TEGNA(US:TGNA)2023-11-07 17:05Financial Data and Key Metrics Changes - Total company revenue decreased by 11% year-over-year, primarily due to reduced political revenue from the mid-term election cycle last year [9][37] - Subscription revenue reached a record high for the third quarter, showing a slight year-over-year increase [9][31] - Adjusted EBITDA for the third quarter was $166 million, down 38% year-over-year, mainly due to the absence of high-margin political revenue and increased programming costs [48][45] - Free cash flow generated during the quarter was $60 million, supported by high-margin subscription revenues [48] Business Line Data and Key Metrics Changes - Advertising and marketing services (AMS) revenue finished down 3% year-over-year, but underlying advertising trends were flat when adjusted for a national account loss [11][39] - Automotive advertising, the largest category within AMS, grew by 20% year-over-year, marking the fifth consecutive quarter of growth [12][41] - Services category also showed strong performance with a 15% year-over-year increase [12] Market Data and Key Metrics Changes - The company expects a favorable portfolio of stations for political advertising in 2024, benefiting from the presidential election cycle and the Summer Olympics [13][44] - Local OTT revenue for Premion was strong, up double-digits year-to-date, despite a year-over-year decline in total Premion revenue due to a national account loss [43][82] Company Strategy and Development Direction - The company is focused on enhancing performance, optimizing operational efficiency, and driving long-term shareholder value [7] - TEGNA reached a multiyear deal with ABC, renewing affiliations in 13 markets, which covers 9% of the US population [19][20] - The company is pursuing organic growth and evaluating opportunistic bolt-on M&A to augment its growth outlook [14][35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2024, citing strong operating performance and favorable market conditions [44][18] - The company anticipates continued improvement in advertising revenue trends into the fourth quarter [11][61] - Management acknowledged macroeconomic challenges but highlighted the resilience of their business model [41][36] Other Important Information - The company completed an initial $300 million accelerated share repurchase program, reducing outstanding shares by approximately 18 million [32][26] - A second ASR program targeting $325 million is expected to commence shortly [16][70] - The board declared a 20% increase in the regular quarterly dividend, which was paid out for the first time in October [34] Q&A Session Summary Question: How are advertising trends expected to evolve in Q4? - Management indicated that sequential trends are improving and that underlying advertising trends would be better in Q4, despite the impact of a national account loss [61][60] Question: What is the company's approach to share repurchases during the upcoming ASR? - Management stated that they will use the ASR program opportunistically and will evaluate share repurchase opportunities based on market conditions [70][68] Question: How does the company view the impact of streaming on its business? - Management believes that sports broadcasting will remain a significant driver, and they are focused on maximizing value from their partnerships with networks [76][75] Question: What is the outlook for Premion's performance? - Management noted that while total Premion revenues are down, local revenue is strong and growing, indicating a focus on local advertisers [82][81] Question: How does the company plan to manage expenses moving forward? - Management acknowledged some temporary increases in expenses related to strategic planning and employee development but expects overall expenses to decrease in the fourth quarter [47][66]