Gray Media shares, which trade on the NYSE, torpedoed ahead by more than 20% in value in midday trading as investors celebrated total Q1 2025 revenue finishing above the high end of its guidance. Debt reduction and a decline in broadcast operating expenses were also highlights singled out by the broadcast TV station ownership group.
That dip in broadcasting operating expenses is the first seen since the COVID-19 slowdown of five years ago, Gray notes, as $17 million of the company’s outstanding debt was slashed during the first quarter of 2025.
“We continue to improve our local content offerings and in particular our broadcast of professional and collegiate sports, optimize our cost structure, strengthen our balance sheet and increase our financial flexibility,” Gray said. “We look forward to continuing these trends.”
In Q1, total revenue declined to $782 million from $823 million. That easily best the consensus forecast of $773.2 million.
Adjusted EBITDA declined to $160 million, from $197 million, as operating expenses dipped to $690 million from $699 million.
Then, there is the matter of a $110 million line-item addition to its Q1 2024 dollar totals. This “miscellaneous income” was lowered to $1 million in Q1 2025, and this impacted the bottom line: Gray swung to a net loss of $22 million (-$0.23 per share), compared to net income of $75 million ($0.79 per diluted share) a year ago. The EPS soared past analysts’ forecasts, as the estimate came in at -$0.49.
Looking deeper into the Gray results, retransmission consent dollars again topped core advertising.
Looking ahead to Q2 2025, Gray is not offering detailed Core Advertising guidance as it expects retransmission consent dollars to come in between $369 million and $371 million. Rather, core advertising is expected to decline by the mid single-digits, based on pacings.
Speaking on the earnings call, CEO Hilton Howell Jr. spoke highly of how the results surpassed the company’s guidance.
For Q2, Auto is tracking down by high single-digits. Restaurants and department stores were soft in Q1, and education and financial services performed better, with legal now a “low double-digit” category that is seeing growth, Gray noted.
During the Q&A session, in response to a query about likely deregulation of the broadcast media industry, Howell noted, “Consolidation allows us to compete with the very large tech giants that are taking 80% of that ad business.”
A question about a hesitancy to book advertising was posed to Pat LaPlatney, President and co-CEO. “We’re not seeing cancellations. We are seeing some hesitancy, but it is not overwhelming.” Businesses less impacted by tariffs are performing well, but there are so many questions remaining about the economy that forecasts are nearly impossible for Gray.
