TEGNA(US:TGNA)2021-05-10 23:16Financial Data and Key Metrics Changes - TEGNA achieved record total revenues, advertising and marketing services revenues, subscription revenue, net income, and adjusted EBITDA in Q1 2021, marking the strongest first quarter since becoming a pure-play broadcasting company [7][28]. - Total company revenue increased by 6% year-over-year, with a 41% increase compared to Q1 2019 [33]. - Adjusted EBITDA reached a record $231 million, representing a 32% margin for the quarter, and was up 9% year-over-year [47][48]. Business Line Data and Key Metrics Changes - Advertising and marketing services revenues rose by 9.4% year-over-year, driven by both traditional and digital advertising, including the growth of Premion [8][37]. - Subscription revenues increased by 16% year-over-year, supported by strong retransmission rates and improved subscriber trends [11][35]. - Premion is projected to close 2021 with revenues 45% to 50% higher than 2020, reflecting its continued growth [9]. Market Data and Key Metrics Changes - Subscriber trends improved, with a year-over-year decline of less than 5%, the best performance since 2019 [11][34]. - The automotive advertising category, TEGNA's largest, improved significantly, with low double-digit growth compared to last year [39]. - Non-political advertising categories are recovering, with strong audience metrics across both traditional and digital platforms [38]. Company Strategy and Development Direction - TEGNA is focused on leveraging streaming growth through Premion and expanding news and entertainment content across streaming platforms [13][15]. - The company has a disciplined M&A strategy, integrating acquisitions effectively and realizing synergies [29][57]. - TEGNA aims to continue paying down debt while returning value to shareholders through increased dividends and share repurchase programs [19][55]. Management Comments on Operating Environment and Future Outlook - Management expressed optimism for continued growth in Q2 and the remainder of the year, supported by strong advertising and subscription revenue trends [7][21]. - The company noted that the advertising environment is improving, particularly in larger markets, and expects further recovery as the economy reopens [85][86]. - Management highlighted the importance of local advertising and the unique position of Premion in the competitive OTT advertising market [90][91]. Other Important Information - TEGNA has made significant progress in diversity, equity, and inclusion initiatives, including a comprehensive journalism program [23][24]. - The company has a strong balance sheet, with total debt at $3.5 billion and a net leverage ratio of 3.82x [50][51]. - Free cash flow for Q1 2021 was a record $159 million, representing 22% of total revenue [53]. Q&A Session Summary Question: Can you discuss the drivers of Premion's growth? - Management indicated that local sales are the primary driver of Premion's growth, with increasing inventory and strong demand from local advertisers [70][71]. Question: How is the automotive advertising category performing? - Management noted that automotive advertising is performing well, particularly in large markets, despite supply chain issues affecting the industry [73][75]. Question: What is the outlook for cash taxes? - Management confirmed that the cash tax guidance remains unchanged, with specific figures to be provided later [76][78]. Question: How does TEGNA's core advertising environment compare to 2019? - Management stated that core advertising levels are slightly down compared to 2019, but larger markets are performing better than both last year and 2019 [85][86]. Question: What is the significance of the new NFL deals for TEGNA? - Management emphasized that having NFL content on broadcast for the next 11 years is a significant advantage for the industry, although streaming changes may impact local inventory [87][88]. Question: What is the competitive landscape for Premion? - Management acknowledged the competitive nature of the OTT advertising space but highlighted TEGNA's focus on local advertising as a differentiator [90][91].