Q2 2025 Gannett Co Inc Earning Call

July 31, 2025

Formal presentation.

Yes.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Please note. This conference is being recorded I will now like to turn the conference over to your host Matt Esposito head of Investor Relations you may begin.

Yeah.

Good morning, everyone and thank you for joining our call today to discuss <unk> second quarter 2025 financial results presenting on today's call will be Mike Reed, Chairman and Chief Executive Officer, Tricia <unk>, Our Chief Financial Officer, and Kristin Roberts President of <unk> media.

Thank you good morning, everyone and thank you for joining our call today to discuss <unk> second quarter 2025 financial results presenting on today's call will be Mike Reed, Chairman and Chief Executive Officer, Tricia <unk>, Our Chief Financial Officer, and Kristin Roberts President of <unk> media.

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 and our full year 2025 business outlook before we begin. Please let me remind you that this call is being recorded in addition, certain statements made during this call are.

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 provide you with additional detail on this quarter's performance and our full year 2025 business outlook before we begin. Please let me remind you that this call is being recorded in addition, certain statements made during this call are or.

Or may be deemed to be forward looking statements as defined under the U S. Federal security laws, 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.

It may be deemed to be forward looking statements as defined under the U S. Federal security laws, 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.

As well as the risk factors described in Gannett's filings made with 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. Please keep in mind all comparisons are on a year over year basis, unless otherwise noted. In addition, we will be discussing non-GAAP financial information during the call.

As well as the risk 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. Please keep in mind all comparisons are on a year over year basis, unless otherwise noted. In addition, we will be discussing non-GAAP financial information during the call.

<unk>, including same store revenues free cash flow total adjusted EBITDA adjusted EBITDA margin and adjusted net income attributable taking that you can find reconciliations of our non-GAAP measures to the most comparable U S. GAAP measures in the earnings supplement lastly, I would like to remind you that nothing on this call constitutes an offer to sell or solicitation of offers to purchase.

And he can net securities the webcast and Audiocast copyrighted material of Gannett and may not be duplicated reproduced or rebroadcast without our prior written consent with that I would like to turn the call over to Mike Reed Gannett's, Chairman and CEO.

Thank you Matt good morning, everyone.

The second quarter reflects continued progress across most all facets of our strategy.

The second quarter reflects continued progress across most all facets of our strategy during.

During the call. This morning, you'll hear a lot about the sequential improvements in our financial results from the first quarter to the second quarter.

As we mentioned last quarter 2025 will unfold as the year of two halves and we are now beginning to see that shift take place.

As we mentioned last quarter of 2025 will unfold as the year of two halves and we are now beginning to see that shift take place.

While the first half of the year didn't fully meet our expectations momentum is building across key areas of the business.

And Youll hear today about the operational and strategic initiatives that are improving our current trends and positioning us for stronger performance in the second half of the year.

Stronger performance will also be driven by our recently announced $100 million cost reduction program and the strategic AI content licensing agreement, we announced yesterday with perplexity.

Stronger performance will also be driven by our recently announced $100 million cost reduction program.

And the strategic AI content licensing agreement, we announced yesterday with perplexity.

Tricia will walk through details later in the call, but a few key highlights I wanted to address upfront. This morning that we expect in the second half of the year.

Tricia will walk through details later in the call, but a few key highlights I want to address upfront. This morning that we expect in the second half of the year.

Those include.

Same store digital revenue growth between three and 5% year over year.

Meaningful total adjusted EBITDA growth compared to the prior year.

And free cash flow growth of over 100% versus the prior year.

Free cash flow growth of over 100% versus the prior year.

We are seeing our key financial metrics move in the right direction, we saw that in Q2 and I'll run through a few of those in a second.

We are also seeing that momentum and improvement carry into the third quarter, which we believe positions us well for the back half of the year.

Looking at Q2, we drove sequential improvement across our key financial metrics. These include.

Looking at Q2, we drove sequential improvement across our key financial metrics. These include <unk>.

Total adjusted EBITDA of $64 2 million, reflecting a sequential increase of 27%.

Total adjusted EBITDA of $64 2 million, reflecting a sequential increase of 27% with.

We generated $17 6 million in free cash flow representing sequential growth of 73%.

We repaid $23 $4 million of debt in the second quarter.

For the first six months, we have repaid close to $100 million of debt.

And for the first six months, we have repaid close to $100 million of debt.

Same store revenue trends also improved sequentially driven by momentum across our digital portfolio.

Three of our four digital revenue categories posted sequential growth and our overall digital revenue performance strengthened as the quarter progressed.

Separately digital advertising revenues grew 4% year over year as compared to being down slightly in the first quarter.

Realizing these improvements in the second half of the year is critical to our ongoing transformation.

And we believe our progress and current trends.

<unk> us to accomplish this.

Further in the third quarter, we began implementing a cost reduction program targeting approximately 100 million in annualized expense reductions.

And as a result, we expect total adjusted EBITDA to grow for the full year of 2025 over 2024 with meaningful growth in the back half of the year.

And we believe this cost reduction program positions us to deliver solid total adjusted EBITDA growth again in 2026 and will lead to continued expansion of adjusted EBITDA margins.

We expect the majority of these efficiencies will be implemented by the end of the third quarter with a small portion expected to carry into the fourth quarter.

These actions are targeted near term and are already in motion.

Which along with the green shoots across our digital portfolio that we are seeing reinforce our confidence to drive much stronger performance in the second half of the year.

Now, let's turn to some key operational highlights from the second quarter.

Our diversified digital revenue strategy is rooted in having an audience at scale with improving engagement in order to provide a foundation for sustainable growth.

In the second quarter, which marked the first quarter the audience from the Austin American statesman was excluded.

We maintained our position as one of the leading news and information providers among content creators with 181 million average monthly unique visitors coming to our platform.

This underscores the continued strength of our overall reach.

We also improved our engagement with that audience evidenced by another quarter of page view growth compared to the prior year.

We believe our heightened focus on monetizing the full spectrum of our audience.

Through personalized experiences and diverse revenue streams.

Positions us to drive meaningful improvement across our digital portfolio.

A clear example of this progress is our digital advertising business.

Which returned to year over year growth in the second quarter.

We've consistently seen how scaled audience growth and increased engagement directly drive programmatic yield and revenue.

However.

The more meaningful upside lies in our ability to convert that audience into premium high CPM direct campaigns that align with advertiser objectives.

The more meaningful upside lies in our ability to convert that audience into a premium high CPM direct campaigns that align with advertiser objectives.

We believe we will continue to benefit from the stability, we are seeing across the broader advertising marketplace and that our growth will accelerate as we further leverage the strength of the USA today brand and the reach of our National sales organization.

We believe publishers in general, but USA today network in particular provide an attractive brand safe platform and as a result, we see significant potential to unlock additional demand for large marketing budgets.

Turning to our digital only subscription business.

Six months have been a reset hard but healthy.

As we have evaluated the data on churn we made the decision to stop acquisition that delivered volume without long term subscriber value.

We have calibrated our focus on high value subscribers and are prioritizing <unk> and sustainable growth.

That means some pain in the short term, but this is an intentional necessary shift that is already starting to show positive signs of improvement.

Our local subscriptions continue to be our highest ARPA group and we are doubling down on this core where we have a differentiated product.

Our local subscriptions continue to be our highest ARPA group and we are doubling down on this core where we have a differentiated product strong brand trust and significant pricing power.

<unk> brand trust and significant pricing power.

Last year, we largely price across the board.

This year, we're localizing our approach raising prices in markets with higher engagement and.

And being flexible where needed.

Not a one size fit all and we're getting more sophisticated in our approach.

As we grow this business, we will continue to calibrate our focus on volume and profitability over the long term.

We remain committed to growing digital only subscriptions, but we are building our subscriber base with intention.

This is important as we are seeing positive traction from this approach.

This is important as we are seeing positive traction from this approach as digital only our pud increased both sequentially and year over year.

Digital only our pool increased both sequentially and year over year.

We believe there is continued upside in our pool and we expect sequential improvement in digital only subscription revenue for both the third quarter and the fourth quarter as we continue to build our base of loyal core subscribers.

With that I'll turn the call over to Kristen outlined some of the strategic initiatives in motion.

With that I'll turn the call over to Kristen outlined some of the strategic initiatives in motion for Gannett media during the second half of the year.

<unk> media during the second half of the year.

Thank you Mike the net media continues to run as an organization that prioritizes audience experiments that purpose and intent.

Thank you, Mike and that media continues to run as an organization that prioritizes its audience.

Impairments that purpose and intent.

Move at the speed of man.

Moves at the speed of man and results speak for themselves as we continue to have one of the largest digital audiences among content creators in the country.

Ill speak for themselves as we continue to have one of the largest digital audiences among content creators and the country as I outlined earlier the here our focus in 2025 <unk>, we will continue to lean on highly engaging vertical such as sports.

As I outlined earlier the here our focus in 2025 <unk>, we will continue to lean on highly engaging vertical such as sports or onetime sports continues to demonstrate its dominance in the model that the Paris Olympics, and we have successfully created an effective and a repeatable playbook.

<unk> continues to demonstrate its dominance in the model that the Paris Olympics, and we have successfully created an effective and a repeatable playbook to dominate the big tent pole events.

Dominate the big tent pole events.

Power of our success was evident during major sporting events, such as the Kentucky Derby and the 500 the College World series, where we generated notable increases in audience Hps and readership per story.

Power of our success was evident during major sporting events, such as the Kentucky Derby.

500, the college World series, where we generated notable increases in audience Hps and readership per story.

Our goal when we launched <unk> sportswear to drive repeatable audience growth as we strive to become the nations most Red Sports network and our results in the first half of the year show that we are on our way and importantly, this passionate and highly engaged audience drive meaningful scale.

Our goal when we launched <unk> sports was to drive repeatable audience growth as we strive to become the nations most Red Sports network and our results in the first half of the year show that we are on our way and importantly, this passionate and highly engaged audience drive meaningful scale.

And deliver tremendous value to our advertising partners.

Deliver tremendous value to our advertising partners.

Now with the football season quickly approaching this gives us another chance to engage some of our most loyal readers and viewers with unmatched expertise and authority. Our mission for this season remains perform delivering content that matters to them in the moment every time while open.

Now with the football season quickly approaching this gives us another chance to engage some of our most loyal readers and viewers like unmatched expertise and authority. Our mission for this season remains perform delivering content that matters to them in the moment every time while opening.

Inning, new windows for <unk>, and with inventory of exceptional content and programming opportunities that we have throughout the network. This includes expanding our high school football content portfolio, which is a key driver of local digital only subscription also refining and expanding.

New windows for <unk>, and with inventory of exceptional content and programming opportunities that we have throughout the network. This includes expanding our high school football content portfolio, which is a key driver of local digital only subscription.

Also refining and expanding the NFL takes experience.

NFL picks experience and.

And leveraging newsletters to capitalize on our success with college football.

We also have ambitious plans to become the leading force in entertainment. We have recently made a strategic hire Wendy novel as our USA today network executive editor of Entertainment.

Also have ambitious plans to become the leading force in entertainment. We have recently made a strategic hire Wendy novel as our USA today network executive editor of Entertainment.

Wendy most recently served as the editor in Chief for people and she brings over 25 years of editorial growth and strategy development through our organization Entertainment presents an exciting opportunity to expand our audience to deliver more personalized and relevant experiences and to drive higher <unk>.

Most recently served as the editor in Chief for people and she brings over 25 years of editorial growth and strategy development through our organization Entertainment presents an exciting opportunity to expand our audience to deliver more personalized and relevant experiences and to drive higher <unk>.

Digital revenue per user per before we are moving quickly to execute our strategy that creates standout experiences around the topics our readers love such as celebrities fashion and style and doing so in the formats and platforms. They prefer this deepens their connection with our <unk>.

<unk> revenue per user per visitor.

We are moving quickly to execute our strategy that creates standout experiences around the topics our readers love such as celebrities fashion and style and doing so in the formats and platforms. They prefer this deepens their connection with our products and enticing them to take another step in there too.

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And enticing them to take another step in their journey.

Ernie.

Similar to sports entertainment as a powerful tool for our advertisers and also offers a compelling opportunity to grow our e-commerce business on that note.

<unk> Sports entertainment as a powerful tool for our advertisers and also offers a compelling opportunity to grow our e-commerce business.

On that note our digital only subscription volumes in Q2 reinforces that we still have work ahead to fully unlock the company's potential I am encouraged that our refined acquisition strategy.

Our digital only subscription volumes in Q2 reinforces that we still have work ahead to fully unlock the company's potential I am encouraged that our refined acquisition strategy drove both sequential and year over year growth in digital only auto smart pricing plays a.

Sequential.

Year over year growth in digital only auto smart pricing plays a key role in our strategy and we expect the back half of the year to benefit from a shift away from low priced introductory offers.

A key role in our strategy and we expect the back half of the year to benefit from a shift away from low priced introductory offers.

Which based on our experience generates minimal revenue and results in higher churn to a series of annual subscription offers that are expected to drive near term revenue reduce churn.

Which based on our experience generates minimal revenue and results in higher churn to a series of annual subscription offers that are expected to drive near term revenue reduce churn strengthen our base of loyal readers.

<unk> our base of loyal readers.

We recognize that a portion of our audience will always remain relatively light consumers of our content rather than bringing them into the funnel through these high churn lower intro offers we plan to introduce pay per article options that better align with their consumption habits.

That said, we recognize that a portion of our audience will always remain relatively light consumers of our content rather than bringing them into the funnel through these high churn lower intro offers we plan to introduce pay per article options that better align with their consumption habits.

We also are taking a more dynamic approach to pricing by implementing models that better reflect the unique characteristics of our local markets.

We also are taking a more dynamic approach to pricing by implementing models that better reflect the unique characteristics of our local markets in parallel we also see multiple opportunities to accelerate overall consumer monetization, we recently launched stacked products, which enables multi product subscriptions.

In parallel we also see multiple opportunities to accelerate overall consumer monetization. We recently launched stacked products, which enables multi product subscriptions. It's in data across a few markets and that is a foundational step with long term potential.

It's in beta across a few markets and that is a foundational step with long term potential.

And as we look to more fully monetize our enormous audience. We also expect to lean more heavily into gains to broaden our consumer revenue portfolio.

And as we look to more fully monetize our enormous audience. We also expect to lean more heavily into games to broaden our consumer revenue portfolio.

To put it concisely, we are moving with speed and executing with precision and we will continue to try new things and some that will have an immediate impact.

To put it concisely, we are moving with speed and executing with precision and we will continue to try new things. Some that will have an immediate impact and some that will take time to scale as we work to re energize, our local consumer base and accelerate total consumer monitor.

That will take time to scale as we work to re energize, our local consumer base and accelerate total consumer monetization.

<unk>.

Back to you Mike.

Thanks Kristen.

Exciting to hear you share more about the key initiatives underway to deepen engagement and enhance the overall monetization across our digital advertising and digital only subscription categories.

It's exciting to hear you share more about the key initiatives underway to deepen engagement and enhance the overall monetization across our digital advertising and digital only subscription categories.

Now shifting gears to AI.

We are leveraging every opportunity to lead through innovation and strengthen our competitive position in today's dynamic digital landscape.

You might have seen yesterday that we announced an exciting new deal with perplexity. The AI powered answer engine to licensed content from USA today, and the USA today network of over 200 local publications.

Okay, that's premium content and trusted journalism will be integrated into perplexities AI powered search experiences.

So thats premium content and trusted journalism will be integrated into perplexities AI powered search experiences.

Including its newly released agenda web browser common.

The deal is comprised of both licensing fees and advertising revenue share and importantly represents what we believe is fair value for our content.

This strategic alliance with Perplexity exemplifies our continued leadership and embracing transformative technology and reflects our belief that innovation and responsible stewardship.

Must go hand in hand.

Just go hand in hand.

Setting a standard for the way quality content and trusted journalism should be valued.

Additionally, in the second quarter, we became the first publisher in the U S to launch to Boulos generative AI answer engine deeper dive within USA today.

While still in beta we are expanding this technology to a broader audience to connect readers with clear answers to their questions and surface real time content exclusively from our trusted USA today network.

We are proud to bring this innovative experience to our audience, which we expect to increase time on site and deepen reader loyalty.

Importantly, deeper dive also creates a new monetization channel by inserting contextually relevant high intent ads directly into the AI powered results page and in turn allows us to capture search like advertising revenue on our platform.

Fortunately deeper dive also creates a new monetization channel by inserting contextually relevant high intent ads directly into the AI powered results page and in turn allows us to capture search like advertising revenue on our platform.

Early performance has exceeded our expectations and we are continuously expanding the beta launch two additional users.

Furthermore, the growing volume of our user queries is expected to provide real time insights that can actively inform our content strategy.

Furthermore, the growing volume of our user queries is expected to provide real time insights.

<unk> actively inform our content strategy.

As we gain a deeper understanding of the topics users are searching for we can deliver timely relevant content, which in turn is expected to drive stronger advertising CPM.

And increased engagement from readers, who are more likely to become subscribers.

An increased engagement from readers, who are more likely to become subscribers.

To protect and monetize the value of our journalism and content in the AI era.

We are taking a two pronged approach.

First by Onboarding to the Snowflake marketplace, we provide enterprise developers a straightforward fully licensed way to train and deploy AI models on our content under transparent usage based terms.

Second we have implemented new measures to prevent unauthorized data collection and scraping.

And direct such activities to a specific page for licensing information.

This technology, which is now being adopted more broadly across the industry is already reducing unauthorized use and highlights the premium attached to a trusted real time news content.

Over time, we expect the industry wide shift to tip the scales toward paid access.

And this changes to industry dynamics have tempered the growth we initially expected from partnerships.

We have redirected those efforts towards building high value advertising verticals on our platform.

An example of that is our recently announced multi year agreement with address USA to power an online real estate portal across the USA today network.

As one of our largest multi year agreements address USA as listings have been integrated throughout our network alongside editorial content, including topics such as home buying selling decorating and improvement.

As one of our largest multi year agreements address usa's listings have been integrated throughout our network alongside editorial content, including topics such as home buying selling decorating and improvement.

We are excited to partner on this innovative new real estate marketplace hub.

We're excited to partner on this innovative new real estate marketplace hub, giving our readers the information they need while generating immediate revenue opportunities at a very high margins.

Giving our readers the information they need while generating immediate revenue opportunities at a very high margin.

Now turning to our Dms business, we had a solid quarter with noticeable improvement across key areas of the business.

We saw sequential growth in core platform revenue.

We saw sequential growth in core platform revenue segment, adjusted EBITDA and client count.

Segment, adjusted EBITDA and client count.

We also achieved a record high in quarterly core platform RP.

Which grew both year over year and sequentially.

These positive signals along with the strategic initiatives underway to enhance the product suite.

Reinforce our optimism for the second half of the year.

These strategic initiatives include.

First strengthening our search optimization capabilities.

Search remains an important component of advertising budgets and we are leveraging tools, such as Google AI smart bidding to better position, our clients and search results.

This initiative is expected to deliver measurable improvements in campaign performance.

And customer retention.

Across our broader portfolio.

Second we established a CRM integration in the second quarter to deliver more targeted personalized campaigns and generate stronger insights for our customers.

Which we believe will lead to higher RP and better retention.

Early results are encouraging as campaigns with this new integration have seen immediate measurable improvements to their marketing ROI.

Early results are encouraging as campaigns with this new integration has seen immediate measurable improvements to their marketing ROI.

And then lastly, we launched our conversational AI voice agent within dash to create a seamless and innovative omnichannel customer engagement experience.

We view this as a significant opportunity for our Dms business and a key enhancement to our core product offerings.

These initiatives are all early stage, but we are already seeing a positive impact on our.

These initiatives are all early stage, but we are already seeing a positive impact on our pool.

Retention and customer growth.

As we continue to scale them across our customer base. We expect these efforts to contribute meaningfully to the expected revenue growth during the second half of the year as well as 2026.

I'd now like to turn the call over to Tricia to provide additional details and color around our 2025 second quarter financials as well as the details on our updated full year 2025 guidance Tricia.

I would now like to turn the call over to Tricia to provide additional details and color around our 2025 second quarter financials as well as the details on our updated full year 2025 guidance Tricia.

Thank you Mike Good morning, everyone. Please keep in mind, all comparisons on a year over year basis, unless otherwise noted.

In the second quarter total revenues were $584 9 million a decrease of eight 6% or six 4% on a same store basis.

This represents a 130 basis point improvement from Q1 same store revenue trends.

We are pleased to see the improvement we are not yet improving our revenue trends at the pace needed.

While we are pleased to see the improvements we are not yet improving our revenue trends at the pace needed.

As a result, we expect to continue to align our expense structure with our revenue trends in Q2 operating costs combined with SG&A expenses decreased approximately 8%, reflecting our commitment to prudent cost management building on that momentum in Q3, we began a cost program.

<unk> targeting 100 million in annualized cost savings, which is expected to lead to improved total adjusted EBITDA in the second half of the year.

We're targeting 100 million in annualized cost savings, which is expected to lead to improved total adjusted EBITDA in the second half of the year.

These initiatives give us near term flexibility, while supporting our digital transformation.

These initiatives give us near term flexibility, while supporting our digital transformation we.

We are focused on transformative cost reduction that continue the variable is our cost structure, including an increased reliance on automation and third party research providers to reshape the organization into a leaner more efficient company.

We are focused on transformative cost reduction that continue the variable is our cost structure, including an increased reliance on automation and third party resource providers to reshape the organization into a leaner more efficient company.

Crucially. This is a moment to tap into AI, driven automation across our workflows and back office processes, which is expected to unlock an additional layer of operating efficiency.

We have also announced the closure of two of our largest production facilities.

We have also announced the closure of two of our largest production facilities. Both slated to start later this year.

Slated to start later this year the consolidation of these plans into other facilities.

The consolidation of these plans into other facilities along with ongoing mail delivery conversions is expected to have a positive impact on our expense run rate going forward.

Long with ongoing mail delivery conversion is expected to have a positive impact on our expense run rate going forward.

Total adjusted EBITDA was $64 2 million in the second quarter, representing a margin of 11% on a sequential basis total adjusted EBITDA increased $13 7 million.

Well I'll cover adjusted EBITDA remained lower than the prior year, we expect to see year over year growth in Q3, Q4 and for the full year.

So I'll cover adjusted EBITDA remained lower than the prior year, we expect to see year over year growth in Q3, Q4 and for the full year as a result of the expected improvement in revenue trends and the impact of the cost management program.

As a result of the expected improvement in revenue trends and the impact of the cost management program.

On the bottom line, we reported a net income of $78 4 million in the second quarter, representing an improvement of $64 6 million.

Our results also improved on an adjusted basis with adjusted net income attributable to <unk> of $84 5 million, increasing by $55 3 million.

Our results also improved on an adjusted basis with adjusted net income attributable to the net of $84 5 million, increasing by $55 3 million.

The net income of $78 4 million is heavily impacted by a tax benefit of $87 5 million, which reflects large quarterly variability expected across the year tied to the pretax results of this quarter.

The net income of $78 4 million as heavily impacted by a tax benefit of $87 5 million, which reflects large quarterly variability expected across the year tied to the pretax results of this quarter.

We expect to have a tax provision for the year and given the tax benefit of approximately $94 million year to date, we expect an exceptionally large provision in the back half of the year largely in the fourth quarter.

Total digital revenues in Q2 were $265 4 million down four 6% or two 8% on a same store basis and represented over 45% of total revenue.

We saw 100 basis point improvement in same store digital trends from Q1 to Q2.

The digital share of our revenue expanded 160 basis points over Q1.

Within digital revenues digital advertising returned to growth due to solid performance in our page is programmatic revenue and improvement in direct sales from our national team.

Within digital revenues digital advertising return to growth due to solid performance in our page is programmatic revenue and improvement in direct sales from our national team.

In Q2, our digital only subscription revenues totaled $42 7 million.

We continue to feel the impact of rebuilding our subscriber base.

<unk> offers and implementing a shorter grace period.

Written offers and implementing a short a grace period.

While we believe the largest sequential impact some grades changes are behind us. It will take a few quarters to return to digital only subscription business to year over year growth.

While we believe the largest sequential impact from Grace changes are behind us. It will take a few quarters to return to digital only subscription business to year over year growth.

That said, we are seeing early signs of progress from a more intentional acquisition strategy evidenced by our digital only subscription <unk> of $7 79 in Q2, returning to growth both sequentially and year over year.

And our strategic efforts to enhance the quality and the value proposition of our print product continue to demonstrate results.

While we all know that print and commercial revenues continued to be a declining category for us we are managing the long tail as effectively as possible.

While we all know that print and commercial revenues continued to be a declining category for us we are managing the long tail as effectively as possible and.

And the actions we've implemented to improve the subscriber experience have temporary declines over the last few quarters.

And the actions we've implemented to improve the subscriber experience have tempered declines over the last few quarters.

We are committed to managing our print products and related secular declines as efficiently and profitably as possible and we expect to carry this momentum into the back half of the year.

We are committed to managing the print products and related secular declines as efficiently and profitably as possible and we expect to carry this momentum into the back half of the year.

Turning our attention to the domestic in the media segment revenue trends in Q2 on a reported basis or influenced by the performance in digital only subscription and digital marketing services as well as the first full quarter without revenue from the Austin American statement.

Turning our attention to the domestic media segment revenue trends in Q2 on a reported basis are influenced by the performance in digital only subscriptions and digital marketing services as well as the first full quarter without revenue from the Austin American statement.

In Q2 segment adjusted EBITDA was $43 2 million up 33% compared to Q1.

Segment adjusted EBITDA margins of nine 8% also saw sequential growth increasing by 230 basis points.

Turning to news quest revenue trends returned to slight growth in Q2, a result of favorable currency rates.

Segment, adjusted EBITDA was $14 9 million up five 3% the prior year, while segment adjusted EBITDA margins totaled 24, 3%.

And our digital marketing solution segment revenue remained lower year over year for Q2 showed sequential improvement in both revenue and segment adjusted EBITDA margin through growth in both client count and ARPA, who.

And our digital marketing solution segment revenue remained lower year over year for Q2 showed sequential improvement in both revenue and segment adjusted EBITDA margin.

Growth in both client count and ARPA.

We are pleased with the sequential momentum from Q1 to Q2, which is reflected in the following key areas.

Total core platform revenue was $116 9 million up eight 1%.

Segment, adjusted EBITDA totaled $11 5 million, reflecting growth of 35, 8% and our margin of approximately 10% also extended over Q1.

Average customer account increased nearly 400, an increase of two 8%.

And core platform, our <unk> reached a new quarterly high in Q2 of $2830 or five 1%.

And core platform <unk> reached a new quarterly high in Q2 of $2830 or five 1%.

Now, let's shift to the balance sheet.

At the end of the first quarter, our cash balance stood at $88 $5 million and our outstanding net debt was approximately $926 million.

At the end of the first quarter, our cash balance stood at $88 5 million and our outstanding net debt was approximately $926 million.

In Q2 free cash flow totaled $17 6 million up 73% compared to Q1.

There continues to be variability in our free cash flow each quarter. So while we expect Q3 free cash flow to decrease both sequentially and year over year, we expect free cash flow growth in Q4 and for the full year.

We ended Q2 with approximately 1 billion of total debt, reflecting $23 4 million of total debt pay down for the quarter. We currently have approximately $20 million in real estate assets in various stages of the sales pipeline and we are increasing our expectation on debt pay down to $135 million for the year.

And in light of slower than expected pace of revenue improvement, we are updating our full year outlook.

We now anticipate digital revenue to be roughly flat on a same store basis with growth of 3% to 5% year over year in the last six months of the year driven by ongoing digital advertising growth accelerating dms trends and the impact of incremental AI licensing.

Even with our full year revision digital should still represent nearly 50% of total company revenue by year end.

And as a result, we now project total same store revenues to decrease in the low to mid single digit range for 2025, and low single digits over the last half of the year, which we believe positions revenue to be flat in early 2026.

And as a result, we now project total same store revenues decreased in the low to mid single digit range for 2025, and low single digits over the last half of the year, which we believe positions revenue to be flat in early 2026.

In part due to the $100 million cost reduction program already underway, we continue to expect year over year improvement in net income or a narrower net loss.

In part due to the $100 million cost reduction program already underway, we continue to expect year over year improvement in net income or a narrower net loss and growth in adjusted EBITDA.

And growth in adjusted EBITDA.

We also still forecast free cash flow to increase roughly 30% versus 2024, but we have trimmed the expectations slightly to reflect the near term cash required to implement those cost initiatives.

As we look ahead, our priorities are clear to ensure stability on executing on the basics grow and engage our audience and maximize the sizeable revenue stream this audience generates across multiple channels.

Sequential gains that we have.

The sequential gains that we have.

And our confidence and momentum will compound into year over year growth.

And our confidence and momentum will compound into year over year growth we.

We are optimistic and encouraged by our continued transformation into a digital first business, which we believe will drive enhanced shareholder returns and ensure a long future for journalism.

I will now hand, it back to the operator for questions and then we will go back to Mike for some closing thoughts.

Certainly at this time, we will be conducting a question and answer session.

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One moment, please while we poll for questions.

Your first question for today is from Giuliano Bologna with Compass Bank.

Yeah.

Congrats on the execution, maybe to start off your financial guidance for trends for the back half of 2025 are strong and revenue trends are moving more aggressively.

Congrats on the continued execution maybe to start off your financial guidance for trends for the back half of 2025 are strong and revenue trends are moving more interaction.

What do you think burst or when do you think your revenues will turn swap.

What do you think birth or when do you think your revenues will turn swap.

Thanks Julie.

Thanks Julien.

Nice to talk to you again.

We have some some pretty.

Exciting.

Opportunities ahead of us here in the third and fourth quarter and as we move into 2026. There is a variety of factors as you heard on the call that are really driving our optimism.

Opportunities out of us here in the third and fourth quarter and as we move into 2026. There is a variety of factors as you heard on the call that are really driving our optimism.

One we didn't spend a lot of time on but we're actually seeing improvement in our print trends, we've seen that three consecutive quarters. So the efforts, we're making there to harvest that that business in that cash flow.

Following our continued signs of improvement so we're optimistic about those being contributors to our overall improving trends, but more importantly, the digital advertising marketplace is very strong right now and as you heard we saw a five point improvement in the second quarter alone from the first quarter and so we expect a robust back half of the year.

<unk> continued signs of improvement so we're optimistic about those being contributors to our overall improving trends, but more importantly, the digital advertising marketplace is very strong right now and as you heard we saw a five point improvement in the second quarter alone from the first quarter and so we expect a robust back half of the year.

With regard to digital advertising really on the back of our large audiences and large page views.

And then very excitingly the underlying initiatives that we mentioned on the call that are really showing promising signs already both in the Dms business and the digital circulation business. We expect both of those to drive improvement in trends in the back half of the year and then.

Finally on revenue just the AI licensing deal, we announced yesterday the address USA deal, we announced a few weeks ago.

<unk> will start to contribute as the back half of the year goes on to revenue. So all of those things give us confidence that our Q3 revenue trends will improve versus Q2, two four will improve versus Q3, and then to answer the end of your question. There we expect to get revenues flat in the early stages.

<unk> will start to contribute as the back half of the year goes on to revenue. So all of those things give us confidence that our Q3 revenue trends will improve versus Q2, two four will improve versus Q3, and then to answer the answer to your question. There we expect to get revenues flat in the early stage.

Of 2026.

As of 2026.

And then finally.

And then finally on the strength in the back half of the year and for 2026.

On the strength in the back half of the year and for 2026.

Combined with the improving revenue trends, we also mentioned or announced this morning of $100 million cost reduction program that that's going to help lead to a much more meaningful EBITDA growth back half of this year next year as well as a really significant free cash flow growth we so.

Combined with the improving revenue trends, we also mentioned or announced this morning of $100 million cost reduction program that that's going to help lead to a much more meaningful EBITDA growth back half of this year and next year as well as really significant free cash flow growth we.

So we mentioned this morning in our guidance, we expect it to grow about 100% back half of this year.

Really strong growth again next year or so.

<unk> really strong growth again next year or so.

So positioned on both the revenue and the expense side to deliver the strong back half of the year and have that carry into 2026.

So positioned on both the revenue and the expense side to deliver the <unk>.

<unk> back half of the year and have that carry into 2026.

That's very helpful. Maybe closer to you on that point.

Sorry can you can provide any more details around the cost reduction program in terms of what we're kind of things you might be reducing or cutting back on.

Yes, absolutely. This is Tricia I'll walk you through that so the cost program is really focused on the areas that we can automate areas that we can outsource.

Yes, absolutely. This is Tricia I'll walk you through that so the cost program is really focused on the areas that we can automate areas that we can outsource and then areas, where we may still have some duplication in our organization and the focus is on places, where we can add variability to our cost structure.

And then areas, where we may still have some duplication in our organization and our focus is on places where we can add variability to our cost structure, that's especially true as it relates to our friends and our commercial businesses, where we think we have a lot of opportunity to capture that long tail that Mike was talking about that exists for our revenue and for our profitability.

Especially true as it relates to our friends and our commercial businesses, where we think we have a lot of opportunity to capture that long tail that Mike was talking about that exists for our revenue and for our profitability and you heard me mention that we're shuttering two of our largest print facilities. Later this year and we'll also continue to move some of our products to mail delivery where it.

And you heard me mentioned that we're shuttering two of our largest print facilities. Later this year and we're also continuing to move some of our products email delivery, where it makes economic sense.

It makes economic sense.

And then payroll is going to be a component of this but we're really focused on the areas that are ripe for automation and then the areas that we can leverage AI to improve the processes and the workflows that we have in the organization. So we believe that these changes are really intention all theyre really methodical and what they allow us to do is they really committed to our.

Products, we get to say really committed to our content.

That leads to our commitment to our overall growth so.

That leads to our commitment to our overall growth.

That's very helpful.

Recent headlines recently about publisher audience and traffic.

Funding because search in Google searches spending most of the traffic.

Funding because search in Google searches spending most of the traffic is not sending them to drive it back to content sites I'm curious what your experience has been on your side.

Is not something that drive them back to content sites I'm curious what your experience has been on your side.

Sure. It's Kristen I'll take this one Mike if you don't mind I think this is a Greg. This is a great question Liana I think despite this backdrop I think what you can see in our numbers is that we're continuing to grow we continue to have one of the largest digital audiences and we are consistently generating at least 1 billion page views.

Sure. It's Kristen I'll take this one Mike if you don't mind I think yes. This is a Greg. This is a great question Liana I think despite this backdrop I think what you can see in our numbers is that we're continuing to grow we continue to have one of the largest digital audiences and we are consistently generating at least 1 billion page views.

As per month every month, and we are growing year over year, So our audience and page view growth show that we are not seeing declining trends and I think that's the result of a planning. It's the result of a proactive strategy and we're leaning into automation and diversification as we lessen our Roe.

Clients on Google, So we focused on growing referrals from Facebook and Instagram and read it and threats.

But we also see that our service journalism, our connect teams on really deepening engagement in that.

That has a direct positive impact on the number of people who come to us directly.

I would also say here Giuliano that we have not buried in our head in the sand. We are we're using technology to block unauthorized scraping from AI bots, and you know as the industry adopts it over time, we can create a new marketplace for publishers and as Mike mentioned earlier.

I would also say here giuliana that we have not buried in our head in the sand. We are we're using technology to block unauthorized scraping from AI bots, and you know as the industry adopts it over time, we can create a new marketplace for publishers and as Mike mentioned earlier.

Our partnership with Perplexity is an absolutely Fantastic example of this we are compensated for our content, we receive attribution and we share in the advertising dollars.

I think the potential to be disruptive, but we're being proactive we're being strategic in our approach and we think it actually has the potential to be highly beneficial in the long term as well so I hope that helps Joanna.

That is very helpful. I appreciate it.

I'm curious if there is there any updates on the antitrust.

Antitrust case with Google.

Yes.

Thanks for that.

The various AD tech cases that are out there continuing to move forward positively in our in our view.

The various AD tech cases that are out there continuing to move forward positively.

Our view.

Just just as a reminder for backdrop and.

Just just as a reminder for backdrop.

In April the judge ruled in favor of the Doj on all publisher.

The judge ruled in favor of the Doj on all publisher.

Facing conduct claims that the Doj brought to trial. So that was that was a positive development for us.

Since that division decision, both the Doj and Google have submitted proposed remedies.

<unk> Division decision, both the Doj and Google have submitted proposed remedies.

That remedies hearing is now scheduled for September with a ruling is expected actually later this year. So that's also a very positive development.

Theres other another big cases, Texas, which has I think 17 states attached to it in that trial scheduled for Q3 is actually been pushed to Q4 <unk>.

Theres other another big cases, Texas, which has I think 17 states attached to it.

That trial scheduled for Q3 is actually been pushed to Q4.

Simply because they want to see the Doj remedies trial. We're hearing happened first so we do expect that trial to start in the fourth quarter.

And then with regard to our case, we do expect that our case will be.

And then with regard to our case, we do expect that our case will.

<unk> scheduled the trial date will be set and it will be in 2026, we're not exactly sure when yet, but we think it is getting closer now.

Reschedule the trial date will be set and it will be in 2026, we're not exactly sure when yet, but we think it is getting closer now.

It will happen next year or so.

Really we are we remain very confident in.

In our case and with how things are progressing in that.

In our case and with how things are progressing in.

That actually believed that the broader developments are all moving in the right direction as well. So so overall seeing positive movement and we remain very confident in our position.

And actually believe that the broader developments are all moving in the right direction as well. So so overall seeing positive movement and we remain very confident in our position.

That's very helpful.

And I guess.

On the digital side the digital side.

On the digital side.

With the changes you've made so.

With the changes you've made.

It's just part of our customer acquisition strategy. When do you think youll return to year over year growth for digital subscriber revenue.

If you have a customer acquisition strategy. When do you think youll return to year over year growth for digital subscriber revenue.

Christian again here.

Listen.

The way to think about this is that we are being much more intentional in our acquisition strategy, because we want to ensure that our base of subscribers are sustainable and that it's predictable.

The way to think about this is that we are being much more intentional in our acquisition strategy, because we want to ensure that our base of subscribers are sustainable and that it's predictable, but really most importantly that it's profitable.

Most importantly that it's profitable and our experience is showing that both those low introductory offers.

Experience is showing that both those low introductory offers and this is new.

Network wide pricing actions may lead to more elevated churn. So we step back a bit from both of these practices and we're leaning into the value of our local news subscription, which then can be the foundation for what we're calling stacked products also.

We're utilizing more stable levers like annual offer strategy freezing more strategic pricing and we believe in addition to that we will be able to capture the dollars that were coming to us from high churn subscribers like people, who onboard it through those offers like one dollar for six months by offering those same casual readers.

And we believe in addition to that we'll be able to capture the dollars that were coming to us from high churn subscribers like people, who onboard it through those offers like one dollar for six months by offering those same casual readers pay per article options.

Pay per article options.

And there were positive signs in the corner that the strategy is targeting to take hold so we grew digital only ARPA sequentially. We also grew at year over year and this is the first sequential growth since Q3 of 'twenty four.

There were positive signs in the corner that the strategy is targeting to take hold so we grew digital only ARPA sequentially. We also grew at year over year and this is the first sequential growth since Q3 of 'twenty four.

We expect to.

So we expect to.

We expect all of that really to lead to sequential growth in the third and the fourth quarters and we see overall growth next year.

That's right.

That's what I want me one last one.

One last one.

Yes, yes, yes.

It's very good to see that progressing.

Content partnership announcements.

So there's a lot of news out there and a lot of articles talking about Joe Joseph things on here.

On the industry.

Thanks, a lot.

It seems to be a lot more focus on AI platform signing content deals I'm curious on your side, if you're seeing any trends or any.

More focus on AI platform, signing content deals I'm curious on your side, if you're seeing any trends or any.

Any changes in go.

<unk> or the willingness of it platforms to come to the table and negotiate potential.

How do you partner skills.

Partnership deals.

Yes.

Great question.

Actually we do we do think there's kind of a momentum swing now more towards publishers and.

It's not just.

It's not just <unk>.

Publisher speak or publishers talking their book, we're now seeing.

Publisher speak or publishers talking their book, we are now seeing.

A variety of technology companies, who also are.

Taking the view that.

Taking the view that that.

<unk>.

Unauthorized use of copyright protected content is not right and these companies are putting their money to work to help develop technologies that allow for the blocking complete blocking of AI scrapers stand there are technology companies that are now.

The authorized use of copyright protected content is not right and these companies are putting their money to work to help develop technologies that allow for the blocking complete blocking of AI scrapers stand there are technology companies that are now Cree.

Creating marketplaces for the fair licensing.

Licensing of <unk>.

Content for <unk> and things of that nature.

So an example is our partnership with Snowflake, where were now on their platform for all of their customers who are working on AI.

So an example is our partnership with Snowflake, where now on their platform for all their customers who are working on AI.

Models and they have access to our content through fair licensing deals perplexity as an example, now.

Our partnership we've developed we are talking to cloud for flare and we have a partnership with SaaS Lee on the technology side that allow us to do proper blocking now.

Of our partnership we've developed we are talking to cloud for flare and we have a partnership with SaaS Lee on the technology side that allow us to do proper blocking now.

Of authorized scrapers and all of that is kind of creating a momentum shift towards having more conversations now with the AI companies that that actually do need our content, especially as.

Unauthorized scrapers and all of that is kind of creating a momentum shift towards having more conversations now with the AI companies that that actually do need our content, especially as.

AI morphs.

Ben to answer search business, where real time updated information is that much more necessary. So.

I wouldn't say that you know.

I wouldn't say that.

It's.

Youre going to see a flurry of deals in the next 30 days, but there's definitely a very momentous shifts happening moving towards <unk>.

Youre going to see a flurry of deals in the next 30 days, but there's definitely a very momentous shifts happening moving towards.

Content creators and AI platforms coming together to figure out fair deals. So we're encouraged by that.

Content creators and AI platforms coming together to figure out fair deals. So we're encouraged by that and.

I would say over the next <unk>.

I would say over the next.

<unk> months is as we finish this year and get into next year, we hope there's quite a bit quite a few more deals to do.

12 months.

We finished this year and get into next year.

We hope theres quite a bit quite a few more deals to do.

That's very helpful. I really appreciate the time.

That's very helpful. I really appreciate it.

I will jump back in queue.

And then I will jump back in the queue.

Thanks.

Your next question for today is from Matt Condon with citizens.

Thank you so much for taking my questions. My first one is just on digital advertising revenue understood. It was page view growth programmatic revenue and direct sales that really drove the upside in the quarter, but can you maybe just dig in on each one of those where there are certain formats that outperforms or different product releases that you guys did in the quarter that really true.

Rove drove that improvement.

He drove drove that improvement.

Yeah.

Yes.

This is theresa good morning.

A few things that I think you've heard Chris then talk about the consistent pace of growth that we've had and the way that where we're focused in and in tune with the engagement and the.

Two things I think you've heard Chris then talk about the consistent pace of growth that we've had.

That's where we're focused in and in tune with the engagement and the and the propensity of our of our customers and our readers and so that's really driving our programmatic revenue as we continue to increase our page views year over year, one of the things that we're really starting to see hub take hold is the strength of our national brand.

And the propensity of our customers and our readers and so that's really driving our programmatic revenue as we continue to increase our page views year over year, one of the things that we're really starting to see hub take hold is the strength of our national brand and that we have a very brand safe platform, we have an incredibly.

And that we have a very brand safe platform, we have an incredibly.

And diverse portfolio and audience, reaching 180 million uniques, and so we're really starting to see and I think we're at early stages and the benefit of our national brand and some of the larger deals that where we're seeing come into our pipeline and take hold so I think youre going to see more of that as folks really start to see the bone.

Wide and diverse portfolio and audience, reaching 180 million uniques and so we're really starting to see and I think we're at early stages and the benefit of our national brand and some of the larger deals that where we're seeing come into our pipeline and take hold so I think youre going to see more of that as folks really start to see.

Instead of the USA today network brand and so that's having an impact in our digital advertising as well.

The benefit of the USA today network brand and so that's having an impact.

Our digital advertising as well.

Hey, Matt This is Mike I would add one more thing this is similar to what we're seeing.

And the AI landscape, we're also seeing momentum in.

The AI landscape, we're also seeing momentum.

<unk> been in the country.

Coming from the advertising agency side towards.

Maybe moving back to journalism as a place to to advertise because the rois so healthy.

And there's been a movement away from that over the last 20 years as everyone knows is.

And there's been a movement away from that over the last 20 years as everyone knows.

The technology and the Internet has exploded, but there is a stacked well very well known company has put a lot of money behind research that is demonstrating that actually the ROI.

Technology and the Internet has exploded, but there is a stacked well very well known company has put a lot of money behind research that is demonstrating that actually the ROI is one of the best compared to where where national advertisers are advertising today.

As one of the best compared to World, where national advertisers are advertising today.

There is there are others in the industry or others in the advertising ecosystem that are now not just us talking about the benefit of of advertising on our platform, but there are others, who control budgets and control spend that are putting money to work on research that are showing that there is actually.

So there is there are others in the industry or others in the advertising ecosystem that are now not just us talking about the benefit of of advertising on our platform, but there are others, who control budgets and control spend that are putting money to work on research that are showing that there is actually.

A really good ROI.

They really good ROI.

Our publisher platform. So I think that's going to lead to much more significant Nash.

<unk> publisher platform. So I think that's going to lead to much more significant.

National advertising opportunities in 2026, and I think we'll be able to get into.

Lot more advertisers budgets as a result of that work and and US continuing to tell our story and develop our brands. So.

We're quite encouraged by both the very robust.

We're quite encouraged by both the.

Robust.

Advertising marketplace in the country combined with.

Our reach and our audience and our scale and the data we have on our audience combined with the third leg being being that there is momentum out there in the advertising ecosystem towards moving back to journalism into publishers.

Great. That's very helpful. And then I wanted to ask just on the Dms business. Obviously, there is signs of improving trends.

Great there and I know the strategy is shifting there, but maybe just dig in on what is actually taking place in the strategy both from a sales perspective, and bringing new clients into the Dms portfolio, but also just what youre doing from a product perspective, maybe just digging in on each one of those things.

Yes, I'll start with your second question first.

Yeah I'll start with your second question first on the product perspective, So we still see that search is a very important piece of the advertising.

On a product perspective, so we still see that search is a very important piece of the advertising.

Advertisers' budget and we've been doing a lot of work to improve that product we've implemented AI smart bidding for first time of our search customers and that's lowering the cost of acquisition for them, that's improving the number of leads that they're getting.

Advertisers' budget and we've been doing a lot of work to improve that product we've implemented AI smart fitting for our first time of our search customers and that's lowering the cost of acquisition for them, that's improving the number of leads that they're getting.

Also completed in Q2, our CRM integration.

And that's been great on the search front as well as it allows for much more targeted.

<unk>.

Much more fine tuned targeting for our customers and so they're seeing better results. There is also a much stickier experience as <unk>.

Much more fine tune targeting for our customers and so they're seeing better results. There is also a much stickier experience as you bring somebody CRM into our platform and then I'm sure you've seen that we released the voice isn't on our dash product in Q2.

Bringing somebody CRM into our platform and then I'm sure you've seen that we released.

Isn't on our dash product in Q2, and that's had really great early reviews from our customers who are using that and it really allows them to use our voice agents to connect with the leads that are coming in.

<unk> had really great early reviews from our customers, who are using that and it really allows them to use our voice agents to connect with the leads that are coming in the things that they don't have the capacity to get to so there's a lot under work underway on the product both on the core platform side.

They don't have the capacity to get to so there's a lot under work underway on the product both on the core platform side.

And on continued.

And on a continue.

Continued updates to dash, so a lot of positive momentum there as we go into the second half of the year and then as we're bringing in new customers onto our platform we have been working.

Continued updates to dash, so a lot of positive momentum there as we go into the second half of the year and then as we're bringing in new customers onto our platform.

<unk> been working.

We've been talking about this and we've been working for over a year now to continue to expand the verticals that we are experts and that continues to be a focus for us.

We've been talking about this and we've been working for over a year now to continue to expand the verticals that we are experts and that continues to be a focus for us. We're also bringing together a bit more closely our media sales teams and our Dms sales teams to really open up.

We're also bringing together a bit more closely our media sales teams and our Dms sales team to really open up.

Our reach and our scale of the customers that were were reaching in the customers that are or have access to our <unk> portfolio. So I think both of those things are going to create a lot of momentum for us and we're already seeing that in Q2, but into the back half of the year.

Our reach and our scale of the customers that were.

<unk>, reaching end customers that are or have access to our downtown portfolio. So I think both of those things are going to create a lot of momentum for us and we're already seeing that in Q2, but into the back half of the year.

Matt I think one of the simplest way to think about it as the new products. We are developing that are focused on leading to two.

So Matt I think one of the simplest way to think about it as the new products, we are developing that.

We are focused on leading to two.

Higher ROI for our own customers. So more leads more conversions and more business for them, but we're developing products that are not just enabling better search results, but are integrating us more with the customer so that we become more sticky and that's kind of what Tricia socgen.

Sure.

Higher ROI for our own customers. So more leads more conversions and more business for them, but we are developing products that are not just enabling better search results, but are integrating us more with the customers. So that we become more sticky and that's kind of what Tricia is talking about so the CRM.

So the CRM integration not only do we improve the ROI for our customer.

Integration not only do we improve the ROI for our customer.

Proving our retention would that would those customers, but we just become more sticky because of the integration of our products with the customer and then the second thing that we're really trying to do which is to simplify it as we're trying to help our customers follow up on every lead.

Right now three out of every 10 leads that come to customers through search never get followed up on that.

Right now three out of every 10 leads that come to customers through search never get followed up on that so were with our AI voice agent in our on our AI product Dash, we're actually allowing our customers to follow up on 10 out of 10 leads and so follow up on leads set appointments do all of that work for our.

So were with our AI voice agent and are on our AI product dash, we're actually allowing our customers to follow up on 10 out of 10 leads and so follow up on leads set appointments do all of that work for our customer and then we become much more sticky in their ROI improves because they are now following.

<unk> and then we'd become much more sticky in their ROI improves because they are now following up on 10 out of 10 leads so simple way to do it as we are developing products that not only improve ROI, but makes us more sticky with the client because we're integrated with them both from a CRM perspective endo lead follow up perspective.

On 10 out of 10 leads so simple way to do it as we are developing products that not only improve ROI, but makes us more sticky with the client because we're integrated with them both from a CRM perspective, Randall lead follow up perspective.

Great and maybe just last one for me just on affiliate revenue I know there was the changes last quarter from Google that impacted the business and we just are we over that at this point is that just is that in the rearview mirror and now is it just just to go forward or just what context can you give from what happened in Q2.

Context can you gave and what happened in Q2.

Yes, I'd say, it's pretty much in the rearview mirror, we still have affiliate partnerships.

But we create more of the content and we're still generating revenues from that business, but it's not the same business that we had a year ago before the Google manual actions and so as we said on the call we're focused on.

Different verticals, now and bringing new partnerships and look to address USA, where where we have addressed USA is actually a bigger opportunity than any affiliate deal we have ever signed.

Different verticals, now and bringing new partnerships and let's address USA, where.

We have addressed USA is actually a bigger opportunity than any affiliate deal we had ever signed and so we're turning our attention actually to those kinds of deals moving away from the affiliate deals.

So we're turning our attention actually to those kinds of deals moving away from the affiliate deals.

Very helpful. Thank you so much.

Thanks, Matt.

We have reached the end of our question and answer session and I will now turn the call back over to Mike for closing remarks.

We have reached the end of the question and answer session and I will now turn the call back over to Mike for closing remarks.

Thanks.

So as you heard today, we've got a lot to be excited about as we enter the second half of the year. We're very optimistic about how things are going really across the board that I just want to recap a few of those things that leave those as takeaways for you.

So as you heard today, we got a lot to be excited about as we enter the second half of the year. We're very optimistic about how things are going really across the board that I just want to recap a few of those things that leave those as takeaways for you.

First we are seeing positive results from all of the actions that will.

First we are seeing positive results from all of the actions that we are.

That are improving our trends for both the Dms business and the digital only subscription business.

Also our digital advertising results were solid we saw nice improvement in the quarter and we see that improvement continuing into the back half of the year.

Overall, we're projecting 3% to 5% digital revenue growth.

It's off of a down two eight in the second quarter and we will end the year with about 50% of total revenue coming from digital.

It's off of a down two eight in the second quarter and we will.

And the year with about 50% of total revenue coming from digital.

Our new cost reduction program positions us for for adjusted EBITDA growth in the back half of 2025 and for full year 2026.

We see strong free cash flow growth, both for 2025 and 2026 debt.

Debt repayment has been strong we know we noted we paid back $100 million in the first half of the year. Our leverages declining we will continue to work on Delevering and debt repayment.

And a couple of our new deals that we announced recently was address USA and <unk> to add high margin revenues to our portfolio will start to see revenues during the back half of the year from those deals.

And a couple of our new deals that we announced recently with the dress USA in perplexity, They add high margin revenues to our portfolio will start to see revenues during the back half of the year from those deals.

And we are actively embracing technology to block the ice scrapers that don't have licensing deals with us.

And we are joining AI marketplaces, such as snowflake to offer our content at fair value. So we will have to be optimistic about them a lot of exciting developments in.

We're really looking forward to the back half of this year and thanks, Paul Thanks, everybody for joining the call. This morning, and we look forward to updating you on all of our progress when we get together again in October thanks.

This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.

We will follow the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded I will now like to turn the conference over to your host Matt Esposito head of Investor Relations you may begin.

Yeah.

Navigate 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 and our full year 2025 business outlook before we begin. Please let me remind you that this call is being recorded in addition, certain statements made during this call are.

Call, including same store revenues free cash flow total adjusted EBITDA adjusted EBITDA margin and adjusted net income attributable taking that you can find reconciliations of our non-GAAP measures to the most comparable U S. GAAP measures in the earnings supplement lastly, I would like to remind you that nothing on this call constitutes an offer to sell or solicitation of offers to purchase.

<unk> and <unk> in net securities the webcast and audio cast of a copyrighted material of Gannett and may not be duplicated reproduced or rebroadcast without our prior written consent with that I would like to turn the call over to Mike Reed Gannett's, Chairman and CEO.

Thank you Matt good morning, everyone.

The second quarter reflects continued progress across most all facets of our strategy.

During the call. This morning, you'll hear a lot about the sequential improvements in our financial results from the first quarter to the second quarter.

As we mentioned last quarter 2025 will unfold as the year of two halves and we are now beginning to see that shift take place.

While the first half of the year didn't fully meet our expectations momentum is building across key areas of the business.

And you'll hear today about the operational and strategic initiatives that are improving our current trends and positioning us for stronger performance in the second half of the year.

Stronger performance will also be driven by our recently announced $100 million cost reduction program and the strategic AI content licensing agreement, we announced yesterday with perplexity.

Tricia will walk through details later in the call, but a few key highlights I want to address upfront. This morning that we expect in the second half of the year.

Those include.

Same store digital revenue growth between three and 5% year over year.

Meaningful total adjusted EBITDA growth compared to the prior year.

And then free cash flow growth of over 100% versus the prior year.

We are seeing our key financial metrics move in the right direction, we saw that in Q2 and I'll run through a few of those in a second.

We are also seeing that momentum and improvement carry into the third quarter, which we believe positions us well for the back half of the year.

Looking at Q2, we drove sequential improvement across our key financial metrics. These include.

Total adjusted EBITDA of $64 $2 million, reflecting a sequential increase of 27% with.

We generated $17 6 million in free cash flow representing sequential growth of 73%.

We repaid $23 $4 million of debt in the second quarter.

And for the first six months, we have repaid close to $100 million of debt.

Same store revenue trends also improved sequentially driven by momentum across our digital portfolio.

Three of our four digital revenue categories posted sequential growth and our overall digital revenue performance strengthened as the quarter progressed.

Separately digital advertising revenues grew 4% year over year as compared to being down slightly in the first quarter.

Realizing these improvements in the second half of the year is critical to our ongoing transformation.

And we believe our progress and current trends position us to accomplish this.

Further in the third quarter, we began implementing a cost reduction program targeting approximately 100 million in annualized expense reductions.

And as a result, we expect total adjusted EBITDA to grow for the full year of 2025 over 2024 with meaningful growth in the back half of the year.

And we believe this cost reduction program positions us to deliver solid total adjusted EBITDA growth again in 2026 and will lead to continued expansion of adjusted EBITDA margins.

We expect the majority of these efficiencies will be implemented by the end of the third quarter with a small portion of expected to carry into the fourth quarter.