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E.W. SCRIPPS Co (SSP)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue was $526M, a modest beat vs consensus, while GAAP diluted EPS was a larger loss than expected due to refinancing and restructuring charges; Scripps highlighted “meeting or exceeding Wall Street expectations on nearly every reporting line” and continued leverage reduction .
  • Local Media core advertising grew 1.8% YoY despite macro headwinds; Scripps Networks revenue was roughly flat with a 27% margin, aided by 41% connected TV growth .
  • Q4 guidance: Local Media revenue down ~30%, Networks revenue down low double digits; full-year cash interest expense guided to $165–$175M, improved from prior quarter .
  • Portfolio optimization advanced: two station sales totaling $123M and Gray station swap in review—management called out premium sale multiples and intent to direct proceeds to deleveraging .

What Went Well and What Went Wrong

  • What Went Well

    • Connected TV revenue up 41% YoY; Networks delivered ~flat revenue and a 27% margin with expenses down 7.5% .
    • Local Media core advertising up 1.8% despite macro uncertainty, supported by sports rights and sales execution .
    • CEO emphasized expense discipline and margin progress: “Networks margins have exceeded our original guidance of 400-600 basis-point improvement for three straight quarters” .

  • What Went Wrong

    • Consolidated revenue fell 18.6% YoY, primarily due to the non-election comparison; Local Media revenue down 27% YoY with political dropping to $5.1M vs $125.2M last year .
    • GAAP EPS loss of $0.55 included $7.6M loss on debt extinguishment, $6.5M financing costs, $1.4M deferred financing write-off, and $2.7M restructuring—adding $0.15 to the loss .
    • National ad market pockets of weakness: DR pricing softness (tariff impact), pharma volatility, and upfront softness outside sports; Networks Q4 guide reflects these pressures .

Financial Results

Consolidated Headline Metrics versus Prior Periods and Estimates

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$524.393 $540.080 $525.854
Diluted EPS ($)-$0.22 -$0.59 -$0.55
Scripps Networks Segment Margin (%)32% 27% 27%

Segment Performance

SegmentMetricQ1 2025Q2 2025Q3 2025
Local MediaRevenue ($USD Millions)$325.389 $334.766 $325.456
Local MediaSegment Profit ($USD Millions)$34.919 $55.821 $52.801
Scripps NetworksRevenue ($USD Millions)$198.007 $205.765 $200.956
Scripps NetworksSegment Profit ($USD Millions)$64.093 $55.948 $53.299

KPIs

KPIQ1 2025Q2 2025Q3 2025
Local core advertising growth YoY (%)-3.1% -1.9% +1.8%
Political revenue ($USD Millions)$3.263 $2.624 $5.141
Connected TV revenue growth YoY (%)+42% +57% +41%
Adjusted EBITDA ($USD Millions)$75.606 $88.857 $80.429
Cash & Equivalents ($USD Millions)$24.0 (3/31) $31.7 (6/30) $54.7 (9/30)
Total Debt ($USD Billions)$2.6 (3/31) $2.7 (6/30) $2.7 (9/30)
Net Leverage (x)4.9x 4.4x 4.6x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Local Media revenueQ4 2025N/ADown ~30%New guide
Local Media expenseQ4 2025N/AFlat to down low single digitsNew guide
Scripps Networks revenueQ4 2025N/ADown low double digitsNew guide
Scripps Networks expenseQ4 2025N/ADown low double digitsNew guide
Shared services & corporateQ4 2025~$22M (Q3 guide) ~$21MImproved
Cash interest paidFY 2025$170–$175M $165–$175MImproved lower bound
Cash taxes paidFY 2025$5–$10M Not updated in Q3 releaseMaintained (no update)
Capital expendituresFY 2025$45–$50M Not updated in Q3 releaseMaintained (no update)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
Sports strategyExpanded women’s sports events (SI Women’s Games, Fort Myers Tip-Off); local NHL lifts core NHL/NBA playoffs drove ~$7M; sports adds 1–3% to local core WNBA/NWSL strong demand and premium CPMs; local NHL (Lightning) to bolster Q4 core Strengthening
Connected TV+42% growth; building streaming distribution +57% growth; unique ION FAST positioning +41% growth; continued double-digit runway Strengthening
Macro/tariffs/DRTariffs/uncertainty pressuring auto/retail Hesitancy; auto weakness; uncertainty persists DR pricing weak (tariffs), pharma volatile; government shutdown impacts Medicare ad flow Mixed/pressure
Regulatory/deregulationExpect FCC changes; swaps/sales path forward Court/FCC developments; Gray swap advancing Expect Big Four duopoly cap removal and national cap action; VMVPD negotiating rights sought Positive catalyst
Distribution/retransRenewals covering 25% of pay TV HHs; FY retrans ~flat Renewed FOX affiliations; subs down mid-single digits ABC blackout on YouTube TV noted; minimal revenue impact; 70% of subs renew in 2026 H1 Stable to improving margin
AI/technologyEarly newsroom automation, sales prospecting; more updates expected —Embracing AI across enterprise to drive efficiency; more detail expected next year Building

Management Commentary

  • CEO: “We are pleased today to report a third consecutive quarter of meeting or exceeding Wall Street expectations on nearly every reporting line… Expense discipline is an important part of our success story… Networks margins have exceeded our original guidance of 400-600 basis-point improvement for three straight quarters” .
  • CFO: Net leverage improved to 4.6x; refinancing locked at 9.875% second-lien notes; revolver paid off ahead of guidance; cash interest now $165–$170M for FY25 .
  • Strategic stance: “We will not chase rights we cannot afford, but where we see opportunity to create value, we will be aggressive” (sports rights discipline) .
  • Transformation: “We’re leaning hard into technology and AI… Early results are pointing to real value” .

Q&A Highlights

  • Portfolio optimization/M&A: Management sees continued buy/sell/swap opportunities and remains committed to maximizing shareholder value; recent station sales achieved ~9x EBITDA multiples (gross) with proceeds earmarked for debt paydown .
  • Networks margins sustainability: Confidence in ongoing margin expansion via efficiency and CTV growth despite mixed ad market .
  • YouTube TV–Disney dispute: ABC stations dark; limited direct revenue impact; core guide unaffected; affiliate renewals scheduled (CBS end-2025, ABC mid-2026) .
  • Macro/advertising: DR pricing weak from tariffs; pharma volatile; advertisers hesitant amid uncertainty; Local core pacing strong vs peers .
  • Q4 networks demand: Medicare open enrollment impacted by government shutdown—small piece of pressure; political crowd-out non-repeat .

Estimates Context

Results vs S&P Global Wall Street consensus

MetricQ1 2025 ActualQ1 2025 Consensus*Beat/MissQ2 2025 ActualQ2 2025 Consensus*Beat/MissQ3 2025 ActualQ3 2025 Consensus*Beat/Miss
Revenue ($USD Millions)$524.393 $520.240*Beat$540.080 $542.100*Miss$525.854 $523.580*Beat
Primary EPS ($)-$0.22 -$0.255*Beat-$0.59 -$0.22*Miss-$0.55 -$0.322*Miss
EBITDA ($USD Millions)$75.606 (Adj.) $63.279*Beat$88.857 (Adj.) $84.650*Beat$80.429 (Adj.) $68.750*Beat

Values retrieved from S&P Global.*

Implications:

  • Revenue consistently met/beat consensus, driven by sports and CTV; EBITDA outperformance reflects expense discipline and structural improvements.
  • EPS misses in Q2/Q3 were largely due to financing-related charges and restructuring ($0.15 per-share impact in Q3), plus preferred dividend drag (Q3 EPS reduced by $0.18) .
  • Estimate revisions likely to reflect stronger CTV/Networks margins and lower cash interest, but near-term EPS will remain sensitive to financing and preferred dividend accounting .

Key Takeaways for Investors

  • Sports and CTV are proving resilient growth vectors, supporting revenue and margins even in a soft national ad market; expect continued double-digit CTV growth and premium sports CPMs .
  • Local core advertising momentum (up 1.8% in Q3; guided +~10% in Q4) differentiates SSP vs peers; catalysts include NHL Lightning rights and reduced political crowd-out comparisons .
  • Portfolio optimization (two station sales, Gray swap) and improved cash interest guidance enhance deleveraging capacity; expect proceeds directed to term loan paydown .
  • Near-term headwinds: DR pricing pressure (tariffs), pharma volatility, and Medicare open enrollment impact from government shutdown; Networks Q4 revenue down low double digits is already embedded in guide .
  • Regulatory reform (duopoly rules, national cap, VMVPD negotiations) remains a medium-term upside scenario for retrans margins and distribution economics .
  • EPS is volatile due to financing transactions and preferred dividends; focus on adjusted EBITDA, leverage reduction, and cash interest trajectory for valuation framing .
  • Trading: Near-term narrative revolves around Q4 core resilience vs Networks softness; medium-term thesis centers on CTV scale, sports rights discipline, portfolio optimization, and regulatory optionality .