GTN-A — Gray Media, Inc.

Summary of Gray Media, Inc. Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Total Revenue: $792 million for 2025, exceeding guidance.
• Operating Expenses: $618 million in Q4 2025, $5 million below guidance; broadcasting expenses declined by $78 million (3%) year-over-year.
• Net Loss: $23 million attributable to common stockholders in 2025.
• Adjusted EBITDA: $179 million for the year.
• Political Advertising Revenue: $12 million, above expectations for an off-cycle period.
• Net Retransmission Revenue: Stabilized at $547 million for 2025, returning to growth in Q4 2025 compared to Q4 2024.

2. Strategic Updates and Business Highlights

• Completed acquisition of WBBJ-TV for $25 million.
• Strengthened balance sheet with a $250 million add-on to second lien notes, reducing interest costs.
• Continued growth in local content, winning 10 national Edward R. Murrow Awards.
• Launched new programming initiatives, including "Aging Untold" and expanded local sports broadcasts.
• Transitioning digital platforms to Google Cloud's Quick Play for enhanced viewer engagement.
• Renewed NBC affiliation for three years and expanded Telemundo portfolio to 47 markets.

3. Forward Guidance and Outlook

• Q1 2026 core advertising revenue expected to be flat compared to 2025.
• Anticipated political advertising revenue of $25 million to $30 million in Q1 2026.
• Expected modest growth in net retransmission revenue for 2026.
• Guidance for Q1 broadcasting expenses to decline by 3% year-over-year.

4. Bad News, Challenges, or Points of Concern

• Net Loss: The company reported a significant net loss of $23 million.
• Core Advertising Revenue: Finished down 3% for the full year, with automotive advertising down low single digits.
• Subscriber Trends: While the rate of decline in subscribers has slowed, overall declines in traditional MVPDs persist.
• Competitive Pressures: Concerns regarding how potential NFL TV rights negotiations may impact local affiliates and overall advertising economics.

5. Notable Q&A Insights

• Management expressed optimism about the competitive landscape, particularly regarding potential consolidation in the industry, specifically referencing Nexstar's activities.
• Discussions highlighted a strategic focus on sustainable growth in net retransmission revenue, with expectations for inflationary growth moving forward.
• AI initiatives are enhancing operational efficiency, likened to the productivity boost of employing numerous interns, but quantifying cost savings remains challenging.
• Management acknowledged the challenges posed by political advertising's impact on core revenue and the need for careful navigation through the upcoming political cycle.

Overall, Gray Media, Inc. demonstrated resilience in its financial performance while outlining strategic initiatives aimed at enhancing growth and operational efficiency, despite facing challenges in subscriber trends and competitive pressures.