ENTRAVISION COMMUNICATIONS CORP (EVC)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are a media and advertising technology company.

Our media business owns and operates one of the largest groups of Spanish-language television and radio stations in the United States. Our mission is to serve our Latino audience as a trusted provider of news, information, and entertainment. We serve our advertisers by providing marketing capabilities across broadcast and digital media.

Our advertising technology & services (ATS) business empowers advertisers, primarily mobile app developers, to grow their businesses globally. We provide advertising solutions through two brands. Smadex is a programmatic demand-side platform, which uses proprietary AI to automate media buying. Adwake is a performance-based digital marketing agency.

We have organized our operations into two reportable segments. Our media segment includes its television, radio and digital marketing operations. Our ATS segment consists of Smadex and Adwake.

Our net revenue for the three-month period ended June 30, 2026 was $227.9 million. Of this amount, revenue generated by our media segment accounted for approximately 20%, and revenue generated by our ATS segment accounted for approximately 80% of total revenue.

Highlights

During the second quarter of 2026, our revenue grew by triple digits, driven by revenue growth in our ATS segment, partially offset by a decrease in revenue in our media segment compared to the comparable period of 2025. In addition, during the second quarter of 2026:

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ATS revenue increased by 230% during the second quarter of 2026 compared to the second quarter of 2025, primarily due to a large customer in Asia that we acquired in the second half of 2025, and increases in monthly active advertisers and revenue per monthly active advertiser.

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we have continued to invest in the AI capabilities of our Smadex platform and our sales capacity.

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we continued to reduce our debt by making a scheduled amortization payment of $5 million under our Credit Facility.

Relationship with TelevisaUnivision

Our network affiliation agreement with TelevisaUnivision provides certain of our owned stations the exclusive right to broadcast TelevisaUnivision’s primary Univision network and UniMás network programming in their respective markets. Under our proxy agreement with TelevisaUnivision, we grant TelevisaUnivision the right to negotiate the terms of retransmission consent agreements with MVPDs for our Univision- and UniMás-affiliated television station signals. Revenue generated from retransmission consent agreements represents payments from MVPDs for access to our television station signals so that they may rebroadcast our signals and charge their subscribers for this programming. We also generate revenue under a marketing and sales agreement with TelevisaUnivision, which gives us the right to manage the marketing and sales operations of TelevisaUnivision-owned Univision affiliates in three markets – Albuquerque, Boston and Denver. The term of each of these current agreements expires on December 31, 2026 for all of our Univision and UniMás network affiliate stations. TelevisaUnivision also owns approximately 10% of our common stock on a fully-converted basis. For more information regarding these agreements and the stock that TelevisaUnivision owns, see Note 2 to Notes to Condensed Consolidated Financial Statements.

Critical Accounting Policies

For a description of our critical accounting policies, please refer to “Application of Critical Accounting Policies and Accounting Estimates” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2025 10-K.

Recent Accounting Pronouncements

For further information on recently issued accounting pronouncements, see Note 2 to Notes to Condensed Consolidated Financial Statements.

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Three- and Six-Month Periods Ended June 30, 2026 and 2025

The following table sets forth selected data from our operating results for the three- and six-month periods ended June 30, 2026 and 2025 (in thousands):

Consolidated Operations

Net Revenue. Net revenue increased to $227.9 million for the three-month period ended June 30, 2026 from $100.7 million for the three-month period ended June 30, 2025. This increase was primarily due to an increase of $127.5 million in net revenue from our ATS segment, partially offset by a decrease of $0.3 million in net revenue from our media segment.

Net revenue increased to $424.9 million for the six-month period ended June 30, 2026 from $192.6 million for the six-month period ended June 30, 2025. This increase was primarily due to an increase of $1.1 million in net revenue from our media segment, and an increase of $231.2 million in net revenue from our ATS segment.

Cost of revenue. Cost of revenue increased to $117.9 million for the three-month period ended June 30, 2026 from $38.0 million for the three-month period ended June 30, 2025. This increase was primarily due to an increase of $1.4 million in cost of revenue from our media segment, and an increase of $78.5 million in cost of revenue from our ATS segment.

Cost of revenue increased to $219.9 million for the six-month period ended June 30, 2026 from $71.5 million for the six-month period ended June 30, 2025. This increase was primarily due to an increase of $3.5 million in cost of revenue from our media segment, and an increase of $144.9 million in cost of revenue from our ATS segment.

Direct Operating Expenses. Direct operating expenses increased to $50.6 million for the three-month period ended June 30, 2026 from $37.7 million for the three-month period ended June 30, 2025. This increase was primarily due to an increase of $2.0 million in direct operating expenses in our media segment, and an increase of $10.9 million in direct operating expenses in our ATS segment.

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Direct operating expenses increased to $95.4 million for the six-month period ended June 30, 2026 from $73.2 million for the six-month period ended June 30, 2025. This increase was primarily due to an increase of $3.5 million in direct operating expenses in our media segment, and an increase of $18.7 million in direct operating expenses in our ATS segment.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $19.0 million for the three-month period ended June 30, 2026, from $16.5 million for the three-month period ended June 30, 2025. This increase was primarily due to an increase of $2.9 million in selling, general and administrative expenses in our ATS segment, partially offset by a decrease of $0.3 million in selling, general and administrative expenses in our media segment.

Selling, general and administrative expenses increased to $37.2 million for the six-month period ended June 30, 2026, from $32.0 million for the six-month period ended June 30, 2025. This increase was primarily due to an increase of $0.2 million in selling, general and administrative expenses in our media segment, and an increase of $5.0 million in selling, general and administrative expenses in our ATS segment.

Corporate Expenses. Corporate expenses increased to $6.6 million for the three-month period ended June 30, 2026 from $6.4 million for the three-month period ended June 30, 2025. This increase was primarily due an increase of $0.6 million in non-cash stock-based compensation partially offset by a decrease of $0.3 million in salaries and benefits.

Corporate expenses decreased to $13.8 million for the six-month period ended June 30, 2026 from $14.2 million for the six-month period ended June 30, 2025. This decrease was primarily due to a decrease of $1.3 million in audit fees and other professional services, and a decrease of $0.3 million in cloud expense, partially offset by an increase of $1.1 million in non-cash stock-based compensation and an increase of $0.2 million in salaries and benefits.

Depreciation and amortization. Depreciation and amortization increased to $3.6 million for the three-month period ended June 30, 2026 compared to $3.0 million for the three-month period ended June 30, 2025, primarily due depreciation of newly purchased assets.

Depreciation and amortization increased to $6.6 million for the six-month period ended Ju

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our consolidated results of operations and cash flows for the years ended December 31, 2025, 2024 and 2023 and consolidated financial condition as of December 31, 2025 and 2024 should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report on Form 10-K.

The discussion and analysis of our financial condition and results of operations for 2025 compared to 2024 appears below. As a smaller reporting company, we have chosen to omit the discussion and analysis of our financial condition and results of operations for 2024 compared to 2023.

OVERVIEW

We are a global media and advertising technology company. We have organized our operations into two reportable segments, media and ATS, and we manage and report our financial results through these two operating segments.

Our Media business owns and operates one of the largest groups of Spanish-language television and radio stations in the United States. Our mission is to serve our Latino audience as a trusted provider of news, information, and entertainment. We serve our advertisers by providing marketing capabilities across broadcast and digital media.

Our ATS business empowers advertisers, primarily mobile app developers, to grow their businesses globally. We provide programmatic advertising solutions through two brands. Smadex is our demand-side platform, which uses proprietary AI to automate media buying. Adwake is our performance-based digital marketing agency.

In 2024, we discontinued and divested a significant portion of our operations, which consisted primarily of several acquisitions that had been completed prior to 2024, and which operations comprised the majority of our former digital segment.

Our net revenue for the year ended December 31, 2025 was $447.6 million. Of this amount, revenue generated by our media segment accounted for approximately 39%, and revenue generated by our advertising technology & services segment accounted for approximately 61% of total revenue.

See "Item 1. Business" for detailed information about our business, the industry in which we operate, certain industry trends and important recent business developments.

2025 Highlights

During the year ended December 31, 2025, our revenue grew by double digits, driven primarily by revenue growth of 90% in our advertising technology & services segment, partially offset by a decrease in revenue in our media segment compared to the year ended December 31, 2024. In addition, during the year ended December 31, 2025:

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investments in the AI capabilities of our platform and increased sales capacity enabled ATS to increase monthly active advertisers and revenue per monthly active advertiser.

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amended our original 2023 Credit Agreement, or the original 2023 Credit Agreement, to provide more financial flexibility and accelerate debt reduction.

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we continued to reduce our debt by making a voluntary prepayment of $10 million and scheduled amortization payments of $10 million under our Credit Facility.

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management began to implement an ongoing organization design plan (the "Plan") to support revenue growth and reduce expenses, primarily in our media operations. As management continues to implement the Plan, and evaluate its early results, further changes may be made if management believes that is appropriate. For more details see Note 2 to Notes to Consolidated Financial Statements.

Dispositions

See Note 3 to Notes to Consolidated Financial Statements for details.

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RESULTS OF OPERATIONS

Separate financial data for each of our operating segments is provided below. Segment operating profit (loss) is defined as operating profit (loss) before corporate expenses, change in fair value of contingent consideration, impairment charge, other operating (gain) loss, and foreign currency (gain) loss. We evaluate the performance of our operating segments based on the following (in thousands):

* Percentage not meaningful.

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Asset information by segment is not reported because we do not use this measure to assess performance or make decisions to allocate resources

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Consolidated Operations

Net Revenue. Net revenue increased to $447.6 million for the year ended December 31, 2025 from $364.9 million for the year ended December 31, 2024. This increase was primarily due to an increase of $128.0 million in net revenue from our advertising technology & services segment, partially offset by a decrease of $45.4 million in net revenue from our media segment.

Cost of revenue. Cost of revenue increased to $184.1 million for the year ended December 31, 2025 from $102.2 million for the year ended December 31, 2024. This increase was primarily due to an increase of $1.5 million in cost of revenue from our media segment, and an increase of $80.4 million in cost of revenue from our advertising technology & services segment.

Effective July 1, 2024, with the realignment of our operations and reassignment of certain responsibilities, certain costs that were previously included as corporate expenses, primarily salaries, are now included in direct operating expenses and in selling, general and administrative expenses.

Direct Operating Expenses. Direct operating expenses increased to $156.8 million for the year ended December 31, 2025 from $136.3 million for the year ended December 31, 2024. This increase was primarily due to an increase of $21.9 million in direct operating expenses in our advertising technology & services segment, partially offset by a decrease of $1.4 million in direct operating expenses in our media segment.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased to $66.8 million for the year ended December 31, 2025 from $62.9 million for the year ended December 31, 2024. This increase was primarily due to an increase of $1.2 million in selling, general and administrative expenses in our media segment, and an increase of $2.7 million in selling, general and administrative expenses in our advertising technology & services segment.

Depreciation and Amortization. Depreciation and amortization decreased to $12.3 million for the year ended December 31, 2025 from $16.8 million for the year ended December 31, 2024, primarily due to fully depreciated assets and fully amortized intangible assets.

Corporate Expenses. Corporate expenses decreased to $27.0 million for the year ended December 31, 2025 from $37.5 million for the year ended December 31, 2024. This decrease was primarily due to a decrease of $2.6 million in salaries, including a reduction in the base salary and cash bonus components of our three most senior executives' compensation, a decrease of $2.9 million in non-cash stock-based compensation, a decrease of $1.1 million in severance expense, a decrease of $1.3 million in audit fees and other professional service, a decrease of $0.7 million in rent expense, a decrease of $0.3 million in cloud expense, and a decrease of $1.5 million in corporate expenses due to the realignment of our operations as noted above.

Change in fair value of contingent consideration. As a result of the change in fair value of the contingent consideration, primarily related to earnouts of certain past acquisitions, we recognized income of $0.6 million for the year ended December 31, 2024.

Impairment. For the year ended December 31, 2025, we incurred impairment charges of $55.4 million, of which $29.4 million was primarily related to assets held for sale, and $26.0 million was related to certain FCC licenses in our media segment. For the year ended December 31, 2024, we incurred impairment charges of $61.2 millio

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