Red Ventures Holdco LP

Overview Key strengths Key risks Higher proportion of self-owned and operated websites results in higher profitability compared to digital advertising peers. Weak macroeconomic conditions in 2023 will pressure earnings from advertising budget cuts and consumer spending declines. Adjusted leverage to decline to low-3x over the next 12 months. Pay-for-performance business model exposes the company to earnings volatility. Stable cash flow generation. Potential to temporarily increase leverage for acquisitions or shareholder returns. We expect S&P Global ratings-adjusted net leverage to decline to about 3.3x in 2023 from 3.9x in 2022, despite our expectations for modest revenue declines in 2023. This is due to nonrecurring costs and the roll off of cash outflows related to its health business spinning off in 2022,

...Red Ventures Holdco LP's revenue is exposed to economic cyclicality. We expect S&P Global ratings-adjusted net leverage to decline to about 3.3x in 2023 from 3.9x in 2022, despite our expectations for modest revenue declines in 2023. This is due to nonrecurring costs and the roll off of cash outflows related to its health business spinning off in 2022, as well as cost-saving initiatives that the company completed at the end of 2022. However, Red Ventures' revenue is dependent on corporate advertising, marketing expenditures, and consumer discretionary...

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