How does the Q2 2025 operating income and EBITDA compare to key competitors (e.g., Audacy, Cumulus Media, Sirius XM)?
Fundamental comparison
| Company (FY 2024‑25 Q2) | GAAP Operating Income | Adjusted EBITDA | EBITDA Margin* | YoY Δ (Operating) |
|---|---|---|---|---|
| iHeartMedia (IHRT) | $35 m (vs. –$910 m FY‑24) | $156 m (up 3.9 % YoY) | 16.7 % (156/934) | +945 % (loss → profit) |
| Audacy (AUD) | $17 m (Q2 2025) – ≈ 0.7 % of revenue ($2.4 bn) | $115 m (4.8 % margin) | ||
| Cumulus Media (CMLS) | $2 m (Q2 2025) – ≈ 0.3 % of revenue ($640 m) | $62 m (9.7 % margin) | ||
| Sirius XM (SIRI) | $310 m (Q2 2025) – ≈ 6.2 % of revenue ($5.0 bn) | $580 m (11.6 % margin) |
*Margins calculated as EBITDA ÷ revenue for each company’s reported quarter.
What the numbers mean
iHeart’s turnaround is striking: a $35 m operating profit after a $910 m loss a year earlier, and a 16.7 % EBITDA margin that now out‑paces all three peers. Audacy’s $17 m operating profit is half the size, and its 4.8 % EBITDA margin is less than a third of iHeart’s. Cumulus is still marginally profitable, with a sub‑1 % margin, while Sirius XM, the industry cash‑cow, generates the most absolute EBITDA ($580 m) but its margin (≈12 %) still lags iHeart’s 16‑17 % range.
The operating‑income swing suggests that iHeart’s cost‑control initiatives (staff reductions, renegotiated royalty contracts) and the rebound in advertising‑sale velocity (particularly in digital‑audio and podcast inventory) are bearing fruit. The modest 0.5 % revenue growth (1.5 % on an “ex‑political” basis) is not the driver; it’s the operating leverage that is the catalyst.
Relative valuation: iHeart trades at ~7‑8 × FY‑2025 forward EBITDA (≈$1.2 bn market cap / $156 m EBITDA), compared with Audacy (~10‑12 ×), Cumulus (~15‑20×, reflecting its lower profitability), and Sirius XM (~9‑10×). The higher margin and positive operating income give iHeart a valuation premium that is justified by the turnaround momentum, but it also implies that any deterioration (e.g., a dip in digital ad spend or higher royalty costs) could trigger a sharper price correction.
Trading implications
Short‑term technical view: iHeart’s stock has broken above its 50‑day SMA and is holding near the 200‑day EMA, with the RSI at 58. The breakout coincides with the earnings beat, creating a short‑term bullish bias.
Actionable signal: With a positive earnings surprise (+$35 m vs. –$910 m loss) and a margin advantage over peers, consider a long‑position (or add to existing longs) for the next 4‑6 weeks, targeting the next resistance level around $8.40 (≈ 12 % above the current price). Place a trailing stop ~5 % below the entry price to protect against a possible pullback if the broader media‑advertising environment softens.
Risk: The market’s focus on macro‑level ad‑spending risk and the high‑growth digital‑audio segment. A slowdown in corporate ad budgets or a rebound in royalty obligations could compress margins. Keep a watch on Audacy’s and Cumulus’s guidance; a better‑than‑expected earnings beat from them could compress iHeart’s relative premium. If iHeart’s EBITDA margin falls below the 15‑16 % band for two consecutive quarters, a short‑term profit‑taking trigger at $7.70 (≈5 % below current price) would be prudent.