Saga Communications (NASDAQ:SGA) reported lower revenue and an operating loss for the third quarter of 2026 as declines in traditional advertising continued to offset growth in its digital business.
Net revenue fell 5.4% to $26.7 million from $28.2 million a year earlier, Executive Vice President, Chief Financial Officer and Treasurer Sam Bush said on the company’s earnings call. Saga recorded a $9.2 million non-cash impairment charge related to the value of its Federal Communications Commission licenses, contributing to an operating loss of $9.8 million.
Excluding the impairment charge, the operating loss was $563,000, compared with $626,000 a year earlier. Station operating income was $2.4 million, while station operating expenses fell 1.7%.
President and CEO Chris Forgy said the company’s transition toward a broader local media and marketing business was taking longer than management wanted. “As of today, we are not pleased with our results, clearly. We must do better,” he said.
Traditional Advertising Declines as Digital Grows
Bush said local revenue declined 11% in the quarter, national revenue fell 13.2% and non-traditional revenue decreased 5%. For the first nine months of the year, net revenue fell 5.8% to $75.9 million.
The company’s blended digital strategy, which includes services such as search, social media, targeted display and video, grew 24.9% in the third quarter and 55% year to date. Non-blended digital revenue fell 7% in the quarter, primarily because of declines in streaming revenue, Bush said.
Total digital revenue rose to $4.9 million in the quarter from $4.6 million a year earlier. For the first nine months, digital revenue was $14.5 million, or 19% of gross revenue, compared with $12.6 million, or 16%, a year earlier.
Forgy said radio remains central to Saga’s strategy, but that advertisers increasingly need services beyond traditional radio schedules. He said the company is seeing more digital revenue, more customers and longer contracts, while adding that management would evaluate progress based on financial results rather than digital revenue alone.
Political Advertising Supports Fourth-Quarter Pacing
Gross political revenue rose to $1.2 million in the third quarter from $73,000 a year earlier. Bush said Saga had sold an additional $3.6 million in gross political revenue for the remainder of 2026 and expected a full-year total of $5.7 million. That compares with $650,000 in 2025 and $3.3 million in 2024.
Fourth-quarter revenue was pacing up 9%, with digital pacing up 10.7%. Excluding political advertising, revenue was pacing down 5.7%, Bush said.
As of November 9, first-quarter 2027 revenue was pacing up 5.8%, with digital up 29.5%, Bush said, while cautioning that it was still early. Political advertising was not a factor in that first-quarter pacing, he added.
Client Wins and Digital Partnerships
Forgy cited recent advertising wins as evidence that Saga’s blended radio and digital approach is gaining traction. In Springfield, Massachusetts, the company won a $109,000 renewal for a seven-month recruitment campaign combining radio and targeted display, he said.
In Bellingham, Washington, a roofing company renewed a $38,000 annual radio buy and added $46,000 in search and $90,000 in video for its 2027 campaign, bringing annual spending to $174,000, Forgy said. He also said Saga was one of two finalists for another opportunity worth $100,000 per month, though the outcome was not yet known.
Saga partnered with Marketron NXT at the end of the second quarter for digital fulfillment products other than search, and with Borrell and Associates to give leadership and sales teams more visibility into their markets, Forgy said.
Dividend and Asset Sales
Saga declared a quarterly dividend of $0.25 per share, payable December 11 to shareholders of record on November 23. The payment will total approximately $1.6 million. The company also paid a $0.25-per-share dividend on October 16.
During the third quarter, Saga sold land in the Hilton Head market, a former studio building in Brattleboro, Vermont, and a non-core tower site in Portland, Maine, for approximately $1.8 million in cash proceeds. Through September 30, non-core asset sales had generated approximately $4 million in cash proceeds for the year, excluding routine selling costs.
Saga held $23.5 million in cash and short-term investments at September 30 and $22.4 million as of November 9. It expects 2026 capital expenditures of approximately $3 million to $3.5 million and station operating expense growth of 1.5% to 2.5%, including digital infrastructure and non-cash tower rental expenses.
About Saga Communications (NASDAQ:SGA)
Saga Communications, Inc. is a broadcast media company that owns and operates radio stations in markets across the United States. Its stations offer a mix of programming formats, including music, news, talk, sports, and other locally focused content designed to serve regional audiences. In addition to traditional AM and FM broadcasting, Saga provides digital media and marketing services to advertisers. These services may include online audio, streaming, website and social media advertising, and other multimedia solutions that complement its radio platforms.
