Nexstar Media(NXST) - 2025 Q2 - Quarterly Results

Executive Summary & Headline Results This section presents Nexstar's Q2 2025 financial performance, highlighting key operational achievements and strategic initiatives despite a decline in political advertising CEO Statement & Key Financial Overview Nexstar Media Group reported solid second-quarter 2025 financial results, with year-over-year impacts primarily from lower non-election year political advertising, partially offset by strong expense management - Q2 2025 results were impacted by lower non-election year political advertising revenue, partially offset by strong expense management[3] - The CW ascended to the 8-ranked network overall in the first half of 2025, reflecting five consecutive quarters of primetime ratings growth and a strategic pivot to sports programming, which now accounts for over 40% of its programming hours[3] - NewsNation was ranked the fastest growing network overall year-over-year, shortly after celebrating its one-year anniversary as a 24/7 cable news network[3] - The company refinanced senior secured term loans and revolving credit facilities, reducing interest rate margin, expanding revolver capacity, and extending maturities[2] - Nexstar returned $106 million to shareholders and repaid $101 million of debt during the quarter[2] Q2 2025 Key Financial Highlights (YoY Change) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | H1 2025 ($M) | H1 2024 ($M) | % Change | | :-------------------------------- | :----------- | :----------- | :--------- | :----------- | :----------- | :--------- | | Net Revenue | $1,229 | $1,269 | (3.2%) | $2,462 | $2,553 | (3.6%) | | Net Income | $91 | $106 | (14.2%) | $188 | $273 | (31.1%) | | Net Income % Margin | 7.4% | 8.4% | (1.0) pp | 7.6% | 10.7% | (3.1) pp | | Adjusted EBITDA | $389 | $414 | (6.0%) | $770 | $866 | (11.1%) | | Adjusted EBITDA % Margin | 31.7% | 32.6% | (0.9) pp | 31.3% | 33.9% | (2.6) pp | | Net Cash Provided by Operating Activities | $247 | $176 | 40.3% | $584 | $452 | 29.2% | | Adjusted Free Cash Flow | $101 | $77 | 31.2% | $449 | $466 | (3.6%) | Company and Business Highlights This section details Nexstar's strategic achievements, including capital structure enhancements, significant viewership growth for NewsNation and The CW, and industry recognition for journalism Operational and Strategic Achievements Nexstar strengthened its capital structure through successful refinancings and received shareholder approval for key proposals - Completed refinancings for revolving credit facilities, Term Loan A, and Term Loan B, strengthening the Company's capital structure and financial flexibility by extending maturities, reducing interest rate margin, and expanding revolver capacity[8] - Shareholders approved all proposals at the 2025 Annual Shareholder Meeting, including electing Board nominees and affirming executive compensation with approximately 95.5% support[8] - NewsNation celebrated its one-year anniversary of 24/7 news programming, ranking as the 1 basic cable network for year-over-year growth with overall viewership growing nearly 50% and 67% among adults aged 25-54[8] - The CW achieved five consecutive quarters of audience growth, becoming the 8 network in total audience for the first half of 2025[8] - Continued to build sports programming at The CW, renewing the Pac-12 Conference agreement for college football and announcing a multi-year partnership with the Professional Bowlers Association[8] - Finalized agreements to move three additional CW affiliations to Nexstar stations in Charlotte, NC, Erie, PA, and Elmira, NY, by September 2025[8] - Earned 52 Regional Edward R. Murrow Awards for outstanding journalism and locally produced news programming[8] Detailed Financial Performance This section provides a comprehensive breakdown of Nexstar's second-quarter financial results, analyzing changes in net revenue, distribution, advertising, net income, EBITDA, and cash flows Net Revenue Second quarter net revenue declined by 3.2% year-over-year to $1.23 billion, primarily driven by a reduction in political advertising revenue Net Revenue (Q2 YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :--------- | :----------- | :----------- | :--------- | | Net Revenue | $1,229 | $1,269 | (3.2%) | - The decline was primarily due to reduced political advertising revenue[12] Distribution Revenue Distribution revenue for the second quarter saw a marginal decrease of 0.1% year-over-year to $733 million Distribution Revenue (Q2 YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :----------------- | :----------- | :----------- | :--------- | | Distribution Revenue | $733 | $734 | (0.1%) | - Primarily reflects modest subscriber renewals in 2024 vs 2023 and MVPD subscriber attrition[12] - Partially offset by increased rates, contractual commitments, growth in vMVPD subscribers, and the addition of CW affiliations[12] Advertising Revenue Second quarter advertising revenue decreased by 9.0% year-over-year to $475 million, primarily attributable to a $36 million decrease in political advertising Advertising Revenue (Q2 YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :----------------- | :----------- | :----------- | :--------- | | Advertising Revenue | $475 | $522 | (9.0%) | - Political advertising decreased by $36 million to $9 million[12] - Non-political advertising revenue decreased by $11 million (2.5%) due to television advertising market softness[12] Net Income Net income for the second quarter decreased by 14.2% year-over-year to $91 million, with the Net Income margin declining from 8.4% to 7.4% Net Income (Q2 YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :--------- | :----------- | :----------- | :--------- | | Net Income | $91 | $106 | (14.2%) | | Net Income Margin | 7.4% | 8.4% | (1.0) pp | - Primarily reflects lower revenue, increased one-time corporate expenses from debt refinancing, and reduced income from equity investments related to TV Food Network LLC[12] - Offset, in part, by lower amortization of broadcast rights at The CW, lower interest expense, income tax, and operating expenses[12] Adjusted EBITDA Second quarter Adjusted EBITDA decreased by 6.0% year-over-year to $389 million, with the margin at 31.7% compared to 32.6% in the prior year Adjusted EBITDA (Q2 YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :-------------- | :----------- | :----------- | :--------- | | Adjusted EBITDA | $389 | $414 | (6.0%) | | Adjusted EBITDA Margin | 31.7% | 32.6% | (0.9) pp | - Primarily reflects lower revenue and reduced income from equity method investments, mainly from TV Food Network LLC[12] - Offset, in part, by lower amortization of broadcast rights at The CW and lower operating expenses from restructuring initiatives[12] Net Cash Provided by Operating Activities Net Cash Provided by Operating Activities for the second quarter increased significantly by 40.3% year-over-year to $247 million Net Cash Provided by Operating Activities (Q2 YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :-------------------------------- | :----------- | :----------- | :--------- | | Net Cash Provided by Operating Activities | $247 | $176 | 40.3% | - Increase primarily due to changes in operating assets and liabilities reflecting the timing of receipts and payments[12] - Offset, in part, by a reduction in net income excluding other non-cash items[12] Adjusted Free Cash Flow Second quarter Adjusted Free Cash Flow increased by 31.2% year-over-year to $101 million, driven by lower interest expense, capital expenditures, cash taxes, and operating expenses Adjusted Free Cash Flow (Q2 YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :-------------------- | :----------- | :----------- | :--------- | | Adjusted Free Cash Flow | $101 | $77 | 31.2% | - Increase primarily due to lower interest expense (from reduced SOFR and debt reduction), lower capital expenditures, lower cash taxes, and lower operating expenses[12] - Offset, in part, by lower advertising revenues[12] Capital Allocation This section outlines Nexstar's capital allocation strategy for Q2 2025, detailing debt repayment, dividend distributions, and share repurchases Q2 2025 Capital Allocation Summary In the second quarter of 2025, Nexstar utilized cash on hand and operating cash flow to repay $101 million of debt, distribute $56 million in dividends, and repurchase $50 million worth of common stock - Used cash on hand and cash flow from operations to repay $101 million of debt in Q2 2025[13] - Paid $56 million in dividends and repurchased 311,998 shares for $50 million, totaling $106 million in shareholder returns in Q2 2025[13] Capital Allocation (Q2 & H1 YoY) | Cash Used For | Q2 2025 ($M) | Q2 2024 ($M) | H1 2025 ($M) | H1 2024 ($M) | | :-------------------- | :----------- | :----------- | :----------- | :----------- | | Debt repayment | $101 | $31 | $132 | $61 | | Acquisitions | - | - | $22 | - | | Stockholder return | $106 | $190 | $238 | $358 | | Common stock dividends | $56 | $55 | $113 | $112 | | Stock repurchases | $50 | $135 | $125 | $246 | | Shares Outstanding (End of period, in thousands) | 30,315 | 32,486 | 30,315 | 32,486 | | % Change in shares outstanding | (0.1%) | (1.7%) | (1.0%) | (3.3%) | Debt, Cash and Leverage This section provides an overview of Nexstar's consolidated debt, cash balances, and leverage ratios as of June 30, 2025, including updated calculation methodologies Debt and Leverage Ratios As of June 30, 2025, Nexstar's consolidated debt stood at $6.4 billion, with a first lien net leverage ratio of 1.81x and a total net leverage ratio of 3.19x - Consolidated debt of Nexstar and Mission Broadcasting, Inc. was $6.4 billion as of June 30, 2025, including senior secured debt of $3.7 billion[18] - The Company updated its leverage ratio calculation to reflect the average of the last two years of EBITDA[18] - As of June 30, 2025, the first lien net leverage ratio was 1.81x (compared to a covenant of 4.25x) and the total net leverage ratio was 3.19x[18] Cash Balances and Debt Obligations | ($ in millions) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Unrestricted Cash | $234 | $144 | | Revolving Credit Facilities | $206 | $62 | | First Lien Term Loans | 3,465 | 3,750 | | 5.625% Senior Unsecured Notes due 2027 | 1,716 | 1,716 | | 4.75% Senior Unsecured Notes due 2028 | 996 | 995 | | Total Debt | $6,383 | $6,523 | Non-GAAP Financial Measures & Reconciliations This section defines Nexstar's key non-GAAP financial measures and provides detailed reconciliations for Adjusted EBITDA, Free Cash Flow, and Adjusted Free Cash Flow Definitions of Non-GAAP Measures This section provides the definitions for key non-GAAP financial measures used by Nexstar, explaining their calculation methodologies and purpose as indicators of operating performance and liquidity - Adjusted EBITDA is considered an indicator of the assets' operating performance, calculated by adjusting net income for various non-cash and one-time items[21] - Free Cash Flow is calculated as net cash provided by operating activities less capital expenditures[22] - Adjusted Free Cash Flow is considered a liquidity measure, providing useful information about cash generated for ongoing operations, debt payments, dividends, share repurchases, and acquisitions, by adjusting Free Cash Flow for specific items[23] Adjusted EBITDA Reconciliation This section presents the reconciliation of Net Income to Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024, detailing the adjustments made to arrive at this non-GAAP measure Reconciliation of Adjusted EBITDA | ($ in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $91 | $106 | $188 | $273 | | Add (Less): | | | | | | Transaction, other one-time and restructuring expenses | 10 | - | 10 | 1 | | Stock-based compensation expense | 21 | 20 | 39 | 38 | | Depreciation and amortization expense | 197 | 208 | 402 | 398 | | (Amortization) of broadcast rights expense | (79) | (87) | (168) | (156) | | Amortization of basis difference of equity method investments | 17 | 17 | 35 | 35 | | Interest expense, net | 97 | 113 | 194 | 227 | | Pension and other postretirement plans (credit), net | (8) | (7) | (16) | (14) | | Income tax expense | 39 | 43 | 80 | 105 | | Gain on disposal of an investment | - | - | - | (40) | | Other | 4 | 1 | 6 | (1) | | Adjusted EBITDA | $389 | $414 | $770 | $866 | Free Cash Flow and Adjusted Free Cash Flow Reconciliation This section provides the reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow and Adjusted Free Cash Flow for the three and six months ended June 30, 2025, and 2024 Reconciliation of Free Cash Flow and Adjusted Free Cash Flow | ($ in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $247 | $176 | $584 | $452 | | Add (Less): | | | | | | Capital expenditures | (29) | (37) | (64) | (81) | | Free Cash Flow | $218 | $139 | $520 | $371 | | Add (Less): | | | | | | Transaction, other one-time and restructuring expenses | 10 | - | 10 | 1 | | Changes in operating assets and liabilities | (21) | 75 | (18) | 150 | | Changes in income tax payable | (92) | (130) | (38) | (59) | | Taxes paid on sale of assets | - | 11 | - | 11 | | Pension and other postretirement plans (credit), net | (8) | (7) | (16) | (14) | | Payments for capitalized software obligations | (7) | (10) | (10) | (11) | | Proceeds from disposal of assets and insurance recoveries | 1 | 1 | 1 | 2 | | Cash contribution from noncontrolling interests | - | - | - | 19 | | Other | - | (2) | - | (4) | | Adjusted Free Cash Flow | $101 | $77 | $449 | $466 | Consolidated Financial Statements This section presents Nexstar's condensed consolidated statements of operations and cash flows for the specified periods, offering a statutory view of financial performance Condensed Consolidated Statements of Operations This section provides the condensed consolidated statements of operations for the three and six months ended June 30, 2025, and 2024, detailing net revenue, operating expenses, income from operations, net income, and earnings per share Condensed Consolidated Statements of Operations | (in millions, except for share and per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenue | $1,229 | $1,269 | $2,462 | $2,553 | | Operating expenses: | | | | | | Direct operating | 557 | 552 | 1,108 | 1,100 | | Selling, general and administrative | 198 | 216 | 404 | 432 | | Corporate | 64 | 54 | 116 | 108 | | Depreciation and amortization | 197 | 208 | 402 | 398 | | Other | - | (1) | - | (1) | | Total operating expenses | 1,016 | 1,029 | 2,030 | 2,037 | | Income from operations | 213 | 240 | 432 | 516 | | Income from equity method investments, net | 11 | 16 | 19 | 35 | | Interest expense, net | (97) | (113) | (194) | (227) | | Pension and other postretirement plans credit, net | 8 | 7 | 16 | 14 | | Gain on disposal of an investment | - | - | - | 40 | | Other expenses, net | (5) | (1) | (5) | - | | Income before income taxes | 130 | 149 | 268 | 378 | | Income tax expense | (39) | (43) | (80) | (105) | | Net income | 91 | 106 | 188 | 273 | | Net loss attributable to noncontrolling interests | 6 | 12 | 17 | 20 | | Net income attributable to Nexstar Media Group, Inc. | $97 | $118 | $205 | $293 | | Net income per share available to common stockholders: | | | | | | Basic | $3.09 | $3.59 | $6.50 | $8.85 | | Diluted | $3.06 | $3.54 | $6.43 | $8.71 | | Weighted average number of common shares outstanding: | | | | | | Basic (in thousands) | 30,221 | 32,816 | 30,375 | 33,133 | | Diluted (in thousands) | 30,514 | 33,287 | 30,719 | 33,656 | Condensed Consolidated Statements of Cash Flows This section presents the condensed consolidated statements of cash flows for the six months ended June 30, 2025, and 2024, detailing cash flows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows | ($ in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Cash flows from operating activities: | | | | Net income | $188 | $273 | | Adjustments to reconcile net income to net cash provided by operating activities: | | | | Depreciation and amortization | 402 | 398 | | Stock-based compensation expense | 39 | 38 | | Amortization of debt financing costs, debt discounts and premium | 5 | 5 | | Loss on extinguishment of debt | 5 | - | | Gain on disposal of an investment | - | (40) | | Deferred income taxes | (24) | (14) | | Payments for broadcast rights | (161) | (166) | | Income from equity method investments, net | (19) | (35) | | Distribution from equity method investments – return on capital | 125 | 139 | | Changes in operating assets and liabilities, net of acquisitions and dispositions: | | | | Accounts receivable | 6 | 48 | | Prepaid and other current assets | (6) | (12) | | Other noncurrent assets | 5 | (11) | | Accounts payable | 60 | (94) | | Accrued expenses and other current liabilities | 20 | (1) | | Income tax payable | (38) | (59) | | Other noncurrent liabilities | (29) | (21) | | Other | 6 | 4 | | Net cash provided by operating activities | 584 | 452 | | Cash flows from investing activities: | | | | Purchases of property and equipment | (64) | (81) | | Payments for acquisitions | (22) | - | | Proceeds from disposal of an investment | - | 40 | | Other investing activities, net | (3) | 2 | | Net cash used in investing activities | (89) | (39) | | Cash flows from financing activities: | | | | Proceeds from debt issuance, net of debt discounts | 3,393 | 55 | | Repayments of long-term debt | (3,543) | (116) | | Purchase of treasury stock | (125) | (246) | | Common stock dividends paid | (113) | (112) | | Payments for capitalized software obligations | (10) | (11) | | Contribution from noncontrolling interests | - | 19 | | Payment for excise tax on stock repurchases | (5) | - | | Other financing activities, net | (2) | (3) | | Net cash used in financing activities | (405) | (414) | | Net increase (decrease) in cash and cash equivalents | 90 | (1) | | Cash and cash equivalents at beginning of period | 144 | 147 | | Cash and cash equivalents at end of period | $234 | $146 | Other Information This section provides details on Nexstar's Q2 2025 conference call, forward-looking statement disclaimers, and investor and media contact information Second Quarter Conference Call Details for Nexstar's second quarter 2025 earnings conference call, including dial-in numbers, conference ID, and webcast access for investors and interested parties - Nexstar hosted a conference call on August 7, 2025, at 10:00 a.m. ET to discuss financial results[17] - Dial-in number: +1 877-407-9208 or +1 201-493-6784, conference ID 13753994[17] - A live webcast and replay are available through nexstar.tv under 'Events and Presentations' / 'Investor Relations'[17] Forward-Looking Statements This section serves as a standard disclaimer, indicating that the communication contains forward-looking statements based on current expectations, which are subject to various risks and uncertainties - The communication includes forward-looking statements based on current expectations and projections about future events[19] - These statements involve risks and uncertainties, and are subject to change based on various important factors, including economic conditions, debt servicing, acquisitions, advertising pricing, regulatory actions, competition, programming costs, and technological developments[19] - Nexstar undertakes no obligation to update or revise any forward-looking statements[19] Investor and Media Contacts This section provides contact information for investor relations and media inquiries, listing key personnel and their respective contact details - Investor Contacts: Lee Ann Gliha (EVP and Chief Financial Officer) and JCIR (Joe Jaffoni, Jennifer Neuman)[27] - Media Contact: Gary Weitman (EVP and Chief Communications Officer)[27]