Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gray Television Inc (GTN, Financial) reported a 2% increase in total revenue for the second quarter of 2024, reaching $826 million.
- Net income rose significantly to $22 million in Q2 2024, compared to $4 million in the same quarter of 2023.
- The company successfully refinanced $2 billion of its 2026 debt maturities, extending them to 2029 and increasing its revolving credit facility to $680 million.
- Gray Television Inc (GTN) is expanding its content and reach with new initiatives, including live broadcasts and new network launches.
- The company reported strong political advertising revenue, with a 62% increase compared to the last presidential election year.
Negative Points
- Core advertising revenue in Q2 2024 was $373 million, which was below the low end of the company's guidance range.
- Gray Television Inc (GTN) lowered its full-year revenue guidance by $75 million for core ad revenue and $25 million for retransmission revenue.
- The company is experiencing subscriber declines in its traditional MVPD base, impacting retransmission revenue.
- Leverage metrics increased slightly from Q1 to Q2, partly due to refinancing-related expenses.
- The company anticipates significant political ad displacement, which could impact core advertising revenue in the coming quarters.
Q & A Highlights
Q: Can you provide an update on your expectations for political advertising revenue, especially in light of recent political developments?
A: Pat LaPlatney, President & Co-CEO, stated that while they are optimistic about political advertising, they are not providing a full-year guide. They have given a strong guide for Q3, which aligns with 2020 and 2022 levels, despite not having $30 million from presidential primary money. Hilton Howell, CEO, added that they are bullish on political advertising for the year, with significant activity expected as elections approach.
Q: When are the network renewals due, and how are you approaching them?
A: Kevin Latek, EVP & Chief Legal and Development Officer, mentioned that all network renewals are due within the next 18 months. The schedule is detailed in their investor deck from March. They are committed to adjusting network costs to reflect changes in the television ecosystem.
Q: How is the Assembly Atlanta project progressing, and what are your expectations for its financial impact?
A: Hilton Howell, CEO, expressed optimism about Assembly Atlanta, noting that the studios were profitable from day one. They have secured a solid lease with a significant client and expect all studios to be leased soon. Jeff Gignac, CFO, added that the project cost was $571 million, and they expect meaningful returns starting in Q1 next year.
Q: Can you elaborate on your strategy for local sports partnerships?
A: Sandra Breland, COO, highlighted their interest in expanding local sports partnerships. They have successfully partnered with several NBA teams and are exploring additional opportunities. Local sports and news are seen as complementary, and they aim to increase distribution and reach through these partnerships.
Q: What are your thoughts on subscriber trends and the potential for improvement?
A: Kevin Latek, EVP & Chief Legal and Development Officer, noted that they expect subscriber declines to slow due to factors like more streaming apps in MVPD bundles and changes in the streaming landscape. They are optimistic about future trends, although declines have continued at a similar pace to last year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
