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Saga Communications (SGA) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Communication Services· Aug 13, 2026

Source: earnings call transcript

Executive summary

Saga Communications Q2 FY26 — Digital Revenue Growth Amidst Traditional Declines

Saga Communications navigated Q2 FY26 with significant digital revenue growth, up 60.8%, partially offsetting double-digit declines in traditional advertising verticals. The company is actively investing in digital transformation, including new hires and strategic partnerships, while monetizing non-core assets to fund these initiatives and maintain a strong balance sheet. Management emphasized a return to traditional media's community connection and the strength of its radio foundation.

Highlights

5

  • Blended digital revenue was up 60.8% for the quarter year-over-year.

  • Gross political revenue for Q2 FY26 was $450,000, up from $50,000 in the prior year period.

  • Corporate general and administrative expense was down 13% or $398,000 for the quarter.

  • The company has sold or is selling 6 noncore properties for over $4 million since Q4 last year.

  • Saga has paid over $145 million in dividends to shareholders since the first special dividend in 2012.

Concerns

5

  • Net revenue decreased $1.8 million or 6.5% to $26.4 million for the quarter.

  • Station operating expense increased $1.2 million or 5.4% for the quarter.

  • Local revenue was down 11.2% for the quarter.

  • National revenue was down 25% for the quarter.

  • Nontraditional revenue was down 16.4% for the quarter.

Guidance & targets

CategoryTargetConfidence
Political Revenue
$1.1 million
medium materiality
Medium
Station Operating Expense Increase
1.5% to 2.5%
medium materiality
High
Corporate General and Administrative Expense
$11.8 million to $12 million
medium materiality
High
Capital Expenditures
$3 million to $3.5 million
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Local Revenue
Local revenue for the quarter ending June 2026.
—down 11.2%——
Local Revenue
Local revenue year-to-date.
—down 11%——
National Revenue
National revenue for the quarter ending June 2026.
—down 25%——
National Revenue
National revenue year-to-date.
—down 19.5%——
Nontraditional Revenue
Nontraditional revenue for the quarter ending June 2026.
—down 16.4%——
Nontraditional Revenue
Nontraditional revenue year-to-date.
—down 12.9%——
Blended Digital Strategy Revenue
Blended digital strategy revenue for the quarter ending June 2026.
—up 60.8%——
Blended Digital Strategy Revenue
Blended digital strategy revenue for the 6 months ending June 2026.
—up 76.4%——
E-commerce Revenue
E-commerce revenue for the quarter ending June 2026.
—up 10.7%——
E-commerce Revenue
E-commerce revenue year-to-date.
—up 15.2%——
All Other Digital Revenue
All other digital revenue for the quarter ending June 2026.
—down 9.6%——
All Other Digital Revenue
All other digital revenue year-to-date.
—down 8.4%——

Product announcements

ProductTypeDetails
AI Lead Generation Solutionlaunch
AI Search Calculator and Proposal Writing Solutionlaunch

Deals & partnerships

Marketron NXT Digital fulfillment solution provider

Saga partnered with Marketron NXT for all digital fulfillment products other than search, migrating from previous solutions. Marketron is already Saga's radio traffic and billing solution.

Borrell Associates Market and advertiser visibility and strategy

Saga forged a partnership with Borrell Associates to gain visibility into markets, advertiser spending, market share, and strategies for acquiring, retaining, and growing revenue in key business categories.

University of Florida College of Journalism and Communication 7-year joint sales partnership and educational collaboration 7 years

A landmark 7-year joint sales partnership expanding Saga's broadcast footprint to include WOGK-FM, WRUF-AM and FM, WIND-FM, and the University of Florida Gators Sports Network. It also involves collaboration on broadcast media sales, digital media, audience development, sports media, content strategy, internships, and mentorships.

Risks & headwinds

Traditional advertising verticals decline Q2 FY26

Local revenue down 11.2% for Q2; National revenue down 25% for Q2; Nontraditional revenue down 16.4% for Q2.

Mitigation:Investment in blended digital strategy, hiring sales managers and digital campaign managers, strategic partnerships to gain market visibility.

Increased station operating expenses due to digital transformation Full-year 2026

Station operating expense increased $1.2 million or 5.4% for Q2; expected to increase 1.5% to 2.5% for full-year 2026.

Mitigation:Monetizing non-core assets to offset cash spent on these increases; focus on improving profitability as digital initiatives mature.

Loss of revenue from tower sale lease transfers Ongoing

Leases on sold towers were generating approximately $200,000 in revenue per quarter.

Mitigation:Monetization of non-core assets to offset impacts; strategic management of balance sheet and liquidity.

What to watch in Q3 FY26

Political revenue booking

Q3/Q4 FY26
Current $1.1 million booked for remainder of year
Target Increase in political dollars as elections approach

Why it matters

Political advertising is a significant revenue driver in election years, and management expects further bookings closer to elections.

I'm encouraged that we'll see an increase in political dollars as we get closer to the actual elections as opposed to the primaries and so forth.

Find out whether SGA delivers this. Inve re-checks your case every morning.

Q&A highlights

Does the company possess the necessary digital feature sets for success, or are further investments in products and services required?

Management believes most major digital investments have been made, particularly in search and display. They will continue to adjust and expand digital offerings based on evolving customer needs and market shifts, ensuring competitiveness.

“Well, as I stated, most of the major investments have been made. We're already real strong in search and display, as referenced in my statement about the growth of the blend, which primarily deals with search and display and radio. And we will adjust and add to our digital offerings as this ever-changing digital landscape continues to change, and it will.”

asked by Samuel D. Bush (implied) · answered by Christopher Forgy

2 min read 6 chapters

Detailed narrative

Digital Transformation & Strategy

Saga Communications is undergoing a significant digital transformation, building a blended digital strategy over the last three years, encompassing search, display, SEO, social, managed e-mail, OTT, and CTV. Key initiatives include bringing search tools in-house with three full-time specialists, hiring 10 digital campaign managers and 9 directors of sales, and partnering with Marketron NXT for digital fulfillment. The strategy aims to create an easy-to-understand, buy, execute, measure, and renew digital platform focused on the customer journey, while mitigating declines in traditional radio ad spend.

Revenue Trends & Pacing

The company faces headwinds in traditional advertising verticals, with local, national, and nontraditional revenue experiencing double-digit year-over-year declines for Q2 FY26. Conversely, blended digital revenue surged by 60.8% for the quarter. Third-quarter revenue is pacing down mid-single digits overall, with digital revenue pacing up mid- to high single digits. Monthly pacing shows improvement, with September gross revenue up low single digits and October gross revenue up mid-single digits, indicating a potential stabilization trend.

Strategic Partnerships & AI Integration

Saga has forged strategic partnerships, including with Borrell Associates, to gain deeper market and advertiser visibility, aiming to maximize programmatic revenue and grow market share. Paul O'Malley has been promoted to Senior Vice President of Revenue Development to focus on all revenue streams. Internally, AI-driven solutions have been developed for lead generation, search calculation, and proposal writing, significantly enhancing efficiency and speed to market for media advisers.

Community Engagement & Industry Recognition

Saga's radio stations are deeply embedded in their local communities, raising nearly $4 million in the first half of 2026. The company received significant industry accolades, including WYMG-FM winning the NAB Service to America Award, WOGK-FM being recognized as a favorite station, and four nominations for the 2027 Marconi Awards across various markets and categories, highlighting the strength and impact of its traditional media operations.

University of Florida Joint Sales Partnership

A landmark 7-year joint sales partnership has been established with the University of Florida College of Journalism and Communication. This agreement expands Saga's broadcast footprint in the Ocala Gainesville, Florida market, incorporating WOGK-FM, WRUF-AM and FM, WIND-FM, and the Gators Sports Network. The partnership extends beyond sales to create opportunities for advertisers, students, and faculty in broadcast media sales, digital media, audience development, and content strategy, fostering the next generation of media professionals.

Non-Core Asset Monetization & Balance Sheet Management

Saga is actively monetizing non-core assets to offset investments in digital transformation and operational expenses. Since Q4 last year, the company has sold or is selling six properties for over $4 million, including a former Sarasota House for $1.7 million and an unused tower site for $1 million. The company also repaid and terminated a $5 million revolving credit agreement, enhancing flexibility for future capital allocation towards dividends, share repurchases, and strategic opportunities.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.