TEGNA Inc. ((TGNA)) has held its Q4 earnings call. Read on for the main highlights of the call.
TEGNA Inc.’s recent earnings call reflected a positive sentiment, highlighting robust revenue growth driven by political advertising and digital revenue streams. The company also made significant strides in cost-cutting measures. However, challenges persist in the form of declining AMS revenue, rising programming expenses, and difficulties in the automotive advertising sector.
Record Revenue Growth
TEGNA Inc. reported a remarkable 20% year-over-year increase in total company revenue for the fourth quarter, reaching $871 million. For the full year, revenue grew by 7% to $3.1 billion, showcasing the company’s strong financial performance.
Political Advertising Success
The company achieved substantial success in political advertising, generating $373 million in revenue for the full year 2024. This nearly matched the results from 2020, despite facing fewer competitive races, underscoring TEGNA’s strategic positioning in this sector.
Digital Revenue Growth
TEGNA’s digital revenue saw year-over-year growth, driven by its owned and operated digital products. This growth helped offset a slight decline in premium revenue, highlighting the company’s adaptability in the evolving digital landscape.
Cost-Cutting Initiatives
The company successfully achieved approximately $50 million in annualized savings by the end of 2024. This contributes to their target of $90 to $100 million in core non-programming annualized savings by the end of 2025, demonstrating a strong commitment to operational efficiency.
Strong Financial Position
TEGNA reported a robust financial position with cash and cash equivalents totaling $693 million at year-end. Their net leverage stood at 2.7 times, below the three times annual guidance, reflecting prudent financial management.
Advertising and Marketing Services Revenue Decline
AMS revenue faced pressure in the fourth quarter, finishing 11% below the previous year. This decline was attributed to political displacement and continued softness from national accounts, presenting a challenge for the company.
Programming Expenses Increase
The fourth quarter saw a 2% increase in expenses compared to last year, driven primarily by programming expenses, including local sports rights. This rise in expenses highlights the ongoing cost pressures in content acquisition.
Core Advertising Challenges
Automotive advertising continues to face challenges, particularly in tier one and tier two segments. Despite some sequential improvement, this sector remains a concern for TEGNA, impacting overall advertising revenue.
Forward-Looking Guidance
TEGNA Inc. provided guidance for the full year and the first quarter of 2025 during the earnings call. They anticipate a 4% to 7% revenue decline in Q1 2025 due to reduced political advertising but expect non-GAAP operating expenses to remain flat or increase slightly. The company aims to achieve $90 to $100 million in annualized savings by the end of 2025 and plans to renew approximately 45% of their traditional MVPD subscribers in 2025, focusing on digital revenue growth and operational efficiencies.
In summary, TEGNA Inc.’s earnings call highlighted a positive outlook with strong revenue growth and effective cost-cutting measures. While challenges remain in AMS revenue and automotive advertising, the company’s strategic focus on political and digital advertising, coupled with a solid financial position, positions it well for future growth.