Gannett(GCI) - 2021 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total operating revenues for Q2 were $804.3 million, an increase of 4.9% year-over-year, with same-store revenue growth of 6.8% [41] - Adjusted EBITDA totaled$ 115.8 million, up 48.4% year-over-year, with an adjusted EBITDA margin of 14.4%, an increase from 10.2% in the prior year [42] - Net income for the quarter was $15.1 million, with adjusted net income of$ 30.1 million [43] Business Line Data and Key Metrics Changes - Publishing segment revenue was $724.5 million, up 4.2% year-over-year, with advertising revenue increasing by 10.7% [44] - Digital advertising and marketing services revenues increased by 35.9% on a same-store basis, with national sales of digital advertising growing by 77% [45] - Digital marketing services revenue grew 41% year-over-year, with a significant increase in average revenue per user (ARPU) from$ 1,600 to $2,300 [52][54] Market Data and Key Metrics Changes - Digital-only subscribers grew by 41% year-over-year to approximately 1.4 million, contributing to a 40% increase in digital-only revenue [50] - The company achieved 174 million unique visitors per month, ranking sixth in digital reach among domestic peers [12] Company Strategy and Development Direction - The company is focused on accelerating digital subscription growth, with a goal of reaching 10 million digital-only subscribers by 2025 [14] - A strategic partnership was announced with Typical U.S. in the sports gaming sector, expected to enhance value for subscribers and drive growth [29][31] - Continued investment in local and regional content is prioritized to improve subscriber retention and engagement [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in digital subscriptions and digital marketing solutions, with expectations for same-store revenue growth in the low single digits for Q3 [38] - The company anticipates adjusted EBITDA growth for the fourth consecutive quarter, reflecting strong execution against strategic priorities [62] Other Important Information - The company repaid approximately$ 46 million in debt during the quarter, reducing the principal balance under its term loan to below $1 billion [10] - Free cash flow for the quarter was$ 23.1 million, impacted by working capital timing [59] - The company expects to generate $80 million to$ 100 million in incremental asset sales during the second half of the year [61] Q&A Session Summary Question: What are the expectations for digital subscription growth? - Management highlighted record growth in digital-only subscribers, with a target of 10 million by 2025, driven by new product launches and data-driven strategies [14][66] Question: How is the company addressing the challenges in the advertising market? - The company reported strong national demand for digital advertising, with significant growth in both owned and operated and third-party properties [45][66] Question: What is the outlook for the events business? - Management noted a slight increase in live events, with expectations for more favorable conditions in the latter half of the year despite ongoing pandemic impacts [34][66]