Tegna Reports 27% 2Q Revenue Gain

Tegna this morning released second quarter 2021 results that included total revenue of $733 million, up 27% year-over-year, driven by record second quarter subscription revenue and advertising and marketing services (AMS) revenue.

• Subscription revenue came in at $375 million, up 16% driven by rate increases.
• AMS revenue totaled $341 million, up 49% year-over-year.

Net income was $107 million on a GAAP basis, or $112 million on a non-GAAP basis.

Total company adjusted EBITDA was a second-quarter record of $228 million, an increase of 83%, reflecting strong operational performance of Tegna’s stations as well as an improving economy. 2Q adjusted EBITDA was up 35% percent compared with the second quarter of 2019.

Dave Lougee, Tegna president-CEO, said: “Tegna’s consistent execution of our long-term strategy resulted in another quarter of record performance, supported by the underlying strength of our subscription business, growing and accelerating advertising and marketing services revenue, as well as our disciplined expense management. We achieved record second quarter total company revenue, subscription revenue, AMS revenue, net income and adjusted EBITDA. We achieved our previously provided second quarter guidance on all key financial metrics. And based on our accelerating performance, we are raising our two-year free cash flow guidance for the second time this year.

“Our high-margin subscription revenue remains a core driver of our underlying growth, and this quarter was no exception. Subscription revenue was 16% above the same quarter last year, and 59% above the second quarter of 2019. Subscriber trends also continue to improve, now more than a full percentage point better than five months earlier. We remain on track for our full-year subscription revenue to grow mid-to-high teens percent and net subscription profit growth to finish in the mid-to-high twenties percent for the full year.

“The advertising market continues to show broad-based strength, with accelerating momentum across almost every major advertising category. Even with current supply chain issues significantly impacting the auto category, AMS revenue in the second quarter was up nearly 50 percent over last year. On a two-year pro forma basis, AMS revenue was down less than 1% compared to the second quarter of 2019, and excluding auto, would have been up mid-single digits. AMS sales are accelerating each week and we expect the third quarter to finish significantly stronger.

“Premion also continues to accelerate and remains on track to grow 45% to 50%  compared to 2020. This industry-leading OTT advertising platform is fueled by a local salesforce that now extends to almost 75% of households across the U.S., augmenting how TEGNA serves the growing and evolving needs of local and regional advertisers.

“Tegna’s board evaluates the best use of capital through our disciplined capital allocation framework, always with the goal of maximizing value for our shareholders. Our ability to deploy capital is driven by our high-margin, durable revenue streams and substantial free cash flow. During the quarter, we returned capital to shareholders through our July dividend payment, which was the first payment after our recent 36 percent annualized dividend increase. Following through on our commitment to pay down debt, we achieved net leverage of 3.64x at the end of the second quarter, and expect to reach the low 3x range by the end of 2021. In anticipation of achieving this, our board is actively monitoring all additional options to deploy capital to enhance shareholder value, including the use of our $300 million share repurchase program over the next three years, organic investments, and opportunistic M&A.

“In the quarter, we continued to make meaningful progress on embedding diversity, equity and inclusion into our culture. This February, we set quantifiable five-year goals to increase Black, indigenous and people of color representation in content teams, news leadership and management roles. Since then, through intentional actions, we are progressing at or above the rate of change needed to achieve our five-year goals. This includes improvements in department-head management positions that are key to hiring and decision-making. Our Inclusive Journalism program, which was developed last year in partnership with the Poynter Institute, aims to tackle unconscious bias in news reporting and content development across our platforms. All stations’ news, digital, and marketing teams have begun taking part in the program, with 54 stations completing the first phases which, in addition to unconscious bias, inclusive reporting, and role-specific training, also includes content audits and leadership coaching.

“Just last week, Tegna was recognized as one of the Achievers 50 Most Engaged Workplaces for our leadership in, and commitment to increasing engagement of our workplace. I am particularly proud of this achievement. Our people are at the heart of everything we do, and their great work drives our success. Our deliberate approach to understanding our employees’ perspectives and acting on what we have heard are key to our purpose-driven culture.”

Read the company’s report here.