Group 1 - Gannett Co., Inc. (NYSE: GCI) is undergoing multiple changes aimed at enhancing its operations and increasing profitability [1]

Group 1 - The largest contributor during the quarter was Gannett (GCI), which increased by 24%, recovering part of its first quarter drawdown [2] - Gannett is considered significantly mispriced in the market [2]

Part I. Financial Information [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited Q2 2025 financial statements report total assets decreased to $2.01 billion, liabilities to $1.77 billion, and net income significantly improved to $78.4 million, despite a 9% revenue decline [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $88,542 | $106,299 | | Total current assets | $392,840 | $425,895 | | Total assets | $2,010,187 | $2,040,147 | | Total current liabilities | $540,953 | $545,602 | | Total debt (Long-term + Convertible) | $919,571 | $1,005,511 | | Total liabilities | $1,773,598 | $1,887,513 | | Total equity | $236,589 | $152,634 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $584,861 | $639,840 | $1,156,434 | $1,275,601 | | Net income (loss) attributable to Gannett | $78,391 | $13,748 | $71,058 | $(71,020) | | Diluted income (loss) per share | $0.42 | $0.09 | $0.40 | $(0.50) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Cash provided by operating activities | $55,863 | $57,576 | | Cash provided by (used for) investing activities | $27,804 | $(16,266) | | Cash used for financing activities | $(102,163) | $(43,524) | | Decrease in cash, cash equivalents and restricted cash | $(20,016) | $(1,818) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail Q2 2025 revenue disaggregation, showing a decline to $584.9 million, with $12.3 million in restructuring costs and total debt reduced to $988.9 million, while Domestic Gannett Media remains the largest segment Q2 2025 Revenue by Segment and Type (in thousands) | Revenue Type | Domestic Gannett Media | Newsquest | Digital Marketing Solutions | Consolidated Total | | :--- | :--- | :--- | :--- | :--- | | Digital | $161,026 | $20,165 | $117,478 | $265,435 | | Print and commercial | $278,273 | $41,153 | $— | $319,426 | | **Total Segment Revenues** | **$439,299** | **$61,318** | **$117,478** | **$584,861** | Integration and Reorganization Costs (in thousands) | Period | Severance-related | Other Reorganization | Total | | :--- | :--- | :--- | :--- | | **Q2 2025** | $8,204 | $4,114 | $12,318 | | **Q2 2024** | $4,429 | $15,346 | $19,775 | Debt Summary (in millions) | Debt Instrument | Carrying Value (June 30, 2025) | Carrying Value (Dec 31, 2024) | | :--- | :--- | :--- | | 2029 Term Loan Facility | $750.7 | $830.1 | | 2031 Notes | $216.3 | $215.9 | | 2027 Notes | $21.9 | $33.8 | | **Total Debt** | **$988.9** | **$1,079.8** | - In April 2025, the company repurchased **$14.0 million** principal amount of its 2027 Notes for **$15.0 million** in cash, financed by drawing from its 2029 Delayed Draw Facility[50](index=50&type=chunk)[76](index=76&type=chunk) - On February 28, 2025, the company sold the Austin American-Statesman, recognizing a pre-tax gain of approximately **$20.8 million**[122](index=122&type=chunk)[123](index=123&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20(MD%26A)) MD&A highlights a 9% Q2 2025 revenue decrease driven by print decline, a 5% digital revenue drop, and an 8% reduction in operating costs, with net income improving due to tax benefits and asset sales, and **$97.9 million** debt prepaid [Business Trends and Recent Developments](index=31&type=section&id=Business%20Trends%20and%20Recent%20Developments) - Key business trends include the ongoing decline of print advertising and circulation, macroeconomic pressures on ad spending, reliance on third-party technology platforms, and the increasing pace of change due to artificial intelligence (AI)[132](index=132&type=chunk)[133](index=133&type=chunk) - The Detroit Joint Operating Agreement (JOA) will not be renewed and is set to end in December 2025[134](index=134&type=chunk) - New U.S. tax legislation, the "One Big Beautiful Bill Act," signed in July 2025, is being evaluated for its impact on interest deductibility and R&D expensing[137](index=137&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Consolidated Results Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total revenues | $584,861 | $639,840 | (9)% | | Digital revenues | $265,435 | $278,378 | (5)% | | Print and commercial revenues | $319,426 | $361,462 | (12)% | | Operating costs | $359,448 | $391,474 | (8)% | | Net income attributable to Gannett | $78,391 | $13,748 | 470% | Segment Adjusted EBITDA (in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Domestic Gannett Media | $43,224 | $52,898 | (18)% | | Newsquest | $14,894 | $14,138 | 5% | | Digital Marketing Solutions | $11,498 | $11,773 | (2)% | | **Total Segment Adjusted EBITDA** | **$69,616** | **$78,809** | **(12)%** | - The significant increase in net income for Q2 2025 was primarily driven by an **$87.5 million** benefit for income taxes, compared to a **$26.8 million** benefit in Q2 2024[143](index=143&type=chunk)[161](index=161&type=chunk) [Key Performance Indicators](index=47&type=section&id=Key%20Performance%20Indicators) Key Performance Indicators (as of June 30) | KPI | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Digital-only paid subscriptions (thousands) | 1,723 | 2,034 | (15)% | | Domestic Gannett Media Digital-only ARPU | $7.92 | $7.70 | 3% | | DMS Core platform average customer count (thousands) | 13.8 | 14.7 | (6)% | | DMS Core platform ARPU | $2,830 | $2,777 | 2% | [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) - Cash provided by operating activities was **$55.9 million** for the first six months of 2025, a slight decrease from **$57.6 million** in the prior-year period[217](index=217&type=chunk) - The company's total outstanding debt had a carrying value of **$988.9 million** as of June 30, 2025, with **$97.9 million** prepaid under its 2029 Term Loan Facility in the first half of 2025[220](index=220&type=chunk)[224](index=224&type=chunk) - No shares were repurchased under the **$100 million** Stock Repurchase Program during Q2 2025, leaving approximately **$96.9 million** authorized[230](index=230&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures were reported for Q2 2025 compared to the 2024 Annual Report on Form 10-K - No material changes have occurred in the quantitative and qualitative disclosures about market risks since the company's 2024 Form 10-K[234](index=234&type=chunk) [Item 4. Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during Q2 2025 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[235](index=235&type=chunk) - No material changes were made to the company's internal control over financial reporting during Q2 2025[236](index=236&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, including a civil action filed against Google and Alphabet Inc. on June 20, 2023, alleging anticompetitive ad-tech practices - The company has filed a lawsuit against Google and Alphabet Inc. for alleged anticompetitive practices in the ad-tech market, with an unpredictable outcome[106](index=106&type=chunk) [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the 2024 Annual Report on Form 10-K have occurred - No material changes to the risk factors described in the 2024 Form 10-K have occurred[240](index=240&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, the company did not repurchase equity securities in the open market, but withheld 95,000 shares from employees at **$3.39** per share for tax obligations - The company did not repurchase any shares of its common stock under its publicly announced repurchase program during the three months ended June 30, 2025[241](index=241&type=chunk)[242](index=242&type=chunk) Issuer Purchases of Equity Securities (Q2 2025) | Period | Total shares purchased (a) | Average price paid per share (a) | | :--- | :--- | :--- | | April 2025 | 3,000 | $3.02 | | May 2025 | 0 | $— | | June 2025 | 92,000 | $3.40 | | **Total** | **95,000** | **$3.39** | (a) Represents shares withheld to cover employee tax-withholding obligations upon vesting of restricted stock awards

Gannett (GCI) Q2 2025 Earnings Call July 31, 2025 08:30 AM ET Speaker0Greetings. Welcome to the Gannett Company Q2 twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded.I would now like to turn the conference over to your host, Matt Esposito, Head of Investor Relations. You may begin.Speaker1Thank you. Good morning, everyone, and thank you for joining our cal ...

1 Disclaimer and Notes In General. This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with any such verbal or written comments, is referred to herein as the "Presentation." Gannett Co., Inc. is referred to in this Presentation as "Gannett," "we," "us," "our" or the "Company". Cautionary Statement Regarding Forward-Looking Statements. Certain items in this Presentation may constitute forward-looking statements within the mean ...

Gannett Announces Second Quarter 2025 Results, Updated Business Outlook & $100 Million Cost Reduction Program NEW YORK, NY — July 31, 2025 — Gannett Co., Inc. ("Gannett", "we", "us", "our", or the "Company") (NYSE: GCI) today reported its financial results for the second quarter ended June 30, 2025. "In the second quarter, we delivered sequential improvement across our key financial metrics, including Total Adjusted EBITDA with margins expanding to 11% from approximately 9%, net income attributable to Ganne ...

Group 1 - Gannett (NYSE: GCI) is viewed as a deeply discounted turnaround opportunity, with the market pricing in failure while overlooking execution potential [1] - If management successfully continues deleveraging and meets digital revenue targets, there is a credible path for a 50-70% re-rating through modest multiple expansion [1] - The analysis emphasizes the importance of financial trends, profit growth, and institutional capital accumulation in identifying high-growth, underanalyzed companies [1] Group 2 - The research approach integrates both fundamental and technical analysis, focusing on indicators such as relative strength, trading volume shifts, and accelerating profit growth [1] - The goal is to identify strong growth stocks before they gain widespread attention, enhancing market understanding and providing actionable investment insights [1]

Financial Performance - Total revenues for Q1 2025 were $571.6 million, a decrease of 10.1% compared to $635.8 million in Q1 2024[13] - Operating income for Q1 2025 was $9.8 million, a significant improvement from an operating loss of $49.9 million in Q1 2024[13] - Net loss attributable to Gannett was $7.3 million, compared to a net loss of $84.8 million in the prior year, reflecting a 91.4% reduction in losses[13] - Adjusted EBITDA for the three months ended March 31, 2025, was $50.509 million, down from $57.589 million in the same period of 2024, representing a decline of 12.1%[103][104] - The company recognized a pre-tax gain of approximately $20.8 million from the sale of the Statesman to Hearst Corporation on February 28, 2025[105] Revenue Breakdown - Digital revenues decreased to $250.4 million, down 6.4% from $267.5 million in the same period last year[13] - Print and commercial revenues fell by 12.8% to $321.2 million from $368.3 million year-over-year[13] - Digital revenues accounted for $250.394 million, which is 43.8% of total revenues for Q1 2025, compared to $267.499 million or 42.0% in Q1 2024[28][29] - Revenues generated from international operations comprised 11.5% of total revenues for Q1 2025, compared to 11.0% in Q1 2024[28][31] - Digital marketing solutions brand, LocaliQ, contributed $108.709 million in revenue for Q1 2025, down from $117.045 million in Q1 2024[28][29] Cash Flow and Assets - Cash provided by operating activities was $23.3 million, slightly up from $22.5 million in Q1 2024[14] - The company reported a decrease in cash and cash equivalents to $85.9 million from $106.3 million at the end of 2024[11] - Total assets decreased to $1.95 billion as of March 31, 2025, down from $2.04 billion at the end of 2024[11] - Total liabilities decreased to $1.80 billion, down from $1.89 billion at the end of 2024[11] - The company’s total equity decreased to $149.6 million as of March 31, 2025, down from $152.6 million at the end of 2024[11] Debt and Interest - Total debt as of March 31, 2025, was $1.008 billion, down from $1.080 billion at the end of 2024, representing a decrease of 6.7%[41] - Interest expense for the three months ended March 31, 2025, was $20.1 million, significantly higher than $9.3 million in the prior year, marking a 116.2% increase[47] - The effective interest rate for the 2029 Term Loan Facility was 10.1% as of March 31, 2025[48] - The Company recognized a loss of $1.3 million on early extinguishment of debt due to prepayments on the 2029 Term Loan Facility[47] Operational Costs - Integration and reorganization costs for the three months ended March 31, 2025, amounted to $9.498 million, compared to $17.881 million in the same period of 2024[103][104] - The company recorded an impairment charge of approximately $1.9 million for the three months ended March 31, 2025, compared to $46.0 million in the prior year[118][119] - Corporate and other operating expenses decreased by 62% to $26.5 million for the three months ended March 31, 2025, compared to $70.0 million in the same period of 2024[191] Shareholder Information - The company did not repurchase any shares of Common Stock under the Stock Repurchase Program during the three months ended March 31, 2025, leaving approximately $96.9 million remaining authorized for repurchase[89] - The company does not currently pay a quarterly dividend and has restrictions on dividend payments due to the terms of its indebtedness[207] Taxation - The effective tax rate for the three months ended March 31, 2025, was 48.2%, compared to an effective tax rate of -13.5% for the same period in 2024[76] - The total amount of unrecognized tax benefits as of March 31, 2025, was approximately $43.6 million, an increase from $41.7 million as of December 31, 2024[79] Legal Proceedings - The company is involved in ongoing legal proceedings, including a civil action against Google for anticompetitive practices, but does not expect these to materially affect its financial position[95][96] Digital Strategy - The company is focused on a digital-first strategy to drive audience growth and engagement while diversifying revenue streams through its digital marketing solutions brand, LocaliQ[113]

Financial Data and Key Metrics Changes - Total operating revenues for Q1 were $571.6 million, a decrease of 10.1% year-over-year, or 7.7% on a same-store basis [31] - Adjusted EBITDA totaled $50.5 million, representing a margin of 8.8%, with a year-over-year decline in line with expectations [33] - The company reported a net loss of $7 million, an improvement of approximately $77 million compared to the previous year [35] - Free cash flow in Q1 totaled $10.2 million, growing 7.6%, with expectations for similar performance in Q2 [40][41] Business Line Data and Key Metrics Changes - Total digital revenues in Q1 were $250.4 million, down 6.4% year-over-year, representing approximately 44% of total revenues [36] - Digital-only subscription revenues exceeded $43 million, reflecting minor same-store growth, impacted by the sale of Austin and elevated customer churn [36] - Adjusted EBITDA for the Digital Marketing Solutions (DMS) segment totaled $8.5 million, with core platform revenue at $108.2 million [39] Market Data and Key Metrics Changes - The company experienced a slowdown in digital advertising trends, particularly in the UK market, affecting the NewsQuest segment [38] - The average monthly unique visitors reached 195 million, growing over 4% compared to the prior year [14] Company Strategy and Development Direction - The company aims to leverage its industry-leading scale and diverse digital businesses to capture long-term growth opportunities [11] - A key focus is on enhancing monetization opportunities through a unified content strategy and the launch of new platforms like Studio Nine [19] - The company is committed to reducing debt and improving its capital structure, with a target of repaying over $125 million in debt through various means [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the full-year 2025 business outlook, citing improving revenue trends and operational efficiencies [56] - The recent DOJ ruling against Google is seen as a positive development that could lead to a more equitable digital advertising marketplace [12][46] - Management noted that Q1 results were viewed as an anomaly, with expectations for stabilization and growth in digital revenues moving forward [36][68] Other Important Information - The company has made several changes to streamline its executive leadership team, resulting in a more cohesive structure and significant cost savings [35] - The company is focused on enhancing customer experience across its product suite, particularly in the DMS segment [29] Q&A Session Summary Question: Impact of DOJ case against Google - Management believes the ruling sets the stage for a more favorable ad marketplace, potentially leading to higher revenue shares for publishers [46][49] Question: Adjustments to affiliate revenue business - The company is working with affiliate partners to navigate changes and reenergize revenue growth through existing content [50][51] Question: Confidence in 2025 guidance - Management reaffirmed confidence in guidance, citing improvements in retention and diversified revenue base [56][57] Question: Digital subscription revenue trends - On a same-store basis, there was some growth in digital subscriptions, but impacted by revenue reversals [72][74] Question: Tools to aggregate budgets onto the platform - The company is leveraging relationships with advertisers and building out first-party data solutions to drive up CPM [78][79] Question: Status of non-strategic asset sales - The company has largely completed its real estate sales and does not feel pressured to sell any strategic assets [81][83]

Financial Data and Key Metrics Changes - Total operating revenues for Q1 were $571.6 million, a decrease of 10.1% year-over-year, or 7.7% on a same-store basis [31] - Adjusted EBITDA totaled $50.5 million, representing a margin of 8.8%, with a year-over-year decline in line with expectations [33] - The company reported a net loss of $7 million, an improvement of approximately $77 million compared to the previous year [35] Business Line Data and Key Metrics Changes - Total digital revenues in Q1 were $250.4 million, down 6.4% year-over-year, representing approximately 44% of total revenues [36] - Digital-only subscription revenues exceeded $43 million, reflecting minor same-store growth, impacted by elevated customer churn [36] - Adjusted EBITDA for the Digital Marketing Solutions (DMS) segment totaled $8.5 million, with core platform revenue at $108.2 million [39] Market Data and Key Metrics Changes - The company experienced a slowdown in digital advertising trends, particularly in the UK market, affecting the NewsQuest segment [38] - The average monthly unique visitors reached 195 million, growing over 4% compared to the prior year [14] Company Strategy and Development Direction - The company aims to leverage its industry-leading scale and diverse digital businesses to capture long-term growth opportunities [11] - A key focus is on enhancing monetization opportunities through a unified content strategy and the launch of new platforms like Studio Nine [19] - The company is committed to reducing debt and improving its capital structure, with expectations to repay over $125 million in debt through various means [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial objectives for 2025, despite a challenging economic backdrop [6] - The recent DOJ ruling against Google is seen as a positive development that could lead to a more equitable digital advertising marketplace [12] - Management noted that Q1 results were viewed as an anomaly, with expectations for improved revenue trends in the second half of the year [66] Other Important Information - The company made significant leadership changes, including the appointment of a new CFO, to strengthen financial and operational performance [10] - The company is focused on enhancing customer experience and retention through product development and marketing initiatives [28] Q&A Session Summary Question: Impact of DOJ case against Google - Management believes the ruling sets the stage for a more favorable ad marketplace, potentially increasing revenue shares for publishers [46] Question: Adjustments to affiliate revenue business - The company is working with affiliate partners to navigate changes and reenergize revenue growth through existing content [50] Question: Confidence in 2025 guidance - Management reaffirmed confidence in guidance, citing improvements in retention and operational efficiencies [56] Question: Digital subscription revenue trends - On a same-store basis, there was some growth in digital subscriptions, but impacted by revenue reversals [74] Question: Tools to aggregate budgets onto the platform - The company is leveraging relationships with advertisers and building out first-party data solutions to drive up CPM [80] Question: Status of non-strategic asset sales - The company has largely worked through its real estate portfolio and does not feel pressured to sell assets that could negatively impact the business [83]