Nexstar’s Q1 Net Revenue Rises 2.1%

Nexstar Media Group this morning reported financial results for the fourth quarter of 2023 that included net revenue of $1.284 billion, an increase of 2.1% from the same quarter of 2022. It said the increase reflected growth in distribution revenue, “partially offset by a slight decline in advertising and other revenue.

• Distribution Revenue. First quarter distribution revenue of $761 million was an all-time quarterly high for the company, increasing $33 million, or 4.5%, over the comparable prior year quarter. Approximately 59% of Nexstar’s first quarter revenue was derived from distribution revenue. Distribution revenue growth was primarily due to distribution contract renewals in 2023 on terms favorable to the Company, annual rate escalators, and the return of our partner stations on one MVPD in January, partially offset by MVPD subscriber attrition. Distribution revenue includes retransmission revenue, carriage fees, affiliation fees, and spectrum leasing revenue.
• Advertising Revenue. First quarter advertising revenue of $512 million decreased $5 million, or 1.0%, compared to the prior year quarter reflecting a $36 million year-over-year reduction in core and digital advertising revenue due to ongoing advertising market softness offset, in part, by a $31 million year-over-year increase in election-year political advertising to $39 million. Advertising revenue includes core television advertising, digital advertising and political advertising revenue.

First quarter net income of $167 million increased $79 million, or 89.8%, compared to the prior year quarter, reflecting increased revenue, lower operating expenses driven by reduced amortization of broadcast rights at The CW, and a $40 million gain on the sale of its ownership interest in BMI offset, in part, by increased interest expense. Net income margin increased to 13.0% from 7.0% in the comparable prior year period.

First quarter adjusted EBITDA of $542 million increased $46 million, or 9.3%, compared to the prior year quarter primarily reflecting revenue growth and a $50 million year-over-year reduction in losses at The CW, partially offset by an increase in other operating and corporate and elimination expenses and a reduction of cash distributions from equity method investments at TV Food Network primarily related to lower advertising revenue. Adjusted EBITDA margin improved to 42.2% from 39.5% in the comparable prior year period.

First quarter adjusted free cash flow of $403 million, increased $26 million, or 6.9%, due primarily to the increase in Adjusted EBITDA offset, in part, by higher interest expense due to rising interest rates, slightly higher capital expenditures and lower cash contributions from our partners in The CW.

Perry A. Sook, Nexstar chairman, president-CEO, said: “Nexstar is off to a strong start in 2024, delivering the highest first quarter net revenues in the Company’s history and once again outpacing consensus expectations for Adjusted EBITDA and Adjusted Free Cash Flow. As the industry’s largest local broadcaster with the most-watched broadcast television programming, Nexstar’s value to our distribution and advertising partners is demonstrated by our continued strong financial performance, including all-time quarterly high distribution revenue.

“We continue to make progress at The CW, reducing operating losses by $50 million year-over-year and kicking off the 2023/2024 broadcast season by delivering two sequential quarters of primetime audience improvement.

“Looking ahead, we remain confident that Nexstar will deliver another strong year of financial results and expect to build momentum through 2024, given the anticipated record-level of political spending this presidential election cycle.”

Read the company’s report here.

Last Friday, Nexstar announced that its board of directors declared a quarterly cash dividend of $1.69 per share of its common stock. The dividend is payable on Friday, May 24, to shareholders of record on Friday, May 10.