Nexstar Media Group, Inc. (NXST) Cash Flow Statement

The persistent gap between operating cash flow and net income, particularly in 2025Q4 when net income was -$166M but OCF was $190M, suggests that non-cash charges like depreciation and amortization are substantial. This implies that reported earnings understate the company's cash-generating ability, a common feature in capital-intensive broadcasting. Investors should note that the gap may also reflect timing differences in working capital, but the consistency of the positive gap supports a high-quality earnings profile.

The trajectory of free cash flow shows a clear cyclical pattern, peaking in election quarters and troughing in off-cycle periods. The 2026Q2 FCF margin of 8.2% is the lowest in the series, likely due to the absence of political revenue and integration costs from the TEGNA acquisition. This suggests that investors should normalize FCF across the two-year political cycle to assess the underlying cash generation capacity. The absolute FCF levels remain positive, but the volatility warrants a cautious approach to valuation multiples.

CapEx as a percentage of revenue has remained consistently below 4.2%, with the highest reading in 2025Q4. This suggests that Nexstar's broadcast infrastructure requires relatively modest ongoing investment, allowing most operating cash flow to flow through to free cash flow. The low capital intensity is a key driver of the company's ability to service debt and return capital to shareholders, though it may also imply limited growth investment in new technologies or content.

The working capital line items show significant quarter-to-quarter swings, likely driven by the timing of retransmission payments, advertising collections, and programming rights. The negative working capital changes in 2026Q1 and 2026Q2 may indicate that the company is using cash to fund receivables or pay down liabilities, but the pattern is not consistent enough to signal a structural deterioration. Investors should monitor whether these swings stabilize as the TEGNA integration matures.

The data shows a clear pivot from aggressive share repurchases in 2024 to a more conservative stance in 2026, with buybacks ceasing entirely in the most recent quarter. This may reflect management's desire to preserve cash for debt reduction or integration costs, or a response to the elevated leverage from the TEGNA acquisition. The consistent dividend, however, signals a commitment to returning cash to shareholders, albeit at a lower total payout than when buybacks were active.

The cumulative gap between operating cash flow and net income is substantial, driven by depreciation, amortization, and other non-cash items. This divergence suggests that the company's earnings power is understated by GAAP net income, which is burdened by high D&A from past acquisitions. For valuation purposes, investors should focus on cash flow metrics rather than net income, as the cash generation is more reflective of the company's ability to service debt and fund returns.