Broadcasting and digital media company TEGNA (NYSE:TGNA) reported Q2 CY2025 results beating Wall Street’s revenue expectations, but sales fell by 5% year on year to $675 million. On the other hand, next quarter’s revenue guidance of $653.5 million was less impressive, coming in 2.6% below analysts’ estimates. Its non-GAAP profit of $0.44 per share was 20.5% above analysts’ consensus estimates.
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TEGNA (TGNA) Q2 CY2025 Highlights:
- Revenue: $675 million vs analyst estimates of $670.7 million (5% year-on-year decline, 0.6% beat)
- Adjusted EPS: $0.44 vs analyst estimates of $0.37 (20.5% beat)
- Adjusted EBITDA: $151 million vs analyst estimates of $140.4 million (22.4% margin, 7.5% beat)
- Revenue Guidance for Q3 CY2025 is $653.5 million at the midpoint, below analyst estimates of $670.7 million
- Operating Margin: 18.1%, down from 20% in the same quarter last year
- Free Cash Flow Margin: 13.7%, down from 15.3% in the same quarter last year
- Market Capitalization: $2.63 billion
“We delivered on our financial commitments this quarter while making important progress on the strategic initiatives that will shape TEGNA’s future, including accelerating our technology roadmap and expanding our local news coverage by 100 hours a day,” said Mike Steib, CEO.
Company Overview
Spun out of Gannett in 2015, TEGNA (NYSE:TGNA) is a media company operating a network of television stations and digital platforms, focusing on local news and community content.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, TEGNA’s 3.9% annualized revenue growth over the last five years was sluggish. This was below our standard for the consumer discretionary sector and is a poor baseline for our analysis.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. TEGNA’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 2.5% annually. 
We can dig further into the company’s revenue dynamics by analyzing its most important segments, Subscription and Advertising, which are 54.7% and 42.6% of revenue. Over the last two years, TEGNA’s Subscription revenue (access to content) averaged 2.7% year-on-year declines while its Advertising revenue (marketing services) averaged 4% declines. 
This quarter, TEGNA’s revenue fell by 5% year on year to $675 million but beat Wall Street’s estimates by 0.6%. Company management is currently guiding for a 19% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to decline by 7.6% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and indicates its products and services will see some demand headwinds.
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Operating Margin
TEGNA’s operating margin has risen over the last 12 months and averaged 22% over the last two years. On top of that, its profitability was top-notch for a consumer discretionary business, showing it’s an well-run company with an efficient cost structure.
This quarter, TEGNA generated an operating margin profit margin of 18.1%, down 1.8 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
TEGNA’s EPS grew at a remarkable 18.1% compounded annual growth rate over the last five years, higher than its 3.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
In Q2, TEGNA reported adjusted EPS at $0.44, down from $0.50 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects TEGNA’s full-year EPS of $2.96 to shrink by 37%.
Key Takeaways from TEGNA’s Q2 Results
We enjoyed seeing TEGNA beat analysts’ EPS expectations this quarter. We were also happy its adjusted operating income outperformed Wall Street’s estimates. On the other hand, its revenue guidance for next quarter missed. Overall, this print had some key positives. Investors were likely hoping for more, and shares traded down 5.4% to $15.52 immediately after reporting.
Is TEGNA an attractive investment opportunity right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.