Entravision Communications Corp (NYSE:EVC) stock dropped 45% in pre-market trading on Wednesday after Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB) announced the end of their partner program.
Alongside its quarterly results, the advertising, media and technology company said the owner of Facebook and Instagram had contacted it on March 4 to say it intends to wind down its authorized sales partner (ASP) program globally and end its relationship with all of its ASPs, including Entravision by the start of July this year.
Last year, Entravision estimated that Meta’s ASP program contributed roughly half its revenue and earnings, namely $586.4 million of its total $1.1 billion revenue and $23.8 million of its $57.7 million total consolidated EBITDA.
Entravision said it has launched a review of its operating strategy and cost structure as a result of this.
"While we are disappointed in Meta’s decision, we are confident in Entravision’s long-term opportunities given the strength of our advertising and marketing platforms and the need for our solutions globally,” said CEO Michael Christenson.
He said the balance sheet is "solid" with a $118.9 million cash position to support the business as its navigate the Meta fallout.