TEGNA INC Q1 FY2024 earnings call

• Closed the acquisition of Octillion and began integrating it into Premion.
• Achieved key guidance metrics in the first quarter.
• Returned over $100 million to shareholders with $82 million in share repurchases and $20 million in dividends, and Board approved a 10% increase to the regular quarterly dividend.
• Core business transformation initiatives are expected to generate $90 million to $100 million of annualized cost savings by exiting 2025, with initial benefits in the second quarter.
• Strong political advertising position with coverage of 6 out of 7 key presidential states and 5 out of 7 competitive Senate seats.
• Summer Olympic Games in Paris to drive significant engagement.
• Secured multiple local pro sports deals, including with the Indiana Fever and Seattle Kraken.
• Stations nominated for a Peabody Award for investigative journalism work.

Total company revenue for the first quarter was down 4% year-over-year, primarily due to lower subscription revenue, partially offset by higher political advertising dollars. Subscription revenue was down 9% year-over-year, mainly because of net subscriber declines and service disruption with a distribution partner in January, though offset by contractual rate increases. Advertising and Marketing Services (AMS) revenue decreased 3% year-over-year; local advertising showed resilience. Premion revenue saw low single-digit growth year-over-year, driven by strong local revenue but offset by soft national revenue. Subscription revenue contribution: down 9% YoY; AMS revenue contribution: down 3% YoY; Premion revenue contribution: up low single digits YoY

• Full year 2024: Reaffirmed key metrics, including 2-year adjusted free cash flow guidance of $900 million to $1.1 billion. Amortization expense guidance updated to $51 million to $55 million due to the Octillion acquisition.
• Q2 2024: Expected total company revenue to be down low to mid-single digits year-over-year due to lower subscription and AMS revenue, partially offset by higher political ad dollars. Operating expenses forecasted to be flat compared to last year, improving sequentially due to transformation cost reduction efforts.

• Factors affecting actual results to differ from forward-looking statements as outlined in SEC filings.
• National advertising softness continuing to impact AMS revenue.
• Uncertainty around political ad spending trends and potential regulatory changes.

Q: Unpack Q2 guide, especially revenue decline and political trends A: David Lougee mentions no retrans deals in Q2, Julie Heskett notes AMS softness on national side, political to be sequentially better but not dramatically Q: Retrans revenue, transformation costs, Octillion M&A A: David Lougee says no significant upfront costs for transformation, Julie Heskett notes retrans mix and Tom Cox mentions potential M&A in streaming landscape Q: Octillion acquisition benefits, net retrans, cost trends A: Tom Cox explains Octillion's offensive and defensive benefits, David Lougee says retrans costs stable, Julie Heskett says cost growth percentage will improve sequentially Q: Premion political ad sales, women's sports, regulatory changes A: Tom Cox says Premion helps in political ad sales outside footprint, David Lougee talks about women's sports viewing levels, David Lougee mentions uncertainty around regulatory changes Q: Fever/Kraken deals, free cash flow, leverage A: David Lougee doesn't discuss deal lengths, Julie Heskett talks about free cash flow sensitivity factors, Julie Heskett says leverage under 3x is appropriate