Gray Television’s third quarter results prompted a positive market reaction, with management crediting broad-based cost containment and operational efficiency for outperforming consensus expectations. CEO Hilton Howell Jr. highlighted that “total operating expenses before depreciation, amortization, impairment and gain or loss on any disposal of assets...were $17 million below the low end of our guidance.” Additionally, the company benefited from higher-than-expected political ad revenue in an off-cycle year and early signs of improvement in core advertising categories, despite ongoing advertiser caution due to macroeconomic uncertainty.
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Gray Television (GTN) Q3 CY2025 Highlights:
- Revenue: $749 million vs analyst estimates of $746.1 million (21.2% year-on-year decline, in line)
- Adjusted EPS: -$0.20 vs analyst estimates of -$0.33 (38.2% beat)
- Adjusted EBITDA: $157 million vs analyst estimates of $138.8 million (21% margin, 13.1% beat)
- Revenue Guidance for Q4 CY2025 is $774.5 million at the midpoint, below analyst estimates of $813.3 million
- Operating Margin: 13.6%, down from 26.3% in the same quarter last year
- Market Capitalization: $497.3 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Gray Television’s Q3 Earnings Call
- Daniel Kurnos (The Benchmark Company) asked about the future trajectory of net retransmission revenue. CFO Jeff Gignac described current quarters as “flattening out,” but refrained from providing long-term guidance, citing ongoing contract renewals and industry dynamics.
- Aaron Watts (Deutsche Bank) inquired about the outlook for core advertising in 2026. President Pat LaPlatney expressed strong optimism for next year, referencing early data showing encouraging trends and highlighting the expected benefit from the upcoming political cycle.
- Patrick Sholl (Barrington Research) probed the impact of the Atlanta station rebrand on advertiser reception. COO Sandy Breland reported positive results, noting increased local news programming and audience engagement, with gains in key demographics and strong advertiser interest.
- Craig Huber (Huber Research) questioned the timeline and return on investment for Assembly Atlanta. CEO Hilton Howell Jr. and CFO Jeff Gignac discussed ongoing lease negotiations and recent production deals, suggesting the asset could become a major cash contributor within 12 to 24 months.
- Gengxuan Qiu (Barclays) sought clarification on lower fourth quarter political revenue guidance. Chief Legal and Development Officer Kevin Latek explained that weaker-than-expected fundraising and fewer competitive races dampened near-term political ad spend but emphasized improved prospects following recent election outcomes.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the ramp-up of political advertising ahead of the 2026 election cycle, (2) the pace at which Assembly Atlanta secures new leases and production commitments, and (3) the effectiveness of Gray Television’s new digital streaming platform in driving audience and advertiser engagement. Additionally, developments in retransmission negotiations and potential M&A activity will be key signposts of strategic execution.
Gray Television currently trades at $4.85, up from $4.63 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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