Saga Communications (SGA 2.89%), a radio broadcasting company focused on local and digital advertising, reported its second-quarter earnings on August 7, 2025. The headline was a decline in both revenue and earnings per share (GAAP) in Q2 2025, with GAAP results coming in below analyst expectations. Revenue (GAAP) was $28.2 million in Q2 2025, under the $28.6 million GAAP revenue expected, while GAAP earnings per share reached $0.18 in Q2 2025, just shy of the $0.19 GAAP consensus. Both headline numbers (GAAP net revenue and GAAP net income) showed notable year-over-year declines, reflecting ongoing pressures in core advertising. The period saw active cost management but persistent top-line and margin challenges, despite the company’s ongoing digital push.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $0.18 | $0.19 | $0.40 | (55.0%) |
| Revenue (GAAP) | $28.2 million | $28.6 million | $29.7 million | (5.0%) |
| Operating Income | $1.4 million | $2.1 million | (34.2%) | |
| Station Operating Income (Non-GAAP) | $6.0 million | N/A | N/A | |
| Capital Expenditures | $1.3 million | $1.5 million | (13.3%) |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Company Overview and Recent Strategic Focus
Saga Communications (SGA 2.89%) operates radio stations in local U.S. markets, focusing on delivering community-driven programming combined with digital offerings. Its stations provide a mix of Classic Hits, Country, and News/Talk formats, tailoring content to attract diverse audience segments and, crucially, local advertisers.
The company's core business remains local advertising, which made up about 88% of revenue in 2024. Success hinges on maintaining high ratings and strong listener engagement, supported by local management and unique programming. In recent years, Saga has prioritized expanding its digital footprint, integrating digital ad sales, streaming, and e-commerce to offset pressures in traditional radio. Cost management, stable leadership after a recent CEO transition, and capital discipline also form key planks of Saga's current strategy.
Quarter Highlights and Key Developments
The second quarter revealed persistent pressure in the traditional advertising business. Total revenue (GAAP) dropped 5.0% compared to the same period last year, consistent with management’s stated expectations of mid-single-digit declines. This drop reflected a sharp decline in political advertising. Political ad sales shrank from $288,000 in Q2 2024 to $51,000. Same-station net revenue was down 6.4%, highlighting challenges across Saga’s established markets.
Core cost controls provided some cushion. Station operating expenses fell 4.6% to $22.2 million Station operating income, a non-GAAP profitability measure excluding certain administrative and one-off costs, slipped 6.4% to $6.0 million. Corporate expenses were $3.07 million (GAAP), partly due to legal and board-related costs tied to shareholder matters and board refreshment in the period. With revenue declines outpacing expense savings, margins and profit levels narrowed, with operating income (GAAP) falling to $1.4 million from $2.1 million versus Q2 2024.
On the digital and interactive side, management emphasized continued momentum, with commentary in May 2025 highlighting four consecutive months of significant growth in digital ad revenue (February through May 2025) and record-setting digital ad revenue for May 2025. While detailed digital revenue for the quarter was not specified, the company previously reported generating $5.3 million in digital ad revenue by May 2025—surpassing all of 2024’s digital total by early in the quarter. Total interactive revenues, which combine digital advertising, streaming, and online news, reached $12.5 million as of May 8, 2025. However, despite gains in digital, those increases have yet to offset the ongoing revenue declines in the legacy radio broadcast segment, as reflected in the company's reported GAAP net revenue.
The quarter also featured ongoing shareholder-return activity. The company maintained its quarterly dividend at $0.25 per share, paying out $1.6 million in dividends. Saga has distributed over $138 million in dividends to shareholders since 2012 The company is in negotiations to sell certain non-core tower assets, and management signaled that a portion of those proceeds will support further buybacks. Cash and short-term investments totaled $24.9 million as of June 30, 2025 and rose to $27.3 million as of August 4, 2025, reflecting disciplined capital allocation and a stable long-term debt balance of $5.0 million as of June 30, 2025.
Business Lines and Current Priorities
Advertising remains Saga’s most important revenue engine. The company's radio stations generate revenue by selling space for commercial messages to local businesses, regional advertisers, and, during election cycles, political candidates and organizations. The station mix—Classic Hits, Country, and News/Talk—enables Saga to reach varied demographics, making its proposition attractive for targeted local marketing.
In recent years, the focus has increasingly shifted to digital and interactive products. The digital ad business captures dollars from local clients looking to reach consumers via internet, streaming, and digital search, in addition to traditional on-air spots. Initiatives include “blended” campaigns, which combine radio messaging with digital display and search, seeking to match evolving advertiser demands and consumer media habits. Interactive revenue, which also includes streaming and e-commerce sales, continues to scale—though aggregate levels remain smaller than the legacy broadcasting segment.
Outlook and What’s Ahead
Previously announced targets remain: capital expenditures for FY2025 are expected to total $3.0 million to $3.5 million, trimmed from an earlier range of $4.0 million to $4.5 million. Corporate expense is anticipated at roughly $12 million for the year, though digital strategy remains a top priority.
The period ahead will be shaped by Saga’s ability to sustain digital growth and manage through legacy advertising headwinds. Key areas to watch include progress on interactive and digital product adoption; progress on pending asset divestiture negotiations. Investors may also track future board changes, management execution of shareholder return policies.
SGA pays a regular dividend, which held at $0.25 per share for the quarter.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
