SAGA COMMUNICATIONS INC (SGA)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 net revenue was $24.2 million, down 4.3% year over year, with diluted EPS of $(0.25); operating loss narrowed slightly to $(2.3) million as station operating expense declined 2.2% .
• Results beat Wall Street consensus: revenue $24.212M vs $23.0M* and EPS $(0.25) vs $(0.33)*; sequentially softer vs Q4 given seasonality, but loss was smaller than feared as costs fell and interactive momentum strengthened .
• Management guided Q2 pacing to down mid-single digits, with April down high-single digits, May down low-single digits, and June approximately flat; interactive pacing up 18.4% for Q2, supported by the “blended” radio+digital strategy .
• Capital allocation remains supportive: $0.25 dividend paid March 7 and another declared for June 27; evaluating a non-binding LOI to sell tower sites, with a significant portion of proceeds intended for buybacks .
• 2025 guardrails: capex $4.0–$4.5M (maintained), station opex expected flat to down ~1%, corporate G&A ~$12.0M, tax rate 27–30% with 2–6% deferred .

Values with an asterisk are retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

• Interactive revenue up 14% with a 51% profit margin in Q1; online news revenue almost doubled to $0.562M from $0.285M, underscoring traction in blended digital offerings .
• Cost discipline: station operating expense fell 2.2% (same-station down 5.0%), aiding a slightly smaller operating loss despite revenue pressure .
• Strategic progress and clarity: evaluating LOI to sell tower sites and prioritizing buybacks; CEO emphasized the “click, visit, call, search” blended strategy to capture digital dollars (“radio is the magic top-of-funnel… we call it click, visit, call and search”) .

What Went Wrong

• Revenue contracted 4.3% year over year to $24.2M; same-station revenue down 6.6%, reflecting softness in core broadcast categories and April weakness .
• Corporate expense increased, including ~$110K tied to a threatened proxy contest; additional legal/proxy costs will impact Q2 .
• Macro uncertainty persists: Q&A highlighted tariff volatility and potential ripple effects on advertisers’ cost of goods sold, limiting near-term visibility .

Financial Results

Actual vs Consensus

Values with an asterisk are retrieved from S&P Global.

KPIs and Balance Sheet Highlights

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Saga’s radio stations get the advertiser wanted and Saga’s digital platform gets the advertiser found and chosen… we call it click, visit, call and search.” — Christopher Forgy .
• “We have entered into a nonbinding letter of intent to sell some of our tower sites… the Board is committed to using a significant portion of the proceeds… for stock buybacks.” — Management .
• “Interactive pacing is strong for the second quarter being up 18.4%… local direct is improving… from down high-single digits in April to down very low-single digits in June.” — Samuel D. Bush .
• “We anticipate that the annual corporate general and administrative expense will be approximately $12 million for 2025… our tax rate is expected to be 27% to 30% with a deferred tax of 2% to 6%.” — Samuel D. Bush .

Q&A Highlights

• Tariff impact: management flagged continued volatility and potential ripple effects on advertisers’ costs; automotive re-enters top 3 categories but macro trajectory remains uncertain .
• Digital performance and trends: confirmed Q1 interactive strength and Q2 interactive pacing +18.4%; declined to break out detailed guidance between digital vs legacy broadcast .
• Category color: focus is on strengthening categories rather than detailing weak ones; emphasized improving local direct tied to blended strategy .

Estimates Context

• Q1 2025 beat: revenue $24.212M vs $23.0M*; EPS $(0.25) vs $(0.33)* — both better than consensus .
• Prior quarters: Q4 2024 revenue $28.770M vs $28.0M* and EPS $0.20 vs $(0.12); Q3 2024 revenue $28.118M vs $28.7M and EPS $0.20 vs $0.13* .
• Implications: Consensus likely needs to reflect stronger interactive momentum and expense control, offset by lingering macro softness and proxy-related costs .

Values with an asterisk are retrieved from S&P Global.

Key Takeaways for Investors

• Beat vs consensus on both top line and EPS; smaller loss than expected driven by expense control and rising interactive contribution — supportive for near-term sentiment .
• Cost trajectory improving: station opex down; 2025 guide to flat/down ~1% and corporate G&A ~$12M — provides operating leverage if revenue stabilizes .
• Digital ramp is real: interactive +14% in Q1 with 51% margin; Q2 interactive pacing +18.4% — blended strategy is gaining traction and may reshape mix over ’25–’26 .
• Capital return visibility: dividend cadence maintained; potential tower sale proceeds earmarked for buybacks — a key stock catalyst pending LOI completion .
• Near-term setup: Q2 revenue pacing down mid-single digits but improving intra-quarter (May better, June ~flat) — watch weekly pacing and local direct trends for inflection .
• Medium-term thesis: if Saga captures a modest share of local digital ad dollars via blended offerings while preserving radio, revenue/margin mix can improve and support sustained capital returns .
• Risk monitor: tariff and macro volatility, proxy-related expenses in Q2, and execution on in-house digital ad placement and tower sale timeline .