Negative Points

• Net revenue decreased 6.5% in Q2 and 6% for the six-month period, driven by double-digit declines in traditional advertising verticals.

• Station operating expenses increased 5.4% in Q2, partly due to non-cash tower rent expense and hiring initiatives, pressuring profitability.

• Traditional revenue streams are under pressure, with local revenue down 11.2%, national down 25%, and non-traditional down 16.4% in Q2.

• The company faces ongoing challenges from the 'remodeling the house' phase, with operating income of only $623,000 in Q2, reflecting the impact of transformation costs.

• Third-quarter revenue is pacing down mid-single digits, and without political, down mid-to-high single digits, indicating continued softness in core advertising.

• The termination of the credit agreement may limit financial flexibility for future strategic opportunities, though the company plans to renegotiate when appropriate.

Q & A Highlights

Q: What is the company's outlook for political revenue for the remainder of 2026, and how does it compare to prior years? A: Samuel Bush (CFO): We have $1.1 million in gross political revenue booked for the remainder of the year, compared to $650,000 for all of 2025 and $3.3 million for 2024. We are encouraged by the volume of calls regarding political advertising (e.g., lowest unit rates, FCC filings) and expect to see an increase in political dollars as we get closer to the general election, as opposed to the primaries.

Q: Does the company feel it has the right feature sets to be successful in digital, or are there additional products and services that need to be invested in? A: Christopher Forgy (CEO): Most of the major investments have been made. We are already strong in search and display, which are the primary drivers of our blended digital growth. We will continue to adjust and add to our digital offerings as the landscape evolves, always basing decisions on what customers need to compete in their markets. We will shift and expand as the market dictates.

Q: Can you provide more detail on the company's digital revenue performance and its contribution to overall results? A: Christopher Forgy (CEO): Our blended digital strategy (search, display, SEO, social, managed email, OTT/CTV) was up 76.4% year-over-year for the six months ending June 30, 2026, and up 60.8% for the quarter. E-commerce was up 15.2% year-to-date. Digital as a percentage of gross revenue reached 19% for the first half of 2026, up from 14% in the same period of 2025. This growth is helping to mitigate the decline in traditional radio ad spend.

Q: What is the company's current revenue pacing, and what are the expectations for the third quarter? A: Samuel Bush (CFO): Revenue for the third quarter is pacing down mid-single digits, with digital up mid to high single digits. Excluding political, we are pacing down mid to high single digits. We are seeing monthly improvement, with July and August down high single digits, while September is pacing up low single digits gross and down low single digits without political. October is pacing up mid-single digits gross and down low single digits without political.

Q: What is driving the increase in station operating expenses, and what is the expected impact for the full year? A: Samuel Bush (CFO): Station operating expense increased 5.4% in Q2, or 3.9% excluding non-cash rent expense from the tower sale. The increase is primarily due to hiring initiatives, including nine new sales managers ($146,000 in Q2) and digital campaign managers and fulfillment team members ($211,000 in Q2). We expect station operating expense to increase 1.5% to 2.5% for the full year, including these investments and the non-cash tower rent expense.

Q: Can you elaborate on the company's recent partnership with the University of Florida and its significance? A: Christopher Forgy (CEO): We announced a landmark seven-year joint sales partnership with the University of Florida College of Journalism and Communications. This expands our broadcast footprint in the Ocala-Gainesville market with stations like WOGK-FM, WRUF-AM/FM, and WIND-FM, as well as the Gators Radio Network. The partnership extends beyond sales to include opportunities for advertisers, students, and faculty in areas like digital media, sports media, and internships, reflecting our commitment to investing in the future of media.

Q: What is the company's strategy regarding its balance sheet and credit facility? A: Samuel Bush (CFO): We repaid the $5 million outstanding under our revolving credit agreement and subsequently terminated the credit agreement to have more flexibility in using our cash for dividends, share repurchases, and investments in digital initiatives. We had $27.8 million in cash and short-term investments as of June 30, 2026. We will put a new agreement in place when it makes sense as we continue our transformation.

Q: How is the company addressing the decline in traditional revenue verticals? A: Christopher Forgy (CEO): Traditional verticals are facing real challenges. Local revenue was down 11.2% for the quarter, national down 25%, and non-traditional down 16.4%. To counter this, we are investing heavily in our digital transformation, hiring sales managers and digital campaign managers, and partnering with Borrell & Associates for market data and visibility. We are also bringing search tools in-house and migrating digital fulfillment to Marketron NXT to improve efficiency and speed to market.

Q: What is the company's progress on monetizing non-core assets? A: Samuel Bush (CFO): Since the fourth quarter of last year, we have sold or are selling six non-core properties for proceeds of over $4 million, including the former Sarasota house for $1.7 million and an unused tower site in Portland, Maine, for $1 million. This allows us to offset cash spent on capital and operational expenses while investing in our digital transformation.

Q: Can you provide an update on the company's capital expenditure plans for 2026? A: Samuel Bush (CFO): We recorded capital expenditures of $1.3 million in Q2 and $2 million for the first half of the year, comparable to last year. We expect to spend approximately $3 million to $3.5 million in capital expenditures during 2026.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .