Segment Information

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Information

5. SEGMENT INFORMATION

The Company’s management has determined that the Company operates in three reportable segments as of March 31, 2023, based upon the type of advertising medium, which segments are digital, television and audio (formerly radio). 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 business units:

•the Company's digital commercial partnerships business;

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

•the Company's mobile growth 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, ByteDance and Twitter, as well as other media companies 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 programmatic ad 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 mobile growth solutions business, which provides managed services to advertisers looking to connect with consumers, primarily on mobile devices. This business allows the Company to manage programmatic media buys for its advertising customers or their ad agencies through multiple ad purchasing platforms in real time across multiple channels.

The Company's digital audio business provides digital audio advertising solutions for advertisers in the Americas. The Company's advertising customers and their ad agencies use these solutions to promote their brands on online audio streams, and provides them with tools to target specific users by demographic and geographic categories.

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 80% and 73% of its revenue outside the United

States during the three-month periods ended march 31, 2023 and 2022, respectively. The Company evaluates the performance of its operating segments based on the following (in thousands):

	Three-Month Period
	Ended March 31,						%
	2023			2022			Change
Net revenue
Digital	$	196,482		$	153,711			28	%
Television		30,312			30,867			(2	)%
Audio		12,212			12,594			(3	)%
Consolidated		239,006			197,172			21	%
Cost of revenue - digital		167,756			129,891			29	%
Direct operating expenses
Digital		8,010			7,133			12	%
Television		14,759			14,283			3	%
Audio		7,093			6,407			11	%
Consolidated		29,862			27,823			7	%
Selling, general and administrative expenses
Digital		13,529			8,102			67	%
Television		5,340			4,957			8	%
Audio		3,899			2,980			31	%
Consolidated		22,768			16,039			42	%
Depreciation and amortization
Digital		3,631			2,677			36	%
Television		2,658			2,893			(8	)%
Audio		182			825			(78	)%
Consolidated		6,471			6,395			1	%
Segment operating profit (loss)
Digital		3,556			5,908			(40	)%
Television		7,555			8,734			(13	)%
Audio		1,038			2,382			(56	)%
Consolidated		12,149			17,024			(29	)%
Corporate expenses		10,502			8,724			20	%
Change in fair value of contingent consideration		(4,065	)		5,100		*
Foreign currency (gain) loss		(956	)		(847	)		13	%
Other operating (gain) loss		-			(119	)		(100	)%
Operating income (loss)		6,668			4,166			60	%
Interest expense	$	(4,028	)	$	(1,836	)		119	%
Interest income		860			406			112	%
Dividend income		18			3			500	%
Realized gain (loss) on marketable securities		(32	)		-		*
Gain (loss) on debt extinguishment		(1,556	)		-		*
Income (loss) before income taxes		1,930			2,739			(30	)%
Capital expenditures
Digital	$	1,111		$	769
Television		7,336			460
Audio		103			288
Consolidated	$	8,550		$	1,517
	March 31,			December 31,
Total assets	2023			2022
Digital		415,204			408,027
Television		355,996			363,904
Audio		107,083			108,910
Consolidated	$	878,283		$	880,841

* Percentage not meaningful.