Tegna Reports 34% 3Q Revenue Increase

Tegna this morning released third quarter 2020 results that included total revenue of $738 million, up 34% year-over-year, driven by record 2020 political advertising revenue, continued strength of subscription revenue and stronger than expected advertising and marketing services revenue despite the impact of COVID-19 on the advertising market this year, as well as the impact of acquisitions.

Excluding political advertising, second quarter revenue grew 14% year-over-year.

Political revenues were $116 million, a new third quarter record.

Subscription revenue came in at $317 million, up 32% due to rate increases and acquisitions, reflecting the approximately 50% of subscribers repriced in the fourth quarter of 2019.

Third quarter advertising and marketing services revenue of $299 million was approximately flat year-over-year due to the partial impact of acquisitions, very strong year-over-year growth of Premion, the company’s OTT advertising service, return of live sporting events and aggregate share increases in its markets.

Net income was $132 million in the third quarter, on a GAAP basis, more than double compared to the third quarter of 2019, or $131 million on a non-GAAP basis.

Total company adjusted EBITDA was $259 million, a 65 percent increase compared to the same period in 2019.

Dave Lougee, Tegna president-CEO, said: “Our record single quarter revenue performance in the third quarter reflects the strength and durability of our business model and ongoing focus of our Board and management to deliver on our long-term strategy. Local news continues to be the preferred medium for viewers to receive important, timely information, which we have seen play out several times this year throughout the COVID-19 pandemic, racial injustice demonstrations, and the 2020 elections. The strategic positioning of our portfolio, including our recent acquisitions, has served us well and our stations, journalists and all our employees have demonstrated resilience throughout this challenging period.

“Third quarter political revenue is the highest we have ever seen at Tegna, more than 200 percent above the last presidential election year, in part due to the recent strategic additions of stations in key political spending states, such as Iowa and Pennsylvania. For the full year, we booked $395 million of political revenue through last Tuesday’s Election Day, exceeding our prior guidance of $370 million and almost 70 percent above our prior full year record of $234 million in 2018.

“As we have highlighted before, our high-margin, stable political and subscription revenues will make up more than half of our 2019-2020 revenues, and we expect an increasing percentage thereafter. As a reminder, we now expect to see our full year subscription revenues increase by high-twenties percent year-over-year.

“Despite the significant impact of COVID-19, advertising and marketing services has benefited from our sustained efforts to diversify our platforms and an expansion of our number of new advertisers, which is reflected in an aggregate market share increase across our portfolio. Advertising and marketing services has continued to show sequential monthly improvement since April. This performance demonstrates the sales transformation improvements we have actively implemented over the past several years, including bringing national sales in-house and creating one, holistic sales organization, which we call ‘One Team Tegna,’ to accelerate growth and better serve clients and agencies.

“In September, we proactively completed our third refinancing in twelve months. This offering is another example of our continued focus on strengthening our balance sheet, as part of our broader commitment to thoughtful capital allocation. We will continue to evaluate the most appropriate use of capital given the current market environment, with a near-term focus on debt reduction.”

Read the company’s report here.