Gannett Co., Inc. ((GCI)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Gannett Co., Inc. recently held an earnings call that reflected a generally positive sentiment, highlighting significant advances in digital revenue growth, audience expansion, and improved financial performance. However, the company also acknowledged ongoing challenges, such as declining operating revenues and the impact of external factors on their digital marketing solutions and partnerships.
Digital Revenue Growth
Gannett reported a commendable increase in total digital revenues, which rose by 5% to approximately $1.1 billion in 2024, now comprising 44% of the company’s total revenue, up from 39% the previous year. Looking forward, the company expects digital revenues to constitute 50% of total revenue by 2025, with an anticipated growth rate of 7% to 10% on a same-store basis.
Financial Performance Improvement
The company demonstrated notable financial performance improvements, marking the second consecutive year of increased adjusted EBITDA in 2024. Adjusted net income attributable to Gannett climbed to $25 million, a stark improvement from a net loss of $41 million the previous year, showcasing a $66 million turnaround.
Audience Growth
Gannett’s digital audience saw a substantial increase, reaching 200 million average monthly unique visitors in the third and fourth quarters. This figure represents a 7% rise compared to the previous year’s fourth quarter, indicating successful audience expansion efforts.
Debt Refinancing Success
The company successfully refinanced its debt, effectively simplifying its capital structure, extending the debt runway, and reducing the potential for future share dilution. This strategic financial move has contributed to strengthening Gannett’s balance sheet.
Video Content Expansion
Gannett achieved significant gains in video programming and views, particularly from major sporting events, and plans to further expand its video strategy in 2025.
Decline in Operating Revenues
Despite positive strides in other areas, Gannett experienced a 7.2% decrease in total operating revenues in the fourth quarter of 2024. Revenues declined by 5.5% on a same-store basis, highlighting an area of concern for the company.
Challenges in Digital Marketing Solutions
The company’s digital marketing solutions segment was adversely affected by macroeconomic conditions and increased customer churn, which hindered growth in this area.
Impact of Google’s Algorithm Changes
Changes in Google’s search policies and algorithms negatively impacted Gannett’s partnership revenue, underscoring the need for adaptability in the face of evolving digital market landscapes.
Forward-Looking Guidance
Looking ahead to 2025, Gannett provided optimistic guidance during its Q4 2024 earnings call. The company anticipates its third consecutive year of growth in adjusted EBITDA and free cash flow. A key focus will be driving digital revenue growth, projected at 7% to 10% on a same-store basis, with digital revenues expected to account for 50% of total revenue. The company is also targeting a positive inflection point for same-store revenue growth and plans to enhance its digital initiatives, including personalized consumer journeys and the expansion of digital advertising, subscriptions, e-commerce, and video content.
In summary, Gannett Co., Inc.’s latest earnings call highlighted a generally positive outlook with significant progress in digital revenue and audience growth, as well as improved financial performance. However, the company continues to face challenges such as declining operating revenues and external impacts on digital marketing solutions. With an optimistic guidance for 2025, Gannett aims to further strengthen its position in the digital landscape.
