Nexstar Media Group, Inc. (NASDAQ:NXST) has consistently demonstrated its ability to execute at the highest level, generating robust financial results and delivering exceptional shareholder returns. With a diversified portfolio of local and national media assets, the company has solidified its position as a bellwether in the broadcasting industry.

Financials

For the full year 2023, Nexstar reported net income of $346 million, revenue of $4.93 billion, operating cash flow of $999 million, and free cash flow of $850 million. These impressive figures underscore the strength and resilience of Nexstar's business model, which has enabled the company to navigate the evolving media landscape with agility and foresight.

In the first quarter of 2024, Nexstar continued to build on its momentum, reporting record quarterly net revenue of $1.28 billion, driven by all-time high distribution revenue of $761 million. Adjusted EBITDA and adjusted free cash flow exceeded consensus expectations, further validating the company's ability to generate consistent and substantial shareholder value.

Business Overview

Nexstar's diversified portfolio of local and national media assets, including its ownership of one of the nation's five major broadcast networks, The CW, and the fastest-growing cable news network, NewsNation, has been a key driver of its success. The company's strategic investments in these growth platforms have positioned Nexstar to capitalize on the evolving media landscape and deliver enhanced value to its stakeholders.

The CW Network

The CW, which Nexstar acquired in 2022, has shown significant improvement, with the network's first-quarter operating profit increasing by $50 million year-over-year, driven by a $55 million reduction in programming costs. Nexstar expects the CW's operating profit to improve by over $100 million for the full year 2024, as the company continues to optimize the network's programming and operations.

NewsNation

Similarly, NewsNation has made impressive strides, becoming the second-largest cable news network in pay-TV distribution, surpassing both CNN and MSNBC. The network's focus on delivering balanced and differentiated content has resonated with viewers, and Nexstar is poised to further capitalize on this momentum as it completes the transition to a 24/7 news format in June 2024.

ATSC 3.0 Initiative

Nexstar's commitment to innovation is also evident in its progress on the ATSC 3.0 initiative, which aims to leverage the company's extensive spectrum assets to deliver advanced applications and services. The company has already surpassed its goal of serving 50% of the U.S. population with ATSC 3.0 signals, and it is actively pursuing new revenue streams from business-to-business applications, positioning itself as a leader in the evolving broadcast technology landscape.

Liquidity

The company's financial strength is further underscored by its robust liquidity position and prudent capital allocation strategy. As of March 31, 2024, Nexstar had $237 million in cash and cash equivalents, and its net leverage ratio, excluding the CW, stood at 3.73x, well below the covenant requirement of 4.25x. This financial flexibility has enabled Nexstar to return significant capital to shareholders, with the company repurchasing $111 million of its common stock in the first quarter of 2024 and increasing its quarterly dividend by 25% to $1.69 per share.

Outlook

Looking ahead, Nexstar remains confident in its ability to deliver another strong year of financial results in 2024, driven by the successful renegotiation of its distribution contracts, significant presidential election year political advertising, and reduced losses related to the CW network. The company's focus on executing its strategy and leveraging the strengths of its platform to maximize every opportunity positions it well to drive continued strong growth and shareholder returns.

Conclusion

Nexstar's consistent operational excellence, diversified asset base, and prudent financial management have solidified its position as a premier media company. With a proven track record of value creation and a robust pipeline of growth initiatives, Nexstar is poised to continue delivering exceptional results for its shareholders.