Nexstar Media Q3 sees huge retransmission, advertising revenue growth

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Nexstar Media posted a blockbuster third quarter with its core television ad revenue increasing 138.7% and its retransmission fee revenue and digital media revenue rising 162.1% and 96.3%, respectively.

Nexstar said its $257.5 million in retransmission fee revenue reached the highest ever quarterly level in the company’s history. The company also managed to mitigate somewhat the drop-off in political ad revenue after a presidential election year, posting approximately $8.4 million during the quarter, which was up 229% over the same quarter in 2015.

“In line with Nexstar’s unwavering commitment to localism, innovation and growth, we continued to successfully transition our traditional television broadcasting operating model into a diversified platform with multiple high margin revenue streams,” said Nexstar Media CEO Perry Sook in a statement. He said that Nexstar’s combined third-quarter digital media and retransmission fee revenue of $313.7 million rose 147.2% year-over-year and accounted for 51.3% of net revenue.

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In all, Nexstar Media generated about $612 million in net revenue during the quarter, up 122%. That helped the company push its operating income to $129 million and net income to $42 million, up 77.1% and 64.2%, respectively. The company saw a 96.1% increase in adjusted EBITDA and a 105.9% rise in free cash flow as it funneled 20% of every net revenue dollar to the free cash flow line.

Looking ahead, Nexstar is anticipating growth next year thanks to the Winter Olympics, mid-term elections and new OTT agreements.

“As always, we remain focused on actively managing our capital structure to provide the financial flexibility to support our near- and long-term growth and we continue to expect Nexstar’s net leverage, absent additional strategic activity, to be in the high 4x range at the end of 2017 before declining to the mid 3x range by the end of 2018,” said Sook.