Core Points - Gannett Co., Inc. will release its third quarter 2025 financial results on October 30, 2025, before the New York Stock Exchange opens [1] - Management will host a conference call on the same day at 8:30 A.M. Eastern Time to discuss the financial and operating results for the period [1] - The earnings release will be available in the Investor Relations section of Gannett's website [1]

Core Points - Gannett Co., Inc. will release its third quarter 2025 financial results on October 30, 2025, before the New York Stock Exchange opens [1] - Management will host a conference call on the same day at 8:30 A.M. Eastern Time to discuss the financial and operating results [1] - The earnings release will be available on the Investor Relations section of Gannett's website [1]

Core Viewpoint - Major news publishers are facing lawsuits from Rich Media Club LLC, which claims that they are infringing on its patents related to online advertising tools [1][2][15]. Group 1: Legal Context - Rich Media Club has filed lawsuits against prominent publishers including Comcast, Guardian Media Group, Gannett, News Corp's UK publishing arm, and MediaNews Group [1]. - The lawsuits come at a time when web publishers are experiencing declining search traffic and a volatile advertising market, with potential legal costs exceeding $1 million for each publisher [2]. - Legal experts suggest that these lawsuits exhibit characteristics of a "patent troll," targeting end users rather than technology companies [3][4]. Group 2: Rich Media Club's Background - Rich Media Club was established in 2002 as an IP holding company for patents related to its adtech arm, RealVu, which focuses on ad viewability technologies [11]. - The company holds several US patents for ad viewability solutions, including "ad refreshing" and "lazy loading," which are commonly used by publishers to enhance user experience [12][14]. Group 3: Patent Enforcement and Legal Strategy - Rich Media Club has initiated a patent enforcement campaign since 2022, previously suing Duration Media for similar patent infringements [17]. - The company is seeking damages from the publishers, claiming lost profits or a "reasonable royalty" to be determined at trial [16]. - Rich Media Club prefers to enter licensing agreements rather than pursue litigation, although it has indicated a willingness to file further lawsuits if necessary [22]. Group 4: Industry Implications - The current trend of elevated refusals to institute inter partes reviews (IPRs) by the USPTO may lead to an increase in patent troll cases, as companies find it more challenging to contest patents [20][21].

Core Insights - Gannett Co., Inc. has launched DeeperDive, an industry-first Generative AI answer engine developed by Taboola, fully implemented on USA TODAY, reaching over 195 million monthly unique visitors [1][2][3] - The DeeperDive technology aims to enhance user engagement by providing clear, AI-generated responses enriched with relevant stories and context, addressing the challenges posed by traditional AI search engines [2][3] - This partnership is expected to create new revenue channels through stronger advertising CPMs and increased reader engagement, with plans to integrate purchasing opportunities tailored to user interests [2][3] Company Overview - Gannett Co., Inc. is a diversified media company focused on empowering communities through trusted journalism and digital marketing solutions, reaching approximately 140 million monthly unique visitors [5][7] - USA TODAY, a cornerstone of the national media landscape since 1982, serves as the foundation for Gannett's newsroom network, delivering high-quality content to a significant audience [6][7] - Taboola, the partner behind DeeperDive, provides performance advertising technology that reaches approximately 600 million daily active users, enabling businesses to achieve measurable outcomes [8]

Core Insights - Gannett Co., Inc. has launched DeeperDive, an industry-first Generative AI answer engine developed by Taboola, now fully implemented on USA TODAY, reaching over 195 million monthly unique visitors [1][2] - DeeperDive aims to enhance user engagement by providing AI-generated responses enriched with relevant stories and context, addressing the challenges posed by traditional AI search engines [2][3] - The partnership with Taboola is expected to drive stronger advertising CPMs and create new revenue channels through curated ads and increased reader engagement [2][3] Company Overview - Gannett Co., Inc. is a diversified media company focused on empowering communities through trusted journalism and digital marketing solutions, reaching approximately 140 million monthly unique visitors [5][7] - USA TODAY, a cornerstone of the national media landscape since 1982, serves as the foundation for Gannett's newsroom network, delivering high-quality content to an audience of about 73 million unique visitors each month [6][7] - Taboola specializes in performance advertising technology, reaching approximately 600 million daily active users and partnering with major publishers to enhance audience engagement and revenue [8]

NEW YORK, NY--(BUSINESS WIRE)--Gannett Co., Inc. (NYSE: GCI) today announced DeeperDive, an industry-first Gen AI answer engine created by Taboola, is now fully implemented on USA TODAY for an audience of over 195 million monthly unique visitors. After completing a successful beta, DeeperDive delivers the power of GenAI conversations directly on USA TODAY's platform for all users, tapping into years of proprietary, real-time, high-quality content created by journalists and editors at USA TODAY. ...

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

Financial Data and Key Metrics Changes - In Q2 2025, total revenues were $584.9 million, a decrease of 8.6% year over year, or 6.4% on a same-store basis, with a 130 basis point improvement from Q1 [33] - Total adjusted EBITDA was $64.2 million, reflecting a sequential increase of 27% [9][35] - Free cash flow totaled $17.6 million, representing sequential growth of 73% [9][42] - Net income was $78.4 million, significantly improved by a tax benefit of $87.5 million [36] Business Line Data and Key Metrics Changes - Digital revenues in Q2 were $265.4 million, down 4.6% year over year, but digital advertising returned to growth due to improved page views and programmatic revenue [36][37] - Digital-only subscription revenues totaled $42.7 million, with ARPU increasing to $7.79, showing sequential and year-over-year growth [37][38] - The Digital Marketing Solutions (DMS) segment saw total core platform revenue of $116.9 million, up 8.1%, and segment adjusted EBITDA of $11.5 million, reflecting growth of 35.8% [41] Market Data and Key Metrics Changes - The company maintained an audience of 181 million average monthly unique visitors, indicating strong reach and engagement [12] - Digital advertising revenues grew 4% year over year, with significant potential for further growth as the advertising marketplace stabilizes [10][13] Company Strategy and Development Direction - The company is focusing on a diversified digital revenue strategy, enhancing audience engagement, and leveraging AI for content licensing [7][24] - A $100 million cost reduction program is underway, targeting operational efficiencies and improved EBITDA margins [11][34] - The company aims to grow digital-only subscriptions intentionally, focusing on high-value subscribers and sustainable growth [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of 2025, expecting stronger performance driven by digital revenue growth and cost reduction initiatives [6][11] - The digital advertising marketplace is showing strength, with expectations for robust growth in Q3 and Q4 [50] - Management anticipates that revenue trends will stabilize and improve, aiming for flat revenues in early 2026 [51][44] Other Important Information - The company has implemented measures to protect its content from unauthorized AI scraping and is exploring partnerships for fair licensing [27][72] - Strategic hires in the entertainment sector are expected to enhance audience engagement and drive higher digital revenue [19] Q&A Session Summary Question: When do you think your revenues will turn flat? - Management expects revenues to stabilize in early 2026, driven by improvements in print trends and digital advertising [50] Question: Can you provide more details around the cost reduction program? - The program focuses on automation, outsourcing, and eliminating duplication, including the closure of two large print facilities [52][53] Question: What has been your experience with AI search and traffic? - The company continues to grow its digital audience and page views, leveraging automation and diversifying traffic sources [58][60] Question: Any updates on the ad tech antitrust case with Google? - Positive developments are noted in ongoing antitrust cases, with expectations for a ruling later this year [62][64] Question: When do you expect to return to year-over-year growth for digital subscriber revenue? - Management anticipates sequential growth in the third and fourth quarters, with overall growth expected next year [68] Question: Are you seeing trends in AI content partnership deals? - There is a momentum shift towards publishers, with more technology companies recognizing the need for fair licensing of content [71][73] Question: Can you dig into the digital advertising revenue drivers? - Growth was driven by page view increases, programmatic revenue, and the strength of the national brand [78][80] Question: What is happening with the DMS business strategy? - The strategy includes improving search capabilities and integrating CRM systems to enhance customer engagement and retention [83][87]