Gannett Announces Second Quarter 2023 Results

“We are pleased to report strong operational and financial results for the quarter. In the second quarter, Adjusted EBITDA grew by 40% year-over-year, reflecting a margin of approximately 11%, a sizable increase compared to the prior year’s margin of about 7%. Additionally, free cash flow increased by 189% year-over-year, while our strategic initiatives drove ongoing sequential improvements in same-store revenue trends. As a result, our total digital revenues returned to growth in the second quarter and account for nearly 40% of total revenues, representing an all-time high. We believe we are making great progress on our strategy, and our results signify a notable turning point in our business trajectory”, said Michael Reed, Gannett Chairman and Chief Executive Officer.

“In the second quarter, our digital businesses continued to deliver solid results. Digital-only subscription revenues experienced growth of 17% year-over-year on a same store basis, while our digital marketing solutions business achieved record high core platform revenues and ARPU, and sustained strong Adjusted EBITDA margins. We also repaid $15 million of debt, and combined with our improving Adjusted EBITDA performance, we materially reduced our first lien net leverage to 2.26x, while maintaining a healthy liquidity position.”

“We continue to build on the strong foundation we laid over the past year and our focus persists on profitability, digital revenue growth and continuing to enhance our balance sheet. We believe that focus is evident in our results, enabling us to raise our full year guidance again this quarter. We expect sustained improvement in same store revenue trends throughout the second half of the year, alongside more substantial growth in our digital revenue trends. Our strong performance expected in the latter half of this year also extends to Adjusted EBITDA and free cash flow, reinforcing our confidence in achieving a first lien net leverage well below 2.0x by the end of 2023.”

Second Quarter 2023 Highlights:

  • Total revenues of $672.4 million decreased 10.2% compared to the second quarter of 2022
    ◦ Same store revenues(1) decreased 8.6% compared to the second quarter of 2022, reflecting a sequential improvement of 70 basis points compared to the first quarter of 2023
  • Total digital revenues were $262.1 million, or 39.0% of total revenues, up 0.8% over the same period in the prior year on a same store(1) basis
  • Net loss attributable to Gannett of $12.7 million improved by $41.0 million versus the net loss attributable to Gannett of $53.7 million in the second quarter of 2022
  • Cash provided by operating activities of $46.1 million
  • Free cash flow(1) of $38.4 million, an increase of 188.8% compared to second quarter of 2022
    details at: https://s202.q4cdn.com/162862548/files/doc_financials/2023/q2/GCI-Q2-2023-EX-99-1-Earnings-Release-Final-Version.pdf
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