TEGNA's Q1 2025: Unpacking Contradictions in M&A Strategy, Premion Performance, and Consumer Confidence

M&A strategy and opportunities, Premion's growth and performance, consumer sentiment and advertising confidence, M&A appetite and regulatory support are the key contradictions discussed in TEGNA's latest 2025Q1 earnings call.



Revenue and Advertising Trends:
- TEGNA Inc. reported total revenue of $680 million for Q1 2025, a 5% decrease year-over-year, in line with their outlook of down 4% to 7%.
- Advertising and marketing services (AMS) revenue was $286 million, a 3% decrease year-over-year, due to macroeconomic headwinds and the Super Bowl airing on Fox.
- The decrease was partially offset by growth in advertising revenue from local sports rights, with digital advertising revenue growing year-over-year.

Digital Growth and Strategic Focus:
- TEGNA is aggressively pursuing growth initiatives in its digital product portfolio, including web solutions, mobile and streaming apps, and local CTV advertising.
- Digital ad revenue showed year-over-year growth, leveraging TEGNA's powerful brands, footprint, and customer relationships to drive profitable digital growth through 2025 and beyond.

Cost-cutting and Operational Efficiency:
- First-quarter non-GAAP expenses finished flat year-over-year, driven by increases in programming expenses (including local sports rights), offset by cost reductions.
- TEGNA is on track to achieve its goal of generating $90 million to $100 million in annualized core nonprogramming savings by the end of 2025, with approximately 60% of the target already achieved.

M&A Opportunities and Capital Allocation:
- TEGNA is positioned to pursue M&A opportunities, with a strong balance sheet and a healthy track record of disciplined capital allocation.
- The company remains committed to returning 40% to 60% of adjusted free cash flow to shareholders over the '24 and '25 2-year period and is on track to achieve this goal.

Regulatory Environment and Industry Dynamics:
- TEGNA is monitoring the evolving regulatory landscape, with potential deregulation expected to unlock M&A opportunities that could be accretive for both buyers and sellers.
- The company is staying flexible and focused on deploying capital where it drives long-term shareholder growth, while maintaining financial flexibility to pursue attractive value-creating opportunities.