Entravision 4Q Net Revenue Up 27%

Of the overall increase, approximately $52.6 million was attributable to our digital segment and was primarily due to advertising revenue growth from its digital commercial partnerships business. In addition, the increase in net revenue in the digital segment was due to investments in variable interest entities in 2022, which did not contribute to the results of operations in the comparable prior-year period.

In addition, of the overall increase, approximately $5.6 million was attributable to the television segment, primarily due to an increase in political advertising revenue, partially offset by decreases in local and national advertising revenue. These decreases were mainly attributed to the expiration of Univision and UniMás network affiliation agreements in Orlando, Tampa and Washington, D.C. on Dec. 31, 2021. Additionally, of the overall increase, approximately $4.2 million was attributable to our audio segment, primarily due to increases in political advertising revenue and national advertising revenue, partially offset by a decrease in local advertising revenue.

Operating expenses in the fourth quarter of 2022 totaled $57.2 million, up 19% from $48.1 million in the prior-year period. Of the overall increase, approximately $7.0 million was attributable to the digital segment and was primarily due to an increase in expenses associated with the increase in digital advertising revenue, an increase in salary expense and non-cash stock-based compensation, and an increase due to investments in variable interest entities in 2022, which did not contribute to our results of operations in the comparable prior-year period.

In addition, of the overall increase in operating expenses, approximately $1.1 million was attributable to the television segment primarily due to an increase in rent expense, an increase in bad debt expense and an increase in non-cash stock-based compensation, partially offset by a decrease in expenses associated with the decrease in local and national advertising revenue.

Additionally, of the overall increase in operating expenses, approximately $1.0 million was attributable to the audio segment primarily due to an increase in expenses associated with the increase in national advertising revenue and an increase in rent expense.

Cost of revenue in the fourth quarter of 2022 totaled $192.0 million, up 29% from $148.4 million in the prior-year period. The increase was primarily due to increased cost of revenue related to advertising revenue growth from our digital commercial partnerships business, and due to our investments in variable interest entities in 2022, which did not contribute to our results of operations in the comparable prior-year period.

Operating expenses in the fourth quarter of 2022 totaled $57.2 million, up 19% from $48.1 million in the prior-year period. Of the overall increase, approximately $7.0 million was attributable to the digital segment and was primarily due to an increase in expenses associated with the increase in digital advertising revenue, an increase in salary expense and non-cash stock-based compensation, and an increase due to investments in variable interest entities in 2022, which did not contribute to the results of operations in the comparable prior-year period.

Commenting on the company’s earnings results, Entravision Interim Chief Executive Officer and Chief Financial Officer Chris Young said: “We are pleased with our 2022 performance, which marks a record year for Entravision for revenue and consolidated adjusted EBITDA. Our results demonstrate the resiliency and strength of our business through challenging macro conditions, and the successful execution of our strategic plan to create a leading global advertising solutions, media and technology company. We have enhanced our digital segment organically, as well as through strategic partnerships, geographic expansion and accretive acquisitions to bolster our suite of digital services in the large and growing advertising industry. Our complementary non-digital businesses, while a smaller percentage of our revenue portfolio, continue to be an important contributor to our growth. We will continue to leverage our tools, reach, technology and world-class team to meet our clients’ evolving needs and deliver enhanced shareholder value.”

Paul Zevnik, interim chair and co-founder said, “The Entravision team mourns the sudden and tragic loss of our late CEO, founder and dear friend, Walter Ulloa. Walter passed unexpectedly on the last day of the most successful year in the company’s history. Since we founded Entravision in 1996, we have developed a clear vision to build a leading global advertising solutions, media and technology company serving diverse demographics with diverse media. Through Walter’s leadership and with the support of a strong leadership team and dedicated entrepreneurs across each of Entravision’s business platforms, we have achieved tremendous growth and transformed the Company’s geographical breadth and media portfolio. Most importantly, we created a company that is a great place to work with a focus on engagement, trust, open communications, community service and involvement, and long-lasting relationships with our key partners. I miss our friend dearly, and the Board is committed to working with management to advance Walter’s vision and execute on our roadmap to deliver enhanced value for our stakeholders and partners.”

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