USA TODAY Co. — Third Quarter 2026 Earnings Summary

Financial Performance

• Total revenues were $519.2 million, a 7.4% decrease year-over-year.
• Same store revenues decreased 5.8% year-over-year, showing a sequential improvement of 30 basis points compared to Q2 2026.
• Net loss attributable to USA TODAY Co. was $4.6 million.
• Total Adjusted EBITDA was $36.6 million.
• Cash provided by operating activities was $16.7 million.
• Free cash flow was $4.3 million.
• Adjusted net income attributable to USA TODAY Co. was $1.366 million.
• Total digital revenues were $249.3 million, representing 48.0% of total revenues.
• Digital advertising revenues were $75.0 million.
• Digital-only subscription revenues were $46.0 million, marking the third consecutive quarter of year-over-year growth.
• LocaliQ segment core platform revenues were $105.4 million.
• Cash and cash equivalents were $68.2 million as of September 30, 2026.
• Total debt principal outstanding was $952.9 million, including $705.1 million in first lien debt.
• First lien net leverage was 2.5x, a decrease of 8.2% year-over-year.
• Deferred revenue was $102.9 million as of September 30, 2026.

Guidance and Future Outlook

• Full year 2026 total revenues are expected to be down in the mid-single digits on a same store basis.
• Total digital revenues are expected to make up 50%+ of total revenues during 2027.
• Net income attributable to USA TODAY Co. is expected to grow versus the prior year, with sequential improvement expected in Q4 2026.
• Total Adjusted EBITDA, cash provided by operating activities, and free cash flow are expected to decline versus the prior year, with sequential improvement expected in Q4 2026.
• Management expects the $100 million annualized cost reduction program to drive significant sequential growth in Adjusted EBITDA and free cash flow, as well as substantial margin expansion in the fourth quarter.

Business Segments and Product Lines

• USA TODAY Media segment revenues were $380.6 million with a Segment Adjusted EBITDA margin of 6.3%.
• Newsquest segment revenues were $59.5 million with a Segment Adjusted EBITDA margin of 23.3%.
• LocaliQ segment revenues were $105.7 million with a Segment Adjusted EBITDA margin of 6.9%.
• Digital-only average revenue per user (ARPU) reached a record high of $10.82, an increase of 23% year-over-year.
• LocaliQ core platform ARPU reached a record high of $2,996, an increase of 6% year-over-year.
• Average monthly unique visitors increased to 161 million in Q3 2026 from 158 million in Q2 2026.
• Digital-only paid subscriptions totaled 1.396 million, a 12% decrease year-over-year.

Market and Competitive Landscape

• Audience trends showed signs of stabilization and engagement strengthened across platforms.
• The company continues to grow digital revenue categories central to its strategy, including direct-sold digital advertising, digital-only subscriptions, and digital other.
• The company believes its current market valuation does not fully reflect the underlying value of its business or long-term potential.

Risks and Challenges

• The company faced impacts from changes in consumer search and inflationary pressures.
• The Ad Tech litigation against Google continues, with a trial date set for April 5, 2027.
• Damages calculated through 2024 totaled $901 million, excluding potential treble damages; the company expects to update this calculation ahead of trial.
• Full year 2026 outlook for Adjusted EBITDA, operating cash flow, and free cash flow indicates a decline versus the prior year.

Management Commentary and Tone

• Michael Reed, Chairman and CEO, noted encouraging underlying signals in categories important to the future despite external pressures.
• Management stated the new $100 million annualized cost reduction program is already benefiting the fourth-quarter run rate.
• Management expressed confidence that improvements will drive sequential growth in Adjusted EBITDA and free cash flow.
• Management indicated plans to be opportunistic with share repurchases in the fourth quarter.

Other Key Points

• The company implemented a $100 million annualized cost reduction program at the end of the third quarter.
• The company has $96.9 million available under its authorized Stock Repurchase Program.
• The company received a waiver from lenders to enter into strategic agreements with Lee Enterprises to acquire the remaining 50% interest in TNI Partners and assume full ownership of the Arizona Daily Star.
• The company transferred its Montana and South Dakota publications to Lee Enterprises as part of the Lee Transactions, which did not result in additional indebtedness.
• Subsequent to the quarter, the 2029 Term Loan Facility was amended to permit incremental debt financing of up to $50.0 million to be used for share repurchases by December 31, 2026.
• The company received consent from certain lenders and note holders to undertake the share repurchases described above.