Davenport-based newspaper publisher Lee Enterprises touted its growing digital revenues in its preliminary first quarter fiscal 2025 financial results report. Those results, for the period that ended Dec. 29, were reported Thursday, Jan. 6.
The report states the newspaper publisher’s total digital revenue increased by 5% year over year, and its digital-only subscription revenue increased 14%. However, it also shows print revenues continue to fall. Its total print revenues fell 16% year over year. Print advertising revenue fell 19% and print subscription revenues fell 11%.
Also, Kevin Mowbray, Lee’s president and chief executive officer, said the company plans to make $40 million in cost cuts by the end of the second quarter. He did not offer any details on those planned cost cuts.
In the Quad Cities region, Lee is the publisher of the Quad-City Times, Rock Island Argus and Dispatch and Muscatine Journal newspapers. It publishes more than 350 weekly and specialty publications serving 73 markets in 26 U.S. states.
“Our first quarter results demonstrate the continued progression of our digital transformation. We achieved over $300 million in total digital revenue over the last twelve months, including over $100 million in Amplified Digital Agency revenue,” said Mr. Mowbray.
“To accelerate our digital transformation, we recently announced a strategic partnership with Amazon Web Services (AWS). By leveraging AWS’s cutting-edge cloud computing solutions, we aim to optimize content delivery, improve customer engagement, and drive innovative digital products across our extensive portfolio of publications. This partnership highlights our commitment to embracing advanced technologies to meet the evolving needs of our audience and advertisers while achieving long-term growth and scalability. With AWS’s proven expertise, Lee Enterprises is well-positioned to drive sustainable growth, enhance efficiency, and deliver increased value to our shareholders,” Mr. Mowbray added.
Some of the first quarter highlights include:
- Total operating revenue was $145 million.
- Total digital revenue was $73 million, a 5% increase over the prior year, and represented 51% of Lee’s total operating revenue.
- Revenue from digital-only subscribers totaled $22 million, up 14% over the prior year.
- Digital advertising and marketing services revenue represented 70% of the company’s total advertising revenue and totaled $47 million.
- Digital services revenue, which is predominantly from BLOX Digital, totaled $5 million in the quarter.
- Operating expenses totaled $149 million and cash costs totaled $139 million, flat and a 1% decrease compared to the prior year, respectively.
“As we look forward into the rest of the fiscal year, we expect digital revenue growth to accelerate achieving full year guidance of growth between 7% and 10%. In addition, we have identified approximately $40 million of annualized cost reductions that we expect to have executed on by the end of the second quarter. We expect strong digital revenue growth combined with strong cost management of our print business to keep us on track,” Mr. Mowbray said.
In addition to the company’s digital growth, the quarterly report also outlines its falling print revenues. For instance, its total print revenues fell year over year from almost $84.8 million to $71.1 million in the latest quarter. Print advertising went from $24.4 million to $19.8 million, and print subscriptions went from $51.8 million to $43.3 million.
