Summary of Gray Media, Inc. Q1 2026 Earnings Call

1Key Financial Results and Metrics

Total Revenue: $768 million, at the high end of guidance.

Adjusted EBITDA: $154 million.

Net Loss: $330,000 attributable to common stockholders.

Total Operating Expenses: $622 million, down $7 million year-over-year.

Political Advertising Revenue: $30 million, exceeding guidance and up from $26 million in the previous midterm cycle.

Core Advertising Revenue: Approximately flat year-over-year, with a slight 2% increase due to the Winter Olympics.

Net Retransmission Revenue: Down $4 million year-over-year, impacted by a distribution dispute with DISH.

2Strategic Updates and Business Highlights

Resolved a significant distribution dispute with DISH, marking the first extended blackout in the company's history, leading to a new multi-year agreement.

Successfully negotiated retransmission consent renewals with three major MVPDs, covering 39% of the traditional MVPD footprint.

Acquired WBBJ in Jackson, TN, and completed acquisitions of TV stations in 10 markets from Allen Media Group and three markets from Block Communications.

Anticipated future acquisitions from E.W. Scripps and Sagamore Hill.

Expansion in sports programming, including partnerships with Major League Baseball and the Atlanta Braves.

Positive developments at Assembly Studios, including CBS renewing a daytime soap for two additional seasons and hosting Tennis Channel matches.

3Forward Guidance and Outlook

Q2 2026 Core Advertising Revenue: Expected to decline mid-single digits compared to Q2 2025.

Political Revenue for Q2: Anticipated to be between $60 million and $70 million.

Net Retransmission Revenue: Expected to show low single-digit growth for the full year, despite the impact of the recent blackout.

CapEx Guidance: Maintaining a $140 million estimate for 2026, back-end weighted.

4Challenges and Points of Concern

Softness in Core Advertising: Economic uncertainty, particularly due to the situation in the Middle East and volatility in oil prices, is causing advertisers to delay commitments.

Consumer-Focused Categories: Weakness noted in consumer goods and discount department stores.

Corporate Expenses: Higher than expected due to legal costs associated with M&A regulatory approvals.

Net Retransmission Revenue Decline: The recent blackout negatively impacted revenue visibility.

5Notable Q&A Insights

Management expressed optimism regarding regulatory processes, noting that the FCC and DOJ appear to have a better understanding of the broadcasting industry, which may facilitate future M&A activities.

Discussion on retransmission negotiations highlighted unprecedented demands from distributors, but management does not expect similar situations to arise in the future.

Insights into political advertising indicated a more engaged electorate, with expectations for strong revenue due to competitive races, despite previous cycles showing pulled-forward spending.

AI implementation is enhancing operational efficiency, allowing staff to focus more on content creation and client relationships. Overall, Gray Media reported solid financial results for Q1 2026, with strategic acquisitions and a strong political advertising outlook, though facing challenges in core advertising and retransmission revenue.