Recovery In Core Advertising Pumps Nexstar Media's Q2 Earnings, Clocks Double-Digit Distribution Revenue Growth

Nexstar Media Group Inc NXST reported second-quarter FY21 net revenue growth of 23.7% year-on-year to $1.13 billion, beating the analyst consensus of $1.12 billion.
Revenues from Total Television Advertising jumped 35.1% Y/Y to $431.97 million, Core Advertising climbed 42% Y/Y to $423.5 million, highlighting growing demand for its premium local and national marketing solutions partially offset by a 60.5% Y/Y decline in Political Advertising revenue to $8.5 million.
Distribution Fee revenue rose 15% Y/Y to $616.9 million. It reflected the renewal of distribution agreements in 2020, representing 18% of its subscriber base, synergies related to Mission Broadcasting’s acquisition of WPIX-TV, and stable subscriber trends across its platform.
Digital revenue expanded 57.3% Y/Y to $73.4 million, driven by solid Y/Y growth in local digital advertising revenue and agency services business, combined with contributions from the Dec. 2020 accretive acquisition of Best Reviews. Other revenue declined 20.4% Y/Y to $9.3 million.
The adjusted EBITDA margin expanded 500 bps to 37%.
EPS of $4.51 beat the analyst consensus of $3.68.
It returned $167.7 million to the shareholders via share buybacks and dividends.
Nexstar Media generated $181.2 million in free cash flow and held $313.3 million in cash and equivalents.
The record Q2 net revenue reflects a faster and stronger-than-anticipated recovery in core advertising and continued double-digit distribution revenue growth.
Outlook: Nexstar raised the Pro-forma average annual free cash flow guidance for the 2021/2022 cycle by $60 million to $1.33 billion.
Price action: NXST shares closed higher by 0.21% at $147.57 on Tuesday.

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