TEGNA (TGNA) 7 Aug 24 2024 Q2 Earnings call transcript

In the recent Q2 2024 earnings call, TEGNA Inc. showcased a mixed performance with a slight dip in overall revenue due to subscriber and national advertising declines, partially offset by political advertising. The company's focus on capitalizing on the growing trend of CTV advertising, particularly through its industry-leading CTV sales platform, Premion, has proven to be a strategic move. TEGNA's strong local advertising performance, particularly in the local market, was a key takeaway from the call.

Strong Local Advertising Performance

TEGNA's local advertising, especially in the CTV segment, has shown resilience despite the challenges faced by national advertising. The company's local market presence and its emphasis on CTV advertising through Premion have positioned it well for growth. With almost 80% of U.S. households reached by Premion, there is significant upside for cross-selling to existing linear customers. TEGNA's acquisition of Octillion is expected to further accelerate the combined businesses, as it marries cutting-edge technology with Premion's sales acumen.

Political Ad Spending and the Upcoming Election

TEGNA is well positioned to capture a significant share of linear and OTT political ad dollars in the upcoming election cycle. The company's coverage of key electoral states and the anticipated surge in political spending, especially in the Senate races, provide a robust outlook for TEGNA's financial performance in the coming months. The company's NBC stations are among the strongest in the country, outperforming the national average in ratings, further bolstering its position in the political ad market.

Capital Deployment Strategy and Financial Performance

TEGNA's capital deployment strategy, which includes the return of capital to shareholders, has been a significant focus of the call. The company has returned $196 million of capital to shareholders in the first half of 2024, achieving 56% of its year-to-date commitment. This return of capital, coupled with the company's strong balance sheet and adjusted free cash flow generation, positions TEGNA well for future growth.

Outlook and Challenges

The call also touched on challenges, such as the sluggish and uncertain economy, which has impacted national ad spend. However, TEGNA's local advertising performance and its strategic focus on CTV advertising through Premion provide a positive outlook for the company. The company's transition to a new CEO, Mike Steib, was also discussed, with confidence expressed in his leadership abilities.

Overall, TEGNA's Q2 2024 earnings call painted a picture of a company navigating challenges while capitalizing on opportunities, particularly in the local advertising and political ad markets. The company's strategic focus on CTV advertising and its strong local market presence position it well for future growth.