Gray Media, Inc. Q1 FY2025 earnings call

• Revenue: Total revenue $782M, down 5% y-o-y but 1% above guidance; net loss $9M vs net income $88M in Q1 2024; adjusted EBITDA $160M, down 19% y-o-y.
• Balance Sheet: Reduced outstanding indebtedness by $17M, finished Q1 with lower leverage ratio; extended and increased accounts receivable securitization facility and revolver.
• Local Content: Enhanced local content offerings, entered new sports rights agreements, 80% of markets carry local sports.
• Political Ad Revenue: Q1 2025 political ad revenue $13M vs guidance $2M-$4M.
• Assembly Studios: New CBS soap opera 'Beyond the Gates' had strong ratings, hosting high-profile productions, expect more announcements in 2025.
• Advertising: Core ad revenue down 8% y-o-y, but digital up double digits, new local direct business grew slightly.

Total revenue in Q1 2025 was $782 million, a 5% decrease from Q1 2024 but 1% above the high end of guidance. Net loss was $9 million in Q1 2025 compared to net income of $88 million in Q1 2024. Adjusted EBITDA was $160 million in Q1 2025, a 19% decrease from Q1 2024. Political ad revenue in Q1 2025 was well above expectations, finishing at $13 million vs. guidance of $2M-$4M. Sports efforts saw 80% of the footprint (90 stations) carrying local sports.

• Second quarter core ad revenue guided to be down mid-single digits.
• Q2 guide: expenses remain below inflationary levels.
• Political ad revenue seeing early buys for races 1-18 months out.
• NCAA Final Four and Championship Game on CBS provided ~$5M benefit in early April.

• Uncertainty from trade and tariffs impacting advertiser confidence.
• Difficulty in providing guidance due to current economic conditions.
• Regulatory environment and its impact on deleveraging and potential M&A.

Q: Dan Kurnos asked about deregulation and creative opportunities for M&A.

A: Kevin Latek and Hilton Howell discussed potential swaps, duopolies, and need for regulatory changes.

Q: Aaron Watts asked about industry consolidation margin lift and ad buying hesitancy.

A: Kevin Latek and Pat LaPlatney talked about varying margin improvements by deal, and ad buying hesitancy with some categories showing strength.

Q: Patrick Sholl asked about political ad cycle and affiliate negotiations.

A: Hilton Howell and Kevin Latek discussed political ad buys vs midterms and ongoing affiliate negotiations.

Q: Craig Huber asked about Assembly Studios return on investment.

A: Hilton Howell and Jeffrey Gignac talked about occupancy, contributions, and capital neutrality.

Q: Alan Gould asked about MVPD negotiation impact on re-trans revenue and Assembly revenue guide.

A: Kevin Latek and Jeffrey Gignac discussed MVPD impact and Assembly revenue projection.

Q: Steven Cahall asked about strategic opportunities and debt repurchases.

A: Hilton Howell and Jeffrey Gignac talked about strategic transactions and debt repurchase plans.

Q: David Hamburger asked about cost-cutting realization and further cost reduction.

A: Jeffrey Gignac discussed cost-cutting implementation and ongoing evaluation of further cost reductions.