IHeartMedia targets $50M in new annual cost savings for 2026 while digital audio margins climb

Earnings Call Insights: iHeartMedia (IHRT) Q3 2025

MANAGEMENT VIEW

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CEO Bob Pittman highlighted, "In the third quarter, even though 2025 is a nonpolitical year, we generated adjusted EBITDA of $205 million, slightly above the midpoint of our previously provided guidance range of $180 million to $220 million and flat to prior year." Pittman noted that consolidated revenue was down 1.1% year-over-year, but excluding political, revenue rose 2.8%. The Digital Audio Group posted quarterly revenue of $342 million, up 13.5% versus prior year, with adjusted EBITDA of $130 million, up 30.3% year-over-year and margins improving to 38.1%. Podcast revenue increased 22.5%. Pittman stated, "Earlier today, we announced an exciting new partnership with TikTok that will bring TikTok creators into iHeart's ecosystem," including new podcasts, a national broadcast radio station, and expanded live event access.

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Pittman announced, "We have taken actions that will generate an additional $50 million of incremental annual savings beginning in 2026."

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Pittman also referenced the recent programmatic audio partnership with Amazon, stating, "Our non-podcast digital inventory will be available immediately, and our podcast and broadcast radio inventory will follow in 2026."

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CFO Rich Bressler said, "Our Q3 2025 consolidated revenue was at the high end of our guidance of down low single digits and was down 1.1% compared to the prior year quarter. Excluding the impact of political, our consolidated revenue was up 2.8%." He emphasized, "We remain on track to generate $150 million of net savings in 2025," and highlighted an additional $50 million in annual savings starting in 2026. Bressler detailed, "We generated a third quarter GAAP operating loss of $116 million, which includes the impact of a $209 million impairment charge directly related to the value of FCC licenses."

OUTLOOK

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Bressler stated, "We expect to generate fourth quarter adjusted EBITDA in the range of $200 million to $240 million compared to $246 million in the prior year quarter." He guided for consolidated Q4 2025 revenue to be down low single digits year-over-year and up mid-single digits excluding political revenue. For the Digital Audio Group, Q4 revenue is expected to be up high single digits with podcasting revenue growing in the mid-teens, and for the full year, podcasting revenue is expected to grow in the low 20s.

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The Multiplatform Group's Q4 revenue is expected to be down low single digits, with Audio & Media Services Group revenue down approximately 20% and up approximately 15%, excluding political revenue.

FINANCIAL RESULTS

* The Digital Audio Group achieved revenue of $342 million, up 13.5% year-over-year, and adjusted EBITDA of $130 million, up 30.3%. Podcasting revenue reached $140 million, up 22.5%. Non-podcasting digital revenue was $202 million, up 8%. Multiplatform Group revenue was $591 million, down 4.6%, with adjusted EBITDA at $119 million, down 8.3%. Audio & Media Services Group revenue was $67 million, down 26%, with adjusted EBITDA of $23 million, down 49.1%. Free cash flow for Q3 was negative $33 million. Quarter-end net debt was approximately $4.7 billion, total liquidity $510 million, and cash balance $192 million, which includes $100 million borrowed under the ABL facility.

Q&A

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Aaron Watts, Deutsche Bank, asked about free cash flow and capital structure strategy. Bressler responded that iHeart expects meaningful Q4 cash flow and plans to repay the ABL, stating, "We're going to be opportunistic and continue to have that one goal in mind to create a more efficient capital structure for all of our stakeholders."

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Watts also questioned Multiplatform Group’s revenue trends and the outlook for political advertising in 2026. Bressler explained, "We expect it to be a strong revenue cycle for us on a political front, without giving any details on any numbers," and Pittman added, "The advertising environment is pretty good... trends are very good."

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Watts inquired about programmatic initiatives and DSP partnerships. Pittman said, "We have agreements with all the major DSPs for at least part of our inventory," and noted the growth trajectory is expected to mirror podcasting’s historical ramp.

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Sebastiano Petti, JPMorgan, asked about podcasting growth rates and the phasing of cost cuts. Bressler clarified that podcasting dollar growth is increasing sequentially and that the $50 million cost program will ramp at full run rate starting 2026, with a slightly smaller impact in Q1.

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Stephen Laszczyk, Goldman Sachs, explored podcasting growth sustainability and ad effectiveness. Pittman said, "More people are listening to podcast today than ever," and Bressler added that about 50% of podcasting ad revenue now originates locally, up from about 10% three to four years ago.

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Ken Silver, Stifel, asked about events revenue trends and margin improvement for Multiplatform. Bressler indicated events revenue volatility was minor and not due to lost partners, and on margins, he pointed to continued improvement efforts and the benefit of cost reductions.

SENTIMENT ANALYSIS

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Analysts pressed on the sustainability of podcasting growth, the effectiveness of new programmatic initiatives, cash flow, and cost savings. The tone was neutral to slightly positive, with focus on clarification and future implications.

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Management maintained a confident tone in prepared remarks and in response to questions, especially regarding digital momentum, advertising environment, and cost management. Statements such as "We are on track" and "We think it's a very big positive for us" were frequent, with occasional hesitancy on forward-looking political ad specifics.

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Compared to the previous quarter, analysts’ tone was similarly inquisitive but more focused on digital segment growth and monetization, while management appeared incrementally more confident, particularly with concrete cost-cutting targets and new partnerships.

QUARTER-OVER-QUARTER COMPARISON

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Guidance for Q4 2025 adjusted EBITDA was provided ($200 million to $240 million), following Q3’s result of $205 million. Revenue trends remain similar, with continued digital outperformance and podcasting strength.

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Strategic focus shifted more toward new partnerships (TikTok, Amazon) and sales modernization, compared to last quarter’s emphasis on ad tech buildout and new executive hires.

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Key metrics showed Digital Audio Group revenue and margins accelerating, while Multiplatform Group continued to see revenue decline but at a manageable pace. Cost savings targets increased by $50 million for 2026.

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Analysts’ focus evolved from ad category performance and margin bridges to digital growth drivers, cash flow, and new revenue streams.

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Management’s confidence grew, especially regarding digital revenue scalability, cost actions, and growing audience metrics.

RISKS AND CONCERNS

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Management cited the government shutdown as a source of uncertainty for ad markets.

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A $209 million impairment charge affecting operating loss was noted.

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Analysts questioned the sustainability of podcasting growth and the timeline for programmatic revenue impact.

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Management is addressing monetization challenges in broadcast radio and is investing in programmatic solutions and digital database enhancements as mitigation strategies.

FINAL TAKEAWAY

iHeartMedia emphasized ongoing strength in its digital and podcasting businesses, highlighted by robust revenue growth and expanding margins, as well as significant upcoming cost savings initiatives. The company announced a new $50 million annual savings program set for 2026, reinforced confidence in digital partnerships with TikTok and Amazon, and continues to prioritize sales modernization and operational efficiency. Management expressed optimism about future monetization opportunities and the resilience of the advertising market, while remaining focused on audience growth and disciplined cost control.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/ihrt/earnings/transcripts]

MORE ON IHEARTMEDIA

* iHeartMedia, Inc. (IHRT) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4841537-iheartmedia-inc-ihrt-q3-2025-earnings-call-transcript]
* iHeartMedia: Q2 Results Show Potential Inflection Point Reached [https://seekingalpha.com/article/4812959-iheartmedia-stock-q2-results-show-potential-inflection-point-reached-reiterate-buy]
* iHeartMedia reports Q3 results [https://seekingalpha.com/news/4519558-iheartmedia-reports-q3-results]
* iHeartMedia strikes new multiplatform partnership with TikTok [https://seekingalpha.com/news/4519489-iheartmedia-strikes-new-multiplatform-partnership-with-tiktok]
* Seeking Alpha’s Quant Rating on iHeartMedia [https://seekingalpha.com/symbol/IHRT/ratings/quant-ratings]