding political revenue of $1.3 million and $0.6 million for the three months ended June 30, 2026 and 2025, respectively, net revenue decreased $0.9 million, or 0.8%, to $114.0 million, Broadcast Advertising net revenue decreased $3.5 million, or 7.2%, to $45.3 million, and Digital Advertising net revenue increased $4.7 million, or 11.1%, to $47.1 million.
•Operating income decreased $33.3 million to an operating loss of $12.3 million for the three months ended June 30, 2026. The decrease was primarily due to a $25.1 million increase in non-cash impairment charges, a $6.0 million decrease in net gain on sales and retirements of assets and a $1.7 million increase in direct operating expenses.
•Broadcast Advertising reported an operating loss of $15.9 million for the three months ended June 30, 2026, which represents a decrease of $32.4 million, as compared to operating income of $16.5 million for the same period in 2025. The decrease is primarily due to incremental non-cash impairment charges of $25.1 million, a $6.0 million decrease in net gain on sales and retirements of assets, and a $1.2 million decrease in segment profit. Digital Advertising reported operating income of $10.1 million for the three months ended June 30, 2026, a decrease of $0.1 million, as compared to the same period in 2025. Subscription Digital Marketing Solutions reported operating income of $5.4 million, a decrease of $0.2 million from the three months ended June 30, 2025.
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Certain key financial developments in our business for the six months ended June 30, 2026, as compared to the same period in 2025 are summarized below:
•Net revenue for the six months ended June 30, 2026 as compared to the same period in 2025 decreased $2.0 million, or 0.9%, primarily driven by a $5.4 million decrease in Broadcast Advertising net revenue and a $3.1 million decrease in our Subscription Digital Marketing Solutions net revenue, partially offset by a $7.2 million increase in Digital Advertising net revenue.
•Excluding political revenue of $2.0 million and $1.1 million for the six months ended June 30, 2026 and 2025, respectively, net revenue decreased $2.9 million, or 1.3% to $210.1 million. Broadcast Advertising net revenue decreased $6.3 million, or 7.1%, to $83.3 million, and Digital Advertising net revenue increased $7.2 million, or 9.2%, to $86.4 million.
•Operating income decreased $41.7 million for the six months ended June 30, 2026, to an operating loss of $13.6 million, primarily due to a $33.7 million increase in non-cash impairment charges, a $5.6 million decrease in net gain on sales and retirements of assets and the $2.0 million decrease in net revenue.
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Consolidated Results of Operations
Three months ended June 30, 2026 compared to three months ended June 30, 2025
The following table summarizes our historical consolidated results of operations:
| ($ in thousands) | Three Months Ended June 30, | ||||||||||||||||||||||
| Statement of Operations Data: | 2026 | 2025 | $ Change | % Change | |||||||||||||||||||
| Net revenue | $ | 115,353 | $ | 115,448 | $ | (95) | (0.1) | % | |||||||||||||||
| Operating costs and expenses: | |||||||||||||||||||||||
| Direct operating expenses, excluding depreciation, amortization, and stock-based compensation | 84,510 | 82,829 | 1,681 | 2.0 | % | ||||||||||||||||||
| Depreciation and amortization | 4,783 | 4,558 | 225 | 4.9 | % | ||||||||||||||||||
| Corporate expenses | 6,051 | 6,198 | (147) | (2.4) | % | ||||||||||||||||||
| Stock-based compensation | 3,302 | 3,790 | (488) | (12.9) | % | ||||||||||||||||||
| Transaction and business realignment costs | 2,173 | 1,389 | 784 | 56.4 | % | ||||||||||||||||||
Impairment of intangible assets | 26,643 | 1,500 | 25,143 | ** | |||||||||||||||||||
| Net loss (gain) on sales and retirement of assets | 183 | (5,866) | 6,049 | ** | |||||||||||||||||||
| Total operating costs and expenses | 127,645 | 94,398 | 33,247 | 35.2 | % | ||||||||||||||||||
| Operating (loss) income | (12,292) | 21,050 | (33,342) | ** | |||||||||||||||||||
| Other expense: | |||||||||||||||||||||||
| Interest expense, net | 11,430 | 12,652 | (1,222) | (9.7) | % | ||||||||||||||||||
| Other expense, net | 47 | 100 | (53) | (53.0) | % | ||||||||||||||||||
| (Loss) income from operations | (23,769) | 8,298 | (32,067) | ** | |||||||||||||||||||
| Income tax provision | 18,037 | 6,289 | 11,748 | 186.8 | % | ||||||||||||||||||
| Net (loss) income | $ | (41,806) | $ | 2,009 | $ | (43,815) | ** | ||||||||||||||||
** not meaningful
Segment Results
The following table presents the Company's reportable segment net revenue, direct operating expenses and segment profit for the three months ended June 30, 2026 and 2025 (in thousands):
| Net Revenue | Direct Operating Expenses | Segment Profit | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, | Three Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Digital Advertising | $ | 47,221 | $ | 42,538 | $ | 4,683 | 11.0 | % | $ | 36,328 | $ | 31,641 | $ | 4,687 | 14.8 | % | $ | 10,893 | $ | 10,897 | $ | (4) | 0.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Subscription Digital Marketing Solutions | 17,166 | 18,767 | (1,601) | (8.5) | % | 10,711 | 12,524 | (1,813) | (14.5) | % | 6,455 | 6,243 | 212 | 3.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Broadcast Advertising | 46,510 | 49,196 | (2,686) | (5.5) | % | 32,562 | 34,007 | (1,445) | (4.2) | % | 13,948 | 15,189 | (1,241) | (8.2) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 4,456 | 4,947 | (491) | (9.9) | % | 4,909 | 4,657 | 252 | 5.4 | % | (453) | 290 | (743) | ** | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 115,353 | $ | 115,448 | $ | (95) | (0.1) | % | $ | 84,510 | $ | 82,829 | $ | 1,681 | 2.0 | % | $ | 30,843 | $ | 32,619 | $ | (1,776) | (5.4) | % | |||||||||||||||||||||||||||||||||||||||||||||||
29
Net Revenue
Net revenue for the three months ended June 30, 2026 decreased $0.1 million, or 0.1%, as compared to the same period in 2025. Broadcast Advertising net revenue decreased $2.7 million, or 5.5%, due to decreases in the purchases of advertising by our clients and Subscription Digital Marketing Solutions net revenue decreased $1.6 million, or 8.5%, due to reduced sales velocity as a result of lower sales headcount, and Other net revenue decreased $0.5 million, or 9.9%. These decreases were largely offset by an increase in Digital Advertising net revenue of $4.7 million, or 11.0%, due to increases in the purchases of advertising by our clients.
Direct Operating Expenses
Direct operating expenses for the three months ended June 30, 2026 increased by $1.7 million, or 2.0%, as compared to the same period in 2025. Digital Advertising direct operating expenses increased by $4.7 million, or 14.8%, primarily due to higher inventory costs as compared to the same period in 2025, as a result of higher costs associated with acquiring digital advertising inventory, partially driven by the increase in net revenue discussed above. This was partially offset by a decrease of $1.8 million, or 14.5% of Subscription Digital Marketing Solutions direct operating expenses due to lower compensation and a $1.4 million, or 4.2%, decrease in Broadcast Advertising direct operating expenses primarily due to lower compensation, each as compared to the same period a year ago.
Segment Profit
Segment profit for the three months ended June 30, 2026 decreased by $1.8 million, or 5.4%, when compared with the same period in 2025. Broadcast Advertising segment profit decreased $1.2 million, or 8.2%, primarily due to the decrease in net revenue and Other segment profit decreased $0.7 million, primarily due to the performance of certain events in the current year period. These declines were partially offset by an increase in Subscription Digital Marketing Solutions segment profit of $0.2 million, or 3.4%, as compared to the same period in 2025, due to the decrease in direct operating expenses.
Transaction and Business Realignment Costs
Transaction and business realignment costs for the three months ended June 30, 2026 increased $0.8 million, or 56.4%, as compared to the same period in 2025, primarily due to continued operational cost reduction efforts, which was led by the acceleration of the amortization of certain leased assets during the second quarter of 2026 due to a reduction in space.
Impairment of Intangible Assets
The Company incurred $26.6 million of non-cash impairment charges related to FCC licenses during the three months ended June 30, 2026, as compared to $1.5 million of non-cash impairment charges for the same period in 2025. The impairment charge was primarily driven by decreases in third-party forecasts of broadcast revenues. For further discussion, see Note 5, Goodwill and Other Intangible Assets, in the Notes to Unaudited Consolidated Financial Statements.
Unfavorable changes in key assumptions utilized in the impairment assessment of our FCC licenses may affect future testing results. For example, keeping all other assumptions constant, a 100-basis point increase in the weighted average cost of capital as of the date of our last quantitative assessment would cause the estimated fair values of our FCC licenses to decrease by $16.5 million which would have resulted in an incremental impairment charge of $10.0 million as of June 30, 2026. Further, a 100-basis point decline in the long-term revenue growth rate would cause the estimated fair values of our FCC licenses to further decrease by $8.4 million which would have resulted in an incremental impairment charge of $5.6 million as of June 30, 2026. Finally, a 100-basis point decline in operating profit margins would result in a decrease in the estimated fair values of our FCC licenses of $8.0 million which would result in an incremental impairment charge of $6.8 million. Assumptions used to estimate the fair value of our FCC licenses are also dependent upon the expected performance and growth of our traditional broadcast radio operations. In the event broadcast radio revenue experiences actual or anticipated declines in excess of these assumptions, such declines will have a negative impact on the estimated fair value of our FCC licenses, and the Company could recognize additional impairment charges, which could be material.
Net Loss (Gain) on Sale and Retirement of Assets
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During the three months ended June 30, 2026, the Company recognized a $0.2 million net loss on certain asset retirements, as compared to net gains on the sales of assets of $5.9 million, which included a $5.6 million gain on the sale of land in the Boise, ID market, during the three months ended June 30, 2025.
Interest Expense, net
The following table illustrates the components of our interest expense, net for the periods indicated (in thousands):
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Term Loan | $ | 9,771 | $ | 10,984 | |||||||
| Revolver | 179 | 190 | |||||||||
| Capital leases and other | 230 | 229 | |||||||||
| Deferred financing costs | 237 | 237 | |||||||||
| Debt discount amortization | 1,013 | 1,012 | |||||||||
| Interest expense, net | $ | 11,430 | $ | 12,652 | |||||||
Interest expense decreased primarily due to a lower effective interest rate on the term loan, driven by declines in SOFR, and a reduction in term loan principal resulting from scheduled quarterly and voluntary repayments. For further discussion related to the terms of the credit agreement and effective interest rates, see Note 6, Long-Term Debt, in the Notes to Unaudited Consolidated Financial Statements.
Provision for income taxes
We recognized a provision for income taxes of $18.0 million for the three months ended June 30, 2026, as compared to $6.3 million for the same period in 2025. Our effective tax rate for the three months ended June 30, 2026 and 2025 was approximately 75.9% and 75.8%, respectively. The effective tax rate and tax provision for the three months ended June 30, 2026 are driven by the valuation allowance for interest expense carryforwards resulting from higher non-cash impairment charges and non-deductible compensation.
Our effective tax rate may vary significantly from period to period and can be influenced by many factors. These factors include, but are not limited to, changes to statutory rates in the jurisdictions where we have operations and changes in the valuation of deferred tax assets and liabilities. The difference between the effective tax rate and the federal statutory rate of 21%, primarily relates to certain non-deductible items, state and local income taxes and the valuation allowance for deferred tax assets.
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Consolidated Results of Operations
Six months ended June 30, 2026 compared to six months ended June 30, 2025
The following table summarizes our historical consolidated results of operations:
| ($ in thousands) | Six Months Ended June 30, | ||||||||||||||||||||||
| Statement of Operations Data: | 2026 | 2025 | $ Change | % Change | |||||||||||||||||||
| Net revenue | $ | 212,134 | $ | 214,123 | $ | (1,989) | (0.9) | % | |||||||||||||||
| Direct operating expenses, excluding depreciation, amortization, and stock-based compensation | 160,087 | 158,645 | 1,442 | 0.9 | % | ||||||||||||||||||
| Depreciation and amortization | 9,479 | 8,973 | 506 | 5.6 | % | ||||||||||||||||||
| Corporate expenses | 10,874 | 10,920 | (46) | (0.4) | % | ||||||||||||||||||
| Stock-based compensation | 7,033 | 7,978 | (945) | (11.8) | % | ||||||||||||||||||
| Transaction and business realignment costs | 3,314 | 3,827 | (513) | (13.4) | % | ||||||||||||||||||
Impairment of intangible assets | 35,231 | 1,500 | 33,731 | ** | |||||||||||||||||||
| Net gain on sales and retirement of assets | (318) | (5,903) | 5,585 | (94.6) | % | ||||||||||||||||||
| Total operating costs and expenses | 225,700 | 185,940 | 39,760 | 21.4 | % | ||||||||||||||||||
| Operating (loss) income | (13,566) | 28,183 | (41,749) | ** | |||||||||||||||||||
| Other expense: | |||||||||||||||||||||||
| Interest expense, net | 22,759 | 22,891 | (132) | (0.6) | % | ||||||||||||||||||
| Loss on extinguishment of debt | — | 1,452 | (1,452) | (100.0) | % | ||||||||||||||||||
| Other expense, net | 159 | 91 | 68 | 74.7 | % | ||||||||||||||||||
| (Loss) income from operations | (36,484) | 3,749 | (40,233) | ** | |||||||||||||||||||
| Income tax provision | 2,365 | 3,251 | (886) | (27.3) | % | ||||||||||||||||||
| Net (loss) income | $ | (38,849) | $ | 498 | $ | (39,347) | ** | ||||||||||||||||
** not meaningful
Segment Results
The following table presents the Company's reportable segment net revenue, direct operating expenses and segment profit for the six months ended June 30, 2026 and 2025 (in thousands):
| Net Revenue | Direct Operating Expenses | Segment Profit | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | Six Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Digital Advertising | $ | 86,485 | $ | 79,289 | $ | 7,196 | 9.1 | % | $ | 68,086 | $ | 60,492 | $ | 7,594 | 12.6 | % | $ | 18,399 | $ | 18,797 | $ | (398) | (2.1) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Subscription Digital Marketing Solutions | 34,676 | 37,789 | (3,113) | (8.2) | % | 22,321 | 25,370 | (3,049) | (12.0) | % | 12,355 | 12,419 | (64) | (0.5) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Broadcast Advertising | 85,158 | 90,583 | (5,425) | (6.0) | % | 63,731 | 66,950 | (3,219) | (4.8) | % | 21,427 | 23,633 | (2,206) | (9.3) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 5,815 | 6,462 | (647) | (10.0) | % | 5,949 | 5,833 | 116 | 2.0 | % | (134) | 629 | (763) | ** | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 212,134 | $ | 214,123 | $ | (1,989) | (0.9) | % | $ | 160,087 | $ | 158,645 | $ | 1,442 | 0.9 | % | $ | 52,047 | $ | 55,478 | $ | (3,431) | (6.2) | % | |||||||||||||||||||||||||||||||||||||||||||||||
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Net Revenue
Net revenue for the six months ended June 30, 2026 decreased $2.0 million, or 0.9%, as compared to the same period in 2025. Broadcast Advertising net revenue decreased $5.4 million, or 6.0%, due to decreases in the purchases of advertising by our clients, Subscription Digital Marketing Solutions net revenue decreased $3.1 million, or 8.2%, due to reduced sales velocity, and Other net revenue decreased by $0.6 million, or 10.0%, due to the performance of certain events in 2026, as compared to 2025. These decreases were partially offset by an increase in Digital Advertising net revenue of $7.2 million, or 9.1%.
Direct Operating Expenses
Direct operating expenses for the six months ended June 30, 2026 increased by $1.4 million, or 0.9%, as compared to the same period in 2025. Digital Advertising direct operating expenses increased $7.6 million, or 12.6%, primarily due to higher inventory and compensation costs. This increase was partially offset by a decrease in Broadcast Advertising direct operating expenses of $3.2 million, or 4.8%, and a decrease in Subscription Digital Marketing Solutions direct operating expenses of $3.0 million or 12.0%, each primarily due to lower compensation.
Segment Profit
Segment profit for the six months ended June 30, 2026, decreased by $3.4 million, or 6.2%, as compared to the same period in 2025. Broadcast Advertising segment profit decreased $2.2 million, or 9.3%, primarily due to the decline in net revenue. Digital Advertising segment profit decreased $0.4 million, or 2.1%, primarily due to the increases in inventory and compensation costs discussed above, and Other segment profit decreased by $0.8 million.
Stock-based Compensation
Stock-based compensation expense for the six months ended June 30, 2026, decreased $0.9 million, or 11.8%, as compared to the same period in 2025, due a $1.1 million decrease in expense related to grants that were fully amortized in 2025 and early 2026, partially offset by a $0.2 million increase in expense related to the stock bonus program. For further discussion, see Note 8, Stockholders' Deficit, in the Notes to Unaudited Consolidated Financial Statements.
Impairment of Intangible Assets
The Company incurred a total of $35.2 million in non-cash impairment charges related to FCC licenses in 20 of our 74 local markets during the six months ended June 30, 2026, as compared to impairment charges of $1.5 million related to FCC licenses in 4 of our 74 local markets during the six months ended June 30, 2025. The impairment charges during the six months ended June 30, 2026 were primarily driven by decreases in third-party forecasts of broadcast revenue and increases in the discount rate applied in the valuation of our FCC licenses due to an increase in the weighted average cost of capital, caused by an increase in industry bond yields. For further discussion, see Note 5, Goodwill and Other Intangible Assets, in the Notes to Unaudited Consolidated Financial Statements.
Net Gain on Sale and Retirement of Assets
During the six months ended June 30, 2026, the Company recognized a $0.3 million net gain on the sales of assets, as compared to net gains on the sales of assets of $5.9 million, which included a $5.6 million gain on the sale of land in the Boise, ID market, during the six months ended June 30, 2025.
Interest Expense, net
The following table illustrates the components of our interest expense, net for the periods indicated (in thousands):
33
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| 2026 Notes | $ | — | $ | 4,282 | |||||||
| Term Loan | 19,711 | 15,833 | |||||||||
| Revolver | 258 | 277 | |||||||||
| Capital leases and other | 426 | 488 | |||||||||
| Deferred financing costs | 448 | 566 | |||||||||
| Debt discount amortization | 1,916 | 1,445 | |||||||||
| Interest expense, net | $ | 22,759 | $ | 22,891 | |||||||
Loss on Extinguishment of Debt
During the six months ended June 30, 2025, the Company recognized a $1.5 million loss on the early extinguishment of debt. The $1.5 million loss on the early extinguishment of debt is comprised of the write-off of $1.5 million of unamortized deferred financing fees previously capitalized in connection with our 2026 Notes. For further discussion, see Note 6, Long-Term Debt, in the Notes to Unaudited Consolidated Financial Statements.
Provision for income taxes
We recognized a provision for income taxes of $2.4 million for the six months ended June 30, 2026, as compared to $3.3 million for the same period in 2025. Our effective tax rate for the period was approximately 6.5% for the six months ended June 30, 2026 as compared to 86.7% for the six months ended June 30, 2025. The effective tax rate and provision for the six months ended June 30, 2026 are driven by the valuation allowance for interest expense carryforwards, non-deductible compensation and the effects of non-cash impairment charges recognized in the first half of 2026.
Our effective tax rate may vary significantly from period to period and can be influenced by many factors. These factors include, but are not limited to, changes to statutory rates in the jurisdictions where we have operations and changes in the valuation of deferred tax assets and liabilities. The difference between the effective tax rate and the federal statutory rate of 21.0%, primarily relates to certain non-deductible items, state and local income taxes and the valuation allowance for deferred tax assets.
Liquidity and Capital Resources
The following table summarizes our change in cash and cash equivalents (in thousands):
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
Cash and cash equivalents | $ | 1,170 | $ | 3,183 | |||||||
Restricted cash | 323 | 323 | |||||||||
Cash provided by operating activities | 7,779 | 10,129 | |||||||||
Cash used in investing activities | (6,141) | (1,906) | |||||||||
Cash used in financing activities | (4,962) | (37,707) | |||||||||
Net decrease in cash and cash equivalents and restricted cash | $ | (3,324) | $ | (29,484) | |||||||
Operating Activities
Net cash provided by operating activities was approximately $7.8 million for the six months ended June 30, 2026, as compared to $10.1 million for the same period in 2025. The decrease was primarily related to net changes in working capital balances, particularly accounts receivable, accounts payable and accrued expenses, partially offset by lower cash interest payments in 2026.
34
Investing Activities
Net cash used in investing activities was $6.1 million for the six months ended June 30, 2026, as compared to $1.9 million for the same period in 2025. The increase in net cash used in investing activities was primarily due to a $5.5 million decrease in net proceeds from sales of assets in 2026, partially offset by $1.2 million decrease in purchases of property and equipment.
Financing Activities
Net cash used in financing activities was $5.0 million for the six months ended June 30, 2026, as compared to $37.7 million for the same period in 2025. The primary differences in net cash used in financing activities include:
•$25.7 million of net cash utilized in the February 2025 debt refinancing transactions, including fees and expenses;
•$10.0 million in net borrowings under the Revolver during the six months ended June 30, 2026, as compared to no net borrowings during the same period in 2025;
•Fixed term loan repayments of $5.9 million in 2026, as compared to $2.9 million in 2025;
•$1.5 million of shares repurchased to cover employee tax withholdings on restricted stock that vested during the six months ended June 30, 2025, which did not recur in 2026; and
•$7.2 million of dividend payments in 2026, as compared to $6.6 million of dividend payments in 2025.
Sources of Liquidity and Anticipated Cash Requirements
We fund our working capital requirements through a combination of cash flows from our operating, investing, and financing activities. Based on current and anticipated levels of operations and conditions in our markets and industry, we believe that our cash on hand and cash flows from our operating, investing, and financing activities will enable us to meet our working capital, capital expenditures, debt service, and other funding requirements for at least one year from the date of this report. Future capital requirements may be materially different than those currently planned in our budgeting and forecasting activities and depend on many factors, some of which are beyond our control. We have focused on and will continue to monitor our liquidity in response to current and future economic challenges and uncertainty.
As of June 30, 2026, we had $440.0 million of outstanding indebtedness, net of unamortized discount and deferred financing costs of $22.2 million.
Based on the terms of our Senior Secured Credit Facility, as of June 30, 2026, we expect our mandatory debt service requirements to be approximately $51.6 million over the next twelve months. See Note 6, Long-Term Debt, in our Notes to Consolidated Financial Statements for additional information related to our Senior Secured Credit Facility.
As of June 30, 2026 we had $1.2 million of cash and cash equivalents, and $60.3 million of receivables from customers, which historically have had an average collection cycle of approximately 50 days. As of June 30, 2026, the Company had $8.0 million available under its revolving credit facility. Amounts borrowed under the revolving credit facility above an aggregate $6.0 million as of the end of each fiscal quarter requires compliance with a net leverage ratio covenant, which could limit the Company’s ability to access the full amount of the facility.
On October 29, 2025, the board of directors approved a quarterly cash dividend of $0.20 per share. The dividend of $3.3 million was paid to holders of record as of January 26, 2026, on February 2, 2026.
On March 4, 2026, the board of directors approved a quarterly dividend of $0.20 per share. The dividend of $3.6 million was paid to holders of record as of April 27, 2026 on May 4, 2026.
On May 1, 2026, the board of directors approved a quarterly cash dividend of $0.20 per share. The dividend of $3.6 million was paid to holders on record as of July 27, 2026, on August 3, 2026.
On August 4, 2026, the board of directors approved a quarterly cash dividend of $0.20 per share. The dividend will be payable on November 2, 2026 to shareholders of record as of the close of business on October 26, 2026.
Our anticipated uses of cash in the near term include working capital needs, interest payments, debt amortization payments, dividend payments, excess cashflow payments that may be required under the terms of the Credit Agreement,
35
other obligations, and capital expenditures. The Company believes that the cash generated by its operations should be sufficient to meet its liquidity needs for at least the next 12 months. However, our ability to fund our working capital needs, interest payments, debt payments, dividend payments, other obligations, capital expenditures, and to comply with financial covenants under our debt agreements, depends on our future operating performance and cash flow, which are in turn subject to prevailing economic conditions, increases or decreases in advertising spending, changes in the highly competitive industry in which we operate, which may be rapid, and other factors, many of which are beyond our control. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders, while the incurrence of debt financing would result in additional debt service obligations. Such debt instruments could introduce covenants that might restrict our operations. We cannot assure you that we could obtain additional financing on favorable terms or at all.
Additionally, on a continuing basis, we evaluate and consider strategic acquisitions and divestitures to enhance our strategic and competitive position as well as our financial performance. Any future acquisitions, joint ventures or other similar transactions may require additional capital, which may not be available to us on acceptable terms, if at all.
We closely monitor the impact of capital and credit market conditions on our liquidity and our ability to refinance in the future. We also routinely monitor the changes in the financial condition of our customers and the potential impact on our results of operations.
Off-Balance Sheet Arrangements
We have no material off-balance sheet arrangements or transactions.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our significant estimates, including those related to determining the fair value of assets and liabilities acquired in a business combination, impairment testing of intangible assets, stock-based compensation expense and income taxes. We base our estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the result of which forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our estimates may change, however, as new events occur and additional information is obtained, and any such changes will be recognized in the Consolidated Financial Statements. Actual results could differ from such estimates, and any such differences may be material to our financial statements.
We believe the accounting policies and estimates discussed within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report on Form 10-K reflects our more significant judgments and estimates used in the preparation of the Consolidated Financial Statements. There have been no material changes to the critical accounting policies and estimates as filed in such report.
Recent Accounting Standards
For a discussion of accounting standards updates that have been adopted or will be adopted in the future, please refer to Note 2, Summary of Significant Accounting Policies of the Notes to Unaudited Consolidated Financial Statements included under Item 1.
36
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), with the assistance of other members of management, have reviewed the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Our disclosure controls and procedures are intended to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Based on this review, our CEO and CFO have concluded that the disclosure controls and procedures were effective as of June 30, 2026.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect every misstatement. An evaluation of effectiveness is subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may decrease over time.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal controls over financial reporting that occurred during the three months ended June 30, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
There are inherent limitations in the effectiveness of any control system, including the potential for human error and the possible circumvention or overriding of controls and procedures. Additionally, judgments in decision-making can be faulty and breakdowns can occur because of a simple error or mistake. An effective control system can provide only reasonable, not absolute, assurance that the control objectives of the system are adequately met. Accordingly, the management of the Company, including its Chief Executive Officer and Chief Financial Officer, does not expect that the control system can prevent or detect all error or fraud. Finally, projections of any evaluation or assessment of effectiveness of a control system to future periods are subject to the risks that, over time, controls may become inadequate because of changes in an entity’s operating environment or deterioration in the degree of compliance with policies or procedures.
37
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There is no current material pending litigation to which we are a party and no material legal proceedings were terminated, settled or otherwise resolved during the three and six months ended June 30, 2026. In the normal course of business, the Company is subject to various regulatory proceedings, lawsuits, claims and other matters related to intellectual property, personal injury, employee, or other matters. These matters are subject to many uncertainties and outcomes are not predictable with assurance. However, we do not believe that the ultimate resolution of these matters will have a material adverse effect on our financial position or results of operations.
Item 1A. Risk Factors
Please refer to Part I, Item 1A, “Risk Factors,” in our 2025 Annual Report on Form 10-K for information regarding known material risks that could affect our results of operations, financial condition and liquidity. In addition to these risks, other risks that we presently do not consider material, or other unknown risks, could materially adversely impact our business, financial condition and results of operations in a future period.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None of our directors or executive officers adopted terminated
38
Item 6. Exhibits
See Exhibit Index.
EXHIBIT INDEX
Exhibit | Description | |||||||
31.1* | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended | |||||||
31.2* | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended | |||||||
| 32.1** | Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350 | |||||||
| 32.2** | Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350 | |||||||
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
* Filed herewith
** Furnished herewith
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SIGNATURES
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.
| TOWNSQUARE MEDIA, INC. | |||||
Date: August 6, 2026 | |||||
| By: | /s/ Stuart Rosenstein | ||||
| Name: Stuart Rosenstein | |||||
| Title: Executive Vice President & Chief Financial Officer | |||||
| By: | /s/ Robert Worshek | ||||
| Name: Robert Worshek | |||||
| Title: Senior Vice President, Chief Accounting Officer | |||||
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