Segment Information

6 Months Ended

Jun. 30, 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 June 30, 2022, 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 (formerly known as Facebook Inc.), Spotify, TikTok, and Twitter, as well as other media companies, in more than 30 countries throughout the world. The Company's dedicated local sales teams sell advertising space on these and other 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 other Internet-connected devices. 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 45 radio stations (37 FM and 8 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 70% of its revenue outside the United States during the three-month periods ended June 30, 2022 and 2021, respectively. The Company generated 73% and 67% of its

revenue outside the United States during the six-month periods ended June 30, 2022 and 2021, respectively. The Company evaluates the performance of its operating segments based on the following (in thousands):

	Three-Month Period									Six-Month Period
	Ended June 30,						%			Ended June 30,						%
	2022			2021			Change			2022			2021			Change
Net revenue
Digital	$	174,378		$	130,223			34	%	$	328,089		$	231,705			42	%
Television		32,373			34,057			(5	)%		63,240			70,148			(10	)%
Audio		14,944			14,130			6	%		27,538			25,437			8	%
Consolidated		221,695			178,410			24	%		418,867			327,290			28	%
Cost of revenue - digital		144,965			109,030			33	%		274,856			193,786			42	%
Direct operating expenses
Digital		7,843			6,238			26	%		14,976			11,139			34	%
Television		14,488			15,203			(5	)%		28,771			30,172			(5	)%
Audio		7,265			6,895			5	%		13,672			13,586			1	%
Consolidated		29,596			28,336			4	%		57,419			54,897			5	%
Selling, general and administrative expenses
Digital		9,419			5,789			63	%		17,521			11,738			49	%
Television		5,238			4,313			21	%		10,195			9,228			10	%
Audio		3,118			3,004			4	%		6,098			5,993			2	%
Consolidated		17,775			13,106			36	%		33,814			26,959			25	%
Depreciation and amortization
Digital		2,644			1,613			64	%		5,321			3,194			67	%
Television		2,808			3,107			(10	)%		5,701			6,323			(10	)%
Audio		811			354			129	%		1,636			741			121	%
Consolidated		6,263			5,074			23	%		12,658			10,258			23	%
Segment operating profit (loss)
Digital		9,507			7,553			26	%		15,415			11,848			30	%
Television		9,839			11,434			(14	)%		18,573			24,425			(24	)%
Audio		3,750			3,877			(3	)%		6,132			5,117			20	%
Consolidated		23,096			22,864			1	%		40,120			41,390			(3	)%
Corporate expenses		8,520			7,345			16	%		17,244			14,503			19	%
Change in fair value of contingent consideration		976			-		*				6,076			-		*
Impairment charge		-			112			(100	)%		-			1,438			(100	)%
Foreign currency (gain) loss		993			(309	)	*				146			277			(47	)%
Other operating (gain) loss		(834	)		(523	)		59	%		(953	)		(2,436	)		(61	)%
Operating income (loss)		13,441			16,239			(17	)%		17,607			27,608			(36	)%
Interest expense	$	(2,334	)	$	(1,856	)		26	%	$	(4,170	)	$	(3,573	)		17	%
Interest income		722			83			770	%		1,128			223			406	%
Dividend income		11			2			450	%		14			4			250	%
Income (loss) before income taxes		11,840			14,468			(18	)%		14,579			24,262			(40	)%
Capital expenditures
Digital	$	1,092		$	538					$	1,861		$	874
Television		676			430						1,136			1,461
Audio		123			147						411			293
Consolidated	$	1,891		$	1,115					$	3,408		$	2,628
	June 30,			December 31,
Total assets	2022			2021
Digital		350,725			309,347
Television		384,087			433,303
Audio		105,391			108,692
Consolidated	$	840,203		$	851,342

* Percentage not meaningful.