Core Insights - Gray Media's Net Retransmission Revenue returned to growth in Q4 2025, indicating progress in adapting to changing subscriber trends [1][6] - The company reported total revenue of $792 million for Q4 2025, exceeding guidance, with operating expenses also below expectations [3][4] - Political advertising contributed $12 million in revenue during the quarter, surpassing expectations [2][9] Financial Performance - Total operating expenses before depreciation and amortization were $618 million, which was $5 million below the low end of guidance [3] - Adjusted EBITDA for the quarter was $179 million, while the company reported a net loss of $23 million attributable to common stockholders [2][6] - For the full year 2025, Net Retransmission Revenue was essentially flat at $547 million compared to $550 million in 2024 [7][8] Advertising Trends - Core advertising revenue increased by 3% year over year in Q4 2025, slightly above guidance, with notable growth in financial, health, and home improvement sectors [9][10] - Digital revenue grew in low double digits during Q4, while local direct business rose in low single digits [10][11] - Political advertising guidance for Q1 2026 is set at $25 million to $30 million, compared to $26 million in Q1 2022 [13] Balance Sheet and Leverage - Gray completed a $250 million add-on to its 9.625% Second Lien Notes and called $125 million of First Lien Notes, ending the quarter with over $1.1 billion in liquidity [5][14] - The company aims to reduce leverage back towards 4x, with current leverage metrics reported as 2.43x first lien, 3.65x secured, and 5.8x total [18][15] Strategic Initiatives - Gray is focusing on operational initiatives, including new local and regional sports broadcasts, and has earned 10 national Edward R. Murrow Awards [17] - The company renewed its NBC affiliation agreement for three additional years, covering 54 markets, and expanded its Telemundo portfolio to 47 markets [19] - Gray completed the acquisition of WBBJ-TV for $25 million and anticipates further transactions pending regulatory approvals [20]

Financial Data and Key Metrics Changes - In Q2, users, revenue, and profitability each improved year over year, with revenue growth driven by momentum in the self-serve channel [16][22] - Q2 revenue was $65 million, up 3% year over year, while self-serve revenue grew 27% year over year and accounted for nearly 60% of total revenue [22][24] - Q2 GAAP net loss was $15 million, representing a negative 24% margin, while adjusted EBITDA loss was $2 million, reflecting a six percentage point year over year improvement [26][28] Business Line Data and Key Metrics Changes - The self-serve channel has become a key contributor to growth, improving advertiser performance, revenue yields, and advertiser retention [16][22] - The new product features, including local news, real-time alerts, and the FAVES AI assistant, aim to increase daily utility for users and create richer surfaces for advertisers [11][12][14] Market Data and Key Metrics Changes - Local news now accounts for roughly 5% of overall feed content, reaching 77% of U.S. cities, with over half of users engaging with this content [8][47] - The alert feature is expected to grow as real-time events occur, enhancing user engagement during critical situations [48][50] Company Strategy and Development Direction - The company is undergoing a transformation focused on product excellence, operational discipline, and community engagement, aiming to become the essential neighborhood network [5][18] - A restructuring plan was announced to improve focus and efficiency, including a workforce reduction to reset the cost structure and aim for adjusted EBITDA breakeven in 2026 [18][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transformation strategy, emphasizing the importance of user experience and the potential for long-term value creation [64][65] - The company expects modest year-over-year revenue growth for the full year 2025, with a path to quarterly adjusted EBITDA breakeven in Q4 [29][30] Other Important Information - The company ended the quarter with $413 million in cash and no debt, indicating a strong balance sheet [27] - A leadership change was announced, with Craig Lisowski appointed as President of Products and Matt Anderson stepping down as CFO [19][20] Q&A Session Summary Question: Can you quantify the changes made to ad loads and the strategy for turning them back on? - Management indicated that the focus is on optimizing user experience first rather than increasing ad load, with excitement about experimenting with new ad formats [35][36] Question: What feedback have you received from advertisers regarding the new platform? - Management noted that CMOs expressed a desire for a better user experience, which aligns with the company's focus, and they plan to work closely with advertisers to define new ad formats [40][42] Question: What are the evolving use cases for the Nextdoor app and which surfaces are users spending the most time on? - Management highlighted that local news and alerts are gaining traction, with significant user engagement, while alerts will grow organically based on real-time events [47][48] Question: How are budget conversations with large advertisers evolving? - Management reported meaningful quarter-over-quarter improvements and expects ongoing gradual benefits from programmatic partnerships and click optimization for larger advertisers [52][54]

Core Points - Gray Media and Graham Media Group's joint fundraiser, Together for Texas, has raised over $1,104,000 for communities affected by flooding in Central Texas and the Hill Country [1] - The campaign was launched in response to the flooding on July 4, with Gray stations in 113 markets and Graham Media Group's KSAT and KPRC encouraging donations for The Salvation Army's relief efforts [1][2] - Donations are being used to provide essential supplies such as food, water, and emotional support, as well as recovery needs like clean-up supplies and assistance for small businesses [3][4] Company Overview - Gray Media, Inc. is the largest owner of local television stations in the U.S., reaching approximately 37% of U.S. television households across 113 markets [6] - The company operates 78 markets with top-rated television stations and has the largest Telemundo Affiliate group with 44 markets [6] - Graham Media Group consists of seven local media outlets and offers a range of digital media tools and advertising solutions, operating in multiple states [7]