USA Today NYSE: TDAY lowered its full-year revenue outlook after changes in consumer search behavior weighed on indirect digital advertising, even as the publisher reported growth in subscriptions and direct-sold ads during the third quarter of 2026.
The company now expects same-store revenue to decline by a mid-single-digit percentage in 2026, compared with its prior forecast for a low-single-digit decline. It also expects adjusted EBITDA and free cash flow to fall for the full year, despite a projected sequential improvement in the fourth quarter.
Third-quarter revenue fell 7.4% year over year to $519.2 million, or 5.8% on a same-store basis. Adjusted EBITDA declined 36% to $36.6 million, while the company reported a net loss of $4.6 million, an improvement of $34.6 million from a year earlier.
Search changes pressure advertising
Chairman and CEO Mike Reed said changes in search behavior have particularly affected indirect advertising, which includes programmatic advertising and sponsored content recommendations. That business declined 32% year over year in the third quarter and now represents about $100 million in annualized revenue, or less than 5% of the company’s total business, he said.
Reed said search traffic declined year over year in both the second and third quarters but did not fall further sequentially. The company recorded 161 million unique visitors in the third quarter, up from 158 million in the second.
Digital advertising revenue overall fell 13.9%. CFO Trisha Gosser attributed the decline to lower page views associated with search changes, the loss of a programmatic advertising partner in the second quarter and lower revenue from third-party vendors following Google’s spam policy.
During the question-and-answer session, Gosser said indirect revenue deteriorated further year over year even as the audience stabilized. Direct-sold advertising improved, she said, but not enough to offset the indirect decline. The timing of anticipated AI licensing deals also contributed to the guidance change, she said.
Reed said direct-sold digital advertising returned to growth in the third quarter and that he expects stronger growth in the fourth. The company is focusing on known users, video advertising and branded content designed to be discoverable by AI tools.
Subscriptions and licensing grow
Total digital revenue fell 5.1% to $249.3 million, accounting for 48% of company revenue. USA Today now expects digital revenue to reach 50% of the total in 2027 rather than 2026.
Digital-only subscription revenue rose 5.3% to $46 million, its third consecutive quarter of year-over-year growth. Average revenue per digital-only user increased 23% to a record $10.82.
Kristin Roberts, president of USA TODAY Media, said the company had prioritized subscriber quality and moved away from heavily discounted offers. Its 2027 focus is to return to subscriber volume growth while maintaining the gains in average revenue per user.
Digital other revenue, which includes AI partnerships, content licensing and syndication, rose 24.8% to $21.3 million. Reed said the company expects to announce at least one, and possibly two, AI licensing agreements before year-end, although he acknowledged a broader slowdown in deals across the industry.
Cost cuts and share repurchases
USA Today implemented a $100 million annualized cost-reduction program in late September and early October, including workforce reductions. Gosser said the third quarter reflected only a partial month of savings, with a more substantial impact expected in the fourth quarter.
Management expects the largely permanent cuts to support adjusted EBITDA and free cash flow growth in 2027. Gosser said the company also sees further savings opportunities through vendor consolidation, outsourcing, print operations and automation.
The company ended the quarter with $952.9 million in total debt and $68.2 million in cash. It paid down $17.7 million of debt during the quarter, while free cash flow totaled $4.3 million.
Reed said debt reduction remains the top capital-allocation priority, but the company also plans to repurchase shares in the fourth quarter because management believes they are undervalued. Approximately $97 million remains available under its repurchase authorization. USA Today also secured access to up to $50 million in incremental debt financing from funds managed by affiliates of Apollo Global Management, designated for fourth-quarter share repurchases.
Google antitrust case advances
Reed said the company’s antitrust claims against Google are moving toward a jury trial scheduled for April 5, 2027, after the judge ruled against most of Google’s summary judgment motion.
The company’s damages calculation made public in the ruling totaled $901 million through 2024, Reed said. USA Today expects to update the figure through the trial date; the calculation does not include potential treble damages.
About USA Today (NYSE:TDAY)
USA TODAY is a national news and media brand owned by Gannett Co, Inc It publishes news and analysis through its website, mobile applications and print newspaper, covering national and international events as well as politics, sports, business, entertainment, lifestyle and consumer topics.
Founded in 1982, USA TODAY was developed as a broadly accessible national newspaper and has expanded into a digital-first media operation. Its content is distributed through online articles, video, podcasts, newsletters and other digital formats, in addition to its print edition.
USA TODAY also operates within Gannett's broader network of local newspapers and digital publications, serving readers across the United States.
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