What Management Said
Read the full Q1 2026 transcript ↗We closed our landmark acquisition of TEGNA following FCC and DOJ approval, and we continued to build and grow The CW and NewsNation as national networks. We delivered strong quarterly net revenue, adjusted EBITDA, and adjusted free cash flow. Against this backdrop, our acquisition of TEGNA represents an important step in solidifying our future and our ability to continue providing these valuable services to local communities across the United States. I'll now spend a few minutes bringing you up to speed on where we are today with the acquisition of TEGNA.
Nexstar is a company built on localism, and our track record demonstrates that scale and operational strength are critical to sustaining high-quality local news programming. In the quarter, we delivered record net revenue of $1.4 billion and strong adjusted EBITDA and adjusted free cash flow of $470 million and $420 million, respectively. As you'll hear more from Lee Ann later, we continue to execute on our capital allocation plan. It is a subsidiary of Nexstar Media Inc., our primary operating subsidiary, and we can use excess cash flow for the combined debt repayment, as was our plan.
Given the number of variables, I'm sure you'll appreciate that for now, forward-looking guidance will be limited. On a combined basis, assuming we own TEGNA for the entire quarter, distribution revenue increased 1.6% year-over-year. Putting it all together, we do not expect a material change from the original distribution guidance we provided for Legacy Nexstar. Advertising revenue of $548 million increased $88 million or 19.1% over the comparable prior year, primarily reflecting $51 million incremental TEGNA advertising revenue and higher political advertising revenue.
What went well
- Nexstar delivered record net revenue of $1.4 billion in the first quarter, up $162 million or 13.1% year over year, including 13 days of TEGNA operations that contributed $106 million of revenue.
- Consolidated adjusted EBITDA rose to $470 million, a 33.7% margin and an $89 million increase from $381 million a year ago, while adjusted free cash flow grew to $420 million from $348 million.
- The company closed its landmark $6.2 billion TEGNA acquisition on March 19 after receiving FCC and DOJ approval, and Legacy Nexstar on its own generated $439 million of adjusted EBITDA and $400 million of adjusted free cash flow.
- NewsNation was the number one fastest-growing network in prime time across all major broadcast and cable networks in March 2026, growing 85% in total viewers and 100% among adults 25 to 54 versus the prior year.
- The CW improved year-over-year profitability in the quarter and remains on track for profitability by the fourth quarter, supported by new distribution deals with ESPN (exclusive streaming home for CW sports) and Roku, plus a multi-year Mountain West Conference agreement.
- On a combined basis, first quarter political advertising was $78 million, up 89% versus 2022 and 19% versus 2024, driven by strong primary and gubernatorial spending in Texas, Illinois, California, Michigan, Georgia and Maine.
What went wrong
- DIRECTV and several state attorneys general sued to block the TEGNA transaction, and a court hold-separate order now prevents Nexstar from managing or integrating TEGNA, forcing the two companies to operate separately pending litigation.
- Management said forward-looking guidance will be limited given the litigation uncertainty, acknowledging the market does not like uncertainty.
- The advertising environment weakened into the second quarter, with combined non-political advertising expected to decline mid-single digits; a large home improvement advertiser went silent and pharma advertising had not returned.
- TEGNA's Premion segment continued to decline, due primarily to the loss of a major customer in 2025, and income from the 31% TV Food Network stake fell $4 million or 50% on lower revenue.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Distribution revenue | FY2026 | No material change from original Legacy Nexstar guidance (reiterated; management feels more optimistic on subscriber attrition but retained the plan given the FCC-mandated retrans extension offers through November 30) |
| Non-political advertising (combined) | Q2 2026 | Expected to decline mid-single digits (lowered, due to a weaker advertising environment) |
| The CW losses | FY2026 | Improve full-year losses by more than 30%, profitability by Q4 (reiterated; on track with improved distribution offsetting Nielsen big-data measurement headwinds) |
| CapEx | Q2 2026 | About $45 million (reiterated as spending catches up post-close) |
| Cash taxes | Q2 2026 | About $152 million (reiterated) |
| Interest expense run rate | Quarterly, based on April 30 balances | About $187.5 million (reiterated; will fluctuate with SOFR and decline as debt is repaid) |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Net revenue | +13.1% to $1.4 billion | $106 million from 13 days of TEGNA plus higher advertising and distribution revenue at legacy business units |
| Distribution revenue | +9.8% to $837 million (combined +1.6%) | $54 million from TEGNA and 2.8% higher legacy revenue from rate increases, MVPD subscriber growth, CW affiliations and Fox One launch, offset by MVPD attrition |
| Advertising revenue | +19.1% to $548 million | $51 million incremental TEGNA advertising and higher political advertising; Legacy non-political grew 0.4% as digital offset TV declines |
| Adjusted EBITDA | +$89 million to $470 million (33.7% margin) | TEGNA contributed $31 million; remainder driven primarily by the political cycle |
| Adjusted free cash flow | +$72 million to $420 million | higher EBITDA, lower CapEx and an $84 million Food Network distribution, partly offset by one-time TEGNA financing fees |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| TEGNA integration and litigation | On track to close by end of Q2 2026 with roughly $300 million of synergies | Deal closed March 19 but a hold-separate order blocks integration; Nexstar engaged trial lawyer Beth Wilkinson, filed a Ninth Circuit appeal, and expects to prevail on the merits | — |
| The CW path to profitability | Reduce losses about 30% in 2026, profitability in Q4 | Improved YoY profitability in Q1, on track for Q4 profitability, adding ESPN and Roku distribution and Mountain West sports | — |
| Capital allocation and deleveraging | Conserve cash to fund TEGNA, maintain dividend | Repaid $182 million of debt through April 30, maintained $1.86 quarterly dividend (3.7% yield), net leverage 3.84x versus a 4.75x covenant | — |
| Regulatory / national ownership cap | Awaiting FCC action on the 39% cap | Sook expects Chairman Carr may start a rulemaking to eliminate the national cap this quarter or next; deregulation seen still on track | — |
Q&A Summary
Are there any other rulings or events beyond those disclosed that could influence the trial, and is Nexstar preserving cash while the process unfolds?
Sook said the disclosed litigation is the complete list with nothing else in the offing; Gliha said the CapEx pullback was just timing that will catch up over the year, and both companies remain focused on executing their respective plans with no longer-term guidance.
Has holding the companies separately informed how you would operate them together once litigation resolves?
Sook said the hold-separate order keeps TEGNA within its pre-closing interim operating covenants (primarily financial, with large transactions needing TEGNA board approval); there is no additional read-through, and the integration plan is already well baked and will proceed if and when resolved.
What can you do at arm's length with TEGNA, and how much of TEGNA's cash flow can you sweep for debt repayment?
Sook said certain commercial agreements, potentially including Premion and local news production arrangements, could be entered on an arm's length basis; Gliha said all debt obligations are joint and several, so excess free cash flow above minimum operating cash can be used to repay debt.
Why did the FCC grant a waiver rather than first changing the 39% ownership cap, and does that weaken your position in the court cases?
Sook said the deal was fully approved by both expert agencies and expects Chairman Carr to pursue a rulemaking eliminating the cap; Biard added the plaintiffs' claims are antitrust-based and outside FCC purview, so a rule change would not have changed the litigation.
Do the ESPN and Roku partnerships represent a shift in Nexstar's digital strategy, and how would divestitures affect the synergy buckets?
Biard called it an evolution not a shift, choosing to partner rather than build capital-intensive digital platforms; Gliha said it is premature to size divestiture impacts, though retrans and in-market synergies would have to be reduced while corporate synergies likely less so.
Where are you seeing advertising softness across your large verticals in Q2 and Q3?
Gliha said there is no single category to flag, but the mix shifted from roughly 50/50 increasing/decreasing last quarter to about two-thirds decreasing this quarter, reflecting general weakness; Sook cited a silent home improvement advertiser, absent pharma, and consumer conservatism amid higher gas prices.
How important is maintaining a conservative leverage profile if deal assumptions such as divestitures or synergies change?
Gliha said Nexstar's track record is to use excess cash flow to deleverage and avoid being over-levered; the company had already repaid $150 million optionally after quarter end and expects continued paydown through the 2026 political year.
Is there operational risk that distracted TEGNA employees hurt sales during the limbo period?
Sook said the hold-separate order bars headcount reductions during the TRO, attrition levels tracked normally during the pendency, and TEGNA delivered a stellar first quarter, so day-to-day operational risk to Nexstar shareholders appears limited.
More on Nexstar Media Group, Inc.
Reported 2026-05-07 · figures from the Nexstar Media Group, Inc. Q1 2026 earnings call.
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