TEGNA 2025 Q2 Earnings Misses Targets as Net Income Falls 17%

TEGNA reported mixed earnings results for Q2 2025, with both revenue and profitability falling short of prior-year levels. The company reaffirmed its two-year Adjusted Free Cash Flow guidance despite the declines, signaling ongoing cost discipline and strategic initiatives. However, with a notable drop in net income and EPS, the results missed expectations.

Revenue
TEGNA reported total revenue of $675.04 million for Q2 2025, a 5.0% decline from $710.36 million in the same period a year ago. The Distribution segment remained stable at $369.58 million, counterbalancing subscriber declines through contractual rate increases. Advertising & Marketing Services revenue slipped 4.0% to $287.86 million, reflecting macroeconomic headwinds, while Political advertising dropped 74.0% to $8.19 million due to cyclical shifts in election-year advertising. Other revenue rose slightly by 5.0% to $9.42 million. These trends underscore a challenging advertising environment and ongoing pressures in political advertising.

Earnings/Net Income
TEGNA’s net income fell 17.2% year-over-year to $67.90 million, and earnings per diluted share (EPS) declined 12.5% to $0.42. This represents a significant deterioration compared to the prior year, driven by lower political and advertising revenue. Despite cost-cutting efforts, the EPS result indicates a weak performance relative to expectations.

Price Action
The stock price of TEGNA has continued to decline, with a 10.37% drop in a single trading day, a 9.94% loss during the most recent full trading week, and a 12.46% decrease month-to-date. The underperformance highlights investor concern over the company’s earnings and future prospects.

Post Earnings Price Action Review
The performance of TEGNA shares following the earnings release has been disappointing. A strategy of buying the stock 30 days after the earnings date and holding for 30 days has resulted in a significant underperformance relative to the benchmark. Over the past three years, this strategy has yielded a return of -26.20%, far below the benchmark’s 51.69%. The CAGR of -9.76% and a Sharpe ratio of -0.49 underscore the lack of risk-adjusted returns. While the strategy showed no significant drawdowns, it also failed to capitalize on potential gains, indicating a challenging investment environment.

CEO Commentary
Mike Steib, CEO of TEGNA, emphasized the company’s progress on strategic initiatives such as accelerating its technology roadmap and expanding local news coverage by 100 hours daily. He highlighted TEGNA’s commitment to reinventing its operations and delivering compelling content and digital experiences to audiences. Steib also paid tribute to COO Lynn Beall, who is retiring on August 31, noting her invaluable contributions to the company over more than 35 years.

Guidance
TEGNA reaffirmed its 2024/2025 two-year Adjusted Free Cash Flow guidance of $900 million to $1.1 billion. For Q3 2025, the company expects total GAAP revenue to decline by 18% to 20% year-over-year, primarily due to the impact of the election year and the Summer Olympics. The company also provided full-year 2025 guidance, including Corporate Expenses of $40–45 million, Depreciation of $60–65 million, Amortization of $33–37 million, Interest Expense of $160–165 million, Capital Expenditures of $50–60 million, and an Effective Tax Rate of 22.0–23.0%.

Additional News
Recent non-earnings-related developments include TEGNA's multi-year renewal of station affiliation agreements with FOX Corporation for six of its markets, covering approximately seven percent of TEGNA households. Additionally, COO Lynn Beall was honored with the 2025 Radio + Television Business Report Lifetime Leadership Award, marking over 35 years of leadership in the industry. During the quarter, TEGNA also redeemed $250 million in par value of 4.75% senior notes due in March 2026. The company returned $20 million to shareholders via dividends and reported cash and cash equivalents of $757 million at quarter-end, with a net leverage ratio of 2.8x.