Segment Information

6 Months Ended

Jun. 30, 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 June 30, 2023, 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 principally 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 X (formerly known as Twitter, Inc.), 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 business – 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 primarily 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 primarily 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. The Company also sells advertisements and syndicates radio programming to more than 100 markets across the United States.

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 81% and 73% of its revenue outside the United States during the three-month periods ended June 30, 2023 and 2022, respectively. The Company generated 81% and 73% of its

revenue outside the United States during the six-month periods ended June 30, 2023 and 2022, 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,						%
	2023			2022			Change			2023			2022			Change
Net revenue
Digital	$	229,896		$	174,378			32	%	$	426,378		$	328,089			30	%
Television		29,943			32,373			(8	)%		60,255			63,240			(5	)%
Audio		13,542			14,944			(9	)%		25,754			27,538			(6	)%
Consolidated		273,381			221,695			23	%		512,387			418,867			22	%
Cost of revenue - digital		195,836			144,965			35	%		363,592			274,856			32	%
Direct operating expenses
Digital		10,283			7,843			31	%		18,293			14,976			22	%
Television		15,024			14,488			4	%		29,783			28,771			4	%
Audio		7,758			7,265			7	%		14,851			13,672			9	%
Consolidated		33,065			29,596			12	%		62,927			57,419			10	%
Selling, general and administrative expenses
Digital		14,760			9,419			57	%		28,289			17,521			61	%
Television		4,844			5,238			(8	)%		10,184			10,195			(0	)%
Audio		3,961			3,118			27	%		7,860			6,098			29	%
Consolidated		23,565			17,775			33	%		46,333			33,814			37	%
Depreciation and amortization
Digital		3,729			2,644			41	%		7,360			5,321			38	%
Television		2,551			2,808			(9	)%		5,209			5,701			(9	)%
Audio		229			811			(72	)%		411			1,636			(75	)%
Consolidated		6,509			6,263			4	%		12,980			12,658			3	%
Segment operating profit (loss)
Digital		5,288			9,507			(44	)%		8,844			15,415			(43	)%
Television		7,524			9,839			(24	)%		15,079			18,573			(19	)%
Audio		1,594			3,750			(57	)%		2,632			6,132			(57	)%
Consolidated		14,406			23,096			(38	)%		26,555			40,120			(34	)%
Corporate expenses		12,042			8,520			41	%		22,544			17,244			31	%
Change in fair value of contingent consideration		1,123			976			15	%		(2,942	)		6,076		*
Foreign currency (gain) loss		697			993			(30	)%		(259	)		146		*
Other operating (gain) loss		-			(834	)		(100	)%		-			(953	)		(100	)%
Operating income (loss)		544			13,441			(96	)%		7,212			17,607			(59	)%
Interest expense	$	(4,306	)	$	(2,334	)		84	%	$	(8,334	)	$	(4,170	)		100	%
Interest income		1,037			722			44	%		1,897			1,128			68	%
Dividend income		14			11			27	%		32			14			129	%
Realized gain (loss) on marketable securities		(29	)		-		*				(61	)		-		*
Gain (loss) on debt extinguishment		-			-		*				(1,556	)		-		*
Income (loss) before income taxes		(2,740	)		11,840			(123	)%		(810	)		14,579			(106	)%
Capital expenditures
Digital	$	1,370		$	1,092					$	2,481		$	1,861
Television		2,555			676						6,875			1,136
Audio		2,371			123						5,490			411
Consolidated	$	6,296		$	1,891					$	14,846		$	3,408
	June 30,			December 31,
Total assets	2023			2022
Digital		399,474			408,027
Television		356,282			363,904
Audio		109,400			108,910
Consolidated	$	865,156		$	880,841

* Percentage not meaningful.