Nexstar Media(NXST) - 2025 Q1 - Quarterly Results

Financial Performance Summary Nexstar reported Q1 2025 net revenue of $1.23 billion, a 3.9% decrease, with record distribution revenue and $348 million Adjusted Free Cash Flow 2025 First Quarter Financial Summary | ($ in millions) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Distribution | $762 | $761 | 0.1% | | Advertising | $460 | $512 | (10.2)% | | Other | $12 | $11 | 9.1% | | Net Revenue | $1,234 | $1,284 | (3.9)% | | Net Income | $97 | $167 | (41.9)% | | Adjusted EBITDA | $381 | $452 | (15.7)% | | Net Cash Provided by Operating Activities | $337 | $276 | 22.1% | | Adjusted Free Cash Flow | $348 | $389 | (10.5)% | - CEO Perry A. Sook stated the company's focus for the remainder of 2025 includes renewing distribution contracts representing about 60% of its subscriber base, continuing The CW's path to profitability, preparing for the 2026 political cycle, and pursuing deregulation[1] Company and Business Highlights Net revenue declined 3.9% to $1.23 billion due to lower advertising, while operational highlights include a 10% dividend increase and strategic acquisitions Financial Results - First quarter net revenue decreased 3.9% YoY to $1.23 billion, primarily due to a $32 million decrease in political advertising revenue[6] - Distribution revenue reached a record for the first quarter at $762 million, a slight increase of 0.1% YoY, driven by rate escalators and vMVPD growth, which offset MVPD subscriber attrition[6] - Net income decreased by $70 million to $97 million, primarily due to lower revenue, increased amortization of broadcast rights for The CW sports, and a Q1 2024 non-recurring $40 million gain from the sale of its BMI interest[6] - Adjusted EBITDA decreased 15.7% to $381 million, reflecting lower revenue, reduced income from the TV Food Network equity investment, and higher amortization of broadcast rights at The CW[10] Operational Highlights & Strategic Initiatives - The quarterly cash dividend was raised by 10% to $1.86 per share, marking the twelfth consecutive annual dividend increase[6] - Viewership for key sports on The CW grew significantly, with NASCAR Xfinity Series and WWE NXT average viewership both increasing 19% year-over-year in their respective periods[6] - Acquired WBNX-TV in Cleveland, Ohio, in January 2025, creating a new duopoly in the nation's 19th largest television market. WBNX will become a CW affiliate on September 1, 2025[6] - Expanded sports programming by adding Grand Slam Track, AVP volleyball, and the Men's HBCU All-Star Basketball Game to The CW, and partnering with the Texas Rangers for regional broadcasts[6] Capital Allocation and Shareholder Returns Nexstar deployed capital in Q1 2025 through $31 million debt repayment, $22 million acquisition, and $132 million returned to shareholders Q1 2025 Capital Allocation | ($ in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash Used For | | | | Debt repayment | $31 | $30 | | Acquisitions | $22 | - | | Stockholder return | $132 | $168 | | Common stock dividends | $57 | $57 | | Stock repurchases | $75 | $111 | - In Q1 2025, the company repurchased 441,164 shares of its common stock at an average price of approximately $169.99 per share for a total of $75 million[8] Financial Position As of March 31, 2025, Nexstar maintained a strong financial position with $6.5 billion total debt and healthy leverage ratios Debt and Cash Summary | ($ in millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash on Hand | $253 | $144 | | Total Debt | $6,495 | $6,523 | - As of March 31, 2025, the company's first lien net leverage ratio was 1.67x, compared to a covenant of 4.25x, and its total net leverage ratio was 2.93x[14] - Leverage ratios are calculated in accordance with credit agreements and exclude The CW Network's operations and its $20 million cash balance[14] Appendix This section provides supplementary information, including forward-looking statements, non-GAAP financial measure definitions, and detailed financial statements Condensed Consolidated Financial Statements Condensed Consolidated Statements of Operations (Q1 2025 vs Q1 2024) | (in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net revenue | $1,234 | $1,284 | | Income from operations | $220 | $275 | | Income before income taxes | $138 | $228 | | Net income | $97 | $167 | | Net income attributable to Nexstar | $108 | $175 | | Diluted EPS | $3.37 | $5.16 | Condensed Consolidated Statements of Cash Flows (Q1 2025 vs Q1 2024) | (in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $337 | $276 | | Net cash used in investing activities | ($61) | ($4) | | Net cash used in financing activities | ($167) | ($182) | | Net increase in cash and cash equivalents | $109 | $90 | | Cash and cash equivalents at end of period | $253 | $237 | Reconciliation of Non-GAAP Financial Measures Reconciliation of Net Income to Adjusted EBITDA | ($ in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income | $97 | $167 | | Adjustments | $284 | $285 | | Adjusted EBITDA | $381 | $452 | Reconciliation to Free Cash Flow and Adjusted Free Cash Flow | ($ in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $337 | $276 | | Capital expenditures | ($35) | ($44) | | Free Cash Flow | $302 | $232 | | Adjustments | $46 | $157 | | Adjusted Free Cash Flow | $348 | $389 | Definitions and Disclosures - The report contains forward-looking statements subject to risks and uncertainties, protected under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995[15] - Adjusted EBITDA is defined as net income adjusted for items including one-time expenses, stock-based compensation, D&A, interest, taxes, and other specified items. It is considered an indicator of operating performance[17] - Adjusted Free Cash Flow is defined as Free Cash Flow (Net Cash from Operations minus capex) adjusted for items like one-time expenses, changes in operating assets and liabilities, and other specified cash items. It is considered an indicator of liquidity[19]