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GM

GRAY MEDIA, INC (GTN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $0.749B, at the high end of guidance, and expenses came in below the low end; Adjusted EBITDA was $162M, and diluted EPS was $(0.24) .
  • Versus consensus, revenue modestly beat ($745.0M* vs $749.0M actual), EPS beat (Primary EPS -$0.48* vs -$0.204* S&P actual; company diluted EPS -$0.24), and EBITDA beat (consensus $138.8M* vs S&P actual $157.0M*; company Adjusted EBITDA $162M) .
  • Q4 2025 guidance calls for total revenue of $0.767–$0.782B and broadcasting core advertising of $380–$390M; FY 2025 capex ex-Assembly Atlanta was reduced to $70–$75M from $85–$90M (maintained interest expense $460M; cash taxes $39M) .
  • Strategic catalysts: multi-year FOX affiliation renewal, significant debt refinancing pushing maturities out to 2032/2033, and announced station swap/acquisitions creating eleven new Big Four duopolies; Board declared $0.08 quarterly dividend .

What Went Well and What Went Wrong

What Went Well

  • Exceeded guidance on retransmission ($346M vs $345M high) and political ($8M vs $7M high) while core ad revenue landed at guidance high; broadcasting expenses were materially below the range .
  • Balance sheet actions extended maturities and addressed material amortization until 2028; liquidity and availability improved with revolver commitments raised to $750M .
  • Management highlighted content momentum and tech upgrades: “a first-of-its-kind partnership with Google Cloud powered by Quick Play to revolutionize how our viewers find and connect with our content” with rollout starting January .

What Went Wrong

  • Political revenue fell sharply vs off-cycle 2024 comps (Q3 political $8M vs $173M prior year) and Adjusted EBITDA compressed to $162M from $338M YoY .
  • Net loss to common shareholders of $(23)M vs $83M in Q3 2024, driven by cyclical political decline and lower net retrans after WANF’s transition to independent .
  • Network affiliation fees and retrans revenue both declined YoY (fees -9%, retrans -6% in Q3), with Q4 net retrans expected to decline slightly versus prior year due primarily to WANF becoming independent .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Total Revenue ($USD Millions)$950 $772 $749
Diluted EPS ($USD)$0.86 $(0.71) $(0.24)
Adjusted EBITDA ($USD Millions)$338 $169 $162
Core Advertising Revenue ($USD Millions)$365 $361 $355
Political Advertising Revenue ($USD Millions)$173 $9 $8
Retransmission Revenue ($USD Millions)$369 $369 $346
Network Affiliation Fees ($USD Millions)$234 $233 $214
Broadcast Operating Expense ($USD Millions)$571 $563 $542
Net (Loss) Income ($USD Millions)$96 $(56) $(10)
Adjusted EBITDA Margin (%)35.6% (=$338/$950) 21.9% (=$169/$772) 21.6% (=$162/$749)
Net Margin (%)10.1% (=$96/$950) -7.3% (=$(56)/$772) -1.3% (=$(10)/$749)

Segment breakdown

Segment Revenue ($USD Millions)Q3 2024Q2 2025Q3 2025
Broadcasting$924 $754 $724
Production Companies$26 $18 $25
Total$950 $772 $749

Key operating KPIs and leverage

KPI6/30/20259/30/2025
Cash and Equivalents ($USD Millions)$199 $182
Revolver Borrowing Availability ($USD Millions)$692 $742
First Lien Leverage Ratio (as defined)2.99x 2.72x
Secured Leverage Ratio (as defined)2.99x 3.66x
Total Leverage Ratio (as defined)5.60x 5.77x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Core Advertising Revenue ($USD Millions)Q4 2025N/A$380–$390 New
Political Advertising Revenue ($USD Millions)Q4 2025N/A$7–$8 New
Retransmission Revenue ($USD Millions)Q4 2025N/A$328–$330 New
Total Revenue ($USD Millions)Q4 2025N/A$767–$782 New
Station Expenses ($USD Millions)Q4 2025N/A$358–$362 New
Network Affiliation Fees ($USD Millions)Q4 2025N/A$202–$203 New
Corporate Expenses ($USD Millions)Q4 2025N/A$26–$29 New
Interest Expense (excl. amortization) ($USD Millions)FY 2025$460 $460 Maintained
Amortization of Deferred Financing Costs ($USD Millions)FY 2025$16 $16 Maintained
Preferred Stock Dividends ($USD Millions)FY 2025$52 $52 Maintained
Common Stock Dividends ($USD Millions)FY 2025$32 $32 Maintained
Cash Tax Payments ($USD Millions)FY 2025$39 $39 Maintained
Total CapEx ex-Assembly Atlanta ($USD Millions)FY 2025$85–$90 $70–$75 Lowered
Assembly Atlanta CapEx (net of reimbursements) ($USD Millions)FY 2025$0 $0 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
Macro/core advertisingQ1: macro uncertainty weighed on core; core down 8% YoY; cost savings tracking . Q2: core down 3% YoY; guidance updated; cost containment ongoing .Core finished at high end; October up low double digits; Q4 pacing up slightly; automotive stabilizing at low single-digit decline .Gradual improvement; cautious optimism into Q4/Q1.
AI/technology/streamingQ1/Q2: No explicit AI or streaming tech initiatives disclosed in releases .Announced Google Cloud + Quick Play streaming structure for rollout beginning January; InvestigateTV launched AI education project .New initiative; accelerates DTC/OTT discovery.
Sports programmingQ1: focus on professional/collegiate sports expansion . Q2: continued sports strategy (Dallas Stars, Saints) .Renewed Suns/Mercury; expanded Stars outer markets; Hawks renewed; Braves spring training to start March .Expanding portfolio; expected ratings tailwind.
Regulatory/legal/FCCQ1/Q2: Station acquisitions and swaps announced; regulatory approvals pending .Active FCC proceedings; approvals delayed due to gov’t shutdown; emphasis on sub-$200M deleveraging deals; caution on large-scale M&A .Navigating evolving rules; disciplined M&A stance.
Retransmission/net affiliationQ1: retrans roughly flat YoY . Q2: fees flat; retrans -1% YoY .Q3 fees -9% YoY; retrans -6% YoY; Q4 net retrans to decline slightly (WANF independent) .Net retrans flattening; visibility improving.
Balance sheet/liquidityQ1: AR facility to $400M; revolver $700M . Q2: issued 2L/1L notes; revolver to $750M .All material maturities addressed until Dec 2028; >$900M liquidity; leverage metrics improved first lien 2.72x .Maturity extension; higher flexibility.

Management Commentary

  • “Total revenue in the third quarter of 2025 was $749 million, at the high end of our guidance… Total operating expenses… were $592 million, which was $17 million below the low end of our guidance.” — Hilton Howell (CEO) .
  • “Our fourth quarter guide… is that our retransmission consent revenue, less network affiliation fees, will decline slightly… primarily attributable to WANF… shifting to be independent.” — Jeff Gignac (CFO) .
  • “This new streaming structure [Google Cloud + Quick Play] will begin rolling out in all Gray markets in January next year.” — Hilton Howell (CEO) .
  • “We are laser-focused on the deals… sub-$200 million deleveraging deals that improve our portfolio and our balance sheet.” — Kevin Latek (Chief Legal & Development Officer) .

Q&A Highlights

  • Net retrans run-rate: Management emphasized net metrics flattening and potential for improvement; too early to guide 2026, but trend is stabilizing .
  • Core ad trajectory: After a tough 2025, momentum into Q4 and early Q1 2026 looks “very optimistic,” with services and FS categories trending better and auto stabilizing .
  • WANF transition: Added 25+ hours local news/sports; strong reception, ratings gains in key demos; strategic independence supports hyper-local content .
  • Assembly Atlanta ROI: Net investment ~ $650M to date; monetization through leases/JVs; expected reimbursements (~$25M) and potential for meaningful cash flow within 12–24 months .
  • MVPD dynamics: Frustration over limited affiliate voice in YouTube TV dispute; hope for resolution benefiting consumers and affiliates .

Estimates Context

Q3 2025 vs Wall Street consensus (S&P Global):

  • Revenue: Consensus $745.0M* vs Actual $749.0M → beat by ~$4.0M*.
  • Primary EPS: Consensus -$0.48* vs S&P actual -$0.204*; company diluted EPS -$0.24 .
  • EBITDA: Consensus $138.8M* vs S&P actual $157.0M*; company Adjusted EBITDA $162M .

Forward consensus snapshot:

  • Q4 2025: Revenue $799.3M*, Primary EPS -$0.37*, EBITDA $157.1M*.
  • Q1 2026: Revenue $776.5M*, Primary EPS -$0.23*, EBITDA $177.5M*.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Beat-and-raise mechanics: Modest top-line beat and expense undershoot, with Q4 guidance introducing specific ranges that reflect WANF transition but healthy core pacing; watch for upside if political ramp accelerates .
  • Margin reset and rebuilding: EBITDA margin compressed YoY but stabilized sequentially; cost actions and lower capex support FCF resiliency into 2026 .
  • Strategic portfolio moves: FOX renewals and announced swaps/acquisitions create 11 new Big Four duopolies—expect synergies in news/sales/sports and potential leverage reduction on close .
  • Balance sheet optionality: Maturities pushed to 2032/2033 and revolver upsized; >$900M liquidity enhances flexibility in a volatile regulatory environment .
  • Political tailwinds: Management views 2026 political cycle as potentially “gargantuan”; early signs post-November outcomes could lift pacing sooner than prior off-years .
  • Streaming/tech pivot: Google Cloud + Quick Play rollout (January) may improve content discovery and local OTT engagement; monitor KPIs and monetization .
  • Trading setup: Near term, watch Q4 core pacing, net retrans trajectory, and regulatory approvals for announced deals; medium term, Assembly Atlanta monetization and sports programming expansion could be catalysts .

Additional Relevant Press Releases in Q3 Period

  • Quarterly cash dividend of $0.08/share declared; payable Dec 31, 2025 .
  • Expanded Memphis Grizzlies simulcast partnership across key markets, reinforcing sports strategy .