Digital Now Accounts For 57% Of Townsquare Revenue.

Townsquare Media's third-quarter revenue increased 3.9% year over year to $110.9 million, while Adjusted EBITDA grew 2.7% to $22.6 million, as accelerating digital advertising growth and stronger political revenue helped offset continued pressure on its core broadcast and subscription digital marketing businesses.

The results exceeded the company's previously issued revenue guidance and came within its guidance range for Adjusted EBITDA. Net loss narrowed to $4 million from $5.5 million a year earlier.

"Townsquare's third quarter results reflect the continued strength of our Digital Advertising platform," CEO Bill Wilson says.

Digital Advertising revenue increased 12.7% to $45.3 million, accelerating for a third consecutive quarter. Programmatic advertising was the fastest-growing component, with revenue climbing 22.5% year over year.

Wilson also highlighted the expansion of Townsquare's Media Partnerships business, which provides white-label digital advertising solutions to other radio and media companies. The division now serves 18 partners, compared to one two years ago and six a year ago, extending Townsquare's programmatic advertising platform into 122 markets.

The company expects Media Partnerships revenue to more than double in 2026. Wilson said Townsquare is "proud to be helping so many other local radio and media companies drive incremental digital revenue for them and great solutions for their clients."

Revenue from monetizing Townsquare's owned and operated websites and mobile apps also increased more than 10%. The company's digital portfolio includes more than 400 local news and entertainment websites and mobile apps.

Digital now represents 57% of Townsquare's year-to-date net revenue and 56% of segment profit, even with broadcast benefiting from a strong political advertising cycle.

But Wilson acknowledged that the company's local advertising clients continue to face economic challenges.

"At the same time, we want to be candid about the challenges we face," he said. "Our local clients continue to feel pressure from higher operating costs and interest rates, and they are scrutinizing every marketing dollar, particularly those spent on traditional media."

Broadcast Advertising revenue increased 0.4% to $47.2 million, helped by political advertising. Political broadcast revenue reached $2.8 million, compared to just $155,000 in the third quarter of 2025.

Excluding political, however, broadcast revenue declined 5.2% to $44.4 million. That marked an improvement from the 7% declines in core non-political broadcast revenue reported in both the first and second quarters.

Wilson said the company expects those declines to deepen in the fourth quarter, partly because political advertising is crowding out other inventory.

Despite the underlying revenue pressure, Broadcast Advertising segment profit increased 9% to $14.6 million, reflecting lower direct operating expenses.

Townsquare Interactive, the company's subscription-based digital marketing solutions business, also remains an area of concern. Revenue declined 8.5% to $17.1 million, although segment profit was essentially flat at $6.2 million. The business posted a 36% segment profit margin.

Wilson said Townsquare Interactive's profitability remains strong, but lower-than-anticipated sales velocity has delayed its anticipated return to sequential revenue growth.

"While Townsquare Interactive's profit remains strong, lower-than-anticipated sales velocity means it will not return to sequential revenue growth in Q4 2026 as we had projected," he said.

The company had previously expected monthly revenue growth to resume in the fourth quarter but now does not anticipate that improvement until 2027. Townsquare is rebuilding and growing the business's sales team.

For the quarter, total digital revenue increased 6% to $62.4 million, although combined Digital segment profit declined 1.1% to $14.7 million. Digital Advertising segment profit slipped 1.7% to $8.5 million, while Townsquare Interactive segment profit was down 0.2%.

For the first nine months of 2026, Townsquare reported revenue of $323.1 million, up 0.7%. Adjusted EBITDA declined 4.2% to $63.8 million. Excluding political, revenue was down 0.4% and Adjusted EBITDA declined 8.9%.

The company also announced that it is suspending its quarterly cash dividend, which had been $0.20 per share. The previously declared dividend was paid Nov. 2 to shareholders of record as of Oct. 26.

Wilson said the decision was made with the Board of Directors because management does not believe the market is assigning sufficient value to the dividend. The suspension is expected to preserve approximately $14 million in cash annually.

"Given these challenges, and the meaningful direct impact of higher interest rates on our floating-rate debt, we have made the decision, together with our Board, to suspend our quarterly dividend," Wilson said.

He added that Townsquare believes the cash can be put to better use supporting the company's financial position and pursuing growth opportunities.

"We do not believe that the market is ascribing value to the dividend and we believe this cash can generate greater value for shareholders elsewhere," Wilson said.

The company plans to use the preserved cash for general corporate liquidity and to opportunistically pursue higher-return opportunities. Wilson described the move as a way to maintain investment in the company's digital growth platform while strengthening financial flexibility.

At Sept. 30, Townsquare had $4.6 million in cash and cash equivalents and $467.5 million in outstanding indebtedness, representing gross leverage of 5.48 times trailing 12-month Adjusted EBITDA.

"We believe this is the prudent course for Townsquare and our stakeholders, and that it positions us to continue investing in our digital growth engine while strengthening our financial flexibility," Wilson said.

For the fourth quarter, Townsquare expects revenue of $107 million to $109 million and Adjusted EBITDA of $23 million to $25 million. For full-year 2026, the company continues to project revenue of $430 million to $432 million and Adjusted EBITDA of $87 million to $89 million, both within its original guidance ranges.