Gannett’s Earnings Call: Mixed Outlook Amid Digital Growth

Gannett Co., Inc. ((GCI)) has held its Q1 earnings call. Read on for the main highlights of the call.

Gannett Co., Inc. recently held its earnings call, presenting a mixed outlook for the company. While there were notable achievements such as digital audience growth and debt reduction, the overall financial performance was tempered by declines in both total and digital revenues. The DOJ’s ruling against Google offers potential future advantages, but current headwinds in revenue streams pose immediate challenges.

Digital Audience Growth

Gannett reported a significant increase in its digital audience, attracting 195 million average monthly unique visitors, which marks a growth of over 4% compared to the prior year. This indicates a strong engagement with Gannett’s digital platforms, showcasing the company’s successful efforts in expanding its digital reach.

Debt Reduction

The company made substantial progress in strengthening its capital structure by aggressively reducing debt by approximately $75 million. Additionally, the repurchase of $14 million of 2027 convertible notes further reduced future dilution, demonstrating Gannett’s commitment to financial stability.

DOJ Ruling on Google

The recent DOJ ruling against Google for monopolistic practices in the digital advertising marketplace is expected to create a more equitable ad ecosystem. This development could significantly benefit Gannett by leveling the playing field in digital advertising.

Launch of Studio IX

Gannett launched Studio IX, a new sports vertical focusing on women’s sports. The initiative has shown early positive engagement and advertiser interest, highlighting Gannett’s strategic move to diversify its content offerings and capture new audience segments.

Decline in Total Operating Revenues

Total operating revenues saw a decline of 10.1% year-over-year, with same-store revenues decreasing by 7.7%. This decline was attributed to factors such as the sale of the Austin American-Statesman, posing challenges to Gannett’s revenue streams.

Challenges in Digital Revenues

Gannett faced a 6.4% decline in total digital revenues, or 3.8% on a same-store basis. This was impacted by larger-than-normal customer revenue reversals and Google’s manual actions, presenting hurdles in the digital revenue landscape.

Print Revenue Decline

Despite implementing improvement strategies, Gannett continues to face challenges in the print revenue environment. Ongoing efforts are required to stabilize subscriber bases and adapt to the changing media consumption landscape.

Forward-Looking Guidance

During the earnings call, Gannett provided forward-looking guidance, emphasizing a progressive improvement in financial performance throughout the year. The company reaffirmed its full-year 2025 business outlook, highlighting significant improvements in net income, free cash flow generation, and debt reduction. Gannett anticipates a return to growth in adjusted EBITDA and free cash flow over the second half of the year, driven by improving revenue trends and disciplined cost management. The company remains optimistic about capturing growth opportunities within the digital advertising ecosystem, especially following the federal court ruling against Google’s monopolistic practices.

In summary, Gannett’s earnings call presented a mixed picture, with significant achievements in digital audience growth and debt reduction, but challenges in revenue streams. The DOJ ruling against Google offers a potential future advantage, yet immediate challenges remain. Gannett’s strategic initiatives and forward-looking guidance reflect its commitment to navigating these challenges and capturing growth opportunities in the evolving digital landscape.