USA TODAY (TDAY) Q3 2024 earnings summary

Executive summary

• Adjusted EBITDA grew 5.6% year-over-year to $62.9 million, with free cash flow up 168% to $19.8 million and digital revenues surpassing 45% of total revenues.

• Audience reached a record 203 million average monthly unique visitors, up 7.4% year-over-year, and digital-only subscriptions and ARPU hit new highs.

• Debt refinancing completed in October 2024 extended maturities, reduced potential share dilution by 46%, and simplified the capital structure.

• Strategic partnerships, including BetMGM and Microsoft Copilot, were launched to enhance content monetization and AI capabilities.

• Strategic closures and divestitures impacted total reported revenue but did not materially affect Adjusted EBITDA.

Financial highlights

• Q3 2024 total revenues were $612.4 million, down 6.2% year-over-year, mainly due to divestitures and print/commercial declines.

• Adjusted EBITDA margin improved to 10.3% from 9.1% last year.

• Digital revenues reached $277.4 million (45.3% of total), up 5% year-over-year; digital-only subscription revenue hit $50.1 million, up 25%.

• Net loss attributable to Gannett was $19.7 million, including $17.3 million in integration and reorganization costs.

• Free cash flow for Q3 was $19.8 million, with cash provided by operating activities at $33.7 million.

Outlook and guidance

• 2024 digital revenues expected to grow 6–7% on a same store basis; total revenues projected to decline low to mid-single digits.

• Digital revenues anticipated to reach 50% of total in 2025 and over 55% in 2026, with annual growth exceeding 10%.

• Free cash flow CAGR projected at 30–40% through 2026, with capital expenditures rising for tech and product investments.

• Net income expected to improve, excluding a $46 million impairment charge from the McLean, VA office exit.

• Optimism for Q4 driven by strong September performance and improving digital and DMS trends.