Gannett, the owner of USA TODAY, reported on Thursday a first-quarter performance that was “slightly ahead of expectations” with a nearly 44% year-over-year increase in digital-only paid subscribers.
The company, which owns local media organizations in 45 states, reported a net loss of $2.97 million in the quarter compared with a net loss of $142.3 million the prior-year quarter.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $64.2 million in the quarter, down 36.1% from the same period a year earlier.
Total revenue fell 3.7% to $748.1 million. Digital revenue rose 9.7% to $251.1 million, which comprised 34% of total revenue.
Circulation revenue declined 10.9% to $288.4 million. Advertising and marketing services revenue fell 1.2% to $374.9 million.
Digital-only circulation revenue of $30.1 million rose 30% from the prior-year quarter.
Gannett’s stock fell 4% to $4.05 as of 10:41 am ET.
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‘Strong growth’ in digital at USA TODAY
Gannett Chairman and CEO Michael Reed said in a statement that the company is positioned to “carry this momentum” throughout 2022 despite a “challenging macro environment” with inflationary pressures.
Reed pointed to “strong growth” in digital-only circulation, with the company surpassing 1.75 million digital-only subscribers in the quarter. This was the fifth consecutive quarter that the company has notched subscriber growth of at least 40%.
In 2021, Reed said Gannett was aiming for 10 million paid digital subscriptions by the end of 2026. The company is targeting 2 million for 2022.
Gannett plans to capitalize on its organic audience to fuel that growth, with Reed noting191 million average monthly unique visitors in the first quarter. In the US, the company has 4 million registered users who are not registered and another 7 million newsletter subscribers who are not registered users.
“Right there we have 11 million consumers and we are interacting with on a regular basis. Our goal is to build on these relationships,” Reed said.
Reed also highlighted the company’s digital marketing solutions business, whose revenue rose 14% year over year.
In all, digital-only revenues accounted for more than one-third of total revenues in the quarter.
“If you look back at where we were a year ago, or at the time of the acquisition, and where this business is today, it is in a fundamentally different place,” Reed said. “We believe we are positioned to be a growing business that generates significant free cash flow.”
Cost pressures for the company in the most recent quarter included fuel, delivery, postage and higher newsprint prices.
“As we sit here today, we’re expecting many of those (inflationary) pressures to continue throughout the year, and that’s baked into our outlook,” said Doug Horne, Gannett’s chief financial officer.
You can follow USA TODAY reporter Bailey Schulz on Twitter @bailey_schulz.