GTN Q3 Deep Dive: Expense Reductions, M&A Activity, and Shifting Political Tailwinds

Local television broadcasting and media company Gray Television (NYSE:GTN) met Wall Streets revenue expectations in Q3 CY2025, but sales fell by 21.2% year on year to $749 million. On the other hand, next quarter’s revenue guidance of $774.5 million was less impressive, coming in 4.8% below analysts’ estimates. Its GAAP loss of $0.24 per share was 50% above analysts’ consensus estimates.

Is now the time to buy GTN? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

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.

Looking ahead, Gray Television’s forward guidance reflects both optimism and caution as the company prepares for a more active political advertising cycle and continues to expand through acquisitions. President and Co-CEO Pat LaPlatney noted, “We are very, very optimistic about 2026,” citing encouraging early numbers for the next quarter and an anticipated boost from political spending. Management emphasized that investments in local content, new sports partnerships, and digital initiatives—such as the rollout of a Google Cloud-powered streaming platform—are expected to support future growth, though they acknowledged ongoing industry challenges and evolving regulatory dynamics.

Key Insights from Management’s Remarks

Management attributed the quarter’s results to disciplined expense management, targeted M&A, and momentum in digital and local content initiatives.

• Expense management success: The company achieved notably lower operating expenses, with CEO Hilton Howell Jr. crediting station-level teams for “tightening the belt,” resulting in expenses dropping $17 million below internal targets and helping offset revenue declines.
• Accelerated M&A activity: Gray Television accelerated efforts to acquire the top-ranked local news stations in six new markets and plans to create 11 new Big Four network duopolies, aiming to expand its market presence and reinforce its portfolio’s strength.
• Growth in legal and financial ad categories: COO Sandy Breland and President Pat LaPlatney highlighted continued double-digit growth in legal advertising and high single-digit growth in financial services, helping to partially counteract ongoing weakness in automotive advertising.
• Digital and local direct gains: Management pointed to healthy digital growth and an increase in local direct advertising, which was up low single digits year-over-year, signaling the company’s ability to adapt to changing advertiser preferences.
• Progress at Assembly Atlanta: The Assembly Atlanta studio investment, which now totals around $650 million, is attracting new long-term tenants and production deals. Management expects this asset to become a significant contributor to cash flow over the next 12 to 24 months as more partnerships and monetization opportunities materialize.

Drivers of Future Performance

Gray Television’s outlook is shaped by expectations for increased political advertising, evolving retransmission revenue, and continued expansion in sports and digital content.

• Political ad cycle impact: Management anticipates a substantial uplift from political advertising in 2026, with early primary activity and competitive races expected to drive higher spending. CEO Hilton Howell Jr. stated that “confidence in the level of political spend in the midterm this year is tremendous,” and management expects both parties to ramp fundraising and advertising efforts following recent election results.
• Retransmission and affiliation trends: CFO Jeff Gignac explained that net retransmission revenue is stabilizing due to multiyear sustainability efforts with cable and network partners, but noted it is “too early to give a guide for full year,” as future contract renewals and channel disputes may affect results.
• Expansion of local sports and digital: The company is leveraging new sports rights deals, such as expanded partnerships with the Dallas Stars and renewed agreements with the Braves and Hawks, as well as a new streaming platform rollout, to diversify revenue and attract broader audiences, positioning itself for resilience amid shifting media consumption trends.

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 $4.82, up from $4.63 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).

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