Lee Enterprises Achieves Notable Growth in Digital Revenue

Lee Enterprises Reports Impressive Financial Results

In the recent quarter, Lee Enterprises, Incorporated (NASDAQ: LEE), showcased remarkable achievements with total digital revenue reaching 51% of its quarterly revenue, amounting to $82 million. This reflects a thriving digital landscape with digital-only subscription revenue surging by 30% over the same period last year. Revenue from the Amplified Digital Agency alone totaled $28 million, marking a year-over-year increase of 21%, and edging closer to the $100 million mark for the fiscal year.

Strong Digital Subscription Growth

During the fiscal year that ended on September 29, Lee Enterprises reported a substantial growth of 41% in revenue generated from digital subscriptions. Kevin Mowbray, the President and CEO, expressed pride in achieving digital subscription targets while laying a solid foundation for ongoing digital transformation through strategic investments in AI and technology. Despite these milestones, Mowbray acknowledged that the company fell short of its Adjusted EBITDA target, indicating areas for improvement.

Fiscal Year 2024 Financial Highlights

• Total operating revenue reached $611 million, with $299 million coming from digital operations, marking an 11% increase from the previous year.
• Total print revenue saw a decline of 21%, totaling $312 million.
• Operating expenses matched total revenue at $611 million, but cash costs saw a reduction, highlighting effective cost management.
• Adjusted EBITDA stood at $65 million, showcasing operational resilience.

Impressive Fourth-Quarter Performance

For the fourth quarter, Lee Enterprises garnered total operating revenue of $159 million. Digital revenue growth of 13%, contributing $82 million, underscores the company's strong market position. Notably, revenue from digital-only subscribers reached $24 million, driven by strategic marketing and enhanced customer engagement. Additionally, digital advertising and marketing services accounted for 73% of the total advertising revenue.

Looking Ahead to Fiscal Year 2025

As the company prepares for fiscal year 2025, optimism persists regarding its core strategy and the endless opportunities it entails. Mowbray predicts further advances in local advertising driven by AI technology, emphasizing the unique position of Lee Enterprises in the local market with its extensive library of hyper-local content and strong ties with over 25,000 local advertisers.

Debt Management and Cash Flow Insights

Lee Enterprises maintains a significant debt of $446 million under a favorable credit agreement, ensuring sustainable financial health. This debt is structured with a 25-year maturity and a fixed interest rate of 9%. With the company aiming for reduced capital expenditures of approximately $12 million for FY25, effective debt management remains a crucial aspect of their strategy. Furthermore, the expected reduction in cash paid for income taxes adds to the financial flexibility for future investments.

Communication and Transparency

Lee Enterprises emphasizes its commitment to transparency with regular updates to analysts and investors. The recent earnings conference call provided insights into the company’s performance and strategic direction, reinforcing its position in the evolving media landscape. For further inquiries, the company’s investor relations can be contacted via email or phone.

Frequently Asked Questions

What were the main highlights of Lee Enterprises' recent financial results?

Key highlights include a 41% growth in digital subscriptions, total digital revenue of $299 million, and an Adjusted EBITDA of $65 million.

How has Lee Enterprises' digital revenue changed?

Digital revenue made up 51% of total revenue in the last quarter, marking a significant shift towards digital operations.

What initiatives are in place for fiscal year 2025?

Lee Enterprises plans to enhance local advertising capabilities through AI advancements and strategic partnerships with tech companies.

How is Lee handling its debt?

The company holds $446 million in debt with favorable terms, aiming for sustainable debt management alongside future growth.

How does Lee Enterprises plan to improve its Adjusted EBITDA?

By optimizing operational efficiency and focusing on revenue growth in digital subscriptions and advertising.

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