The decrease to $713 million is attributed to lower political advertising compared to 2022’s mid-term election cycle.
Tegna this morning released third quarter 2023 results that included total revenue of $713 million, down 11% year-over-year, due primarily to the reduction of political revenue from the mid-term election cycle last year.
Subscription revenue was a 3Q record $378 million, up slightly year-over-year, driven by contractual rate increases, partially offset by subscriber declines.
Advertising and marketing services revenue was $312 million, down 3% year-over-year. Advertising trends in the third quarter showed sequential improvement compared to the second quarter. Automotive advertising revenue continued to show strong year-over-year growth for the fifth consecutive quarter. Underlying advertising trends were down less than 1% year-over year, adjusting for the loss of a single national Premion account. As noted earlier this year, this impact will continue to be felt throughout 2023.
Net income was $96 million on a GAAP basis, or $78 million on a non-GAAP basis.
Total company adjusted EBITDA was $166 million, representing a decrease of 38% compared to the same quarter of 2022, as expected, due to the absence of high-margin political revenue from mid-term elections and an increase in programming expenses.
GAAP operating expenses were $579 million, up 1% year-over-year. Non-GAAP operating expenses of $576 million, up 1% year-over-year, finished in-line with the company’s guidance range, with the increase driven primarily by programming costs, partially offset by operational expense management improvements. Free cash flow was $112 million for the quarter.
Total cash at the end of the quarter was $553 million.
Dave Lougee, president-CEO, said: “Tegna is operating from a position of strength within the broadcast industry, and we are seeing positive momentum across our organization. Our management team and board are laser focused on generating shareholder value and building a track record of disciplined capital allocation as Tegna advances its strategy as a standalone company. We are pleased with our initial actions to return cash accumulated during the pendency of the merger process by retiring a significant amount of shares. Our balance sheet affords us the unique opportunity to pursue organic growth and bolt-on M&A opportunities while also offering shareholders our recently increased dividend, as well as share repurchases. We fully expect 2024 will be another strong year driven by our favorable portfolio of stations in key markets benefiting from a robust presidential election cycle, the Summer Olympic Games, and the Super Bowl.
“We are pleased to share that we will surpass our previously announced three-quarters of a billion dollars commitment of capital return to shareholders. During the third quarter, we opportunistically repurchased an incremental $28 million of shares in the open market under our existing share repurchase program. The initial $300 million ASR program we entered in June was completed at the end of August, earlier than anticipated. A second ASR program of $325 million is expected to commence this week. Taken together with the $136 termination fee from Standard General that was satisfied through the transfer of Tegna common stock, we are now committing this year to nearly $800 million in share repurchases.
“We are pleased to announce we’ve reached a comprehensive multi-year agreement renewal with ABC. Our strong relationships with our valued network partners have been built over decades and led to mutual success based on common goals. This renews Tegna’s ABC network affiliations in 13 markets across the country, which cover nine percent of the U.S. and serve nearly 11 million households. Our partnership combines ABC’s popular entertainment, sports and news programming with our strong local stations and large audiences.
“Turning to our results, we achieved a new third quarter record for subscription revenue. Our high-margin subscription revenue remains a core driver of our cash flow and, looking ahead, we will be repricing approximately 30 percent of our traditional subscribers at the end of this year. “Advertising and marketing services revenue saw sequential improvement driven by improving trends in key verticals such as automotive. Automotive, our largest category within AMS, has steadily recovered and is generating strong year-over-year growth for the fifth consecutive quarter.
“Finally, all of us at Tegna wish to congratulate our colleagues at WWL in New Orleans for receiving a News Emmy from the National Academy of Television Arts & Sciences for Outstanding Regional News Story: Investigative Report for The Man Behind the Warehouse, an in-depth report on how more than 800 nursing homes residents ended up living in squalor after Hurricane Ida. We are proud that the investigation has contributed to the changing of laws, which will positively impact numerous lives in the community.”
Tegna declared a regular quarterly dividend of 11.375 cents per share, payable on Jan. 2, 2024, to stockholders of record as of the close of business on Dec. 8, 2023. Tv News Check