In the first quarter of 2025, Gray Television delivered a robust financial performance that exceeded market expectations. The company’s shares experienced a significant surge in value, climbing over 20% during midday trading as investors reacted positively to total revenues surpassing the upper range of forecasts. Key achievements included reducing debt and cutting broadcasting operating expenses, marking the first decline in these costs since the economic slowdown caused by the pandemic five years ago. Despite a decrease in overall revenue compared to the previous year, Gray Television managed to outperform analyst predictions, driven by strategic improvements in content offerings and cost management.
Under the leadership of Hilton H. Howell Jr., Gray Television has focused on enhancing local content, particularly sports programming, while optimizing its cost structure. This approach contributed to slashing $17 million from the company's outstanding debt during Q1 2025. While total revenue fell slightly to $782 million from $823 million, it still surpassed the consensus forecast of $773.2 million. Adjusted EBITDA also showed a decline, dropping to $160 million from $197 million, but operating expenses decreased correspondingly to $690 million from $699 million. A notable change was observed in the "miscellaneous income" category, which plummeted from $110 million in Q1 2024 to just $1 million in Q1 2025, resulting in a net loss of $22 million (-$0.23 per share) compared to net income of $75 million ($0.79 per diluted share) in the same period last year. Nevertheless, the earnings per share (EPS) significantly beat analysts' projections, coming in at -$0.23 versus an estimated -$0.49.
Retransmission consent revenues continued to exceed core advertising in Q1 2025, reflecting the ongoing importance of this revenue stream for Gray Television. Looking forward to Q2 2025, the company anticipates retransmission consent dollars to range between $369 million and $371 million, with core advertising expected to decline moderately based on current pacing estimates. During the earnings call, CEO Hilton Howell Jr. expressed satisfaction with the results, noting their alignment with guidance. Specific industry sectors like auto sales are projected to see a high single-digit downturn, whereas education and financial services have shown resilience. Legal services emerged as a growing segment, contributing positively to revenues.
In response to questions about potential deregulation in the broadcast media sector, Howell emphasized the benefits of consolidation, allowing Gray Television to compete more effectively against dominant tech giants capturing the majority of ad spending. Addressing concerns about advertiser hesitation, Pat LaPlatney, President and co-CEO, reassured stakeholders that while some caution exists, cancellations remain minimal. The economic uncertainty poses challenges for precise forecasting, yet certain businesses less affected by tariffs continue to perform well.
To reward shareholders, Gray Media's Board of Directors announced a quarterly cash dividend of $0.08 per share of common stock and Class A common stock. Shareholders of record as of June 13 will receive the dividend payment on June 30. These actions underscore Gray Television's commitment to strengthening its balance sheet and increasing financial flexibility while navigating evolving market conditions.