Davenport-based newspaper publisher Lee Enterprises reported “continued momentum” in improving its operations, according to the company’s preliminary second quarter 2026 financial report that was released today, Thursday, May 7.
The earnings report outlined a strong quarter with cuts to expenses, more digital revenue and increases in digital-only subscriptions, Lee officials said.
However, Lee also reported continued losses in total operating revenues and the print side of the business. That includes falling print advertising and subscriptions.
In the Quad Cities region, Lee is the publisher of the Quad-City Times, The Moline Dispatch and Rock Island Argus, and Muscatine Journal newspapers. It publishes more than 70 daily newspapers and 350 weekly and specialty publications serving 73 markets in 26 U.S. states.
Lee’s new president and CEO said he is optimistic about the future of the company. “Our second quarter results reflect continued momentum in the business and disciplined execution across our operations. … In the quarter, we continued to take proactive steps to align our cost structure with the ongoing shift in our revenue mix,” Nathan Bekke, Lee’s president and chief executive officer, said in the earnings news release.
Mr. Bekke was named as Lee Enterprises’ new president and CEO of the company last month.
“We are also beginning to realize benefits from the strategic investment completed in February,” Mr. Bekke added. “The amendment to our credit agreement reduced our interest rate mid-quarter, which will drive meaningful interest expense savings going forward. We expect these savings to total approximately $18 million annually, or up to $90 million over the next five years, further strengthening our capital structure and enhancing our financial flexibility as we continue to invest in digital growth. Additionally, we finished the quarter with $53 million in cash on our balance sheet, up $49 million year-over-year. This improved liquidity, combined with lower interest expense, positions us well to accelerate our strategic priorities and further strengthen our balance sheet over time.”
Lee’s net loss for the quarter totaled $2 million, an improvement of $10 million, or 86%, compared to the prior year quarter, according to the quarterly report.
“Our progress continues to reflect the strength of our strategy and advances we are making in our digital transformation,” Mr. Bekke added. “We remain focused on expanding recurring digital revenue while maintaining disciplined cost management to support margin improvement. We are highly encouraged by our performance through the first half of the fiscal year and remain confident in our strategy and our ability to deliver continued growth in the quarters ahead.”
Some of the other highlights of the quarter include:
- Total operating revenue was $122 million, down from about $137 million at this time last year.
- Total digital revenue was $68 million and represented 56% of total operating revenue.
- Revenue from digital-only subscribers totaled $22 million. Digital-only subscription revenue increased 17% annually over the past three years. Digital-only subscribers totaled 591,000 at the end of the quarter.
- Digital advertising and marketing services revenue represented 74% of the company’s total advertising revenue and totaled $41 million. Amplified Digital Agency revenue totaled $23 million in the quarter.
- Digital services revenue, which is predominantly from BLOX Digital, totaled $5 million.
- Total print revenue was $54 million in the period, ended March 29. That’s down from about $64.8 million in the three-month period ended March 30, 2025.
- Operating expenses totaled $114 million and cash costs totaled $112 million, representing 20% and 15% decreases compared to the prior year, respectively. During the quarter, operating expenses were reduced by $4 million due to business interruption insurance recoveries. Operating expenses were further reduced by $1 million from insurance recoveries related to expenses incurred in response to the prior year cyber incident. Excluding the business interruption insurance proceeds and expense reimbursements, operating expenses decreased 17% compared to the prior year.
The quarterly report also showed continued falling print revenues. Those include print subscriptions that are now listed at about $32.9 million, down from $41 million at this time last year; and print advertising revenues listed at about $14.2 million, down from about $16.5 million at this time last year.
