Global media and entertainment company iHeartMedia (NASDAQ:IHRT) announced better-than-expected revenue in Q3 CY2025, but sales fell by 1.1% year on year to $997 million. Its GAAP loss of $0.43 per share was significantly below analysts’ consensus estimates.
Is now the time to buy IHRT? Find out in our full research report (it’s free for active Edge members).
iHeartMedia (IHRT) Q3 CY2025 Highlights:
- Revenue: $997 million vs analyst estimates of $978.7 million (1.1% year-on-year decline, 1.9% beat)
- EPS (GAAP): -$0.43 vs analyst estimates of -$0.01 (significant miss)
- Adjusted EBITDA: $204.8 million vs analyst estimates of $203.3 million (20.5% margin, 0.7% beat)
- Operating Margin: -11.7%, down from 7.6% in the same quarter last year
- Market Capitalization: $644.1 million
StockStory’s Take
iHeartMedia's third quarter results were marked by a mixed performance, as revenue modestly exceeded analyst expectations but profitability fell short, leading to a significant decline in the company’s share price. Management attributed the quarter’s results to continued strength in the Digital Audio Group, particularly podcasting and non-podcast digital sales, offset by declines in the Multiplatform Group, which includes broadcast radio and events. CEO Robert Pittman described the company’s challenge as one of monetization rather than audience, emphasizing, “We have more broadcast radio listeners today than we had ten years ago and even twenty years ago. Our challenge is one of monetization.”
Looking ahead, iHeartMedia’s outlook centers on expanding its digital audio and programmatic advertising capabilities while maintaining strict cost controls. Management highlighted new partnerships with platforms like TikTok and Amazon, and ongoing investments in proprietary audience data as core to future strategy. President and CFO Richard Bressler noted that further cost reductions are expected in 2026, while Pittman stressed the importance of converting audience reach into revenue: “A key component in meeting that challenge is to make our broadcast inventory transact like digital, unlocking a significant monetization opportunity for the company.”
Key Insights from Management’s Remarks
Management cited robust growth in digital audio, especially podcasting, and ongoing cost savings as key themes, while new partnerships and ad tech initiatives aim to address weaknesses in traditional broadcast.
- Digital Audio Group momentum: The Digital Audio Group, which includes podcasting and other digital formats, showed strong growth in both revenue and profitability, driven by increased advertiser demand and expanded content offerings. Podcast revenue grew over 20% year-over-year, with EBITDA margins in this segment reaching above 38%. Management attributed this strength to the group’s leading audience position in the U.S. and the unique reach enabled by its large local sales force.
- Broadcast monetization remains a challenge: Despite stable or even growing audience numbers in broadcast radio, revenue from the Multiplatform Group continued to decline, highlighting persistent difficulties in monetizing traditional audio formats. Management pointed to the need for broadcast inventory to be transacted in a digital-like manner, with new programmatic partnerships (such as with Amazon) expected to help bridge this gap over time.
- Cost savings initiatives: Ongoing efforts to streamline operations delivered $40 million in net savings during the quarter, with an additional $50 million in annualized savings announced for 2026. These cost reductions are primarily aimed at improving margins in the Multiplatform Group, where fixed costs remain high relative to revenue.
- Programmatic advertising and data investments: The company is investing in its proprietary audience database and programmatic advertising capabilities, aiming to allow advertisers to target broadcast and digital audio audiences using the same tools. This strategy is designed to unlock new revenue streams by making it easier for advertisers to buy across iHeartMedia's platforms.
- New strategic partnerships: Recently announced deals with TikTok and Amazon are intended to expand content offerings and cross-platform monetization. The TikTok partnership will introduce new podcasts, a dedicated radio station, and live event integration, while the Amazon partnership allows iHeartMedia’s audio inventory to be purchased programmatically through Amazon’s ad platform.
Drivers of Future Performance
iHeartMedia’s guidance is shaped by digital audio growth, expanding programmatic capabilities, and disciplined cost management, with management acknowledging macroeconomic and industry-specific risks.
- Digital and programmatic expansion: Management believes that continued investment in digital audio—especially podcasting and programmatic ad capabilities—will be the primary driver of future revenue growth. The goal is to replicate the success seen with podcasting across other digital and broadcast assets by making inventory accessible to advertisers in a digital format.
- Cost discipline and margin focus: The company expects to realize additional cost savings in 2026, with a focus on improving Multiplatform Group margins and overall profitability. Management highlighted the use of AI-powered tools as part of their modernization and efficiency efforts but cautioned that fixed costs in broadcast could remain a headwind.
- Ad market and macroeconomic uncertainty: While management sees positive trends among major advertisers and agencies, they acknowledged the risk of external factors such as government shutdowns and broader economic volatility. The company’s diversified advertiser base is seen as a mitigating factor, but management remains watchful for changes in demand.
Catalysts in Upcoming Quarters
In the coming quarters, StockStory analysts will focus on (1) the pace at which digital audio and programmatic ad initiatives scale and generate incremental revenue, (2) the impact of new partnerships with platforms like TikTok and Amazon on both content reach and monetization, and (3) the effectiveness of ongoing cost reduction efforts—particularly in the Multiplatform Group. Additional attention will be given to macroeconomic trends and shifts in advertiser sentiment that could affect overall demand.
iHeartMedia currently trades at $3.71, down from $4.54 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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