Newspaper publisher Lee Enterprises on Thursday, Dec. 7, reported growth in its digital revenues as the company continues its “digital transformation.” It also reported a continued decline in print revenues and subscriptions.
Those are among the highlights of the company’s preliminary fourth quarter fiscal 2023 financial results for the period ended Sept. 24. The fourth results, reported Thursday, can be viewed here. (Highlights of the third quarter report can be found here.)
The Davenport-based Lee Enterprises owns 77 daily newspapers in the U.S., including the Quad-City Times, The Dispatch-Argus and the Muscatine Journal.
“Our fourth quarter digital subscription results lead the industry by a significant margin, continuing the streak for 16 consecutive quarters. Subscribers to our digital products totaled 721,000, up 36% compared to last year and digital-only subscription revenue accelerated–growing 68% on a Same-store basis,” Kevin Mowbray, Lee’s president and CEO, said in the earnings release. “Amplified Digital revenue totaled $24 million in the quarter, leading to an 11% increase over the prior year. Total digital revenue increased 14% in the quarter, and represented 44% of our total operating revenue.”
Lee Enterprises stock was trading at $10.84 a share as of Thursday morning. That price is up about 16% over the past month, but down about 24% in the past six months.
Lee officials added they are optimistic about the future and the company’s “digital transformation.”
“These significant improvements to our long-term outlook demonstrate our confidence in Lee’s digital transformation. We are on a clear path to becoming sustainable solely from the revenue and cash flow from our digital products,” said Mr. Mowbray.
He added: “The long-standing industry-leading digital execution gives us even more confidence in our transformation. In fact, the best-in-class performance increases our long-term outlook on digital-only subscribers by one-third to 1.2 million and digital subscription revenue by approximately 50% to more than $150 million.”
In addition to highlighting Lee’s strong digit revenue growth, the earnings report Thursday also pointed out the company’s continued struggles with print revenues. For instance, print advertising revenue is down almost 42% for the quarter and down 32% for year over year. Print subscription revenues are down more than 25% for the quarter and more than 19% for year over year. Print subscription revenues have gone from about $78 million in the third quarter to $58.7 million this quarter. The year-over-over revenues in this category have gone from about $313 million in September 2022, to about $252 million as of this Sept. 24.
Total print revenues also have also decreased year over year from about $541 million at the end of September 2022, to about $417 million at the end of this September. The quarterly total print revenues are also down – going from about $129 million at the end of September 2022 to about $91 million as of Sept. 24.
Also, total operating revenues were down 15% for the quarter and about 11% year over year.
Some of the other fourth quarter highlights include:
- Total operating revenue was $164 million.
- Total digital revenue was $73 million, a 14% increase over the prior year, and represented 44% of our total operating revenue.
- Digital-only subscription revenue increased 68% in the fourth quarter compared to the same quarter last year due to a 36% increase in digital-only subscribers and marketing efforts driving price yields. Digital-only subscribers totaled 721,000 at the end of the September quarter.
- Digital advertising and marketing services revenue represented 68% of Lee’s total advertising revenue and totaled $49 million. Digital marketing services revenue at Amplified Digital fueled the growth, with quarterly revenue of $24 million.
- Digital services revenue, which is predominantly BLOX Digital, totaled $5 million in the quarter.
