Urban One Reports $117.8 Million Revenue in Q3 2023, Operating Loss of $56.1 Million

Urban One, Inc. reported a net revenue of $117.8 million for the third quarter of 2023, a decrease of 2.8% from $121.3 million in the same period last year. The decline was attributed to lower advertising revenues across its segments, particularly in cable television, which saw a drop from $50.6 million to $46.8 million. The radio broadcasting segment remained relatively stable, generating $40.2 million compared to $40.4 million in the prior year. For the nine months ended September 30, 2023, total revenue increased slightly to $357.3 million from $352.0 million, driven by growth in the Reach Media segment, which rose to $42.1 million from $31.2 million, largely due to the addition of new networks and events.

The company's operating expenses surged significantly, totaling $173.9 million for the third quarter, up from $103.3 million a year earlier. This increase was primarily due to an impairment charge of $85.4 million related to radio broadcasting licenses, reflecting a decline in projected market revenues and increased discount rates. The overall operating loss for the quarter was $56.1 million, compared to an operating income of $18.0 million in the same quarter of 2022. For the nine-month period, Urban One reported an operating loss of $38.3 million, a stark contrast to the $79.8 million operating income recorded in the previous year.

Strategically, Urban One completed the acquisition of a Houston radio cluster from Cox Media Group for $27.5 million in August 2023, while also divesting KTHT-FM for $3.1 million. The company has been actively managing its portfolio, including the sale of its investment in MGM National Harbor, which generated a pre-tax gain of approximately $96.8 million recognized in other income. This transaction significantly bolstered the company's cash position, with cash and cash equivalents totaling $195.7 million as of September 30, 2023.

Operationally, Urban One's total assets decreased to $1.19 billion from $1.34 billion at the end of 2022, primarily due to the impairment of broadcasting licenses and the deconsolidation of the RVAEH joint venture. The company reported a loss from its unconsolidated joint venture of $2.7 million for the third quarter. The workforce remained stable, with no significant changes in employee headcount reported.

Looking ahead, Urban One faces challenges related to its compliance with Nasdaq listing requirements, having received a delisting determination due to late filings. The company has requested a hearing to address these issues and has been granted an extension to file its third-quarter report by January 16, 2024. Management remains focused on improving internal controls and financial reporting processes to enhance operational efficiency and compliance moving forward.