Gannett’s Digital Revenue Grows, Not Enough to Offset Print

Gannett reported a continuing increase in digital revenue over print, with digital subscriptions outpacing digital ads in the fourth quarter compared to a year earlier.

The company reported 200 million average monthly unique visitors again for the fourth quarter, same as the previous period, and up 7% versus the prior year. Total digital revenue in the quarter accounted for 45% of total revenue.

Key figures, year-over-year:

• Total revenue of $621 million decreased 7.2%, impacted by the decision to sell or shut down certain non-strategic assets including real estate
• Total digital revenue of $280 million increased 1.2%
• Print revenue of $340 million down 13%
• Digital-only subscription revenue of $49 million grew 17%
• 200 million average monthly unique visitors, an increase of 7%
• Digital advertising revenue of nearly $93 million grew 1.7%
• Operating income fell 65% to $6 million
• ARPU remains below peer averages at $8.08, and Gannett expects to be able to “unlock additional value through pricing optimization.” Read: Expect prices to increase. 

“Over the past two years, we have expanded our total digital mix from 35% to 44%, improved our bottom line by $52 million, and increased our cash provided by operating activities and free cash flow by approximately $60 million; overall, the progress highlighted in our results underscores the traction we have gained and further validates our strategic plan,” Chief Executive Officer Mike Reed said on the earnings call Thursday. 

Gannett is focused on building scale and improving audience engagement, primarily through personalizing the experience by understanding what readers are engaging with. The company can “use our vast array of content to continue to serve more personalized experiences to that consumer, which will lead to, we believe, better conversion from users to paid subscribers.”    

“We have achieved another quarter of double digit page view growth compared to the prior year period,” Reed said. “We have successfully grown this audience at scale, and moving forward, our focus will be on driving higher engagement and increasing the monetization of that audience. We believe there is significant potential to grow our total digital revenues by further personalizing the consumer journey through strategic tools and tactics, along with increasing the engagement, loyalty and monetization of those consumers that come to our platform. This is expected to unlock greater revenue opportunities through digital advertising, digital-only paid subscriptions, e-commerce and video.” 

While partnership revenue—for example, Home Solutions, a digital media company that helps homeowners make decisions about services and projects, has a branded “Homefront” section on the USA Today website—continued to grow in the quarter, it was tempered by Google’s “updated and fluid search policies and algorithm changes, which negatively impacted many media companies,” Reed said. “Search will always be an evolving space, and Google’s sudden change reinforces the importance of maintaining flexibility in an evolving market. We’ve heard from our partners the positive impact our speed to market with evolving solutions has had on their business, and ultimately, it’s highlighted the opportunity of an e-commerce business for us, built on the content.”

E-commerce and affiliate marketing represent a small amount of revenue today and are expected to increase in relevance. 

Guidance

The company expects 2025 to be a third consecutive year of adjusted EBITDA and free cash flow growth, along with ongoing improvement in top line trends. Digital revenue should make up 50% of total revenue during the year, growing between 7% and 10% on a same store basis compared to 2024.    

In 2024, Gannett saw 12 consecutive months of at least 1 billion page views, which should continue as a baseline for 2025, according to Chief Content Officer Kristin Roberts. She pointed out their strength in sports as a key for growth. 

“In 2025 we will continue to meet readers where they are to deliver highly engaging sports news and information. We also have ambitious plans to become the leading force in women’s sports coach through the USA Today network, we reach more women’s sports fans than any of our competitors, and we expect to capitalize on that opportunity,” Roberts said on the call. 

Video content will also be in focus given audience demand. In 2024, Gannett saw significant gains in programming and views with the Kentucky Derby, Indy 500 and College World Series.

With “March Madness quickly approaching, we plan to expand this strategy, both in our local markets and nationwide. Importantly, video content meets the habits of our audience, while creating inventory with higher advertising CPMs,” Roberts said. 

The digital marketing services segment saw core platform revenues down 2.6% for the quarter from a year earlier. Gannett will launch new “features and capabilities to enhance product fulfillment, while further leveraging our AI powered solution dash to optimize campaigns and drive strong new commercial outcomes.”  

“As we enter 2025, we remain extremely confident in the large opportunities related to our DMS, business, and we look forward to restoring our DMS business to growth during the year,” Reed said.