Gannett Co., Inc.

Greetings. Welcome to the Gannett Company, Inc. Q1 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Matt Esposito, Head of Investor Relations, you may begin.

Thank you. Good morning, everyone, and thank you for joining our call today to discuss Gannett's first quarter 2024 financial results. Presenting on today's call will be Mike Reed, Chairman and Chief Executive Officer, Doug Horn, Chief Financial Officer, Kristen Roberts, Chief Content Officer, and Chris Cho, President of Digital Marketing Solutions. If you navigate to the Gannett website, you will find that we have posted an earnings supplement in addition to our earlier press release. We will be referencing it today on the call as it provides you with additional detail on this quarter's performance. Before we begin, please let me remind you that this call is being recorded. In addition, certain statements made during this call are or may be deemed to be forward-looking statements, including those with respect to future results and events and are based upon current expectations. These statements involve risks and uncertainties that may cause actual results and events to differ materially from those discussed today. We encourage you to read the cautionary statement regarding forward-looking statements in the earnings supplement, as well as the risk factors described in Gannett's comments made with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to publicly update or correct any of the forward-looking statements made during this call. In addition, we will be discussing non-GAAP financial information during the call, including same-store revenues, free cash flow, adjusted EBITDA, adjusted EBITDA margin, and adjusted net income attributable to Gannett. You can find reconciliations of our non-GAAP measures to the most comparable U.S. GAAP measures in the earnings supplement. Lastly, I would like to remind you that nothing on this call constitutes an offer to sell or solicitation or an offer to purchase any interest in Gannett. The webcast and audio cast are copyrighted material of Gannett and may not be duplicated, reproduced, or rebroadcasted without our prior written consent. With that, I would like to turn the call over to Mike Reed, Gannett's chairman and CEO.

Thank you, Matt, and good morning, and thank you for joining Gannett's 2024 first quarter earnings call. Gannett had an excellent start to the year. In our last call, we laid out our expected path to growth. We told you that we would meaningfully improve total revenue trends through digital revenue growth and that is reflected in our Q1 results. As you will hear throughout the call this morning, our momentum continues to build and we believe our first quarter results have set the tone for a promising 2024. Year-over-year revenue trends were a bright spot in the quarter, reflecting the most pronounced sequential trend improvement in nearly three years. Our top line improvement was fueled by the solid growth in digital revenues, up 8% year over year, and quickly approaching our guidance of over 10% growth this year. As a result, digital revenues accounted for over 42% of total revenues in the first quarter, representing an all-time high. In the first quarter, each of our digital revenue streams grew year over year as we executed on our expanded monetization strategy. Audience and engagement grew. driving growth in digital advertising. New highs in digital-only subscription ARPU helped drive digital-only subscription revenue growth, and our DMS business returned to growth, and our partnership revenue continued to scale, nearly doubling over the prior year. In addition to our top-line momentum, we drove a marked improvement in free cash flow versus the prior year period, along with improved sequential year-over-year trends in adjusted EBITDA, which we believe position us well for full-year adjusted EBITDA and free cash flow growth. We also continue to optimize our capital structure and maintain a strong balance sheet, evidenced by a solid cash position, further debt repayment, and firstly net leverage of two times at the end of the quarter. As we look ahead, based on the performance we are seeing in our business today, we remain optimistic and expect that we will exit the year with total revenues growing over the prior year. We believe our strong execution is achieving the results we had anticipated and therefore we are reaffirming our full year business outlook. With that I'd like to discuss the key operational highlights from the first quarter. As we outlined last year, our digital revenue strategy is rooted in audience expansion and increased engagement, as well as diversified monetization along the customer journey. We continue to serve an engaged digital audience with 187 million average monthly unique visitors in the first quarter, and page views growing more than 10% over the prior year period. We believe this growing audience and increased engagement offers us great potential for diversified, predictable, and repeatable digital revenue growth. This focus on the overall monetization of our audience has delivered positive results across each of our digital businesses in Q1. One area worth highlighting is our digital-only subscription business. In Q1, digital-only subscription revenue and digital-only ARPU achieved new highs with growth rates exceeding 20% compared to the first quarter of the prior year. Digital-only paid subscriptions surpassed 2 million in Q1, marking the third consecutive quarter of sequential growth. We expect digital-only paid subscriptions to return to year-over-year growth in the second quarter. In addition to our digital-only subscription business, we are seeing great traction with our partnerships. The partnerships announced in 2023 have created a new digital revenue stream with significant potential and at a very high margin. While we are still in the early stages of scale, we are encouraged by the growth observed across the portfolio, which has immediately contributed to our earnings and free cash flows. These partnerships have allowed us to reach a broader audience and increase the overall monetization of our platform. As a reminder, we expect to generate approximately 20 million in this high margin digital revenue category in 2024. Equally impressive, our digital advertising business sustained its growth trajectory in Q1 thanks to the solid execution of our revitalized content strategy. Central to that strategy is our commitment to driving audience growth and engagement by delivering broad content experiences to our consumers. Kristen Roberts and her team have played a crucial role on this front. Their initiatives and investments around audience expansion and increased engagement have led to notable gains in page views and readership per story. I will now hand it over to Kristen to discuss the momentum we are seeing on the content side. Kristen?