Thanks to the injection of $60.4 million in political advertising dollars during Q3, TEGNA enjoyed strong revenue growth.
But, subscription revenue also climbed by double-digits, making the replacement of political ads for full-rate spots not as painful for the broadcast media company formerly known as Gannett.
Total revenue on a GAAP basis increased by 16.1%, to $538.98 million.
On a non-GAAP basis, ex-political, revenue improved by 3.8% to $478.57 million.
A large reason for the improvement is TEGNA’s subscription revenue, which rose 16.8% to $207.46 million in Q3.
For advertising and marketing services revenue, a 4.7% dip was logged, with dollars dipping to $264.85 million.
Free Cash Flow grew to $164.2 million from $94.57 million, as adjusted EBITDA on a non-GAAP basis moved ahead by 24.7%, to $180.88 million.
This was fueled by Q3 net income from continuing operations of $92.83 million (43 cents per diluted share), rising from $50.75 million (23 cents).
But, it is “record breaking” political dollars that is making TEGNA shine. In fact, political ad revenue of $144 million is anticipated in Q4, up 56% from the previous mid-terms.
“We continue to execute growth in shareholder value with another quarter of strong results driven by an increase in year-over-year paid subscribers, strong subscription revenue, and record political revenue,” said TEGNA President/CEO Dave Lougee. “Our portfolio is evolving, and we remain focused on growing these stable and profitable revenue streams. As a result, we expect the mix of high margin subscription and political revenues will comprise approximately half of our total two-year revenue beginning in 2019/2020, and a larger percentage on a rolling two-year cycle, allowing us to continue to deliver value to our shareholders, regardless of cyclical or economic conditions.”
Demand for Premion, TEGNA’s OTT advertising service, also remains strong. “It is on track to achieve our increased revenue guidance of $75 million,” Lougee said.
TEGNA expects Q4 total company GAAP revenue to increase 30% to 32% year-over-year, driven by continued strong political advertising and subscription revenue growth.
Political revenue of $238 million for the full-year is anticipated.
“Adjusted company revenue, excluding political advertising, is still expected to be up mid-single digits despite being negatively impacted by political displacement,” the company said.