GRAY MEDIA, INC (GTN)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

Introduction. The following discussion and analysis of the financial condition and results of operations of Gray Media, Inc. and its consolidated subsidiaries (except as the context otherwise provides, “Gray Media,” “Gray,” the “Company,” “we,” “us” or “our”) should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included elsewhere herein, as well as with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”) filed with the SEC.

Business Overview. We are a multimedia company headquartered in Atlanta, Georgia. We are the nation’s largest owner of top-rated local television stations and digital assets. We serve 117 full-power television markets that collectively reach approximately 37% of US television households. The portfolio includes 78 markets with the top-rated television station and 101 markets with the first and/or second highest rated television station in average all-day ratings across the 116 of such markets that were measured by Nielsen in 2025. We also own the largest Telemundo Affiliate group with 46 markets and Gray Digital Media, a full-service digital agency offering national and local clients digital marketing strategies with the most advanced digital products and services. Our additional media properties include video production companies Raycom Sports, Tupelo Media Group, and PowerNation Studios, and studio production facilities Assembly Atlanta and Third Rail Studios.

Our operating revenues are derived primarily from broadcast and internet advertising, as well as retransmission consent fees. For each of the six-months ended June 30, 2026 and 2025, we generated revenue of $1.6 billion.

Revenues, Operations, Cyclicality and Seasonality. Broadcast advertising is sold for placement generally preceding or following a television station’s network programming and within local and syndicated programming. Broadcast advertising is sold in time increments and is priced primarily on the basis of a program’s popularity among the specific audience an advertiser desires to reach. In addition, broadcast advertising rates are affected by the number of advertisers competing for the available time, the size and demographic makeup of the market served by the station and the availability of alternative advertising media in the market area. Broadcast advertising rates are generally the highest during the most desirable viewing hours, with corresponding reductions during other hours. The ratings of a local station affiliated with a major network can be affected by ratings of network programming. Most advertising contracts are short-term, and generally run only for a few weeks.

We also sell internet advertising on our stations’ websites and mobile apps. These advertisements may be sold as banner advertisements, video advertisements and other types of advertisements or sponsorships.

Our broadcast and internet advertising revenues are affected by several factors that we consider to be seasonal in nature. These factors include:

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We derived a material portion of our non-political broadcast advertising revenue from advertisers in a limited number of industries, particularly the services sector, comprising financial, legal and medical advertisers, and the automotive industry. The services sector has become an increasingly important source of advertising revenue over the past few years. Approximately 27% and 25% of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to the services sector during the six-months ended June 30, 2026 and 2025, respectively. Approximately 17% and 15% of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to automotive customers during the six-months ended June 30, 2026 and 2025, respectively. Revenue from these industries may represent a higher percentage of total revenue in odd-numbered years due to, among other things, the increased availability of advertising time, as a result of such years being the “off year” of the two-year election cycle.

Our primary broadcasting operating expenses are employee compensation, related benefits and programming costs. In addition, the broadcasting operations incur overhead expenses, such as maintenance, supplies, insurance, rent and utilities. A large portion of the operating expenses of our broadcasting operations is fixed. We continue to monitor our operating expenses and seek opportunities to reduce them where possible.

Please see our “Results of Operations” and “Liquidity and Capital Resources” sections below for further discussion of our operating results.

Revenue

Set forth below are the principal types of revenue, less agency commissions, earned by us for the periods indicated and the percentage contribution of each type of revenue to our total revenue (dollars in millions):

Results of Operations

As described in Note 3, “Acquisitions and Divestitures” within the accompanying condensed consolidated financial statements, during the six-months ended June 30, 2026, we acquired stations from Bahakel Communications, Ltd., Allen Media Group, Block Communications, Inc. and Sagamore Hill Broadcasting, Inc. (collectively, the “2026 Acquisitions”), and swapped stations with The E. W. Scripps Company.

Three-Months Ended June 30, 2026 (“the 2026 three-month period”) Compared to Three-Months Ended June 30, 2025 (“the 2025 three-month period”)

Revenue. Total revenue increased by $67 million or 9% in the 2026 three-month period compared to the 2025 three-month period. The 2026 Acquisitions contributed $41 million of the increase in total revenue. During the 2026 three-month period:

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Broadcasting Expenses. Broadcasting expenses (before depreciation, amortization and gain or loss on disposal of long-lived assets) increased by $6 million, or 1%, to $569 million in the 2026 three-month period compared to the 2025 three-month period. The 2026 Acquisitions increased broadcasting expenses by $30 million during the 2026 three-month period. During the 2026 three-month period:

Production Company Expenses. Production company operating expenses increased by $2 million or 10% in the 2026 three-month period compared to the 2025 three-month period due to increases in contract labor expenses.

Corporate and Administrative Expenses. Corporate and administrative expenses (before depreciation, amortization and gain or loss on disposal of long-lived assets) increased by $12 million or 48% to $37 million in the 2026 three-month period compared to the 2025 three-month period, due primarily to increases in transaction-related professional service expenses. Non-cash stock-based compensation expenses were $3 million and $5 million for the three-month periods ended June 30, 2026 and 2025, respectively.

Depreciation. Depreciation of property and equipment increased by $2 million or 6% to $34 million for the 2026 three-month period compared to the 2025 three-month period. Depreciation increased primarily due to additional depreciation incurred for the 2026 Acquisitions.

Amortization. Amortization of intangible assets totaled $21 million in the 2026 three-month period and $28 million in the 2025 three-month period. The decrease in amortization expense was the result of finite-lived intangible assets becoming fully amortized offset by additional amortization related to intangibles acquired from the 2026 Acquisitions.

Impairment of Intangible Assets. There was no impairment of intangible assets during the 2026 three-month period. During the 2025 three-month period, we recorded a non-cash impai

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Overview

Introduction. The following discussion and analysis of the financial condition and results of operations of Gray Media, Inc. and its consolidated subsidiaries (except as the context otherwise provides, “Gray,” the “Company,” “we,” “us” or “our”) should be read in conjunction with our audited consolidated financial statements and notes thereto included elsewhere herein.

This section of our Annual Report discusses 2025 and 2024 items and year-over-year comparisons between 2025 and 2024. A detailed discussion of 2023 items and year-over-year comparisons between 2024 and 2023 that are not included in this Annual Report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7. of our Annual Report for the year ended December 31, 2024.

Business Overview. We are a multimedia company headquartered in Atlanta, Georgia. We are the nation’s largest owner of top-rated local television stations and digital assets in the United States. Our television stations serve 114 full-power television markets that collectively reach approximately 37% of US television households. This portfolio includes 77 markets with the top-rated television station and 97 markets with the first and/or second highest rated television station in average all-day ratings across the 113 of such markets measured by Nielsen in 2025. We also own the largest Telemundo Affiliate group with 47 markets totaling over 1.6 million Hispanic TV Households. We also own Gray Digital Media, a full-service digital agency offering national and local clients digital marketing strategies with the most advanced digital products and services. Our additional media properties include video production companies Raycom Sports, Tupelo Media Group, and PowerNation Studios, and studio production facilities Assembly Atlanta and Third Rail Studios.

Our operating revenues are derived primarily from broadcast and digital advertising, retransmission consent fees and, to a lesser extent, other sources such as production of television and event programming, television commercials, tower rentals and management fees. For the years ended December 31, 2025, 2024 and 2023, we generated revenue of $3.1 billion, $3.6 billion and $3.3 billion, respectively.

Revenues, Operations, Cyclicality and Seasonality. Broadcast advertising is sold for placement generally preceding or following a television station’s network programming and within local and syndicated programming. Broadcast advertising is sold in time increments and is priced primarily on the basis of a program’s popularity among the specific audience an advertiser desires to reach. In addition, broadcast advertising rates are affected by the number of advertisers competing for the available time, the size and demographic makeup of the market served by the station and the availability of alternative advertising media in the market area. Broadcast advertising rates are generally the highest during the most desirable viewing hours, with corresponding reductions during other hours. The ratings of a local station affiliated with a major network can be affected by ratings of network programming. Most advertising contracts are short-term, and generally run only for a few weeks.

We also sell digital advertising on our stations’ websites and mobile apps. These advertisements may be sold as banner advertisements, video advertisements and other types of advertisements or sponsorships.

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Our broadcast and digital advertising revenues are affected by several factors that we consider to be seasonal in nature. These factors include:

We derived a material portion of our non-political broadcast advertising revenue from advertisers in a limited number of industries, particularly the services sector, comprising financial, legal and medical advertisers, and the automotive industry. The services sector has become an increasingly important source of advertising revenue over the past few years. Approximately 26%, 23%, and 27% of our Core Advertising Revenue was derived from advertising sales to customers in the services sector for the years ended December 31, 2025, 2024, and 2023, respectively. Approximately 17%, 20%, and 20% of our Core Advertising Revenue was derived from advertising sales to automotive customers for the years ended December 31, 2025, 2024, and 2023, respectively. Revenue from these industries may represent a lower percentage of total revenue in even-numbered years due to, among other things, the decreased availability of advertising time, as a result of such years being the “on-year” of the two-year election cycle.

Our primary broadcasting operating expenses are employee compensation, related benefits and programming costs. In addition, the broadcasting operations incur overhead expenses, such as maintenance, supplies, insurance, rent and utilities. A large portion of the operating expenses of our broadcasting operations is fixed. We continue to monitor our operating expenses and seek opportunities to reduce them where possible.

Please see our “Results of Operations” and “Liquidity and Capital Resources” sections below for further discussion of our operating results.

Risk Factors. The broadcast television industry relies primarily on advertising revenue and faces significant competition. For a discussion of certain other presently known, significant risk factors that may affect our business, see “Item 1A. Risk Factors” included elsewhere herein.

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Revenue

Set forth below are the principal types of revenue, less agency commissions, and the percentage contribution of each to our total revenue (dollars in millions):

Results of Operations

Year Ended December 31, 2025 (“2025”) Compared to Year Ended December 31, 2024 (“2024”)

Revenue. Total revenue decreased $549 million, or 15%, to $3.1 billion for 2025 compared to 2024. During the year ended December 31, 2025:

Broadcasting Expenses. Broadcasting expenses (before depreciation, amortization, impairment and gain or loss on disposal of assets) decreased $78 million or 3%, to $2.2 billion. During the year ended December 31, 2025 compared to the year ended December 31, 2024:

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Production Company Expenses. Production company expenses (before depreciation, amortization, and gain or loss on disposal of assets) increased by approximately $12 million to $95 million for 2025, compared to $83 million in 2024. Production company operating expenses in 2025 increased primarily due to increases in property taxes at Assembly Atlanta and the non-recurring recovery from the Diamond Sports bankruptcy, which was recorded in 2024.

Corporate and Administrative Expenses. Corporate and administrative expenses (before depreciation, amortization and gain or loss on disposal of assets) increased by $9 million to $113 million in 2025 compared to 2024. During 2025, professional services increased by $7 million primarily related to our pending business combination transactions. Non-cash stock-based compensation expenses increased to $21 million in 2025 compared to $17 million in 2024.

Depreciation. Depreciation of propert

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