Full Transcript: Nexstar Media Gr Q2 2026 Earnings Call

Nexstar Media Gr (NASDAQ: NXST ) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below. This content is powered APIs. For comprehensive financial data and transcripts, visit View the webcast at Summary Full Transcript OPERATOR Good day and welcome to Nexstar Media Gr's second quarter 2026 conference call.

Today's call is being recorded. I will now turn the conference over to Joe Jeffroni, Investor Relations. Please go ahead. Joe Jeffroni, Investor Relations Thank you, Sachi, and good morning, everyone.

I'll read the safe harbor language and then we'll get right into the call. All statements and comments made by management during this conference call, other than statements of historical fact, may be deemed forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Nexstar Media Gr cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those reflected by the forward-looking statements made during this call.

For additional details on these risks and uncertainties, please see Nexstar Media Gr's Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission, and Nexstar Media Gr's subsequent public filings with the SEC. Nexstar Media Gr undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. It's now my pleasure to turn the conference over to your host, Nexstar Media Gr Founder, Chairman and Chief Executive Officer Perry Sook. Perry, please go ahead.

Perry Sook, Founder, Chairman and Chief Executive Officer Thank you, Joseph, and good morning, everyone. We appreciate you all joining us today. You'll be hearing from Mike Beard, our Chief Operating Officer, and Leanne Gliha, our Chief Financial Officer, after my opening remarks this morning. Nexstar Media Gr delivered record second quarter results, including an all-time high quarterly revenue number of $2 billion, adjusted EBITDA of $633 million, and year-over-year free cash flow more than doubling to $238 million for the quarter.

Our outstanding performance was driven by the TEGNA acquisition, advertising revenue growth, and disciplined operating execution that has long been a hallmark of this company. Advertising revenue benefited from strong midterm election political advertising, incremental FIFA World Cup sports advertising, and continued growth in legacy local streaming advertising. On the cost side, we continue to drive efficiencies and improve profitability by centralizing station marketing, automating content production, and realigning our sales incentives. I'll briefly review a few of the operating highlights, after which I'll provide a brief update on our litigation matters.

Starting with NewsNation. The network continues to distinguish itself through its commitment to objective, fact-based reporting and balanced perspectives, maintaining its position as the fastest growing cable news network in primetime and total day, with total viewers in June 2026 growing 44% over the comparable prior-year period. The CW also achieved impressive results, ranking as the ninth most-watched ad-supported television network in total day, with CW Sports achieving its strongest quarter ever. In addition, the CW accelerated its growth strategy by entering into new distribution partnerships with both ESPN and Roku, expanding our reach to new streaming services.

0 in Cleveland, Ohio, completing the deployment of the next-generation broadcast standard now across the top 20 industry DMAs. This most important milestone was made possible by Nexstar Media Gr's acquisition of WBNX-TV, which removed the structural constraints that had previously hindered deployment in that market. 0 leverages broadcast spectrum more efficiently to support high-speed data transmission and enhanced services, providing meaningful benefits for both viewers and local communities in terms of local programming and community engagement. During the quarter, our owned and operated stations earned 34 regional Edward R.

Murrow Awards for outstanding journalism and exceptional locally produced news programming. These awards represent and reflect the hard work of our teams and the crucial impact of quality local journalism on the communities that we serve nationwide. We also celebrated Nexstar Media Gr's 30th anniversary on June 17 by giving back to our local communities through our annual Founders Day of Caring, which provides employees with paid time off to volunteer locally.

This year, we expanded our commitment through the Nexstar Media Charitable Foundation's 30 Days of Giving initiative, which awarded grants to 60 employee-nominated nonprofit organizations across our local television markets. 86 per share, to shareholders in the form of dividends, representing an annualized yield of just under 4%. In addition, during the quarter we made significant progress toward our debt reduction goals by repaying $409 million in debt, which equates to a little bit more than $13 per share of equity value.

Looking ahead, we are well positioned for strong free cash flow generation in the second half of 2026, and we remain committed to defending our acquisition of TEGNA against baseless attacks. To that end, we continue to focus on defending our position in the ongoing litigation and continuing our full compliance with the preliminary injunction issued last April. Now I'll spend a few minutes bringing you up to speed on where we are today.

In May, TEGNA appointed experienced broadcast executive Patrick Paolini to CEO, where he is responsible for leading the company and overseeing all aspects of its business, including operations, local journalism, revenue growth, and strategic initiatives. Since then, Patrick has promoted or hired several executives to serve in various leadership roles spanning legal, finance, human resources, technology, and programming, affirming TEGNA's independent operations under Nexstar Media Gr ownership.

Nexstar Media Gr remains resolute that a complete factual record will demonstrate that the DirecTV and States Attorneys General lawsuit is without merit, and the company is committed to resolving the matter as expeditiously as the legal process will allow. With that, I'll briefly review the key milestones in the litigation to date, along with related regulatory developments. S. Court of Appeals for the Ninth Circuit, seeking an expedited appellate review to narrow the scope of the preliminary injunction and to dismiss the state plaintiffs, with oral arguments now anticipated in the fourth quarter of 2026.

S. C. Circuit rejected all challenges to the Media Bureau's order approving Nexstar Media Gr's acquisition of TEGNA, concluding that the appellants have not met their burden to show irreparable harm. Today, the FCC is scheduled to vote on a proposal to eliminate the national broadcast station ownership cap and replace it with a case-by-case review process for M&A in the future.

S. District Court for the Eastern District of California is scheduled to begin. The court has allocated approximately 15 days for trial to consider the merits of the antitrust claims, with equal time provided for each side. We recognize that several claims have been made about the TEGNA acquisition by the State's Attorney General and others.

However, the facts tell a very different story. That's why we posted a new presentation on our website, Nexstar TV, to clarify the details for our investors and the public at large. While we encourage you to review this presentation on your own, I'll spend a few minutes just touching on the main points. First, this transaction underwent extensive review by both the FCC and the Department of Justice before receiving regulatory approval, with the FCC concluding that the acquisition serves the public interest.

Second, Nexstar Media Gr remains a relatively small participant in the broader media landscape. Some pundits have confused the reach of our television stations with our market share. S. population, compared with 70% before the TEGNA acquisition.

However, our stations account for less than 5% of the total viewing, and we increasingly compete against significantly larger technology, media, and distribution companies. S. television stations. Third, the free universal access afforded by local broadcast television is not just a convenience; it is an essential public service and central to Nexstar Media Gr's mission.

Our stations have always been available to consumers for free over the air, and they remain so today. Prices paid for pay-TV subscriptions are determined by the satellite, cable, and streaming television providers, and not by Nexstar Media Gr. Fourth, our commitment to independent, fact-based journalism—local journalism in particular—has not changed, and our local newsrooms continue to retain editorial independence, as always. Underscoring this fact is the analysis from independent watchdog group Ad Fontes, which confirms time and again that Nexstar Media Gr provides unbiased and reliable news.

Finally, this acquisition strengthens—and not weakens—local journalism. Nexstar Media Gr has a long track record of expanding local news following acquisitions, increasing local news hours by 18% since the Tribune acquisition, and we have plans to do so with the TEGNA stations as well. Most recently, we announced the launch of new daily primetime local newscasts in Dallas and in Phoenix. Greater scale enables us to invest more in local journalism, create differentiated programming, and better serve the communities in which we operate.

In summary, as these various processes play out, we remain committed to maintaining the same level of professionalism and integrity and respect that has defined Nexstar Media Gr and earned us the trust of our viewers, our partners, and our stakeholders for more than three decades. Taking the high road does not mean remaining silent in the face of commercial and politically motivated attacks. We will continue to respond appropriately and decisively with transparency and the facts in a manner that is consistent with the values that we have upheld since our founding.

We have a depth of executive leadership and legal expertise to help address these matters while continuing to operate the business at a high level. As our results prove today, our focus remains on executing our strategy, serving our communities, and meeting or exceeding our financial targets. With all of that said, let me now turn the call over to Mike Baird. Lee Ann Gliha, EVP and Chief Financial Officer Thank you, Mike, and good morning, everyone.

Mike gave you most of the details on the revenue side and the CW, so I'll provide a review of expenses, adjusted EBITDA, adjusted free cash flow, along with a review of our capital allocation activities. Combined second quarter direct operating and SG&A expenses excluding depreciation and amortization and corporate expenses increased by $500 million, driven primarily by the acquisition of TEGNA, $11 million in one-time expenses related to the TEGNA transaction, and offset in part by a slight reduction in recurring legacy Nexstar Media Gr operating expenses excluding one-time expenses.

Second quarter recurring cash operating expenses on a combined basis were lower by $10 million, driven by expense initiatives at legacy Nexstar Media Gr that Perry mentioned and lower digital cost of goods sold and programming expenses. At TEGNA Q2 2026, total corporate expense was $131 million, including non-cash compensation expense of $40 million, compared to $64 million and including non-cash compensation expense of $21 million in the second quarter of 2025.

The $67 million increase is primarily due to the acquisition of TEGNA, including a year-over-year increase of $50 million of one-time costs, of which $32 million of the increase was from cash, primarily related to change in control, severance and accelerated stock vesting, and legal and other professional fees associated with the TEGNA transaction, as well as increased legal fees at Nexstar Media Gr. Q2 2026 amortization of broadcast rights included in our definition of adjusted EBITDA was $87 million, an increase of $8 million from $79 million in the second quarter of 2025, primarily due to the TEGNA acquisition.

On a combined basis, amortization of broadcast rights was down approximately $2 million year over year. Q2 2026 income from equity method investments was $3 million, which primarily reflects our 31% ownership in TV Food Network. This compares to $11 million last year, with the reduction primarily due to TV Food Network's declining advertising revenue. 8% margin, an increase of $244 million from the 2025 second quarter of $389 million.

TEGNA operations accounted for $187 million of this gain, with the remainder due primarily to the political cycle. On a combined basis, Q2 2025 adjusted EBITDA including TEGNA would have been $545 million. Moving to the components of free cash flow and adjusted free cash flow, second quarter CapEx was $45 million, an increase of $16 million from $29 million in the second quarter last year, primarily due to the TEGNA acquisition. On a combined basis, second quarter CapEx in 2025 was $36 million.

Second quarter net interest expense was $190 million, an increase of $93 million from second quarter of 2025 due primarily to the increased interest expense associated with the debt incurred to facilitate the TEGNA acquisition. On a recurring cash basis, this compares to $185 million in Q2 2026 versus $94 million in Q2 2025. Second quarter operating cash taxes were $151 million. Payments for capitalized software obligations net of proceeds from disposal of assets and insurance recoveries were $8 million.

Cash programming amortization costs were higher than cash payments by $2 million as certain programming payments were deferred, and we received an $11 million distribution from Food Network. Putting this all together, consolidated second quarter 2026 adjusted free cash flow was $238 million, more than double last year's $101 million. Looking ahead, we are projecting CapEx in the $50 million range in Q3. Third quarter cash taxes are estimated to be in the $65 million range.

From an interest perspective, our run-rate quarterly interest expense based on our current balances outstanding as of June 30 is about $185 million. That amount will fluctuate with SOFR rates, which are expected to increase and reduce as we pay debt. 39 billion senior secured notes in Q3 2026. Payments for programming are expected to be in excess of amortization by $9 million.

Now turning to capital allocation, on our balance sheet, together with the cash from operations generated in the quarter and cash on hand, we returned $57 million to shareholders in the form of dividends. Consistent with past commentary, we made no repurchases, instead using excess cash to repay $409 million of debt. 3 billion at year end, reflecting the impact of the TEGNA acquisition. 725 billion of 7 1/4% senior notes due 2034.

Our cash balance at quarter end was $218 million. Because we designated the CW as a non-restricted subsidiary, the losses associated with the CW are not accounted for in our calculation for purposes of our credit agreement. In addition, our credit agreement allows us to include the adjusted EBITDA of TEGNA as if we acquired the business on the first day of the period presented, and to add back one-time expenses related to the deal and any operational restructuring, and to include the impact of any synergies we expect to realize within 18 months of the close of the transaction, which would be September 2027.

In early July we learned that the trial on the merits of the plaintiffs' claims is set for July 16, 2027. Given the limited time between the resolution of the trial and the September 2027 date, we removed the synergies from the leverage calculation. If conditions change, we can revisit this assessment and calculation. 75 times.

22. At quarter end, our Q3 2026 cash flow will be deployed first to fulfill our mandatory obligations, including debt repayments, pension and defined benefit plan contributions, our dividend, and then to optionally repay any additional debt with excess cash flow. Despite the delay in our ability to execute on the synergies we expected from our acquisition of TEGNA, we continue to benefit from the combined strong political-year cash flow of the company. From the date of acquisition through the end of the year, we currently anticipate repaying over a billion dollars of total debt, creating over $33 per share of equity value.