Good afternoon, everyone, and thank you for taking the time to join us for our second quarter 2022 earnings call. Joining me for today's discussion are Bob Pittman, our Chairman and CEO; and Rich Bressler, our President, COO and CFO. At the conclusion of our prepared remarks, management will take your questions. In addition to our press release, we have an investor presentation that you can use to follow along with our remarks. Please note that this call may include forward-looking statements regarding our financial performance and operating results. These statements are based on management's current expectations, and actual results could differ from what is deemed as a result of certain factors identified on today's call and in the company's SEC filings. Additionally, during this call, we will refer to certain non-GAAP financial measures. Reconciliations between GAAP and non-GAAP financial measures are included in our earnings release, investor presentation and our SEC filings, which are available in the Investor Relations section of our website. And now I'll turn the call over to Bob.

Thanks, Mike, and good afternoon, everyone. Thank you for joining our second quarter 2022 earnings conference call. We're pleased to report another quarter of solid operating results for iHeart in Q2 in consumer usage, revenue and earnings growth. And I want to thank all of our team members who made this performance possible. I also want to note that in Q2, we generated strong free cash flow of $127 million, with a Q2 adjusted EBITDA-to-free cash flow conversion rate of 54%. Free cash flow generation is more important than ever in times like this, and it's a financial metric that we continue to prioritize. We believe that our ability to consistently generate such strong free cash flow with exceptional conversion characteristics sets us apart from other companies and is one of our most important financial attributes. We also feel that the steps we've taken in the past to make the company leaner and more cost-efficient, even as we've invested in our high-growth businesses, are reflected in these results and help drive our margin improvements. Now, let me take you through some of the highlights of our performance. In the second quarter, consolidated revenues grew almost 11% compared to prior year, within the guidance range we provided of up 10% to 14%. We generated adjusted EBITDA of $237 million for the quarter, slightly above the midpoint of our guidance range of $225 million to $245 million. Our Q2 adjusted EBITDA grew 29% versus prior year, and our Q2 adjusted EBITDA margins improved by 345 basis points versus prior year to 25%. Looking at our operating segments individually. We continue to deliver industry-leading growth in our Digital Audio Group, with revenues increasing 28% versus prior year, and our margin expanding to 31.2%, a 380 basis-point improvement from prior year. Within the Digital…

Thanks, Bob. As I take you through our results, you'll notice that, as Bob mentioned, we performed well despite external factors that have been impacting the economy. Turning to Slide 19 of our investor deck. Our consolidated revenues were 10.7% year-over-year, within the guidance range we provided of about 10% to 14%. Our direct operating expenses increased 14% for the quarter, driven primarily by the increase in revenue, which drives higher content and profit sharing expenses, third-party digital costs and expenses related to the return of local and national live events. Our SG&A expenses increased 2% for the quarter, driven by increased compensation expense related to investments in key growth areas. As discussed on our Q1 call, higher sales commission is due to higher revenue and increased bad debt expenses, partially offset by lower trade and barter expense and lower bonus expense compared to our over target performance from prior year. Our second quarter GAAP operating income was $82.9 million compared to an operating income of $28.1 million in the prior year quarter. And our second quarter adjusted EBITDA was $237.2 million compared to $184.5 million in the prior year quarter. If you turn back to Slide 4, I will provide you additional color on the performance of our operating segments. And as a note, there are additional slides in the investor presentation on our segment revenue performance. Digital Audio Group revenues were up 28% year-over-year, and adjusted EBITDA was up 45% year-over-year. Within the Digital Audio Group are our podcasting revenues, which grew 60% year-over-year; and our non-podcasting digital revenues, which grew 15% year-over-year. As a point of reference, Slides 7 through 12 in our investor deck show in detail the podcast ecosystem dynamics and our leadership position in this high-value segment of publishing. Looking again at the Digital…

[Operator Instructions] We'll take our first question today from Daniel Day, B. Riley.

Just first of all, Bob, maybe just drill a little more down into the commentary around how July pacing up 4%. A lot of your other radio peers have reported national certainly appears to be weaker than local. So maybe just parse that out. Are we looking at year-over-year declines in national, what with local holding up pretty well so far? Or what exactly are you guys seeing after quarter end?

It's a little hard. You'll notice, we don't break out national from local because we think that, that distinction is sort of blurred in a company like ours, where any seller, anywhere, can sell anything. And so we look at it overall. And again, as we've pointed out in the past, we've got no advertising category that's over 5% of our revenue, no single advertiser over 2%. So we have a remarkable diversity here. And even times like this, you've got some folks who are -- it's good for their business, as you find some people that are softer. And I think that mix probably plays pretty well for us.

The only thing I might add is just, I'm not quite sure who you're putting the category of competitors. But at least, from a radio standpoint and a rodeo standpoint, nobody else has got the national footprint that we have also. So I'm not kind of looking at that mix for anybody else compared to ourselves. It's probably a little bit apples and oranges just to the composition of our assets.

Understood. And then a follow-up for me. I know the focus with the free cash flow has been on debt reduction. You guys have done a great job and did a great job in the quarter with that. Just when you look at where the stock is trading right now, is there a level where you think the buyback math just makes too much sense and you might switch to share repurchases before you get to that 4x net debt leverage goal, or is that just not something you're considering?

Look, it's something that we're constantly challenging ourselves how we improve the balance sheet and the total capital structure of the company. We saw, and we highlighted on the call, that we bought back well over $100 million of [indiscernible]. This quarter is probably overall debt reduction, and we bought them back at an attractive price. And you could do math, and it's got a great yield on there. At this point, we've made the decision to continue to stay the course. We may get, as we talked about, approximately 4x, and we think that's the best way to create shareholder value, especially in a levered capital structure, which I think you'd agree. But it's something we're constantly challenging ourselves on and the Board.

[Operator Instructions] Next up is Steve Cahall, Wells Fargo.

Thanks for the 4% growth number for July. I would love to just kind of put that in context of a trend line. I think it feels like a lot of advertisers maybe slowed down proactively in June. So I would love to get your sense, did you start to see things improve in July? So any kind of inflection maybe on July versus June, whether upwards or downwards. And then, Rich, just a couple of housekeeping ones. First, the $350 million in free cash flow. Does it matter if that includes or excludes the real estate sales? I know you kind of had them in free cash flow in the press release. And then also you said $1 billion in EBITDA would be kind of in the zone. Is $900 million in the zone? Is $950 million in the zone? It's just kind of a new phrase, so sorry for that annoying one.

Well, let me just hit the one about the monthly. I think there's -- it's up and down a little bit. But we have seen a trend that we see more softness for the first month of the quarter than we do the other 2 months of the quarter. And so our thesis is, that in times of uncertainty, first month of the quarter, everybody takes a beat and waits and looks and then continues to spend in the other months. So other than that, I can't give you much insight. And we continue to watch it. Again, having a diverse group of advertisers gives us some advantage there, I think.

Yes. And then, Steve, just to cover your second question. So on the free cash flow, just to be clear, we generated $106 million of free cash flow. That included about $20 million of proceeds from real estate sales. If you kind of adjust it, that free cash flow is $127 million. So, -- and I think we also -- if you kind of look at the investor deck, from a transparency standpoint, it is well laid out there, and that's a 54% EBITDA free cash flow conversion. So we feel very good about that. . From the $1 billion EBITDA zone, look, and you're spot on, but we just want to make sure we reflect certain marketplace. But let me give you or everybody a little bit of a road map that hopefully gives everybody some comfort. If you take our first 6 months EBITDA and then you combine the midpoint of our guidance range that we just gave you and articulated, you would get to $630 million of EBITDA for the first 9 months of the year. So that's just math. First 6 months, take the midpoint of the Q3, and together you get to $630 million. So again, if you do the math, that would say we'd have to be approximately $370 million in Q4 overall. Just as a reminder, Q4 is by far our biggest quarter in the company. And just to be clear, it always has been our biggest quarter in the company. I think last year, we did approximately $294 million of EBITDA in Q4. But again, this is a political year, so we expect the fourth quarter number to be significantly benefited by political spending out there. And I think we highlighted this on the call, the majority of political spending comes in the second half of the year, and by far, the biggest piece of that comes in the fourth quarter of the year. So hopefully, that's helpful to yourself and everybody else, both in a road map and giving you comfort about how we're thinking about it.

At this time, there are no further questions. I'll hand the conference back to our speakers for any additional or closing remarks.

Well, we want to thank everybody for the questions. Thanks, everybody. Thanks, everyone, on the call for listening to the iHeart story, and thank you for your continued support. And Bob and I and Mike McGuinness and the team are always available for follow-ups, and we look forward to speaking to everybody soon. Thank you.

Thank you.

And everyone, that does conclude today's conference. Thank you all for your participation.