TEGNA (TGNA) Q2 EPS Beats by 20.5%

Key Points

• Non-GAAP earnings per share came in at $0.44 for Q2 2025, beating analyst expectations by 20.5%.

• Revenue (GAAP) was $675 million, slightly above consensus and in line with company guidance, but down nearly 5% year over year.

• Political advertising revenue fell sharply due to the election cycle, while Distribution revenue (GAAP) was $370 million, and expense controls helped preserve margins.

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TEGNA (NYSE:TGNA), one of the largest U.S. owners of local television stations and digital media outlets, reported its quarterly results for Q2 2025 on August 7, 2025. The company posted non-GAAP earnings per share of $0.44, which was above analyst forecasts of $0.36. Revenue (GAAP) was $675 million for Q2 2025, exceeding GAAP revenue expectations by about $3.4 million but down from the previous year. While the top and bottom line figures beat estimates, business trends showed declines in major revenue streams, with advertising headwinds and low political ad spend largely responsible. The quarter showed that cost-cutting efforts, local content expansion, and digital investments contributed to performance despite industry-wide disruption.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Strategic Priorities

TEGNA operates a portfolio of local TV stations and digital properties, delivering news, sports, and entertainment to communities across the United States. Its business model relies heavily on advertising and distribution fees, while digital and streaming initiatives are becoming a bigger focus. The company produces more than 1,700 hours of local news each week.

Recently, TEGNA has made local journalism and digital transformation its core focus areas. Key strategies include expanding local content, developing digital platforms like its streaming apps and Premion digital advertising, and controlling costs. Maintaining regulatory compliance and adapting to a changing competitive environment also remain important to its ongoing success.

Quarterly Results: Key Themes and Developments

The headline results showed GAAP revenue of $675 million, a small beat compared to analyst consensus, with non-GAAP EPS of $0.44 exceeding the analyst estimate of $0.365 and GAAP revenue of $675 million exceeding the analyst estimate of $671.6 million. However, this figure dropped nearly 5% from the prior year, continuing a downward trend compounded by sharp declines in political advertising and broader softness in advertising and marketing services. Political advertising, which is highly cyclical, fell from $31.6 million in Q2 2024 to $8.2 million in Q2 2025, a 74% decrease in political revenue that is typical in non-election years. Advertising and marketing services revenue (GAAP) dropped 4% to $288 million, with declines offset somewhat by increased revenue from local sports rights.

Distribution revenue, which comprises fees paid by pay-TV distributors for carrying TEGNA's channels, was reported at $369.6 million (GAAP). Subscriber declines from cord-cutting were balanced by contractual fee increases, reflecting an industry-wide shift. The company acknowledged that this flat performance in distribution revenue is partly a result of successfully negotiating rate hikes and subscriber attrition in the broader cable and satellite ecosystem.

On the content and programming side, TEGNA announced plans to add over 100 hours of new daily local programming across more than 50 markets. This move is described as a step toward becoming a "24/7 digital news organization." In recognition of its efforts, 23 TEGNA stations won a combined 59 Regional Edward R. Murrow Awards for excellence in journalism, highlighting both innovation and leadership in local news. Leadership changes also continued, with the retirement of the longstanding Chief Operating Officer, signaling an ongoing refresh of the executive team.

Expense management has become a central part of TEGNA's near-term strategy. GAAP operating expenses dropped 3% to $553 million as a result of compensation and outside service reductions. Interest expense (GAAP) remained steady at $42 million, and Adjusted free cash flow (non-GAAP) was $96 million. TEGNA ended the quarter with $757 million in cash and a net leverage ratio of 2.8 times net debt to trailing two-year adjusted EBITDA (non-GAAP). The company redeemed $250 million par value of 4.75% senior notes due March 15, 2026, on July 2, 2025, and continues to target the return of 40–60% of adjusted free cash flow to shareholders over fiscal 2024 and 2025. The quarterly dividend remained steady, with $20 million paid.

Looking Ahead: Management Outlook and Investor Focus

TEGNA’s management provided forward-looking guidance for the rest of fiscal 2025. For Q3 2025, total company GAAP revenue is expected to decline by 18–20% compared to the prior year period, driven by the lack of political and Olympic event spending, which boosted results last year. Non-GAAP operating expenses are expected to decline by 2–3%. The company reaffirmed its two-year 2024/2025 Adjusted free cash flow guidance of $900 million to $1.1 billion. Other forecasts include capital expenditures of $50–60 million for full year 2025 and an effective tax rate of 22.0–23.0% (guidance for full-year 2025).

Investors should continue monitoring trends in advertising and marketing services, where declines have persisted despite pockets of growth in local sports rights and digital solutions. Distribution revenue has stabilized for now, but ongoing cord-cutting and the pace of digital transformation will remain critical. Management reiterated its capital return strategy and highlighted operational flexibility for possible mergers and acquisitions, should regulatory conditions change. The dividend was maintained at previous levels.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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