Lee Enterprises, Inc. reported first‑quarter 2026 results that highlighted a sharp shift toward digital while underscoring ongoing profitability challenges. Total operating revenue fell 10% to $130.1 million, driven by a 10% decline in print advertising and subscription revenue. Net loss widened to $5.1 million, an improvement from the $16.2 million loss reported in the same quarter a year earlier. Earnings per share were –$0.92, missing the consensus estimate of –$0.69 and marking the eighth consecutive quarterly miss.
Adjusted EBITDA rose 61% year‑over‑year to $12 million, largely due to disciplined cost control and a $2 million insurance reimbursement related to a February 2025 cyber incident. The figure excludes the one‑time reimbursement, which still represents a 35% increase on a comparable basis. Digital revenue, which now accounts for 54% of total operating revenue, grew 2% year‑over‑year, reflecting a 5% increase in digital‑only subscription revenue and a 330‑basis‑point lift in the digital revenue mix.
Digital‑only subscription revenue grew 5% year‑over‑year, a slowdown from the 16% same‑store growth reported in Q4 FY25. The modest pace is offset by a 2% rise in same‑store digital advertising revenue, which helped lift the overall digital mix. Print‑based revenue continued to decline, but the company’s focus on local journalism and subscription‑based digital offerings is expected to offset the decline over the long term.
The company closed a $50 million private placement in early February, reducing the interest rate on its $455.5 million debt from 9% to 5% and creating an estimated $18 million in annual interest savings. The capital raise is intended to support ongoing digital expansion and accelerate debt repayment, strengthening the balance sheet and improving cash‑flow generation.
President and interim CEO Nathan Bekke said the quarter demonstrated “the effectiveness of our Three Pillar Digital Growth Strategy” and that the company’s “digital is no longer an emerging segment inside a legacy business, but the primary economic engine.” He added that the equity infusion and interest savings “position Lee for an exciting future as we drive sustainable growth and create long‑term value for our shareholders.” Management reiterated its guidance for mid‑single‑digit Adjusted EBITDA growth for FY2026 and maintained a cautious outlook for revenue growth, citing continued headwinds in print and the need for disciplined cost management.
Investors responded positively to the earnings, citing the company’s strong digital momentum and the significant balance‑sheet improvements from the equity raise and debt refinancing. The EPS miss was offset by the robust digital growth and the company’s clear path to improving profitability through cost discipline and a higher digital revenue mix.
The content on EveryTicker is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.