Entravision Communications Corporation (EVC) Earnings

Management highlights

- **Media Segment Strategic and Operational Updates** • Core priorities: Grow monthly active advertisers and increase revenue per monthly active advertiser • Key ongoing revenue-focused initiatives: Expanded the local sales team, upskilled the sales force to sell digital marketing solutions (search, social, streaming, owned digital properties) via extensive training and new digital product specialist roles, expanded local news programming to serve local audiences, and built direct sales capability for political campaign advertising • Additional new projects in 2Q26: The AltaVision multicast television network and the WAPA Orlando station partnership with Hemisphere Media • All initiatives are funded via targeted cost cuts in non-core areas (including corporate expenses); total 2Q26 operating expenses were only $1.6 million higher than 2Q25, and lower than 4Q24 levels • Management remains committed to returning the media segment to profitability - **ATS Segment Strategic and Operational Updates** • Number one strategic priority since 2024 has been investing in more powerful AI capabilities for the ad platform • Key ongoing investments: Expanded product and engineering teams to improve technology, grew infrastructure capacity with a focus on maintaining operating leverage (growing infrastructure costs slower than revenue), and increased sales and customer service organizational capacity - **Corporate Financial Updates** • Corporate expenses were $6.6 million in 2Q26, a 3% increase year-over-year and 39% lower than 2Q24 corporate expenses, reflecting sustained cost reduction efforts • Balance sheet remains strong with $83 million in cash and marketable securities at quarter-end; $5 million debt repayment was completed in 2Q26, reducing credit facility indebtedness to $158 million • Cash allocation strategy prioritizes debt reduction to maintain low leverage, followed by returning capital to shareholders via dividends; a $0.05 per share dividend was approved for 3Q26

Guidance

- For the ATS segment, management does not expect to repeat 2Q26's exceptional sequential growth in the second half of 2026, and expects a sequential revenue decline from 2Q26 to 3Q26 - ATS is still expected to deliver over 100% year-over-year revenue growth in both 3Q26 and 4Q26 - Quarterly revenue variability will persist as the business prioritizes winning larger clients, since large client ad spend can fluctuate and meaningfully impact quarterly results - Core ATS business remains strong, with long-term growth in both monthly active accounts and revenue per account expected

Segment performance

EntraVision reports two operating segments: 1. Media Segment: Revenue was $45.1 million in 2Q26, a 1% decrease from 2Q25. This segment contributed 19.8% of total consolidated revenue. The segment posted an operating loss of $3.3 million in 2Q26, compared to an operating profit of $0.4 million in 2Q25. Total operating expenses increased by $1.6 million (4%) year-over-year, primarily due to higher compensation costs. 2. Advertising Technology and Services (ATS) Segment: Revenue was $182.8 million in 2Q26, a 230% increase from 2Q25 and an 18% sequential increase from 1Q26. This segment contributed 80.2% of total consolidated revenue. The segment generated operating profit of $40.0 million in 2Q26, a 673% increase year-over-year and a 17% sequential increase from 1Q26. Total operating expenses increased 85% year-over-year ($13.9 million), driven by higher cloud infrastructure costs, sales compensation, and new hiring for AI development, sales and operations. On a consolidated basis, total 2Q26 revenue was $227.9 million, up 126% year-over-year, with consolidated operating income of $30.0 million compared to a $0.8 million operating loss in 2Q25.

Risks & headwinds

- Operating losses in the media segment require additional work to achieve targeted profitability - The Televisa Univision affiliation agreement is up for renewal at the end of 2026, and no update on renewal progress was available as of the 2Q26 earnings call - Quarterly ATS revenue is exposed to variability from large client ad spend fluctuations as the business pursues larger customers - All forward-looking statements are subject to general market and business risks that could cause actual results to differ materially from expectations, as detailed in EntraVision's SEC filings

Analyst Q&A

• Q: David Bastian from Kingdom Capital asked management to discuss trends related to new large clients, customer concentration, and expected Q3 revenue ramp activity. /

  A: Management stated it only discloses customer information as required by SEC reporting rules, and will not discuss individual large clients for competitive and business confidentiality reasons. Management confirmed that winning larger clients is a core strategic priority for ATS, and acknowledged that the entry and exit of these large clients does create quarterly revenue variability that the company accepts as part of its growth strategy.