Executive Summary

Q1 2025 reported revenue of $29.1M (down 6.4% YoY) and GAAP EPS of $5.28 driven by a $36.2M gain on the Plano printing facility sale; adjusted operating loss was $(1.2)M as revenue declines outweighed cost savings .
Balance sheet materially strengthened: cash and cash equivalents were $44.2M at March 31 and the company fully funded its pension via an annuity in April using ~$10M of cash, eliminating the company’s lone “debt-like” obligation .
Agency segment profit improved by ~$0.6M YoY on better client mix and expense discipline; print advertising softness persisted, though management saw signs of improvement in April .
Management reiterated ~$5M annualized expense savings from the print transition with realization beginning in May (partial in Q2, full Q3/Q4); Board evaluating capital allocation (digital investments and potential return of capital) over the next 90 days .
Near-term stock catalysts: pension de-risking and net cash position, visible expense savings ramp, and early traction from AI-driven paywall (+16% lift in starts) and video/commenting initiatives enhancing digital monetization .

What Went Well and What Went Wrong

What Went Well

Pension fully funded and annuitized in April, removing a key liability and clarifying valuation; cash remained robust post-funding (~$36M as of April 25) .
Agency profitability improved ~$0.6M YoY on mix shift to larger clients and disciplined cost management; management targets further margin expansion toward double-digits .
AI-driven dynamic paywall showed a 16% lift in subscription starts versus prior meter model; video player and commenting rollout intended to increase engagement and premium ad yield .

What Went Wrong

Total revenue declined 6.4% YoY (to $29.1M) on broad print weakness: advertising down 12.2% and print circulation down 6.0% YoY; printing/distribution revenue fell on canceled partnerships .
Digital membership growth slower than expected in Q1; total membership fell sequentially to 125,972 (from 126,973 at Dec 31), though digital-only subs rose to 65,028 .
Newsprint tonnage up ~32% in Q1 (dual-facility operations/testing), temporarily dragging margins; expected to normalize in Q2, with expense still sensitive to pricing/tariffs .

Financial Results

Metric	Q1 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$31.102	$31.088	$29.125
Diluted EPS ($USD)	$(0.25)	$0.74	$5.28
Net Income ($USD Millions)	$(1.363)	$3.971	$28.285
Operating Income (Loss) ($USD Millions)	$(1.756)	$(1.752)	$34.208
Adjusted Operating Loss ($USD Millions)	$(0.780)	$(1.316)	$(1.197)

Notes:

Q1 2025 GAAP operating income includes $36.206M gain on sale of the Plano printing facility .
Adjusted operating loss excludes depreciation, severance, and gain on sale .

Segment Breakdown (Q1 2025 vs Q1 2024)

Segment	Q1 2024	Q1 2025
TDMN Net Operating Revenue ($USD Thousands)	$27,053	$25,152
Agency Net Operating Revenue ($USD Thousands)	$4,049	$3,973
TDMN Segment Profit ($USD Thousands)	$5,249	$3,764
Agency Segment Profit ($USD Thousands)	$(401)	$240
Print Advertising ($USD Thousands)	$5,639	$4,949
Digital Advertising ($USD Thousands)	$1,958	$1,891
Agency Marketing & Media Services ($USD Thousands)	$4,049	$3,973
Print Circulation ($USD Thousands)	$11,756	$11,047
Digital Circulation ($USD Thousands)	$4,544	$4,400
Printing, Distribution and Other ($USD Thousands)	$3,156	$2,865

KPIs

KPI	Mar 31, 2024	Dec 31, 2024	Mar 31, 2025
Total Membership (Print + Digital)	129,857	126,973	125,972
Digital-only Subscriptions	—	64,334	65,028
Employees (Headcount)	—	526	461
Cash & Equivalents ($USD Millions)	—	$9.6	$44.2

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Expense savings from print transition	FY 2025 run-rate	~$5M annualized savings beginning in 2025	Savings realization begins in May; partial in Q2, full in Q3/Q4	Timing maintained; realization shifted later within 2025
Pension funding (cash contribution)	Q2 2025	$14–$16M expected to annuitize	~$10M spent in April to fully fund via annuity	Lower than prior expectation
CapEx run-rate	2025	Post-Q1 completion: ~$0.25–$0.50M per quarter; annual $0.5–$1.0M top-end	No change indicated in Q1 call; Q1 spend largely completed	Maintained
Cash taxes	2025	“Less than ~$1M” cash taxes on property sale	~$0.7M cash taxes (federal/state), utilizing NOLs	Clarified lower bound, consistent with prior
Capital allocation (return of capital)	Near-term 90 days	Evaluating priorities (pension, invest, shareholders)	Board to evaluate digital investments and returning capital over next 90 days	Maintained, timeline reiterated
Dividend policy	Ongoing	No commitment; forward-looking caution	No commitment; forward-looking caution	Maintained

Earnings Call Themes & Trends

Topic	Q3 2024 (Q-2)	Q4 2024 (Q-1)	Q1 2025 (Current)	Trend
AI/technology initiatives	Shift to volume-centric digital strategy	Website/app upgrades; video player; commenting to improve engagement	Dynamic AI paywall +16% lift in starts; video/commenting rolling out	Strengthening execution
Tariffs/macro	—	Monitoring potential newsprint price/tariff impacts	Monitoring economy/tariffs and client budgets	Ongoing caution
Product performance	Adjusted op loss improved despite revenue declines	Digital audience/product upgrades; strong Q4 digital adds (+3,119)	Digital volume slower than expected; testing more aggressive offers	Mixed near-term
Printing transition	Announced reportable segments; cost focus	Transition to smaller facility; sale proceeds strengthened balance sheet	Completed transition; savings realization starts May	Completed; savings ramping
Advertising verticals	Mixed; shared mail exit impacted print	Classified softness; volatility; March improving	Real estate/retail/recruiting soft; financial services robust; Agency steadier (tourism/academics)	Stabilizing in areas; diversified
Regulatory/Nasdaq	—	Equity compliance update (Dec 31 equity $6.8M)	—	Improved positioning

Management Commentary

CEO on Return to Growth Plan and capital allocation: “Over the next 90 days we will be evaluating the Company’s use of our remaining cash for investment opportunities in the digital growth of the business and returning capital to shareholders.” .
CEO on Agency margin: “The expansion of the Medium Giant Agency’s operating margin is a priority… two new large clients… disciplined approach to expense management.” .
President on pension and print transition: “We used approximately $10 million of company funds… to purchase an annuity contract… Starting in May, we will begin to recognize planned expense savings… our first full month no longer operating in dual facilities.” .
CFO on taxes/NOLs: “Recorded $6 million of tax expense… utilization of our net operating loss carryforwards will reduce our cash taxes to approximately $700,000.” .
CEO on digital initiatives: “We are seeing… a 16% lift in starts coming from the new paywall versus our former meter strategy.” .

Q&A Highlights

Expense savings cadence: Management reaffirmed ~$5M annualized savings; realization to start in May (partial Q2, full Q3/Q4) as dual-facility operations end .
Digital subscriptions: Growth slower than expected; AI paywall delivering +16% lift; testing more aggressive offers ($1 for 6 months) to drive volume .
Advertising verticals: Softness in real estate, retail, recruiting; limited auto exposure; financial services robust; Agency steadier with tourism/academics mix .
Newsprint tonnage: Q1 increase (~32%) due to testing/dual facilities; expected to normalize in Q2; pricing/tariffs monitored .
Pension funding: Actual cash contribution ~$10M (below prior $14–$16M expectation); impacts Q2 cash flows .

Estimates Context

S&P Global consensus for Q1 2025 EPS and Revenue was unavailable; no “Primary EPS Consensus Mean” or “Revenue – # of Estimates” populated for Q1 2025 via S&P Global. Values retrieved from S&P Global*.
As a result, we cannot benchmark Q1 results versus Wall Street EPS/Revenue estimates; the absence of coverage implies limited analyst participation and likely reduces estimate-based surprise catalysts in the near term. Values retrieved from S&P Global*.

Disclaimers: *Values retrieved from S&P Global.

Key Takeaways for Investors

Balance sheet reset is material: post-sale cash and pension annuitization de-risk the equity, improving optionality for digital investments and potential shareholder returns within 90 days .
Expense savings ramp is the near-term earnings driver: expect sequential improvement as May-onward savings flow through (partial Q2, fuller Q3/Q4), a visible catalyst for margins and cash generation .
Agency profit mix is improving and should continue as larger, more profitable accounts scale; management is aiming for double-digit margin over time .
Digital monetization has multiple levers (AI paywall, video yield, commenting/engagement); early paywall lift (+16% starts) and video economics can offset legacy print declines as execution scales .
Print advertising remains volatile; watch real estate/retail/recruiting and any tariff-driven cost headwinds that could pressure near-term results despite savings .
With estimates sparse, narrative catalysts (pension removal, savings realization, capital returns) may be more impactful than “beats/misses”; monitor Q2 call for capital allocation decisions and updated digital KPIs .
Medium-term thesis: de-levered balance sheet, cost base reset, and focused digital investments can drive a path toward sustainable profitability; execution against subscription volume and Agency margin targets is critical .

Citations: Press Release Q1 2025 ; 8-K 2.02 Q1 2025 ; Earnings Call Q1 2025 ; Press Release Q4 2024 ; Earnings Call Q4 2024 ; Press Release Q3 2024 ; Press Release plant sale .

DallasNews Corp (DALN)·Q1 2025 Earnings Summary