Gray Media, Inc.

Gray reported Q2 2026 total revenue of $839 million, up 9% year over year and about $9 million above the high end of adjusted guidance. Political revenue was $83 million versus guidance of $60 million to $70 million, net retransmission revenue was $150 million, broadcast expenses were $569 million, net income attributable to stockholders was $21 million, and adjusted EBITDA was $214 million. Core advertising was down 1% reported, but management said it would have been down mid-single digits on an acquisition-adjusted basis. For Q3, Gray guided to political revenue of $165 million to $185 million and core advertising flat year over year on an as-reported basis; if acquisitions are removed, core would be down mid-single digits. Full-year CapEx guidance was reduced to $120 million to $130 million, and full-year tax guidance was lowered to $80 million to $100 million.

Hilton Howell said the quarter was “overall quite favorable” and emphasized that the company is executing well on acquisitions, integration, and deleveraging. He highlighted Gray’s growing recurring retransmission revenue, saying it is a foundational pillar of the debt-reduction plan, and noted there are no further retransmission negotiations in 2026. His tone was upbeat and confident, especially on political advertising, sports rights, and Gray’s station portfolio, while repeatedly stressing that incremental political cash will go toward debt reduction.

Jeff Gignac focused on balance sheet actions and leverage. He said leverage ratios as of June 30 were 2.55x first lien net leverage, 3.71x secured net leverage, and 5.73x total net leverage, down from 5.94x in Q1 on the total net basis. He also said Gray finished Q2 with a little over $900 million in liquidity, redeemed $50 million of Series A preferred equity, repurchased $120 million of debt in a private transaction, and later bought $100 million of 10.5% first lien notes plus $20 million of 5-3/8% unsecured notes at par plus accrued interest. He framed lower interest expense and lower debt as a key free-cash-flow benefit and said the company expects to use essentially all incremental political cash flow to reduce debt.

Analysts focused on net retransmission margins, 2027 EBITDA direction, spectrum policy, political ad expectations, core ad softness, AI cost savings, and how debt repurchases might affect interest expense. Management said net retrans margins should hold a little above 40% and that dollars should ramp into 2027 as acquisitions contribute; on EBITDA, Jeff said 2027 should be “up slightly” versus 2025, but Pat noted it depends on the macro environment. On spectrum and FCC ownership rules, management called the regulatory changes favorable in the medium term and said the company remains open to transactions but is prioritizing debt reduction. On political and borrowing base dynamics, Jeff said Q3 political should be backloaded, Q4 displacement is hard to quantify, and the borrowing base may dip temporarily when political prepayments arrive but should recover by year-end.