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SAGA COMMUNICATIONS INC (SGA)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue declined 1.8% year over year to $28.2M, and diluted EPS fell to $(0.08) from $0.20; an industry-wide ASCAP/BMI music licensing settlement (retroactive ~$2.1M) turned the quarter from profit to loss, and excluding it SGA would have shown operating income of ~$1.5M and station operating income of ~$5.6M .
  • Versus S&P Global consensus, revenue was essentially in line (missed by ~$0.13M, ~0.5%) while EPS missed materially (consensus $0.21 vs actual $(0.08))—coverage is thin (1 estimate) .
  • Digital/interactive momentum is building: interactive revenue grew 32.6% YoY and nearly offset broadcast revenue declines when adjusted for political; management targets doubling gross revenue in 18–24 months, “most of it digital,” by capturing ~5% of search/display in 27 markets .
  • Near-term cadence: Q4 pacing down ~11% including political (lapping ~$2.0M last year), down ~4.7% ex-political; interactive pacing +32%—watch for buyback deployment from $10.7M tower monetization as a potential stock catalyst .

What Went Well and What Went Wrong

  • What Went Well

    • Interactive revenue +32.6% YoY; management emphasized it almost fully offset broadcast declines when adjusted for political: “the increase in our interactive revenue made up almost the entire decrease in our broadcast revenue when adjusted for political” .
    • Strategic capital allocation advanced: closed sale of 22 tower sites for ~$10.7M with continued tower access at nominal cost; plan to use a portion of proceeds for buybacks .
    • Expense discipline excluding settlement: on a same-station basis for 9M ended 9/30/25, station operating expense would have decreased 3.9% ex-settlement; 2025 station OpEx guided to flat YoY (down 2–3% ex-settlement) .

  • What Went Wrong

    • Reported profitability impacted by retroactive ASCAP/BMI settlement (~$2.1M); Q3 swung to operating loss $(0.6)M and net loss $(0.5)M from $1.6M and $1.3M respectively in Q3’24 .
    • Political advertising was weak: $73K in Q3’25 vs $677K in Q3’24; management flagged a tough Q4 comp (last year $2.0M: $1.6M Oct, $389K Nov, $10K Dec) .
    • National advertising remains soft; management noted national is weak and often late, while rate cuts haven’t helped radio spot—“It’s the economy, stupid... spot radio’s downdraft is more a function of the macro decline in the sector” .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$28.694 $28.229 $28.166
Diluted EPS ($)$0.20 $0.18 $(0.08)$
Station Operating Expense ($MM)$22.709 $22.226 $24.674
Corporate G&A ($MM)$2.900 $3.074 $2.820
Operating Income (Loss) ($MM)$1.645 $1.409 $(0.626)$
Station Operating Income ($MM, non-GAAP)$5.985 $6.003 $3.492
Net Income (Loss) ($MM)$1.267 $1.128 $(0.532)$
Weighted Avg Diluted Shares (MM)6.075 6.176 6.164

Q3 2025 reported vs. ex-ASCAP/BMI settlement:

MetricQ3 2024Q3 2025 ReportedQ3 2025 ex-Settlement
Operating Income (Loss) ($MM)$1.645 $(0.626)$ ~$1.5
Station Operating Income ($MM, non-GAAP)$5.985 $3.492 ~$5.6

Estimates and surprises (S&P Global consensus):

MetricQ3 2025 ConsensusQ3 2025 ActualSurprise
Revenue ($MM)$28.30*$28.166 $(0.13)$, ~$(0.5)%*
EPS ($)$0.21*$(0.08)$ $(0.29)$ miss*
# of Estimates (Rev/EPS)1 / 1*——

Values marked with an asterisk (*) are from S&P Global consensus and are provided without document citations. Values retrieved from S&P Global.

KPIs and other items:

  • Political revenue: Q3’25 $0.073M vs Q3’24 $0.677M; 9M’25 $0.395M vs 9M’24 $1.3M .
  • Interactive revenue growth: +32.6% YoY in Q3; NTR/broadcast event revenue −6.8% YoY .
  • Capex: Q3’25 $0.590M vs Q3’24 $0.625M; 9M’25 $2.600M vs 9M’24 $3.199M .
  • Cash and short-term investments: $26.3M at 9/30/25; $34.2M at 11/3/25 .
  • Dividend: $0.25 paid 9/19/25 ($1.6M aggregate) ; $0.25 declared for 12/12/25 ($1.6M) .
  • Towers monetization: 22 sites sold for ~$10.7M; ~$8.7M received, ~$1.8M in escrow pending consents .

Segment detail (limited):

D&A by Segment ($MM)Q3 2024Q3 2025
Radio Stations$1.325 $1.263
Corporate$0.066 $0.044

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
CapexFY 2025$3.0–$3.5M (Q2 update) $3.25–$3.75M Raised midpoint
Station Operating ExpenseFY 2025Not specified previously~Flat YoY; ex-ASCAP/BMI down 2–3% New detail; ex-settlement improvement
Corporate G&AFY 2025Not specified previously~$12M vs $12.4M in 2024 Lower vs 2024 actual
Q4 Revenue Pacing (incl. political)Q4 2025n/a~Down 11% including political Qualitative outlook
Q4 Revenue Pacing (ex-political)Q4 2025n/a~Down 4.7% ex-political Qualitative outlook
DividendsOngoing$0.25 paid 9/19/25 $0.25 declared for 12/12/25 Maintained

Earnings Call Themes & Trends

TopicQ1 2025 (prior)Q2 2025 (prior)Q3 2025 (current)Trend
Digital/Interactive initiativesLimited disclosure in PR Not quantified in PR Interactive +32.6% YoY; “blend” gaining momentum; goal to 2x gross revenue in 18–24 months Accelerating
Political/macroQ2 pacing mixed; macro caution Political Q2 $51K; 6M $321K Q3 political $73K; Q4’24 comp $2.0M; Q4 pacing down incl. political Tough comp in Q4
Capital allocationExploring non-core asset sales; $0.25 dividend In talks to sell towers; $0.25 dividend Closed 22 tower sale, proceeds earmarked in part for buybacks; $0.25 declared Execution progressing
Expense disciplineStation OpEx −2.2% YoY Station OpEx −4.6% YoY Ex-settlement OpEx declines; FY OpEx ~flat; ex-settlement −2–3% Improving ex-settlement
Ad mix (local vs national)Q2 pacing improving late in quarter —National weak; local steady; digital strong National headwind persists
Licensing/Regulatory——ASCAP/BMI settlement; Q4 incremental ~$135K One-time catch-up; modest run-rate impact

Management Commentary

  • “In September, we booked $1.7 million for the periods from January 1, 2022, to December 31, 2024, and another $407,000 for the nine-month period ending September 30, 2025… Without the settlement, station operating income would have been $5.6 million for the quarter… [and] the company would have reported net income for the quarter” .
  • “For the third quarter this year, the increase in our interactive revenue made up almost the entire decrease in our broadcast revenue when adjusted for political” .
  • “We intend to use a portion of the proceeds from [the 22 tower] sale to fund stock buybacks… We also entered into long-term leases at each of the sites to allow us continued use of the towers at a nominal cost” .
  • “We currently expect that our station operating expense will be flat for the year… Without the music licensing settlement expense, we would expect station operating expense to decrease by 2% to 3%. We anticipate that the annual corporate general and administrative expense will be approximately $12 million for 2025 compared to $12.4 million in 2024” .
  • “Objective of 2X gross revenue, most of it digital, in 18 to 24 months by capturing just 5% of the available search and display dollars” .

Q&A Highlights

  • Ad pacing and mix: National remains weak and comes in later; local steady; digital pacing +32% for Q4; overall Q4 pacing down ~11% including political, ~4.7% ex-political .
  • Macro and rate cuts: Management sees little impact from Fed cuts on radio spot; weakness seen as sector/macro-driven, with housing starts and autos as the key indicators .
  • Buybacks: Timing/amount pending resolution of transaction complexities; four tower sites still in escrow; buybacks remain a priority with more clarity expected as the board finalizes decisions .

Estimates Context

  • Q3 2025 vs consensus: Revenue ~$28.17M vs $28.30M* (miss ~$0.13M, ~0.5%); EPS $(0.08)$ vs $0.21 (miss $0.29) . Coverage is thin (1 estimate each for revenue and EPS*), so estimate surprise should be interpreted cautiously. Values retrieved from S&P Global.
  • Forward look: Q4 2025 consensus revenue $28.5M* and EPS $0.16*, while management flagged tough political comps (Q4’24 $2.0M) and Q4 pacing down including political; interactive pacing remains strong . Values retrieved from S&P Global.

Key Takeaways for Investors

  • Core print was distorted by a retroactive music licensing settlement; excluding this, operating metrics were notably healthier—important for assessing run-rate profitability into Q4/FY25 .
  • The digital “blend” is beginning to offset broadcast pressure; interactive growth (+32.6%) and strong Q4 interactive pacing (+32%) underpin the transition narrative .
  • Near-term revenue headwinds persist given political lapping and weak national; expect volatile Q4 but stabilizing ex-political trend lines .
  • Capital deployment is a potential catalyst: tower proceeds ($10.7M) and a reiterated buyback intent could support shares as details firm up .
  • FY25 OpEx control should aid margin repair: station OpEx guided ~flat YoY (ex-settlement down 2–3%); corporate G&A ~ $12M vs $12.4M in 2024 .
  • Dividend remains intact ($0.25/quarter), reinforcing shareholder-return orientation alongside prospective repurchases .
  • Watch Q4 execution on interactive, the cadence of national, and buyback communications—likely the primary near-term stock drivers .