Segment Information

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Segment Information

5. SEGMENT INFORMATION

The Company’s management has determined that the Company operates in three reportable segments as of December 31, 2021, based upon the type of advertising medium, which segments are digital, television and audio. The Company’s segments results reflect information presented on the same basis that is used for internal management reporting and it is also how the chief operating decision maker evaluates the business.

Digital

The Company's digital segment, whose operations are located in Latin America, Europe, the United States, Asia and Africa, reaches a global market, with a focus on advertisers in emerging economies that wish to advertise on digital platforms owned and operated primarily by global media companies.

The Company provides digital end-to-end advertising solutions that allow advertisers to reach online users worldwide. These solutions are comprised of four separate business units:

•the Company's digital commercial partnerships business;

•Smadex, the Company's programmatic ad purchasing platform;

•the Company's branding and mobile performance solutions business; and

•the Company's digital audio business.
 

Through the Company's digital commercial partnerships business – the largest of its digital business units – the Company acts as an intermediary between primarily global media companies and advertising customers or their ad agencies. The global media companies represented by the Company include Meta Platforms, or Meta (formerly known as Facebook Inc.), Spotify AB, or Spotify, ByteDance Ltd., also known as TikTok, and Twitter, Inc., or Twitter, as well as other media companies, in 30 countries throughout the world. The Company's dedicated local sales teams sell advertising space on these media companies' digital platforms to its advertising customers or their ad agencies for the placement of ads directed to online users of a wide range of Internet-connected devices. The Company also provides some of its advertising customers billing, technological and other support, including strategic marketing and training, which it refers to as managed services.

Smadex is the Company's proprietary automated purchasing platform, on which advertisers can purchase ad inventory. This practice – the purchase and sale of advertising inventory electronically – is referred to in the Company's industry as programmatic advertising. Smadex is also a “demand-side" platform, which allows advertisers to purchase space from online marketplaces on which media companies list their advertising inventory. Most advertisements acquired through Smadex are placed on mobile devices, but they may also be placed on computers and Internet-connected televisions. The Company also provides managed services to some of its advertising customers in connection with their use of its Smadex platform.

The Company also offers a branding and mobile performance solutions business, which provides managed services to advertisers looking to connect with consumers, primarily on mobile devices. The Company's digital audio business provides digital audio advertising solutions for advertisers in the Americas.

Television

The Company's television operations reach and engage U.S. Hispanics in the United States. The Company owns and/or operates 49 primary television stations located primarily in California, Colorado, Connecticut, Florida, Kansas, Massachusetts, Nevada, New Mexico, Texas and Washington, D.C. The Company generates revenue from advertising, retransmission consent agreements and the monetization of spectrum usage rights in these markets.

Audio

The Company's audio operations reach and engage U.S. Hispanics in the United States. The Company owns and operates 46 radio stations (37 FM and 9 AM) located primarily in Arizona, California, Colorado, Florida, Nevada, New Mexico and Texas.

Separate financial data for each of the Company’s operating segments are provided below. Segment operating profit (loss) is defined as operating profit (loss) before corporate expenses, change in fair value of contingent consideration, impairment charge, foreign currency (gain) loss and other operating (gain) loss. The Company generated 73% and 65% of its revenue outside the United States during the three-month periods ended March 31, 2022 and 2021, respectively. The Company evaluates the performance of its operating segments based on the following (in thousands):

	Three-Month Period
	Ended March 31,						%
	2022			2021			Change
Net revenue
Digital	$	153,711		$	101,482			51	%
Television		30,867			36,091			(14	)%
Audio		12,594			11,307			11	%
Consolidated		197,172			148,880			32	%
Cost of revenue - digital		129,891			84,756			53	%
Direct operating expenses
Digital		7,133			4,901			46	%
Television		14,283			14,969			(5	)%
Audio		6,407			6,691			(4	)%
Consolidated		27,823			26,561			5	%
Selling, general and administrative expenses
Digital		8,102			5,949			36	%
Television		4,957			4,915			1	%
Audio		2,980			2,989			(0	)%
Consolidated		16,039			13,853			16	%
Depreciation and amortization
Digital		2,677			1,581			69	%
Television		2,893			3,216			(10	)%
Audio		825			387			113	%
Consolidated		6,395			5,184			23	%
Segment operating profit (loss)
Digital		5,908			4,295			38	%
Television		8,734			12,991			(33	)%
Audio		2,382			1,240			92	%
Consolidated		17,024			18,526			(8	)%
Corporate expenses		8,724			7,158			22	%
Change in fair value of contingent consideration		5,100			-		*
Impairment charge		-			1,326			(100	)%
Foreign currency (gain) loss		(847	)		586		*
Other operating (gain) loss		(119	)		(1,913	)		(94	)%
Operating income (loss)		4,166			11,369			(63	)%
Interest expense	$	(1,836	)	$	(1,717	)		7	%
Interest income		406			140			190	%
Dividend income		3			2			50	%
Income (loss) before income taxes		2,739			9,794			(72	)%
Capital expenditures
Digital	$	769		$	336
Television		460			1,031
Audio		288			146
Consolidated	$	1,517		$	1,513
	March 31,			December 31,
Total assets	2022			2021
Digital		330,204			309,347
Television		425,867			433,303
Audio		105,538			108,692
Consolidated	$	861,609		$	851,342

* Percentage not meaningful.