UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-K

Overview of Townsquare’s Performance

Townsquare is a community-focused digital and broadcast media and marketing solutions company principally focused outside the top 50 markets in the U.S. The company’s primary sources of revenue are the sale of digital and broadcast advertising solutions, as well as subscription digital marketing services.

For the year ended December 31, 2024, Townsquare reported a 0.7% decrease in net revenue compared to 2023. This was driven by an 8.4% decline in Subscription Digital Marketing Solutions revenue and a 1.3% decrease in Broadcast Advertising revenue, partially offset by a 5.5% increase in Digital Advertising revenue.

Financial Highlights

• Net revenue decreased $3.2 million, or 0.7%, to $450.9 million. Excluding political advertising revenue, net revenue decreased 3.0% to $437.6 million.
• Operating income increased $40.8 million to $21.7 million, driven by a $52.9 million decrease in non-cash impairment charges and a $3.6 million decrease in direct operating and corporate expenses, partially offset by a $9.1 million increase in stock-based compensation.
• The Broadcast Advertising segment reported operating income of $19.0 million, compared to an operating loss of $33.8 million in 2023, due to the decrease in impairment charges and lower direct operating expenses.
• The Digital Advertising segment reported operating income of $37.3 million, a decrease of $7.6 million from 2023, due to higher direct operating expenses.
• The Subscription Digital Marketing Solutions segment reported operating income of $18.4 million, a decrease of $2.9 million from 2023, due to the decline in net revenue.

Macroeconomic Factors and Risks

Townsquare faces risks from current economic challenges, including high inflation and interest rates, which could result in advertising and subscription cancellations, declines in new advertising purchases, and increases in operating expenses. The company is monitoring the situation closely and may take precautionary measures such as wage reductions and controlling capital expenditures.

The company also faces risks related to new or changing privacy legislation that could hinder the growth of its digital properties. Townsquare must comply with a variety of federal and state laws governing the collection, use, and security of consumer data, and changes to these laws could impact the company’s operations.

Smaller Reporting Company Status

Townsquare is a smaller reporting company and intends to take advantage of reduced disclosure requirements, which could make its common stock less attractive to some investors. The company will remain a smaller reporting company until the aggregate market value of its outstanding common stock held by non-affiliates reaches $250 million or more.

Stock Price Volatility and Corporate Social Responsibility

Townsquare’s Class A common stock may experience significant volatility in response to various factors, including changes in financial estimates, research reports, and market conditions. The company is also facing increasing scrutiny related to its environmental, social, and governance (ESG) practices, and a failure to satisfy evolving shareholder expectations in this area could impact its reputation and relationships with investors.

Dividend Policy and Anti-Takeover Provisions

Townsquare began paying quarterly cash dividends in 2023, although future dividend payments will be at the discretion of the board of directors. The company’s certificate of incorporation and bylaws also contain provisions that may delay, discourage, or prevent a merger or acquisition that a stockholder may consider favorable.

Cybersecurity and Property Overview

Townsquare’s information security is managed by the Executive Vice President, Finance, Operations and Technology, and the company has implemented a comprehensive set of cybersecurity measures to protect its systems and data. As of December 31, 2024, the company owned 52 facilities containing broadcast studios and 278 towers, and leased various other office and event spaces.

Conclusion

Townsquare faced a challenging macroeconomic environment in 2024, with declines in Subscription Digital Marketing Solutions and Broadcast Advertising revenue. However, the company was able to improve its overall profitability through cost-cutting measures and a reduction in non-cash impairment charges. Going forward, Townsquare will need to navigate evolving privacy regulations and continue to adapt its business model to changing consumer and advertiser preferences. The company’s ability to maintain its strong local media presence and grow its digital advertising and marketing solutions will be critical to its long-term success.