NEXSTAR MEDIA GROUP, INC. Q4 FY2024 earnings call

• Fourth quarter and full-year net revenue were record highs, driven by election year political advertising and distribution revenue growth.
• Full-year adjusted EBITDA was $2 billion, adjusted free cash flow was $1.2 billion, with $820 million returned to shareholders via repurchases and dividends.
• NewsNation is a 24/7 news network with strong performance, out-delivering MSNBC in the 25-54 demo.
• The CW transformed with sports programming like WWE, NXT, and NASCAR Xfinity Racing, aiming to drive profitability.
• ATSC 3.0 consortium formed with Scripps, Gray, and Sinclair to advance next-gen TV, with first paying customer signed.
• Actively working on broadcast ownership rule deregulation to pursue accretive M&A, like the acquisition of WBNX TV in Cleveland.

Nexstar Media Group, Inc. achieved record financial results. For the fourth quarter, net revenue was $1.5 billion, up 14% year-over-year. Total net revenue for the year was $5.4 billion, the highest in the company's history. Full-year adjusted EBITDA was $2 billion, and adjusted free cash flow was $1.2 billion. Distribution revenue grew, driven by the company's position as the largest owner of local broadcast stations. NewsNation established itself as a top cable news network, and The CW transformed with high-quality entertainment, unscripted live events, and sports programming. The broadcast stations benefited from strong election year political advertising, capturing nearly 85% of contested election markets.

• 2025 adjusted EBITDA guidance is in the range of $1.5 to $1.595 billion.
• CapEx for 2025 is projected to be $120 to $125 million, with $30 to $35 million in Q1.
• Full-year 2025 cash interest expense expected to be $375 to $380 million, an improvement from 2024.
• Full-year 2025 cash taxes expected to be $260 to $270 million, using a 26% tax rate.
• Anticipate The CW to cut losses by over 25% in 2025 and achieve profitability in 2026.

• Potential regulatory changes not occurring could limit M&A opportunities.
• Continued weakness in advertising markets, including insurance and automotive, could impact revenue.
• Subscriber attrition in pay TV could affect distribution revenue if not managed.

Q: On M&A, what's the accretion discipline?

A: Any acquisition must be substantially more accretive than buying back stock (high teens to 20% yield on equity).

Q: Thoughts on MLB and ESPN parting ways?

A: MLB will likely seek broader platforms, and broadcast has opportunities to access such content.

Q: Progress on deregulation?

A: Optimal for deregulation, with strong messaging on preserving local journalism resonating, and consortium working on ATSC 3.0 transition for innovation.

Q: ATSC 3.0 revenue ramp?

A: Revenue will ramp as transition progresses, with potential clients and trials starting, aiming for 2028 for top markets.

Q: Core advertising trends?

A: First quarter advertising down low single digits, with slight sequential improvement; insurance and auto still weak, but CW and digital revenue help.