Executive Summary

Q3 2024: GAAP net loss of $3.9M and $(0.73) EPS; operating loss of $4.1M. Adjusted operating loss improved to $0.7M (from $0.9M), driven by $3.5M in expense savings; revenue fell 9.7% YoY to $31.1M due to 2023 exits of shared mail and print-only niche publications .
Mix: Agency (Medium Giant) revenue rose $0.9M YoY to $4.4M; circulation held nearly flat ($16.1M) with digital-only subscription revenue +8.8% offsetting print decline; digital ad revenue mixed (ePaper up; website down) .
Operational focus: Cash of $14.0M and no debt; headcount 534 (-74 YoY). Printing transition to Carrollton is on track for Q1 2025; management reiterates expected ~$5M annualized expense savings post-completion .
Estimates: S&P Global Wall Street consensus estimates for Q3 2024 were unavailable at time of request, so beat/miss vs consensus cannot be assessed (see Estimates Context) [GetEstimates error].
Potential catalysts: New digital pricing strategy ended a 14‑month volume decline and drove ~3,100 net digital subscriber adds since early September; installation of new presses underway; ongoing marketing of the Plano facility with strong buyer interest .

What Went Well and What Went Wrong

What Went Well

Adjusted operating loss improved $0.2M YoY to $(0.7)M, with savings in distribution ($1.9M), employee benefits/compensation ($1.2M), and newsprint ($1.1M). CEO: “continued focus on returning to sustainable profitability” .
Agency momentum: Marketing and media services revenue +$0.9M YoY to $4.4M; management strategy to win larger clients (> $250k/year) has grown big-client count ~30% YTD .
Digital subscription economics: Digital-only subscription revenue +8.8% YoY; pricing increased ~13.5% and, after strategy change (extended intro period), volume returned to growth in late Q3 and accelerated in early Q4 .

What Went Wrong

Revenue decline: Total revenue fell $3.4M (-9.7% YoY) with print advertising down $3.1M due to prior exits; GAAP operating loss widened to $(4.1)M .
One-time severance: $3.0M severance impacted GAAP results tied to anticipated headcount reductions as part of printing transition .
Traffic/ad headwinds: Google referral traffic decline pressured website advertising; election-related ad lift expected to be immaterial in Q4 .

Financial Results

Metric	Q3 2023	Q2 2024	Q3 2024
Total Revenue ($USD Millions)	$34.5	$32.1	$31.1
GAAP Operating Income (Loss) ($USD Millions)	$(1.6)	$0.6	$(4.1)
GAAP Net Income (Loss) ($USD Millions)	$(1.4)	$1.5	$(3.9)
GAAP Diluted EPS ($)	$(0.26)	$0.27	$(0.73)
Adjusted Operating Income (Loss) ($USD Millions)	$(0.9)	$1.2	$(0.7)
Operating Margin %	-4.7% (=(−1.6/34.5))	1.8% (=(0.6/32.1))	-13.2% (=(−4.1/31.1))
Adjusted Operating Margin %	-2.6% (=(−0.9/34.5))	3.6% (=(1.2/32.1))	-2.3% (=(−0.7/31.1))

Segment breakdown (revenue):

Segment / Category ($USD Millions)	Q3 2023	Q3 2024
TDMN Print Advertising	$9.1	$5.4
TDMN Digital Advertising	$2.1	$2.2
Agency Marketing & Media Services	$3.5	$4.4
Print Circulation	$12.0	$11.5
Digital Circulation	$4.2	$4.6
Printing, Distribution & Other	$3.6	$3.1
Total Revenue	$34.5	$31.1

Key KPIs and balance sheet:

KPI	Q3 2023	Q4 2023	Q3 2024
Total Subscribers (Home Delivery + Digital)	137,493	132,694	124,886
Digital-only Subscription Revenue YoY (%)	—	—	+8.8%
Digital-only Subscriber YoY Change	—	—	(5,348) or −8%
Digital-only Pricing Change	—	—	+~13.5%
Headcount	~608 (prior year basis = 534 + 74)	—	534
Cash & Cash Equivalents ($USD Millions)	—	$11.7	$14.0
Debt	—	—	None

Notes: Operating and adjusted margins are computed from reported values (citations reference underlying numerator/denominator). Headcount prior-year comparison derived from current headcount and YoY decrease disclosed .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Printing Transition Annualized Expense Savings	Post-completion (expected early 2025)	“Around $5M” (Q2/Q1 commentary)	Reiterated ~$5M	Maintained
Printing Transition Capital Spend	2024 into early 2025	~$8M total (spent $2.9M in Q2; ~$5M remaining)	Additional capex and opex incurred this year; transition on track Q1’25	Maintained/clarified timing
Dividends	Ongoing	Suspended until further notice (May)	No change communicated	Maintained
Headcount Reductions	Q1 2025	~85 roles tied to transition (Q1)	Additional headcount reductions expected in Q1 2025	Maintained
Tax Expense (Texas franchise)	Q3 2024	—	Recorded $345k in Q3	New actual (not guidance)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2024)	Current Period (Q3 2024)	Trend
Digital subscription strategy	Premium pricing drove revenue but hurt volume; plan to balance price/volume; testing new price points	Extended intro pricing (1→3 months); ended 14‑month volume decline; ~3,100 net adds since early Sep; focus on retention post-intro	Improving volume; watch churn post-intro
Agency (Medium Giant) mix and scale	Segment reporting introduced; focus on larger, more profitable clients; Agency added $573k YTD OI (as of Q2)	Agency revenue +26% YoY; higher outside services (media COGS) tied to media buying mix; strategy to grow large clients continues	Scaling with mix-dependent margins
Printing transition & facility sale	Lease signed; ~$5M annual savings post-completion; capex ~$8M; Plano asset actively marketed; NOLs to offset potential gains	First press installed; timeline intact for Q1’25 completion; strong buyer interest (data centers/industrial); partnerships (WSJ/NYT/USA TODAY) continue	Execution progressing; monetization optionality
Traffic/ad market	Modest one-offs (e.g., eclipse not material)	Google referral traffic decline hurting website ads; election ad impact immaterial	External headwinds persist
Product features	Considering new products; scrutinizing pro formas; enhance current app/video	New video platform in beta (sports), app update live (iOS), commenting to launch in Q1; features prioritized over new products for near-term ROI	Feature-first for engagement and monetization
Cash/Pension	Cash/ST investments $17.1M; pension derisking history; over 90% funded	Cash $14.0M at Q3 end; ~90%+ funded; target cash TBD post return-to-growth and potential asset sale	Adequate liquidity; balanced capital allocation

Management Commentary

CFO: “On a GAAP basis for the quarter, DallasNews Corporation reported a net loss of $3.9 million or $0.73 per share and an operating loss of $4.1 million… 2024 net loss includes $3 million of severance expense…” .
CEO: “The third quarter $0.2 million year-over-year financial improvement in adjusted operating loss reflects our continued focus on returning to sustainable profitability… Medium Giant’s advertising and marketing services revenue growth of $0.4 million” .
CEO on digital strategy: “We modified our digital subscription strategy to a volume-centric strategy… successfully ended our 14-month volume decline” .
President: “We expect additional headcount reductions in the first quarter of 2025 due to our transition to a smaller printing facility… partnership to print and distribute the Wall Street Journal, New York Times and USA TODAY will continue” .
CEO on traffic: “Since the beginning of this year, we have witnessed a steady decline in the audience coming from Google… contributed to slight decrease in our digital advertising revenue… difficult to overcome” .

Q&A Highlights

Digital subscriber growth: “We have grown a little bit over 3,100 digital subscribers since we changed the strategy back in early September… ~2,500 since Oct 1” .
TAM for paid local news: “About 600,000 [in North Texas]… we’re a little north of 10% of that… aim to move in 5% increments” .
Election advertising: “Rounding error in the fourth quarter… not material” .
Product roadmap: “Beta test of an entirely new video platform… new app update on iOS… commenting to launch in the first quarter” .
Agency cost mix: Higher outside services expense reflects media buying on behalf of clients; mix depends on client type .
Cash targets: ~$12M current; target depends on investments, profitability, and potential facility sale; more clarity in 2025 .
Transition savings: Annualized ~$5M savings reaffirmed; comp and distribution lines expected to step down post-transition; more detail in March call .

Estimates Context

S&P Global Wall Street consensus for Q3 2024 Primary EPS and Revenue was unavailable at time of request due to data access limits; therefore, beat/miss vs consensus cannot be assessed in this report. Where estimate comparisons are required by your process, please note absence of S&P Global data for DALN Q3 2024 at this time [GetEstimates error].

Key Takeaways for Investors

Adjusted operating trajectory improving despite top-line pressure; cost reductions remain the primary lever until printing transition completes and new pricing strategy flows through revenue .
Agency growth and client mix are favorable, but margin sensitivity to outside media buying requires monitoring of COGS and mix shift .
Digital subscription strategy pivot is showing early volume wins; near-term revenue may pause as intro pricing ramps, making retention and churn at roll-to price the key variable into 1H25 .
External traffic headwinds (Google referrals) are pressuring web ads; feature enhancements (video, commenting, app) target engagement and higher-priced ad formats to offset .
Liquidity is adequate ($14.0M cash, no debt) with expected ~$5M annual savings post printing transition; timing and proceeds from Plano facility sale could materially influence capital allocation (pension, reinvestment, shareholder returns) .
Dividend remains suspended pending completion of transition and clearer profitability path; revisit after Q1 2025 operational step-down and strategic asset monetization progress .
Near-term trading lens: watch subscriber momentum metrics and commentary on churn at roll price; operational milestones on presses (Carrollton) and updates on Plano sale interest could be stock catalysts .

DallasNews Corp (DALN)·Q3 2024 Earnings Summary