Saga Communications (SGA) Q2 2026 earnings summary

Executive summary

• Net revenue for Q2 2026 decreased 6.5% year-over-year to $26.4 million, with a six-month decline of 6.0% to $49.3 million, driven by declines in national and local advertising, partially offset by digital and political revenue growth.

• Net income for Q2 2026 was $960,000 ($0.15 per diluted share), down 14.9% from Q2 2025; six-month net loss was $1.43 million.

• Station operating income was $3 million and operating income was $623,000 for the quarter, reflecting ongoing digital transformation investments.

• Traditional revenue streams (local, national, non-traditional) saw double-digit declines, while blended digital revenue grew 60.8% for the quarter and 76.4% year-to-date.

• Significant progress in digital initiatives, including hiring digital campaign managers and sales managers, and partnerships to enhance digital and traditional offerings.

Financial highlights

• Q2 net revenue fell by $1.8 million year-over-year; station operating expense rose by 5.4% in Q2 and 2.8% for the six months, mainly due to digital service, compensation, and tower lease costs.

• Gross political revenue for Q2 was $450,000, up from $50,000 last year; $1.1 million in political revenue already sold for the remainder of 2026.

• Digital advertising revenue grew to $5.3 million in Q2 (up from $4.6 million YoY), representing 19% of gross revenue in H1.

• Cash and short-term investments were $27.8 million as of June 30, 2026, and $22.9 million as of August 10, 2026, after repaying $5 million in revolving credit.

• Working capital was $25.6 million at June 30, 2026, down from $29.1 million a year earlier.

Outlook and guidance

• Q3 revenue pacing down mid-single digits, with digital revenue up mid to high single digits.

• Capital expenditures expected to be $3 million–$3.5 million for 2026, funded by operations.

• Management expects continued investment in digital fulfillment and campaign management, with compensation expenses projected to rise by $800,000 in 2026.

• Anticipates increased productivity from new hires and expects improvement in profitability as digital initiatives mature.

• The company intends to continue paying regular quarterly cash dividends.