Nexstar posted a record first quarter with net revenue of $1.4 billion (up 13.1%), adjusted EBITDA of $470 million and adjusted free cash flow of $420 million, aided by 13 days of TEGNA following the March 19 close of the $6.2 billion acquisition. The quarter was dominated by litigation: DIRECTV and state attorneys general obtained a preliminary injunction and hold-separate order that bar Nexstar from managing or integrating TEGNA, prompting the company to hire trial counsel Beth Wilkinson and limit forward guidance. Operationally, Legacy Nexstar generated $439 million of adjusted EBITDA, NewsNation was the fastest-growing prime-time network in March, and The CW stayed on track for Q4 profitability with new ESPN and Roku distribution deals. Management flagged a weaker Q2 advertising environment (combined non-political down mid-single digits) but remained focused on deleveraging, repaying $182 million of debt through April 30 and maintaining the $1.86 quarterly dividend.
Good morning, everyone, and thank you, Stacy. I'll read the safe harbor language, and then we'll get right into the call. All statements and comments made by management during this conference call, other than statements of historical fact, may be deemed forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Nexstar cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those reflected by the forward-looking statements made during today's call.
For additional details on these risks and uncertainties, please see Nexstar's annual report on Form 10-K for the year ended December 31st, 2025, as filed with the Securities and Exchange Commission, and Nexstar's subsequent public filings with the SEC. Nexstar undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. It's now my pleasure to turn the conference over to your host, Nexstar Founder, Chairman, and Chief Executive Officer, Perry Sook. Perry, please go ahead.
Thank you, Joseph. Good morning, everyone. We appreciate you all joining us today. Michael Biard, our Chief Operating Officer, and Lee Ann Gliha, our Chief Financial Officer, are with me on the call here as always. Nexstar hit the ground running in the first quarter of 2026, advancing our strategic priorities across multiple fronts. We closed our landmark acquisition of TEGNA following FCC and DOJ approval, and we continued to build and grow The CW and NewsNation as national networks. We delivered strong quarterly net revenue, adjusted EBITDA, and adjusted free cash flow. This year marks the 30th anniversary of Nexstar's founding, starting with a single television station in Scranton, Pennsylvania.
From the very beginning, Nexstar's growth and success has always been grounded in our steadfast commitment to high-quality local broadcast journalism, which we believe is essential to the communities we serve and to American democracy. While our core mission has not wavered, the competitive landscape has changed dramatically in those 30 years. Big tech, legacy, big media, and distribution companies have grown exponentially, and despite consolidation within our industry, Nexstar still operates with a fraction of their ubiquitous reach and financial resources, prohibiting us and every other company in our industry from competing on a level playing field. Against this backdrop, our acquisition of TEGNA represents an important step in solidifying our future and our ability to continue providing these valuable services to local communities across the United States. I'll now spend a few minutes bringing you up to speed on where we are today with the acquisition of TEGNA.
I'll start by saying the situation that we are dealing with is unusual, and I would caution against attempting to draw legal conclusions at this stage. We will be as transparent as possible under the circumstances and share what we can at this time. As you know, the transaction closed on March the 19th after receiving all required regulatory approvals. As part of that process, we engaged extensively with the FCC and DOJ and provided more than 7 million pages of documentation in response to their inquiries. We also made meaningful concessions to secure our approvals, including agreeing to increase local news programming in nine markets, divest stations in six markets within 2 years, and extend expiring retransmission agreements through November 30th of this year. Under ordinary circumstances, that process with the concessions and the regulatory approvals would allow us to move forward post-closing with our integration plans.
However, DIRECTV, along with a number of state AGs, filed suit seeking to block the transaction. DIRECTV is a sophisticated company owned by a private equity firm, TPG, with its own commercial interests, just as we have ours. That said, the issue before the courts is not the relative commercial negotiating positions of the parties. It is whether this transaction serves the broader public interest, including American consumers and in the preservation of local journalism. As such, we believe we will prevail on the merits of this case. We are confident in our arguments expressed in detail in the FCC's order approving the transaction that a stronger, more financially resilient local broadcast industry is in the public's best interest. We believe this is a fight worth having for us, for our industry, and for the future of local journalism.
Nexstar is a company built on localism, and our track record demonstrates that scale and operational strength are critical to sustaining high-quality local news programming. As the company has grown, we've consistently made meaningful investments in our station infrastructure and in expanding local news programming, which is the most viewed and the most valued programming that we offer. This transaction represents an opportunity to further our longstanding commitment to serving the communities of all sizes with high-quality, free over-the-air programming, fact-based journalism, and innovative digital and marketing solutions for both our viewers and our advertising partners. We're focused on presenting the strongest possible legal arguments to the court. To that end, we've engaged Beth Wilkinson of Wilkinson Stekloff to lead our trial and appellate efforts, supplementing our formidable antitrust counsel at Morrison Foerster.
Beth Wilkinson is one of the nation's most highly regarded trial lawyers, having recently led the defense team that secured a victory for the NFL and its 32 member teams in a major antitrust class action suit challenging the Sunday Ticket distribution and related media agreements. With our expanded legal team in place, we move forward now with complete confidence in the merits of our case and our ability to bring this process to a successful conclusion. As far as next steps are concerned, there are multiple legal proceedings underway. First, we filed our notice of appeal of the preliminary injunction before the Ninth Circuit Court of Appeals. Second, the trial in the U.S. District Court for the Eastern District of California. Finally, there is also a separate challenge to the FCC's approval of the transaction pending before the D.C. Circuit Court.
The court has already denied a request for an emergency stay, finding that it lacked jurisdiction at this stage. Both we and the FCC have been directed to file our responses to the petition by May 11th. While we don't have control over the various courts' timelines, in the meantime, in compliance with the court order, Nexstar and TEGNA are operating separately, and we are proud of both teams' continuing focus on execution and their local community commitments. Now let's turn to the first quarter highlights, which include 13 days of the results of TEGNA. In the quarter, we delivered record net revenue of $1.4 billion and strong adjusted EBITDA and adjusted free cash flow of $470 million and $420 million, respectively.
At our legacy Nexstar business units, we made strong progress towards our goal of achieving additional operating expense savings, driven by further cost reductions at The CW and broader core operating efficiencies. The CW Network improved year-over-year profitability in the first quarter and is well on its way to achieving profitability by the fourth quarter of this year. Launched just 5.5 years ago and featuring Nexstar's enterprise-wide commitment to unbiased and fact-based journalism, NewsNation was the number one fastest-growing network in prime time across all major broadcast and cable networks in the month of March of 2026, growing 85% in total viewers and 100% among adults 25-54 compared to the prior year. The network now ranked 35th in total household viewing for all of prime time ad-supported cable networks in the first quarter.
As you'll hear more from Lee Ann later, we continue to execute on our capital allocation plan. During the quarter, we returned $56 million to shareholders in the form of dividends and have maintained our $1.86 per share quarterly dividend, which represents a 3.7% yield, placing Nexstar in the top tier of all dividend payers in the S&P 400. We also remain focused on de-leveraging and repaid $182 million in debt through April the 30th. In closing, the free universal access offered by local broadcast television is not just convenience, it's an essential public service and central to Nexstar's mission.
If local broadcasters are to continue providing these essential services for future generations, we must be allowed to operate our business in a manner that accurately reflects today's market realities. Let me turn the call over to Lee Ann to provide a little more color on the transaction and the interim TEGNA operations and our reporting until the court cases are heard. Lee Ann?
Thank you, Perry, good morning, everyone. I wanted to jump on the call today a little out of order to provide you some color on what you'll hear from us on the financials and operations given the current situation. Operationally, we're in a bit of an unprecedented place right now with the court order until we can be heard by the appellate court, go to trial, or settle the case. To be clear, we own TEGNA. It is a subsidiary of Nexstar Media Inc., our primary operating subsidiary, and we can use excess cash flow for the combined debt repayment, as was our plan. As Perry re-noted, we repaid $182 million of debt through April 30th. We can also execute on whatever actions we need to accomplish our financial reporting and internal control oversight.
As described in the court order, we must hold separate the assets of the TEGNA subsidiary. What this effectively means is TEGNA is operating as it did prior to the transaction, including operating under its own retransmission agreement. All of this, however, remains in flux pending the natural progression of the litigation. In addition, the operations of TEGNA will be under the purview of the team at TEGNA rather than under Nexstar's day-to-day management. Given the number of variables, I'm sure you'll appreciate that for now, forward-looking guidance will be limited.
We understand the market does not like uncertainty, we're gonna do our best to keep you up to speed as much as we can, given the constraints placed upon us. The good news is TEGNA was a public company, so there's plenty of comparable financial data for you to review along with the longer-term projections they provided in their proxy. I'm gonna turn the call over to Mike to provide some color on our results, primarily on the revenue side of the P&L, and then I'll return for some more discussion on expenses and capital allocation. Mike?
Thank you, Lee Ann, good morning, everyone. As noted in this morning's press release and Perry Sook's remarks, Nexstar's consolidated financial results for the 3-month period ending March 31, 2026, include 13 days of TEGNA operations, while the comparable 2025 period reflects only Nexstar's legacy business units. The company delivered first quarter net revenue of $1.4 billion, an increase of $162 million or 13.1% compared to the prior year, primarily due to $106 million of revenue from TEGNA and higher advertising and distribution revenue from our legacy business units.
First quarter distribution revenue of $837 million increased $75 million or 9.8% compared to the prior year quarter and primarily reflects $54 million of revenue from TEGNA and 2.8% higher revenue from our legacy business due to increased rates, growth in MVPD subscribers, the addition of CW affiliations on certain of our stations, and our local Fox affiliates' participation in the launch of Fox One, offset in part by MVPD subscriber attrition. On a combined basis, assuming we own TEGNA for the entire quarter, distribution revenue increased 1.6% year-over-year.
Given what we are seeing in the numbers reported to us and the publicly reported subscriber counts from distributors, we are feeling more optimistic than our original plan for subscriber attrition for the year. However, as you know, we committed to the FCC in connection with the transaction to offer to extend current retransmission agreements until November 30 for MVPDs renewing with us before that date. Putting it all together, we do not expect a material change from the original distribution guidance we provided for Legacy Nexstar. Advertising revenue of $548 million increased $88 million or 19.1% over the comparable prior year, primarily reflecting $51 million incremental TEGNA advertising revenue and higher political advertising revenue.
Excluding TEGNA revenues, Legacy Nexstar non-political advertising revenue was flattish and in line with our expectations, growing 0.4% as growth in digital advertising offset declines in non-political television advertising. Top advertising categories in the quarter for Legacy Nexstar were department and retail stores, attorneys, and gaming and sports betting. While drugstores and medication, packaged goods, and radio, TV, newspaper, cable advertisers had the largest declines. There were no major category outlier in terms of positive or negative performance. On a combined basis, non-political advertising was up 1.2% as TEGNA's large portfolio of NBC affiliations benefited from NBC's broadcast of the Super Bowl and the Olympics in the first quarter.
In addition, on a combined basis, overall digital advertising revenue increased a mid-single-digit percentage driven by strong local digital revenues, offset in part by continued declines at TEGNA's Premion segment, due primarily to the loss of a major customer in 2025. For the second quarter, including TEGNA on an as-combined basis, non-political advertising is expected to decline mid-single digits due to a weaker advertising environment. Legacy Nexstar and TEGNA both delivered strong first quarter political advertising revenue driven by strong primary and early gubernatorial spending. As reported, political advertising was $46 million, but on a combined basis, political advertising in Q1 was $78 million, up 89% versus 2022 and 19% versus 2024, driven by strong spending in key states of Texas, Illinois, California, Michigan, Georgia, and Maine.
According to AdImpact, industry-wide broadcast political advertising spending was up 79% in the first quarter versus the comparable election cycle in 2022 and up 13% versus 2024, demonstrating the continued importance of broadcast television for candidates and campaigns seeking to reach and engage voters. We anticipate a favorable 2026 political season consistent with our combined historical track records and are prepared at Legacy Nexstar to manage any changes regarding access to lowest unit rate by PACs and parties without materially impacting our performance. Turning to the CW. We continue executing our strategic plan and remain on track to achieve profitability in the fourth quarter with the expectation that we'll improve full-year losses by more than 30% in the year.
While we are facing some near-term advertising headwinds related to Nielsen's transition to big data measurement, improved distribution from our 2025 affiliation renewal cycle will more than offset those impacts. We are also further strengthening The CW's burgeoning sports programming with a multi-year broadcast partnership with the Mountain West Conference beginning this fall and continuing through the 2030-2031 seasons. Under that agreement, The CW will televise 13 football games annually, along with 20 men's and 15 women's basketball games each season. In addition, we added six Banana Ball games to our schedule for May and June, broadening the network's overall appeal and audience reach. With 148 additional hours of programming airing in 2026, nearly half of The CW schedule will be sports or sports adjacent. Importantly, we are continuing to drive strong results from our sports investments.
The NASCAR O'Reilly Auto Parts series on the CW has delivered more than 1 million total viewers for each of its first 12 races in the 2026 season. In addition, ACC men's and women's basketball concluded the 2025-2026 season with record viewership, with total audiences increasing 6% for the men's games and 26% for the women's. On the digital front, the marketplace is increasingly endorsing the value of CW programming, and we are strengthening our brand equity by expanding distribution and unlocking new advertising opportunities through groundbreaking partnerships with leading digital platforms. We recently announced a deal with ESPN that will make the ESPN app and website the exclusive streaming home for all CW sports.
Beginning this summer, fans with an ESPN Unlimited subscription will be able to stream CW sports live across devices and platforms, complementing our free over-the-air broadcasts and MVPD and vMVPD distribution while significantly extending our reach to new audiences and advertisers through ESPN sports best-in-class platform. We also announced a partnership with Roku, the largest AVOD platform in the United States which will bring CW entertainment programming to The Roku Channel for next day streaming beginning with the broadcast season this coming fall. This partnership will provide access to more than half of U.S. broadband households through a dedicated CW branded vertical hub, further enhancing our digital footprint and monetization capabilities. To close, we are focused on expanding reach and unlocking new monetization opportunities across our portfolio by leveraging our growing sports programming, multi-platform distribution, and digital partnerships to drive incremental value.
At The CW Network, this includes scaling live sports and extending distribution through partnerships like ESPN and Roku. At NewsNation, we continue to build a differentiated, fact-based national news offering that can be monetized across linear, digital, and on-demand platforms. Consistent with Nexstar's view that programming must reach audiences wherever they are, we are prioritizing broader distribution, improved ad monetization across platforms, and exploiting new revenue streams that position us to compete more effectively in a rapidly evolving media landscape. With that, it's my pleasure to turn the call back over to Lee Ann for the remainder of the financial review.
Hello again. Combined first quarter direct operating and SG&A expenses, excluding depreciation and amortization and corporate expenses, increased by $76 million, driven primarily by $73 million of recurring incremental expense from the acquisition of TEGNA and $4 million in one-time expenses related to cost reduction initiatives taken at Legacy Nexstar. Excluding one-time expenses, first quarter recurring cash operating expenses were lower by $1 million for Nexstar's Legacy business unit. Q1 2026 corporate expense was $106 million, including non-cash compensation expense of $20 million, compared to $52 million, including non-cash compensation expense of $18 million in the first quarter of 2025. The increase of $54 million is primarily due to $38 million of one-time costs associated with our TEGNA acquisition.
Q1 2026 amortization of broadcast rights included in our definition of adjusted EBITDA was $72 million, a reduction of $16 million from $88 million in the first quarter of 2025, primarily due to timing of programming at the CW. Q1 2026 income from equity method investments, which primarily reflects our 31% ownership in TV Food Network, declined by $4 million in the quarter, or 50%, primarily related to TV Food Network's lower revenue. Putting it all together on a consolidated basis, first quarter adjusted EBITDA was $470 million, representing a 33.7% margin and an increase of $89 million from the 2025 first quarter of $381 million. TEGNA operations accounted for $31 million of this difference, with the remainder due primarily to the political cycle. Excluding TEGNA, Legacy Nexstar generated $439 million of adjusted EBITDA.
Moving to the components of free cash flow and adjusted free cash flow. First quarter CapEx was $22 million, a decrease of $13 million from $35 million in the first quarter of last year, primarily due to delayed spending given the pendency of and plans related to the TEGNA acquisition. First quarter net interest expense was $120 million, an increase of $23 million from the first quarter of 2025, due primarily to $22 million of one-time commitment and funding fees associated with the temporary bridge loans in connection with the acquisition of TEGNA and the refinancing of certain TEGNA indebtedness. On a recurring cash basis, this compares to $94 million in the first quarter of 2026 versus $95 million in Q1 2025. First quarter operating cash taxes were $1 million, as the first quarter cash taxes are related to state taxes.
Payments for capitalized software obligations, net of proceeds from disposal of assets and insurance recoveries were $3 million, both in the first quarter of this year and last. In Q1, cash programming amortization costs were greater than cash payments by $10 million, as certain programming payments were deferred. We also received an $84 million distribution from Food Network related to the 2025 operating cash flows, greater than the $21 million of income from unconsolidated investments reported on our income statement. Putting this all together, consolidated first quarter 2026 adjusted free cash flow was $420 million as compared to $348 million last year. Excluding the impact of TEGNA, Legacy Nexstar generated $400 million of adjusted free cash flow. We are currently projecting CapEx in the $45 million range in Q2.
Second quarter cash taxes are estimated in the $152 million range. From an interest perspective, our run rate quarterly interest expense based on our current balances outstanding as of April 30th is about $187.5 million. That amount will fluctuate with SOFR rates and reduce as we repay debt. In Q2 2026, payments for programming are expected to be in excess of amortization by about $5 million. Turning now to capital allocation in our balance sheet. Together with the cash from operations generated in the quarter and cash on hand, we returned $56 million to shareholders in the form of dividends. We made no repurchases, and we used excess cash to fund the acquisition of TEGNA and repay $28 million of mandatory amortization payments on our debt.
Nexstar's outstanding debt at March 31st, 2026 was $12.1 billion, an increase from $6.3 billion at year-end, reflecting the impact of the TEGNA acquisition. Our cash balance at quarter end was $379 million, including $12 million of cash related to the CW. Because we designated the CW as an unrestricted subsidiary, the losses associated with the CW are not accounted for in our calculation of leverage for purposes of our credit agreement.
In addition, our credit agreement allows us to include the adjusted EBITDA of TEGNA as if we acquired the business on the 1st day of the period presented, to add back one-time expenses related to the deal and any operational restructuring, and to include the impact of any synergies we expect to realize within 18 months of the close of the transaction, which we continue to expect we will be able to do just on a delayed timeframe. As such, our net first lien covenant ratio at March 31st, 2026 for the last eight quarters annualized was 2.94x, which is well below our first lien and only covenant of 4.75x.
Our covenant increased from 4.25x to 4.75x for this quarter and for the next three consecutive fiscal quarters after the acquisition, as permitted under our credit agreement. Our total net leverage for Nexstar was 3.84x at quarter end using the same calculation methodology. Subsequent to quarter end, we repaid in full our $150 million short-term Term Loan A and made $4 million in mandatory amortization payments. We also closed on the refinancing of our 2027 senior notes with new $1.725 billion of 7.25% senior notes due 2034.
Our Q2 2026 cash flow will be deployed first to fulfill our mandatory obligations, including debt repayments, pension and defined benefit plan contributions, our dividend, and then optionally repay any additional debt with excess cash flow. With that, I'll open up the call for questions. Operator, can you go to the first question?