Saga Communications Q2 2025: Contradictions in Advertising Trends, Digital Growth, and Board Strategy

Advertising market trends, digital strategy focus, board of directors transformation, digital business growth challenges, and advertising market outlook are the key contradictions discussed in Saga Communications' latest 2025Q2 earnings call.



Revenue Trends and Digital Growth:
- Saga Communications reported a decrease in net revenue, with a 5% reduction to $28.2 million for Q2 2025 compared to the previous year. On a same-station basis, net revenue decreased 6.4%.
- Despite this, the company's digital percentage of total net revenue increased from 13.6% in Q1 to 15.6% in Q2 2025. Total interactive revenue was up 7% in Q2 and 10% for the 6-month period, with a profit margin of 58% and 55% respectively.
- The slower overall revenue growth was attributed to challenges in traditional broadcast verticals, while the digital segment showed improvement due to increased digital advertising and a shift to more in-house services.

Operating Expenses and Cost Management:
- Station operating expenses decreased by 4.6% to $22.2 million for Q2 2025 and 3.4% to $44.2 million for the 6-month period compared to the previous year.
- The reduction in expenses was largely due to a decrease in same-station operating expenses and the sale of nonproductive assets. A portion of these savings was reinvested in digital services and operational efficiencies.
- The company is targeting a further 2% to 3% reduction in station operating expenses for 2025, indicating a continued focus on cost management and optimization.

Capital Allocation and Shareholder Returns:
- Saga Communications has entered into nonbinding negotiations to sell tower sites, expecting proceeds in the high 7-figure or low 8-figure range. The company is also considering selling other noncore assets.
- The proceeds from these sales will be used to fund stock buybacks and continuing the quarterly dividend. The company has paid over $138 million in dividends to shareholders since 2012 and bought back over $58 million in Saga stock.
- These initiatives are part of the company's overall capital allocation strategy to improve profitability as digital initiatives drive growth in both local radio and interactive revenue.