Saga Communications Inc-Class A (NASDAQ:SGA) Reports Q3 2025 Earnings Miss, Driven by Music Licensing Settlement

Saga Communications Inc-Class A (NASDAQ:SGA) reported financial results for the third quarter of 2025 that fell short of analyst expectations, leading to a negative market reaction in after-hours trading. The radio broadcasting company experienced a decline in revenue and a surprise net loss for the quarter, primarily driven by a significant, one-time expense related to an industry-wide music licensing settlement.

Earnings and Revenue Versus Estimates

The company's performance for Q3 2025 missed analyst projections on both the top and bottom lines. The reported figures highlight the immediate financial impact of the quarter's headwinds.

• Earnings Per Share (EPS): The company reported a diluted loss per share of $0.08. This contrasts sharply with the analyst consensus estimate, which had projected a profit of $0.21 per share.
• Revenue: Net operating revenue for the quarter was $28.2 million, a decrease of 1.8% compared to the $28.7 million reported in the same period last year. This came in below the analyst revenue estimate of $28.58 million.

Market Reaction

The market's response to the earnings miss has been negative. Following the release, the stock has shown a downward trend. The immediate performance data indicates a sell-off as investors digest the weaker-than-expected quarterly results and the reported net loss.

Key Factors from the Press Release

A deep dive into the earnings report reveals that the company's results were heavily influenced by a single, non-recurring event. Management emphasized that without this expense, the quarter would have told a different story.

• Music Licensing Settlement Impact: The company incurred a retroactive rate adjustment of approximately $2.1 million as part of an industry-wide settlement with music licensing organizations ASCAP and BMI. This charge single-handedly pushed the company’s results into negative territory.
• Underlying Performance: Excluding the settlement, the company stated it would have reported operating income of $1.5 million (compared to $1.6 million in Q3 2024) and net income for the quarter. On a same-station basis for the nine-month period, which excludes stations not owned for the full comparable period, net revenue decreased 4.8%.
• Balance Sheet and Capital Management: The company maintains a strong balance sheet, with $26.3 million in cash and short-term investments as of September 30, 2025, which grew to $34.2 million by November 3, 2025, following a tower asset sale. Saga continues its commitment to returning capital to shareholders, paying a quarterly dividend of $0.25 per share in September.

Looking Ahead

The press release did not provide a specific financial outlook for the coming quarters or the full year. This leaves investors to rely on existing analyst estimates, which project revenue of $28.79 million for Q4 2025. The company's ability to stabilize its core advertising revenue, which saw a decline in political advertising, will be a key area of focus moving forward.

For a detailed breakdown of historical earnings and future analyst estimates for Saga Communications, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial advice, or any recommendation to buy or sell securities.