Q2 2026 Saga Communications Inc Earnings Call Transcript
Key Points
- Blended digital revenue surged 76.4% year-to-date and 60.8% in Q2, with digital now representing 19% of gross revenue.
- Strategic investments in digital infrastructure, including in-house search specialists and digital campaign managers, are enhancing operational efficiency and speed to market.
- Political revenue is showing strong growth, with Q2 gross political revenue up to $450,000 from $50,000 year-over-year, and an additional $1.1 million booked for the remainder of 2026.
- The company maintains a strong balance sheet with $27.8 million in cash and short-term investments, and has repaid its $5 million revolving credit facility in full.
- Saga has successfully monetized non-core assets, generating over $4 million from six property sales, and has formed strategic partnerships, including a landmark seven-year joint sales agreement with the University of Florida.
- The company's radio stations have received industry recognition, including four Marconi Award nominations and a NAB Service to America Award, highlighting strong community engagement and brand strength.
- Net revenue decreased 6.5% in Q2 and 6% for the six-month period, driven by double-digit declines in traditional advertising verticals.
- Station operating expenses increased 5.4% in Q2, partly due to non-cash tower rent expense and hiring initiatives, pressuring profitability.
- Traditional revenue streams are under pressure, with local revenue down 11.2%, national down 25%, and non-traditional down 16.4% in Q2.
- The company faces ongoing challenges from the 'remodeling the house' phase, with operating income of only $623,000 in Q2, reflecting the impact of transformation costs.
- Third-quarter revenue is pacing down mid-single digits, and without political, down mid-to-high single digits, indicating continued softness in core advertising.
- The termination of the credit agreement may limit financial flexibility for future strategic opportunities, though the company plans to renegotiate when appropriate.
Good day everyone, and welcome to the Saga Communications second quarter earnings release and conference call. At this time, all participants are placed on a listen-only mode. It is now my pleasure to hand the floor over to your host, Chris Forgy, President and CEO of Saga. Sir, the floor is yours.
Thank you, Matthew. Thank you to everyone who has taken the time to join Saga Communications' 2026 Q2 earnings call. We appreciate your continued support, your interest, and your participation in Saga Communications, Inc. What we believe is the best media company on the planet. Before my remarks, I am going to surrender the floor to Sam, but only for a moment, Sam, so don't get comfortable. Then I will be back with my comments shortly thereafter.
Sam?
Thank you, Chris. This call will contain forward-looking statements about our future performance and
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