The podcast business continues to add to Cumulus Media’s bottom line as the company reports its tenth consecutive quarter of podcast revenue gains. While it did not release a specific dollar figure, Cumulus says its podcast business grew 22% during the first quarter of the year. That helped drive digital revenue overall up 18% year-over-year to $31.9 million for the broadcaster.
“We're seeing great traction with the launch of our local podcasting effort,” said CEO Mary Berner. She said revenue for the local podcasts “doubled” during the first quarter and its local podcasts are now on pace to have nearly 100 million downloads this year.
Leveraging its 406 radio stations in 86 markets, Cumulus has quietly launched hundreds of local podcasts during the past year. Beyond creating new revenue opportunities, executives have said it comes with little additional cost since the talent are typically already on the Cumulus radio station payroll.
During a conference call with analysts Wednesday, Berner explained that it’s not only the local podcasts that are growing their business.
“The strong start we're seeing in 2022 is driven both by our existing stable of content partners, as well as new relationships, such as the partnership that we launched in February with the Bulwark, a leading political news and analysis network,” said Berner. “In podcasting, we remain highly focused on doing what we do best monetizing, promoting, and growing personality driven content across and within genres.”
Cumulus ended first quarter with $181 million of cash on hand, and when asked whether it planned to spend any of that on acquisitions, CFO Frank Lopez-Balboa left a door open. “We continue to look at podcasting from time to time,” he said, with a qualification. “But that's more on content acquisition or adding partnerships as opposed to buying a tech stack where a lot of other companies have done.”
In the near term, Cumulus will focus on a $50 million stock buyback program. It announced the share repurchase initiative as the first step in a share repurchase program as it also rejected a proposed buyout. A consortium led by Connoisseur Media CEO Jeff Warshaw made an unsolicited offer to acquire Cumulus for $15-$17 per share.
“After a careful and thorough review, conducted in consultation with our financial and legal advisors, the board unanimously concluded that the indication of interest significantly undervalues the company and is not in the best interests of its shareholders,” Berner said in a letter to shareholders. “Our strong momentum across business lines, multiple digital revenue growth drivers, operational efficiency and superior cash flow provide the company with substantial untapped upside that it expects to continue to realize on behalf of its shareholders,” she added.
Total revenue grew 15% year-over-year to $232 million at Cumulus as the advertising recovery from the COVID-19 pandemic continued in the first quarter of 2022. While Cumulus has not yet returned to 2019 revenue levels, Q1 marked a fifth consecutive quarter of sequential improvement compared to the comparable 2019 quarter.
“The company is solidly in growth mode, and our balance sheet is the strongest it's been in more than a decade. Importantly, our outlook for the balance of 2022 continues to be positive,” Berner told analysts.
The company said advertising categories such as professional services, employment recruitment, travel, entertainment, restaurants, and live events all gained traction in the first months of 2022. “We continue to see a strong rebound driven by stage relaxing COVID restrictions,” said Lopez-Balboa.
Cumulus said its total revenue in the second quarter is currently pacing up in the mid-single digits versus a year ago.