Gray Media Q1 Earnings Call Highlights

Key Points

• Gray Media posted first-quarter revenue of $768 million, hitting the high end of guidance, with core advertising and political advertising both outperforming expectations. The company also reported adjusted EBITDA of $154 million and a net loss attributable to common stockholders of $33 million.
• Management said second-quarter core advertising is softening, though digital revenue is still growing in the high teens and political advertising is expected to remain strong at $60 million to $70 million. Gray also kept a cautious outlook for core advertising, guiding for a mid-single-digit decline year over year in Q2.
• Gray resolved its long-running Dish retransmission dispute and said it has no further retransmission negotiations for the rest of 2026. The company also highlighted an active M&A pipeline, more than $1 billion in liquidity, and expectations that political spending in the 2026 midterms could be “extraordinarily strong.”

Gray Media NYSE: GTN reported first-quarter 2026 revenue at the high end of its guidance range, helped by stronger-than-expected core advertising and political advertising revenue that also landed at the top of the company’s outlook.

Executive Chairman and CEO Hilton Howell said total revenue for the quarter was $768 million, while operating expenses before depreciation, amortization, impairment, and gains or losses on asset disposals were $622 million, down $7 million from the comparable period last year. Broadcasting expenses declined $22 million from the first quarter of 2025, according to Howell.

The company reported a net loss attributable to common stockholders of $33 million and adjusted EBITDA of $154 million for the quarter. Political advertising revenue was $30 million, compared with $26 million in the first quarter of 2022, the last comparable midterm cycle.

Advertising Results Mixed as Core Softens in Second Quarter

President and Co-CEO Pat LaPlatney said first-quarter core advertising revenue finished up 2% from the prior year, outperforming the company’s initial guidance for approximately flat results. He attributed part of the strength to the Winter Olympics.

LaPlatney said the company is seeing softer core advertising trends in the second quarter, citing uncertainty tied to the situation in the Middle East and oil price volatility, which he said has caused some advertisers to delay commitments. He also noted that the NCAA Final Four rotated away from CBS this year, after Gray earned $5 million of revenue in April 2025 as the largest CBS affiliate group.

Among advertising categories, LaPlatney said gaming remained strong into the second quarter. Legal, insurance and financial services also performed well, while automotive was down only slightly from the prior-year quarter. Consumer goods and discount and department stores were weaker.

Digital revenue continued to grow, increasing in the high teens from the first quarter of 2025. LaPlatney said new local direct business growth accelerated to 15% over the same period.

Gray guided for second-quarter core advertising revenue to decline by mid-single digits from the second quarter of 2025. Political advertising revenue in the second quarter is expected to be between $60 million and $70 million.

Retransmission Dispute Resolved; No Further 2026 Renewals

Howell said Gray and Dish resolved what he described as the first extended distribution blackout in the company’s history. He said the negotiation was difficult for both sides and that Gray regretted the impact on local viewers and advertisers. The company reached a new multi-year agreement that Howell said was consistent with internal expectations.

Since the start of the year, Gray has renewed retransmission consent agreements with three of its largest traditional multichannel video programming distributors, representing about 39% of its traditional MVPD footprint, Howell said. The company also expanded agreements with two virtual MVPDs related to independent stations carrying professional sports. Howell said Gray has no further retransmission negotiations for the rest of 2026.

Chief Financial Officer Jeff Gignac said net retransmission revenue declined by $4 million in the first quarter from a year earlier, and that the recently resolved distribution dispute had not been anticipated when the company issued its first-quarter guidance. He said the company expects 2026 net retransmission revenue to be in “the same zip code” as the first quarter, implying low-single-digit growth for the full year before the impact of certain acquisitions.

During the question-and-answer portion of the call, Gignac said the outlook reflected better subscriber trends and Gray achieving its objectives in contract renewals. Chief Legal and Development Officer Kevin Latek declined to discuss specific contract terms but described one demand in the Dish dispute as “incredibly unprecedented” and said he viewed it as a one-off.

Political Advertising Outlook Remains Strong

Management expressed optimism about the 2026 midterm political advertising cycle. LaPlatney said Gray saw strong first-quarter political spending in Texas, Maine, Virginia, Georgia and Michigan.

Latek said Gray has exposure to all but one of the competitive governor and Senate races this year. He said the current cycle appears different from 2022, when large amounts of spending were pulled forward into primaries. This year, he said, more spending appears likely to be deployed toward general elections.

Howell said Gray is “exceptionally well-positioned” based on its markets and station positions, and described the political cycle as likely to be “extraordinarily strong,” while cautioning that the company would not forecast specific full-year political revenue figures beyond its guidance.

M&A Activity and Balance Sheet Updates

Howell highlighted several recent and pending transactions. In the first quarter, Gray acquired WBBJ in Jackson, Tennessee, from Bahakel. The company also recently completed the acquisition of television stations in 10 markets from Allen Media Group and closed the acquisition of stations in three markets from Block Communications. Howell said Gray expects to close remaining transactions with E.W. Scripps and SagamoreHill in the next few weeks.

Gignac said Gray ended the first quarter with more than $1 billion in liquidity. As of March 31, the company’s leverage metrics were 2.56 times consolidated first-lien net leverage, 3.79 times consolidated secured net leverage and 5.94 times consolidated total net leverage, using calculations under its amended senior credit agreement.

He said Gray amended its senior credit agreement on March 31 to align it with covenants under its secured notes and incorporate current market standards. The company then repaid the $10 million balance on its Term Loan F, which had been scheduled to mature in 2029.

Gignac said refinancing to reduce interest expense could further improve cash flow during 2026. First-quarter capital expenditures were $19 million, compared with $15 million in the prior-year period, and the company maintained its $140 million companywide capital expenditure estimate for 2026. Gray lowered its full-year tax guidance by $25 million to a range of $90 million to $110 million.

Sports, Digital Platforms and Assembly Studios

Gray executives also discussed sports programming and studio operations. LaPlatney said 19 Major League Baseball teams will play across Gray’s 16 broadcast sports networks this year, along with 13 NBA teams, eight NHL teams, six WNBA teams and various NCAA and Minor League Baseball teams. He also said Raycom Sports has partnered with the Atlanta Braves as the live production team for BravesVision.

LaPlatney said Gray’s digital team completed the transition of all company digital apps and websites to the Quickplay platform, which he said provides a foundation for continued digital audience and advertising growth.

At Assembly Studios, Howell said CBS renewed the daytime soap “Beyond the Gates” for two additional seasons, with the first two seasons filmed at Assembly. He also said INTENNSE Tennis will host all 52 matches of its 2026 season in a 30,000-square-foot soundstage at Assembly Studios.

Looking ahead, Howell said the FIFA World Cup should benefit Gray through its 33 Fox channels and 47 Telemundo affiliates. He said Gray expects the event to be particularly strong for its Spanish-language Telemundo portfolio, while also benefiting its Fox stations.

About Gray Media NYSE: GTN

Gray Media NYSE: GTN is a U.S.-based broadcasting and digital media company that owns and operates a portfolio of local television stations and associated digital platforms. The company's core business centers on delivering local news, sports and entertainment programming through its network-affiliated broadcast outlets. In addition to traditional over-the-air distribution, Gray Media supports multi-platform video streaming and on-demand services for audiences across its markets.

Gray Media's television stations carry network programming from major national broadcasters, including ABC, CBS, NBC, Fox and The CW, and often feature locally produced news and public affairs content.

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