TEGNA INC (TGNA)·Q3 2024 Earnings Summary

Executive Summary

• Q3 delivered solid upside to internal guidance: revenue rose 13% YoY to $806.8M (above 9–12% guide) on record political ($126.3M) and resilient AMS, while GAAP EPS was $0.89 and non-GAAP EPS $0.94, supported by cost actions and Olympics tailwinds .
• Management reaffirmed all FY24 key guidance items and lowered the effective tax rate to 22–23% (from 22.5–23.5% prior), and guided Q4 GAAP revenue up 19–21% with non-GAAP opex up 1–3% .
• Capital return remained robust: $91M returned in Q3 (4.9M shares repurchased at $14.48 plus $21M dividends), cash $536M, and net leverage 2.8x; on track to ~ $350M of 2024 returns .
• Catalysts into Q4: record-cycle political, lowered tax rate, cost reductions (50% of $90–100M annualized by YE24), and expanded sports/streaming distribution (Mavericks, Nuggets/Avs, Fubo deal) supporting audience and advertiser reach .

What Went Well and What Went Wrong

• What Went Well
  • Record third-quarter political advertising ($126.3M) drove revenue above guidance; QTD political through Election Day ~ $375M underscored TGNA’s battleground footprint .
  • Olympics boosted NBC affiliate viewership (35% growth in total hours watched vs Tokyo), supporting AMS/local core growth on NBC stations .
  • Cost control: non-GAAP opex $566M; company reiterated $90–100M annualized core savings exiting 2025 and expects ~50% by YE24 .
• What Went Wrong
  • Subscription revenue declined 6% YoY to $356.2M on subscriber losses (partially offset by price); net retrans stabilized structurally, but gross remains pressured by mix .
  • AMS national softness persisted (auto/retail/home improvement) despite improvements in local categories; Premion faced national headwinds, with local Premion up double digits but total Premion constrained in Q3 .
  • Core advertising pacing remains sluggish post-election; December better than Oct/Nov, but still challenged (suggesting cautious near‑term core trends) .

Financial Results

• Consolidated summary

• Revenue mix

• KPIs and balance sheet

Notes: Q3 non-GAAP EPS reconciles GAAP $0.89 + $0.02 SBC + $0.01 cash retention + $0.02 restructuring ≈ $0.94 . Olympics and political displacement helped AMS/linear but crowded some AMS categories .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We delivered record political revenue in the third quarter... and exceeded our 9–12% revenue growth guidance” – CFO .
• “We remain on track to generate $90–100 million in core annualized savings when we exit 2025... ~50% by the end of 2024” – CFO .
• “I believe we are underutilizing automation and AI to drive efficiency and create a better product… The no‑huddle offense is on the field at TEGNA from now on.” – CEO .
• “We like these [local sports] opportunities… Anything we do… is an investment whose job is to deliver cash flow returns” – CEO .

Q&A Highlights

• Regulatory/M&A optionality: Management open to value-accretive combinations amid potential FCC shifts; capital allocation will balance buybacks/dividends with optionality for deals .
• Expense outlook: Core cost takeout continues; 2025 specifics not yet provided; growth vectors (sports rights, Premion) imply some opex growth offset by core savings .
• Premion: Local strong; national still soft; returning to growth in Q4; political on CTV additive but not material vs broadcast; long-term execution focus .
• Post-election pacing: December improving vs Oct/Nov but still sluggish; broadly similar to Q2 trends ex Olympics/political noise .
• Sports rights economics: Pursuing profitable rights aligned to reach and advertiser monetization; discipline emphasized .

Estimates Context

• Street consensus from S&P Global (EPS/Revenue/EBITDA) for Q3 2024 could not be retrieved due to access limits; therefore a quantitative beat/miss vs consensus cannot be presented. Given management’s statement that Q3 revenue exceeded its own 9–12% growth guidance and the non-GAAP opex discipline, we expect models to reflect higher political and improved Q4 revenue (19–21%) and a lower FY24 tax rate (22–23%), with EPS sensitivity to mix and tax .
• Note: S&P Global consensus data was unavailable at time of analysis (daily request limit exceeded).

Key Takeaways for Investors

• Revenue momentum into Q4 is strong: management guides +19–21% YoY GAAP revenue, underpinned by record-cycle political and Olympics tailwinds rolling off but replaced by late-cycle political spend .
• Mix matters: AMS local outperforms while national remains uneven; expect continued divergence near-term; Premion local growth and Q4 reacceleration help offset national softness .
• Structural savings are real and accelerating: opex down 2% YoY in Q3; ~50% of targeted $90–100M annual savings by YE24 improves 2025 set-up, even in an odd-year backdrop .
• Tax rate cut is an EPS lever: FY24 effective tax rate lowered to 22–23%; this provides incremental earnings support vs prior guide .
• Capital returns remain robust with balance sheet flexibility: $536M cash, 2.8x net leverage, and commitment to 40–60% of adjusted FCF over 2024–2025 (approx. $350M in 2024) .
• Sports and distribution strategy is broadening reach: multi-market Mavericks/Nuggets/Avs distribution and Fubo deal expand audience and advertiser access, potentially supporting AMS over time .
• Watch 2025 setup: Odd-year advertising, retrans mix, and execution on AI/automation and digital engagement will determine margin durability post-political .

Management disclosures and reconciliations are available in the Q3 2024 8‑K/press release and transcript .