Saga outlines $10.7M tower asset sale and signals 2x digital revenue growth target while advancing blended strategy

Earnings Call Insights: Saga Communications (SGA) Q3 2025

MANAGEMENT VIEW

* Christopher Forgy, CEO, highlighted continued progress with Saga's blended digital strategy, emphasizing comprehensive training and development for market leaders and sales teams. Forgy stated the company's objective is to “2x gross revenue, most of it digital, in 18 to 24 months by capturing just 5% of the available search and display dollars available in our 27 Saga markets.”
* The CEO described strategic investments in R&D and resources, increased board expertise in digital, M&A, and financial audit, and the completion of several tower sales. Forgy confirmed the sale of telecom towers for “a total cash purchase price of approximately $10.7 million,” with $8.7 million already received and $1.8 million in escrow.
* The company is working to sell additional non-core assets, including a Florida property, as part of a broader plan to return value through stock buybacks and robust dividends. “We have finally made and continue to make strategic expense reductions at the market and the corporate levels to allow us to reinvest in our transformational digital strategy to enable us to be more nimble,” Forgy said.
* CFO Samuel D. Bush stated: “For the quarter ended September 30, 2025, net revenue decreased $528,000 or 1.8% to $28.2 million compared to $28.7 million last year. Station operating expense increased $2 million to $24.7 million for the 3-month period. As reported in the press release, this increase was primarily the result of an industry-wide settlement with 2 of the music licensing organizations we are licensed by.”
* Bush also emphasized: “For the third quarter this year, the increase in our interactive revenue made up almost the entire decrease in our broadcast revenue when adjusted for political.”

OUTLOOK

* The company expects to use proceeds from the tower sale to fund stock buybacks, stating, “All said, we believe Saga is in a strong financial position to improve profitability as our digital initiative improves both local radio and interactive revenue.”
* Management currently projects capital expenditures of $3.25 million to $3.75 million for 2025 and expects station operating expense to be flat for the year compared to 2024, accounting for the music license settlement and ongoing investments.
* On a positive note for Q4, “our interactive pacing is strong for the fourth quarter being up 32% as of now.” However, overall pacing is “currently pacing down approximately 11%, including political and 4.7% when political is excluded.”

FINANCIAL RESULTS

* For Q3 2025, net revenue was $28.2 million, station operating expense was $24.7 million, and the company reported an operating loss of $626,000 due to the music licensing settlement. Without the settlement, operating income would have been $1.5 million.
* Station operating income (non-GAAP) was $3.5 million for the quarter. Without the settlement, it would have been $5.6 million.
* Gross broadcast revenue, including NTR, decreased $1.8 million or 6.8%, while gross interactive revenue increased $1.1 million or 32.6%. Gross political revenue was $73,000 this quarter compared to $677,000 last year.
* For the 9-month period ended September 30, 2025, net revenue totaled $80.6 million, with a reported operating loss of $1.5 million, primarily due to the settlement. The balance sheet showed $26.3 million in cash and short-term investments as of September 30, 2025, and $34.2 million as of November 3, 2025.

Q&A

* Michael Kupinski, NOBLE Capital: Can you give us some color on the tone of the market, pacings into the upcoming quarter, local spot versus digital versus national? And how is national advertising performing going forward? CEO Forgy responded that national is weak in Q4 and “has had a little bit of a tradition in coming in later and later, which impacts our forward pacing.” He added, “overall, total revenue pacing, excluding political, is down 4.7% for the quarter. Local pacing is consistent across the quarter, and digital pacing is still pacing plus 32% for the quarter.”
* Kupinski: On the impact of Fed rate cuts on radio spot advertising. CEO Forgy stated, “I don't believe it's an anomaly... it's the economy, stupid. On Main Street, there's a delayed reaction, in my opinion, to rate cuts by the Fed... We believe spot radio's downdraft is more a function of the macro decline in the sector and not the rate cuts or lack thereof.”
* Shareholders: Why isn’t there a concrete plan for a buyback post tower sale? CFO Bush explained the complexities of the sale, ongoing real estate issues, and timing, saying, “Buybacks are still a priority for a portion of these proceeds as we have previously stated. There will be more clarity to this in the near future as the Board continues to look at the amount and timing and make some final decisions.”

SENTIMENT ANALYSIS

* Analysts’ tone was probing and slightly negative, particularly around revenue pacing, national ad weakness, and the lack of a concrete buyback plan.
* Management’s tone in prepared remarks was confident and focused on digital transformation, but answers during Q&A reflected a more cautious, explanatory approach, especially regarding sector headwinds and transaction complexities. Phrases like “hope is not a strategy” and “we believe” signaled realistic, if guarded, optimism.
* Compared to the previous quarter, management’s confidence in the digital shift was more assertive, while analysts maintained a skeptical stance, especially regarding near-term revenue trends and capital allocation timing.

QUARTER-OVER-QUARTER COMPARISON

* Net revenue was essentially flat compared to Q2 ($28.2 million both quarters), but Q3 saw increased operating expenses and a reported operating loss due to the music licensing settlement.
* Interactive revenue growth accelerated in Q3 (up 32.6%) compared to Q2 (up 7%).
* Political revenue was lower this quarter than in Q2.
* The previous quarter’s outlook expected station operating expense to decrease 2%-3% for the year, while the current quarter projects flat expenses due to the settlement, offset by digital investment.
* Management’s digital transformation strategy was more aggressively highlighted this quarter, with a clear revenue doubling target and detailed progress updates.
* Analysts’ focus remained on digital growth, pacing, and capital allocation, with continued skepticism on the pace of improvement.

RISKS AND CONCERNS

* The music licensing settlement with ASCAP and BMI increased expenses for the quarter and will have a continuing impact.
* National advertising remains weak, and there is uncertainty regarding the timing of buybacks due to ongoing real estate issues from asset sales.
* Management acknowledged the challenge of scaling digital initiatives quickly enough to offset declines in traditional revenue streams.
* Pacing for Q4 is down year-over-year, especially when factoring in last year’s political revenue.

FINAL TAKEAWAY

Saga Communications’ Q3 2025 results reflect the ongoing challenges of a shifting media landscape, with the company doubling down on a blended digital strategy and targeting a doubling of gross revenue—primarily digital—within two years. The sale of tower assets for $10.7 million supports further share buybacks and capital returns, though timing is contingent on transaction closure complexities. Digital revenue growth is offsetting declines in broadcast, and management maintains a confident, if realistic, outlook as the company navigates sector headwinds and executes its transformation plan.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/sga/earnings/transcripts]

MORE ON SAGA COMMUNICATIONS

* Saga Communications, Inc. (SGA) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4840255-saga-communications-inc-sga-q3-2025-earnings-call-transcript]
* Seeking Alpha’s Quant Rating on Saga Communications [https://seekingalpha.com/symbol/SGA/ratings/quant-ratings]
* Historical earnings data for Saga Communications [https://seekingalpha.com/symbol/SGA/earnings]
* Dividend scorecard for Saga Communications [https://seekingalpha.com/symbol/SGA/dividends/scorecard]
* Financial information for Saga Communications [https://seekingalpha.com/symbol/SGA/income-statement]