Gray Media, Inc. - Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. Gray Media, Inc. is a multimedia company and the nation's largest owner of top-rated local television stations, serving 120 full-power markets. The company operates through two primary segments: Broadcasting and Production Companies. As of May 1, 2026, the company had 92,869,148 shares of Class A common stock and 9,869,307 shares of common stock outstanding.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenue | $768 million | $782 million |
| Operating Income | $81 million | $92 million |
| Net Loss | $(20) million | $(9) million |
| Net Loss Attributable to Common Stockholders | $(33) million | $(22) million |
| Diluted EPS (Loss) | $(0.34) | $(0.23) |
| Operating Cash Flow | $1 million | $132 million |
| Cash and Cash Equivalents | $259 million | $210 million |
| Total Debt (Principal) | $5,808 million | $5,810 million |
| Revolving Credit Availability | $745 million | $745 million |
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased 2% ($14 million) year-over-year. This was driven by a $40 million decrease in retransmission consent revenue due to subscription declines and a distribution dispute with a satellite provider (resolved May 1, 2026).
- Advertising Mix: Core advertising revenue increased $8 million, aided by Super Bowl and Winter Olympics broadcasts on NBC/Telemundo affiliates. Political advertising revenue surged $17 million due to the 2026 election cycle.
- Expense Management: Broadcasting expenses decreased 4% ($22 million), primarily due to reduced retransmission expenses, partially offset by an $11 million increase in payroll costs.
- Cash Flow Volatility: Operating cash flow dropped significantly from $132 million to $1 million, largely due to a $131 million decrease in net working capital and higher net losses.
- Acquisitions: The company completed acquisitions of WBBJ-TV ($25 million) and three Allen Media Group stations ($56 million) during the quarter, resulting in $77 million of cash used in investing activities.
Guidance, Outlook, and Risks
- Capital Expenditures: Management expects routine capital expenditures of approximately $120 million for the remainder of 2026, including station construction and Assembly Atlanta projects.
- Tax Outlook: The company anticipates income tax payments of $90 million to $110 million for the remainder of 2026.
- Debt Service: Estimated debt interest payments for the next 12 months are approximately $450 million. The company remains in compliance with all debt covenants, with a Consolidated Total Net Leverage Ratio of 5.94x (limit 7.00x).
- Pending Transactions: Significant acquisitions closed shortly after the period end, including the "Allen 7" stations ($115 million) on May 1, 2026, and Block Communications stations ($80 million) on May 6, 2026. A non-cash swap with Scripps remains pending regulatory approval.
- Risks: Key risks include the cyclical nature of political advertising, retransmission consent disputes, and the impact of economic conditions on core advertising spend (services and automotive sectors).
Investor Verification Checklist
- Verify the final purchase price allocation for the WBBJ and Allen 3 acquisitions, as provisional values are subject to change.
- Monitor the status of the pending Scripps station swap and regulatory approvals for the Allen 7 and Block Communications acquisitions.
- Assess the sustainability of operating cash flows given the sharp decline in Q1 2026 compared to Q1 2025.
- Review the impact of the resolved satellite distribution dispute on future retransmission consent revenue stability.
- Confirm the company's ability to service $450 million in annual interest payments while funding $120 million in remaining capital expenditures and pending acquisitions.