QUARTERLY REPORT

Tegna Reports 35% 4Q Revenue Increase

The increase to $938 million is driven by a record-breaking quarter for political advertising revenues, and ongoing strength of subscription business.

Tegna this morning released fourth quarter 2020 results that included total revenue of $938 million, up 35% year-over-year, driven by record political advertising revenue and continued growth in subscription revenue.

Excluding political advertising, 4Q revenue grew slightly year-over-year.

  • Record political revenues were $264 million, including $50 million of revenue generated from the Georgia Senate run-off elections. Fourth quarter political revenue was up 89% from the fourth quarter of 2018.
  • Subscription revenue came in at $314 million, up 9% due to rate increases. The increase would have been 17% but for a temporary suspension of service with AT&T-DirecTV.
  • Fourth quarter advertising and marketing services revenue of $352 million was down 6% year-over-year despite inventory displacement due to political advertising. AMS revenues continue to reflect quarterly sequential improvement since the height of the pandemic in the second quarter of 2020..

Net income was $244 million in the fourth quarter, almost triple the amount in the fourth quarter of 2019, and non-GAAP net income was $256 million..

Total company adjusted EBITDA was record $429 million. This represents an increase of 87% percent in adjusted EBITDA compared with fourth quarter of 2019.

Dave Lougee, Tegna president-CEO, said: “As we previewed in our January 6th press release announcing preliminary fourth quarter and full-year 2020 results, TEGNA had an exceptional year of growth and innovation. The resiliency of our business model and continued execution of our fivepillar strategy positioned us for success regardless of the broader economic backdrop.

“I am particularly proud of the innovative spirit and perseverance of our employees throughout 2020. Their efforts to serve the greater good of our communities have never been more impactful or inspirational. Whether through exceptional local journalism, helping businesses navigate the pandemic or supporting our neighbors through fundraising and giving, our people were there for our communities when they needed us most. And during a time when mistrust is at an all-time high, our journalists are focused on combating disinformation and misinformation, and building and deepening the trust our audiences place in us through our Verify fact-checking reporting initiative and award-winning news and digital reporting.

BRAND CONNECTIONS

“Due to the very nature of our purpose as a company to serve local communities, social responsibility is woven into the fabric of our company and culture. In 2020, we took a number of steps to further strengthen our commitment to diversity, equity and inclusion (DE&I), appointing a chief diversity officer, identifying specific areas of oversight for our board as it relates to DE&I and launching a diversity and inclusion employee working group. We recently took further steps by setting five-year goals to ensure our newsrooms, news leaders and management fully reflect the communities we serve.

“To better reflect our long-standing practices, we have also increased our ESG reporting and transparency, including the adoption of SASB disclosure standards for our industry as part of our 2020 Social Responsibility Highlights report. We look forward to continuing to update you on the work we are doing in these important areas, which remain a top priority of our Board and management.

“Looking to 2021, the full-year 2021 guidance we provided in early January and the incremental first quarter 2021 guidance we are providing today reflect our expectation for continued strength of our operations, visibility into our future cash flows, and continued commitment to prudent expense management. Together with the renewal of our largest network affiliation agreement in January, our high-margin, recurring subscription revenues reflecting leading Big Four rates will continue to be a key growth driver in 2021 and beyond. We successfully repriced approximately 35% of our subscribers last year and will reprice approximately 30% toward the end of this year. As a result, we still expect our net subscription profits to increase mid-to-high twenties percent in 2021.

“We will continue to execute and innovate to drive advertising and marketing services revenues, and we expect to see continued improvement in underlying advertising trends following the impact of the global pandemic. Premion, our over-the-top advertising business, is poised to continue to benefit from increased viewing on streaming services into 2021 and beyond, helping us expand our revenue base and giving us access to new markets.

“The strong financial position and balance sheet we have built through our thoughtful financing actions and prudent expense management provides us with significant optionality in the ways in which we can allocate capital. We recently reintroduced a three-year, $300 million share repurchase authorization as an additional opportunistic capital allocation tool. As we look to the year ahead, we are confident in our ability to continue to create and return value to our shareholders.”

Read the company’s report here.


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