Gannett Sees 3%-5% Digital Revenue Growth and $100M Cost Cuts with Expanding AI Partnerships

Key Highlights from Gannett Co., Inc.'s Q2 2025 Earnings Call

During the recent earnings call, Gannett Co., Inc. (GCI) shared insights into its financial performance and strategic direction for the second half of 2025. The company reported notable improvements in key financial metrics, with a focus on digital growth, cost management, and new AI-driven initiatives.

Michael E. Reed, Chairman, CEO, and President, emphasized that the business is gaining momentum across several areas. He highlighted the implementation of a $100 million cost reduction program, which aims to streamline operations and improve efficiency. Additionally, Gannett announced a strategic AI content licensing agreement with Perplexity, signaling a commitment to leveraging artificial intelligence for future growth.

Reed also outlined several financial targets for the remainder of the year, including same-store digital revenue growth between 3% and 5% year-over-year, meaningful total adjusted EBITDA growth, and free cash flow growth exceeding 100% compared to the previous year. These goals reflect the company’s confidence in its ongoing operational and strategic initiatives.

Financial Performance and Strategic Initiatives

In Q2, Gannett reported total revenues of $584.9 million, with total adjusted EBITDA reaching $64.2 million, representing an 11% margin. Free cash flow for the quarter was $17.6 million, showing a 73% sequential increase. The company also repaid $23.4 million in debt during the period.

Digital revenues were a significant contributor, totaling $265.4 million, or over 45% of total revenues. Digital-only subscription revenues reached $42.7 million, with an average revenue per user (ARPU) of $7.79. The Domestic Gannett Media segment contributed $43.2 million in adjusted EBITDA, while the Newsquest segment generated $14.9 million in adjusted EBITDA.

The Digital Marketing Solutions (DMS) core platform revenue was $116.9 million, with a segment adjusted EBITDA of $11.5 million and a core platform ARPU of $2,830. This reflects continued strength in the DMS division, which is expected to play a crucial role in driving future growth.

Outlook and Future Expectations

Looking ahead, Gannett anticipates digital revenue to be roughly flat on a same-store basis, with growth of 3% to 5% year-over-year in the last six months of the year. This growth is expected to be driven by digital advertising expansion, accelerating DMS trends, and the impact of incremental AI licensing deals.

For the full year, total same-store revenues are projected to decrease in the low to mid-single-digit range, with a goal of achieving flat revenue in early 2026. The company continues to expect year-over-year improvement in net income or a narrower net loss, along with growth in adjusted EBITDA and an estimated 30% increase in free cash flow compared to 2024.

Strategic Moves and New Partnerships

Kristin Roberts, President of Gannett Media, emphasized engagement as a primary focus, highlighting the continued dominance of the sports vertical, OneTEAM Sports. She also announced the appointment of Wendy Naugle as USA TODAY NETWORK Executive Editor of Entertainment to drive growth in the entertainment sector.

Reed discussed the company’s AI partnerships, including the launch of Taboola's generative AI answer engine, Deeper Dive, within USA TODAY, and a multi-year agreement with AddressUSA for a real estate portal. These initiatives underscore Gannett’s commitment to integrating AI technologies into its content and services.

Trisha Gosser, CFO, provided further details on the $100 million cost savings program, explaining that it focuses on automation, outsourcing, and eliminating redundancies. She also mentioned additional workflow automation and plant closures as part of ongoing expense alignment efforts.

Analyst Questions and Market Sentiment

Analysts raised questions about the timing and sustainability of revenue improvements, as well as the impact of AI search on audience trends. Reed confirmed that the company expects revenues to become flat in the early stages of 2026, citing improvements in print, digital advertising, DMS, and new deals.

Gosser provided more details on the cost reduction program, emphasizing that it targets areas where automation and outsourcing can be applied. She also addressed concerns about the long-term viability of digital audience growth amid changes in AI search.

Overall, analysts expressed a positive-to-neutral tone, focusing on execution of cost reductions, digital growth, and AI partnerships. Management remained confident and optimistic, citing “momentum,” “positive signals,” and “optimism for the second half of the year.”

Comparative Analysis with Previous Quarters

Compared to Q1, the tone of the earnings call was slightly more constructive, with less skepticism and greater confidence from management. The current quarter introduced new strategic initiatives, including the $100 million cost reduction program and multiple AI partnerships, which were not present in Q1.

Digital growth expectations became more specific, with Q2 guidance targeting 3%–5% digital revenue growth in the second half of the year. In contrast, Q1 remarks focused on overcoming one-time items and external headwinds.

Risks and Concerns

Despite the positive outlook, management acknowledged challenges, including declining overall revenues and slower-than-expected improvement in revenue trends. Gosser noted that the company is not yet improving at the pace needed. However, cost management remains a key mitigation strategy, with the $100 million cost program, automation, outsourcing, and facility closures playing a critical role.

Analysts also raised concerns about the sustainability of digital audience growth, the risk of revenue reversals, and the timing of a return to digital subscription growth.

Final Takeaway

Gannett’s strategic pivot toward digital and AI-driven monetization, supported by clear cost reduction measures and new partnerships, positions the company for digital revenue growth of 3%–5% in the second half of 2025. While overall revenues remain under pressure, the company’s proactive approach to expense alignment and content licensing is expected to drive stronger results in the back half of the year and position it for flat revenues and continued EBITDA growth by early 2026.