[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) Lee Enterprises reported strong Q3 2025 results, with 92% sequential Adjusted EBITDA growth and digital revenue comprising 55% of total operating revenue Q3 2025 Key Financial Metrics | Metric | Value (million USD) | Year-over-Year Change | | :--- | :--- | :--- | | Total Operating Revenue | $141 | -6.2% | | Total Digital Revenue | $78 | +3% | | Digital-Only Subscription Revenue | $23 | +13% | | Adjusted EBITDA | $15 | +1% | | Net Loss | $2 | Improvement from $3.7M loss | - Digital revenue now represents **55%** of the company's total operating revenue, underscoring the ongoing strategic shift to digital[1](index=1&type=chunk)[2](index=2&type=chunk) - Digital-only subscribers reached **670,000**, with same-store digital subscription revenue growing **16% YoY**, driven by higher average rates[1](index=1&type=chunk)[2](index=2&type=chunk) - Amplified Digital Agency revenue grew by an industry-leading **10%** on a same-store basis over the prior year, reaching **$29 million**[1](index=1&type=chunk) - The company achieved significant reductions in print-related expenses and corporate overhead, which contributed to the expansion of Adjusted EBITDA[1](index=1&type=chunk) [Financial Condition](index=2&type=section&id=Financial%20Condition) The company reported $455 million in outstanding debt with favorable terms, with recent payments funded by organic free cash flow Debt and Liquidity as of June 29, 2025 | Metric | Value (million USD) | | :--- | :--- | | Principal Amount of Debt | $455 | | Cash on Balance Sheet | $14 | | Debt, Net of Cash | $441 | - The company's debt is under a Credit Agreement with BH Finance, featuring a **25-year maturity**, a **9.0% fixed annual interest rate**, no fixed principal payments, and no financial performance covenants[3](index=3&type=chunk) - As a result of a cyber event, interest and rent payments for March, April, and May 2025 were waived and added to the principal. However, since May 2025, all principal and interest payments have been satisfied through organic free cash flow[4](index=4&type=chunk)[1](index=1&type=chunk) - Fiscal year 2025 outlook includes up to **$5 million** in capital expenditures and **$3 million to $9 million** in cash paid for income taxes. No material pension contributions are expected[4](index=4&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated statements of operations, including revenue, expenses, net loss, and a detailed revenue composition [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Q3 2025 reported total operating revenue of $141.3 million, an operating income of $4.7 million, and a net loss of $1.7 million, showing improvement year-over-year Q3 Statement of Operations Highlights (in thousands) | Account | Q3 2025 (thousand USD) | Q3 2024 (thousand USD) | | :--- | :--- | :--- | | Total Operating Revenue | $141,294 | $150,578 | | Total Operating Expenses | $137,318 | $146,775 | | Operating Income | $4,662 | $4,925 | | Net Loss | $(1,676) | $(3,691) | | Loss Per Share (Basic) | $(0.31) | $(0.73) | Nine Months Statement of Operations Highlights (in thousands) | Account | Nine Months 2025 (thousand USD) | Nine Months 2024 (thousand USD) | | :--- | :--- | :--- | | Total Operating Revenue | $423,235 | $452,806 | | Operating Loss | $(3,193) | $8,206 | | Net Loss | $(29,915) | $(14,094) | | Loss Per Share (Basic) | $(5.16) | $(2.68) | [Revenue Composition](index=6&type=section&id=Revenue%20Composition) Q3 2025 Total Digital Revenue grew to $77.9 million, partially offsetting print declines, with digital now representing 55% of total operating revenue Q3 Revenue Composition (in thousands) | Revenue Type | Q3 2025 (thousand USD) | Q3 2024 (thousand USD) | % Change | | :--- | :--- | :--- | :--- | | Total Digital Revenue | $77,907 | $75,754 | +2.8% | | Total Print Revenue | $63,387 | $74,824 | -15.3% | | **Total Operating Revenue** | **$141,294** | **$150,578** | **-6.2%** | Nine Months Revenue Composition (in thousands) | Revenue Type | Nine Months 2025 (thousand USD) | Nine Months 2024 (thousand USD) | % Change | | :--- | :--- | :--- | :--- | | Total Digital Revenue | $223,843 | $217,406 | +3.0% | | Total Print Revenue | $199,392 | $235,400 | -15.3% | | **Total Operating Revenue** | **$423,235** | **$452,806** | **-6.5%** | [Reconciliation of Non-GAAP Financial Measures](index=6&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section reconciles non-GAAP financial measures such as Adjusted EBITDA, Cash Costs, and Same-store revenues to their GAAP equivalents [Adjusted EBITDA Reconciliation](index=6&type=section&id=Adjusted%20EBITDA%20Reconciliation) Q3 2025 Adjusted EBITDA was $14.9 million, a slight increase year-over-year, reconciled from net loss with various non-cash and non-operating adjustments Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Description | Q3 2025 (thousand USD) | Q3 2024 (thousand USD) | | :--- | :--- | :--- | | Net Loss | $(1,676) | $(3,691) | | Adjustments (Net) | $16,620 | $18,515 | | **Adjusted EBITDA** | **$14,944** | **$14,824** | [Cash Costs Reconciliation](index=7&type=section&id=Cash%20Costs%20Reconciliation) Q3 2025 Cash Costs decreased by 7% to $128.0 million, derived by adjusting total operating expenses for non-cash items and certain restructuring costs Reconciliation of Operating Expenses to Cash Costs (in thousands) | Description | Q3 2025 (thousand USD) | Q3 2024 (thousand USD) | | :--- | :--- | :--- | | Operating Expenses | $137,318 | $146,775 | | Adjustments (Non-Cash) | $(9,362) | $(9,224) | | **Cash Costs** | **$127,956** | **$137,551** | [Same-Store Revenue Reconciliation](index=8&type=section&id=Same-Store%20Revenue%20Reconciliation) Q3 2025 same-store total operating revenue was $141.3 million, with digital subscription revenue growing strongly by 15.6% year-over-year Same-Store Revenue Highlights (in thousands) | Revenue Category | Q3 2025 (thousand USD) | Q3 2024 (thousand USD) | % Change | | :--- | :--- | :--- | :--- | | Same-store, Digital Subscription Revenue | $23,482 | $20,322 | +15.6% | | Same-store, Digital Advertising Revenue | $49,097 | $49,597 | -1.0% | | Same-store, Total Operating Revenue | $141,297 | $149,235 | -5.3% | [Company Information & Disclosures](index=4&type=section&id=Company%20Information%20%26%20Disclosures) This section provides a corporate overview of Lee Enterprises, outlines key business risks, and defines non-GAAP financial measures used in the report - Lee Enterprises is a subscription and advertising platform and a leading provider of local news, serving **72 markets** in **25 states**[6](index=6&type=chunk) - Key business risks include managing declining print revenue, changes in advertising demand, significant cyber security breaches, and competition[10](index=10&type=chunk) - The report utilizes non-GAAP measures like Adjusted EBITDA, Cash Costs, and Same-store revenues to provide a clearer understanding of the company's core operating performance, excluding unusual or non-cash items[16](index=16&type=chunk)

Financial Data and Key Metrics Changes - The third quarter total operating revenue was $141 million, showing a year-over-year trend consistent with the second quarter results [14] - Digital revenue reached $305 million on a trailing twelve-month basis, with a goal of achieving $450 million by 2028 [10][19] - Cash costs decreased by 7% compared to the same quarter last year, with expectations of finishing the fiscal year with cash costs between $522 million and $532 million, representing a 3% to 5% decline over the prior year [16] Business Line Data and Key Metrics Changes - Digital subscription revenue grew 16% year-over-year on a same-store basis, driven by a 28% increase in ARPU [8][15] - Amplify Digital agency revenue grew 10% on a same-store basis over the prior year, indicating a return to double-digit growth [11][15] - Total digital revenue in the third quarter was $78 million, representing a 4% increase on a same-store basis [15] Market Data and Key Metrics Changes - Local advertising revenue trends improved significantly, with a year-over-year trend favorable by seven points [7] - Digital revenue now constitutes 55% of overall revenue, highlighting the strength of the digital business [11] Company Strategy and Development Direction - The company is focused on a three-pillar digital growth strategy aimed at achieving $450 million in digital revenue by 2028 [9][10] - The launch of AI-powered products is expected to drive lead capture, customer engagement, and business automation, enhancing the product catalog [8][14] - The company aims to replace print revenue with growing and profitable digital revenue to achieve long-term sustainability [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in reaching long-term unit targets despite recent challenges, including the cyber event [9] - The company anticipates continued growth in digital subscriptions and new AI revenue streams to drive momentum [21] - Management emphasized the importance of enhancing operational rigor without compromising quality to strengthen long-term positioning [16] Other Important Information - The company executed approximately $40 million in annualized cost reductions aimed at lowering costs across non-core print operations [16] - The credit agreement with Berkshire Hathaway includes favorable terms, allowing the company to focus on executing its strategy [17] Q&A Session Summary Question: How is Lee addressing the shift in how readers consume news? - Management highlighted the competitive advantage of their asset portfolio and the focus on enhancing digital user experience and expanding local content to address changes in consumer behavior [24][25]

Financial Performance - Q3 FY2025 - Total operating revenue reached $141 million, a decrease of 6% year-over-year (YoY), or 5% on a same-store basis[13] - Total digital revenue amounted to $78 million, reflecting a 4% YoY increase[13] - Print revenue totaled $63 million, experiencing a 15% decline[13] - Adjusted EBITDA stood at $15 million, showing a 1% YoY growth[14] - Total cash costs were $128 million, a reduction of 7% YoY[14] Digital Revenue Growth - Digital-only subscription revenue was $23 million, up by 13% YoY, or 16% on a same-store basis[6] - Amplified Digital® Agency revenue reached $29 million, an increase of 9% YoY, or 10% on a same-store basis[6] - Digital advertising revenue was $49 million, a decrease of 2% YoY, or 1% on a same-store basis[6] - The company expects to drive more than $450 million of digital revenue by 2028[4] Strategic Initiatives and Outlook - The company is implementing a Three Pillar Digital Growth Strategy to transform from a print-centric to a digital-centric business[3] - The company anticipates YoY growth in the low single digits for both total digital revenue and adjusted EBITDA in the second half of FY25[24]

Core Insights - Lee Enterprises reported a significant growth in Adjusted EBITDA of 92% over Q2, indicating strong operational performance and effective cost management [1][2] - Total Digital Revenue reached $78 million, accounting for 55% of total revenue, reflecting the company's successful transition to a digital-first model [1][6] - Digital-only subscription revenue increased by 16% year-over-year, showcasing the growing demand for digital content among consumers [1][6] Financial Performance - Total operating revenue for the quarter was $141 million, with a net loss of $2 million and Adjusted EBITDA of $15 million, a 1% increase compared to the previous year [6][15] - Operating expenses decreased by 6% to $137 million, while cash costs fell by 7% to $128 million, demonstrating effective cost control measures [6][17] - The company achieved organic free cash flow growth, fulfilling all mandatory principal and interest payments through cash from operations since May 2025 [2][10] Digital Growth - Digital advertising and marketing services revenue totaled $49 million, representing 74% of total advertising revenue [6][16] - Amplified Digital Agency revenue grew by 10% year-over-year, highlighting the company's competitive position in the digital marketing space [1][2] - The number of digital-only subscribers reached 670,000, contributing $23 million in revenue, a 13% increase over the prior year [6][16] Debt and Cash Flow - The company has $455 million in outstanding debt with favorable terms, including a fixed annual interest rate of 9.0% and no fixed principal payments [5][10] - Cash on the balance sheet totaled $14 million, resulting in a net debt of $441 million after accounting for cash [10][20] - Capital expenditures for the quarter were $1 million, with expectations of up to $5 million for FY25 [10][20]

Company Overview - Lee Enterprises, Incorporated is a major subscription and advertising platform providing high-quality local news and information in 72 markets across 25 states [3] - The company operates daily newspapers, rapidly growing digital products, and nearly 350 weekly and specialty publications [3] - Key markets include St. Louis, MO; Buffalo, NY; Omaha, NE; Richmond, VA; Lincoln, NE; Madison, WI; Davenport, IA; and Tucson, AZ [3] Upcoming Events - Lee Enterprises has scheduled an audio webcast and conference call for August 7, 2025, at 9 a.m. Central Time to discuss preliminary results for the quarter ended June 29, 2025 [1] - A news release will be issued before the market opens on the same day [1] - The live webcast can be accessed via the Investor Relations section of Lee's website and will be available for replay 24 hours later [2]

Core Insights - Nathan Bekke has been appointed as the Chief Operating Officer of Lee Enterprises, succeeding his role as Operating Vice President and Vice President of Audience Strategy [1][2] - Kevin Mowbray, the President and CEO of Lee, highlighted Bekke's significant contributions to the company's digital transformation and revenue growth, particularly in digital-only audience expansion [2] - Bekke expressed his commitment to accelerating Lee's digital transformation and building on the company's progress as a digital-first organization [2] Company Overview - Lee Enterprises is a major subscription and advertising platform, providing local news and information through daily newspapers and nearly 350 weekly and specialty publications across 72 markets in 25 states [6] - The company is focused on delivering valuable local news and information to its communities, with key markets including St. Louis, MO; Buffalo, NY; Omaha, NE; and Richmond, VA [6] - Lee's common stock is traded on NASDAQ under the symbol LEE [6]

Core Viewpoint - The approval of Arizona's application for primacy to oversee underground injection wells marks a significant milestone for the state's energy sector, allowing for direct regulation of these wells used in oil, gas, and helium production [2][4]. Group 1: Regulatory Developments - The U.S. Environmental Protection Agency (EPA) Administrator Lee Zeldin approved Arizona's application, empowering the state to regulate underground injection wells under the Safe Drinking Water Act [1][2]. - Desert Mountain Energy Corp. expressed gratitude to Administrator Zeldin and local congressmen for their support in achieving this regulatory milestone [4]. Group 2: Company Developments - Desert Mountain Energy is optimistic about the future of domestic energy and helium production in Arizona, emphasizing its commitment to sustainable resource development [5]. - The company recently closed the fourth tranche of its non-brokered private placement, raising an additional C$10,000, bringing the total raised to C$981,500 through the issuance of 3,926,000 Units [6][7]. Group 3: Company Profile - Desert Mountain Energy Corp. focuses on the exploration, development, and production of helium, hydrogen, natural gas, and condensate, aiming to supply critical elements for renewable energy and high technology industries [8].

Core Insights - Lee Enterprises, Inc. is hosting a "Draw Off" event series featuring editorial cartoonists Phil Hands and Adam Zyglis alongside D.J. Coffman from VeeFriends, aimed at blending local news with a broader digital audience through creativity and storytelling [1][3][4] Event Details - The events will be streamed live on Facebook, with the first session on May 20, 2025, featuring Phil Hands, and the second on May 22, 2025, featuring Adam Zyglis [2][4] - Each session will last one hour, allowing viewers to engage by commenting and voting while the cartoonists create new sketches in real time [2][3] Company Background - Lee Enterprises serves 72 markets across 25 states, focusing on quality journalism and digital innovation to provide valuable content and advertising solutions [5] - VeeFriends is an entertainment company that creates a universe of over 250 characters, promoting storytelling and community-driven experiences [6]

Revenue Performance - Total operating revenue was $137.4 million in the 2025 Quarter, down $9.2 million, or 6.3%, compared to the 2024 Quarter[68]. - Total operating revenue for the six months ended March 30, 2025, was $281.9 million, down $20.3 million, or 6.7%, compared to the 2024 Period[91]. - Subscription revenue decreased to $129.9 million in the 2025 Period, a decline of 7.6%, despite a 14.2% growth in digital-only subscription revenue, which now totals 728,000[93]. - Advertising and marketing services revenue totaled $60.5 million in the 2025 Quarter, down 5.7% compared to the 2024 Quarter[69]. - Advertising and marketing services revenue totaled $127.1 million in the 2025 Period, down 5.9% compared to the 2024 Period, with digital advertising representing 71.4% of total revenue[92]. Digital Revenue Growth - Digital subscription revenue grew 17.4% to $23.8 million in the 2025 Quarter, with digital-only subscribers totaling 728,000[70]. - Total digital revenue reached $72.6 million in the 2025 Quarter, an increase of 2.5%, representing 52.8% of total operating revenue[72]. - Total digital revenue increased by 3.0% to $145.9 million in the 2025 Period, representing 51.8% of total operating revenue[95]. Operating Expenses - Total operating expenses decreased by 6.1% to $143.0 million in the 2025 Quarter, with significant reductions in newsprint and ink costs by 25.3%[74][75]. - Total operating expenses were $292.1 million in the 2025 Period, a decrease of 3.2% compared to the 2024 Period[97]. Net Loss and Financial Performance - Net loss for the 2025 Quarter was $12.0 million, with diluted loss per share at $2.07, compared to a net loss of $11.6 million and diluted loss per share of $2.06 in the 2024 Quarter[86]. - Net loss for the 2025 Period was $28.2 million, with diluted loss per share of $4.87, compared to a net loss of $10.4 million and diluted loss per share of $1.94 in the 2024 Period[110]. Cash Flow and Liquidity - Cash required for operating activities totaled $8.1 million in the 2025 Period, a decrease of $11.4 million compared to cash provided by operating activities of $3.3 million in the 2024 Period[121]. - Cash provided by investing activities totaled $3.2 million in the 2025 Period, compared to $0.2 million in the 2024 Period, including proceeds from the sale of non-core real estate[123]. - The company's liquidity totaled $4.7 million on March 30, 2025, with plans to reduce operating and capital spending to maintain sufficient liquidity[128]. Restructuring Costs - Restructuring costs increased by 57.4% to $6.5 million in the 2025 Quarter, primarily due to costs associated with recovering from a Cyber Incident[77]. - Restructuring costs increased by $3.3 million in the 2025 Period, primarily due to costs associated with recovering from the Cyber Incident and ongoing business transformation efforts[100]. Interest Expense - Interest expense decreased by 2.6% to $10.0 million in the 2025 Quarter, attributed to a lower average outstanding balance on the Term Loan[82]. Capital Expenditures - The company anticipates capital expenditures of up to $7.0 million in 2025 will be funded from internally generated funds[124].

[Financial Highlights and Management Commentary](index=1&type=section&id=Financial%20Highlights%20and%20Management%20Commentary) Lee Enterprises reported **$73 million** in digital revenue (53% of total), with digital-only subscriptions up **20% YoY**, despite a **$2 million** cybersecurity incident - Digital transformation continues with digital-only subscription revenue up **20% YoY** (same-store) and Amplified Digital Agency revenue up **9% YoY** (same-store)[1](index=1&type=chunk) - A February cybersecurity incident incurred **$2 million** in restoration costs and negatively impacted advertising revenue and digital subscriber growth[1](index=1&type=chunk) - The company launched an AI Enablement solution for local businesses in March 2025 to prepare them for the AI transformation of advertising[2](index=2&type=chunk) - Executed **$40 million** in annualized cost reductions to improve free cash flow in the second half of FY25[3](index=3&type=chunk) Q2 FY2025 Key Metrics | Metric | Value | | :--- | :--- | | Total Operating Revenue | $137 million | | Total Digital Revenue | $73 million (53% of total) | | Digital-Only Subscription Revenue | $24 million (+17% YoY) | | Digital-Only Subscribers | 728,000 | | Net Loss | $12 million | | Adjusted EBITDA | $8 million | [Financial Condition](index=2&type=section&id=Financial%20Condition) As of March 30, 2025, Lee Enterprises reported **$453 million** in debt and **$5 million** in cash, with its lender waiving interest payments to enhance short-term liquidity Debt and Liquidity as of March 30, 2025 | Metric | Value | | :--- | :--- | | Principal Debt Outstanding | $453 million | | Cash on Balance Sheet | $5 million | | Net Debt | $448 million | | FY25 Expected CapEx | Up to $7 million | - The company's sole lender, BH Finance, waived March and April 2025 interest and rent payments to provide short-term liquidity, with the waived amounts added to the principal balance[6](index=6&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents the company's consolidated financial performance, detailing revenue, expenses, net loss, and the evolving digital-to-print revenue mix [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Lee Enterprises reported **$137.4 million** in total operating revenue for Q2 2025, a decrease from the prior year, resulting in a net loss of **$12.0 million** Q2 FY2025 vs Q2 FY2024 Statement of Operations (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Operating Revenue | $137,380 | $146,550 | | Total Operating Expenses | $143,038 | $152,308 | | Operating Loss | ($4,503) | ($4,552) | | Net Loss | ($12,015) | ($11,636) | | Loss Per Share (Basic) | ($2.07) | ($2.06) | [Digital / Print Revenue Composition](index=6&type=section&id=Digital%20%2F%20Print%20Revenue%20Composition) Digital revenue increased to **$72.6 million** in Q2 2025, now comprising **53%** of total operating revenue, while print revenue declined significantly Q2 Revenue Composition (in thousands) | Revenue Stream | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Digital Revenue | $72,556 | $70,773 | +2.5% | | Total Print Revenue | $64,824 | $75,777 | -14.5% | | **Total Operating Revenue** | **$137,380** | **$146,550** | **-6.3%** | - Digital Only Subscription Revenue was a key growth driver, increasing **17.4%** to **$23.8 million** from **$20.3 million** YoY[14](index=14&type=chunk) [Reconciliation of Non-GAAP Financial Measures](index=7&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides reconciliations for key non-GAAP financial metrics, including Adjusted EBITDA, Cash Costs, and Same-store Revenues, to GAAP measures [Reconciliation of Adjusted EBITDA and Cash Costs](index=7&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA%20and%20Cash%20Costs) Adjusted EBITDA for Q2 2025 significantly decreased to **$7.8 million** from **$15.1 million** YoY, while Cash Costs slightly decreased to **$131.2 million** Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Loss | ($12,015) | ($11,636) | | **Adjusted EBITDA** | **$7,768** | **$15,061** | Cash Costs Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Operating Expenses | $143,038 | $152,308 | | **Cash Costs** | **$131,225** | **$133,259** | [Reconciliation of Same-store Revenues](index=8&type=section&id=Reconciliation%20of%20Same-store%20Revenues) Same-store total operating revenue decreased **5.3%** to **$137.4 million**, while same-store Digital Subscription Revenue grew strongly by **19.7%** Same-Store Revenue Growth (in thousands) | Revenue Stream (Same-Store) | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Digital Subscription Revenue | $23,789 | $19,880 | +19.7% | | Digital Advertising Revenue | $43,938 | $45,050 | -2.5% | | Total Operating Revenue | $137,357 | $144,966 | -5.3% | [Company Information and Disclosures](index=4&type=section&id=Company%20Information%20and%20Disclosures) This section outlines Lee Enterprises' business as a subscription and advertising platform, details forward-looking statement risks, and defines key non-GAAP financial measures - Lee Enterprises is a subscription and advertising platform and a leading provider of local news, serving **72 markets** in **25 states**[8](index=8&type=chunk) - The report contains forward-looking statements subject to risks including declining print revenue, cybersecurity breaches, and changes in advertising demand[9](index=9&type=chunk)[12](index=12&type=chunk) - Non-GAAP measures like Adjusted EBITDA and Cash Costs are used by management to assess operating performance by excluding unusual, infrequent or non-cash items[17](index=17&type=chunk)