Net revenues gained 19.9% in Q2 to a record $74.5 million. That had CEO Perry Sook crowing proudly about the company’s “quadruple play” of revenue drivers: spot sales, retrans, mobile/e-Media and management fees.
While TV ad revenues were up an impressive 24.6%, including political, Sook told analysts that the other three categories combined were up 12.8% to $11.1 million “and these higher margin revenue streams accounted for 14.9% of 2010 second quarter net revenue.”
Nexstar broke out lots of detail for the quarter. Gross local ad sales were up 7.8% to $43.3 million and national gained 32.6% to $16.1 million to bring core TV ad revenues in at a gain of 13.6% to $59.5 million. On top of that the company added $6.8 million in political advertising, up from a mere $826K a year ago.
Retransmission consent fee revenues were up 14% to $7.3 million; e-Media gained 12.4% to $3.3 million; and fees for managing the Four Points Media group were flat at $500K. Sook noted that the management agreement includes performance bonus provisions which will show up in revenues during the second half.
One interesting line item: Network comp (yes, it still exists) declined 4.7% to $505K.
“Nexstar achieved record second quarter net revenue based on the strength of our core television operations and growing contributions from our newer revenue streams. The record second quarter net revenue reflects the broad-based advertising recovery, an acceleration of the growth of national revenue, our success in garnering leading shares of political billings in our markets and growth from our other revenue sources,” said Sook.
That growth on the top line translated into much bigger gains in measures of profitability. Broadcast cash flow increased 52.7% to $30.7 million; adjusted EBITDA grew 61.7% to $27 million and free cash flow more than doubled, up 118.2% to $10.9 million.
Nexstar doesn’t provide specific forward guidance, but Sook noted that “we continue to see strong demand on inventory from national and political advertisers, which is driving higher rates at our stations.” In other words, business is getting even better.
In addition to political, automotive continues to be a strong growth driver. Auto advertising was up 37% in Q2, with advertising by local dealers up 31%, so it is not just national auto advertising that is growing.