Gannett(GCI) - 2024 Q4 - Annual Results

Digital Revenue Performance - Total digital revenues exceeded 45% of total revenues in Q4 2024, amounting to over $1.1 billion for the year, with a year-over-year increase of over 5%[3] - Digital-only subscription revenues grew by 17% to $49.0 million in Q4 2024[7] - Digital revenues increased to $280.4 million in Q4 2024, up 1.0% from $277.1 million in Q4 2023[17] - Digital revenues for the year ended December 31, 2024, increased by 5.1% to $1,103,651,000 compared to $1,050,370,000 in 2023[32] - Domestic Gannett Media's digital-only ARPU increased to $8.03 in Q4 2024, up 13.3% from $7.09 in Q4 2023[36] - Total Gannett's digital-only ARPU rose to $7.93 in Q4 2024, reflecting a 12.5% increase from $7.05 in Q4 2023[36] - Digital-only paid subscriptions for Domestic Gannett Media reached 1,953 thousand, a 2.1% increase from 1,912 thousand in 2023[36] - Newsquest's digital-only paid subscriptions surged by 32.5% to 110 thousand in Q4 2024 from 83 thousand in Q4 2023[36] - Total Gannett's digital-only paid subscriptions grew to 2,063 thousand, marking a 3.4% increase from 1,995 thousand in 2023[36] Financial Performance - Adjusted EBITDA for Q4 2024 totaled $78.2 million, reflecting a 5.5% increase, with an adjusted EBITDA margin of 12.6%, up 150 basis points[7] - Total revenues for Q4 2024 were $621.3 million, a decrease of 7.2% due to the sale or shutdown of non-strategic assets[7] - Net income attributable to Gannett for Q4 2024 was $64.3 million, representing a margin of 10.4%[7] - The net income attributable to Gannett for Q4 2024 was $64,319,000, up from a net loss of $22,892,000 in Q4 2023, representing a significant turnaround[28] - For the year ended December 31, 2024, Gannett reported a consolidated total adjusted EBITDA of $273,189,000, with an adjusted EBITDA margin of 10.9%[29] - The net income attributable to Gannett for the year ended December 31, 2024, was $(26,354,000), a decrease from $(27,791,000) in 2023[30] - The company reported a net income margin of 10.4% for Q4 2024, compared to a negative margin of 3.4% for Q4 2023, indicating a strong recovery[28] Cash Flow and Debt - Cash provided by operating activities is projected to grow by over 30% in 2025, while free cash flow is expected to increase by over 40% compared to the prior year[11] - As of December 31, 2024, the company had cash and cash equivalents of $106.3 million and total principal debt outstanding of $1,111.8 million[11] - Cash provided by operating activities for the year ended December 31, 2024, was $100.3 million, compared to $94.6 million in 2023[18] - Free cash flow for the year ended December 31, 2024, was $58,445,000, compared to $56,458,000 in 2023[31] - Gannett's interest expense for the year ended December 31, 2024, was $104,697,000, slightly down from $111,776,000 in 2023[29] Operational Metrics - Average monthly unique visitors reached 200 million in Q4 2024, a 7% increase year-over-year, with approximately 149 million from the U.S. media network[6] - The company expects total digital revenues to grow approximately 7%-10% on a same-store basis in 2025, aiming for digital revenues to constitute 50% of total revenues[11] - The average customer count for the core platform decreased to 13.9 thousand in Q4 2024, down 6.7% from 14.9 thousand in Q4 2023[36] - The core platform average customer count for the year ended December 31, 2024, was 14.3 thousand, a decline of 5.3% from 15.1 thousand in 2023[36] - Overall, Gannett's performance indicates a mixed trend in revenue and user growth, with digital ARPU showing positive growth while customer counts are declining[36] Asset and Liability Overview - Total assets decreased to $2.04 billion as of December 31, 2024, from $2.18 billion at the end of 2023[16] - Total liabilities increased slightly to $1.89 billion in 2024 from $1.86 billion in 2023[16] - Gannett's total equity fell to $152.6 million in 2024 from $317.3 million in 2023[16] - The company entered into an asset purchase agreement to divest the Austin American-Statesman, expected to close in Q1 2025[11] Management and Future Outlook - Management emphasizes the importance of non-GAAP measures in evaluating performance, results of operations, and financial position, despite their limitations[25] - The company expects to provide non-GAAP outlooks for Same store revenues, Adjusted EBITDA, and Free cash flow for the full year 2025, without factoring in future acquisitions or dispositions[27] - Integration and reorganization costs for the year ended December 31, 2024, totaled $66,155,000, compared to $24,468,000 in 2023[30]