Core Points - The Memphis Grizzlies, Gray Media, and FanDuel Sports Network are partnering to simulcast seven Grizzlies games this season, expanding access for fans across multiple states [1][4] - Gray Media will broadcast these games free over-the-air in Tennessee's largest media markets, including Memphis, Nashville, and Knoxville, with plans to extend to additional markets [1][3] - The broadcast schedule includes specific dates and times for each game, with local over-the-air simulcast distribution as part of the NBA's agreement with Main Street Sports Group [6] Company Overview - Gray Media, Inc. is the largest owner of top-rated local television stations in the U.S., reaching approximately 37% of U.S. television households [5] - The company operates in 113 television markets and includes a significant number of top-rated stations, as well as a full-service digital agency [5]

Core Insights - Gray Media, Inc. reported better-than-expected results for Q3, with losses of 24 cents per share, surpassing the analyst consensus estimate of 34 cents per share [1] - The company achieved quarterly sales of $749 million, exceeding the analyst consensus estimate of $745.047 million [1] - For FY2025, Gray Media projects sales between $3.070 billion and $3.085 billion, which is below market estimates of $3.109 billion [1] Stock Performance - Following the earnings announcement, Gray Media shares increased by 1.6%, trading at $4.8950 [2] Analyst Ratings and Price Targets - Wells Fargo analyst Steven Cahall maintained an Equal-Weight rating on Gray Media and raised the price target from $5 to $5.5 [4] - Benchmark analyst Daniel L. Kurnos maintained a Buy rating and increased the price target from $9 to $10 [4]

Core Insights - Gray Television met Wall Street's revenue expectations for Q3 CY2025, reporting sales of $749 million, a 21.2% year-on-year decline [1][6] - The company's Q4 CY2025 revenue guidance of $774.5 million fell 4.8% short of analysts' estimates [1][6] - GAAP loss per share was $0.24, exceeding analysts' consensus estimates by 50% [1][6] Financial Performance - Revenue: $749 million vs analyst estimates of $746.1 million, reflecting a 21.2% year-on-year decline [6] - EPS (GAAP): -$0.24 vs analyst estimates of -$0.48, a 50% beat [6] - Adjusted EBITDA: $157 million vs analyst estimates of $138.8 million, representing a 21% margin and a 13.1% beat [6] - Revenue Guidance for Q4 CY2025: $774.5 million at the midpoint, below analyst estimates of $813.3 million [6] - Operating Margin: 13.6%, down from 26.3% in the same quarter last year [6] - Market Capitalization: $496.3 million [6] Management Insights - Management credited disciplined expense management and operational efficiency for outperforming consensus expectations, with operating expenses $17 million below guidance [3][5] - The company experienced higher-than-expected political ad revenue and early signs of improvement in core advertising categories [3] - Investments in local content, new sports partnerships, and digital initiatives are expected to support future growth [4][5] Strategic Initiatives - Gray Television is accelerating M&A efforts to acquire top-ranked local news stations in six new markets, aiming to create 11 new Big Four network duopolies [7] - Continued double-digit growth in legal advertising and high single-digit growth in financial services were noted, helping to counteract weakness in automotive advertising [7] - The Assembly Atlanta studio investment, totaling around $650 million, is expected to become a significant cash flow contributor over the next 12 to 24 months [8]

Core Insights - Gray Television's shares increased by 6.8% after reporting third-quarter financial results that exceeded profitability expectations despite a decline in sales [1][2] - The company reported revenue of $749 million, aligning with Wall Street expectations, but experienced a GAAP loss of $0.24 per share, which was better than the anticipated loss of $0.48 per share [2] - Adjusted EBITDA was 16.7% higher than estimates, indicating strong cash flow performance [2] - Sales fell by 21.2% year-over-year, and the revenue guidance for the next quarter was nearly 5% below analysts' estimates, raising concerns [2] Market Reaction - Shares closed at $4.82, reflecting a 4.2% increase from the previous close, indicating investor focus on profitability despite sales decline [3] - The stock has shown extreme volatility, with 46 moves greater than 5% in the past year, suggesting that the market views the recent news as significant but not fundamentally altering its perception of the business [4] Broader Market Context - The tech-heavy Nasdaq index fell approximately 1.4%, indicating a wave of caution in the market, particularly affecting high-growth technology companies [5] - Leadership at Goldman Sachs and Morgan Stanley suggested a potential correction in equity markets over the next couple of years, viewing this cooling-off period as a healthy aspect of a long-term bull market [6]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $749 million, at the high end of guidance, while total operating expenses were $592 million, $17 million below the low end of guidance [5][6] - Adjusted EBITDA was $162 million for the quarter, with a net loss attributable to common stockholders of $23 million [5][6] - Political advertising revenue reached $8 million, exceeding expectations for an off-cycle year [6] Business Line Data and Key Metrics Changes - Core advertising was up about 1% over 2024, with automotive down high single digits, while legal services grew at double-digit percentages [10][11] - Financial services also showed growth, up high single digits, and digital continued its healthy growth [11] - The new local direct business was up low single digits compared to the same period in 2024 [11] Market Data and Key Metrics Changes - October 2025 finished up low double digits, with November and December pacing slightly up [12] - The fourth quarter guidance for core ad revenue is expected to be up low single digits due to less challenging comparisons from the previous year [11][12] Company Strategy and Development Direction - The company plans to enter six new markets by acquiring top-ranked local news stations and create 11 new Big Four full duopolies [6][8] - A partnership with Google Cloud is set to revolutionize viewer content connection, with a rollout planned for January next year [8] - The company is focused on enhancing local content offerings and has renewed partnerships with sports teams [7][8] Management's Comments on Operating Environment and Future Outlook - Management noted that advertisers remain cautious due to the macro environment but core activity strengthened more than projected [10] - There is optimism for 2026, with early Q1 numbers showing encouraging trends and expectations for robust political spending [24][51] - The company is committed to maintaining a strong balance sheet and reducing debt while exploring strategic M&A opportunities [40][45] Other Important Information - The Board of Directors declared a quarterly common dividend of $0.08 per share, consistent with recent quarters [7] - The company has made significant progress in strengthening its balance sheet, with over $900 million in liquidity [13][15] Q&A Session Summary Question: What is the expected run rate for net retransmission revenue heading into 2026? - Management indicated that net retransmission revenue has flattened out, and while it's too early to provide guidance for the full year, there is hope for a positive turn [20][21] Question: How does the company view core advertising trends for next year? - Management expressed optimism for 2026, citing encouraging early Q1 numbers and the expected political spending cycle [24] Question: What has been the advertiser reception to the increased news content in Atlanta? - The company reported strong reception to the increased local news and sports content, with gains in viewership and quality recognized through awards [26][28] Question: What is the total investment in Assembly Atlanta and expected ROI? - The net investment in Assembly Atlanta is around $650 million, with expectations for significant cash flow generation within 12 to 24 months [32][34] Question: What is the company's strategy regarding M&A? - The company remains focused on announced transactions and sees opportunities for smaller acquisitions that improve the portfolio without risking the balance sheet [40][41][45] Question: What is the impact of the YouTube TV carriage dispute? - Management expressed frustration over the situation but hopes for a resolution that benefits both companies and consumers [56][58]

Revenue Performance - Total revenue for the nine months ended September 30, 2025, was $2.3 billion, a decrease of $297 million or 11% compared to $2.6 billion in the same period of 2024[91]. - Total revenue decreased by $296 million, or 11%, in the 2025 nine-month period compared to the 2024 nine-month period[117]. - Core advertising revenue decreased by $10 million or 3% in the three months ended September 30, 2025, primarily due to a $16 million revenue drop from the 2024 Olympic Games broadcasts[109]. - Core advertising revenue decreased by $50 million, or 5%, primarily due to macro-economic softness, with political advertising revenue decreasing by $217 million, or 88%[117]. - Political advertising revenue saw a significant decline of $165 million, or 95%, in the three months ended September 30, 2025, consistent with it being an "off-year" in the election cycle[109]. Expenses - Broadcasting expenses decreased by $29 million, or 5%, to $542 million in the three months ended September 30, 2025[106]. - Broadcasting expenses decreased by $37 million, or 2%, to $1.7 billion in the 2025 nine-month period[118]. - Corporate and administrative expenses increased by $4 million, or 17%, to $28 million, primarily due to increased professional services related to pending business combination transactions[108]. - Corporate and administrative expenses increased by $5 million to $85 million, with professional services costs rising due to pending business combination transactions[119]. - The company continues to monitor and seek opportunities to reduce operating expenses, which are largely fixed in nature[95]. Cash Flow and Debt - Net cash provided by operating activities was $177 million in the 2025 nine-month period, down from $383 million in the 2024 nine-month period[128]. - Net cash used in investing activities was $34 million in the 2025 nine-month period, compared to net cash provided of $10 million in the 2024 nine-month period[129]. - Interest expense decreased by $10 million to $120 million in the three months ended September 30, 2025, due to a reduction in outstanding debt and lower interest rates[114]. - Interest expense decreased by $8 million, or 2%, to $355 million, with an average outstanding total long-term debt balance of $5.7 billion[125]. - The company anticipates making approximately $453 million in debt interest payments over the twelve months following September 30, 2025[131]. Tax and Income - The effective income tax benefit rate for the three months ended September 30, 2025, was 64%, compared to an income tax expense rate of 25% in the same period of 2024[116]. - The company recognized an income tax benefit of $12 million in the 2025 nine-month period, compared to an income tax expense of $70 million in the 2024 nine-month period[127]. - As of September 30, 2025, the company reported a net income of $290 million[139]. Leverage and Debt Structure - The First Lien Leverage Ratio was 2.72, below the maximum permitted incurrence of 3.5 to 1.00[139]. - The Secured Leverage Ratio was 3.66, under the maximum permitted incurrence of 5.50 to 1.00[139]. - Total outstanding principal secured by a first lien amounted to $2.774 billion[139]. - As of September 30, 2025, long-term debt included $1.25 billion in 2029 Notes and $1.2 billion in 2031 Notes[141]. - The company issued $900 million in 2032 Notes (2L) and $775 million in 2033 Notes (1L) to refinance existing debt and pay transaction expenses[98][100]. Acquisitions and Capital Expenditures - The company entered into agreements for television station acquisitions and divestitures, expecting to enter six new markets[144]. - The total purchase price for acquisitions included $2 million for SGH, $80 million for BCI, and $171 million for AMG[146]. - Capital expenditures for 2025 are expected to be in the range of $37 million to $42 million, including reimbursements of approximately $25 million[146]. - The company has approximately $232 million remaining under its debt repurchase authorization[142]. Impairment and Other Charges - The company recorded a non-cash impairment charge of $28 million related to changes in network affiliation at one station during the 2025 nine-month period[121]. - The Gray Pension Plan purchased a group annuity contract for $18 million and paid out $15 million in lump sum payments[148].

Financial Performance & Guidance - Gray Media's 3Q25 total revenue reached $749 million, hitting the high-end of guidance[12] - Core advertising revenue for 3Q25 also reached the high-end of guidance at $346 million[12] - Retransmission revenue for 3Q25 exceeded guidance at $355 million[12] - Corporate expense for 3Q25 was below the low-end of guidance at $22 million[12] - Broadcasting expense for 3Q25 was below the low-end of guidance at $542 million[12] - Production companies expense for 3Q25 was below the low-end of guidance at $28 million[12] - For the nine months ending September 30, 2025, total revenue was $2303 million, compared to $2599 million for the same period in 2024[15] - Adjusted EBITDA for the nine months ending September 30, 2025, was $491 million, compared to $760 million for the same period in 2024[15] Debt & Leverage - As of September 30, 2025, Gray Media's secured leverage ratio was 366x[16] - As of September 30, 2025, the first lien leverage ratio was 272x[16] - As of September 30, 2025, the leverage ratio was 577x[16]

Group 1: Earnings Performance - Gray Media reported a quarterly loss of $0.24 per share, better than the Zacks Consensus Estimate of a loss of $0.41, and compared to earnings of $0.86 per share a year ago, indicating an earnings surprise of +41.46% [1] - The company posted revenues of $749 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.27%, but down from $950 million in the same quarter last year [2] - Over the last four quarters, Gray Media has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - Gray Media shares have increased by approximately 46% since the beginning of the year, outperforming the S&P 500's gain of 14.3% [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at -$0.05 on $810 million in revenues for the coming quarter and -$1.40 on $3.11 billion in revenues for the current fiscal year [4][7] - The current Zacks Rank for Gray Media is 3 (Hold), indicating expected performance in line with the market in the near future [6] Group 3: Industry Context - The Broadcast Radio and Television industry, to which Gray Media belongs, is currently in the top 38% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Revenue Performance - Total revenue for Q3 2025 was $749 million, at the high end of the guidance range of $750 million[6]. - Core advertising revenue reached $355 million, reflecting strong performance despite the prior year's $16 million from the Summer Olympics[6]. - Retransmission consent revenue was $346 million, exceeding guidance by $1 million, with a decline attributed to WANF's transition to an independent station[6]. - Political advertising revenue was $8 million, exceeding guidance by $1 million, reflecting the off-year in the political advertising cycle[6]. - Total revenue for the three months ended September 30, 2025, was $749 million, a decrease of 21% compared to $950 million in the same period of 2024[15]. - Core advertising revenue decreased by 3% to $355 million from $365 million year-over-year for the three months ended September 30, 2025[15]. - Political advertising revenue plummeted by 95% to $8 million from $173 million in the same quarter of 2024[15]. - Total broadcasting revenue for the nine months ended September 30, 2025, was $2,233 million, a decrease of 12% from $2,531 million in the same period of 2024[18]. Financial Results - Net loss attributable to common stockholders was $23 million, compared to a net income of $83 million in Q3 2024, primarily due to decreased political advertising[6]. - Adjusted EBITDA for Q3 2025 was $162 million[6]. - Adjusted EBITDA for the three months ended September 30, 2025, was $162 million, a decrease of 52% compared to $338 million in the same period of 2024[34]. - Net loss for the three months ended September 30, 2025, was $10 million, compared to a net income of $96 million in the same quarter of 2024, representing a 110% decline[15]. - The net loss for the nine months ended September 30, 2025, was $75 million, compared to a net income of $206 million for the same period in 2024[35]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $177 million, down from $383 million in 2024[20]. - The company's interest expense for the three months ended September 30, 2025, was $120 million, down from $130 million in the same period of 2024[34]. Debt and Financing - The company completed refinancing activities, including a $900 million issuance of Senior Secured Second Lien Notes and an amendment to increase the Revolving Credit Facility by $50 million[6][11]. - The First Lien Leverage Ratio as of September 30, 2025, was 2.72 to 1.00, with a total borrowing availability of $742 million under the Revolving Credit Facility[11]. - The First Lien Leverage Ratio as of September 30, 2025, was 2.72, below the maximum permitted incurrence of 3.50 to 1.00[37]. - Total outstanding principal secured by a first lien was $2,774 million as of September 30, 2025[37]. - The Adjusted Total Indebtedness as of September 30, 2025, was $5,511 million, with a Leverage Ratio of 5.77, which is above the maximum permitted incurrence of 7.00 to 1.00[37]. - Long-term debt as of September 30, 2025, was $5,610 million, slightly down from $5,621 million at the end of 2024[20]. - The company incurred Transaction Related Expenses amounting to $4 million for the eight quarters ended September 30, 2025[37]. Operational Activities - The company entered into agreements for television station acquisitions and divestitures, expecting to enter six new markets and create 11 new full-power "duopolies"[8][9]. - The company plans to host a conference call on November 7, 2025, to discuss its operating results for the quarter[24]. Depreciation and Expenses - Depreciation for the nine months ended September 30, 2025, was $99 million, compared to $108 million in the same period of 2024[35]. - The company reported a pension expense of $3 million for the nine months ended September 30, 2025[35]. - The company’s purchases of property and equipment for the nine months ended September 30, 2025, were $43 million, down from $64 million in the same period of 2024[35].

Core Insights - Gray Media, Inc. reported strong financial results for Q3 2025, with total revenue of $749 million, exceeding the high end of guidance [4][12] - Core advertising revenue reached $355 million, reflecting solid performance despite a comparison to the previous year's Olympic-related revenue [4][14] - The company successfully executed debt market transactions to enhance liquidity and extend debt maturities, increasing financial flexibility [4][6] Financial Performance - Total revenue for Q3 2025 was $749 million, aligning with the high end of guidance [4] - Core advertising revenue was $355 million, slightly down from $365 million in Q3 2024, but at the high end of guidance [14] - Retransmission consent revenue was $346 million, exceeding guidance by $1 million, though down from $369 million in Q3 2024 [4][14] - Political advertising revenue was $8 million, exceeding guidance by $1 million, but significantly lower than $173 million in Q3 2024 [4][14] - Net loss attributable to common stockholders was $23 million, compared to a net income of $83 million in Q3 2024, primarily due to decreased political advertising [4][14] Operational Highlights - Broadcast operating expenses were $542 million, significantly below guidance, reflecting ongoing cost containment efforts [4][14] - The transition of WANF in Atlanta to an independent station is expected to enhance local news and sports programming [4][14] - The company is pursuing acquisitions and divestitures to expand its market presence, with agreements involving several television stations [6][7] Debt and Liquidity Management - The company amended its Senior Credit Agreement to increase the Revolving Credit Facility by $50 million, extending the term to December 2028 [4][9] - Gray Media issued $900 million in Senior Secured Second Lien Notes and $775 million in Senior Secured First Lien Notes to refinance existing debt [4][9] - As of September 30, 2025, the company had $742 million available under its Revolving Credit Facility [9][18] Future Guidance - For Q4 2025, the company anticipates a decrease in retransmission consent revenue compared to the prior year, primarily due to WANF's transition [12] - Guidance for core advertising revenue is projected between $380 million and $390 million for Q4 2025 [12] - Total revenue guidance for the year ending December 31, 2025, is set between $3,070 million and $3,085 million [12]