Q1 2024 Gannett Co Inc Earnings Call
Greetings welcome to the Gannett Company, Inc, Q1, 2024 earnings call.
At this time all participants are in a listen only mode.
A question and answer session will follow the formal presentation.
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Please note. This conference is being recorded I will now turn the conference over to your host MS. Esposito head of Investor Relations you may begin.
Esposito: Thank you good morning, everyone and thank you for joining our call today to discuss Gannett's first quarter 2020 for financial results on today's call will be Mike Reed, Chairman and Chief Executive Officer, Doug Horne, Chief Financial Officer, Kristin Roberts Chief content Officer.
Esposito: And Chris Cho President of digital marketing solutions.
Esposito: Advocate to the Gannett website, you will find that we have posted an earnings supplement in addition to our earlier press release, we will be referencing it today on the call as it provides you with additional detail on this quarter's performance before we begin. Please let me remind you that this call is being recorded in addition, certain statements made during the call are or may be deemed to be fair.
Esposito: Forward looking statements, including those with respect to future results and events and are based upon current expectations. These statements involve risks and uncertainties that may cause actual results and events to differ materially from those discussed today. We encourage you to read the cautionary statement regarding forward looking statements in the earnings supplement as well as a risk.
Esposito: Factors described in Gannett's filings made with the Securities and Exchange Commission, except as required by law, we undertake no obligation to publicly update or correct any of the forward looking statements made during this call. In addition, we will be discussing non-GAAP financial information during the call, including same store revenues free cash flow adjusted EBITDA.
Esposito: Adjusted EBITDA margin and adjusted net income attributable to Gannett you can find reconciliations of our non-GAAP measures to the most comparable U S. GAAP measures in the earnings supplement.
Esposito: Lastly, I would like to remind you that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase any interest in Gannett the webcast and audio cast our copyrighted material I was getting at and may not be duplicated reproduced or rebroadcast without our prior written consent.
Esposito: That I would like to turn the call over to Mike Reed, <unk>, Chairman and CEO.
Michael E. Reed: Thank you, Matt and good morning, and thank you for joining again, that's 2024 first quarter earnings call.
Michael E. Reed: That had an excellent start to the year.
Michael E. Reed: In our last call, we laid out our expected path to growth. We told you that we would meaningfully improve total revenue trends through digital revenue growth and that is reflected in our Q1 results as you will hear throughout the call. This morning, our momentum continues to build and we believe our first quarter results have set the tone for a <unk>.
Michael E. Reed: <unk> 2024.
Michael E. Reed: Year over year revenue trends were a bright spot in the quarter, reflecting the most pronounced sequential trend improvement in nearly three years.
Michael E. Reed: Our top line improvement was fueled by the solid growth in digital revenues up 8% year over year and quickly approaching our guidance of over 10% growth this year.
Michael E. Reed: As a result digital revenues accounted for over 42% of total revenues in the first quarter, representing an all time high.
Michael E. Reed: In the first quarter of each of our digital revenue streams grew year over year as we executed on our expanded monetization strategy.
Michael E. Reed: Audience and engagement grew driving growth in digital advertising.
Michael E. Reed: New highs in digital only subscription to help drive digital only subscription revenue growth in our.
Michael E. Reed: <unk> business returned to growth.
Michael E. Reed: And our partnership revenue continued to scale nearly doubling over the prior year.
Michael E. Reed: In addition to our topline momentum we drove a marked improvement in free cash flow versus the prior year period, along with improved sequential year over year trends in adjusted EBITDA, which we believe position us well for full year, adjusted EBITDA and free cash flow growth.
Michael E. Reed: We also continue to optimize our capital structure and maintain a strong balance sheet evidenced by our solid cash position.
Michael E. Reed: Further debt repayment and first lien net leverage of two times at the end of the quarter.
Michael E. Reed: As we look ahead based on the performance we are seeing in our business today, we remain optimistic and expect that we will exit the year with total revenues growing over the prior year we.
Michael E. Reed: We believe our strong execution is achieving the results we had anticipated.
Michael E. Reed: Therefore, we are reaffirming our full year business outlook.
Michael E. Reed: With that I'd like to discuss the key operational highlights from the first quarter.
Michael E. Reed: As we outlined last year, our digital revenue strategy is rooted in audience expansion and increased engagement.
Michael E. Reed: As well as diversified monetization along the customer journey.
Michael E. Reed: We continue to serve an engaged digital audience with 187 million average monthly unique visitors in the first quarter.
Michael E. Reed: And Patriot is growing more than 10% over the prior year period.
Michael E. Reed: We believe this growing audience and increased engagement offers us great potential for diversified predictable and repeatable digital revenue growth.
Michael E. Reed: This focus on the overall monetization of our audience has delivered positive results across each of our digital businesses in Q1.
Michael E. Reed: One area of worth highlighting is our digital only subscription business.
Michael E. Reed: In Q1 digital only subscription revenue and digital only <unk> achieved new highs with growth rates exceeding 20% compared to the first quarter of the prior year.
Michael E. Reed: Digital only paid subscriptions surpassed 2 million in Q1 <unk>.
Michael E. Reed: Marking the third consecutive quarter of sequential growth.
Michael E. Reed: We expect digital only paid subscriptions to return to year over year growth in the second quarter.
Michael E. Reed: In addition to our digital only subscription business, we are seeing great traction with our partnerships.
Michael E. Reed: The partnerships announced in 2023 have created a new digital revenue stream with significant potential and at a very high margin.
Michael E. Reed: While we are still in the early stages of scale. We are encouraged by the growth observed across the portfolio, which has immediately contributed to our earnings and free cash flow.
Michael E. Reed: These partnerships have allowed us to reach a broader audience and increase the overall monetization of our platform.
Michael E. Reed: As a reminder, we expect to generate approximately $20 million in this high margin digital revenue category in 2024.
Michael E. Reed: Equally impressive.
Michael E. Reed: Our digital advertising business sustained its growth trajectory in Q1, thanks to the solid execution of our revitalized content strategy.
Michael E. Reed: Central to that strategy is our commitment to driving audience growth and engagement by delivering broad content experiences to our consumers.
Michael E. Reed: Kristin Roberts and their team have played a crucial role on this front.
Michael E. Reed: There are initiatives and investments around audience expansion and increased engagement have led to notable gains in page views and readership per story.
Michael E. Reed: I will now hand, it over to Christian to discuss the momentum we are seeing on the content side Christian.
Christian: Thank you Mike we are off to an incredible start in 2020 four we're executing on our strategy to rapidly expand our audience and content amplify our journalism and drive diversified revenue stream simply put we believe we are delivering on the things. We suddenly went in our newsrooms continue to demonstrate for audiences motion.
Michael E. Reed: Right now we are the preferred platform for our relevance and essential currency the outcome eight consecutive months and at least 1 billion page views a USA today in the USA today network as well as meaningful growth in poultry. None of this was my Cheez. It is a direct result of our <unk>.
Michael E. Reed: Collaborative work to anticipate and deliver the journalism and information that our readers viewers and listeners Watson.
Michael E. Reed: As I outlined on our last call. This year's focus is about engage.
Michael E. Reed: A crucial element of engaging highly monetize about audience involves understanding their preferences and creating standout experiences around the topics. They love. This includes entertainment updates guides to living your best life and multi platform experiences based on content, we are already creating where else.
Michael E. Reed: So doubling down on highly successful vertical such as sports, where we serve approximately 50 million average monthly unique visitors. According to March 'twenty 'twenty four Comscore media metrics. This comprehensive approach provides diverse engaging content that caters to the wide range of interests within our audio.
Michael E. Reed: Which is expected to further solidify our position as a market leader in consumer reach we're also making a strategic shift into video, which not only captures the audience, where they are what is it expected to allow us to further grow our diversified digital revenue streams, one way and we're leveraging this opera Kennedy is by bringing together our constant.
Michael E. Reed: On a foundation and video teams.
Michael E. Reed: The creation of a unified video team is expected to enhance our position to reach new audiences and improve our video monetization through expanded locally relevant currency. We believe this opportunity is significant and I look forward to providing additional updates on our video strategy in future calls to recap our progress in the first quarter was.
Michael E. Reed: A total team effort and I want to express my sincere gratitude to the entire continental team. It's early and we have important work ahead of us to sustain this momentum, but as I said earlier, we believe we are executing on our strategy that came right.
Michael E. Reed: Thank you Kristen it is great to see the outstanding audience results, which are expected to unlock additional revenue opportunities throughout 2024.
Michael E. Reed: I'll now hand, it over to Chris to provide an update on the positive developments, we are seeing across our Dms business Chris.
Chris Cho: Thank you Mike overall, I am pleased with our first quarter performance of our Dms business.
Chris Cho: We are executing on our strategy and we believe we are well positioned to capitalize on this momentum moving forward Dms.
Chris Cho: Dms revenue rebounded in the first quarter and was up three 7% over the same period in the prior year ahead of the 1% to 2% expectations. We expressed on last quarter's call.
Chris Cho: The strength in revenues was primarily fueled by a strong rebound in our largest vertical home services.
Chris Cho: While average customer count contracted in Q1 due to higher churn among our lower <unk> customers, we continue to retain and grow accounts that align with our ideal customer profile.
Chris Cho: As a result core platform <unk> experienced.
Chris Cho: <unk> robust growth as well as a new high in the quarter.
Chris Cho: As discussed in our previous earnings call, we are expanding our product portfolio with AI powered solutions that we believe will increase our total addressable market and core platform revenues I am excited to share that we recently launched our first AI powered CRM tool set and a private beta for 30.
Chris Cho: <unk> exclusive customers and we expect to further expand into a public data and subsequently monetize against this tool set this marks the first milestone in our product expansion journey as we continue to strengthen the local IQ a value proposition for our customers.
Chris Cho: Overall, I am delighted with a return to revenue growth rising our apparel and higher retention rates, we experienced in the first quarter as well as the remaining opportunities for our Dms business as.
Chris Cho: Mike.
Michael E. Reed: Thank you Chris It is encouraging to see our Dms business start to the year with solid execution.
Michael E. Reed: The innovation your team is driving through AI powered solutions reinforces the optimism we have for the business and its potential for growth.
Speaker Change: Overall, our solid first quarter performance has set a promising tone for the year ahead.
Speaker Change: We are confident and believe in our business trajectory and look forward to building on the success throughout the year.
Michael E. Reed: With that I will now turn the call to Doug to provide additional detail and color around our 2024 first quarter financials dove.
Douglas Edward Horne: Thank you, Mike and good morning, everyone. As Mike mentioned, we are very pleased by our business momentum and the progress we've made in the first quarter, which is evident in our financial results.
Douglas Edward Horne: Before going through the details I want to highlight that we have modified our revenue presentation in our financial reports to better align with how we look at the business and internally manage our revenue streams.
Douglas Edward Horne: Our updated revenue breakdown consists of two main categories total digital revenues and print and commercial revenues.
Douglas Edward Horne: Digital revenues include digitally served advertising marketing services subscription and other which includes syndication affiliate partnership and licensing.
Douglas Edward Horne: Commercial revenues include print advertising print circulation as well as commercial and other.
Douglas Edward Horne: We believe this revised format provides greater transparency into our evolving business model the performance of our digital businesses and the key components. We believe are needed to drive our achievement of the revenue growth inflection point, we expect as we exit 2024.
Douglas Edward Horne: Let's move to our consolidated results. Please keep in mind all comparisons are on a year over year basis, unless otherwise noted.
Douglas Edward Horne: For Q1 total operating revenues were $635 $8 million a decrease of 5%.
Douglas Edward Horne: This represents a 340 basis point improvement from Q4 revenue trends, marking five consecutive quarters of top line trend improvement.
Douglas Edward Horne: The strength in revenue was primarily driven by the expansion of our digital revenues, which demonstrated robust growth compared to the prior year.
Douglas Edward Horne: Adjusted EBITDA totaled $57 $6 million in the first quarter.
Douglas Edward Horne: Adjusted EBITDA margin in Q1 was nine 1% and relatively unchanged from the prior year.
Douglas Edward Horne: While adjusted EBITDA declined as we had forecasted our year over year trends saw sequential improvement and we are planning for a return to growth in the second half of the year driven by continued improvement in revenue trends as well as prudent cost management.
Douglas Edward Horne: Expense management remains a key piece of our success story and in Q1, our adjusted operating expenses declined compared to the prior year.
Douglas Edward Horne: On the bottom line, we ended the first quarter with a net loss of $84 8 million and an adjusted net loss of $36 $4 million.
Douglas Edward Horne: Our net loss reflects the expected $46 million asset impairment associated with the company's exit from its least Mclean, Virginia facility.
Douglas Edward Horne: Important to note. However that this does not impact our free cash flow.
Douglas Edward Horne: Digital revenues in Q1 were 267 5 million up eight 1%, representing the fourth consecutive quarter of growth.
Douglas Edward Horne: Within digital revenues digital advertising grew five 3% in Q1 due to solid performance in our programmatic business fueled by the increase in platform pagers.
Douglas Edward Horne: As well as rebounding CPM.
Douglas Edward Horne: Our digital only subscription revenue growth remained strong with increased subscriptions on a sequential basis and meaningful year over year growth in digital only <unk>.
Douglas Edward Horne: In Q1, our digital only subscription revenue reached a high of $43 5 million growing 21, 3%.
Douglas Edward Horne: The company is digital only <unk> also reached a new high of $7 22.
Douglas Edward Horne: Increasing 22, 4% year over year.
Douglas Edward Horne: One important operating element continues to be optimizing our print and commercial revenue business. We continue to focus on improving the overall trends in our legacy revenue streams, which is why we continue to strengthen the overall quality and value proposition of our print product.
Douglas Edward Horne: These initiatives are already showing returns with positive feedback from our customers.
Douglas Edward Horne: As a result of our efforts our overall print trends saw sequential improvement in Q1, and we expect to continue this momentum moving forward.
Douglas Edward Horne: Looking at the domestic isn't that media segment in Q1, adjusted EBITDA of $44 $5 million was up slightly and adjusted EBITDA margin grew 60 basis points compared to the prior year for.
Douglas Edward Horne: For Q1, our total revenues decreased six 5%, representing a sequential improvement of 380 basis points and demonstrate solid growth across each of our digital revenue streams.
Douglas Edward Horne: Turning to news quest for Q1 adjusted EBITDA in this segment was $14 $2 million up 10, 3% and adjusted EBITDA margins grew 180 basis points to 23, 5% for.
Douglas Edward Horne: For Q1 total revenues grew one 8% compared to the prior year as.
Douglas Edward Horne: As we've discussed previously please keep in mind that that news quest margins differ from our Gannett media margins as a result of strategic differences and the print distribution model.
Douglas Edward Horne: And our digital marketing solutions business total core platform revenue in the first quarter was $116 1 million.
Douglas Edward Horne: <unk> an increase of four 2%.
Douglas Edward Horne: Adjusted EBITDA for the segment was $8 $8 million, representing a margin of seven 5%.
Douglas Edward Horne: We had approximately 14300 core platform customers with core platform <unk>, reaching a new high and increasing six 4% over the prior year.
Douglas Edward Horne: Additionally, budget retention saw an increase of 40 basis points year over year, reaching approximately 96%.
Douglas Edward Horne: At the end of the first quarter, our cash balance stood at $93 $3 million and our outstanding net debt was approximately $1 billion.
Douglas Edward Horne: Cash provided by operating activities in Q1 was $22 5 million up $15 $1 million.
Douglas Edward Horne: We also grew our fee cash flow from a use of $2 $1 million in the prior year quarter to a source of $9 $5 million.
Douglas Edward Horne: We ended Q1 with approximately $1 1 billion of total debt, reflecting $16 $3 million of total debt pay down for the quarter.
Douglas Edward Horne: During April we retired the remaining $3 $3 million balance of our 2024 convertible notes and repaid $2 $4 million of our term loan using the proceeds from recent asset sales.
Douglas Edward Horne: Debt repayment remains our priority and we will continue to focus on reducing our first lien net leverage which remained at two times in Q1.
Speaker Change: Before wrapping up I just want to reiterate how excited we are about our performance in the first quarter. We believe our solid results reflect sustained momentum across our business further validates our strategic plan and represents just the beginning of the value we expect to generate for the year.
Speaker Change: I will now hand, it back to the operator for questions and then we will go back to Mike for some closing thoughts.
Douglas Edward Horne: At this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
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Douglas Edward Horne: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Douglas Edward Horne: One moment, please while we poll for questions.
Douglas Edward Horne: Yeah.
Douglas Edward Horne: Your first question for today is from Giuliano Bologna.
Giuliano Jude Anderes Bologna: With Compass point.
Giuliano Jude Anderes Bologna: Well good morning, it's great to see.
Douglas Edward Horne: Solid results and good progress on a lot of our strategic initiatives.
Douglas Edward Horne: Yes.
Giuliano Jude Anderes Bologna: First question.
Giuliano Jude Anderes Bologna: It looks like total your total revenue deceleration one from.
Speaker Change: Last quarter I am curious what caused that and how do you how do you see or do you see that trend continuing throughout the year.
Speaker Change: Good morning, Giuliano thanks.
Giuliano Jude Anderes Bologna: So it wasn't really great quarter, we're really pleased with the progress we've made across the board really but now as it relates specifically to revenue we did make great progress in the first quarter and we actually expect that progress to continue on a steady pace through the remainder of the year. The thing about the first quarter being so strong gives us even more.
Speaker Change: Confidence in our expectation to obtain revenue growth as we exit the year from.
Giuliano Jude Anderes Bologna: From here from the first quarter, we expect about one to one five points a further trend improvement each quarter.
Giuliano Jude Anderes Bologna: Which will lead to revenue growth as we exit the year and importantly, Giuliano we expect digital revenue to be the main contributor to the continued improvement in trend and we do expect our digital revenues to surpass 10% growth this year.
Giuliano Jude Anderes Bologna: So we're pleased with where we are and what the next three quarters will play.
Giuliano Jude Anderes Bologna: That's great.
Speaker Change: Kind of.
Speaker Change: Jumped into whatever was implanted asking I study, our digital revenue growth I think went from 2% to 8%.
Speaker Change: Yes.
Speaker Change: Or in the last quarter or two borders John I'm curious.
Speaker Change: Yeah.
John: What really drove that and.
Speaker Change: Obviously implies that I can see continue to the extent that you're referring to call it 10% plus and I'm kind of curious Russ cadence and how that could unfold throughout the year.
Russ: Yes, our Q1 digital revenue growth was actually a bit stronger than we had anticipated as we went into the quarter.
Russ: So that was great to see and gives us even more confidence on the guidance, we've given for the year.
Russ: The other the other real positive about our digital revenue growth as we solve the drivers be.
Russ: The across the board in terms of the different revenue strategies, we have different revenue categories. We have.
Russ: And that gives us a lot more confidence as the year goes on as well so the two drivers that drove.
Russ: The drivers for Q1 will be the same engines that fuel the remainder of the year. So for example, our advertising growth was strong digital advertising growth was strong that came from overall page view growth and better monetization of those pages as we continue to scale the audience that our engagement with that.
Russ: Audience as you heard from Christian today, with our content strategy, we expect that to continue to grow and improve.
Russ: We also feel we have continued upside on our digital only subscription revenue, which we had a strong first quarter, but we see continued improvement there through both volume growth as well as pricing opportunities.
Russ: Third our Dms revenue returned to growth in the first quarter, we actually outperformed our expectations. There was it was a good first quarter in.
Russ: As we continue to expand both the product suite and importantly, our expertise into additional verticals that gives us a lot of confidence that we will continue to accelerate the revenue growth in that category.
Russ: And then finally I would say our partnership revenue scaling and performing as we expected we would expect that category to be a double this year, reaching a $20 million and just a reminder that comes with 90 plus percent EBITDA margins. So.
Russ: Really across the board strong performance that will continue to fuel the growth through the remainder of the year.
Russ: Okay.
Speaker Change: That's great and based on the prepared remarks.
Speaker Change: On the D&S side, it seems like Theres, a big new software AI product launch that's coming up soon can you give us a little more detail about the product the market opportunity and what problems, we're solving for small businesses there.
Speaker Change: Yeah, Yes, Sir I'm going to ask Chris Chung, who runs our our book.
Chris Chung: Dms business and as the creator of the product to shed some light on that force be happy too. So we are focused on creating products that have additive value to our existing digital marketing solutions.
Chris Chung: And in our conversations with customers their largest any points.
Chris Chung: Our managing and responding to the volume of leads generated as well as understanding the value and priority of.
Chris Chung: The leads that we deliver so we.
Chris Chung: Have developed and are now day viewing our AI powered CRM solution, which solves the pain points.
Chris Chung: Over time.
Chris Chung: Our plan is to monetize the software solution and make a commercial commercially available more broadly we're in beta testing right now and we've seen super positive reception for our early features and as we continue on our journey and we look forward to sharing more details on what our AI powered CRM switch can offer.
Speaker Change: That's very helpful. Thank you.
Speaker Change: Then.
Speaker Change: Just thinking about.
Chris Chung: On the free cash flow side that also came in above my assets. It looks like also you guys also beat consensus.
Chris Chung: Quarter on in first quarter.
Speaker Change: I'm curious.
Chris Chung: How do you feel about the drop in taking full year based on the <unk>.
Chris Chung: Your guidance.
Chris Chung: Hi, This is Doug I would say.
Douglas Edward Horne: We're right, where we want to be we are feeling very confident based upon Q1 results in terms of the full year outlook that we.
Douglas Edward Horne: Reaffirmed this morning, when you think about free cash flow, we had an increase in free cash flow in Q1, which is typically just from a seasonal perspective, a little bit of a weaker period. So that was good and we still expect on a full year basis to grow our free cash flow and I would say the same from an EBIT perspective, you saw.
Douglas Edward Horne: The trends really improve quarter to quarter, we expect that to continue through the year and overall.
Chris Chung: Our EBITDA growth is as we've guided to so we feel very good about where we sit today.
Speaker Change: That's great and then.
Speaker Change: Going back over there.
Chris Chung: Digital subscription side.
Chris Chung: Volume seem to be back on track.
Chris Chung: In terms of.
Chris Chung: Part of the trend there.
Chris Chung: Returning to our digital sub growth I'll say.
Chris Chung: It's a pretty impressive harpoon trends.
Chris Chung: And how that should be at sort of all.
Chris Chung: Throughout the year.
Speaker Change: Yes, absolutely.
Chris Chung: We feel really good about where we sit right now and it it really goes back to actions we took in the prior year to refocus our acquisition efforts around the digital subs and to make sure that we were growing.
Chris Chung: More of a long term subscriber base and Youre seeing the results of the actions we took last year kind of transpire in our results right now.
Chris Chung: And we think we have opportunity to grow both volume and <unk> and so from a revenue contribution perspective, we expect the digital only subscriber revenue stream to contribute there'll be a significant contributor to that digital growth both in the near term and long term.
Chris Chung: And when you think about kind of the drivers there from a local market perspective, we feel like we'll have opportunity to further penetrate the market.
Chris Chung: Also from a pricing perspective, we feel like we're still under price relative to the market and so there's both opportunity in both those categories as well as.
Chris Chung: All of the improvements from a content perspective, and that local focus supplemented with broader content.
Chris Chung: It's really made a positive impact and Chris and the team.
Speaker Change: That's very helpful and then.
Speaker Change: Looking on it looks like you posted some yes, some good growth on audience and page views I'm curious.
Speaker Change: Similar to ferret out, what's driving that and if there's anything new on the initial side that's driving that.
Speaker Change: Prudent there.
Speaker Change: Christine can you take that.
Christine: Sure I'm happy for him and thanks I Love This question.
Christine: And we're seeing it.
Christine: Cold in so many parts of the content organize telephone so our local markets have been incredibly focused on pulling local.
Christine: I'm being really relentlessly focused on our topic selection Milton sorry that that's local on their local service journalism and thats going to expand through the remainder of the year, we'll see that in a lot of area for CNN elections, where we're pivoting to vote, our guides and election education and away from horse race comprehension away from palace interim.
Speaker Change: Thank you.
Christine: <unk> also will be a pretty nature audience driver in local as well for the balance of the year as well.
Speaker Change: And yes, it's a hard one.
Speaker Change: Air USA today's Scarlet has been outperforming its competitive set its national competitors were increasing for example, our sports audience.
Speaker Change: We're not all growing pools being far, but we are improving on bold shrunk of that audience and our ability to monetize we will try to remember multiple times during their journey on our platform March Madness is just a great example of this we made significant changes to our organization and to our <unk>.
Speaker Change: So that would be really well positioned in this part of the season.
Speaker Change: The result was that we more than doubled more than doubled our sports audience comparable year ago, all of that had a direct impact on revenue and a larger sports audience will help of course to drive programmatic Ross you've heard about that earlier.
Ross: Yeah, a little person raw and sponsorship revenue from Super Bowl in Abu Dhabi coach as Paul on March <unk>.
Speaker Change: This expanding audience around sports is driving revenue also from partnership.
Speaker Change: As Mike mentioned, so partnerships like gambling dotcom, and we see a lot more opportunities to go out of partnerships in our space cant capitalize on other verticals beyond sports and just lifting up I think this is what it means to be a content company. We certainly produce essential journalism, we also printing.
Speaker Change: Central content, that's helping all of our customers and our consumers to live a better life. So we're bullish about the audience reach this year and we're bullish about our ability to monetize it.
Speaker Change: I hope that helps Mike.
Michael E. Reed: Yeah. Thank you Kristen.
Speaker Change: And then one final one investors about picking your brain about hopefully not hopefully not too convoluted, but you're obviously you're involved in the litigation.
Speaker Change: Litigation with Google those are real.
Speaker Change: Losses, I don't think that you guys are part of.
Speaker Change: From some other.
Speaker Change: Papers and.
Speaker Change: And content providers against open nowadays.
Speaker Change: Yeah.
Speaker Change: And then there is also some petrol changes on the on the legislation front and I'm kind of curious, though where they stand on the litigation side for broader perspective, and then also on the legislation side, if there's anything that could accelerate.
Speaker Change: The accelerated resolution there for.
Speaker Change: Or create a framework for the industry how to move forward professionally yes sure sure.
Speaker Change: Okay.
Speaker Change: So the first question around the law suit we have Bob.
Bob: Don't want to say too much about it but I would say two things julianna.
Speaker Change: July one.
Speaker Change: The Doj case involving Google, which outlines many of the same allegations we have in our case is scheduled to go to trial in September of this year. So just a few months away.
Speaker Change: First thing I would say is we remain very very confident in the case that we've laid out.
Speaker Change: Turning to the legislation.
Speaker Change: <unk>.
Speaker Change: Yes.
Speaker Change: The J C P a.
Speaker Change: Thing that we've been lobbying.
Speaker Change: In Washington for with both the Congress and the Senate.
Speaker Change: In today's political environment, I think it's going to be pretty hard in 2024 to give get something passed especially with it being a big election year.
Speaker Change: But I do think you know underneath the hood, we are making progress.
Speaker Change: J C. P. A legislation and I think we will have a much more active discussion with Congress and the Senate in 2025.
Speaker Change: And then we're also seeing progress at the state level.
Speaker Change: And we saw a bipartisan oh.
Speaker Change: Legislation passed in California, that's very similar to the J C. P. A that's a great step even though it's at the state level. It's a great step that we can get this legislation passed which will lead to.
Speaker Change: Fair compensation for the content, we produce that platforms are using four for commercial purposes. So we're making very slow, but we are making progress on the legislative front with J C. P. A.
Speaker Change: And I think there's a lot more positivity to come in 2025 that was actually in Washington, This weekend and talked to a few senators governors in Congress people throughout the day and.
Speaker Change: I'm optimistic.
Speaker Change: So congrats on the quarter and I will jump back in the queue. Thank you.
Speaker Change: Thank you.
Speaker Change: Your next question for today is from Jason Bazinet with Citi.
Jason Boisvert Bazinet: Thanks, I just had a question on your your digital subscriptions and digital <unk>.
Speaker Change:
Jason Boisvert Bazinet: If I went back a few years.
Jason Boisvert Bazinet: The <unk> are sort of I don't know on the five ish dollar range, but you were adding sort of a lot of subs at that juncture.
Jason Boisvert Bazinet: And now you've got a couple of quarters, where the art cruiser sort of $7, but not as much sub growth my.
Jason Boisvert Bazinet: My question is what is the can you just unpack sort of the dynamics that were going on there wasn't a lot of promotions that have sort of rolled off.
Jason Boisvert Bazinet: And what is the what do you what are your expectations in the future in terms of our crews and digital subs.
Jason Boisvert Bazinet: So I would see.
Jason Boisvert Bazinet: This reflects a lot of testing and learning in terms of the early volume growth. I mean, we were experimenting with a lot of different plans and price points and really looking at the data in terms of retention and lifetime customer value.
Jason Boisvert Bazinet: After all of kind of that testing and looking at the data, that's where we kind of pivoted a little bit last year to make sure. We're focusing on those populations of subscribers that we believe tend to have longer retention higher lifetime value.
Jason Boisvert Bazinet: As well as you know.
Jason Boisvert Bazinet: Come.
Jason Boisvert Bazinet: Come in.
Jason Boisvert Bazinet: I would say kind of level out at an overall higher price point than what we'd seen previously which is why youre seeing that ARPA growth and so I think.
Jason Boisvert Bazinet: Look going forward perspective, we still feel like based upon kind of industry studies, we look at that work.
Jason Boisvert Bazinet: Relatively underpriced relative to competitors.
Jason Boisvert Bazinet: Kind of the same space.
Jason Boisvert Bazinet: So we do believe we have opportunities to grow pricing going forward as well as all of the great work that Chris and team are doing I think it's going to enable us also to grow volume and so both of those things I think are really key elements to the overall revenue growth going forward.
Speaker Change: Okay. That's super helpful. Thank.
Speaker Change: Thank you.
Speaker Change: Okay.
Jason Boisvert Bazinet: We have reached the end of our question and answer session and I will now turn the call over to Mike Reed for closing remarks.
Michael E. Reed: Thank you and thanks, everybody for joining us this morning.
Michael E. Reed: Before I give my closing summary here I just wanted to.
Michael E. Reed: I mentioned to everybody that we did post a supplement online.
Michael E. Reed: Detailing our Q1 results and giving our outlook for the year and look I do encourage everybody to take a look at the supplement there is a lot of good information on the details of our performance in there. So I do encourage you when you have time to flip through the pages in our supplement.
Michael E. Reed: Now turning back to my closing.
Michael E. Reed: As you can as you can tell I'm proud of the strong performance, we achieved in the first quarter.
Michael E. Reed: Our focus and dedication and that of the team here at Gannett has led to the high level of operational performance and that's resulted in solid financial results. The stress the strategic actions and plans that we started putting in place last year and talking to you about last year are now showing up in the financials and that resulted in a.
Michael E. Reed: A real momentum shift here at Gannett.
Michael E. Reed: Just showing up meaningfully in our Q1 results and it puts us on track to transform this business into a growing digital media business. We believe our Q1 performance is an indicator of our ability to achieve our full year commitments that gives us more confidence with the results we achieved in the quarter and we expect to eggs.
Michael E. Reed: The year with overall revenue growth to grow adjusted EBITDA and free cash flow this year and to create a sustainable growing business.
Michael E. Reed: Our optimism is really backed by a number of catalysts that we saw in Q1.
Michael E. Reed: And I'll run through a couple of those achieving meaningful improvement in our topline trend gives us confidence that we will hit the inflection point as we exit 2024.
Michael E. Reed: Driving digital revenue growth of 8% and digital accounted for over 42% of total revenues, achieving new highs across digital only subscription revenue digital only our pools and seeding our dms core platform revenue grow and our ARPA growth all give us great confidence that digital will continue to.
Michael E. Reed: Grow above the 10% guidance, we've given for the year.
Michael E. Reed: We're generating year over year free cash flow growth as well as sequential improvement in adjusted EBITDA trends and we're continuing to grow our audience and engagement as evidenced by 187 million average monthly unique visitors an eight consecutive months of at least 1 billion page views across our domestic properties.
Michael E. Reed: As you can see our commitment to our strategy and most importantly to our readers and customers is unwavering with.
Michael E. Reed: These catalysts driving US forward, we are excited and confident about the opportunities that lie ahead, not just in 2024, but 2025 and beyond the progress achieved during Q1 puts us right on track with where we want to be in terms of delivering our full year objectives.
Speaker Change: And again please please visit our supplement if you have time, but thanks for your time today and we look forward to updating you again with our results at the end of the second quarter. Thank you.
Speaker Change: This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.