Saga Communications (NASDAQ:SGA) reported lower second-quarter revenue and operating income as declines in traditional advertising categories outweighed continued growth in its blended digital business.
For the quarter ended June 30, 2026, net revenue fell $1.8 million, or 6.5%, to $26.4 million from $28.2 million a year earlier, according to Executive Vice President, CFO and Treasurer Sam Bush. Station operating income was $3 million, while operating income was $623,000.
Traditional Advertising Declines, Digital Revenue Expands
President and CEO Chris Forgy said Saga’s traditional advertising categories faced “real challenges” in monetization, even as he said audience consumption remained intact. Local, national and non-traditional revenue all posted double-digit year-over-year declines in the second quarter.
- Local revenue declined 11.2% in the quarter and 11% year to date.
- National revenue fell 25% in the quarter and 19.5% year to date.
- Non-traditional revenue decreased 16.4% in the quarter and 12.9% year to date.
Meanwhile, Saga’s blended digital strategy, which includes search, display, search engine optimization, social media, managed email, OTT and connected television, increased 60.8% from a year earlier in the second quarter and 76.4% for the first six months of 2026. E-commerce revenue rose 10.7% in the quarter and 15.2% year to date.
Digital represented 19% of gross revenue for the first six months, up from 14% in the comparable 2025 period. Other digital revenue, however, declined 9.6% during the quarter and 8.4% year to date.
Forgy said the company has been building its digital platform for more than three years and is seeking to integrate its radio operations with digital products. He described the company’s current effort as “remodeling the house while we are still living in the house,” referring to the challenge of building new capabilities while operating its established broadcast business.
Investment in Sales and Digital Infrastructure
During the second quarter, Saga hired sales managers in nine markets, adding approximately $146,000 in station operating expenses. The company also continued hiring digital campaign managers and related fulfillment employees, which added $211,000 in quarterly expense and $290,000 for the first half.
The company expects station operating expenses to increase between 1.5% and 2.5% for the full year, including spending related to its digital initiatives and non-cash tower rental expense. Corporate general and administrative expense declined 13%, or $398,000, in the quarter. Saga expects corporate G&A expense of approximately $11.8 million to $12 million in 2026, compared with $12.3 million last year.
Forgy said Saga has moved its search tools in-house and now employs three full-time search specialists. It also hired and trained 10 digital campaign managers, partnered with Marketron NXT for digital fulfillment outside of search, and entered a partnership with Borrell & Associates to gain more market and advertiser data.
The company also promoted former Charleston cluster President and General Manager Paul O’Malley to senior vice president of revenue development, with responsibility across traditional, non-traditional and digital revenue.
Political Revenue and Revenue Pacing
Gross political revenue was $450,000 in the second quarter, compared with $50,000 a year earlier. For the first half, political revenue totaled $725,000, versus $321,000 in the prior-year period. Saga had another $1.1 million in gross political revenue sold for the rest of the year as of the call.
Bush said the company was seeing indications of additional prospective political spending that had not yet been booked. He said he was encouraged that political revenue could increase closer to the elections.
For the third quarter, Saga said revenue was pacing down in the mid-single digits, while digital revenue was pacing up in the mid- to high-single digits. Excluding political revenue, total revenue was pacing down in the mid- to high-single digits.
Monthly pacing showed some improvement, according to Bush. July and August gross revenue were pacing down in the high-single digits, while September was pacing up in the low-single digits on a gross basis. October was pacing up in the mid-single digits gross, though it remained down in the low-single digits excluding political revenue.
Liquidity, Asset Sales and Community Partnerships
As of June 30, Saga had $27.8 million in cash and short-term investments, declining to $22.9 million as of Aug. 10. The reduction primarily reflected repayment of the $5 million outstanding under its revolving credit agreement. Following that repayment, the company terminated its existing credit agreement, saying it wanted greater flexibility in using cash for dividends, share repurchases, digital investments, capital expenditures and strategic opportunities.
Saga paid a quarterly dividend of $0.25 per share on June 12, totaling about $1.6 million. Bush said the company has paid more than $145 million in dividends since its first special dividend in 2012.
The company expects 2026 capital expenditures of approximately $3 million to $3.5 million. It recorded $1.3 million in capital expenditures during the second quarter and $2 million during the first half.
In addition to the prior tower sale that generated $10.5 million in cash, Saga said it has sold or is selling six non-core properties since the fourth quarter of 2025 for proceeds exceeding $4 million. Those transactions include the sale of its former Sarasota house for $1.7 million and an unused Portland, Maine, tower site for $1 million.
Forgy also highlighted a seven-year joint sales partnership with the University of Florida College of Journalism and Communications. The agreement expands Saga’s broadcast footprint in the Ocala-Gainesville market through a lineup including WOGK-FM, WRUF-AM and FM, WIND-FM and the University of Florida Gators Radio Network.
About Saga Communications (NASDAQ:SGA)
Saga Communications, Inc (NASDAQ: SGA) is an independent radio broadcasting company that owns and operates a portfolio of local radio stations across the United States. Headquartered in Grosse Pointe Farms, Michigan, the company focuses on full‐service radio properties offering a variety of formats, including music, news‐talk and sports programming. In addition to traditional over‐the‐air broadcasts, Saga leverages web streaming and mobile platforms to broaden listener reach and provide advertisers with multimedia opportunities.
Founded in 1985 by Edward J.
