IRVING, TEXAS—Nexstar reported record first quarter net revenue of $1.28 billion, up 2.1%, thanks to higher distribution revenue. But advertising revenue at the nation’s largest station group declined slightly despite $39 million in political advertising during Q1.
Approximately 59% of Nexstar’s first quarter revenue was derived from distribution revenue, which hit a record high of $761 million for the company, increasing $33 million, or 4.5%, over the comparable prior year quarter.
Despite ongoing pay TV sub losses, Nexstar said distribution revenue growth was primarily due to distribution contract renewals in 2023, annual rate escalators, and the return of one of its partner stations to one MVPD in January. Distribution revenue includes retransmission revenue, carriage fees, affiliation fees, and spectrum leasing revenue.
Meanwhile first quarter advertising revenue of $512 million decreased $5 million, or 1.0%, compared to the prior year quarter reflecting a $36 million year-over-year reduction in core and digital advertising revenue due to ongoing advertising market softness. This was offset, in part, by a $31 million year-over-year increase in election-year political advertising to $39 million. Advertising revenue includes core television advertising, digital advertising and political advertising revenue.
First quarter net income of $167 million increased $79 million, or 89.8%, compared to the prior year quarter, reflecting increased revenue, lower operating expenses driven by reduced amortization of broadcast rights at The CW, and a $40 million gain on the sale of our ownership interest in BMI. Net Income margin increased to 13.0% from 7.0% in the comparable prior year period.
“Nexstar is off to a strong start in 2024, delivering the highest first quarter net revenues in the Company’s history and once again outpacing consensus expectations for Adjusted EBITDA and Adjusted Free Cash Flow,” Perry Sook, founder, chairman and CEO of Nexstar in a statement. “As the industry’s largest local broadcaster with the most-watched broadcast television programming, Nexstar’s value to our distribution and advertising partners is demonstrated by our continued strong financial performance, including all-time quarterly high distribution revenue. We continue to make progress at The CW, reducing operating losses by $50 million year-over-year and kicking off the 2023/2024 broadcast season by delivering two sequential quarters of primetime audience improvement. Looking ahead, we remain confident that Nexstar will deliver another strong year of financial results and expect to build momentum through 2024, given the anticipated record-level of political spending this presidential election cycle.”
