USA Today Q4 Earnings Call Highlights

Key Points

• USA Today reported its strongest profitability in four years with Adjusted EBITDA of $91.1 million (up ~17% YoY) and a 15.6% margin; total revenue fell 5.8% YoY but same-store trends improved and operating costs/SG&A declined about 9%.
• The digital mix reached an all-time high at >47% of revenue, driven by a 27.1% jump in “digital other” largely from AI licensing deals (including Meta and Microsoft); management expects to exceed a 50% digital mix in 2026 but cautioned AI revenue can be lumpy.
• Cash generation and deleveraging improved with Q4 free cash flow of $31.5M (FY free cash flow $64.2M), net debt of $887.1M and First Lien Net Leverage down to 2.4x2x leverage by year-end.

USA Today NYSE: TDAY management highlighted what it described as its strongest quarter in recent years during the company’s fiscal fourth-quarter 2025 earnings call, pointing to improving same-store revenue trends, expanding margins, growing digital mix, and stronger cash generation as key takeaways entering 2026.

Fourth-quarter results show improved trends and higher profitability

Chief Executive Officer Mike Reed said the company delivered its strongest profitability in four years, with total Adjusted EBITDA surpassing $90 million and increasing about 17% year-over-year. Chief Financial Officer Trisha Gosser reported fourth-quarter total Adjusted EBITDA of $91.1 million, up $13.0 million, and total Adjusted EBITDA margin of 15.6%, compared with 12.6% in the prior-year period.

Total revenue in the quarter was $585 million, down 5.8% year-over-year, or down 3.9% on a same-store basis. Gosser noted that same-store revenue trends improved by 290 basis points from the third quarter, which management attributed to renewed momentum across digital initiatives including AI licensing, more targeted subscription efforts, and strength in high-interest content verticals such as sports and entertainment.

Management also emphasized cost discipline. Gosser said operating costs and SG&A expenses declined 9% from the prior year quarter.

Digital mix reaches a new high as advertising and “digital other” rise

Reed said digital revenue represented more than 47% of total revenue, an all-time high, and he reiterated an expectation that the company could surpass a 50% digital mix during 2026. Gosser reported total digital revenues of $277.5 million in Q4, up 5.6% sequentially and up slightly on a same-store basis.

Digital advertising revenue increased 1.8% year-over-year, marking the third consecutive quarter of growth. Gosser attributed the improvement primarily to better sell-through and stronger yields as sales teams leveraged the USA TODAY co-brand to attract national advertisers and deliver scaled audiences.

“Digital other” revenue—which includes digital content syndication, affiliate, content, and AI partnerships and licensing—grew 27.1% year-over-year and rose by approximately $10 million versus Q3. Gosser said the increase reflected the Meta agreement and a shift of revenue from Perplexity into the fourth quarter, while cautioning that AI-related revenue recognition can be variable based on deal structures.

Subscription strategy shifts toward higher ARPU; engagement initiatives expand

Management detailed progress from changes made early in 2025 to the digital-only subscription strategy. Reed said the company experienced pressure on volume and revenue earlier in the year but saw “early signs” in Q3 that strengthened in Q4.

In the fourth quarter:

• Digital-only subscription revenue was $45.6 million, up 4.4% sequentially (second straight quarter of sequential growth).
• Digital-only ARPU reached a record $9.81, up about 24% year-over-year (and up sequentially, per Reed).

Reed said the company expects digital-only subscription revenues to continue growing year-over-year and contribute to overall digital revenue per user growth. Kristin Roberts, President of USA TODAY Media, said management sees additional ARPU upside through “smarter pricing,” packaging, improved retention and lifecycle marketing, and an expanding product set—including the newly launched gaming hub, Play, which she said is showing early indicators of audience expansion and increased engagement.

On audience scale, Reed said the company averaged 179 million monthly unique visitors during the quarter and continued to generate at least 1 billion domestic page views per month. In response to a question about a dip in unique visitors versus prior periods, Roberts said the company took deliberate steps to stabilize around the 1 billion page-views-per-month level while testing subscription tactics intended to improve engagement, registration, and long-term subscriber health.

AI licensing strategy: Meta partnership, Microsoft deal, and a “lumpy” but growing category

Reed emphasized that the company is pursuing AI licensing as its primary monetization path for AI platforms, rather than relying on traffic referrals. He said USA TODAY Co. entered a multiyear partnership with Meta in the fourth quarter to license new and archival content from the USA TODAY Network, following an October agreement with Microsoft. Reed described these AI licensing deals as high margin and said they are expected to contribute meaningfully to year-over-year growth in digital other revenue.

Management also discussed steps to protect content. Reed said the company blocks more than 99% of verified and unverified AI bots attempting to scrape content without licensing agreements in place, excluding Google.

On the 2026 outlook for AI licensing, Reed said management expects “significant growth” but cautioned that the category is still developing and can be “lumpy.” He said 2026 growth is expected to come from both existing contracts and potential new deals.

LocaliQ, Newsquest, cash flow, and balance sheet updates; 2026 outlook

In LocaliQ, Reed said there is “still work ahead” on customer count and revenue, but he expects the segment to return to revenue growth in the back half of 2026 as product and sales initiatives mature. Gosser reported LocaliQ core platform revenue of $107.3 million, segment Adjusted EBITDA of $16.6 million, average core platform customer count of about 12,700, and ARPU near record highs at approximately $2,800.

In Newsquest (U.K.), Gosser said fourth-quarter revenue was GBP 60.1 million, up 3.1% year-over-year for a third consecutive quarter of growth, while segment Adjusted EBITDA rose 20.7% to GBP 13.5 million and margin expanded to 22.5%.

On cash flow and leverage, Reed said the company generated $32 million of free cash flow in Q4. Gosser reported free cash flow of $31.5 million in the quarter, up $27.7 million year-over-year, and full-year free cash flow of $64.2 million, up about 10%.

At year-end, the company had $90.2 million of cash and $887.1 million of net debt. Gosser said total debt was $977.3 million and that First Lien Net Leverage declined 11% year-over-year to 2.4x. The company repaid $19.1 million of long-term debt in Q4 and approximately $136 million for the full year, and Reed also noted $14 million of convertible note repurchases.

For 2026, Gosser said the company expects improving same-store revenue trends through the year, with same-store revenue growth anticipated late in 2026. She also said management expects full-year growth in net income attributable to the company and in total Adjusted EBITDA, along with double-digit year-over-year growth in operating cash flow and free cash flow. She added that the company expects “slight usage of cash” in Q1 due largely to seasonality and working capital timing, with more meaningful free cash flow generation over the remaining three quarters.

In Q&A, management said it intends to continue deleveraging in 2026 primarily through operating performance and free cash flow, with an aim to move closer to 2x First Lien Net Leverage by year-end 2026.

About USA Today NYSE: TDAY

Gannett Co, Inc NYSE: GCI is a media and marketing solutions company headquartered in McLean, Virginia. As the largest U.S. newspaper publisher by circulation, Gannett publishes USA Today alongside more than 260 local news brands. The company’s multimedia platforms include daily and weekly newspapers, websites, mobile apps and a network of subscription-based digital products.

In addition to journalism and content production, Gannett offers a suite of digital marketing services designed to help small and medium-sized businesses grow online.

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