NM
NEXSTAR MEDIA GROUP, INC. (NXST)·Q4 2024 Earnings Summary
Executive Summary
- Q4 2024 delivered record net revenue of $1.49B (+14.1% YoY) and strong operating leverage: diluted EPS $7.56, Adjusted EBITDA $628M (42.2% margin), and Adjusted FCF $411M .
- Political advertising surged to $254M, offsetting softness and displacement in core non-political advertising; distribution revenue reached $714M, up 1.4% YoY .
- 2025 guidance introduced: Adjusted EBITDA $1.50–$1.595B; management expects flattish distribution revenue in 2025 ahead of renewals covering ~60% of subs in H2 with benefit starting Q1’26 .
- Capital allocation remained shareholder-friendly: $230M returned in Q4 (dividends + buybacks), net leverage improved to 2.91x; dividend raised 10% to $1.86/quarter in Jan-25 .
- Near-term stock reaction catalysts: CW sports ratings momentum (NASCAR/WWE), dividend increase, and growing confidence around deregulation and ATSC 3.0 monetization initiatives (EdgeBeam Wireless JV) .
What Went Well and What Went Wrong
-
What Went Well
- Record quarter: Net revenue $1.49B (+14.1% YoY), Adjusted EBITDA $628M (+39.9% YoY), Adjusted FCF $411M (+67.8% YoY); CEO: “another quarter of record net revenue” and strong shareholder returns .
- Election-year political tailwind: Political revenue of $254M (+$223M YoY) drove advertising growth; NewsNation/The Hill boosted credibility and reach .
- Balance sheet/returns: Net leverage reduced to 2.91x; Q4 buybacks of $178M and dividends of $52M; dividend increased to $1.86/quarter in Jan-25 .
-
What Went Wrong
- Core advertising softness: Non-political advertising down $51M YoY in Q4 due to market weakness and political displacement; categories like insurance and automotive remained weak into Q1 .
- TV Food Network equity income down: Income from equity method investments declined ($18M in Q4 vs $23M prior-year), impacting net income growth partially .
- CW still loss-making (though improving): Q4 CW losses reduced by $7M and full-year by $126M, but profitability only expected in 2026, keeping near-term drag .
Financial Results
Segment Revenue Breakdown ($USD Millions)
Key KPIs
Consensus vs Actual – Q4 2024
- Consensus EPS and revenue from S&P Global were unavailable due to a request limit today; we attempted to retrieve but could not access data. Actuals: Revenue $1.488B, Diluted EPS $7.56 .
- Values retrieved from S&P Global would normally be shown here; unavailable in this instance.
Guidance Changes
Notes on non-GAAP: Definitions for Adjusted EBITDA and Adjusted FCF were modified during 2024; reconciliations provided in releases .
Earnings Call Themes & Trends
Management Commentary
- CEO Perry Sook: “We ended 2024 with another quarter of record net revenue... In 2025, our key initiatives include renewing distribution contracts representing approximately 60% of our subscriber base, continuing our march towards profitability for The CW, and pursuing deregulation.” .
- On industry dynamics: “Broadcast... remains the gold standard for sports and news programming... Our NASCAR Xfinity Series on The CW drew 1.8M viewers in Daytona (+93% YoY vs FS1) and 1.3M in Atlanta, best in 8+ years.” .
- On valuation and capital returns: “We returned $820M or 68% of Adjusted FCF to shareholders in 2024... we traded at ~6.3x ’24/’25 EBITDA and ~21% FCF yield; a 7–7.5x multiple implies ~$197 per share.” .
Q&A Highlights
- M&A appetite and leverage: Management seeks highly accretive deals that beat buyback ROI; comfortable leverage will be case-by-case; not looking to over-lever .
- Distribution renewals: ~60% of subs renew in H2’25; benefits start Q1’26; guidance assumes slight improvement in attrition .
- Core advertising outlook: Q1 core down low single digits YoY, sequentially better than Q4; insurance and auto remain headwinds .
- CW profitability: On track for profitability during 2026; 2025 losses targeted to decline >25% vs 2024 .
- ATSC 3.0 monetization: EdgeBeam JV has national footprint (97% coverage) and first customer; significant revenue step-up expected post top-55 market transition .
Estimates Context
- We attempted to retrieve S&P Global consensus EPS and revenue for Q4 2024 but were unable due to a daily request limit. Actuals: Revenue $1.488B; Diluted EPS $7.56 .
- Given unavailable consensus, we cannot formally score beat/miss; however, YoY performance was strong, supported by political revenue and improved operating leverage .
Key Takeaways for Investors
- Election-year dynamics drove a powerful finish: record Q4 revenue and margins, with political revenue of $254M offsetting core softness; expect core trends to improve gradually into 2025 .
- 2025 setup is conservative on distribution (flattish) ahead of H2’25 renewals covering ~60% of subs—look for a step-up starting Q1’26; this is a key medium-term catalyst .
- CW transformation is gaining traction via live sports (NASCAR/WWE), reducing losses materially and targeting profitability in 2026; distribution resets for >2/3 of CW subs in 2025 should aid monetization .
- Balance sheet optionality: net leverage at 2.91x with plans to continue buybacks and optional debt reduction; dividend raised to $1.86/quarter enhances total return profile .
- ATSC 3.0/EdgeBeam Wireless represents a longer-dated but potentially meaningful upside option once transition milestones are met; early commercial validation noted .
- Watch near-term advertising categories (insurance/auto) but note sequential improvement and CW programming lift; management guides Q1 core down low single digits .
- Regulatory reform/M&A could unlock strategic consolidation; management remains disciplined—if deregulation is delayed, capital will favor buybacks/deleveraging .