Lee Enterprises reports third quarter Adjusted EBITDA growth

Rhea-AI Summary

Lee Enterprises (NASDAQ: LEE) reported significant Q3 2025 financial results, highlighted by a 92% Adjusted EBITDA growth over Q2. Total Digital Revenue reached $78M, representing 55% of total revenue. The company achieved 16% year-over-year growth in Digital-Only subscription revenue and 10% growth in Amplified Digital® Agency revenue.

Key metrics include 670,000 digital-only subscribers, total operating revenue of $141M, and operating expenses of $137M. The company maintains $455M in debt with BH Finance under favorable terms, including a 25-year maturity and 9.0% fixed annual interest rate. Since May 2025, Lee has funded all principal and interest payments through organic free cash flow generation.

Positive

• 92% Adjusted EBITDA growth over Q2
• Digital revenue represents 55% of total revenue at $78M
• Digital-only subscription revenue up 16% YOY
• Amplified Digital Agency revenue grew 10% YOY
• Operating expenses decreased 6% compared to prior year
• All mandatory principal and interest payments now funded through cash operations
• No financial performance covenants on debt

Negative

• Net loss of $2M in Q3
• Total operating revenue declined to $141M from $151M YOY
• High debt level of $455M with 9% interest rate
• Required interest payment waivers in March-May 2025 due to cyber event
• Print advertising revenue declined 7.7% YOY
• Print subscription revenue declined 20% YOY

Insights

Financial Analyst

Lee's Q3 shows turnaround progress with 92% EBITDA growth over Q2, despite continued print decline being offset by digital revenue growth.

Lee Enterprises is showing meaningful signs of a turnaround with Adjusted EBITDA growing 92% sequentially from $7.8 million in Q2 to $14.9 million in Q3. While year-over-year EBITDA growth was modest at 1%, the significant quarter-over-quarter improvement demonstrates management's success in cost management efforts. The company managed to reduce operating expenses by 6% and cash costs by 7% compared to the prior year.

Digital transformation continues to be the cornerstone of Lee's strategy, with digital revenue now representing 55% of total revenue at $78 million. Digital-only subscription revenue grew 16% year-over-year on a same-store basis, with the company now serving 670,000 digital-only subscribers. Their Amplified Digital Agency business showed strong 10% year-over-year growth.

The company's balance sheet remains highly leveraged with $455 million in debt against just $14 million in cash. However, a critical milestone was achieved this quarter: since May 2025, all mandatory principal and interest payments have been funded through operating cash flow rather than further borrowing. This marks important progress in financial stabilization following their cyber event earlier in the fiscal year.

Revenue challenges persist in the legacy print business, with total operating revenue declining 6.2% year-over-year to $141 million. Print subscription revenue fell 20% year-over-year, continuing the secular decline in this segment. The company's net loss narrowed to $1.7 million from $3.7 million in the year-ago period, showing improved bottom-line performance despite top-line pressure.

The recovery appears to be gaining momentum, with management indicating they're on track to achieve second-half guidance of year-over-year growth in both total digital revenue and Adjusted EBITDA. Their cost-cutting measures appear to be effective while digital investments continue to deliver growth. This quarter suggests Lee's transformation strategy is beginning to yield results, though significant challenges remain in managing the declining print business while servicing substantial debt obligations.

Adjusted EBITDA⁽¹⁾ growth of 92% over Q2
Total Digital Revenue⁽²⁾ of $78M represented 55% of total revenue
Digital-Only subscription revenue increased 16% YOY⁽³⁾
Amplified Digital^® Agency revenue totaled $29M, or up 10% YOY⁽³⁾

DAVENPORT, Iowa, Aug. 07, 2025 (GLOBE NEWSWIRE) -- Lee Enterprises, Incorporated (NASDAQ: LEE), a digital-first subscription platform providing high quality, trusted, local news, information and a major platform for advertising in 72 markets, today reported preliminary third quarter fiscal 2025 financial results⁽⁴⁾ for the period ended June 29, 2025.

“Our third quarter results mark significant progress in our transformation strategy,” said Kevin Mowbray, Lee's President and Chief Executive Officer. “By rigorously managing our operating expenses and continuing to grow our digital business, we are driving sustainable improvements in profitability. The increase in Adjusted EBITDA demonstrates the strength of our underlying business and our commitment to disciplined execution. Adjusted EBITDA improvement drove organic free cash flow growth. This improvement was a major milestone in our cyber recovery, as since May 2025, all mandatory principal and interest payments were funded through cash from operations.”

“During the quarter, Lee achieved meaningful reductions in print-related expenses and corporate overhead, while reinvesting in high-growth digital areas. These efforts enabled Adjusted EBITDA expansion and continued progress toward the Company's long-term digital goals.”

“We are pleased with our industry-leading digital subscription and digital agency revenue growth. Digital subscription revenue continues to grow rapidly, up 16% on a same-store basis⁽³⁾ in the quarter, as we yield higher average digital subscription rates for our 670,000 digital only subscribers. Amplified Digital^® Agency, our full-service digital marketing agency, continues to have strong revenue growth, up an industry-leading 10% on a same-store basis⁽³⁾ over the prior year,” added Mowbray.

“The quarter's strong results put us on pace to achieve our second half's guidance of year-over-year growth in Total Digital Revenue and Adjusted EBITDA,” said Mowbray.

Key Third Quarter Highlights:

• Total operating revenue was $141 million.

• Total Digital Revenue was $78 million, a 3% increase over the prior year, or 4% on a same-store basis⁽³⁾, and represented 55% of our total operating revenue.

• Revenue from digital-only subscribers totaled $23 million, up 13% over the prior year, or up 16% on a same-store basis⁽³⁾. Digital-only subscribers totaled 670,000 at the end of the quarter.

• Digital advertising and marketing services revenue represented 74% of our total advertising revenue and totaled $49 million.

• Digital services revenue, which is predominantly from BLOX Digital, totaled $5 million in the quarter.

• Operating expenses totaled $137 million and Cash Costs⁽⁴⁾ totaled $128 million, a 6% and 7% decrease compared to the prior year, respectively.

• Operating expenses in the quarter included $1 million of cyber restoration expenses, which are included in the line Restructuring costs and other.

• Net loss totaled $2 million and Adjusted EBITDA totaled $15 million, a 1% increase over the prior year.

Debt and Free Cash Flow:

The Company has $455 million of debt outstanding under our Credit Agreement⁽⁵⁾ with BH Finance. The financing has favorable terms including a 25-year maturity, a fixed annual interest rate of 9.0%, no fixed principal payments, and no financial performance covenants.

As of and for the period ended June 29, 2025:

• The principal amount of debt totaled $455 million.

• As a result of the cyber event and in an effort to provide short-term liquidity, the Company's sole lender, BH Finance, waived payment of the Company's March 2025, April 2025 and May 2025 interest and basic rent payments. Waived interest and basic rent payments were added to the principal amount due under the Credit Agreement.

• Since May 2025, the Company has satisfied all principal and interest payments through organic free cash flow generation.

• Cash on the balance sheet totaled $14 million. Debt, net of cash on the balance sheet, totaled $441 million.

• Capital expenditures totaled $1 million for the quarter and $3 million in the first nine months. We expect up to $5 million of capital expenditures in FY25.

• We expect cash paid for income taxes to total between $3 million and $9 million in FY25.

• We do not expect any material pension contributions in the fiscal year as our plans are fully funded in the aggregate.

Conference Call Information:

As previously announced, we will hold an earnings conference call and audio webcast today at 9 a.m. Central Time. The live webcast will be accessible at www.lee.net and will be available for replay 24 hours later. Analysts have been invited to ask questions on the call. Questions from other participants may be submitted by participating in the webcast. To participate in the live conference call via telephone, please register here. Upon registering, a dial-in number and unique PIN will be provided to join the conference call.

About Lee:

Lee Enterprises is a major subscription and advertising platform and a leading provider of local news and information, with daily newspapers, rapidly growing digital products and nearly 350 weekly and specialty publications serving 72 markets in 25 states. Lee's markets include St. Louis, MO; Buffalo, NY; Omaha, NE; Richmond, VA; Lincoln, NE; Madison, WI; Davenport, IA; and Tucson, AZ. Lee Common Stock is traded on NASDAQ under the symbol LEE. For more information about Lee, please visit www.lee.net.

FORWARD-LOOKING STATEMENTS — The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This release contains information that may be deemed forward-looking that is based largely on our current expectations, and is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those anticipated. Among such risks, trends and other uncertainties, which in some instances are beyond our control, are:

• We may be required to indemnify the previous owners of BH Media or The Buffalo News for unknown legal and other matters that may arise;

• Our ability to manage declining print revenue and circulation subscribers;

• The impact and duration of adverse conditions in certain aspects of the economy affecting our business;

• Changes in advertising and subscription demand;

• Changes in technology that impact our ability to deliver digital advertising;

• Potential changes in newsprint, other commodities and energy costs;

• Interest rates;

• Labor costs;

• Significant cyber security breaches or failure of our information technology systems;

• Our ability to achieve planned expense reductions and realize the expected benefit of our acquisitions;

• Our ability to maintain employee and customer relationships;

• Our ability to manage increased capital costs;

• Our ability to maintain our listing status on NASDAQ;

• Competition; and

• Other risks detailed from time to time in our publicly filed documents.

Any statements that are not statements of historical fact (including statements containing the words “may”, “will”, “would”, “could”, “believes”, “expects”, “anticipates”, “intends”, “plans”, “projects”, “considers” and similar expressions) generally should be considered forward-looking statements. Statements regarding our plans, strategies, prospects and expectations regarding our business and industry and our responses thereto may have on our future operations, are forward-looking statements. They reflect our expectations, are not guarantees of performance and speak only as of the date the statement is made. Readers are cautioned not to place undue reliance on such forward-looking statements, which are made as of the date of this report. We do not undertake to publicly update or revise our forward-looking statements, except as required by law.

Contact:
IR@lee.net
(563) 383-2100

CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

	Three months ended						Nine months ended
(Thousands of Dollars, Except Per Common Share Data)	June 29, 2025			June 23, 2024			June 29, 2025			June 23, 2024
Operating revenue:
Print advertising revenue	17,474			18,941			53,867			62,118
Digital advertising revenue	49,097			49,903			139,766			141,747
Advertising and marketing services revenue	66,571			68,844			193,633			203,865
Print subscription revenue	38,076			47,605			122,587			148,443
Digital subscription revenue	23,482			20,701			68,836			60,429
Subscription revenue	61,558			68,306			191,423			208,872
Print other revenue	7,837			8,278			22,938			24,839
Digital other revenue	5,328			5,150			15,241			15,230
Other revenue	13,165			13,428			38,179			40,069
Total operating revenue	141,294			150,578			423,235			452,806
Operating expenses:
Compensation	47,436			59,278			164,349			175,757
Newsprint and ink	3,268			4,096			9,996			13,101
Other operating expenses	77,252			74,177			223,387			221,247
Depreciation and amortization	3,783			6,850			15,218			21,438
Assets loss (gain) on sales, impairments and other, net	(1,562	)		(1,421	)		(2,365	)		4,727
Restructuring costs and other	7,141			3,795			18,806			12,199
Total operating expenses	137,318			146,775			429,391			448,469
Equity in earnings of associated companies	686			1,122			2,963			3,869
Operating (loss) income	4,662			4,925			(3,193	)		8,206
Non-operating (expense) income:
Interest expense	(10,132	)		(10,082	)		(30,365	)		(30,427	)
Pension and OPEB related benefit and other, net	1,050			617			2,362			1,096
Curtailment/Settlement gains	—			—			—			3,593
Total non-operating expense, net	(9,082	)		(9,465	)		(28,003	)		(25,738	)
Loss before income taxes	(4,420	)		(4,540	)		(31,196	)		(17,532	)
Income tax benefit	(2,744	)		(849	)		(1,281	)		(3,438	)
Net loss	(1,676	)		(3,691	)		(29,915	)		(14,094	)
Net income attributable to non-controlling interests	(244	)		(575	)		(1,264	)		(1,663	)
Loss attributable to Lee Enterprises, Incorporated	(1,920	)		(4,266	)		(31,179	)		(15,757	)
Other comprehensive loss, net of income taxes	(115	)		(147	)		(230	)		(2,609	)
Comprehensive loss attributable to Lee Enterprises, Incorporated	(2,035	)		(4,413	)		(31,409	)		(18,366	)
Loss per common share:
Basic:	(0.31	)		(0.73	)		(5.16	)		(2.68	)
Diluted:	(0.31	)		(0.73	)		(5.16	)		(2.68	)

DIGITAL / PRINT REVENUE COMPOSITION
(UNAUDITED)

	Three months Ended				Nine months ended
(Thousands of Dollars)	June 29, 2025		June 23, 2024		June 29, 2025		June 23, 2024
Digital Advertising and Marketing Services Revenue	49,097		49,903		139,766		141,747
Digital Only Subscription Revenue	23,482		20,701		68,836		60,429
Digital Services Revenue	5,328		5,150		15,241		15,230
Total Digital Revenue	77,907		75,754		223,843		217,406
Print Advertising Revenue	17,474		18,941		53,867		62,118
Print Subscription Revenue	38,076		47,605		122,587		148,443
Other Print Revenue	7,837		8,278		22,938		24,839
Total Print Revenue	63,387		74,824		199,392		235,400
Total Operating Revenue	141,294		150,578		423,235		452,806

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)

The tables below reconcile the non-GAAP financial performance measure of Adjusted EBITDA to Net loss, its most directly comparable U.S. GAAP measure:

	Three months ended						Nine months ended
(Thousands of Dollars)	June 29, 2025			June 23, 2024			June 29, 2025			June 23, 2024
Net loss	(1,676	)		(3,691	)		(29,915	)		(14,094	)
Adjusted to exclude
Income tax benefit	(2,744	)		(849	)		(1,281	)		(3,438	)
Non-operating expenses, net	9,082			9,465			28,003			25,738
Equity in earnings of TNI and MNI	(686	)		(1,122	)		(2,963	)		(3,869	)
Depreciation and amortization	3,783			6,850			15,218			21,438
Restructuring costs and other	7,141			3,795			18,806			12,199
Assets (gain) loss on sales, impairments and other, net	(1,562	)		(1,421	)		(2,365	)		4,727
Stock compensation	540			474			1,328			1,189
Add:
Ownership share of TNI and MNI EBITDA (50%)	1,066			1,323			3,488			4,644
Adjusted EBITDA	14,944			14,824			30,319			48,534

	Three months ended						Six months ended
(Thousands of Dollars)	March 30, 2025			March 24, 2024			March 30, 2025			March 24, 2024
Net loss	(12,015	)		(11,636	)		(28,239	)		(10,403	)
Adjusted to exclude
Income tax (benefit) expense	(1,780	)		(2,837	)		1,463			(2,589	)
Non-operating expenses, net	9,292			9,921			18,921			16,273
Equity in earnings of TNI and MNI	(1,155	)		(1,206	)		(2,277	)		(2,747	)
Depreciation and amortization	5,171			7,293			11,436			14,588
Restructuring costs and other	6,516			4,139			11,666			8,404
Assets loss (gain) on sales, impairments and other, net	126			7,617			(803	)		6,148
Stock compensation	358			501			788			715
Add:
Ownership share of TNI and MNI EBITDA (50%)	1,255			1,269			2,422			3,321
Adjusted EBITDA	7,768			15,061			15,377			33,710

The table below reconciles the non-GAAP financial performance measure of Cash Costs to Operating expenses, the most directly comparable U.S. GAAP measure:

	Three months ended						Nine months ended
(Thousands of Dollars)	June 29, 2025			June 23, 2024			June 29, 2025			June 23, 2024
Operating expenses	137,318			146,775			429,391			448,469
Adjustments
Depreciation and amortization	3,783			6,850			15,218			21,438
Assets (gain) loss on sales, impairments and other, net	(1,562	)		(1,421	)		(2,365	)		4,727
Restructuring costs and other	7,141			3,795			18,806			12,199
Cash Costs	127,956			137,551			397,732			410,105

The table below reconciles the non-GAAP financial performance measure of Same-store Revenues to Operating Revenues, its most directly comparable U.S. GAAP measure:

	Three months ended					Nine months ended
(Thousands of Dollars)	June 29, 2025		June 23, 2024			June 29, 2025			June 23, 2024
Print Advertising Revenue	17,474		18,941			53,867			62,118
Exited operations	—		(387	)		(98	)		(1,924	)
Same-store, Print Advertising Revenue	17,474		18,554			53,769			60,194
Digital Advertising Revenue	49,097		49,903			139,766			141,747
Exited operations	—		(306	)		(7	)		(1,137	)
Same-store, Digital Advertising Revenue	49,097		49,597			139,759			140,610
Total Advertising Revenue	66,571		68,844			193,633			203,865
Exited operations	—		(693	)		(105	)		(3,061	)
Same-store, Total Advertising Revenue	66,571		68,151			193,528			200,804
Print Subscription Revenue	38,076		47,605			122,587			148,443
Exited operations	3		(271	)		(29	)		(1,024	)
Same-store, Print Subscription Revenue	38,079		47,334			122,558			147,419
Digital Subscription Revenue	23,482		20,701			68,836			60,429
Exited operations	—		(379	)		(2	)		(1,233	)
Same-store, Digital Subscription Revenue	23,482		20,322			68,834			59,196
Total Subscription Revenue	61,558		68,306			191,423			208,872
Exited operations	3		(650	)		(31	)		(2,257	)
Same-store, Total Subscription Revenue	61,561		67,656			191,392			206,615
Print Other Revenue	7,837		8,278			22,938			24,839
Exited operations	—		—			—			(35	)
Same-store, Print Other Revenue	7,837		8,278			22,938			24,804
Digital Other Revenue	5,328		5,150			15,241			15,230
Exited operations	—		—			—			—
Same-store, Digital Other Revenue	5,328		5,150			15,241			15,230
Total Other Revenue	13,165		13,428			38,179			40,069
Exited operations	—		—			—			(35	)
Same-store, Total Other Revenue	13,165		13,428			38,179			40,034
Total Operating Revenue	141,294		150,578			423,235			452,806
Exited operations	3		(1,343	)		(136	)		(5,353	)
Same-store, Total Operating Revenue	141,297		149,235			423,099			447,453

NOTES
(1)		The following are non-GAAP (Generally Accepted Accounting Principles) financial measures for which reconciliations to relevant U.S GAAP measures are included in tables accompanying this release:
	•	Adjusted EBITDA is a non-GAAP financial performance measure that enhances financial statement users overall understanding of the operating performance of the Company. The measure isolates unusual, infrequent or non-cash transactions from the operating performance of the business. This allows users to easily compare operating performance among various fiscal periods and how management measures the performance of the business. This measure also provides users with a benchmark that can be used when forecasting future operating performance of the Company that excludes unusual, nonrecurring or one-time transactions. Adjusted EBITDA is a component of the calculation used by stockholders and analysts to determine the value of our business when using the market approach, which applies a market multiple to financial metrics. It is also a measure used to calculate the leverage ratio of the Company, which is a key financial ratio monitored and used by the Company and its investors. Adjusted EBITDA is defined as net income (loss), plus non-operating expenses, income tax expense, depreciation and amortization, assets loss (gain) on sales, impairments and other, restructuring costs and other, stock compensation and our 50% share of EBITDA from TNI and MNI, minus equity in earnings of TNI and MNI.
	•	Cash Costs represent a non-GAAP financial performance measure of operating expenses which are measured on an accrual basis and settled in cash. This measure is useful to investors in understanding the components of the Company’s cash-settled operating costs. Periodically, the Company provides forward-looking guidance of Cash Costs, which can be used by financial statement users to assess the Company's ability to manage and control its operating cost structure. Cash Costs are defined as compensation, newsprint and ink and other operating expenses. Depreciation and amortization, assets loss (gain) on sales, impairments and other, other non-cash operating expenses and other expenses are excluded. Cash Costs also exclude restructuring costs and other, which are typically paid in cash.
(2)		Total Digital Revenue is defined as digital advertising and marketing services revenue (including Amplified Digital®), digital-only subscription revenue and digital services revenue.
(3)		Same-store revenues is a non-GAAP performance measure based on U.S. GAAP revenues for Lee for the current period, excluding exited operations. Exited operations include (1) business divestitures and (2) the elimination of stand-alone print products discontinued within our markets.
(4)		This earnings release is a preliminary report of results for the periods included. The reader should refer to the Company's most recent reports on Form 10-Q and on Form 10-K for definitive information.
(5)		The Company's debt is the $576 million term loan under a credit agreement with BH Finance LLC dated January 29, 2020 (the “Credit Agreement”). Excess Cash Flow is defined under the Credit Agreement as any cash greater than $20,000,000 on the balance sheet in accordance with U.S. GAAP at the end of each fiscal quarter, beginning with the quarter ending June 28, 2020.
(6)		TNI refers to TNI Partners publishing operations in Tucson, AZ. MNI refers to Madison Newspapers, Inc. publishing operations in Madison, WI.

FAQ

What was Lee Enterprises (LEE) Q3 2025 Adjusted EBITDA performance?

Lee reported Adjusted EBITDA of $15M, representing a 92% increase over Q2 and a 1% increase year-over-year.

How much debt does Lee Enterprises (LEE) currently have?

Lee has $455M of debt outstanding with BH Finance, featuring a 25-year maturity and 9.0% fixed annual interest rate, with no fixed principal payments required.

What percentage of Lee Enterprises revenue is digital?

Digital revenue represented 55% of total revenue, reaching $78M in Q3 2025, with a 3% increase over the prior year.

How many digital subscribers does Lee Enterprises have?

Lee reported 670,000 digital-only subscribers at the end of Q3 2025, generating $23M in revenue, up 13% over the prior year.

How did Lee Enterprises perform in print vs digital advertising?

Digital advertising represented 74% of total advertising revenue at $49M, while print advertising declined to $17.5M from $18.9M year-over-year.