Gray Media — Q2 2026 Earnings Summary

Financial Performance

• Total revenue reached $839 million in Q2 2026, a 9% increase compared to $772 million in Q2 2025.
• Core advertising revenue was $357 million, down 1% year-over-year from $361 million in Q2 2025.
• Political advertising revenue surged to $83 million in Q2 2026, compared to $9 million in Q2 2025.
• Retransmission consent revenue was $359 million, down 3% from $369 million in Q2 2025, driven by subscriber declines, a station transition to independent status, and a resolved distribution dispute.
• Net Retransmission Revenue was $150 million, up 10% from $136 million in Q2 2025.
• Broadcasting expenses were $569 million, up 1% from $563 million in Q2 2025.
• Corporate and administrative expenses were $37 million, exceeding the guidance range of $30–$35 million due to transaction-related costs.
• Net income was $14 million in Q2 2026, compared to a net loss of $56 million in Q2 2025.
• Adjusted EBITDA was $214 million in Q2 2026, a 27% increase from $169 million in Q2 2025.
• For the six months ended June 30, 2026, total revenue was $1,607 million (up 3% from $1,554 million), and Adjusted EBITDA was $368 million (up 12% from $329 million).
• Net loss for the six months ended June 30, 2026, was $6 million, compared to a net loss of $65 million in the prior year period.

Guidance and Future Outlook

• Guidance for the quarter ending September 30, 2026, forecasts total revenue between $935 million and $965 million, compared to $749 million in Q3 2025.
• Q3 2026 guidance includes political advertising revenue between $165 million and $185 million, compared to $8 million in Q3 2025.
• Q3 2026 guidance forecasts Net Retransmission Revenue between $147 million and $150 million, compared to $132 million in Q3 2025.
• Full-year 2026 estimated interest expense is $440 million, with amortization of deferred financing costs at $16 million.
• Full-year 2026 estimated preferred stock dividends are $50 million and common stock dividends are $33 million.
• Full-year 2026 capital expenditures are estimated between $120 million and $130 million.
• Full-year 2026 income tax payments, net of refunds, are estimated between $80 million and $100 million.

Business Segments and Product Lines

• The company added stations in 22 markets net of dispositions during the period, including six markets from American Spirit Media.
• The local professional sports portfolio expanded with approximately 70 televised Atlanta Hawks regular season games on WANF and the Peachtree Sports Network through the 2028-29 NBA season.
• The company received 93 Regional Edward R. Murrow Awards in 2026, up from 81 in the previous year.
• The portfolio includes 78 markets with the top-rated television station and 101 markets with the first or second highest rated station in average all-day ratings.
• Gray Digital Media operates as a full-service digital agency offering national and local clients digital marketing strategies.
• Video production properties include Raycom Sports, Tupelo Media Group, and PowerNation Studios, alongside studio facilities Assembly Atlanta and Third Rail Studios.

Market and Competitive Landscape

• Gray Media serves 117 full-power television markets, reaching approximately 37% of US television households.
• The company owns the largest Telemundo Affiliate group with 46 markets.
• Political advertising revenue is trending ahead of 2024 and 2022 year-to-date levels.
• Net Retransmission Revenue returned to year-over-year growth even excluding the 2026 acquisitions, despite a blackout that ended on May 1.

Risks and Challenges

• The pending acquisition of remaining assets from American Spirit Media and WHPM-TV is subject to regulatory approval, with no assurance of receipt.
• Retransmission consent revenue declined due to continued subscriber declines, a station transition to independent status, and a resolved dispute with a distribution partner.
• Corporate expenses exceeded guidance due to transaction-related costs associated with M&A activity.
• Forward-looking statements are subject to risks including the inability to complete acquisitions within expected timeframes or obtain necessary FCC approvals.

Management Commentary and Tone

• Executive Chairman and CEO Hilton Howell, Jr. stated that Q2 2026 results reflect the benefits of M&A activity, meeting or exceeding guidance across every metric except corporate expense.
• Management expressed particular pleasure with political advertising significantly exceeding guidance and trending ahead of previous election cycle years.
• The CEO noted progress on the balance sheet through creative transactions lowering the cost of capital and enhancing cash flow.
• The company's goal is to extend market leadership as the largest owner of top-rated local television stations while prioritizing balance sheet deleveraging.
• The net leverage ratio improved during the quarter.

Other Key Points

• Acquisitions: During Q2 2026, the company completed transactions involving station acquisitions and divestitures with Scripps, Sagamore Hill, Block Communications, and Allen Media Group. On July 1, 2026, the company acquired non-license assets of six television stations from American Spirit Media and WHPM-TV for $43 million in cash.
• Debt Activity: On June 30, 2026, the company issued $70 million in additional 7.250% Senior Secured First Lien Notes due 2033 to fund $40 million of the American Spirit Media purchase consideration and $30 million to repurchase $50 million of Series A Perpetual Preferred Stock.
• Debt Repurchases: On July 21, 2026, the company repurchased $100 million of 2029 First Lien Notes and $20 million of 2031 Senior Unsecured Notes at par.
• Debt Authorization: On August 6, 2026, the Board authorized up to $250 million of available liquidity to repurchase outstanding indebtedness through December 31, 2027.
• Leverage Metrics: As of June 30, 2026, the Consolidated First Lien Net Leverage Ratio was 2.55 to 1.00, the Consolidated Secured Net Leverage Ratio was 3.71 to 1.00, and the Consolidated Total Net Leverage Ratio was 5.73 to 1.00.
• Liquidity: As of June 30, 2026, the company held $176 million in cash, had $745 million available under its $750 million revolving credit facility, and had fully drawn its $400 million accounts receivable securitization facility.
• Preferred Stock: The company repurchased 50,000 shares of Series A Perpetual Preferred Stock with an aggregate liquidation preference of $50 million.