TEGNA(TGNA) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total company revenue for Q4 2024 increased by 20% year over year to $871 million, driven primarily by political advertising revenue [29] - For the full year, total company revenue grew by 7$3.1 billion, resulting in $931 million of adjusted EBITDA [30] - Subscription revenue for Q4 was$357 million, up 5% year over year, with full year subscription revenue totaling $1.5 billion [34] Business Line Data and Key Metrics Changes - Advertising and marketing services revenue faced pressure in Q4, finishing 11$50 million in annualized savings by the end of 2024, representing roughly 50% of the goal to generate $90 million to$100 million in core non-programming annualized savings [37] Market Data and Key Metrics Changes - Political advertising revenue for the full year reached 373 million, nearly matching 2020 results despite fewer competitive races [30] - Automotive advertising remains challenged, with slight improvements noted in Q4 but still down across the board [62] Company Strategy and Development Direction - The company has identified five key areas of opportunity: building a world-class team, leveraging strengths across stations, deploying technology and AI, growing digital revenue, and scrutinizing expenses [8][9] - TEGNA is focused on transforming operations to improve efficiency and effectiveness, including centralizing marketing operations and deploying modern technology [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for deregulation and M&A opportunities, emphasizing the importance of being disciplined capital allocators [48][49] - The company is committed to returning 40% to 60% of adjusted free cash flow to shareholders while exploring strategic growth opportunities [82] Other Important Information - TEGNA's cash and cash equivalents totaled 693 million at year-end, with a net leverage of 2.7 times, comfortably below the three times annual guidance [39][40] - The company congratulated KXTV in Sacramento for receiving the prestigious 2025 Alfred DuPont Columbia University Award for excellence in journalism [23] Q&A Session Summary Question: TEGNA's position as a buyer or seller in the context of deregulation - Management indicated that they are disciplined capital allocators and will evaluate opportunities based on value creation for shareholders [48][49] Question: Details on Q1 expense guidance - Management noted that programming expenses are expected to be higher due to sports rights, while core operational reductions are showing sequential improvement [50][51] Question: Trends in core advertising for Q1 - Advertising and marketing services started sluggish but improved throughout the quarter, with a notable impact from the Super Bowl programming change [60] Question: Status of automotive advertising - Automotive advertising remains challenged but showed slight improvement in Q4, with tier three holding up better than tier one and two [62] Question: Renewal of retransmission subscribers - The majority of retransmission subscribers are up for renewal at the end of the year, with one renewal occurring during the year [65] Question: FCC's role in ownership rules - Management clarified that the FCC has authority over in-market regulation, while the national cap's authority is less clear [67] Question: Challenges within premium advertising - Premium continues to grow locally but faces challenges nationally due to shifts in large national holding companies [72] Question: Addressing the 2026 bond - Management confirmed they have the cash to pay off the 2026 bonds and are looking at all options for disciplined capital deployment [82][84]