Name: Sinclair, Inc. Q1 2025 Earnings Call
Start: 2025-05-07T20:31:00.000Z

Executive Summary

Q1 2025 revenue was $0.776B, essentially in line with S&P Global consensus ($0.776B*) while Primary EPS missed (actual -$1.25 vs -$0.91*). GAAP diluted EPS was -$2.30, and Adjusted EBITDA of $112M beat the high end of guidance on lower media expenses . Values with asterisk retrieved from S&P Global.*
Distribution revenue rose $15M YoY to $451M but landed ~$2M below internal guidance as churn moderation lagged; core advertising declined 2% YoY to $292M yet management again cited industry‑leading core trends .
Balance sheet was de‑risked via a comprehensive refinancing (nearest meaningful maturity Dec 2029) and $66M of 2027 notes repurchased in April for $62M; cash totaled $631M. FY25 cash tax outlook was cut to $117–$124M (midpoint $121M) from $211–$220M previously, a key cash flow positive .
Q2 2025 guidance: total revenues $787–$807M; Adjusted EBITDA $91–$107M; company expects Local Media core ~-2% YoY and distribution ~+1% YoY .
Potential stock catalysts: deregulatory actions (ownership rules, reverse comp framework), NextGen/EdgeBeam commercialization, Tennis Channel growth under new CEO, and Ventures cash deployment .

What Went Well and What Went Wrong

What Went Well
- Adjusted EBITDA beat: “Adjusted EBITDA exceeded the high-end of our guidance range,” supported by better‑than‑expected media expenses .
- Distribution resilience and core relative outperformance: Net retrans grew mid‑single digits YoY; management reiterated a 2023–2025 mid‑single‑digit CAGR, and highlighted industry‑leading core advertising trends .
- Strategic momentum: Completed comprehensive refinancing (weighted average maturity >6 years) and repurchased $66M notes at a discount; added high‑profile leadership for Tennis Channel (Jeff Blackburn) and kicked off a new ATP/WTA sponsorship unit with Verizon as first sponsor .
What Went Wrong
- EPS miss: Primary EPS came in below S&P Global consensus (actual -$1.25 vs -$0.91*), while GAAP diluted EPS was -$2.30 on refinancing‑related items and other below‑the‑line pressures . Values with asterisk retrieved from S&P Global.*
- Distribution came in light vs internal guide: churn moderation improved but lagged the plan, yielding ~$2M shortfall vs guidance .
- Macro/tariff uncertainty curtailed visibility: management pulled a full‑year media expense line and cited reduced advertiser visibility (4–6 week look‑ahead), with certain categories (e.g., autos) mixed and leaning to leases .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Total Revenues ($M)	$917	$1,004	$776
Distribution Revenue ($M)	$434	$441	$451
Core Advertising Revenue ($M)	$295	$311	$292
Political Advertising Revenue ($M)	$138	$203	$6
Operating Income ($M)	$179	$266	$14
Adjusted EBITDA ($M)	$249	$330	$112
Diluted EPS (GAAP)	$1.43	$2.61	$(2.30)

Q1 2025 vs S&P Global consensus

Metric	Consensus	Reported
Revenue ($M)	$775.9*	$776
Primary EPS ($)	$(0.91)*	$(1.25)*

Values with asterisk retrieved from S&P Global.*

Segment performance (Q1 2025 vs Q1 2024)

Segment	Total Revenues Q1’24 ($M)	Total Revenues Q1’25 ($M)	Adjusted EBITDA Q1’24 ($M)	Adjusted EBITDA Q1’25 ($M)
Local Media	$727	$694	$131	$103
Tennis	$63	$68	$25	$23
Other	$15	$21	$(3)	$0
Corporate & Eliminations	$(7)	$(7)	$(14)	$(13)
Consolidated	$798	$776	$139	$112

Selected KPIs (Q1 2025)

KPI	Q1 2025
Cash and Cash Equivalents ($M)	$631 (SBG $277; Ventures $354)
Total Company Debt ($M)	$4,191
Capex ($M)	$16
Dividend	$0.25 paid in March
Shares Outstanding (M)	69.5 total (45.8 A; 23.8 B)
Net (Loss) Income Attributable to Sinclair ($M)	$(156)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenues ($M)	Q2 2025	N/A	$787–$807	New
Media Revenues ($M)	Q2 2025	N/A	$778–$798	New
Adjusted EBITDA ($M)	Q2 2025	N/A	$91–$107	New
Core Advertising Revenue ($M)	Q2 2025	N/A	$313–$330 (consol.)	New
Distribution Revenue ($M)	Q2 2025	N/A	$439–$441	New
Net Cash Tax Payments ($M)	FY 2025	$211–$220	$117–$124	Lowered
Interest Expense (net) ($M)	FY 2025	$369 (incl. $75M non‑recurring)	$357 (incl. $68M non‑recurring)	Lowered
Capex ($M)	FY 2025	$83–$86	$83–$86	Maintained
Dividend	Ongoing	$0.25 paid Dec 2024	$0.25 paid Mar 2025	Maintained (paid)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24, Q4’24)	Current Period (Q1’25)	Trend
Deregulation/FCC	Growing optimism; Q4 call flagged potential loosening, Chairman Carr leadership	Highlighted op‑ed proposing cap on network fees at 30% of retrans; expectation of deregulatory actions after third commissioner seated	Improving
Pay TV churn/rebundling	Charter bundle seen as effective; improving churn at some MVPDs	Churn moderating but slower than plan; distribution ~$2M below guide; reiterated mid‑single‑digit 2‑yr net retrans CAGR	Moderating but positive setup
Core advertising	Q3 core ~$295M; Q4 core down on political crowd‑out	Core -2% YoY to $292M; management cites continued relative outperformance	Mixed near‑term; relative outperformance sustained
Political advertising	Record 2024: $405M	$6M in Q1 nonelection quarter; early 2026 setup detailed	Off-cycle trough
ATSC 3.0 / EdgeBeam	EdgeBeam JV unveiled; 3.0 revenue ramps likely post‑sunset	NextGen push continues; interoperability events; advocates sunsetting 1.0; 3.0 commercialization path reiterated	Strategic build-out
Tennis Channel	DTC launch (Q4)	Jeff Blackburn hired as Chairman & CEO; enterprise sponsorship unit with ATP/WTA; Verizon first sponsor	Accelerating
Digital/Compulse	Podcasts, digital expansion (Q4)	Compulse acquisition (~$30M) to scale platform; double‑digit growth cited	Scaling

Management Commentary

“Adjusted EBITDA exceeded the high-end of our guidance range and core advertising trends continue to be among the strongest in the industry… We remain optimistic that the regulatory environment is poised for favorable reforms in the near term.” – Chris Ripley, CEO .
“Following our recent refinancing, we have significantly extended the debt maturity profile… weighted average maturity of more than 6 years… first lien net leverage 1.8x… total net leverage 5.8x.” – Lucy Rutishauser, CFO .
“Distribution revenues increased by $15 million YoY… subscriber churn moderated slightly, [but] improvements have not yet caught up with our guide, which led to distribution revenues coming in $2 million below our guidance.” – Chris Ripley .
“We are now forecasting much lower cash tax payments of $121 million at the midpoint… $95 million lower than our guidance provided last quarter… Diamond exit gain taxes reduced to $83 million.” – Lucy Rutishauser ; FY25 cash taxes guided to $117–$124M .

Q&A Highlights

Regulatory pathway: Management expects action post confirmation of a third Republican commissioner; proposals like capping reverse comp at 30% of retrans seen as leveling the playing field .
Visibility and expenses: Advertiser visibility shortened to 4–6 weeks; ~20% of expenses are variablized to revenue, prompting removal of a full‑year media expense guide line .
Auto category: No broad “buy‑ahead” tariff effect yet; leases trending up; potential back‑half inventory‑driven promotions at dealers .
Capital allocation: Focus on deleveraging Local Media; opportunistic debt repurchases at discount; Ventures cash potential for shareholder returns .
Distribution/churn: Q1 accruals aligned with active MVPD negotiations; churn still mid‑single‑digit assumption; distribution revenue grew YoY .

Estimates Context

Q1 2025: Revenue essentially in line ($776M reported vs $775.9M* consensus), while S&P Global Primary EPS missed (actual -$1.25 vs -$0.91*). Company’s GAAP diluted EPS was -$2.30 . Values with asterisk retrieved from S&P Global.*
Q2 2025: S&P Global revenue consensus $799.6M* sits within company guidance of $787–$807M; S&P Primary EPS consensus -$0.78* (company does not guide EPS) . Values with asterisk retrieved from S&P Global.*
Implications: Lower FY25 cash taxes ($117–$124M) and clarified non‑recurring interest fees (Q1 burden) may warrant estimate revisions to full‑year cash flow metrics rather than EPS near term .

Key Takeaways for Investors

Beat where it matters operationally: Adjusted EBITDA topped the high end of guidance on disciplined cost control despite softer distribution vs plan and macro headwinds .
Balance sheet risk reduced: Refinancing pushed maturities to 2029+, and debt repurchases at a discount continue deleveraging; ample liquidity ($631M cash) .
Cash outlook improved: FY25 cash tax cut to $117–$124M (from $211–$220M prior), a meaningful FCF tailwind .
Distribution/inventory setup constructive: Net retrans growth reiterated (mid‑single‑digit 2023–2025 CAGR) with structural tailwinds from rebundling and negotiated step‑ups .
Near‑term revenue mix: Expect off‑cycle political trough and cautious core ads into Q2; company guides Q2 revenues $787–$807M and Adjusted EBITDA $91–$107M .
Strategic optionality rising: Deregulatory momentum (ownership rules, reverse comp) and NextGen/EdgeBeam commercialization could unlock incremental value beyond core broadcast .
Tennis and digital scaling: New Tennis Channel leadership and sponsorship platform plus Compulse acquisition support multi‑platform growth vectors .

Additional Relevant Press Releases (Q1 context)

FAA approval: Sinclair became the first broadcast media company approved by the FAA to fly drones over people/vehicles for newsgathering, enhancing news production capabilities .

Sinclair, Inc. (SBGI)·Q1 2025 Earnings Summary