Saga Communications Q2 2025 Earnings Report

Saga Communications EPS Results

• Actual EPS: $0.18
• Consensus EPS: $0.19
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: N/A

Saga Communications Revenue Results

• Actual Revenue: $28.23 million
• Expected Revenue: $28.55 million
• Beat/Miss: Missed by -$321.00 thousand
• YoY Revenue Growth: N/A

Saga Communications Announcement Details

• Quarter: Q2 2025
• Date: 8/7/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, August 7, 2025
• Conference Call Time: 11:00AM ET

Saga Communications (NASDAQ:SGA), a media company, engages in acquiring, developing, and operating broadcast properties in the United States. The company's radio stations employ various programming formats, including classic hits, country, classic country, hot/soft/urban adult contemporary, oldies, classic rock, rock, and news/talk. It owns and operates FM and AM radio stations, and metro signals serving various markets. Saga Communications, Inc. was incorporated in 1986 and is headquartered in Grosse Pointe Farms, Michigan.

Saga Communications Q2 2025 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Q2 net revenue fell 5% year-over-year to $28.2 M, and net income dropped to $1.1 M from $2.5 M in Q2 2024.
• Positive Sentiment: Station operating expenses decreased 4.6%, aided by in house digital services and AI-powered voice imaging, saving about $250 K annually.
• Positive Sentiment: Digital initiatives gained momentum: interactive revenue was up 7% in Q2 (10% in H1), and digital’s share of total net revenue rose to 15.6%.
• Neutral Sentiment: Third-quarter pacing shows mixed trends—overall pacing down ~1% ex-political but digital pacing up 40% and September pacing up 1.5%.
• Positive Sentiment: Strong liquidity position with $24.9 M in cash and short-term investments, plus potential tower sale proceeds in the high-7 to low-8-figure range earmarked for dividends and stock buybacks.

Presentation

[Operator]

Good day, and welcome to Saga Communications Second Quarter Earnings Release Conference Call. At this time, all participants have been placed on a listen only mode. It is now my pleasure to turn the floor over to your host, Chris Forge, President and CEO of Saga Communications. Sir, the floor is yours.

[Christopher Forgy, CEO, President & Director at Saga Communications]

Thank you, Paul. And thank you to everyone who has taken the time to join Saga's twenty twenty five q two earnings call. As always, we appreciate your continued support, your interest, and your participation in Saga Communications, what we believe is the best media company on the planet. Before my remarks, I will turn the floor over to Sam for our introduction. Sam?

[Samuel D. Bush, Senior VP, Treasurer & CFO at Saga Communications]

Thank you, Chris. As a reminder, this call will contain forward looking statements about our future performance and results of operations that involve risks and uncertainties that are described in the risk factors section of our most recent Form 10 k. This call will also contain a discussion of certain non GAAP financial measures. Reconciliation for all the non GAAP financial measures to the most directly comparable GAAP measure are attached in the selected financial data tables. And now Chris, on with the show.

[Christopher Forgy, CEO, President & Director at Saga Communications]

Thank you, Sam. You you probably remember Sam during the most recent Saga board meeting, the board of directors meeting, I received a text from Matt Burgoyne. Matt serves as Saga's director of innovation and growth and leads and oversees Saga's transformational digits digital strategy that you've heard so much about. We call it blended advertising. In the text, Matt shared with me an experience he and the team in one of our Saga markets we're navigating through.

[Christopher Forgy, CEO, President & Director at Saga Communications]

And this single client represented an opportunity to win $1,300,000 annually. Although although this type of account is atypical, we refer to this type of customer as a whale. And whales, frankly, they're very complex beasts. Our opportunity win this business was created in part by the failure of another broadcast company to deliver and fulfill the customer's needs and by the relationship our market manager had developed with this customer. The fact of the matter is they trusted us to perform.

[Christopher Forgy, CEO, President & Director at Saga Communications]

So long story short, the problems that existed with this poor performance of the campaign were not of our doing, but of the result of poor performance of other third party providers the customer was using. Matt and his team provided an outline of the necessary changes needed and a road map on how to fix them. The customer left the meeting knowing their third party providers were the problem. But more importantly, they now have a partner. A partner in Saga that knew how to identify the issues and how to fix them.

[Christopher Forgy, CEO, President & Director at Saga Communications]

In that words, they trust us implicitly. As they all left the meeting, the customer was talking about an additional campaign and advised they wanted us to put together for them. This account alone has the potential. This time next year, it'd be a $150,000 a month account. Most who quote unquote know digital could not have navigated this meeting.

[Christopher Forgy, CEO, President & Director at Saga Communications]

In fact, this client had already fired one broadcaster who knew digital. It is only because of Saga's training and teaching of its leaders and media advisers over the past year and a half that we could have even had a seat at the table to discuss this type of money, let alone win the money and then coach the client on how to fix issues they were experiencing with other third party providers. I read the entire text to our board of directors at this SAGA board of directors meeting, and their response was this. Chris, what do you and your team need to run faster and more efficiently? You see, this is a board who sees the opportunity and supports management's efforts to accomplish to accomplish something that some have said can't be done.

[Christopher Forgy, CEO, President & Director at Saga Communications]

I guess we'll see. In a moment, Sam will share details of Saugus q two and six months twenty twenty five performance. Are we delighted with where are we are today? No. Not at all.

[Christopher Forgy, CEO, President & Director at Saga Communications]

We should be doing better, but this isn't the nineties or early two thousands where you can see that new grocery store chain is open in your market and you go out and sell a big schedule or remote and some antiquated promotion that has been done a 100 times and get a windfall of cash. It just doesn't happen that way. We're now playing in the modern ever ever evolving digital age. It's now much more sophisticated and requires skills and abilities to play and to play fast. And we are extremely optimistic.

[Christopher Forgy, CEO, President & Director at Saga Communications]

We're looking ahead to the near future. As you know, Saga still has $2,700 in cash and short term investments on hand and has a plan that is being forged and gaining traction. Sauga's digital culture continues to continues to grow year over year, quarter over quarter, and month to month. In 2025, July is better than June, August is better than July, and September is better than August. Also, our digital percentage of total net revenue has also increased quarter over quarter from 13.6% to 15.6.

[Christopher Forgy, CEO, President & Director at Saga Communications]

And recently, one of our few select third party digital partners referred to Saga as one of their leading and fastest growing digital channel partners. Recently, heard a quote that I think is appropriate, not only for Saga, but for everyone listening. It says, those forged by the fire of adversity become living symbols of unbreakable will. Ladies and gentlemen, the traditional broadcast verticals that have carried us for years have challenged the best. And we're seeing signs that some of these traditional revenue verticals will return.

[Christopher Forgy, CEO, President & Director at Saga Communications]

But the degree to which they will return as well as the timing of those returns really remains to be seen. The truth is we have to sell our way out of this macro downdraft and refuse the urge to cut our way out, where you're left with a shell of an organization with less people, less products, no process, no culture, and no performance. I've said it before, I'll say it again, money comes from customers. We're gonna continue to produce great content that works and continue to provide service to community and create an on air atmosphere conducive to the success of our media partners. To do this, we must have talented, well trained media advisers who are equipped to help these advertisers navigate through fragmented and confusing marketplace where a gap exists when tech meets human behavior.

[Christopher Forgy, CEO, President & Director at Saga Communications]

A marketplace full of frustrated buyers with unmet needs. A marketplace with more available money than we've ever known, and a marketplace that is ripe for disruption. This all takes time, money, commitment, and a resolve like no other. So what do we need to go faster? Reduce unnecessary operating expenses to be more nimble, reinvest in research and development, and in our people to help support the efforts of our medical media advisers, continue to train our leaders and our media advisers to help them earn the trust of our advertising partners in the digital space, all the while continuing to bring value to our shareholders through accretive acquisitions, capital management and capital allocation.

[Christopher Forgy, CEO, President & Director at Saga Communications]

I've often thought of thought of currently in its in its current state in essence as a cash positive startup. We iterate and iterate again with speed, not wasting time or money, and we fail fast. And when we succeed, we reinvest to become even faster. We repeat the good and eliminate the not so good. By being nimble, it allows us when one of Saga's markets experience material success, like the example of the whale I cited earlier.

[Christopher Forgy, CEO, President & Director at Saga Communications]

We're able to push that success and process out to our other 26 Saga markets and do it, not now, but right now. Tim, I'm gonna turn it back over to you.

[Samuel D. Bush, Senior VP, Treasurer & CFO at Saga Communications]

Thank you, Chris. For the quarter ended 06/30/2025, net revenue decreased 1,500,000.0 or 5% to 28,200,000.0 compared to 29,700,000.0 last year. Station operating expense decreased 1,100,000 or 4.6% to 22,200,000.0 for the three month period. For the quarter, we had an operating income of 1,400,000.0 compared to 2,100,000.0 last year. Station operating income, a non GAAP measure, was 6,000,000 for the quarter compared to 6,400,000.0 for the same period last year.

[Samuel D. Bush, Senior VP, Treasurer & CFO at Saga Communications]

Capital expenditures were 1,300,000.0 for the quarter compared to 1,500,000.0 for the second quarter last year. We had net income of 1,100,000.0 for the quarter compared to 2,500,000 for the same period last year. On a same station basis for the quarter ended 06/30/2025, net revenue decreased 1,900,000.0 or 6.4% to 27,600,000.0 and station operating expense decreased 1,500,000.0 or 6.4% to 21,700,000.0. For the six month period ended 06/30/2025, net revenue decreased 2,600,000.0 or 4.7% to 52,400,000.0 compared to 55,000,000 last year. Station operating expense decreased 1,600,000.0 or 3.4% to 44,200,000.0 for the six month period.

[Samuel D. Bush, Senior VP, Treasurer & CFO at Saga Communications]

For the six month period, we had an operating loss of 889,000, comparing compared to an operating loss of 274,000 last year. Station operating income, again, a non GAAP measure, was 8,200,000.0 for the six month period compared to 9,200,000.0 for the same period last year. Capital expenditures were 2,000,000 for the six month period compared to 2,600,000.0 for the same period last year. We had a net loss of 447,000 for the six month period compared to net income of 924,000 for the same period last year. On a same station basis for the six months ended 06/30/2025, net revenue decreased 3,600,000.0 or 6.5% to 51,200,000.0, and station operating expense decreased 5.7% to 43,000,000.

[Samuel D. Bush, Senior VP, Treasurer & CFO at Saga Communications]

Reflecting on operating expenses, it was good to see the 4.6% decrease in station operating expenses for the second quarter and a 3.4% decrease for the six month period. This was largely the result of an increase in operating expenses of approximately 390,000 for the Lafayette acquisition for the quarter and 1,000,000 for the six month period as well as a decrease in same station operating expenses of approximately 1,500,000.0 for the quarter and 2,600,000.0 for the six month period. The decrease in same station expenses was primarily due to a reduction in compensation and compensation related expenses, digital services expenses as we are now doing some of our digital ad placement in house, and bad debt expenses. Corporate expenses increased 70,000 for the quarter and 154,000 for the six months ended 06/30/2025. This did include an 89,000 expense in the quarter and a 199,000 expense for the six month period relating to a potential proxy contest initiated by a stock Solace shareholder.

[Samuel D. Bush, Senior VP, Treasurer & CFO at Saga Communications]

In addition to these expenses, there was also a lot of valuable time investing in working through this issue. The decrease in other operating expense for the six months ended 06/30/2025 compared to the same period in 2024 is primarily due to the sale of a nonproductive AM station along with two translators in Nashville, North Carolina and the shutting down of a nonproductive AM station in Bellingham, Washington in 2024. The decrease in other income is due to a onetime gain in 2024 related to the sale of Saga's equity investment in BMI when the organization was sold. In addition to what Chris has already said and we'll talk more about shortly, want to point out that for the quarter, total interactive revenue was up 7% and for the six month period up 10% with a 58% profit margin for the quarter and 55% for the six month period, excluding sales commissions for the quarter and for the year. While still in its infancy from a total dollar standpoint, our online news initiative revenue, which rolls up into our interact happy numbers, grew by 26% for the quarter and 51% for the six month period compared to 2024.

[Samuel D. Bush, Senior VP, Treasurer & CFO at Saga Communications]

E commerce revenue, which rolls up into our local direct numbers, grew by 17% for the second quarter and is up 8% for the six month period. Pacing for the third quarter is currently showing improvement over Q1 and Q2's results. For the third quarter, we are currently pacing down approximately 1%, although we are seeing improvement inside the quarter as well with September pacing up 1.5% as of now. Obviously, you know that these numbers fluctuate daily. Excluding political, we are facing flat for the last year flat with last year for third quarter.

[Samuel D. Bush, Senior VP, Treasurer & CFO at Saga Communications]

Last year, we had 312,000, 287,000, and 680,000 in political for the first, second, and third quarter, respectively. Fourth quarter will be more of a revenue challenge from a political perspective as we had almost 2,000,000 in political revenues for the quarter in 2024. As Chris indicated, our interactive pacing is strong for the third quarter, being up 40% as of now. Also, as of now, we are seeing improvement, albeit not everything we want, but still improvement in our traditional broadcasting revenue categories as well. For the third quarter, the local direct is pacing down 4.4%, local agency is pacing down 0.8%, and national is the outlier pacing down 19.1%.

[Samuel D. Bush, Senior VP, Treasurer & CFO at Saga Communications]

However, this year, we are seeing national come in later in the quarter than October has previously done. The company paid a quarterly dividend of 25¢ per share on 06/27/2025. The total dividend paid was approximately 1,600,000.0. To date, Saga has paid over 138,000,000 in dividends to shareholders since the first special dividend was paid in 2012, as well as we have bought back over 58,000,000 in Saga stock. Further, as a part of our overall capital allocation plan for 2025 and as stated in the press release, Saga has entered into a nonbinding negotiations to sell some of our tower sites.

[Samuel D. Bush, Senior VP, Treasurer & CFO at Saga Communications]

It is anticipated that these negotiations, if concluded and we expect they will be, will result in proceeds from the sale in the high 7 figure or low 8 figure range and close before the end of the third quarter. We are also assessing the potential sale of other non core assets with the intent to use a portion of the proceeds from these sales to fund stock buybacks, which may include open market repurchases, block trades or other forms of buybacks. All said, we believe SOG is in a strong financial position to improve profitability as our digital initiatives improves both local radio and interactive revenue. The com company's balance sheet reflects 24,900,000.0 in cash and short term investments as of June as of 08/04/2025, which Chris has already commented on. We currently expect to spend between 3 and 3 and a half million for capital expenditures in 2025.

[Samuel D. Bush, Senior VP, Treasurer & CFO at Saga Communications]

We currently expect our station operating expense will be decreasing by two to 3% for the year as compared to 2024. This takes into consideration the expense reductions we have and are making in addition to any costs incurred as the expenses are reduced as well as our continued investment in the ongoing revenue initiatives. We continue to anticipate that the annual corporate general and administrative expense will be approximately 12,000,000 for 2025 compared to 12,600,000.0 in 2024. And with that, Chris, I'll turn it back over to you.

[Christopher Forgy, CEO, President & Director at Saga Communications]

Thank you, Sam. As a part of that significant expense reduction Sam referred to, we're bringing several of our third party digital expenses in house to save money, increase margins, and really to be more efficient. We're also selectively utilizing AI solutions for things like digital reconciliation of of invoices. And in the area of radio station voice and imaging, we are realizing a quarter of a million dollars in annual savings by using voice to voice AI versus the third party production providers used previously. These two examples saved employees' jobs, money, and made us more efficient.

[Christopher Forgy, CEO, President & Director at Saga Communications]

So what's the plan? Speed, reiteration, reduce expenses, reinvestment, research and development, capital allocation, capital management, and growth. That's the plan. Thank you again for your time and interest and support of Saugus Communications, what we believe to be the best media company on the planet. Sam, do you have any questions?

[Samuel D. Bush, Senior VP, Treasurer & CFO at Saga Communications]

We did get a few quest questions, Chris. The the the first one, we did talk about q three pacing a little bit, and and, obviously, we will continue to let folks know as we see where pacing goes as we go into the future. Then we got the question and and you and I talked about this last week. It says, in terms of your digital business, many continue to report strong indications for the growth of this business. And we've already reported today that we are seeing strong growth.

[Samuel D. Bush, Senior VP, Treasurer & CFO at Saga Communications]

We had strong growth in the second quarter, and we're seeing very strong pacing growth for the third quarter. There is a second part to this question. Are you seeing any impact from customers on the recent decline in search traffic? And are there any implications on lower eyeballs to sites?

[Christopher Forgy, CEO, President & Director at Saga Communications]

Well, I I think part of that is a little bit of a misnomer, Sam. I there aren't less searches being done, just more places to search. It's a little bit fragmented right now. And when a client goes searching, it's it's it's fragmented as they go along the search. Our goal is to make sure that we are there when when they are searching and where they are searching.

[Christopher Forgy, CEO, President & Director at Saga Communications]

And we're committed to doing that, whether it's on Google, AI, or social. We really wanna meet them where they are.

[Samuel D. Bush, Senior VP, Treasurer & CFO at Saga Communications]

Very good. The last question we received is can we talk about capital allocations at this point? And I referred to that in my comments that we have looked and are in non binding negotiations to sell some of our tower sites, and we expect proceeds from that sale to be in the high 7 figure or low 8 figure range. We have a number of other somewhat smaller potential sites that we are looking at as well as other opportunities to sell non core assets. And we have committed at a board level and to our shareholders that we are looking at what we will do with the proceeds from this and that some of the proceeds will go into stock buybacks as well as, obviously, continuing the quarterly dividend.

[Samuel D. Bush, Senior VP, Treasurer & CFO at Saga Communications]

And with that, Chris, I think we're good. And Paul, I'll turn it back over to you to wrap up.

[Operator]

Thank you. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your

Participants

Executives

• Christopher Forgy, CEO, President & Director
• Samuel D. Bush, Senior VP, Treasurer & CFO