TEGNA Inc. Q4 FY2024 earnings call

Building a high-performance team and culture

• Rolling out unified values and expectations across stations.
• Expanding roles of leaders like Tom Cox and attracting top talent such as Danusha Sabaji and Adrian Werk.

Improving execution through resource sharing

• Consolidated marketing operations across stations to leverage technologies and achieve $90 to $100 million savings target.

Deploying technology

• Designing the TV station of the future using cloud-based tech, AI, etc., with pilots in two markets to increase capabilities and savings.

Winning in digital

• Shipped or in process of shipping pilots for new engagement features, bringing an entrepreneurial tech mindset.

Scrutinizing expenses

• Zero-basing costs, exiting office space in Tysons Corner, and reviewing vendor contracts.

Regulatory environment

• Evolving FCC landscape with potential M&A opportunities; TEGNA has a strong balance sheet and optionality.

Acknowledgment

• KXTV in Sacramento received the 2025 Alfred DuPont Columbia University Award for journalism.

Total company revenue for the fourth quarter increased 20% year over year to $871 million. For the full year, total company revenue grew 7% to $3.1 billion. Advertising and marketing services (AMS) faced pressure in the fourth quarter, finishing 11% below the previous year. Digital revenue grew year over year. Fourth quarter subscription revenue was $357 million, up 5% year over year, with full year subscription revenue totaling $1.5 billion. Adjusted EBITDA for the full year 2024 was $931 million. Political advertising revenue for the full year 2024 was $373 million, nearly matching 2020 results excluding the Georgia senate runoff.

Reaffirming combined 2024 and 2025 guidance, adjusted EBITDA is expected to be in the range of $1 billion to $1.1 billion. For the first quarter of 2025, total company revenue is expected to be down in the 4% to 7% range year over year, primarily due to lower political revenue. Non-GAAP operating expenses in Q1 2025 are expected to be flat to up slightly compared to Q1 2024, driven by higher programming expenses but offset by core operational cost reductions.

Factors that may cause actual results to differ from forward-looking statements outlined in SEC filings. Uncertainty around regulatory changes and their impact on M&A opportunities. Softness in national advertising affecting premium revenue. Challenges in automotive advertising, particularly in tier one and two markets.

Q: Steven Cahall asks about TEGNA being a buyer or seller post-deregulation and Q1 expense guide.

A: Mike Steib states they are disciplined capital allocators with optionality due to strong balance sheet; Julie Heskett explains Q1 expenses, noting programming expenses are up due to sports rights but core cost reductions are sequential improvements.

Q: Craig Huber inquires about Q1 core advertising pacing, auto category trends, retrans renewals, and FCC ownership rules.

A: Julie Heskett says first quarter AMS started sluggish but improved, auto category is challenged; Mike Steib notes FCC has full authority over in-market regulation but uncertainty on national cap.

Q: Patrick Sholl asks about premium challenges.

A: Julie Heskett explains premium grows locally but national is challenged by large holding companies shifting to programmatic; Mike Steib highlights local advertisers love the product's targeting capabilities.

Q: Marlene Perrero asks about 2026 bond and capital allocation.

A: Julie Heskett says they remain committed to returning 40%-60% of adjusted free cash flow to shareholders and have cash to pay off 2026 bonds; Mike Steib mentions hard to predict interest rates but they have options.

Q: Dan Kurnos asks about TV station evolution and Premion growth.

A: Mike Steib discusses synergies across stations, freeing resources for revenue growth, and Premion's growth drivers including motivating the sales team to sell the full suite of products.