EVC

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: •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. •we have continued to invest in the AI capabilities of our Smadex platform and our sales capacity. •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. 23 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): Three-Month Period Six-Month Period Ended June 30, % Ended June 30, % 2026 2025 Change 2026 2025 Change Statements of Operations Data: Net Revenue $ 227,901 $ 100,735 126 % $ 424,872 $ 192,586 121 % Cost of revenue 117,934 38,010 210 % 219,888 71,482 208 % Direct operating expenses 50,621 37,712 34 % 95,420 73,214 30 % Selling, general and administrative expenses 19,013 16,453 16 % 37,152 31,959 16 % Corporate expenses 6,597 6,375 3 % 13,770 14,163 (3 )% Depreciation and amortization 3,584 3,027 18 % 6,575 6,504 1 % Impairment charge - - - - 23,673 (100 )% Loss on lease abandonment - - - - 25,191 (100 )% Restructuring costs - - - 983 - * Foreign currency (gain) loss 301 6 * 544 18 * Other operating (gain) loss (116 ) - * (116 ) - * Total expenses 197,934 101,583 95 % 374,216 246,204 52 % Operating income (loss) 29,967 (848 ) * 50,656 (53,618 ) * Interest expense (3,146 ) (4,037 ) (22 )% (6,461 ) (7,700 ) (16 )% Interest income 606 619 (2 )% 964 1,224 (21 )% Dividend income 15 1 * 29 1 * Realized gain (loss) on marketable securities 3 3 0 % 11 4 175 % Loss on debt extinguishment - (38 ) (100 )% - (38 ) (100 )% Income before income (loss) taxes 27,445 (4,300 ) * 45,199 (60,127 ) * Income tax benefit (expense) (7,759 ) 800 * (13,153 ) 8,852 * Net income (loss) from continuing operations 19,686 (3,500 ) * 32,046 (51,275 ) * Net income (loss) from discontinued operations, net of tax - 163 (100 )% - (28 ) (100 )% Net income (loss) attributable to common stockholders $ 19,686 $ (3,337 ) * $ 32,046 $ (51,303 ) * Other Data: Capital expenditures $ 3,170 $ 2,271 7,067 4,655 Net cash provided by (used in) operating activities 45,554 (7,416 ) Net cash provided by (used in) investing activities (3,899 ) (4,822 ) Net cash provided by (used in) financing activities (20,297 ) (19,163 ) 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. 24 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 June 30, 2026 compared to $6.5 million for the six-month period ended June 30, 2025, primarily due depreciation of newly purchased assets. Impairment. During the first quarter of 2025, we incurred an impairment charge of $23.7 million related to broadcast licenses and fixed assets of the two television stations in Mexico that are held for sale. Loss on lease abandonment. During the first quarter of 2025, we incurred a loss on lease abandonment of $25.2 million related to our previous Santa Monica lease. Restructuring costs. During the third quarter of 2025 our management began to implement the Plan, intended to support revenue growth and reduce expenses, primarily in our media operations. For the six-month period ended June 30, 2026, we recorded $1.0 million in restructuring costs. Foreign currency (gain) loss. Foreign currency gains and losses are primarily due to currency fluctuations that affect our operations located outside the United States. We had a foreign currency loss of $0.3 million for the three-month period ended June 30, 2026, and a de minimis foreign currency loss for the three-month period ended June 30, 2025. We had a foreign currency loss of $0.5 million for the six-month period ended June 30, 2026, and a de minimis foreign currency loss for the six-month period ended June 30, 2025. Interest Expense, net. Interest expense, net decreased to $2.5 million for the three-month period ended June 30, 2026 from $3.4 million for three-month period ended June 30, 2025. This decrease was primarily due to lower interest rate on our debt and a lower principal balance. Interest expense, net decreased to $5.5 million for the six-month period ended June 30, 2026 from $6.5 million for the six-month period ended June 30, 2025. This decrease was primarily due to lower interest rate on our debt and a lower principal balance. Realized gain (loss) on marketable securities. For each of the three-month periods ended June 30, 2026 and 2025 we recorded a de minimis amount of realized gain related to our available for sale securities. For each of the six-month periods ended June 30, 2026 and 2025 we recorded a de minimis amount of realized gain related to our available for sale securities. Income Tax Expense or Benefit. Income tax expense for the three-month period ended June 30, 2026 was $7.8 million, or 28% of our pre-tax income. The effective tax rate for the three-month period ended June 30, 2026 was different from our statutory rate due to foreign and state taxes, non-deductible executive compensation, share-based compensation from foreign employees, and Net Controlled Foreign Corporation Tested Income. Income tax benefit for the three-month period ended June 30, 2025 was $0.8 million, or 19% of our pre-tax loss. The effective tax rate for the three-month period ended June 30, 2025 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non-deductible executive compensation, share-based compensation from foreign employees, and transaction costs. 25 Income tax expense for the six-month period ended June 30, 2026 was $13.2 million, or 29% of our pre-tax income. The effective tax rate for the six-month period ended June 30, 2026 was different from our statutory rate due to foreign and state taxes, non-deductible executive compensation, share-based compensation from foreign employees, and Net Controlled Foreign Corporation Tested Income. Income tax benefit for the six-month period ended June 30, 2025 was $8.9 million, or 15% of our pre-tax loss. The effective tax rate for the six-month period ended June 30, 2025 was different from our statutory rate due to foreign and state taxes, changes in valuation allowances on deferred tax assets, non-deductible executive compensation, share-based compensation from foreign employees, and transaction costs. Our management periodically evaluates the realizability of the deferred tax assets and, if it is determined that it is more likely than not that the deferred tax assets are, or are not, realizable, adjusts the valuation allowance accordingly. Valuation allowances are established and maintained for deferred tax assets on a “more likely than not” threshold. The process of evaluating the need to maintain a valuation allowance for deferred tax assets and the amount maintained in any such allowance is highly subjective and is based on many factors, several of which are subject to significant judgment calls. Based on our analysis, we determined that it was more likely than not that our deferred tax assets would be realized for all jurisdictions with the exception of certain of our digital operations, certain U.S. Foreign Tax Credit carryovers and certain states deferred tax assets. As a result of historical losses from our digital operations primarily in certain jurisdictions, certain U.S. Foreign Tax Credit carryovers, and capital loss, management has determined that it is more likely than not that deferred tax assets of $18.5 million at June 30, 2026 will not be realized and therefore we have established a valuation allowance in that amount on those assets. The Organization for Economic Co-operation and Development (“OECD”) Pillar 2 guidelines address the increasing digitalization of the global economy, re-allocating taxing rights among countries. The OECD, many other member states and various other governments have adopted, or are in the process of adopting, Pillar 2 which calls for a global minimum tax of 15% to be effective for tax years beginning in 2024. The OECD guidelines published to date include transition and safe harbor rules around the implementation of the Pillar 2, global minimum tax. On January 5, 2026, the OECD released the “Side-by-Side” (SbS) Safe Harbor guidance, effective January 1, 2026. This guidance provides a framework for coordinating the U.S. tax system with Pillar 2 rules, potentially limiting top-up tax liabilities for qualifying periods. We included the tax impact of Pillar 2 in the income tax for the three- and six-month periods ended June 30, 2026, based on the rules effective for that period, and continues to evaluate the impact of the SbS guidance on future periods. On July 4, 2025, the President signed into law the One Big Beautiful Bill Act, which made certain changes to the current tax law and extended certain other tax provisions. We have analyzed the impact of these changes, noting that the main tax law changes that are expected to impact us in 2026 are related to depreciation and Section 163(j) interest expense limitation. We will not take bonus depreciation in 2026 since, given our tax position, the impact on this is nil. Regarding the Section 163(j) limitation, we believe that this will result in less taxable income to us. As of June 30, 2026 and December 31, 2025, we had unrecognized tax benefits of $31.9 million and $31.7 million. We will recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. Segment Operations Our media segment consists of sales of advertising through various media, including television, radio and digital. We own and/or operate one of the largest groups of Spanish-language television and radio stations in the United States. Our assets include 47 television stations and 44 radio stations (37 FM and 7 AM). These stations are concentrated in 13 of the 20 highest-density Latino markets in the United States. We are the largest affiliate group of the Spanish-language Univision and UniMás networks, which are owned by TelevisaUnivision. We also provide digital marketing services for businesses targeting Latino consumers. Our ATS segment provides global performance marketing solutions primarily to mobile app developers. We operate this segment through two distinct business units: Smadex, our programmatic demand-side advertising platform; and Adwake, our performance-based digital marketing agency. Media Net Revenue. Net revenue in our media segment decreased to $45.1 million for the three-month period ended June 30, 2026 from $45.4 million for the three-month period ended June 30, 2025. This decrease was primarily due to a decrease of $2.3 million in broadcast advertising revenue and a decrease of $1.0 million in spectrum usage rights revenue partially offset by an increase of $2.4 million in digital advertising revenue, and an increase of $0.5 million in retransmission consent revenue. Net revenue in our media segment increased to $87.5 million for the six-month period ended June 30, 2026 from $86.4 million for the six-month period ended June 30, 2025. This increase was primarily due to an increase of $5.7 million in digital advertising revenue, an increase of $0.8 million in retransmission consent revenue, and an increase of $0.2 million in other revenue, partially offset by a decrease of $3.6 million in broadcast advertising revenue and a decrease of $2.0 million in spectrum usage rights revenue. In general, the traditional broadcast industry is continuing to experience dramatic transformation. Most of our broadcast stations face declining audiences, which we believe is the situation across the industry, competitive factors with the other major 26 Spanish-language broadcasters, and changing demographics and preferences of audiences, particularly younger audiences, in terms of the media they prefer to consume, including streaming and social media. In particular, the radio broadcast industry remains in a general state of decline as a result of numerous factors, including technological advancements in how audiences consume audio content, such as podcasts overtaking talk radio, leading to fragmentation in radio audiences; changing consumer preferences, especially among younger audiences who tend to prefer interactive and on-demand experiences over the linear broadcast model; economic pressures in the form of certain high fixed operational costs; and competition with other forms of media, especially digital, for advertising revenue. We anticipate that these changes in viewer habits and preferences will persist at least for the foreseeable future and possibly permanently. Additionally, we have previously noted a trend for advertising to move increasingly from traditional media, such as television and radio, to new media, such as digital media, and we expect this trend will also continue at least for the foreseeable future and possibly permanently. While we believe that none of these new technologies and services can completely replace local broadcast stations due to the element of localism that traditional broadcasting offers, the challenges we face in our broadcast operations from new technologies and services will persist and continue to present significant challenges, requiring attention, adaptability and action from management. We must continue to address these changes, including the need to further adjust our business strategies accordingly. Among the steps we have taken so far has been an emphasis on increasing local news and digital offerings, and their integration with our broadcast offerings. No assurances can be given that these or other strategies will be successful in meeting the changes and challenges we face. Cost of revenue. Cost of revenue in our media segment increased to $6.1 million for the three-month period ended June 30, 2026 from $4.7 million for the three-month period ended June 30, 2025, primarily due to the increase in costs associated with the increase in digital advertising revenue. Cost of revenue in our media segment increased to $11.4 million for the six-month period ended June 30, 2026 from $7.9 million for the six-month period ended June 30, 2025, primarily due to the increase in costs associated with the increase in digital advertising revenue and a decrease in gross margins. Direct Operating Expenses. Direct operating expenses in our media segment increased to $28.8 million for the three-month period ended June 30, 2026 from $26.8 million for the three-month period ended June 30, 2025, primarily due to an increase of $0.7 million in salaries and other employee benefits, an increase of $0.2 million in non-cash stock-based compensation, an increase of $0.1 million in rent expense, an increase of $0.1 million in music license fees, and an increase of $0.9 million in other items which were individually immaterial. Direct operating expenses in our media segment increased to $56.9 million for the six-month period ended June 30, 2026 from $53.4 million for the six-month period ended June 30, 2025, primarily due to an increase of $0.9 million in expenses associated with the increase in revenue, an increase of $0.8 million in salaries and other employee benefits, an increase of $0.3 million in music license fees, an increase of $0.1 million in rent expense, and an increase of $1.4 million in other items which were individually immaterial. Selling, General and Administrative Expenses. Selling, general and administrative expenses in our media segment decreased to $10.7 million for the three-month period ended June 30, 2026 from $11.0 million for the three-month period ended June 30, 2025, primarily due to a decrease of $0.2 million in bad debt expense, a decrease in rent expense of $0.2 million, and a decrease of $0.3 million in other items which were individually immaterial, partially offset by an increase of $0.4 million in salaries and other employee benefits. Selling, general and administrative expenses in our media segment increased to $22.0 million for the six-month period ended June 30, 2026 from $21.8 million for the six-month period ended June 30, 2025, primarily due to an increase of $0.7 million in salaries and other employee benefits, and an increase of $0.3 million in bad debt expense, partially offset by a decrease in rent expense of $0.5 million and a decrease of $0.3 million in other items which were individually immaterial. Advertising Technology & Services Net Revenue. Net revenue in our ATS segment increased to $182.8 million for the three-month period ended June 30, 2026 from $55.3 million for the three-month period ended June 30, 2025. The increase was primarily due to an increase in advertising revenue from Smadex, driven primarily by a large customer in Asia that we acquired in the second half of 2025, increases in monthly active advertisers and revenue per monthly active advertiser, and an increase in advertising revenue from Adwake. Net revenue in our ATS segment increased to $337.4 million for the six-month period ended June 30, 2026 from $106.2 million for the six-month period ended June 30, 2025. The increase was primarily due to an increase in advertising revenue from Smadex, driven primarily by a large customer in Asia that we acquired in the second half of 2025, increases in monthly active advertisers and revenue per monthly active advertiser, and an increase in advertising revenue from Adwake. As noted below, the digital advertising industry is dynamic and our ATS operations are subject to rapid change as the underlying technology advances, client expectations vary, and we face increased competition for advertisers generally. In the second 27 quarter of 2026 ATS revenue grew 230% compared to the second quarter of 2025 and 18% compared to the first quarter of 2026. While we currently anticipate continuing growth in the third and fourth quarters of 2026 on a prior-year comparative basis, we expect a lower rate of quarterly growth on a prior-year comparative basis than we had in the second quarter of 2026. Additionally, we currently do not expect sequential ATS revenue growth in the third quarter of 2026. Cost of revenue. Cost of revenue in our ATS segment increased to $111.9 million for the three-month period ended June 30, 2026 from $33.4 million for the three-month period ended June 30, 2025, primarily due to costs associated with the increase in digital advertising revenue. Cost of revenue in our ATS segment increased to $208.5 million for the six-month period ended June 30, 2026 from $63.6 million for the six-month period ended June 30, 2025, primarily due to costs associated with the increase in digital advertising revenue. We have previously noted a trend on a global basis in our ATS operations whereby advertisers are demanding more efficiency and lower cost from intermediaries like us. In response to this trend, we have been offering our programmatic purchasing platform, Smadex, to advertisers, which lowers cost to our advertising customers. Among other things, this has led to lower margins in the products and services we sell, which we anticipate will persist for at least the foreseeable future and possibly permanently. The digital advertising industry as a whole remains dynamic and continues to undergo rapid changes in technology, customer expectation and competition. We expect this trend to continue and possibly accelerate. We must continue to address these dynamic and rapid changes, including the need to further adjust our business strategies, continue to make investments in our technology and offer new products and services, as appropriate. No assurances can be given that the strategies we have pursued and investments we have made, and those we may pursue or make in the future, will be successful. Direct operating expenses. Direct operating expenses in our ATS segment increased to $21.9 million for the three-month period ended June 30, 2026 from $10.9 million for the three-month period ended June 30, 2025, primarily due to an increase of $7.1 million in cloud infrastructure expenses, an increase of $1.7 million in salaries and bonus expense, an increase of $0.7 million in expenses for sales events, an increase of $0.8 million in non-cash stock-based compensation and $0.7 million in other items which were individually immaterial. Direct operating expenses in our ATS segment increased to $38.5 million for the six-month period ended June 30, 2026 from $19.9 million for the six-month period ended June 30, 2025, primarily due to an increase of $10.0 million in cloud infrastructure expenses, an increase of $5.4 million in salaries and bonus expense, an increase of $0.6 million in expenses for sales events expense, an increase of $1.3 million in non-cash stock-based compensation and $1.3 million in other items which were individually immaterial. Selling, general and administrative expenses. Selling, general and administrative expenses in our ATS segment increased to $8.4 million for the three-month period ended June 30, 2026, from $5.4 million for the three-month period ended June 30, 2025, primarily due to an increase of $2.2 million in salaries and payroll tax expense, an increase of $0.4 million in professional services and an increase of $0.4 million in software expense. Selling, general and administrative expenses in our ATS segment increased to $15.1 million for the six-month period ended June 30, 2026, from $10.1 million for the six-month period ended June 30, 2025, primarily due to an increase of $3.4 million in salaries and payroll tax expense, an increase of $0.8 million in software expense, an increase of $0.4 million in professional services and an increase of $0.4 million in other items which were individually immaterial. Liquidity and Capital Resources While we have a history of operating losses in some periods and operating income in other periods, we also have a history of generating significant positive cash flows from our operations. We had net loss attributable to common stockholders of $79.2 million, $148.9 million and $15.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. We had positive cash flow from operations of $10.6 million, $74.7 million and $75.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. We had positive cash flow from operations of $45.6 million for the six-month period ended June 30, 2026. For at least the next twelve months, we expect to fund our working capital requirements, capital expenditures and payments of principal and interest on outstanding indebtedness, with cash on hand and cash flows from operations. We currently believe that our cash position is sufficient to meet our operating and capital expenses and debt service requirements for at least the next twelve months from the issuance of this report. We believe that our position is strengthened by cash and cash equivalents on hand, in the amount of $80.8 million, and available for sale marketable securities in the additional amount of $2.6 million, as of June 30, 2026. Our liquidity is not materially affected by the amounts held in accounts outside the United States. To the extent that our then-current liquidity is insufficient to fund our business activities or if we do not remain in compliance with our financial covenants under the Amended Credit Agreement, we may be required to seek additional equity or debt financing in the future to satisfy capital requirements. There is no guarantee that any such capital would be available to us on favorable terms, or at all. The failure to obtain any required capital could have a material adverse effect on our operations and financial condition. 28 Credit Facility On March 17, 2023, we entered into our Credit Facility, pursuant to the Original 2023 Credit Agreement, by and among us, Bank of America, N.A., as Administrative Agent, and the Lenders. The Original 2023 Credit Agreement amended, restated and replaced in its entirety our previous credit agreement. The Original 2023 Credit Agreement was amended as of July 15, 2025, effective as of June 30, 2025, with respect to certain financial covenants and certain other provisions of our Credit Facility and was further amended as of March 18, 2026, with respect to a certain administrative clarification of the calculation of financial covenants. For more information, see Note 2 to Notes to Condensed Consolidated Financial Statements. Cash Flow Net cash flow provided by operating activities was $45.6 million for the six-month period ended June 30, 2026, compared to net cash flow used in operating activities of $7.4 million for the six-month period ended June 30, 2025. The change in cash flow from operating activities was primarily due to an increase in net income after adjusting for non-cash items. Significant non-cash items in the six-month period ended June 30, 2026 included depreciation and amortization expense of $6.6 million, and non-cash stock based compensation of $7.6 million. Significant non-cash items in the six-month period ended June 30, 2025 included impairment charges of $23.7 million, loss on lease abandonment charges of $25.2 million, depreciation and amortization expense of $6.5 million, deferred income taxes benefit of $6.9 million, and non-cash stock based compensation of $5.3 million. The increase in cash flow from operating activities was also due to an increase in net changes in our working capital of negative $1.1 million for the six-month period ended June 30, 2026 compared to negative $10.5 million for the six-month period ended June 30, 2025. The net changes in working capital were primarily due to the timing of cash payments to publishers and collections from customers. We expect to have positive cash flow from operating activities for the full year 2026. Net cash flow used in investing activities was $3.9 million for the six-month period ended June 30, 2026, compared to net cash flow used in investing activities of $4.8 million for the six-month period ended June 30, 2025. The change in net cash flow used in investing activities was primarily due to proceeds from sale of assets of $1.9 million for the six-month period ended June 30, 2026, and purchases of marketable securities of $1.0 million for the six-month period ended June 30, 2025, which we did not have in the six-month period ended June 30, 2026, partially offset by purchases of property and equipment of $7.0 million for the six-month period ended June 30, 2026 compared to $4.8 million for the six-month period ended June 30, 2025. We anticipate that our capital expenditures will be approximately $12 million during the full year 2026. The amount of our anticipated capital expenditures may change based on future changes in business plans and our financial condition and general economic conditions. We expect to fund capital expenditures with cash on hand and net cash flow from operations. Net cash flow used in financing activities was $20.3 million for the six-month period ended June 30, 2026, compared to $19.2 million for the six-month period ended June 30, 2025. The change in cash flow used in financing activities was primarily due to $1.0 million of tax payments related to shares withheld for share-based compensation during the six-month period ended June 30, 2026, which did not occur in the six-month period ended June 30, 2025. 29