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SAGA COMMUNICATIONS INC (SGA)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 net operating revenue declined 5.0% to $28.23M; operating income was $1.41M, net income was $1.13M, and diluted EPS was $0.18, reflecting continued softness in traditional broadcast categories and lower political advertising versus the prior year .
  • Versus Wall Street consensus, revenue missed ($28.23M vs $28.55M*) and EPS missed ($0.18 vs $0.19*); EBITDA also came in below consensus ($2.68M* vs $3.45M*). Coverage remains thin (1 estimate), but these are modest misses. Bold emphasis reflects a potential near-term sentiment headwind. Values retrieved from S&P Global.
  • Cost controls were a relative bright spot: station operating expenses fell 4.6% YoY; management expects FY 2025 station operating expenses to decline 2–3% YoY, aided by in-sourcing digital services and selective AI adoption (voice-to-voice imaging savings of ~$0.25M annually) .
  • Capital allocation is a key catalyst: non-binding tower sales negotiations (anticipated high-7 to low-8 figure proceeds) with intent to use a portion for buybacks; cash and short-term investments were $27.3M as of August 4, 2025; quarterly dividend of $0.25 declared for payment on September 19, 2025 .
  • Near-term set-up: Q3 pacing is currently down ~1% overall with September pacing up ~1.5%; interactive pacing is strong (+40%), while national is pacing down 19.1%. Q4 faces a tough political comp ($2.0M last year), a known headwind to watch .

What Went Well and What Went Wrong

What Went Well

  • Interactive revenue grew 7% in Q2 and 10% YTD, with 58% profit margin in Q2 and 55% YTD (ex-commissions), supporting the blended advertising strategy’s traction .
  • E-commerce revenue rose 17% in Q2; online news initiative revenue increased 26% in Q2 (51% YTD), diversifying growth vectors beyond traditional broadcast .
  • Execution on cost initiatives: bringing third-party digital services in-house and selective AI use (voice-to-voice imaging) drove ~$0.25M annual savings while preserving jobs, enhancing efficiency and margin resiliency .

What Went Wrong

  • Top-line and earnings pressure: Q2 revenue fell 5.0% YoY; operating income declined to $1.41M (from $2.14M); net income of $1.13M was down from $2.50M a year ago; diluted EPS of $0.18 reflects the softness in traditional categories and political .
  • Category mix remains challenging: Q3 pacing shows national down ~19.1%, with local direct down ~4.4% and local agency down ~0.8%; traditional broadcast verticals remain pressured in the near term .
  • Political advertising normalization: Q4 2025 will lap ~$2.0M of political revenue from Q4 2024, creating a tougher revenue backdrop as the cycle shifts, a known headwind into year-end .

Financial Results

Core P&L Comparison

MetricQ2 2024Q1 2025Q2 2025
Net Operating Revenue ($USD Millions)$29.72 $24.21 $28.23
Operating Income ($USD Millions)$2.14 $(2.30) $1.41
Net Income ($USD Millions)$2.50 $(1.58) $1.13
Diluted EPS ($USD)$0.40 $(0.25) $0.18

EBITDA and Margins

MetricQ2 2024Q1 2025Q2 2025
EBITDA ($USD Millions)$3.40*$(0.92)*$2.68*
EBITDA Margin (%)11.45%*(3.79%)*9.48%*
EBIT Margin (%)7.21%*(9.27%)*4.99%*
Net Income Margin (%)8.42%*(6.51%)*4.00%*

Values retrieved from S&P Global.

Actual vs Consensus (Q2 2025)

MetricActualConsensusDelta
Revenue ($USD Millions)$28.23 $28.55*-$0.32M (Miss)
Diluted EPS ($USD)$0.18 $0.19*-$0.01 (Miss)
EBITDA ($USD Millions)$2.68*$3.45*-$0.77M (Miss)

Values retrieved from S&P Global.

Same-Station vs Actual (Q2 2025)

Metric ($USD Millions)ActualSame-Station
Net Operating Revenue$28.23 $27.58
Station Operating Expense$22.23 $21.66
Operating Income$1.41 $1.43

Balance Sheet & Cash Flow KPIs (Q2 Context)

MetricQ1 2025Q2 2025Notes
Cash & Short-Term Investments ($USD Millions)$27.20 (as of May 5) $27.30 (as of Aug 4) Liquid resources underpin buyback capacity .
Cash & Equivalents ($USD Millions)$17.95 $15.79 Seasonal working capital dynamics .
Capital Expenditures ($USD Millions)$0.70 $1.31 FY guide updated (see Guidance) .
TTM EBITDA ($USD Millions)$10.73 $9.60 Leverage ratio ~0.52x .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Capital ExpendituresFY 2025$4.0–$4.5M (May) $3.0–$3.5M (Aug) Lowered
Station Operating ExpenseFY 2025Not providedDown 2–3% YoY New (Lower)
Corporate G&AFY 2025Not provided~$12.0M (vs $12.6M in 2024) New (Lower vs 2024 actual)
Interactive Revenue PacingQ3 2025Not provided+40% as of call New (Raised)
Political Advertising ContextQ4 2025Not providedLapping ~$2.0M in Q4 2024; expect tougher comp Headwind
DividendOngoing$0.25 paid June 27 $0.25 declared Aug 13, payable Sept 19 Maintained
Tower Sale / BuybacksFY 2025Not providedNon-binding tower sale talks, high-7 to low-8 figure proceeds; intent to fund buybacks New (Potential proceeds, buybacks)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Traditional Broadcast DemandQ4: net revenue -1.3% YoY; station opex +4.1%, highlighting pressure . Q1: revenue -4.3% YoY; operating loss $(2.3)M .CEO notes traditional verticals remain challenged; sell-through needed to overcome macro downdraft .Mixed to Weak
Digital/Interactive StrategyQ1: “blended” model referenced; pacing improvement into Q2 .Interactive revenue +7% Q2; +10% YTD; interactive margin 58% Q2; strong Q3 pacing (+40%) .Improving
Cost Discipline & In-sourcingQ1: legal/proxy costs noted; opex control underway .Station opex -4.6% YoY; in-house digital placement; AI imaging saves ~$0.25M annually .Improving
National AdvertisingQ1: caution in pacing commentary .Q3 pacing for national down ~19.1%; later-quarter booking expected .Weak
Capital AllocationQ4/Q1: maintained dividend; cash strong .Non-binding tower sale; proceeds planned for buybacks; cash/STI $27.3M (Aug 4) .Potential Catalyst
Political AdvertisingQ4: ~$2.0M political tailwind .Q3 ex-political pacing flat YoY; Q4 faces tough comp .Headwind in Q4

Management Commentary

  • “The traditional broadcast verticals that have carried us for years have challenged the best… The truth is we have to sell our way out of this macro downdraft… we refuse the urge to cut our way out” .
  • “We are realizing a quarter of a million dollars in annual savings by using voice-to-voice AI versus third party production providers” .
  • “Interactive revenue was up 7% for the quarter… with a 58% profit margin” and online news revenue grew 26% in Q2; e-commerce +17% in Q2 .
  • “Saga has entered into nonbinding negotiations to sell some of our tower sites… anticipated proceeds in the high 7 figure or low 8 figure range… intent to use a portion… to fund stock buybacks” .

Q&A Highlights

  • Pacing: Q3 is currently down ~1% overall; September pacing up ~1.5%; ex-political, Q3 is flat YoY .
  • Digital search traffic: fragmentation across platforms; company aims to meet customers across Google, AI, and social channels .
  • Capital allocation: tower sale negotiations expected to close before end of Q3; proceeds earmarked in part for buybacks; ongoing quarterly dividends .

Estimates Context

  • Q2 2025 actuals vs consensus: revenue $28.23M vs $28.55M* (miss), EPS $0.18 vs $0.19* (miss), EBITDA $2.68M* vs $3.45M* (miss). Coverage thin at 1 estimate for EPS and revenue, increasing volatility in perceived “beat/miss” outcomes. Values retrieved from S&P Global.
  • Forward consensus: Q3 2025 EPS $0.21*, revenue $28.30M*; Q4 2025 EPS $0.16*, revenue $28.50M*. Values retrieved from S&P Global.
MetricQ3 2025 ConsensusQ4 2025 Consensus
Primary EPS Consensus Mean ($USD)$0.21*$0.16*
Revenue Consensus Mean ($USD Millions)$28.30*$28.50*
EBITDA Consensus Mean ($USD Millions)$3.48*$3.05*
Primary EPS – # of Estimates1*1*
Revenue – # of Estimates1*1*

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Modest miss vs consensus on revenue and EPS with soft national category pacing, likely pressuring near-term sentiment; monitor Q3 in-quarter bookings and any national improvement .
  • Digital momentum and margin profile are improving (interactive +7% Q2, 58% margin), providing a structural offset to traditional category softness .
  • Cost discipline is tangible: station opex down 4.6% YoY, with FY 2025 opex guided down 2–3% and incremental AI/in-sourcing savings underpinning operating leverage potential .
  • Capital allocation is a potential catalyst: tower sale proceeds (high-7 to low-8 figures) and buybacks, supported by $27.3M cash/STI as of Aug 4 and sustained $0.25 quarterly dividends .
  • Watch political normalization: Q4 faces a ~$2.0M comp headwind, increasing the importance of interactive growth and cost control to preserve earnings power .
  • Thin Street coverage (single estimates) increases “headline beat/miss” volatility; traders should weigh internal pacing data and management’s expense guidance more heavily .
  • Medium-term thesis: blended advertising plus disciplined costs and asset monetization could reset earnings power and multiple if execution sustains and national/agency trends stabilize .