Nexstar Media Group Reports Record Q1 Net Revenue, Reaffirms Confidence in Growth Drivers and Shareholder Returns

Nexstar Media Group (NASDAQ: NXST) has reported a robust start to 2024 with record-setting first-quarter net revenue of $1.28 billion, underpinned by a high distribution revenue of $761 million. The company's adjusted EBITDA stood at $542 million, with a strong 42.2% margin. Despite a slight decline in advertising revenue in Q1, Nexstar anticipates improvements in the second quarter, particularly in national advertising. Political advertising has seen a significant increase, with a $31 million rise compared to the same period last year. The CW network is expected to boost operating profit by over $100 million for the year, and NewsNation has risen to become the second-largest cable news network in pay-TV distribution. With a strategic focus on shareholder value, evidenced by share repurchases and a belief in the stock's undervaluation, Nexstar maintains confidence in its business and long-term growth prospects.

Key Highlights:

  • Q1 net revenue of $1.28 billion, record high for any quarter.
  • Distribution revenue of $761 million, an all-time high for any quarter.
  • Political advertising increased by $31 million compared to the prior year.
  • The CW network expected to contribute over $100 million to operating profit for the year.
  • NewsNation now the second-largest cable news network in pay-TV distribution.
  • Expect improvements in national advertising in Q2.

Company Outlook:

  • Rationalization across the industry in direct-to-consumer and pay-TV programming bundles, content spending, and pricing.
  • Optimistic about the remainder of 2024, with momentum building in the second half of the fiscal year.
  • Focus on delivering long-term value to stakeholders and remains open to growth opportunities through acquisitions.

Bearish Highlights:

  • Advertising revenue experienced a slight decline in the first quarter.
  • Need to comp recent acquisitions and expects to revert to industry trends in distribution revenue.
  • Mentioned some weakness at the local level despite overall stability.

Bullish Highlights:

  • Political advertising saw a significant increase year-over-year.
  • The CW network and NewsNation as significant growth drivers for the company.
  • New programming has led to sequential audience growth in prime time for the first two quarters of the broadcast year.

Misses:

No specific misses were mentioned in the provided context.

Q&A Highlights:

  • Nexstar is leveraging partnerships with Comscore and Nielsen to modernize linear television measurement.
  • The company is exploring expansion in the NextGen space and is optimistic about increased conversations and potential commercial clients.
  • Nexstar has expressed interest in making acquisitions but noted that the current regulatory environment could be a hurdle, particularly concerning a potential acquisition of CBS stations.

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