Executive Summary

Mixed print-to-digital transition quarter with a sharp EPS beat but revenue/EBITDA slight misses vs S&P Global consensus. Q2 revenue was $584.9M vs $593.1M est (miss), Primary EPS was $0.45 vs ($0.06) est (beat), and Total Adjusted EBITDA was $64.2M vs $65.9M est (slight miss). Net income benefitted from an $87.5M tax benefit; EBITDA margin expanded sequentially to 11.0% . S&P Global estimates marked with * below (Values retrieved from S&P Global).
Digital advertising returned to growth (+4% YoY) and momentum is expected to continue in H2; management launched a $100M annualized cost-reduction program to variabilize costs and expand margins .
Guidance reset: FY25 digital same-store growth cut from +7–10% (Q1 guide) to ~flat; FCF growth for FY25 trimmed from >40% to >30%; however, H2 outlook calls for digital same-store growth of +3–5%, >70% YoY growth in operating cash flow, and >100% FCF growth .
Strategic AI monetization advanced (Perplexity licensing), beta launch of Taboola’s DeeperDive on USA TODAY, Snowflake marketplace listing, and tech to block unauthorized AI scraping; a high-margin real estate marketplace partnership (AddressUSA) launched for new revenue streams -.

What Went Well and What Went Wrong

What Went Well
- Digital ads inflected to +4% YoY after being down slightly in Q1; management cites scaled audience, stronger programmatic yield, and improving national direct sales as drivers. “We believe the momentum…supports our expectation for improved trends in the second half” .
- Sequential profitability and cash improvement: Total Adjusted EBITDA rose to $64.2M (11.0% margin) from ~9% margin in Q1; free cash flow improved to $17.6M; debt reduced by $23.4M in Q2 (>$100M in H1) .
- AI/content licensing and new monetization lanes: Perplexity deal, DeeperDive beta on USA TODAY, Snowflake marketplace listing, and anti-scraping measures to protect/license content; AddressUSA real estate marketplace provides high-margin ad opportunities - .
What Went Wrong
- Top-line still declining: total revenue -8.6% YoY (-6.4% same-store), reflecting continued print pressure and a reset of digital-only subs; digital revenues -4.6% YoY (-2.8% same-store) .
- Guidance reset: FY25 digital same-store growth cut to ~flat (from +7–10%); FY25 FCF growth trimmed to >30% (from >40%)—partly to fund cost actions; revenue now expected down low–mid single digits same-store .
- EPS beat driven by large tax benefit ($87.5M) rather than core operations; management expects “an exceptionally large [tax] provision” in H2 (mostly Q4), and flagged Q3 FCF to decline sequentially and YoY before recovering in Q4 -.

Financial Results

Actuals vs S&P Global consensus (Primary EPS and Revenue) and sequential trend

Metric	Q1 2025	Q2 2025
Revenue ($M) Actual	$571.6	$584.9
Revenue Consensus Mean ($M)	$593.1*	$593.1*
EPS (Primary) Actual	($0.089) (i.e., -$0.0891)	$0.453 (i.e., $0.4525)
EPS (Primary) Consensus Mean	($0.025)*	($0.058)*

Estimates marked with * retrieved from S&P Global.

Margins, earnings, cash flow (oldest → newest)

Metric	Q4 2024	Q1 2025	Q2 2025
Total Adjusted EBITDA ($M)	$78.2	$50.5	$64.2
Total Adjusted EBITDA Margin (%)	12.6%	8.8%	11.0%
Net Income Attributable to Gannett ($M)	$64.3	($7.3)	$78.4
Diluted EPS (GAAP)	$0.11	($0.05)	$0.42
Cash from Operations ($M)	$9.0	$23.3	$32.6
Free Cash Flow ($M, non-GAAP)	$3.8	$10.2	$17.6

Segment breakdown (Q2 year-over-year)

Segment	Q2 2024 Revenue ($M)	Q2 2025 Revenue ($M)	Q2 2024 Segment Adj. EBITDA ($M)	Q2 2025 Segment Adj. EBITDA ($M)	Margin Q2 2024	Margin Q2 2025
Domestic Gannett Media	$491.9	$439.3	$52.9	$43.2	10.8%	9.8%
Newsquest	$61.3	$61.3	$14.1	$14.9	23.1%	24.3%
Digital Marketing Solutions	$123.8	$117.5	$11.8	$11.5	9.5%	9.8%

KPIs and digital mix (oldest → newest)

KPI	Q4 2024	Q1 2025	Q2 2025
Avg. Monthly Unique Visitors (M)	200	195	181
Digital Revenues ($M)	$280.4	$250.4	$265.4
Digital Advertising Revenues ($M)	$92.7	$83.4	$87.9
Digital-only Subscription Revenues ($M)	$49.0	$43.3	$42.7
Digital-only ARPU ($, Total Gannett)	$7.93	$7.22	$7.79
DMS Core Platform Revenues ($M)	$116.25	$108.17	$116.93
DMS Core Platform ARPU ($)	$2,788	$2,693	$2,830
DMS Avg. Customer Count (k)	13.9	13.4	13.8
Digital-only Paid Subscriptions (k, EOP)	2,063	1,931	1,723

Guidance Changes

Metric	Period	Previous Guidance (Q1’25)	Current Guidance (Q2’25)	Change
Total Digital Revenues (same-store)	FY 2025	+7% to +10%	~Flat	Lowered
Digital as % of Total Revenue	FY 2025/2026 timing	50% in 2025	50%+ during 2026	Delayed
Total Revenues (same-store)	FY 2025	Down low single digits	Down low–mid single digits	Lowered
Total Digital Revenues (same-store)	H2 2025	—	+3% to +5%	New
Net Income Attributable to Gannett	H2 2025	—	Decline vs prior year	New (negative)
Net Income Attributable to Gannett	FY 2025	Improve vs prior year	Improve vs prior year	Maintained
Total Adjusted EBITDA	H2 2025	—	Grow vs prior year	New (positive)
Total Adjusted EBITDA	FY 2025	Grow vs prior year	Grow vs prior year	Maintained
Cash from Operating Activities	FY 2025	>30% growth	>30% growth	Maintained
Cash from Operating Activities	H2 2025	—	>70% growth	New (positive)
Free Cash Flow	FY 2025	>40% growth	>30% growth (reflects cash for cost actions)	Lowered
Free Cash Flow	H2 2025	—	>100% growth	New (positive)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
AI/Technology initiatives	Q4: focus on digital growth; Q1: “incrementally added…A.I. licensing deals” -	Perplexity licensing; Taboola DeeperDive beta on USA TODAY; Snowflake marketplace; blocking unauthorized AI scraping	Acceleration, monetization broadening
Digital advertising	Q4 digital ads +1.7% YoY ; Q1: improving trends continuing into Q2	Inflected to +4% YoY; strong national pipeline, brand-safe platform; robust H2 expected -	Improving
Digital-only subscriptions	Q4 digital-only subs rev +17% YoY; ARPU up	Intentional reset: focus on ARPU, local pricing, annual offers; pay-per-article for casual readers; sequential ARPU growth; see sequential rev improvement in Q3/Q4 -	Rebuilding for quality/ARPU
DMS (LocaliQ)	Q4 stable core metrics ; Q1 core revenues $108.2M	Sequential growth in core revenue, EBITDA, client count; AI voice agent; CRM integration; Google AI Smart Bidding -	Positive sequential momentum
Regulatory/legal (ad tech)	—	DOJ publisher-facing conduct ruling; remedies hearing in Sept; Texas AG case likely Q4; Gannett case trial expected 2026	Positive developments; ongoing
Cost reduction	—	Implementing ~$100M annualized cost reductions; closures of 2 large print facilities; automation/AI to variabilize costs	New lever for margins

Management Commentary

“We delivered sequential improvement across key financial metrics…digital advertising trends…increased from a decline in the first quarter to an increase of 4% in the second quarter…we expect digital advertising trends to further improve in the third quarter” — Michael Reed, CEO .
“We are implementing targeted annualized expense reductions of approximately $100 million…to create a lower and more variable cost structure…we expect to deliver Total Adjusted EBITDA growth in the back half of the year and for the full year of 2026” — Michael Reed .
“The net income…is heavily impacted by a tax benefit of $87.5 million…we expect an exceptionally large [tax] provision in the back half of the year, largely in the fourth quarter.” — Tricia Gosser, CFO .
“We were the first U.S. publisher to launch…Taboola’s…DeeperDive within USA TODAY…we are utilizing…technology to block unauthorized AI scraping…to protect our highly valuable content and expand…monetization opportunities in the AI landscape.” — Michael Reed .
“We’re introducing pay-per-article options…dynamic pricing by local market…stacked products…annual subscription offers to reduce churn and strengthen our base of loyal readers.” — Kristin Roberts, President of Gannett Media -.

Q&A Highlights

Timing and drivers of revenue stabilization: Management targets flat revenues in early 2026, citing improving digital ads, DMS/subscription initiatives, Perplexity and AddressUSA contributions, and $100M cost program to drive EBITDA/FCF growth into 2026 .
Cost program specifics: Focus on automation/AI, outsourcing, eliminating duplication; closing two large print plants; more mail delivery where economics fit; payroll a component, executed methodically to protect product/content .
AI and traffic: Company is blocking unauthorized AI scraping, diversifying traffic beyond Google (Facebook, Instagram, Reddit, Threads), and sees shift toward paid/attributed AI content usage; Perplexity cited as template .
Ad tech litigation: DOJ remedies hearing in Sept; Texas case expected Q4; Gannett’s trial expected in 2026; management “very confident” in position .
DMS product roadmap: AI Smart Bidding, CRM integration, and conversational AI voice agent to improve client ROI, retention, and stickiness; helps follow up on “10 out of 10 leads” vs 7/10 today -.
Affiliate revenue: Google “manual actions” largely in rear-view; pivoting to higher-value, on-platform verticals like AddressUSA .

Estimates Context

Q2 2025 vs S&P Global consensus: Revenue $584.9M vs $593.1M est (miss); Primary EPS $0.45 vs ($0.06) est (beat); EBITDA $64.2M vs $65.9M est (slight miss). The EPS beat was aided by an $87.5M tax benefit; EBITDA margin improved sequentially to 11.0% but remains below Q4 seasonality . Revenue/EPS/EBITDA estimates marked with * are from S&P Global.
Q1 2025 context: Revenue $571.6M vs $593.1M est (miss); Primary EPS ($0.089) vs ($0.025) est (worse than est); sets up sequential improvement into Q2 as management indicated .
Estimates marked with * retrieved from S&P Global.

Key Takeaways for Investors

EPS beat quality is low given the $87.5M tax benefit; on core metrics, revenue and EBITDA were modest misses vs consensus, but momentum improved sequentially and should strengthen into H2 from digital ads and DMS .
The $100M annualized cost-out is the near-term margin driver; expect EBITDA margin expansion and stronger FCF in H2 (but Q3 FCF down sequentially/YoY; rebound in Q4) - .
Strategic AI monetization (Perplexity, DeeperDive, Snowflake) and anti-scraping tech establish a template for fair-value content licensing and ad monetization; watch for additional deals over the next 12 months .
Subscription model reset prioritizes ARPU and retention (annual offers, localized pricing, pay-per-article) over volume; near-term pressure on subs counts but healthier unit economics and expected sequential revenue improvement in Q3/Q4 -.
Digital ads are a key H2 catalyst; management cites robust national demand and publisher ROI research tailwinds that could lift budgets towards journalism platforms -.
Litigation path on ad tech (DOJ remedies; state AGs; Gannett case 2026) is trending favorably; not in base-case models but offers optionality .
Deleveraging continues (>$135M 2025 target); combined with cost actions, sets a setup for improved leverage metrics into 2026 .

Additional Detail and Source Tables

Revenue composition and same-store detail (Q2 2025)

Total revenues: $584.9M; YoY -8.6%; same-store -6.4% .
Digital revenues: $265.4M; YoY -4.6%; same-store -2.8% .
Digital ad revenues: $87.9M; YoY +4% .

Capital structure and liquidity

Cash and cash equivalents: $88.5M (6/30/25); total principal debt: $1,014.9M; first lien net leverage: 2.7x; Q2 debt repaid: $23.4M .

AI and partnerships

Perplexity licensing (terms undisclosed), DeeperDive beta on USA TODAY, Snowflake marketplace listing, AddressUSA real estate portal across the network .

S&P Global estimates disclaimer: All values marked with * are retrieved from S&P Global.

Gannett Co., Inc. (GCI)·Q2 2025 Earnings Summary