Executive Summary

Q2 2025 revenue was $29.8M with operating income of $1.3M; adjusted operating income rose 36.7% YoY to $1.6M as cost reductions offset revenue pressure; GAAP net loss of $33.5M was driven by a non‑cash $35.3M pension settlement charge following annuitization .
Top-line declined 7.2% YoY on softer print ads (-4.6%), print circulation (-5.9%), and the April cancellation of a mailed-ad partnership that reduced “printing, distribution and other” (-28.9%) .
Balance sheet remained solid: cash and cash equivalents were $33.7M at 6/30 and the Company has no debt; headcount declined 15.4% YoY to 451 with the printing transition .
Strategic catalyst: Hearst merger consideration was increased to $15.00/share on July 27; Board adopted a shareholder rights plan after rejecting Alden’s unsolicited $16.50 proposal citing voting constraints; deal expected to close in Q3 or early Q4 2025, subject to approvals .
No Q2 2025 earnings call transcript was available at time of review; themes below incorporate Q1 2025 and Q4 2024 calls for trend continuity [ListDocuments: earnings-call-transcript 0 results for 2025-07/09].

What Went Well and What Went Wrong

What Went Well

Adjusted operating income increased to $1.6M (+36.7% YoY), driven by $1.0M savings in employee compensation and benefits, $0.8M in outside services, and $0.6M from the smaller leased printing facility .
Agency segment delivered improved profitability: Q2 Agency segment profit rose to $0.233M from $0.031M a year ago as Medium Giant’s margin focus continued to bear fruit .
Balance sheet de-risked: pension annuitization completed; management highlighted that eliminating the pension obligation “eliminates our last source of debt and the need for any future contributions” (Grant Moise) .

What Went Wrong

Revenue fell 7.2% YoY to $29.8M with declines across ads (-3.8%), circulation (-5.7%), and printing/other (-28.9%), the latter impacted by the mailed-ad partnership cancellation .
GAAP net loss of $33.5M and diluted EPS of $(6.26) reflected a non‑cash $35.3M pension settlement charge in “other income (loss), net” following annuitization .
Print advertising and print circulation remained pressured; management previously noted softness in real estate and retail, with financial services a partial offset (Q1 call context) .

Financial Results

Consolidated P&L – sequential and YoY comparison

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($M)	$31.088	$29.125	$29.766
Operating Income ($M)	$(1.752)	$34.208 (includes $36.206M gain on sale)	$1.263
Net Income ($M)	$3.971	$28.285	$(33.492)
Diluted EPS ($)	$0.74	$5.28	$(6.26)
Total Operating Costs & Expense ($M)	$32.840	$(5.083) (includes $(36.206)M gain)	$28.503
Adjusted Operating Expense ($M)	$32.404	$30.322	$28.162
Adjusted Operating Income ($M)	$(1.316)	$(1.197)	$1.604

Notes: Q1 2025 includes a $36.2M gain on the Plano printing facility sale; Q2 2025 includes a $35.3M non‑cash pension settlement charge recorded in other income (loss), net .

Segment revenue and profitability (Q2 YoY)

Segment / Line ($M)	Q2 2024	Q2 2025
Advertising & Marketing Services (Total)	$12.784	$12.302
- TDMN Print Advertising	$6.558	$6.257
- TDMN Digital Advertising	$2.274	$2.164
- Agency Marketing & Media Services	$3.952	$3.881
Circulation (Total)	$16.181	$15.263
- TDMN Print Circulation	$11.603	$10.915
- TDMN Digital Circulation	$4.578	$4.348
Printing, Distribution & Other	$3.096	$2.201
Total Revenue	$32.061	$29.766
TDMN Segment Profit	$6.315	$6.377
Agency Segment Profit (Loss)	$0.031	$0.233
Total Segment Profit	$6.346	$6.610

KPIs and Balance Sheet Highlights

KPI	Q4 2024	Q1 2025	Q2 2025
Employees (period end)	526	461	451
Cash & Cash Equivalents ($M)	$9.594	$44.170	$33.700
Debt	None	None	None

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance/Update	Change
Expense savings from printing transition	FY 2025 run-rate	~$5M annualized savings starting 2025	Savings affirmed; partial in Q2 (beginning May) and flowing fully in Q3/Q4	Maintained
Pension annuitization cash need	Q2 2025	Expected $14–$16M company cash to complete annuity purchase	Actual ~$10M company cash used; annuitization completed; non‑cash settlement recorded	Lowered
Capex	2025	Q1 to include remaining press/leasehold payments; thereafter ~$0.25–$0.5M per quarter (max $0.5M)	Consistent; minimal after Q1	Maintained
Merger consideration	Transaction terms	$14.00/share (announced July 9)	Increased to $15.00/share on July 27	Raised
Merger timeline	Close expectation	N/A	Expected close in Q3 or early Q4 2025, subject to approvals	New disclosure

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 and Q1’25)	Current Period (Q2’25)	Trend
Printing transition & cost savings	$5M annualized savings targeted; transition to smaller leased facility; full savings post dual-run period	Adjusted operating expense down $2.7M YoY; savings cited in comp/benefits, outside services, facility and newsprint	Favorable cost trajectory continuing
Pension	Plan to annuitize with $14–$16M; eliminates pension “debt”	Annuitization completed; non‑cash $35.3M settlement charge; pension obligations transferred	De-risked balance sheet (one-time P&L noise)
Digital subscriptions & paywall	Dynamic AI paywall generated 16% more starts vs legacy meter; testing more aggressive offers; digital-only subs +4.2% YoY at Q1	No new Q2 subscriber metrics disclosed in PR	Execution ongoing; validation in Q1 commentary
Advertising environment	Q1: softness in real estate/retail; financial services strong; Agency steadier (tourism, education)	Q2: Ads -3.8% YoY; print ads -4.6% YoY	Mixed; print remains pressured
Agency (Medium Giant)	Q1: +$0.6M YoY operating income; focus on larger clients and margin expansion	Q2: Agency segment profit improved YoY ($0.233M vs $0.031M)	Positive margin momentum
M&A	N/A	Hearst agreement; Alden unsolicited higher proposal rejected; rights plan adopted; price raised to $15	New catalyst; path to go‑private

Management Commentary

“Eliminating our pension obligation is also a benefit to our shareholders because it eliminates our last source of debt and the need for any future contributions.” – Grant Moise, CEO .
“We will begin to recognize realized planned expense savings… starting in May… we will see a partial of that in the second quarter and then a full third quarter and fourth quarter.” – Mary (Katy) Murray, President .
“The agency's contribution… continues to improve… focusing on larger, more profitable accounts… I want [margin] to improve into the double digits.” – Grant Moise .

Q&A Highlights

Expense savings timeline: ~$5M annualized savings affirmed; partial in Q2 (May start) with full run-rate in Q3/Q4 .
Digital paywall performance: AI-driven dynamic paywall delivered 16% more subscription starts vs the prior rules-based meter; testing more aggressive intro offers ($1 for 6 months) to accelerate volume .
Ad verticals: Weakness in real estate, retail, and recruiting; financial services robust; Agency steadier with tourism/education exposure .
Newsprint: Q1 tonnage spike was temporary due to dual-facility operations; expected to normalize in Q2 (pricing subject to market) .
Pension funding: Actual cash outlay ~$10M vs prior $14–$16M expectation to complete annuitization in Q2 .

Estimates Context

Wall Street consensus for Q2 2025 (EPS and revenue) via S&P Global was not available or insufficient for DALN’s coverage at the time of this analysis; therefore, no consensus comparison is presented. Values retrieved from S&P Global where present.*
Actual revenue: $29.766M (Q2 2025) .
EPS: $(6.26) (Q2 2025) .

Key Takeaways for Investors

Cost actions are working: adjusted operating income improved to $1.6M and adjusted operating expense fell $2.7M YoY in Q2; full savings should be most visible in H2 as dual-facility overlap ends .
One-time pension settlement obscures underlying improvement; annuitization removes pension risk and future contributions, supporting long-term equity value clarity (but caused a non‑cash Q2 loss) .
Top-line headwinds persist (ads, print circ, commercial printing) and may continue near term; management’s digital initiatives (AI paywall, video) aim to lift engagement and higher-yield ad inventory .
Agency momentum is building with a focus on larger clients and margin expansion, providing a steadier earnings contributor alongside the core news business .
Strategic outcome likely dominates near-term trading: Hearst agreement at $15/share (raised from $14) with a Board-endorsed rights plan after rejecting Alden’s $16.50 bid due to voting realities; expected close Q3/early Q4 2025 (deal risk remains) .
Liquidity is ample ($33.7M cash, no debt), enabling continued digital investments while navigating cyclical ad softness .

Appendix: Additional Q2 details

Headcount: 451 at 6/30/25 (down 15.4% YoY), reflecting the smaller, more efficient printing footprint .
Cash & cash equivalents: $33.7M at 6/30/25; no debt .
Revenue drivers: Ads & marketing services $12.3M (-3.8% YoY); Circulation $15.3M (-5.7% YoY); Printing/distribution/other $2.2M (-28.9% YoY, mailed-ad partnership ended) .

Citations

Q2 2025 press release and 8-K:
Q1 2025 8-K and call:
Q4 2024 8-K and call:
M&A press releases:

*Values retrieved from S&P Global where present.

DallasNews Corp (DALN)·Q2 2025 Earnings Summary