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Nielsen (NLSN) Q2 Earnings Beat Estimates, Revenues Rise Y/Y

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Nielsen (NLSN - Free Report) reported second-quarter 2022 adjusted earnings of 46 cents per share, which beat the Zacks Consensus Estimate by 2.2%. Further, the figure improved 7% year over year.

Total revenues were $882 million, which increased 2.4% on a reported basis and 4% on a constant-currency basis from the year-ago quarter. The same rose 4.5% from the year-ago quarter on an organic constant-currency basis.

However, the figure missed the consensus mark of $884.3 million.

Year-over-year revenue growth was driven by strength across the company’s Measurement Solutions and Impact/Content segments.

Nielsen Holdings Plc Price, Consensus and EPS Surprise

 

Nielsen Holdings Plc Price, Consensus and EPS Surprise

Nielsen Holdings Plc price-consensus-eps-surprise-chart | Nielsen Holdings Plc Quote

Top Line in Detail

In the second quarter, Measurement Solutions’ revenues rose 2.4% year over year to $644 million (72.4% of the total revenues). This was primarily attributed to the strength across national and digital measurement products in the United States and international markets.

Impact/Content revenues increased 2.6% year over year to $238 million (27.6% of the total revenues). This was attributed to strong growth in Content.

Operating Details

Adjusted EBITDA increased 0.3% year over year to $371 million. The adjusted EBITDA margin contracted 91 basis points (bps) to 42.1% from the year-ago quarter.

Nielsen’s selling, general and administrative expenses were $213 million, decreasing 2.3% year over year. As a percentage of revenues, the figure contracted 120 bps to 24.1%.

The operating income was $213 million, which fell 2.7% year over year. As a percentage of revenues, the figure contracted 130 bps year over year to 24.1%.

Balance Sheet & Cash Flow

As of Jun 30, 2022, the cash and cash equivalent balance was $621 million, up from $482 million as of Mar 31, 2022.

At the end of the reported quarter, gross debt and net debt (gross debt minus cash and cash equivalents) were $5.6 billion and $4.9 billion, respectively. Notably, gross debt and net debt were $5.6 billion and $5.1 billion at the end of the previous quarter, respectively.

The company generated $265 million of cash from operations compared with $219 million in the previous quarter.

Its free cash flow was $192 million in the second quarter.

2022 Guidance

For 2022, the company expects revenue growth of 3.5-4.5% on a constant-currency basis. Organic revenue growth is anticipated between 4% and 5%. The Zacks Consensus Estimate for 2022 revenues is pegged at $3.6 billion.

The company expects adjusted earnings between $1.81 and $1.91 per share. The consensus mark for the same is pegged at $1.88.

The adjusted EBITDA margin is expected to be 42.6-42.9%.

Free cash flow is expected between $650 million and $700 million.

Zacks Rank & Stocks to Consider

Currently, Nielsen sports a Zacks Rank #3 (Hold).

Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Aspen Technology (AZPN - Free Report) , Keysight Technologies (KEYS - Free Report) and Asure Software (ASUR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Aspen technology has returned 18.9% in the year-to-date period. The long-term earnings growth rate for AZPN is currently projected at 16.3%.

Keysight Technologies has lost 26.8% in the year-to-date period. KEYS’ long-term earnings growth rate is currently projected at 9.1%.

Asure Software has lost 27.2% in the year-to-date period. The long-term earnings growth rate for ASUR is currently projected at 14%.