Breaking Down Gray Television, Inc. (GTN) Financial Health: Key Insights for Investors

You're looking at Gray Television, Inc. (GTN) right now, trying to figure out if the recent financial results signal a pivot or just a temporary blip in a tough media market. The direct takeaway is this: while the top-line revenue continues to feel pressure from a non-election year, management's cost control is defintely a bright spot, keeping the investment thesis alive for the patient, debt-aware investor. Here's the quick math: the company's Q3 2025 revenue came in at $749 million, a significant 21.2% year-over-year decline, but they still managed to beat analyst estimates on the bottom line, delivering a GAAP loss of -$0.24 per share and Adjusted EBITDA of $162 million, thanks largely to expenses coming in $17 million below the low end of their guidance. The near-term risk remains the debt load, with a leverage ratio of 5.60 to 1.00 as of Q2 2025, but the opportunity is clear: with over $900 million in liquidity and the massive political ad cycle of 2026 looming, the question is whether they can hold the line until that revenue tsunami hits.

Revenue Analysis

You're looking at Gray Television, Inc. (GTN) and wondering where the money is actually coming from, especially in a non-election year. The direct takeaway is that while the total revenue for the 2025 fiscal year is expected to land between $3.07 billion and $3.09 billion, the core business structure remains a near-equal split between advertising and subscription fees, which is a key point for any media investor.

Gray Television, Inc.'s revenue streams are primarily split into two massive, nearly balanced segments: Advertising and Retransmission Consent. In the third quarter of 2025, these two segments accounted for the vast majority of the company's revenue of $749 million. This balance is a deliberate strategy, but it hides some important near-term volatility, especially with the political cycle. Honestly, this is a broadcast company, so your revenue is always going to be tied to eyeballs and carriage deals. For a deeper dive into the company's long-term strategy, you should check out the Mission Statement, Vision, & Core Values of Gray Television, Inc. (GTN).

Here's the quick math on segment contribution from the latest data, showing just how tight the split is:

• Advertising Revenue: Contributed 47.4% of total revenue in Q3 2025.
• Retransmission Consent Revenue: Contributed 46.2% of total revenue in Q3 2025.

The remaining small percentage comes from other sources, notably the company's production companies and digital media properties, which are growth areas to watch. For example, revenue from production companies increased by 7% in the first six months of 2025, and digital revenue was up 8% in Q2 2025. That's a defintely a bright spot in a challenging environment.

The Impact of the Off-Cycle Year on Growth

The biggest change you need to track is the year-over-year revenue decline, which is primarily driven by the lack of a major national election cycle in 2025. For the third quarter of 2025, total sales fell by a substantial 21.2% compared to the same period in 2024. This is a classic pattern for broadcast media in an 'off-year' (non-major election year). Political advertising revenue, which is highly cyclical, dropped by a staggering 81% in Q2 2025 compared to Q2 2024, falling to just $9 million. Still, the Q3 2025 political ad revenue of $8 million actually exceeded management's expectations for an off-cycle year, which is a small win.

Beyond the political noise, core advertising revenue-the local and regional commercials-is facing macroeconomic headwinds. In Q2 2025, core advertising revenue was $361 million, a decrease of 3% year-over-year. The automotive category, historically a huge spender, is one of the challenged areas. To be fair, this is a sector-wide issue, not just a Gray Television, Inc. problem. Also, Retransmission Consent revenue, which is the fee paid by cable and satellite operators, is also under pressure, declining by 1% in Q2 2025 to $369 million, and network affiliation expenses are declining as well. This is a trend toward 'flattening out' that management is watching closely.

The long-term trend, looking back two years, shows the company's revenue has fallen by about 2% annually. What this estimate hides, though, is the expected surge in 2026, which will be a major election year, and the potential for new revenue from non-traditional sources like the Assembly Atlanta studio project, which is expected to be a significant cash generator within 12 to 24 months.

The next concrete step for you is to monitor the Q4 2025 results against the guidance of $767 million to $782 million to see if the core advertising momentum holds up and if retransmission trends stabilize.

Profitability Metrics

If you're looking at Gray Television, Inc. (GTN), the direct takeaway is this: their profitability is a tale of two metrics-strong gross margins show operational efficiency, but the high debt load and non-election year cycle are crushing the net profit line. The company's trailing twelve-month (TTM) Gross Margin of 32.46% is respectable, but the Net Margin of 5.64% (TTM) is a tight squeeze, honestly, especially when you factor in the high interest payments.

Here's the quick math on their core profitability for the TTM period ending in 2025. With a TTM Revenue of approximately $3.34 billion, the Gross Profit-what's left after Cost of Goods Sold-comes in around $1.084 billion. That's a solid foundation. But as costs pile up, the Operating Margin drops to 22.26%, suggesting an Operating Profit of roughly $743 million. The real pinch comes after interest and taxes, leaving a Net Margin of just 5.64%, or about $188 million in Net Profit for the TTM period.

Operational Efficiency and Industry Comparison

Gray Television, Inc.'s operational efficiency, measured by its Gross Margin, is a clear strength. A 32.46% Gross Margin shows the company is managing its direct costs of content and operations quite well. However, when you compare the full picture to the broader US Television Broadcasting industry, the story gets complicated. The industry average for Operating Margin was actually negative at -6.9% in 2024, which makes GTN's 22.26% Operating Margin look phenomenal.

Still, what this estimate hides is the massive non-operating expense of debt. The company is actively working to reduce operating expenses, which contributed to a net loss of $23 million in Q3 2025, even with better-than-expected political advertising for an off-cycle year. That's why the Net Margin is so thin, or even negative in some quarters. For a more detailed look at who is betting on this operational strength, check out Exploring Gray Television, Inc. (GTN) Investor Profile: Who's Buying and Why?

Here is a snapshot of how Gray Television, Inc. stacks up against the industry, using the most recent available data for comparison:

Profitability Trends and Near-Term Risks

The trend in profitability is volatile, and that's the key risk to defintely watch. GTN's revenue and, consequently, its profit margins, are heavily reliant on the biennial US election cycle. The 2025 fiscal year is a non-political year, which means the revenue forecast of $3.07 billion to $3.085 billion is lower than the market consensus. This reliance is a structural issue: when political ad revenue surges, like in 2024, profitability spikes; when it's an off-cycle year like 2025, the core advertising-which was essentially flat or down in recent quarters-can't pick up the slack.

The company's focus on cost management is a bright spot, with operating expenses in Q3 2025 significantly below guidance. But the secular pressures-cord-cutting and declining retransmission consent revenue-are real and are eroding the total audience and revenue base. Your action here is simple: factor in a significant dip in profitability for 2025 and model a rebound in 2026, but only if the core business can start showing organic growth outside of political cycles. The high debt load of around $6 billion at the end of Q3 2024 means interest payments will continue to be a meaningful drag on net income, regardless of the strong operating performance.

Debt vs. Equity Structure

You're looking at Gray Television, Inc. (GTN) and the first thing that jumps out is the sheer size of its debt load. The company's financing strategy leans heavily on debt, which is common in capital-intensive industries like broadcasting, but Gray Television, Inc.'s leverage is notably higher than its peers. This high debt-to-equity ratio is the core risk you need to understand, even as the company successfully refinances its near-term maturities.

As of September 2025, Gray Television, Inc.'s total debt stood at approximately $5.68 Billion USD. This figure represents the total of all current (short-term) and non-current (long-term) obligations. The vast majority of this is long-term, which is typical for a business with significant fixed assets like television stations. However, this heavy reliance on debt is why S&P Global Ratings downgraded the company's issuer credit rating to 'B-' in late 2024. [cite: 5 in first search]

Here's the quick math on leverage:

The debt-to-equity ratio (D/E) for Gray Television, Inc. is running at about 2.01, which means the company uses roughly two dollars of debt for every one dollar of shareholder equity. To be fair, the broadcasting industry average is around 1.25, so Gray Television, Inc. is operating with a substantially higher debt burden compared to its competition. This high leverage, expected to keep S&P's adjusted net leverage in the high-6x area through 2025, [cite: 5 in first search, 8 in second search] is the main reason for the elevated financial risk profile. It means less cushion if cash flow dips.

The company has been proactive in managing its debt maturity wall. In July 2025, Gray Media, Inc. completed a major refinancing, issuing $900 million in 9.625% senior secured second lien notes due in 2032. [cite: 1 in first search] This move, coupled with amending its senior credit facility to extend the maturity of its revolving credit commitments to December 1, 2028, [cite: 1 in first search] addressed a significant portion of its near-term obligations. This is defintely a positive for liquidity, pushing the risk further out on the timeline.

Gray Television, Inc. balances its capital structure by relying on debt financing for large, long-term capital needs, such as acquisitions and infrastructure, while using equity funding (retained earnings and preferred stock) to maintain a base. The constant refinancing activity, including the Q3 2025 extension of the maturity profile out to 2033, [cite: 7 in second search] shows management's focus on debt management. Still, the cost of that debt is rising, as evidenced by the 9.625% rate on the new notes. This is a critical factor for future earnings, as higher interest expense eats into net income. For a deeper dive into who is betting on this strategy, you should check out Exploring Gray Television, Inc. (GTN) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You need to know if Gray Television, Inc. (GTN) can cover its near-term bills, especially with its substantial debt load. The short answer is that while the company's liquidity ratios are tight, its consistent cash flow from operations and aggressive debt management provide a crucial cushion, but the low current ratio is a red flag.

As of the most recent quarter (MRQ) in late 2025, Gray Television, Inc.'s liquidity position is constrained. The company's Current Ratio, which measures current assets against current liabilities, stands at only 0.93. This means Gray Television, Inc. has only 93 cents of liquid assets for every dollar of short-term debt. The Quick Ratio, which excludes less-liquid inventory, is even tighter at 0.76. A ratio below 1.0 is defintely a sign to watch, suggesting a potential reliance on non-current assets or new financing to meet all short-term obligations if they came due simultaneously.

Here's the quick math on their immediate capacity:

• Current Ratio: 0.93 (Current Assets / Current Liabilities)
• Quick Ratio: 0.76 (Quick Assets / Current Liabilities)

The company's working capital trends, however, show a positive change. Working capital is simply current assets minus current liabilities. The trailing twelve months (LTM) change in working capital, as of September 2025, was a positive $123.0 million. This suggests that over the past year, the short-term liquidity position has improved, even if the absolute ratios remain below the ideal 1.0 to 2.0 range for a healthy business.

The real strength in Gray Television, Inc.'s financial health lies in its cash flow statements. Cash flow from operations (CFO) has been consistently positive over the last five years, which is a massive plus. For example, the trailing 12-month Free Cash Flow (FCF) as of June 2025 was a robust $668 million. This consistent cash generation is the primary mechanism for servicing their substantial debt and funding operations.

On the investing front, the primary use of cash is for capital expenditures (CapEx). Gray Television, Inc. has been disciplined, reducing its expected full-year 2025 CapEx range to between $70 million and $75 million. This lower CapEx means more operating cash is available for debt reduction or other strategic uses.

Cash flow from financing (CFF) is dominated by debt management. The company has aggressively chipped away at its debt, repaying an additional $22 million in Q2 2025, bringing the total debt reduction since 2024 to $560 million. They also completed significant refinancing transactions in July 2025 to extend maturity dates, which is a smart move to manage their $5.71 billion in total debt. Plus, they continue to pay a quarterly common dividend of $0.08 per share.

The key takeaway is this: Gray Television, Inc. has a liquidity concern on paper (low Current Ratio), but a cash flow strength in reality (strong, positive CFO). The risk is not day-to-day operations, but rather the sheer size of the total debt, which the positive cash flow is actively working to reduce. You can dive deeper into the ownership structure and strategy by Exploring Gray Television, Inc. (GTN) Investor Profile: Who's Buying and Why?

Here is a snapshot of the cash flow picture:

Valuation Analysis

You're looking at Gray Television, Inc. (GTN) and wondering if the market is missing something, or if the low stock price is a warning. The direct takeaway is that, based on traditional metrics, Gray Television appears undervalued, but you need to be realistic about the high debt load and industry headwinds that keep it trading cheaply. This isn't a clean-cut value play; it's a deep-value scenario with structural risks.

The core of the valuation story rests on a few key multiples. As of November 2025, Gray Television's trailing twelve-month (TTM) Price-to-Earnings (P/E) ratio stood at about 10.11, which is low compared to the broader market and suggests the stock is cheap relative to its earnings. However, the Price-to-Book (P/B) ratio is the real eye-opener, sitting at just 0.23 as of the June 2025 quarter. Here's the quick math: with a P/B this low, the market values the company at less than a quarter of its stated book value per share of $21.36.

The Enterprise Value-to-EBITDA (EV/EBITDA) ratio, which is a better measure for a capital-intensive, debt-heavy business like broadcasting, was 7.62 as of September 2025. This is right around the historical median for Gray Television, suggesting a fair valuation if you look solely at operational cash flow before factoring in the high interest payments. To be fair, a median EV/EBITDA of 7.52 for a company facing linear TV audience decline isn't defintely a screaming bargain, but it's not wildly overvalued either.

• P/E Ratio (TTM Nov 2025): 10.11
• P/B Ratio (Jun 2025): 0.23
• EV/EBITDA (TTM Sep 2025): 7.62

The stock's price trend over the last 12 months tells a story of volatility and modest recovery. The stock traded between a 52-week low of $2.91 and a high of $6.31. As of late November 2025, the stock is trading around $4.49, representing a gain of only 2.99% over the last year. That's a tiny move, but it shows price stabilization after a rough period. The market is still trying to figure out the long-term value proposition here.

For income-focused investors, the dividend yield is compelling. Gray Television pays an annualized dividend of $0.32 per share, translating to a substantial yield of about 7.13%. The dividend payout ratio is reported at a sustainable 25.20%. What this estimate hides is that the Payout Ratio is often calculated against adjusted earnings, as the company reported a quarterly loss of ($0.24) EPS in November 2025. The dividend itself is a strong signal of management's confidence in future free cash flow, even with current negative GAAP earnings.

Wall Street analysts are generally optimistic, which supports the idea of undervaluation. The consensus rating is either a 'Buy' or 'Strong Buy'. The average price target is in the range of $6.88 to $7.60, suggesting a potential upside of over 50% from the current price. This gap between the current price and the target is what attracts value investors, but remember, price targets are just estimates, not guarantees. For a deeper dive into the company's full financial picture, you should check out Breaking Down Gray Television, Inc. (GTN) Financial Health: Key Insights for Investors.

Risk Factors

You need to look past the occasional stock rally when evaluating Gray Television, Inc. (GTN); the core issue remains a heavy debt load and a cyclical business model facing structural headwinds. The most immediate concern is financial leverage, but the long-term risk is the continued erosion of traditional television advertising revenue in a non-political year.

The company's financial health is under pressure, largely due to its high debt-to-equity ratio of 2, which signals significant reliance on borrowed money. Here's the quick math: as of the third quarter of 2025, the total leverage ratio stood at a high 5.77x, based on the senior credit agreement calculation. That level of debt is why the Altman Z-Score-a measure of bankruptcy probability-is a concerning 0.79, placing the company in the financial distress zone. They are working on it, but it's a long road.

Operational and Market Headwinds

The core business model is highly sensitive to the political advertising cycle. In 2025, an off-cycle year, this risk is clear: the company is projecting a full-year revenue range of $3.07 billion to $3.085 billion, which falls short of the market consensus of approximately $3.11 billion. This cautious outlook is directly tied to the decline in political ad spend, plus broader macro-economic softness that hit core advertising.

Operational challenges in 2025 have also been material. For instance, the loss of a major network affiliation at its Atlanta station led to a significant non-cash impairment charge of $29 million. Also, the company has a concentration risk, with a material portion of its non-political broadcast advertising revenue coming from a limited number of industries.

• Political Ad Cyclicality: Revenue drops sharply in odd-numbered years.
• Affiliation Risk: Loss of network partners impacts viewership and revenue.
• Core Ad Decline: Automotive and other key categories are down.
• Digital Disruption: Competition from streaming and digital media is intense.
• Retransmission Disputes: Near-term risk from issues like the YouTube TV carriage dispute.

Mitigation and Forward Strategy

To be fair, Gray Television, Inc. (GTN) management is not sitting still; they are aggressively focused on deleveraging and cost control. Their long-term objective is to drive the total leverage ratio back below 4x, which would significantly benefit the equity. They've already made progress on debt, repaying an additional $22 million in 2025 and extending debt maturities out to 2033 to manage the repayment schedule.

On the expense side, the cost-cutting is showing up in the numbers. Operating expenses were flat in the second quarter of 2025 compared to 2024, and the Q3 2025 operating expenses came in $17 million below the low end of their guidance. They also reduced the full-year 2025 capital expenditure (CapEx) range by $15 million, to a new range of $70 million to $75 million. This focus on free cash flow is defintely the right move.

Here is a summary of the key financial risks and the company's stated mitigation efforts:

For a deeper dive into the valuation and strategic frameworks, you can check out the full post: Breaking Down Gray Television, Inc. (GTN) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking at Gray Television, Inc. (GTN) and wondering where the real growth comes from beyond the cyclical political advertising. Honestly, the answer is a calculated, two-pronged strategy: aggressive consolidation in local markets and a smart, defintely necessary pivot to digital delivery.

The core growth driver is market expansion through strategic acquisitions. Gray Television, Inc. is leveraging recent regulatory flexibility to create duopolies-owning two major stations in one market-which slashes operational costs and boosts market share. The company is set to enter six new markets by acquiring top-ranked local news stations, plus creating 11 new Big Four full duopolies across its footprint. This isn't just buying; it's buying smart to achieve economies of scale.

Here's the quick math on recent M&A: Gray Television, Inc. is finalizing the acquisition of ten television stations from Allen Media Group for $171 million, alongside the purchase of Block Communications' stations for $80 million. These deals, expected to close in Q4 2025, are designed to fortify the company's dominance in local news, a segment with inelastic demand that keeps retransmission consent fees a critical revenue component. That local news focus is their moat. For a deeper dive into their long-term vision, check out the Mission Statement, Vision, & Core Values of Gray Television, Inc. (GTN).

In terms of financial projections, the near-term picture reflects a transitional period, but the underlying operational efficiency is strong. For the full 2025 fiscal year, the Trailing Twelve Months (TTM) revenue as of November 2025 stands at approximately $3.34 Billion USD. Looking ahead, Q4 2025 Revenue Guidance is pegged at a midpoint of $774.5 million, with an expected GAAP loss per share of -$0.21. This loss is an improvement from the Q3 2025 GAAP loss of -$0.24 per share, which was already a significant 50% beat on analyst estimates. The company is controlling what it can: Q3 2025 operating expenses came in at $592 million, which was $17 million below the low end of their guidance.

The second major growth vector is innovation in product and distribution. Gray Television, Inc. is not just a broadcast company anymore; it's a content delivery platform. They are pushing into the digital space with two key initiatives:

• Digital Revenue Growth: Digital revenue was up 8% in Q2 2025, showing traction.
• Assembly Atlanta: Their production facility is nearing 80% occupancy, providing a new stream of incremental revenue.
• Streaming Partnership: A new streaming structure, a first-of-its-kind partnership with Google Cloud powered by QuickPlay, will start rolling out in January 2026 to revolutionize how viewers connect with content.

Plus, their balance sheet gives them flexibility. Gray Television, Inc. finished Q3 2025 with over $900 million in liquidity, which is a powerful competitive advantage for future consolidation or to weather any economic softness. This financial strength, combined with their local market dominance-serving 113 television markets and reaching roughly 37% of US households-positions them well to capture the upside when core advertising, particularly in the legal and financial services categories which saw strong Q3 growth, rebounds fully.

Next Step: Portfolio Managers should model the accretion from the pending Q4 2025 acquisitions using a $17 million annual cost synergy assumption (based on the Q3 expense beat) to see the true impact on 2026 Free Cash Flow.