Nexstar’s 1Q Net Revenue Rises 4%

Nexstar Media Group this morning reported financial results for the first quarter of 2023 that included record 1Q net revenue of $1.3 billion, an increase of 3.9% from the same quarter of 2022. It said that revenue growth was driven by The CW acquisition that closed on Sept. 30, 2022, as well as growth in distribution revenues, which more than offset a decline in television advertising, due primarily to the absence of mid-term election political and Olympics advertising, as well as continued softness in the advertising market primarily due to national advertising.

The 1Q revenue comprised:

• Core ad revenue of $417 million, down 2.6%.
• Political ad revenue of $8 million, down 66.7%.
• Distribution fee revenue of $728 million, up 9%.
• Digital revenue of $92 million, up 16.5%.
• Other revenue of $12 million, up 9.1%.

Revenue growth was driven by the renewal of distribution agreements in 2022 on improved terms and annual rate escalators, as well as growth in virtual MVPD revenue and the inclusion of The CW, which more than offset MVPD subscriber attrition and the ongoing impact of the removal of partner stations from certain MVPDs related to continued negotiations.

Income from operations was $204 million, down 38%.

Net income totaled $88 million, a decrease of 65%.

Free cash flow was $438 million, down 22.1%.

Perry A. Sook, Nexstar chairman, president and CEO, said: “Nexstar’s first quarter financial results once again outperformed consensus expectations across all key financial metrics including net revenue, Adjusted EBITDA and attributable free cash flow. All-time high quarterly distribution revenue and the benefit of The CW acquisition more than offset the cyclical year-over-year decline in political and Olympic advertising, resulting in record first quarter net revenues for the company. We returned nearly 60% of first quarter attributable free cash flow to shareholders in the form of dividends and share repurchases.

“In addition to posting another strong quarter of financial results, we continue to execute our strategy focused on leveraging our linear, digital, mobile and streaming assets and capabilities in new ways to drive increased monetization and growth across the portfolio. We are also driving strong momentum across our organic growth initiatives. NewsNation remains the fastest growing cable news network with Q1 2023 marking its highest audience delivery to date. As we expand our programming on the network, it continues to be validated by industry watchdog groups as non-biased and a reliable source of news. We’re also making continued progress on our plan for The CW with key personnel appointments, further overhead cost reductions and new programming additions, including our exclusive multi-year partnership with LIV Golf.

“We are excited about the opportunities in front of us and remain confident in our near and long-term strategies, the quality of our assets, the strength of our financial position and our ability to create new value for shareholders. Nexstar’s portfolio of local and national media assets provide nationwide reach with local activation at a greater scale than any other broadcast network owner, creating a differentiated and highly attractive multi-media platform for advertisers and brands seeking direct consumer engagement in an increasingly fragmented marketplace. Looking forward, we expect 2023 will continue to benefit from recently renegotiated distribution contracts representing more than half of our subscribers at the end of last year, while 2024 will see strong upside from presidential election year political advertising and additional distribution contract renewals later this year.”

Read the company’s report here.