Saga Communications’ Earnings Call: Digital Gains Amid Challenges

Saga Communications ((SGA)) has held its Q1 earnings call. Read on for the main highlights of the call.

Saga Communications’ latest earnings call painted a mixed picture for the company. While there was strong growth in digital ad and interactive revenue, these gains were overshadowed by a decrease in net revenue and ongoing net losses. The uncertainty surrounding the pacing for Q2 further adds to the challenges faced by Saga, leaving investors with a cautious outlook.

Digital Ad Revenue Growth

Saga Communications has experienced significant growth in its digital ad revenue, generating $5.3 million by May 8, 2025, surpassing the total digital ad revenue for the entire year of 2024. This growth highlights the success of Saga’s digital strategy and its ability to capture a larger share of the digital ad market.

Increase in Total Interactive Revenue

The company has also seen an increase in its total interactive revenue, reaching $12.5 million by May 8, 2025. This figure is close to the total interactive revenue of $14.2 million for the entire year of 2024, indicating a strong upward trend in this segment.

High Profit Margin in Interactive Revenue

Saga’s interactive revenue not only increased but also maintained a high profit margin of 51% for the quarter. This demonstrates the profitability of the company’s interactive segment and its importance to Saga’s overall financial health.

Successful Digital Strategy

Saga’s digital strategy, which focuses on integrating radio with digital ads, has proven successful. The company has gained trust from clients, as evidenced by a substantial $1 million order from a single client in one market, showcasing the effectiveness of its approach.

Decrease in Net Revenue

Despite the positive trends in digital and interactive revenue, Saga experienced a 4.3% decrease in net revenue, dropping to $24.2 million compared to $25.3 million last year. This decline highlights the challenges the company faces in its traditional revenue streams.

Operating Loss

Saga reported an operating loss of $2.3 million for the quarter, which is slightly better than the $2.4 million loss from the previous year. This indicates that while the company is making strides in some areas, it still faces operational challenges.

Net Loss

The company also reported a net loss of $1.6 million for the quarter, mirroring the loss from the same period last year. This consistency in net loss suggests that Saga has yet to turn the corner on its financial difficulties.

Uncertain Pacing for Q2

Saga’s pacing for the second quarter remains uncertain. April’s pacing was down in the high single digits, May showed improvement to down low single digits, and June is currently flat with last year. This uncertainty adds a layer of complexity to the company’s financial outlook.

Forward-Looking Guidance

Saga Communications outlined several forward-looking strategies during the earnings call. The company plans to leverage proceeds from potential non-core asset sales, such as tower sites, for stock buybacks. Additionally, Saga aims to capture a larger share of the digital ad market by blending radio with digital advertising solutions. Capital expenditures are expected to be between $4 million and $4.5 million for 2025, with station operating expenses anticipated to remain flat or decrease slightly compared to 2024. Saga also plans to continue paying regular quarterly dividends, maintaining a strong financial position.

In conclusion, Saga Communications’ earnings call revealed a company navigating both opportunities and challenges. While digital and interactive revenue growth is promising, the decrease in net revenue and ongoing losses highlight areas needing improvement. The company’s forward-looking strategies reflect a commitment to enhancing its digital presence and financial stability, yet the uncertain pacing for Q2 suggests that caution is warranted.