On November 7, 2024, Nexstar Media Group Inc (NXST, Financial) released its 8-K filing reporting record third quarter net revenue of $1.37 billion, surpassing analyst estimates of $1.367 billion. The company also reported a net income of $180 million, significantly exceeding the previous year's $8 million. This performance underscores the strength of Nexstar's broadcast television business model.
Company Overview
Nexstar Media Group Inc is the largest television station owner-operator in the United States, with over 200 stations in 116 markets. The company is a major affiliate for CBS, Fox, NBC, and ABC, reaching 68% of U.S. TV households. Nexstar also owns NewsNation, a nationwide pay-television network, 75% of The CW, and a 31% stake in Food Network and Cooking Channel.
Financial Achievements and Challenges
Nexstar's third quarter results were driven by record distribution and advertising revenues, including an all-time high in political advertising revenue of $154 million, marking a 16% increase over the comparable 2020 period. The company also reported a reduction in year-over-year quarterly losses at The CW by $36 million. These achievements highlight Nexstar's strategic focus on expanding its distribution network and optimizing its advertising revenue streams.
Nexstar generated record financial results for the third quarter, reflecting the continued power of our broadcast television business model.
Key Financial Metrics
The company's adjusted EBITDA for the quarter was $510 million, an 82.8% increase from the previous year, with a margin of 37.3%. Net cash provided by operating activities was $387 million, up 180.4% year-over-year, while adjusted free cash flow reached $327 million, a 303.7% increase. These metrics are crucial as they indicate the company's operational efficiency and liquidity position.
| Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Net Revenue | $1,370 million | $1,132 million | 20.7% |
| Net Income | $180 million | $8 million | NM |
| Adjusted EBITDA | $510 million | $279 million | 82.8% |
| Net Cash Provided by Operating Activities | $387 million | $138 million | 180.4% |
| Adjusted Free Cash Flow | $327 million | $81 million | 303.7% |
Strategic Initiatives and Market Position
During the quarter, Nexstar announced a new $1.5 billion share repurchase authorization and appointed Ellen Johnson to its Board of Directors. The company also renewed CBS Television Network affiliations in 42 markets and expanded its CW Network affiliations. These strategic moves are aimed at strengthening Nexstar's market position and enhancing shareholder value.
Analysis and Outlook
Nexstar's robust financial performance in the third quarter of 2024 reflects its strategic focus on leveraging its extensive broadcast network and optimizing revenue streams. The company's ability to generate significant cash flow and reduce debt positions it well for future growth and shareholder returns. However, challenges such as market softness in non-political advertising and MVPD subscriber attrition remain areas to watch.
Explore the complete 8-K earnings release (here) from Nexstar Media Group Inc for further details.
