Nexstar's Q4 Revenue Takes Hit From Political Advertising Slump, Eyes Future Cash Flow Maximization

Nexstar Media Group Inc NXST reported a fourth-quarter fiscal 2023 net revenue decline of 12.3% year-over-year to $1.304 billion, missing the consensus of $1.314 billion.

Revenues were impacted by a decline in cyclical political advertising. Excluding political advertising revenue, net revenue increased 4.3% YoY.

Revenues from Television Advertising fell 35.5% Y/Y to $479 million, comprising Core Advertising revenue that fell 5.9% Y/Y to $449 million and Political Advertising revenue that fell 88.7% Y/Y to $30 million.

Distribution revenue gained 14.3% Y/Y to $704 million, and Digital revenue declined 5.4% Y/Y to $106 million.

Income from operations fell 21.8% Y/Y to $230 million. Adjusted EBITDA slid 31.3% Y/Y to $411 million, and the margin contracted to 31.5% from 40.2% a year ago.

EPS was $3.32, down from $5.30 in the fourth quarter of 2022 and below the consensus of $4.20.

Excluding the CW Network, fourth-quarter revenue was $1.26 billion, adjusted EBITDA was $461 million, representing a 36.6% margin, and free cash flow was $295 million. Free cash flow for the fiscal totaled $1 billion, down from $1.54 billion in 2022.

“On average, for the 2022/2023 cycle, Nexstar generated $1.8 billion of Adjusted EBITDA and $1.2 billion of Attributable Free Cash Flow. Over that time frame, we returned an average of $910 million each year to shareholders in the form of dividends and share repurchases, representing approximately 77% of our average Attributable Free Cash Flow. We expect to continue to use our cash flow to maximize shareholder returns,” commented Perry A. Sook, Nexstar’s Chairman and Chief Executive Officer.

2024 Outlook: Nexstar expects Adjusted EBITDA of $2.085 billion to $2.195 billion.

Price Action: NXST shares are trading higher by 1.5% at $164.84 on the last check Wednesday.

Photo via Shutterstock.