GRAY MEDIA, INC. Annual Report: A Look at the Past Year

For investors tracking Gray Media, Inc. (NYSE: GTN.A, GTN), this summary offers a clear, accessible overview of the company's performance and strategic direction for the fiscal year ended December 31, 2025.

Business Overview Gray Media, Inc. is a leading multimedia company that owns and operates television stations across the United States. The company delivers high-quality local news, entertainment, sports, and other programming to its communities. Its primary revenue sources include broadcast advertising, retransmission consent fees (payments from cable and satellite providers), and digital advertising. Gray Media remains committed to serving its local communities through impactful journalism and robust digital platforms.

Financial Performance: A Mixed Picture Gray Media reported total revenue of $3.2 billion, a 2% increase year-over-year. This modest growth stemmed primarily from a 7% rise in retransmission consent fees and a 15% surge in digital advertising revenue. These gains partially offset a 5% decline in traditional broadcast advertising, which faced pressure from a softer national advertising market.

Net income for the year was $280 million, down 10% from the previous year. This decline was mainly due to increased operating expenses from content investments and higher interest expenses. Adjusted EBITDA, a key measure of profitability for media companies, stood at $950 million, a 3% decrease compared to the prior year.

Financial Health Gray Media ended the fiscal year with a strong liquidity position, holding $150 million in cash and equivalents. The company also generated robust cash, producing $450 million in free cash flow. These resources are crucial for funding operations, capital expenditures, and debt service. However, the company's balance sheet reflects substantial debt, with total long-term debt at $5.5 billion, resulting in a net leverage ratio of 5.8x. Managing this debt and improving the leverage ratio are key financial priorities, with capital allocation focused on debt reduction. The company believes its current cash position, free cash flow generation, and access to credit facilities provide sufficient resources to meet its short-term and long-term obligations.

Management Discussion & Analysis Highlights Gray Media continued its strategic focus on local content and digital expansion. Key achievements included:

• Content Investment: Significant investment in local news programming, which increased viewership in key markets and earned several regional awards.
• Digital Growth: Successful rollout of new streaming apps and expanded digital advertising capabilities, contributing to strong digital revenue growth.
• Market Consolidation: The company completed the acquisition of three small-market television stations in Q2 2025, expanding its geographic footprint and audience reach. Integration efforts are ongoing.
• Operational Efficiency: Gray Media implemented cost-saving initiatives across various departments, projected to generate an estimated $25 million in annualized savings starting in 2026.

Looking ahead, Gray Media's strategy centers on three core pillars:

1. Enhancing Local Content: Further investment in high-quality local news and community programming to maintain audience engagement.
2. Accelerating Digital Transformation: Expanding direct-to-consumer digital offerings and diversifying digital revenue streams beyond traditional advertising.
3. Prudent Capital Allocation: Prioritizing debt reduction to strengthen the balance sheet, while selectively pursuing value-enhancing acquisitions that align with strategic goals.

Competitive Position Gray Media operates in a highly competitive media landscape. It vies for audience attention and advertising dollars with other local broadcasters, national networks, cable television providers, and a rapidly expanding array of digital streaming services and online platforms. The company leverages its strong local market presence, established brand recognition in its operating communities, and its commitment to producing high-quality, relevant local news and content. Its extensive portfolio of television stations provides significant reach and scale for advertisers. Furthermore, Gray Media's strategic investments in digital platforms and direct-to-consumer offerings aim to enhance its competitive standing by diversifying revenue streams and engaging audiences across multiple platforms.

Key Risks to Consider The 10-K outlines several significant risks investors should be aware of:

• Advertising Market Volatility: Advertising revenue, a substantial portion of the company's income, is highly sensitive to economic downturns and shifts in spending. The decline in traditional broadcast advertising remains a persistent challenge.
• Competition: Intense competition from other broadcasters, cable providers, and rapidly growing digital streaming services for audience attention and advertising dollars.
• High Debt Levels: Significant debt could limit financial flexibility, increase sensitivity to interest rate changes, and hinder future growth or responses to adverse economic conditions.
• Regulatory Changes: Extensive federal regulation governs the broadcast industry; changes in FCC rules or ownership limits could impact operations and strategic initiatives.
• Technological Disruption: Rapid advancements in media consumption technology could render existing business models less effective if the company does not adapt quickly.

Future Outlook Management anticipates a challenging yet opportunistic year ahead. They project flat to low single-digit revenue growth for fiscal year 2026, with continued strength in retransmission and digital offsetting ongoing pressures in traditional advertising. The company will focus on leveraging local market strengths, driving digital innovation, and disciplined financial management to enhance shareholder value.