Summary of Saga Communications Q2 2026 Earnings Call

1Key Financial Results and Metrics

Net Revenue: Decreased by $1.8 million (6.5%) to $26.4 million compared to $28.2 million in Q2 2025. For the first half of 2026, revenue decreased by $3.2 million (6%) to $49.3 million.

Station Operating Income: Reported at $3 million for Q2, with overall operating income at $623,000.

Station Operating Expenses: Increased by $1.2 million (5.4%) in Q2, or 3.9% excluding noncash rent expenses from a tower sale.

Political Revenue: Significant growth with $450,000 in Q2 compared to $50,000 in Q2 2025, and a total of $1.1 million in gross political revenue sold for the remainder of the year.

Cash Position: $27.8 million in cash and short-term investments as of June 30, 2026, down from $22.9 million by August 10, 2026, primarily due to the repayment of a $5 million revolving credit agreement.

2Strategic Updates and Business Highlights

Digital Transformation: Continued investment in digital initiatives, hiring 9 sales managers and digital campaign managers to enhance productivity and revenue generation.

Partnerships: Collaboration with Borrell Associates for market insights and a joint sales partnership with the University of Florida to expand broadcast opportunities.

Community Engagement: Saga stations raised nearly $4 million for local communities and received multiple industry awards, highlighting their commitment to community involvement.

3Forward Guidance and Outlook

Revenue Trends: Revenue pacing for Q3 is down mid-single digits, with digital revenue up mid- to high single digits. Expectations for increased political revenue as elections approach.

Expense Projections: Anticipated station operating expenses to increase by 1.5% to 2.5% for the year due to ongoing digital transformation costs.

Capital Expenditures: Expected to be between $3 million to $3.5 million for 2026.

4Bad News, Challenges, or Points of Concern

Declining Traditional Revenue: Local revenue down 11% year-to-date, national revenue down 19.5%, and nontraditional revenue down 12.9%. This reflects broader industry challenges in monetizing traditional advertising.

Operational Challenges: The company is facing headwinds in traditional advertising verticals, which are experiencing double-digit declines.

Cash Flow Management: The decision to terminate the existing credit agreement may limit flexibility in managing cash for future investments.

5Notable Q&A Insights

Political Revenue Outlook: Management expressed optimism about potential increases in political advertising revenue as elections approach, with many prospective dollars yet to be booked.

Digital Strategy: Questions regarding the adequacy of digital offerings were addressed, with management indicating readiness to adapt and expand services based on client needs and market trends. Overall, while Saga Communications is navigating significant challenges in traditional revenue streams, it is actively investing in digital transformation and community engagement, positioning itself for potential recovery and growth in the evolving media landscape.