Urban One Reports 8.9% Revenue Growth to $121.4 Million in Q3 2022

Urban One, Inc. reported a net revenue of $121.4 million for the third quarter of 2022, marking an increase of 8.9% from $111.5 million in the same period of 2021. For the nine months ended September 30, 2022, the company achieved net revenue of $352.6 million, a 13.5% rise compared to $310.5 million in the prior year. The growth in revenue was attributed to a recovery from the economic impacts of the COVID-19 pandemic and increased demand for media targeting minority audiences. However, the company faced a decline in profitability, with consolidated net income attributable to common stockholders falling to $4.2 million in Q3 2022 from $13.9 million in Q3 2021, and for the nine months, net income increased to $35.6 million from $31.7 million.

Operating expenses for Urban One rose significantly, totaling $102.4 million in Q3 2022, up from $77.0 million in Q3 2021, primarily due to a $14.5 million impairment charge related to long-lived assets. The increase in operating expenses was also driven by higher selling, general, and administrative costs, which rose to $41.1 million from $33.1 million year-over-year. The company’s operating income for the third quarter decreased to $19.0 million, down 45% from $34.5 million in the previous year. For the nine-month period, operating income was $79.3 million, down from $96.2 million in 2021.

In terms of strategic developments, Urban One completed the acquisition of Emmis Communications' Indianapolis Radio Cluster for $25 million on August 31, 2022, which is expected to enhance its market share. The company also disposed of its WHHH radio broadcasting license for approximately $3.2 million as part of the transaction. The acquisition is anticipated to contribute approximately $1.3 million in revenue and $328,000 in operating income for the three months ended September 30, 2022.

Operationally, Urban One continues to focus on expanding its digital and cable television segments, which reported revenue increases of 33.9% and 16.7%, respectively, in Q3 2022. The digital segment, which includes Interactive One, generated $21.0 million in revenue, while the cable television segment brought in $50.8 million. The company’s total assets as of September 30, 2022, were approximately $1.25 billion, a slight decrease from $1.26 billion at the end of 2021, with cash and cash equivalents totaling $85.6 million.

Looking ahead, Urban One anticipates continued fluctuations in revenue due to the lingering effects of the COVID-19 pandemic and economic conditions. The company is actively working to address identified weaknesses in its internal controls over financial reporting, particularly concerning the valuation of its broadcasting licenses and goodwill. Management remains optimistic about the potential for future growth, particularly in its digital and cable television segments, as it seeks to leverage its market position and diversify its revenue streams.