Sinclair Broadcast Group(SBGI) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights This section provides an overview of Q2 2025 performance, strategic initiatives, and key operational achievements, including leadership changes and digital media expansion CEO Commentary Sinclair's CEO reported solid Q2 2025 results, with Adjusted EBITDA exceeding guidance, alongside strategic moves like a new CFO appointment, Compulse rebranding, and expansion of multicast networks and audio strategy - Adjusted EBITDA exceeded the midpoint of Q2 guidance, indicating strong operational performance in a challenging macro-economic environment[4] - Narinder Sahai was appointed as the new Chief Financial Officer[4] - Compulse was successfully rebranded as Digital Remedy, a 'Rule of 40' software company specializing in omnichannel media activation and Connected TV[4] - Multicast networks delivered record-breaking growth, and the audio strategy expanded with five new AMP sports podcasts launched[4] Recent Company Developments Recent developments include strategic personnel changes, growth in core advertising, debt repurchases, significant acquisitions and rebranding in digital media, expansion of content offerings, and community engagement initiatives - Core advertising revenues grew by $13 million year-over-year, aligning with expectations[6] - The Company repurchased $81 million par value of Sinclair Television Group notes due in 2027 for $77 million cash[6] - Acquired the remaining 75% of Digital Remedy in mid-March and rebranded Compulse under the Digital Remedy name in June[6] - Launched five new AMP sports podcasts, including four focused on college football and one on the WNBA[6] - Sinclair's newsrooms won 208 journalism awards year-to-date, including 25 RTDNA regional Edward R. Murrow Awards[7] - Tennis Channel secured a new six-year media rights deal with WTA Ventures, ensuring exclusive US coverage of WTA tennis through 2032[7] - Sinclair Cares raised nearly $200,000 for Texas Flood relief and partnered with the American Cancer Society in July[8] - Sinclair Ventures made approximately $11 million in minority investments and received approximately $6 million in distributions during Q2[9] - Engaged in several broadcast asset transactions, including purchasing WSJV and KXVO, and selling stations in Milwaukee, Springfield, Ottumwa, and Quincy[13] - Launched WKOF in Syracuse, NY, as an ATSC 3.0 lighthouse, marking the first TV license initiated under the NextGen Broadcast standard[13] Financial Performance - Q2 2025 This section details Sinclair's consolidated and segment financial results for Q2 and H1 2025, highlighting revenue, income, and EBITDA trends Consolidated Financial Results (Three Months Ended June 30, 2025) For the second quarter of 2025, Sinclair reported a decrease in total revenues and a significant decline in operating income and Adjusted EBITDA, leading to a net loss, while core advertising showed growth Consolidated Financial Results (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :--------- | | Total Revenues | $784 | $829 | -5% | | Media Revenues | $777 | $819 | -5% | | Total Advertising Revenues | $322 | $343 | -6% | | Core Advertising Revenues | $316 | $303 | +4% | | Distribution Revenues | $434 | $435 | -0.2% | | Operating Income | $21 | $64 | -67.2% | | Net Loss Attributable to Co. | ($64) | $17 | N/A (loss) | | Adjusted EBITDA | $103 | $158 | -35% | | Diluted EPS | ($0.91) | $0.27 | N/A (loss) | Consolidated Financial Results (Six Months Ended June 30, 2025) For the first half of 2025, Sinclair experienced a decline in total revenues, operating income, and Adjusted EBITDA, resulting in a larger net loss compared to the prior year period, with slight core advertising growth and increased distribution revenues Consolidated Financial Results (H1 2025 vs H1 2024) | Metric | H1 2025 (Millions) | H1 2024 (Millions) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :--------- | | Total Revenues | $1,560 | $1,627 | -4% | | Media Revenues | $1,547 | $1,611 | -4% | | Total Advertising Revenues | $620 | $664 | -7% | | Core Advertising Revenues | $608 | $600 | +1% | | Distribution Revenues | $885 | $871 | +1.6% | | Operating Income | $35 | $106 | -67% | | Net Loss Attributable to Co. | ($220) | $40 | N/A (loss) | | Adjusted EBITDA | $215 | $297 | -28% | | Diluted EPS | ($3.20) | $0.61 | N/A (loss) | Segment Financial Information (Three Months Ended June 30, 2025 & 2024) Segment-wise, Local Media saw a decrease in total revenues and Adjusted EBITDA in Q2 2025 compared to Q2 2024, while Tennis segment revenues slightly increased with a significant rise in Adjusted EBITDA, and the 'Other' segment experienced revenue growth but stable Adjusted EBITDA Segment Financial Performance (Q2 2025) | Metric (Millions) | Local Media | Tennis | Other | | :---------------- | :---------- | :----- | :---- | | Distribution Revenue | $380 | $54 | — | | Core Advertising Revenue | $272 | $13 | $38 | | Political Advertising Revenue | $6 | — | — | | Other Media Revenue | $21 | $1 | — | | Total Revenues | $679 | $68 | $46 | | Operating Income (Loss) | $65 | $8 | $1 | | Adjusted EBITDA | $99 | $13 | $3 | Segment Financial Performance (Q2 2024) | Metric (Millions) | Local Media | Tennis | Other | | :---------------- | :---------- | :----- | :---- | | Distribution Revenue | $384 | $51 | — | | Core Advertising Revenue | $285 | $14 | $9 | | Political Advertising Revenue | $40 | — | — | | Other Media Revenue | $41 | $2 | — | | Total Revenues | $750 | $67 | $20 | | Operating Income (Loss) | $83 | $1 | — | | Adjusted EBITDA | $163 | $7 | $3 | Financial Position & Cash Flow This section outlines Sinclair's debt, cash position, share information, and capital expenditures as of June 30, 2025 Balance Sheet and Cash Flow Highlights As of June 30, 2025, Sinclair's total debt stood at $4,106 million, with $616 million in cash and cash equivalents, having repurchased $81 million of notes and paid a quarterly cash dividend of $0.25 per share Key Financial Position & Cash Flow Data (as of June 30, 2025) | Metric | Amount (Millions) | | :-------------------------------- | :---------------- | | Total Company Debt | $4,106 | | Sinclair Television Group Notes Repurchased (par value) | $81 | | Cash Paid for Notes Repurchase | $77 | | Cash and Cash Equivalents | $616 | | SBG Cash | $224 | | Ventures Cash | $393 | | Class A Common Shares Outstanding | 45.9 million | | Class B Common Shares Outstanding | 23.8 million | | Total Common Shares Outstanding | 69.7 million | | Quarterly Cash Dividend Paid (June) | $0.25 per share | | Capital Expenditures (Q2 2025) | $17 | Outlook This section provides Sinclair's financial guidance for Q3 2025 and the full year 2025, covering revenues, expenses, and EBITDA Q3 2025 Guidance Sinclair projects total revenues for Q3 2025 to be between $752 million and $776 million, with core advertising revenue expected to be $303 million to $314 million, operating income from a loss of $6 million to a gain of $17 million, and Adjusted EBITDA from $71 million to $93 million Q3 2025 Consolidated Financial Guidance | Metric | Range (Millions) | | :-------------------------- | :---------------- | | Core Advertising Revenue | $303 to $314 | | Political Advertising Revenue | $7 to $8 | | Advertising Revenue | $310 to $322 | | Distribution Revenue | $413 to $425 | | Media Revenues | $744 to $768 | | Total Revenues | $752 to $776 | | Operating Income | ($6) to $17 | | Adjusted EBITDA | $71 to $93 | Full Year 2025 Guidance For the full year 2025, Sinclair provides consolidated guidance for various expenses and cash flow items, including capital expenditures of $82 million to $85 million and interest expense of $356 million, which includes $68 million related to comprehensive refinancing Full Year 2025 Consolidated Guidance (Selected Items) | Metric | Amount (Millions) | | :---------------------------------------------------------------- | :---------------- | | Non-media expenses | $52 | | Amortization of program costs | $72 | | Corporate general and administrative | $176 | | Stock based compensation | $54 | | Non-recurring and unusual transaction, implementation, legal, regulatory and other costs | $18 | | Interest expense (net) (includes $68M refinancing fees) | $356 | | Capital expenditures | $82 to $85 | | Distributions to noncontrolling interests | $11 | | Cash distributions from equity investments | $29 | | Net cash tax payments | $43 to $49 | Supplementary Information This section provides an overview of Sinclair, detailed financial statements, non-GAAP reconciliations, and forward-looking statement disclaimers Company Overview Sinclair, Inc. is a diversified media company and a leading provider of local news and sports, operating 178 television stations in 81 markets, with a portfolio including Tennis Channel, various multicast networks, NewsON, and AMP Media - Sinclair operates or provides services to 178 television stations in 81 markets, affiliated with all major broadcast networks[31] - Key assets include Tennis Channel, multicast networks (CHARGE, Comet, ROAR, The Nest), and NewsON, the largest streaming aggregator of local news[31] - AMP Media produces a growing portfolio of digital content and original podcasts[31] Consolidated Statements of Operations This section presents the preliminary unaudited consolidated statements of operations for Sinclair, Inc. and Subsidiaries for the three and six months ended June 30, 2025, and 2024, detailing revenues, operating expenses, other income/expense, and net income/loss - The full consolidated statements of operations are provided, detailing revenues, operating expenses, and net income/loss for both quarterly and year-to-date periods[32] Non-GAAP Reconciliation This section defines Adjusted EBITDA as a non-GAAP operating performance measure used by management and the Board, providing a reconciliation of consolidated net income to Adjusted EBITDA and segment GAAP operating income to segment Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024 - Adjusted EBITDA is defined as earnings before interest, tax, depreciation and amortization, and non-recurring and unusual transaction, implementation, legal, regulatory and other costs, as well as certain non-cash items less amortization of program costs[20][23][33] Reconciliation of Consolidated Net (Loss) Income to Adjusted EBITDA (Q2 & H1 2025 vs 2024) | Metric (Millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :---------------------------------------------------------------- | :------ | :------ | :------ | :------ | | Net (loss) income | ($62) | $19 | ($216) | $44 | | Add: Income tax (benefit) provision | ($14) | $5 | ($60) | $1 | | Add: Other (income) expense | ($3) | $2 | ($3) | ($26) | | Add: Loss (income) from equity method investments | $1 | ($78) | $7 | ($92) | | Add: Loss from other investments and impairments | $30 | $47 | $103 | $45 | | Add: Gain on extinguishment of debt/insurance proceeds | ($5) | ($1) | ($7) | ($3) | | Add: Interest expense | $82 | $76 | $226 | $152 | | Less: Interest income | ($7) | ($6) | ($15) | ($15) | | Less: Loss on asset dispositions and other, net | $9 | $2 | $17 | $2 | | Add: Amortization of intangible assets & other assets | $35 | $38 | $71 | $76 | | Add: Depreciation of property & equipment | $24 | $25 | $50 | $50 | | Add: Stock-based compensation | $15 | $10 | $36 | $38 | | Add: Non-recurring and unusual transaction, implementation, legal, regulatory and other costs | ($2) | $19 | $6 | $25 | | Adjusted EBITDA | $103 | $158 | $215 | $297 | - Reconciliations of Segment GAAP Operating Income to Segment Adjusted EBITDA are provided for Local Media, Tennis, and Other segments for Q2 2025 and Q2 2024[38][39] Forward-Looking Statements & Contacts This section includes a standard disclaimer regarding forward-looking statements, outlining various risks and uncertainties that could cause actual results to differ materially from projections, and provides contact information for investor relations and media inquiries - Forward-looking statements are subject to risks and uncertainties, including subscriber declines, debt servicing ability, execution of agreements, acquisition integration, competition, advertising fluctuations, programming costs, cybersecurity risks, regulatory changes, and litigation[40] - Investor contacts are Christopher C. King (VP, Investor Relations) and Billie-Jo McIntire (VP, Corporate Finance), reachable at (410) 568-1500[41] - Media contact is jbellucci-c@sbgtv.com[41]