Beasley Broadcast Group (NASDAQ:BBGI) executives said the company’s second quarter results reflected “meaningful traction” in its digital business but significant underperformance in its core audio segment, driven largely by continued weakness in national and local agency advertising.
Digital growth and margin expansion offset by sharp agency declines
In prepared remarks, CEO Caroline Beasley said the company’s digital revenue grew 1.3% in the quarter, or 8.1% on a same-station basis, and reached 25% of total revenue—an “important milestone” in Beasley’s shift toward a more digital-centric model. Beasley emphasized the profitability of that growth, noting digital segment operating margin improved 900 basis points sequentially to 26.8% from 17.8%.
- A shift in digital inventory mix, with owned-and-operated (O&O) inventory rising to 55% in Q2 from 49% in Q1, which she said improves margins and control over monetization.
- Programmatic growth supported by back-end technology enhancements, including improvements to inventory access, targeting, campaign optimization, and yield management.
Despite those gains, Beasley said overall net revenue fell 11% on a same-station basis. She framed the shortfall as more than a macro issue, pointing instead to sales execution challenges and what she described as an overreliance on agency-driven revenue. In 2025, she said, both national and local agency channels have seen “significant and sustained pullbacks,” particularly affecting the company’s largest brands.
CFO cites structural shifts in media buying and AI-driven planning
CFO Lauren Burrows Coleman said the quarter’s primary driver was “continued weakness in our agency business,” describing the declines as “not cyclical” but “structural.” National agency revenue declined 12.1% year-over-year, she said, while local agency revenue fell 24.7% year-over-year with “high double-digit declines” in most markets.
Coleman also discussed changes in how agencies plan media, saying large language models and AI-driven recommendation engines are increasingly embedded in planning workflows. According to Coleman, these systems prioritize channels with strong digital attribution and real-time performance signals, which can systematically disadvantage traditional audio because it is “underrepresented” in the datasets used by such tools. She said the trend reinforces the urgency of Beasley’s digital transformation and the need to improve targeting and measurement capabilities.
While agency revenue was down sharply, Coleman said local direct revenue increased 1.7% year-over-year and now represents the majority of the company’s local sales mix. She added that digital revenue grew 8.1% year-over-year on a same-station basis and 22.5% quarter-over-quarter.
Cost actions continue as company focuses on efficiency
Management highlighted ongoing cost reductions across the organization. Beasley said the company implemented about $10 million in annualized expense reductions in the first half of the year, bringing total annualized reductions to roughly $30 million over the past 12 months. She said the actions included streamlining G&A, optimizing vendor contracts, restructuring support functions, and realigning market-level resources while reducing redundancies. In digital, she said Beasley has retooled infrastructure to increase automation, reduce overhead, and shift spending toward growth products.
In the financial review, Coleman said Q2 total operating expenses declined $4.6 million, or 9.3%, year-over-year. She reported station operating income of $8.2 million, representing a 15.6% margin. Adjusted for stock-based compensation and non-recurring severance expense, she said station operating income would have been $8.4 million with a 15.8% margin. Corporate expenses were $3.8 million, down 2.8% year-over-year; she noted Q2 2024 included a one-time $225,000 vendor credit.
Coleman said adjusted EBITDA was $4.7 million after adding back $226,000 in severance and stock-based compensation. The company ended the quarter with $13.7 million in cash and reported capital expenditures of $600,000 for Q2.
Responding to a submitted question on cost savings, Coleman said that after reporting about $219 million in operating and corporate expenses in 2024, she expects 2025 expenses to be “kind of $20 million to below $20 million less” for the full year, reflecting annualized portions of 2024 cuts plus year-to-date reductions. Looking to 2026, she said management expects further optimization, particularly through vendor contract renewals and rationalizing services.
New digital products, Q3 pacing, and ratings highlights
Looking ahead, Beasley said the company plans to launch “Display Plus” later in the quarter, designed to pair with “Audio Plus” to provide “full funnel solutions and advanced attribution” across the company’s digital footprint. She also said a new video platform is live in select markets and that market newsletters have expanded. By year-end, she said Beasley intends to launch a self-serve advertising platform aimed at small and mid-size businesses, using AI-powered features to streamline proposals, creative development, and reporting.
For the third quarter, Beasley said the company continues to see softness in national and local agency channels, which she said account for roughly 45% of total revenue. She said total revenue was pacing down high single digits excluding political advertising, and that including political would imply “similar pacings” to what the company ended the second quarter with. She said local and national agency business were pacing down about 15% and 20%, respectively, while local direct and digital—“the business that we have control over”—were pacing up around 3% and 18%.
Beasley added that in Q3 the company expects digital to represent between 25% and 30% of total revenue “for the first time.” She also cited audience metrics, saying Nielsen data showed Beasley’s PPM market station ratings rose 14% year-over-year in AQH among adults 25-54. She said four PPM stations in Boston, Charlotte, Detroit, and Philadelphia ranked No. 1 in their markets in that demographic. She also reported total cumulative audience—over-the-air, streaming, and podcasts—up 7% year-over-year, and social media audience up more than 8%.
Capital structure actions include note repurchase and announced asset sales
Management also discussed steps to improve the company’s capital position. Beasley said the company repurchased $1.5 million of its stub notes in May, reducing the remaining balance to $2.8 million.
She also said Beasley has entered into an agreement to sell WPBB in Tampa for $8 million and its Fort Myers cluster for $18 million, for combined proceeds of $26 million, with plans to use the net proceeds to reduce debt. In response to a question about additional divestitures, management said the company remains open to asset sales or swaps “if it makes sense for the company.”
On pricing, Coleman said digital CPMs are holding and that effective digital CPMs are increasing as Beasley sells more direct O&O inventory. For traditional over-the-air, she said CPMs are trending down, driven by double-digit declines in agency business, with competitive pricing across markets.
About Beasley Broadcast Group (NASDAQ:BBGI)
Beasley Broadcast Group, Inc is a diversified media company primarily engaged in the ownership, operation and licensing of radio broadcast stations across the United States. Headquartered in Naples, Florida, the company provides local and regional audiences with a mix of music, news, talk and sports programming designed to serve diverse demographic markets. Through its portfolio of stations, Beasley generates advertising revenues by offering on-air spots, sponsorships and promotional partnerships to national and local advertisers.
In addition to traditional over-the-air programming, Beasley Broadcast Group offers digital services that include live audio streaming, podcast production, mobile apps and website content for many of its radio brands.
