GTN-A — Gray Media, Inc.

Summary of Gray Media, Inc. (GTN-A) Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Total Revenue: $768 million, at the high end of guidance.
• Total Operating Expenses: $622 million, down $7 million year-over-year.
• Adjusted EBITDA: $154 million.
• Net Loss: $330,000 attributable to common stockholders.
• Political Advertising Revenue: $30 million, exceeding guidance and up from $26 million in the last midterm cycle.
• Core Advertising Revenue: Approximately flat year-over-year, with a slight increase of 2% due to the Winter Olympics.
• Net Retransmission Revenue: Down $4 million compared to Q1 2025, impacted by a distribution dispute with DISH.

2. Strategic Updates and Business Highlights

• Successfully resolved a significant distribution dispute with DISH, marking the first extended blackout in the company's history.
• Acquired WBBJ in Jackson, TN, and completed acquisitions of TV stations in 10 markets from Allen Media Group and three markets from Block Communications.
• Negotiated retransmission consent agreement renewals with three major MVPDs, covering 39% of the traditional MVPD footprint.
• Expanded sports programming, including partnerships with MLB, NBA, NHL, and NCAA teams.
• Significant growth in digital advertising, up high-teens year-over-year, and local direct business growth accelerated to 15%.

3. Forward Guidance and Outlook

• Q2 2026 Political Revenue Guidance: Expected to be between $60 million and $70 million.
• Core Advertising Revenue Guidance for Q2: Anticipated to decline mid-single digits compared to Q2 2025, influenced by economic uncertainty.
• Net Retransmission Revenue: Expected to show low single-digit growth for the full year 2026, despite the impact of the recent blackout.
• CapEx: Maintained at $140 million for 2026, with expectations for back-end weighting aligned with political advertising cash inflows.

4. Bad News, Challenges, or Points of Concern

• Softness in Core Advertising: Noted for Q2 due to economic uncertainty, particularly in consumer-focused categories.
• Impact of Distribution Dispute: The blackout with DISH affected revenue visibility and local advertising during the dispute.
• Rising Operating Expenses: Broadcasting station operating expenses (excluding network fees) were up 4% year-over-year, attributed to inflation and timing of expenses.
• Competitive Pressures: Challenges in core advertising due to a changing advertising landscape and economic conditions.

5. Notable Q&A Insights

• Regulatory Outlook: Management expressed optimism about the regulatory environment for M&A, noting a faster pace post-Nexstar-TEGNA approval.
• Net Retransmission Revenue: Management indicated that the growth outlook is based on better subscriber trends and achieving market rates on renewals.
• Political Advertising Landscape: Management is optimistic about the upcoming political cycle, citing a more engaged electorate and a favorable positioning in key markets.
• AI Utilization: AI is enhancing productivity and efficiency across sales and news operations, allowing teams to focus on content creation and client relationships.

Overall, Gray Media reported solid Q1 results with strong political revenue and strategic acquisitions, though it faces challenges in core advertising and rising expenses amid economic uncertainty. The outlook remains cautiously optimistic, particularly regarding political advertising and retransmission revenue growth.