Lee 3Q report: Digital revenue up, print down

Lee Enterprises, owner of the Quad-City Times and other area newspapers, will host meetings with investors at the Sidoti May Virtual Investor Conference, taking place on Wednesday and Thursday, May 8-9.
Lee Enterprises, owner of the Quad-City Times and other area newspapers, will host meetings with investors at the Sidoti May Virtual Investor Conference, taking place on Wednesday and Thursday, May 8-9.

Digital revenues continue to grow. Print revenues continue to fall.

Those are the top messages from local newspaper publisher Lee Enterprises, which released its third quarter fiscal results on Thursday, Aug. 4.

Highlights of the report include:

  • Total digital revenue growth of 27% in the quarter
  • 49% growth in digital subscriptions
  • Meanwhile, total print revenues fell by almost 10% in the quarter, and are down 10.6% in the past nine months compared to this time last year.

“Our third quarter results once again demonstrate the success of our Three Pillar Digital Growth strategy to transform Lee Enterprises to a vibrant, digital-centric company,” said Kevin Mowbray, president and chief executive officer of Lee. “With our substantial third quarter digital growth, we exceeded our full year targets in digital subscriptions, digital subscription revenue, and Amplified Digital revenue a full quarter ahead of schedule, and we remain positioned to finish the year strong.”

Lee Enterprises owns 77 daily newspapers in the U.S., including the Quad-City Times, The Dispatch-Argus and the Muscatine Journal. 

Mr. Mowbray added he is encouraged by the “pace of the digital transformation at Lee as we remain the fastest growing digital subscription platform in local media with 49% growth in digital subscriptions, and we reached a digital inflection point in advertising, with digital representing 51% of our total advertising and marketing services revenue.”

Other key financial highlights of the quarterly report include:

  • Total operating revenue of $195 million.
  • Total digital revenue of $61 million, representing nearly one-third of the company’s total operating revenue. Total digital revenue over the last 12 months was $224 million.
  • Digital-only subscription revenue increased 50% in the third quarter. 
  • Digital advertising and marketing services revenue reached the inflection point representing 51% of total advertising revenue and totaled $46 million (+27% year-over-year). 
  • Digital services revenue, which is predominantly TownNews, totaled $4 million in the quarter. On a standalone basis, revenue at TownNews totaled $8 million (+17% year-over-year).  
  • Operating expenses totaled $190 million and cash costs were up 1%.

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