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    NXST
    Earnings call· Jun 2026(Q2 FY26)

    NEXSTAR MEDIA GROUP Q2 FY26 earnings call NXST

    Aug 6, 2026 Source

    Executive summary

    Nexstar Q2 FY26 — Record Revenue and Strong Free Cash Flow Despite TEGNA Litigation

    Nexstar delivered record Q2 FY26 results, driven by the TEGNA acquisition and robust political advertising, while navigating ongoing litigation that prevents full integration. The company demonstrated strong free cash flow generation, enabling significant debt reduction, and is focused on operational efficiencies and strategic investments in content and distribution, particularly for The CW and NewsNation, to drive future growth.

    Highlights

    5

    • Record quarterly revenue of $2 billion, driven by TEGNA acquisition and advertising growth.

    • Adjusted EBITDA of $633 million, up $244 million YoY, representing a 31.8% margin.

    • Free cash flow more than doubled to $238 million, with a commitment to repay over $1 billion in debt by year-end.

    • CW Sports viewership up 14% YoY, with 18 of 19 NASCAR races exceeding 1 million total viewers.

    • Political advertising revenue of $147 million, up 8% vs. 2022 and 99% vs. 2024 on a combined basis.

    Concerns

    4

    • Nonpolitical advertising down 5.8% on a combined basis due to political crowd-out, competitive pressures, and economic softness.

    • TEGNA acquisition integration costs and legal fees increased corporate expenses by $67 million YoY, including $50 million in one-time costs.

    • Distribution revenue growth for TEGNA was offset by subscriber declines, leading to a 1.3% combined YoY increase.

    • Ongoing litigation regarding the TEGNA acquisition, with a bench trial scheduled for July 2027, delaying synergy realization.

    Guidance & targets

    8
    CategoryTargetConfidence
    Free cash flow generation
    strong
    high materiality
    High
    Nonpolitical advertising growth
    decline mid-single digits
    medium materiality
    Medium
    CW profitability
    achieve profitability
    high materiality
    High
    CW full year losses
    improve by more than 30%
    medium materiality
    High
    Capital expenditure
    $50 million range
    medium materiality
    High
    Cash taxes
    $65 million range
    medium materiality
    High
    Debt repayment
    over $1 billion
    high materiality
    High
    Leverage ratio
    pre-transaction leverage levels
    high materiality
    Medium

    Operational metrics

    45
    Adjusted EBITDA
    $633 million
    Q2 FY26

    Record adjusted EBITDA for the quarter.

    NewsNation Total Viewers Growth
    44%YoY
    June 2026

    Fastest-growing cable news network in primetime and total day.

    Dividends Paid
    $57 million
    Q2 FY26

    Capital allocation to shareholders.

    Debt Repayment
    $409 million
    Q2 FY26

    Significant progress towards debt reduction goals.

    Net Revenue Growth
    62.2%YoY
    Q2 FY26

    Primarily due to TEGNA acquisition ($697 million revenue) and higher advertising/distribution from legacy units.

    Net Revenue Growth (Combined Basis)
    4.7%YoY
    Q2 FY26

    Driven by political advertising and distribution revenue, offset by lower nonpolitical advertising.

    Distribution Revenue Growth
    52.3%YoY
    Q2 FY26

    Primarily reflects $362 million from TEGNA and $23 million higher revenue from legacy business.

    Legacy Nexstar Distribution Revenue Growth
    3.1%YoY
    Q2 FY26

    Specific growth for the legacy business units.

    Distribution Revenue Growth (Combined Basis)
    1.3%YoY
    Q2 FY26

    Overall distribution revenue growth for the combined entity.

    Advertising Revenue Growth
    81.5%YoY
    Q2 FY26

    Primarily reflecting $331 million from TEGNA and $75 million increase in political advertising at legacy Nexstar.

    Nonpolitical Advertising Growth (Combined Basis)
    -5.8%YoY
    Q2 FY26

    Performance of nonpolitical advertising for the combined entity.

    Political Advertising Revenue
    $147 millionup 8% vs 2022, up 99% vs 2024
    Q2 FY26

    Strong political advertising performance.

    CW Full Year Losses Improvement
    more than 30%YoY
    FY26

    Part of the strategic plan for the CW network to achieve profitability.

    CW NASCAR Viewership Growth
    14%YoY
    Q2 FY26

    Strong performance of CW Sports portfolio.

    Direct Operating and SG&A Expenses (excl. D&A, Corp)
    increased by $500 millionYoY
    Q2 FY26

    Impact of TEGNA acquisition on operating expenses.

    Recurring Cash Operating Expenses (Combined Basis)
    lower by $10 millionYoY
    Q2 FY26

    Efficiency gains in recurring operating expenses.

    Total Corporate Expense
    $131 millionup $67 million YoY
    Q2 FY26

    Increase primarily due to TEGNA acquisition, including $50 million of one-time costs ($32 million cash).

    Amortization of Broadcast Rights
    $87 millionup $8 million YoY
    Q2 FY26

    Primarily due to TEGNA acquisition.

    Amortization of Broadcast Rights (Combined Basis)
    down approximately $2 millionYoY
    Q2 FY26

    Combined performance of broadcast rights amortization.

    Income from Equity Method Investments
    $3 milliondown from $11 million YoY
    Q2 FY26

    Reduction primarily due to TV Food Network declining advertising revenue.

    Adjusted EBITDA Margin
    31.8%
    Q2 FY26

    Adjusted EBITDA margin for the quarter.

    Adjusted EBITDA Contribution from TEGNA
    $187 million
    Q2 FY26

    Contribution to the year-over-year increase in adjusted EBITDA.

    Adjusted EBITDA (Combined Basis)
    $545 million
    Q2 FY25

    Pro forma adjusted EBITDA for the prior year.

    Capital Expenditure
    $45 millionup $16 million YoY
    Q2 FY26

    Increase primarily due to TEGNA acquisition.

    Capital Expenditure (Combined Basis)
    $36 million
    Q2 FY25

    Pro forma capital expenditure for the prior year.

    Net Interest Expense
    $190 millionup $93 million YoY
    Q2 FY26

    Primarily due to debt from TEGNA acquisition.

    Recurring Cash Interest Expense
    $185 millionup from $94 million YoY
    Q2 FY26

    Recurring cash interest expense for the quarter.

    Operating Cash Taxes
    $151 million
    Q2 FY26

    Cash taxes paid during the quarter.

    Capitalized Software Obligations (Net)
    $8 million
    Q2 FY26

    Payments for capitalized software.

    Cash Programming Amortization vs. Payments
    higher by $2 million
    Q2 FY26

    Difference between cash programming amortization and payments.

    Distribution from Food Network
    $11 million
    Q2 FY26

    Cash distribution received from equity investment.

    Run Rate Quarterly Interest Expense
    $185 million
    Q3 FY26 (run rate)

    This amount will fluctuate with SOFR rates.

    Programming Payments vs. Amortization
    in excess by $9 million
    Q3 FY26

    Expected programming cash flow for Q3.

    Outstanding Debt
    $11.7 billionup from $6.3 billion at year-end
    Q2 FY26

    Total outstanding debt.

    Cash Balance
    $218 million
    Q2 FY26

    Cash on hand at the end of the quarter.

    First Lien Covenant Ratio
    3.21xbelow 4.75x covenant
    Q2 FY26

    Leverage ratio relative to covenant.

    Total Net Leverage
    4.22x
    Q2 FY26

    Total net leverage for Nexstar.

    Nielsen Local TV Viewing Threshold
    1 minutefrom 5 minutes
    August 31, 2026 (planned)

    Planned change in Nielsen methodology for measuring local impressions.

    US Population Reach
    80%up from 70% pre-TEGNA
    Q2 FY26

    Increased reach due to TEGNA acquisition.

    Total Viewing Market Share
    less than 5%
    Q2 FY26

    Nexstar's share of total viewing in the broader media landscape.

    US Full Power TV Station Ownership
    less than 15%
    Q2 FY26

    Nexstar's ownership share of US television stations.

    Local News Hours Increase
    18%
    since Tribune acquisition

    Track record of expanding local news following acquisitions.

    Paramount Acquisition of Warner Bros. Discovery
    $100 billion-plus
    ongoing

    Mentioned as a factor increasing pressure on broadcast affiliates.

    National Broadcast Station Ownership Cap
    eliminated
    July 2026

    FCC vote scheduled for July 2026. Perry Sook later confirms it occurred during the call.

    Federal Limits on Coordinated Spending
    eliminated
    June 30, 2026

    Change in political spending regulations.

    Industry KPIs

    8
    MetricValueDetails
    Total revenue$1.99 billionUSD
    Adjusted EBITDA$633 millionUSD
    CAPEX capital program$45 millionUSD
    Total operating expensesincreased by $500 millionUSD
    Content title performance18 of 19 races exceeding 1 million total viewersraces
    Cash marketable securities$218 millionUSD
    M a integration cost synergies$50 millionUSD
    Free cash flow operating cash flow$238 millionUSD

    Product announcements

    4
    ProductTypeDetails
    ATSC 3.0 Deploymentmilestone
    New Daily Primetime Local Newscastsexpansion
    CW Distribution Partnershipsexpansion
    WWE NXT Premium Live Eventslaunch

    Deals & partnerships

    7
    TEGNAAcquisition of TEGNA operations, now financially consolidated but under preliminary injunction preventing full operational integration.

    The acquisition is the primary driver of revenue and EBITDA growth. Litigation is delaying synergy realization.

    CBSMultiyear agreement to extend CBS affiliations in 36 markets.multiyear

    Completed in July. Nexstar replaced CBS with CW affiliations in Jackson, MS; Bismarck, ND; Rapid City, SD; and Birmingham, AL. Promoted Fox to primary channel in Albuquerque, NM.

    DIRECTVDIRECTV declined FCC-mandated offer to extend expiring distribution agreement.

    DIRECTV declined offer to extend agreement through November 30, 2026, on status quo terms.

    ESPNNew distribution partnership for The CW.

    Part of CW's growth strategy to expand reach.

    RokuNew distribution partnership for The CW.

    Part of CW's growth strategy to expand reach.

    WWEMultiyear agreement for 20 NXT Premium Live Events.multiyear

    Expanded CW sports lineup.

    BondholdersRefinancing of 2027 senior notes with new 7.25% senior notes due 2034.$1.725 billiondue 2034

    New notes carry a 7.25% interest rate.

    Risks & headwinds

    5
    Ongoing TEGNA acquisition litigationOngoing through at least July 2027.

    Bench trial scheduled for July 6, 2027. Oral arguments for appellate review anticipated Q4 2026. Increased legal fees contributed to $67 million increase in corporate expense.

    Mitigation: Nexstar is committed to defending its position, believes a complete factual record will demonstrate lack of merit, and has posted a presentation to clarify details.

    Decline in nonpolitical advertisingQ2 FY26, Q3 FY26

    Down 5.8% on a combined basis in Q2 FY26. Expected to decline mid-single digits in Q3 FY26.

    Mitigation: Attributed to political crowd-out, competitive pressures, and economic softness. Offset in part by incremental FIFA World Cup revenue and strong local digital revenues. Expects Nielsen methodology change to increase local advertising impressions.

    MVPD subscriber attrition impacting distribution revenueQ2 FY26

    TEGNA distribution revenue declined as growth in rates did not offset subscriber declines.

    Mitigation: Nexstar's legacy distribution revenue grew due to increased rates and CW affiliations, partially offsetting the decline. Strategic importance of TEGNA acquisition strengthens negotiation ability with network counterparties.

    Increased pressure from network counterparties (e.g., CBS/Paramount)Future

    Paramount's $100 billion-plus acquisition of Warner Bros. Discovery could increase scale and resources to pressure broadcast affiliates for more payment for less content.

    Mitigation: TEGNA acquisition strengthens Nexstar's ability to negotiate fair and balanced terms with larger network counterparties.

    Increased state-level antitrust scrutiny and M&A delaysOngoing

    States are investing in growing antitrust legal teams.

    Mitigation: Perry Sook questions if this is the best use of taxpayer dollars given federal oversight, but acknowledges it's a broader issue impacting M&A across industries. Nexstar wants to clear the decks of current litigation before pursuing other M&A.

    What to watch in Q3 FY26

    5

    TEGNA Litigation Appellate Review

    Q4 2026
    CurrentOpening brief filed with U.S. Court of Appeals for the Ninth Circuit.
    TargetOral arguments anticipated.

    Why it matters

    The outcome of the appellate review could narrow the scope of the preliminary injunction or dismiss state plaintiffs, potentially accelerating full integration and synergy realization for the TEGNA acquisition.

    On May 20, 2026, Nexstar filed its opening brief with the U.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's plaintiffs with oral arguments now anticipated in the fourth quarter of 2026.

    Q&A highlights

    5

    Will the FCC's repeal of the national broadcast station ownership cap affect the TEGNA litigation, and what is the updated view on political advertising?

    Perry Sook believes the FCC cap repeal, while likely to face judicial review, is on firm legal footing and could marginally benefit the legal process by removing uncertainty, though the trial is more about antitrust. He stated that political advertising is performing ahead of internal expectations and will be very robust, but did not give new guidance. Mike Biard explained Nielsen's upcoming change for local impressions.

    “I think on balance, there could be marginal benefit because it makes the unknown known from a regulatory perspective. but I don't know that it will have a ton of effect as we go through our process. It's more about antitrust than the national ownership cap.”

    asked by Dan Kurnos · answered by Perry Sook

    2 min read6 chapters

    Detailed Narrative

    01

    TEGNA Acquisition & Litigation

    Nexstar's Q2 FY26 results include TEGNA operations for the full quarter, contributing significantly to revenue and EBITDA. However, the company is operating under a preliminary injunction, preventing full integration and synergy realization. A bench trial for antitrust claims is scheduled for July 6, 2027, with oral arguments for an expedited appellate review anticipated in Q4 2026. Nexstar remains confident in its legal position, citing prior FCC and DOJ approvals, and has posted a presentation on its website to clarify details for investors.

    02

    Strategic Importance of CW & Affiliations

    The CW network is on track for profitability in Q4 FY26, with full-year losses expected to improve by over 30%. Nexstar leverages CW affiliations defensively to replace CBS in several markets and offensively through CW Sports, driving stronger ratings and advertiser engagement. Recent distribution partnerships with ESPN and Roku expand its reach, and the network's broadcast model continues to deliver strong viewership, exemplified by NASCAR races exceeding 1 million viewers.

    03

    Political Advertising Strength

    Political advertising revenue reached $147 million in Q2 FY26, an 8% increase over 2022 and 99% over 2024 on a combined basis. This strength was driven by spending in key states like California, Georgia, Colorado, Texas, and Maine. Management expects continued robustness through the year, with Ohio anticipated to be a primary driver of Q3 upside due to competitive Senate and gubernatorial races.

    04

    Nielsen Methodology Changes

    Nielsen implemented a change in Q1 FY26 to its ratings methodology, increasing cable TV households and decreasing streaming households, which boosted national cable networks. A new methodology for local impressions is scheduled for August 31, 2026, which could significantly increase Nexstar's local advertising impressions by equalizing the minimum viewing threshold for crediting viewership between cable and local TV from 5 minutes to 1 minute.

    05

    Capital Allocation & Debt Reduction

    Nexstar returned $57 million ($1.86 per share) to shareholders via dividends and repaid $409 million in debt during Q2 FY26. The company's primary focus is deleveraging, with a target to repay over $1 billion in total debt by year-end FY26, aiming to return to pre-transaction leverage levels by 2028. Total net leverage was 4.22x at quarter-end, with a first lien covenant ratio of 3.21x, well below the 4.75x covenant.

    06

    ATSC 3.0 Deployment

    Nexstar completed the deployment of ATSC 3.0 across the top 20 industry DMAs with the launch in Cleveland, Ohio. This next-generation broadcast standard offers superior picture quality, immersive audio, and more efficient spectrum usage for high-speed data transmission and enhanced services, providing benefits for viewers and local communities.

    AI-generated summary of the company’s earnings call. Not investment advice.