Gannett Co., Inc., the largest newspaper chain in the US, reported mixed results for the second quarter of 2023. The ups and downs included a decrease in total revenue, but an increase in digital revenue and an improved net loss compared to the same period in 2022. Gannett chairman and CEO Michael Reed addressed the quarter’s highlights in an August 3, 2023 news release in which he focused on the positives.
“We are pleased to report strong operational and financial results for the quarter,” Reed said. “Our total digital revenues returned to growth in the second quarter and account for nearly 40% of total revenues, representing an all-time high. I believe we are making great progress on our strategy, and our results signify a notable turning point in our business trajectory.”
Highlights for the second quarter include the following:
- Gannett reported total revenue of $672.4 million, a 10.2% decrease year-over-year.
- Total digital revenue was $262.1 million, representing 39% of total revenue, and a 0.8% increase year-over-year.
- Digital-only subscription revenue was $37.9 million, a 16.6% increase year-over-year.
- The company ended the quarter with 1.95 million digital-only subscriptions, an increase of 4.6% year-over-year.
- Digital-only average revenue per user also increased. It was $6.35 for the quarter, a 6.2% increase year-over-year.
- In terms of web traffic, Gannett had 185 million average monthly unique visitors in the second quarter with 134 million coming from USA Today network and 51 million from the company’s UK digital assets.
- The company reported a net loss attributable to Gannett of $12.7 million, compared to a net loss of $53.7 million for the second quarter of 2022.
- Adjusted EBITDA for the quarter was $71.2 million, a 39.9% increase year-over-year.
- Operationally speaking, the company appointed Chris Cho as president of Digital Marketing Solutions, Imtiaz Patel as Gannett Media Chief Consumer Officer, Kristin Roberts as Gannett Media Chief Content Officer and Jason Taylor as Gannett Media Chief Sales Officer.
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Full year outlook
For the full year 2023, Gannett provided the following business outlook:
- Revenue between $2.75 billion and $2.80 billing (same)
- Same store total revenue year-over-year between (5%) and (3%) (same)
- Net loss/income attributable to Gannett between ($10 million) and $20 million (compared to ($15 million) to $15 million)
- Cash provided by operating activities between $130 million and $150 million (compared to $125 million and $145 million)
- Free cash flow between $90 million and $110 million (compared to $85 million to $105 million)
- Adjusted EBITDA between $290 million and $310 million (compared to $285 million to $305 million)
“We continue to build on the strong foundation we laid over the past year and our focus persists on profitability, digital revenue growth and continuing to enhance our balance sheet. We believe that focus is evident in our results, enabling us to raise our full year guidance again this quarter,” said Reed. “We expect sustained improvement in same store revenue trends throughout the second half of the year, alongside more substantial growth in our digital revenue trends.”
Insider Take
Gannett has made great strides in the last year, growing digital revenue and subscriptions, paying down debt and improving net losses. While they seem a bit overly optimistic, the changes they’ve made and new leadership team seem to be moving them in the right direction. Laid off employees would likely not agree with that but, from a subscription perspective, their strategy looks like it is working.
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