Gray Television(US:GTN)2025-11-07 17:00Financial 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]