Beasley Broadcast Group (NASDAQ:BBGI) reported lower third-quarter revenue and adjusted EBITDA as weakness in agency advertising outweighed growth in direct sales to local businesses, though executives said cost reductions and a shift toward higher-margin digital products are improving the company’s operations.
Third-quarter net revenue fell to approximately $42.8 million from $51 million a year earlier, a decline of roughly 16% on a reported basis and 10% on a same-station basis. Adjusted EBITDA dropped to approximately $1.3 million from $3.9 million.
CEO Caroline Beasley said the advertising environment remained challenging, but that the company was seeing financial benefits from actions taken over the past two years. Same-station revenue declined approximately $4.8 million, while operating expenses fell $3.7 million, limiting the decline in station operating income to about $1.1 million.
“We are not satisfied with the pace of revenue recovery,” Beasley said. She added that the company’s priorities include rebuilding revenue, improving digital profitability, strengthening free cash flow and reducing debt.
Local Direct Growth Contrasts With Agency Weakness
Local direct revenue grew 7% year over year on a same-station basis, while national revenue excluding political advertising declined roughly 18% and local agency revenue fell about 22%, according to Ilana Goldstein, director of investor relations and corporate development.
Goldstein said the company expects traditional agency-driven advertising to continue declining through the remainder of 2026 and into 2027. Chief Business Officer Kevin LeGrett said Beasley is reorganizing its sales operation to sell audio and digital products through a single team and funnel.
Advertising trends varied by category. Gaming generated roughly $3 million in revenue, up 17% from a year earlier. The broader automotive category posted modest growth, with import auto dealer spending rising roughly 13% and domestic dealer spending relatively flat. Insurance, banking and food advertising also grew, Goldstein said.
LeGrett said Beasley’s stations reach nearly 17 million consumers each week and that the company’s rating share rose 3% during the quarter. He said the company’s task is to monetize that audience through broadcast, digital and other offerings.
Digital Margin Reaches a Record
Digital revenue fell to approximately $9.8 million from roughly $13 million on a reported basis, and declined about 12% on a same-station basis. Digital represented approximately 23% of total company revenue in the quarter.
Despite the revenue decline, digital operating income increased nearly $300,000 year over year to $3.1 million, while the digital operating margin expanded to a record 32% from approximately 26%. Executives attributed the improvement in part to a deliberate shift away from lower-margin third-party products toward owned-and-operated offerings.
Those owned-and-operated products represented 65% of digital revenue, LeGrett said. He also outlined investments in sales technology, including the deployment of Futuri’s TopLine Enterprise platform, and said it was too early to report adoption or results.
Debt Reduction and Political Advertising
Beasley ended September with approximately $16.5 million in cash and $127.4 million in total debt. Goldstein said $11.4 million of that cash was used to pay down first-lien debt in early October, leaving total debt at roughly $116.2 million by mid-October, including $3.6 million in first-lien notes.
The company completed a debt restructuring on May 1 and raised $5 million through a registered direct offering and private placement in September. Sales of two radio stations and two parcels of real estate in September and October generated more than $10 million in net proceeds, which the company directed toward strengthening its balance sheet, Caroline Beasley said.
Political advertising was below management’s initial expectations, although Detroit generated more than $2 million. Executives gave differing figures for the full election cycle: Beasley said the company booked more than $4.5 million, while LeGrett cited $4.2 million. Both said $1.3 million fell in the third quarter.
LeGrett said political spending was concentrated in races outside several of Beasley’s markets and characterized the category as a windfall rather than a foundation for the company’s business plan.
Fourth-Quarter Outlook
Caroline Beasley said fourth-quarter revenue was pacing up by a low- to mid-single-digit percentage on a same-station basis, but was pacing slightly down excluding approximately $2.8 million in political advertising. Full-year 2026 revenue was pacing down by a mid-single-digit percentage on a same-station basis.
For 2027, the company plans to continue rebuilding revenue, improving digital profitability and converting its lower cost structure into stronger adjusted EBITDA and free cash flow. Beasley also said the company is focused on refinancing and divesting non-strategic assets to reduce debt.
About Beasley Broadcast Group (NASDAQ:BBGI)
Beasley Broadcast Group, Inc. is a radio broadcasting and digital media company headquartered in Naples, Florida. The company owns and operates commercial radio stations serving listeners in markets across the United States, with programming focused on music, news, sports, talk and other locally relevant content. In addition to traditional terrestrial radio, Beasley provides digital advertising and marketing services through station websites, mobile platforms, streaming audio and other online offerings.
