Gray Television (NYSE:GTN) released its first-quarter 2026 results on May 7, revealing revenue that surpassed analyst expectations despite a sharp stock decline. Shares dropped 20.07% to close at $5.53, with intraday losses reaching 10.49%.
Q1 Earnings Overview
The company posted total revenue of $768 million, exceeding guidance of $680 million. Earnings per share (EPS) came in at $0.34, significantly above the $0.20 forecast from analysts. Results stemmed primarily from retransmission consent agreements with multichannel video programming distributors (MVPDs), boosting overall revenue.
Revenue by Segment
- Retransmission consent revenue: $352 million, topping guidance of $344 million.
- Core advertising revenue: $300 million, meeting the $250-300 million range and signaling a potential inflection point for 2026 sequential growth.
- Total company revenue: $739 million, above analyst estimates of $729 million, driven by retransmission deals.
Adjusted EBITDA reached $154 million, with free cash flow at $20 million.
Political Revenue Surge
Political advertising revenue hit $52 million, surpassing expectations. Executives highlighted growth in core and political segments amid a strong operating environment. Gray Television anticipates further upside from the 2026 political cycle.
Market Leadership and Reach
As the largest owner of local TV stations in the U.S., Gray reaches 37% of the national audience across 120 TV stations. Notably, Nielsen ranks 81 of its 119 highest-viewed stations (70%) as #1 in their markets, with 103 of 119 (89%) holding either #1 or #2 positions.
Comparative Performance
Gray outperformed peers in political revenue growth. In 2025, TV station retrans revenue of $32 per household outpaced the industry average of $22 by 45%. Core advertising per household reached $11 versus the industry’s $6, a 69% premium. From 2022 cycle highs, core growth exceeded 102%.
M&A Activity and Debt Management
Recent acquisitions include Bahakel Communications ($250 million), Allen Media stations ($171 million total), and Block Communications ($800 million), enhancing scale and synergies while improving total long-term net leverage by 0.25 turns.
Debt refinancing efforts continue, with no major maturities until after 2026 and 2028 cycles. As of March 31, 2026, liquidity stands at $1.04 billion, including $259 million in cash. Upcoming maturities include $750 million revolving credit and $739 million Term Loan D, both due December 1, 2028.
Future Outlook
Analysts project Q2 2026 EPS of $0.50 and revenue of $793 million. Full-year 2026 guidance includes EPS of $1.00 and revenue of $9.16 billion, reflecting political momentum. Sequential core revenue growth is expected at $60-70 million for Q2.
Executive Commentary
CEO Pat LaPlatney stated on the earnings call, “While we included Dish Network in our guidance, our overall initiatives and strength in retransmission and core advertising segments provide significant upside.”
CFO Jim Ryan added, “Our liquidity remains solid, focused on non-operating expenses and operating requirements.”
Despite a short-term setback from MVPD dynamics, Gray’s results underscore its dominant position in local broadcasting, particularly ahead of key elections, positioning it for sustained growth.
