USA Today Co. Inc.

04/30/2026 | Press release | Distributed by Public on 04/30/2026 08:18

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations and quantitative and qualitative disclosures should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on February 26, 2026. Management's Discussion and Analysis of Financial Condition and Results of Operations contains a number of forward-looking statements that reflect our plans, estimates, and beliefs, all of which are based on our current expectations and could be affected by certain uncertainties, risks, and other factors described under "Cautionary Note Regarding Forward-Looking Statements," "Risk Factors," and elsewhere throughout this Quarterly Report on Form 10-Q, as well as the factors described in our Annual Report on Form 10-K for the year ended December 31, 2025, and subsequent periodic reports filed with the Securities and Exchange Commission, particularly under "Risk Factors." Our actual results could differ materially from those discussed in the forward-looking statements.
OVERVIEW
We are a diversified media company with expansive reach at the national and local level dedicated to empowering and enriching communities. Our mission is to inspire, inform, and connect audiences. As a media and digital marketing solutions company we are focused on sustainable growth. Through our trusted brands, including the USA TODAY NETWORK, comprised of the national publication, USA TODAY, and our network of local properties, in the United States (the "U.S."), and Newsquest, a wholly-owned subsidiary operating in the United Kingdom (the "U.K."), we provide essential journalism, local content, and digital experiences to audiences and businesses. We deliver trusted unbiased journalism when and where consumers want it. LocaliQ, our digital marketing solutions brand, supports small and medium-sized businesses ("SMBs") with innovative digital marketing products and solutions.
We report in three segments: USA TODAY Media, Newsquest and LocaliQ. We also have a Corporate category that includes activities not directly attributable to a specific reportable segment and includes expenses associated with broad corporate functions. A full description of our reportable segments is included in Note 12 - Segment reporting in the notes to the condensed consolidated financial statements.
Industry trends
We have considered several industry trends when assessing our strategy:
•Print advertising and Print circulation revenues have and are expected to continue to decline as our audience increasingly moves to digital platforms. We seek to optimize our print operations to efficiently manage for the declining print audience. We are focused on growing a digitally-oriented audience across multiple platforms and revenue streams.
•Shortages of newsprint have resulted in price volatility, and we have experienced and expect continued price increases in 2026.
•Our revenues and results of operations continue to be influenced by general macroeconomic conditions, including, but not limited to, trade policy, inflation, interest rates, housing demand, employment levels, and consumer confidence, as well as economic and political instability, global conflicts, and other geopolitical events. We believe that these factors are contributing to uncertainty, which is resulting in lower levels of advertising performance and reduced spending.
•We rely on third-party platforms from large technology companies, particularly search engines, social media platforms, and emerging technologies. These platforms exert significant control over the visibility and ranking of our content, and their actions can adversely impact traffic, engagement, and revenues. Additionally, these companies can influence both the type of media we acquire and the associated costs. We continue to adapt by diversifying our digital strategies and optimizing content distribution to mitigate these impacts.
•The application of artificial intelligence ("AI") and the rapid rate of change within the AI ecosystem is increasing the pace of change in the media sector.
Recent developments
On January 31, 2026, we completed the transfer of The Detroit News from MediaNews Group (the "Detroit News Transaction"). Financing for the Detroit News Transaction was funded partially with cash on the balance sheet, and in part with incremental debt financing under our $900.0 million five-year first lien term loan facility (the "2029 Term Loan Facility") in an
aggregate principal amount equal to $15.0 million from funds managed by affiliates of Apollo Global Management Inc. As part of the financing, certain terms of our 2029 Term Loan Facility, as described in Note 6 - Debt in the notes to the condensed consolidated financial statements, were amended. The Detroit News Transaction was accounted for as an equity transaction as we retained control of the business both before and after the transfer. Accordingly, no gain or loss or step-up in basis was recognized in the condensed consolidated statements of operations and comprehensive income (loss).
Macroeconomic environment
We are exposed to certain risks and uncertainties caused by factors beyond our control, including, among other things, trade policy, inflation, interest rates, housing demand, employment levels, and consumer confidence, as well as economic and political instability, global conflicts, and other geopolitical events. We believe that these uncertain economic conditions have adversely impacted and may continue to have an adverse impact on our revenues, and the occurrence of these factors has resulted in a reduction in demand for our print and digital advertising, reduced the rates for our advertising, and caused marketers to shift, reduce or stop spend.
We are exposed to potential increases in interest rates associated with our 2029 Term Loan Facility, which as of March 31, 2026, accounted for approximately 75% of our outstanding debt, as well as fluctuations in foreign currency exchange rates, primarily related to our operations in the U.K. We expect continued uncertainty and volatility in the U.S. and global economies which will continue to impact our business.
Seasonality
We experience seasonality in our revenues. The USA TODAY Media segment typically witnesses the greatest impact from seasonality in the third quarter, primarily attributed to reduced population in seasonal markets and decreased holiday related spending. The LocaliQ segment generally experiences the greatest impact from seasonality in the first half of the fiscal year, which can be attributed to the advertising needs of specific verticals, which are generally lower in the first half of the year.
Foreign currency
Our U.K. media operations are conducted through our Newsquest subsidiary. In addition, we have foreign operations in regions such as Canada, Australia and New Zealand. Earnings from operations in foreign regions are translated into U.S. dollars at average exchange rates prevailing during the period, and assets and liabilities are translated at exchange rates in effect at the balance sheet date. Currency translation fluctuations have and are expected to continue to impact revenues, expenses, and Segment Adjusted EBITDA for our international operations. For example, our international revenues are favorably impacted as the U.S. dollar weakens relative to other foreign currencies, and unfavorably impacted as the U.S. dollar strengthens relative to other foreign currencies. During the three months ended March 31, 2026, foreign currency exchange rate fluctuations had a positive impact on our revenues and Segment Adjusted EBITDA and a negative impact on costs.
Reclassifications
Certain reclassifications have been made to the prior periods unaudited condensed consolidated financial statements to conform to classifications used in the current periods. These reclassifications had no impact on net income (loss), equity or cash flows as previously reported.
Use of website to distribute material company information
Our website is www.usastodayco.com. Information contained on our website is not part of this Quarterly Report on Form 10-Q. We use our website as a distribution channel for material company information. Financial and other important information regarding the Company is routinely posted on and accessible on the Investor Relations and News and Events subpages of our website, which are accessible by clicking on the tab labeled "Investor Relations" and "News and Events", respectively, on the website home page. Therefore, investors should look to the Investor Relations, and News and Events subpages of the Company's website for important and time-critical information.
RESULTS OF OPERATIONS
Consolidated summary
A summary of our consolidated results is presented below. Refer to Segment results below for a discussion of results by segment.
Three months ended March 31,
In thousands, except per share amounts Change
2026 2025 $ %
Digital(a)
$ 261,917 $ 250,394 $ 11,523 5 %
Print and commercial(b)
286,568 321,179 (34,611) (11) %
Total revenues 548,485 571,573 (23,088) (4) %
Operating costs 327,351 356,622 (29,271) (8) %
Selling, general and administrative expenses 150,780 167,516 (16,736) (10) %
Depreciation and amortization 31,190 42,634 (11,444) (27) %
Integration and reorganization costs 2,193 9,498 (7,305) (77) %
Asset impairments - 1,894 (1,894) (100) %
Gain on sale or disposal of assets, net (7,844) (20,680) 12,836 (62) %
Interest expense 21,240 26,083 (4,843) (19) %
Loss on early extinguishment of debt 75 1,274 (1,199) (94) %
Equity income in unconsolidated investees, net (652) (195) (457) ***
Other (income) expense, net(c)
(6,523) 1,074 (7,597) ***
Income (loss) before income taxes 30,675 (14,147) 44,822 ***
Provision (benefit) for income taxes 10,784 (6,814) 17,598 ***
Net income (loss) attributable to USA TODAY Co. $ 19,891 $ (7,333) $ 27,224 ***
Income (loss) per share attributable to USA TODAY Co. - basic $ 0.14 $ (0.05) $ 0.19 ***
Income (loss) per share attributable to USA TODAY Co. - diluted $ 0.12 $ (0.05) $ 0.17 ***
*** Indicates an absolute value percentage change greater than 100.
(a) Amounts are net of intersegment eliminations of $28.4 million and $34.5 million for the three months ended March 31, 2026 and 2025, respectively. Intersegment eliminations represent digital marketing services revenues and expenses associated with products sold by sales teams in our USA TODAY Media and Newsquest segments but fulfilled by our LocaliQ segment. When discussing segment results, these revenues and expenses are presented gross but are eliminated in consolidation.
(b) Included Commercial printing and delivery revenues of $28.7 million and $32.2 million for the three months ended March 31, 2026 and 2025, respectively.
(c) Other (income) expense, net primarily reflects Google litigation costs and other legal settlements, consulting fees related to a discrete initiative to reformulate our go-to-market strategy and post-sales processes, (gains) losses from the sale of investments, third-party debt costs and the components of net periodic pension and postretirement benefits other than service cost.
Revenues
Digital revenues are primarily derived from digital advertising offerings such as digital marketing services generated through multiple services, including search advertising, display advertising, search optimization, social media, website development, web presence products, customer relationship management, and software-as-a-service solutions, classified advertisements and display advertisements, which may leverage third-party providers, and digital distribution of our publications, as well as digital content syndication, affiliate, content and AI partnerships, and licensing revenues.
Print and commercial revenues are generated from the sale of local, national, and classified print advertising products, the sale of both home delivery and single copies of our publications, as well as commercial printing and distribution arrangements, and revenues from our events business.
Operating costs
Operating costs at the USA TODAY Media and Newsquest segments include labor, newsprint, delivery and digital costs and at the LocaliQ segment include the cost of online media acquired from third parties and costs to manage and operate our marketing solutions and technology infrastructure.
Selling, general and administrative expenses
Selling, general and administrative expenses include labor, payroll, outside services, benefits costs and bad debt expense.
Integration and reorganization costs
Integration and reorganization costs include severance costs as well as other reorganization costs associated with individual restructuring programs, designed primarily to right-size our employee base, consolidate facilities and improve operations.
For the three months ended March 31, 2026, we incurred Integration and reorganization costs of $2.2 million. Of the total costs incurred, $2.1 million were related to severance activities and were $0.1 million related to other reorganization-related costs.
For the three months ended March 31, 2025, we incurred Integration and reorganization costs of $9.5 million. Of the total costs incurred, $6.2 million were related to severance activities and $3.3 million were related to other reorganization-related costs. Other reorganization-related costs included $5.1 million, primarily due to costs related to the departure of the Company's former Chief Financial Officer of $2.1 million, as well as costs associated with improving operations and consolidating facilities, partially offset by the reversal of a withdrawal liability related to a multiemployer pension plan of $1.8 million based on the settlement of the withdrawal liability.
Gain on sale or disposal of assets, net
For the three months ended March 31, 2026, we recognized a net gain on the sale of assets of $7.8 million, primarily at the USA TODAY Media segment as part of our plan to monetize assets.
For the three months ended March 31, 2025, we recognized a net gain on the sale of assets of $20.7 million, primarily related to a gain of $20.8 million recognized on the sale of the Austin American-Statesman (the "Statesman") at the USA TODAY Media segment as part of our plan to monetize assets.
Interest expense
For the three months ended March 31, 2026, Interest expense was $21.2 million compared to $26.1 million for the three months ended March 31, 2025. For the three months ended March 31, 2026, interest expense decreased compared to the three months ended March 31, 2025, mainly due to a lower debt balance.
Other (income) expense, net
A summary of Other (income) expense, net is presented below:
Three months ended March 31,
Change
In thousands 2026 2025 $ %
Google litigation costs and other legal settlements $ (3,028) $ 3,594 $ (6,622) ***
Other(a)
(3,495) (2,520) (975) 39 %
Other (income) expense, net $ (6,523) $ 1,074 $ (7,597) ***
*** Indicates an absolute value percentage change greater than 100.
(a) Primarily includes the components of net periodic pension and postretirement benefits other than service cost, consulting fees related to a discrete initiative to reformulate our go-to-market strategy and post-sales processes, (gains) losses from the sale of investments and third-party debt costs.
Provision (benefit) for income taxes
The following table outlines our pre-tax net income (loss) before income taxes and income tax accounts:
Three months ended March 31,
In thousands 2026 2025
Income (loss) before income taxes $ 30,675 $ (14,147)
Provision (benefit) for income taxes 10,784 (6,814)
Effective tax rate 35.2 % 48.2 %
The provision (benefit) for income taxes is calculated by applying the projected annual effective tax rate for the year to the current period's income or loss before tax, adjusted for the tax effects of any significant or unusual items (discrete events) and changes in tax laws.
The provision for income taxes for the three months ended March 31, 2026, was primarily driven by pre-tax book income and the global intangible low-taxed income inclusion, partially offset by the generation of research and development credits and excess tax benefits related to share-based compensation. The provision was calculated using an estimated annual effective tax rate of 36.2%. The estimated annual effective tax rate before discrete items is principally impacted by the projected full year pre-tax book income, the global intangible low-taxed income inclusion and state tax expense, partially offset by the generation of the research and development credit. The estimated annual effective tax rate is based on the projected tax expense for the full year.
The benefit for income taxes for the three months ended March 31, 2025, was primarily driven by the pre-tax book loss and the release of valuation allowances on capital loss carryforwards associated with the sale of the Statesman. These benefits were partially offset by the global intangible low-taxed income inclusion and an increase in valuation allowances on non-deductible U.S. interest expense carryforwards. The benefit was calculated using an estimated annual effective tax rate of 53.0%.
Net income (loss) attributable to USA TODAY Co. and diluted income (loss) per share attributable to USA TODAY Co.
For the three months ended March 31, 2026, Net income attributable to USA TODAY Co. and diluted income per share attributable to USA TODAY Co. were $19.9 million and $0.12, respectively, compared to Net loss attributable to USA TODAY Co. and diluted loss per share attributable to USA TODAY Co. of $7.3 million and $0.05, respectively, for the three months ended March 31, 2025. The change for the three months ended March 31, 2026, compared to the same periods in the prior year reflects the various items discussed above.
Segment results
Segment Adjusted EBITDA
We evaluate the performance of our segments based on financial measures such as revenues and Segment Adjusted EBITDA (defined below). The Chief Operating Decision Maker ("CODM"), which is our Chief Executive Officer, uses Segment Adjusted EBITDA to evaluate the performance of our segments and allocate resources. Segment Adjusted EBITDA provides an assessment of controllable expenses and affords the CODM the ability to make decisions which are expected to facilitate meeting current financial goals as well as achieve optimal financial performance.
Management considers Segment Adjusted EBITDA to be an important metric to evaluate and compare the ongoing operating performance of our segments on a consistent basis across reporting periods as it eliminates the effect of items that we do not believe are indicative of each segment's core operating performance.
We define Segment Adjusted EBITDA as revenues less (1) operating costs and (2) selling, general and administrative expenses, plus (3) equity (income) loss in unconsolidated investees, net.
Segment Adjusted EBITDA also does not include: (1) Income tax expense (benefit), (2) Noncontrolling interest, (3) Interest expense, (4) Gains or losses on the early extinguishment of debt, (5) Loss on convertible notes derivative, (6) Depreciation and amortization, (7) Integration and reorganization costs, (8) Asset impairments, (9) Goodwill and intangible impairments, (10) Gains or losses on the sale or disposal of assets, (11) Share-based compensation expense, and (12) Other (income) expense, net.
Non-GAAP measure
Total Adjusted EBITDA is defined as Segment Adjusted EBITDA plus Corporate. Total Adjusted EBITDA is a non-GAAP financial performance measure we believe offers a useful view of the overall operation of our business, and may be different than similarly-titled measures used by other companies. A non-GAAP financial measure is generally defined as one that purports to measure financial performance, financial position, or cash flows, but excludes or includes amounts that would not be so excluded or included in the most comparable U.S. generally accepted accounting principles ("U.S. GAAP") measure.
Total Adjusted EBITDA has limitations as an analytical tool. It should not be viewed in isolation or as a substitute for U.S. GAAP measures of earnings. Material limitations in making the adjustments to our earnings to calculate Total Adjusted EBITDA and using this non-GAAP financial measure as compared to U.S. GAAP net income (loss) include: the exclusion of
the cash portion of interest/financing expense, income tax (benefit) provision, and charges related to asset impairments, which are items that may significantly affect our financial results.
Management believes Total Adjusted EBITDA is important in evaluating our performance, results of operations, and financial position. We use this non-GAAP financial performance measure to supplement our U.S. GAAP results in order to provide a more complete understanding of the factors and trends affecting our business.
Total Adjusted EBITDA is not an alternative to Net income (loss) attributable to USA TODAY Co., or any other measure of performance derived in accordance with U.S. GAAP, and as such, should not be considered or relied upon as a substitute or alternatives for any such U.S. GAAP financial measure. We strongly urge you to review the reconciliation of Total Adjusted EBITDA to Net income (loss) attributable to USA TODAY Co. along with our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. We also strongly urge you not to rely on any single financial performance measure to evaluate our business. In addition, because Total Adjusted EBITDA is not a measure of financial performance under U.S. GAAP and is susceptible to varying calculations, the Total Adjusted EBITDA measure as presented in this report may differ from and may not be comparable to similarly titled measures used by other companies.
Reconciliation of Net income (loss) attributable to USA TODAY Co. to Total Adjusted EBITDA
Three months ended March 31,
In thousands 2026 2025
Net income (loss) attributable to USA TODAY Co. $ 19,891 $ (7,333)
Provision (benefit) for income taxes 10,784 (6,814)
Interest expense 21,240 26,083
Loss on early extinguishment of debt 75 1,274
Depreciation and amortization 31,190 42,634
Integration and reorganization costs(a)
2,193 9,498
Asset impairments - 1,894
Gain on sale or disposal of assets, net (7,844) (20,680)
Share-based compensation expense 2,070 2,879
Other (income) expense, net(b)
(6,523) 1,074
Total Adjusted EBITDA $ 73,076 $ 50,509
(a) Integration and reorganization costs mainly reflect severance-related expenses and other reorganization-related costs, designed primarily to right-size the Company's employee base, consolidate facilities and improve operations.
(b) Other (income) expense, net primarily reflects Google litigation costs and other legal settlements, consulting fees related to a discrete initiative to reformulate our go-to-market strategy and post-sales processes, (gains) losses from the sale of investments, third-party debt costs and the components of net periodic pension and postretirement benefits other than service cost.
USA TODAY Media segment
A summary of our USA TODAY Media segment results is presented below:
Three months ended March 31,
Change
In thousands 2026 2025 $ %
Digital $ 168,058 $ 156,051 $ 12,007 8 %
Print and commercial 248,053 284,019 (35,966) (13) %
Segment revenues 416,111 440,070 (23,959) (5) %
Operating costs 249,012 279,718 (30,706) (11) %
Selling, general and administrative expenses 108,292 129,239 (20,947) (16) %
Equity income in unconsolidated investees, net (652) (195) (457) ***
Segment Adjusted EBITDA $ 59,459 $ 31,308 $ 28,151 90 %
*** Indicates an absolute value percentage change greater than 100.
Revenues
The following table provides the breakout of Revenues by category:
Three months ended March 31,
Change
In thousands 2026 2025 $ %
Digital advertising $ 67,945 $ 71,454 $ (3,509) (5) %
Digital marketing services 27,973 32,758 (4,785) (15) %
Digital-only subscription 43,382 41,266 2,116 5 %
Digital other
28,758 10,573 18,185 172 %
Digital 168,058 156,051 12,007 8 %
Print advertising 90,264 105,175 (14,911) (14) %
Print circulation 115,049 133,204 (18,155) (14) %
Commercial and other(a)
42,740 45,640 (2,900) (6) %
Print and commercial 248,053 284,019 (35,966) (13) %
Segment revenues $ 416,111 $ 440,070 $ (23,959) (5) %
(a) Included Commercial printing and delivery revenues of $26.3 million and $29.8 million for the three months ended March 31, 2026 and 2025, respectively.
For the three months ended March 31, 2026, Digital advertising revenues decreased compared to the three months ended March 31, 2025, primarily due to a decrease in national programmatic and sponsored link revenues and the absence of revenues in 2026 associated with businesses divested of $0.6 million, partially offset by higher classified advertising spend.
For the three months ended March 31, 2026, Digital marketing services revenues decreased compared to the three months ended March 31, 2025, primarily due to a decrease in client count and the absence of revenues in 2026 associated with a business divested of $1.5 million.
For the three months ended March 31, 2026, Digital-only subscription revenues increased compared to the three months ended March 31, 2025, primarily due to an increase in digital-only subscription average revenue per user ("Digital-only ARPU") of 48%, partially offset by the absence of revenues in 2026 associated with businesses divested of $0.7 million. Refer to "Key Performance Indicators" below for further discussion of Digital-only ARPU.
For the three months ended March 31, 2026, Digital other revenues increased compared to the three months ended March 31, 2025, primarily due to an increase in revenues from AI partnerships.
For the three months ended March 31, 2026, Print advertising revenues decreased compared to the three months ended March 31, 2025, primarily due to a decrease in local advertiser inserts and print display advertisements, lower classified advertisement spend and the absence of revenues in 2026 associated with businesses divested of $8.4 million.
For the three months ended March 31, 2026, Print circulation revenues decreased compared to the three months ended March 31, 2025, primarily due to a decline in home delivery revenues as a result of a reduction in the volume of subscribers, and to a lesser extent a decline in single copy revenues, partially offset by an increase in rates. The decrease for the three months ended March 31, 2026 was also due to the absence of revenues in 2026 associated with businesses divested of $1.4 million.
For the three months ended March 31, 2026, Commercial and other revenues decreased compared to the three months ended March 31, 2025, mainly driven by the decline in production volume related to the absence of revenues in 2026 associated with businesses divested of $4.3 million, partially offset by an increase in commercial print volume.
Operating costs
The following table provides the breakout of Operating costs for the three months ended March 31, 2026 and 2025:
Three months ended March 31,
Change
In thousands 2026 2025 $ %
Newsprint and other production materials $ 13,292 $ 15,884 $ (2,592) (16) %
Distribution 58,137 64,505 (6,368) (10) %
Compensation and benefits 82,231 94,226 (11,995) (13) %
Outside services 66,885 71,768 (4,883) (7) %
Other 28,467 33,335 (4,868) (15) %
Total operating costs $ 249,012 $ 279,718 $ (30,706) (11) %
For the three months ended March 31, 2026, Newsprint and other production materials decreased compared to the three months ended March 31, 2025, primarily due to the impact of businesses divested of $1.5 million, including lower volume driven by the decline in revenues.
For the three months ended March 31, 2026, Distribution costs decreased compared to the three months ended March 31, 2025, primarily due to the impact of businesses sunset of $6.1 million.
For the three months ended March 31, 2026, Compensation and benefits costs decreased compared to the three months ended March 31, 2025, primarily due to a decrease in headcount tied to ongoing cost control initiatives and the conversion to mail delivery in multiple markets.
For the three months ended March 31, 2026, Outside services costs, which includes professional services fulfilled by third parties, media fees and other digital costs, and paid search and ad serving services, decreased compared to the three months ended March 31, 2025, primarily due to a decrease in third-party media fees of $4.7 million, including the impact of businesses divested of $1.3 million.
For the three months ended March 31, 2026, Other costs decreased compared to the three months ended March 31, 2025, primarily due to lower facility related expenses of $4.4 million, mainly associated with downsizing our facilities footprint.
Selling, general and administrative expenses
The following table provides the breakout of Selling, general and administrative expenses for the three months ended March 31, 2026 and 2025:
Three months ended March 31,
Change
In thousands 2026 2025 $ %
Compensation and benefits $ 51,671 $ 61,548 $ (9,877) (16) %
Outside services and other 56,621 67,691 (11,070) (16) %
Total selling, general and administrative expenses $ 108,292 $ 129,239 $ (20,947) (16) %
For the three months ended March 31, 2026, Compensation and benefits costs decreased compared to the three months ended March 31, 2025, primarily due to a decrease in headcount tied to ongoing cost control initiatives.
For the three months ended March 31, 2026, Outside services and other costs, which include services fulfilled by third parties, decreased compared to the three months ended March 31, 2025, primarily due to lower costs associated with professional services, promotion, and technology, as well as the impact of businesses divested of $1.6 million.
Newsquest segment
A summary of our Newsquest segment results is presented below:
Three months ended March 31,
Change
In thousands 2026 2025 $ %
Digital $ 21,261 $ 18,688 $ 2,573 14 %
Print and commercial 38,515 37,160 1,355 4 %
Segment revenues 59,776 55,848 3,928 7 %
Operating costs 29,827 27,780 2,047 7 %
Selling, general and administrative expenses 15,089 14,134 955 7 %
Segment Adjusted EBITDA $ 14,860 $ 13,934 $ 926 7 %
Our U.K. media operations are conducted through our Newsquest subsidiary, which are translated into U.S. dollars at average exchange rates prevailing during the period. Currency translation fluctuations have and are expected to continue to impact revenues, expenses and Segment Adjusted EBITDA. During the three months ended March 31, 2026, foreign currency exchange rate fluctuations had a positive impact on our revenues and Segment Adjusted EBITDA and a negative impact on costs.
Revenues
The following table provides the breakout of Revenues by category:
Three months ended March 31,
Change
In thousands 2026 2025 $ %
Digital advertising $ 12,936 $ 11,917 $ 1,019 9 %
Digital marketing services 2,113 1,870 243 13 %
Digital-only subscription 2,557 1,993 564 28 %
Digital other
3,655 2,908 747 26 %
Digital 21,261 18,688 2,573 14 %
Print advertising 18,123 17,453 670 4 %
Print circulation 16,199 15,846 353 2 %
Commercial and other(a)
4,193 3,861 332 9 %
Print and commercial 38,515 37,160 1,355 4 %
Segment revenues $ 59,776 $ 55,848 $ 3,928 7 %
(a) Included Commercial printing and delivery revenues of $2.5 million and $2.4 million for the three months ended March 31, 2026 and 2025, respectively.
For the three months ended March 31, 2026, Digital advertising revenues increased compared to the three months ended March 31, 2025, primarily due to the positive impact of foreign currency exchange rate fluctuations of $0.8 million.
For the three months ended March 31, 2026, Digital-only subscription revenues increased compared to the three months ended March 31, 2025, primarily driven by an increase in digital-only paid subscriptions. Refer to "Key Performance Indicators" below for further discussion of digital-only paid subscriptions.
For the three months ended March 31, 2026, Digital other revenues increased compared to the three months ended March 31, 2025, primarily due to an increase in digital content syndication.
For the three months ended March 31, 2026, Print advertising revenues increased compared to the three months ended March 31, 2025, primarily due to the positive impact of foreign currency exchange rate fluctuations of $1.2 million, partially offset by a decline in print display revenues and classified advertisement spend.
For the three months ended March 31, 2026, Print circulation revenues increased compared to the three months ended March 31, 2025, due to the positive impact of foreign currency exchange rate fluctuations of $1.1 million.
Operating costs
The following table provides the breakout of Operating costs for the three months ended March 31, 2026 and 2025:
Three months ended March 31,
Change
In thousands 2026 2025 $ %
Newsprint and other production materials $ 2,961 $ 2,949 $ 12 - %
Distribution 3,135 3,010 125 4 %
Compensation and benefits 14,872 13,129 1,743 13 %
Outside services 3,581 3,369 212 6 %
Other 5,278 5,323 (45) (1) %
Total operating costs $ 29,827 $ 27,780 $ 2,047 7 %
For the three months ended March 31, 2026, Compensation and benefits costs increased compared to the three months ended March 31, 2025, primarily due to higher employer taxes and higher wages, including minimum wages.
Selling, general and administrative expenses
The following table provides the breakout of Selling, general and administrative expenses for the three months ended March 31, 2026 and 2025:
Three months ended March 31,
Change
In thousands 2026 2025 $ %
Compensation and benefits $ 12,081 $ 11,371 $ 710 6 %
Outside services and other 3,008 2,763 245 9 %
Total selling, general and administrative expenses $ 15,089 $ 14,134 $ 955 7 %
For the three months ended March 31, 2026, Compensation and benefits costs increased compared to the three months ended March 31, 2025, primarily due to the impact of foreign currency exchange rate fluctuations.
LocaliQ segment
A summary of our LocaliQ segment results is presented below:
Three months ended March 31,
Change
In thousands 2026 2025 $ %
Digital(a)
$ 99,684 $ 108,709 $ (9,025) (8) %
Segment revenues 99,684 108,709 (9,025) (8) %
Operating costs 72,764 78,501 (5,737) (7) %
Selling, general and administrative expenses 20,168 21,739 (1,571) (7) %
Segment Adjusted EBITDA $ 6,752 $ 8,469 $ (1,717) (20) %
(a)Digital revenues are solely generated by digital marketing services revenues.
Revenues
For the three months ended March 31, 2026, Digital revenues decreased compared to the three months ended March 31, 2025, primarily due to a decline in the core direct business, mainly driven by a decline in customer count. Core platform average monthly revenues divided by average monthly customer count within the period ("Core platform ARPU") increased 4% for the three months ended March 31, 2026. Refer to "Key Performance Indicators" below for further discussion of Core platform ARPU.
Operating costs
The following table provides the breakout of Operating costs for the three months ended March 31, 2026 and 2025:
Three months ended March 31,
Change
In thousands 2026 2025 $ %
Outside services $ 64,498 $ 67,981 $ (3,483) (5) %
Compensation and benefits 7,415 8,980 (1,565) (17) %
Other 851 1,540 (689) (45) %
Total operating costs $ 72,764 $ 78,501 $ (5,737) (7) %
For the three months ended March 31, 2026, Outside services costs decreased compared to the three months ended March 31, 2025, due to a decrease of $5.5 million associated with third-party media fees driven by a corresponding decrease in revenues, partially offset by an increase of $2.0 million, mainly due to costs associated with outsourcing initiatives.
For the three months ended March 31, 2026, Compensation and benefits costs decreased compared to the three months ended March 31, 2025, primarily due to a decrease in headcount.
For the three months ended March 31, 2026, Other costs decreased compared to the three months ended March 31, 2025, primarily due to a reduction in lease expense associated with downsizing our facilities footprint.
Selling, general and administrative expenses
The following table provides the breakout of Selling, general and administrative expenses for the three months ended March 31, 2026 and 2025:
Three months ended March 31,
Change
In thousands 2026 2025 $ %
Compensation and benefits $ 17,858 $ 19,743 $ (1,885) (10) %
Outside services and other 2,310 1,996 314 16 %
Total selling, general and administrative expenses $ 20,168 $ 21,739 $ (1,571) (7) %
For the three months ended March 31, 2026, Compensation and benefits costs decreased compared to the three months ended March 31, 2025, primarily due to a decrease in headcount.
Key performance indicators
A key performance indicator ("KPI") is generally defined as a quantifiable measurement or metric used to gauge performance, specifically to help determine strategic, financial, and operational achievements, especially compared to those of similar businesses.
We define Digital-only ARPU as digital-only subscription average monthly revenues divided by the average digital-only paid subscriptions within the respective period. We define Core platform ARPU as core platform average monthly revenues divided by average monthly customer count within the period. We define Core platform revenues as revenue derived from customers utilizing our proprietary digital marketing services platform that are sold by either our direct or local market teams.
Management believes Digital-only ARPU, Core platform ARPU, digital-only paid subscriptions, Core platform revenues and core platform average customer count are KPIs that offer useful information in understanding consumer behavior, trends in our business, and our overall operating results. Management utilizes these KPIs to track and analyze trends across our segments.
The following tables provide information regarding certain KPIs for the USA TODAY Media, Newsquest and LocaliQ segments:
Three months ended March 31,
In thousands, except ARPU 2026 2025 Change % Change
Digital-only ARPU:
USA TODAY Media $ 10.80 $ 7.31 $ 3.49 48 %
Newsquest $ 5.78 $ 5.76 $ 0.02 - %
Total USA TODAY Co.
$ 10.30 $ 7.22 $ 3.08 43 %
Three months ended March 31,
In thousands, except ARPU 2026 2025 Change % Change
LocaliQ Core platform:
Core platform revenues $ 99,337 $ 108,166 $ (8,829) (8) %
Core platform ARPU $ 2,794 $ 2,693 $ 101 4 %
Core platform average customer count 11.9 13.4 (1.5) (11) %
As of March 31,
In thousands 2026 2025 % Change
Digital-only paid subscriptions:
USA TODAY Media 1,311 1,810 (28) %
Newsquest 150 121 24 %
Total USA TODAY Co.
1,461 1,931 (24) %
LIQUIDITY AND CAPITAL RESOURCES
Our primary cash requirements are for working capital, debt obligations, and capital expenditures.
We expect to fund our operations and debt service requirements through cash provided by our operating activities. We expect we will have adequate capital resources and liquidity to meet our ongoing working capital needs, borrowing obligations, and all required capital expenditures for at least the next twelve months and beyond. However, a further economic downturn or an increased rate of revenue declines would negatively impact our revenue, cash provided by operating activities and liquidity. We continue to implement cost reduction initiatives to reduce our ongoing level of operating expense. We believe our ability to realize benefits from our cost reduction initiatives will be necessary to offset the continued secular decline in our legacy print business revenue streams. We believe that these measures are important in response to the overall challenging macroeconomic environment that we are facing. Refer to "Overview - Macroeconomic Environment" above for further discussion.
Details of our cash flows are included in the table below:
Three months ended March 31,
In thousands 2026 2025
Cash provided by operating activities $ 19,283 $ 23,308
Cash (used for) provided by investing activities (3,649) 34,823
Cash used for financing activities (20,599) (78,354)
Effect of currency exchange rate change on cash (342) 125
Decrease in cash, cash equivalents and restricted cash $ (5,307) $ (20,098)
Cash flows provided by operating activities: Our largest source of cash provided by operating activities is generated through circulation subscribers and advertising and marketing services, primarily from local and national print advertising, as well as retail, classified, and online revenues. Additionally, we generate cash through commercial printing and delivery services to third parties, and events. Our primary uses of cash from our operating activities include compensation, newsprint, delivery, and outside services.
Cash flows provided by operating activities were $19.3 million for the three months ended March 31, 2026, compared to $23.3 million for the three months ended March 31, 2025. The decrease in cash flows provided by operating activities was primarily due to an increase in cash paid for interest, an increase in severance payments and an increase in cash paid for taxes, partially offset by higher cash receipts related to deferred revenues and a decrease in contributions to our pension and other postretirement benefit plans.
Cash flows (used for) provided by investing activities: Cash flows used for investing activities were $3.6 million for the three months ended March 31, 2026, compared to $34.8 million in cash flows provided by investing activities for the three months ended March 31, 2025. The change in cash flows (used for) provided by investing activities was primarily due to the decrease in proceeds from the sale of real estate and other non-strategic assets of $39.1 million.
Cash flows used for financing activities: Cash flows used for financing activities were $20.6 million for the three months ended March 31, 2026, compared to $78.4 million for the three months ended March 31, 2025. The decrease in cash flows used for financing activities was primarily due to the decrease in repayments of long-term debt of $85.1 million, net of borrowings, partially offset by $28.5 million of payments made to a former partner.
Debt
As of March 31, 2026, the carrying value of our outstanding debt totaled $966.4 million, which consisted of $726.8 million related to our 2029 Term Loan Facility, $217.1 million related to our 6.000% Senior Secured Convertible Notes due 2031 (the "2031 Notes"), and $22.5 million related to our 6.000% Senior Secured Convertible Notes due 2027 (the "2027 Notes").
On January 23, 2026, the 2029 Term Loan Facility was amended (the "2029 Term Loan Amendment") in connection with the Detroit News Transaction completed on January 31, 2026.
As a result of the 2029 Term Loan Amendment, the 2029 Term Loan Facility bears interest at an annual rate equal, at the Borrower's option, to either (i) an alternate base rate (which shall not be less than 2.50% per annum) plus a margin equal to 3.50% per annum or (ii) Adjusted Term SOFR (which shall be no less than 1.50%) plus a margin equal to 4.50% per annum. In addition, the 2029 Term Loan Facility is amortized at a rate of $17.7 million per quarter, with a payment holiday for the fiscal quarter ending March 31, 2026.
We are required to repay the 2029 Term Loan Facility from time to time with (i) the proceeds of non-ordinary course asset sales and casualty and condemnation events, (ii) the proceeds of indebtedness that is not otherwise permitted under the 2029 Term Loan Facility and (iii) the aggregate amount of cash and cash equivalents on hand at the Company and our restricted subsidiaries in excess of $100.0 million as of the last day of any fiscal year of the Company (beginning with the fiscal year ended December 31, 2024). The 2029 Term Loan Facility will mature on October 15, 2029 and is freely prepayable without penalty, except as amended in the 2029 Term Loan Amendment to include a 1.00% prepayment premium payable in connection with any prepayment of the 2029 Term Loan Facility using either (i) the proceeds received by the Company or any of its subsidiaries from the civil action filed by the Company on June 20, 2023 against Google LLC and Alphabet Inc. or any other judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action with an aggregate amount of proceeds received in excess of $50.0 million or (ii) the proceeds of indebtedness incurred by the Company or any of its subsidiaries for the purposes of refinancing all or substantially all the 2029 Term Loan Facility.
For the three months ended March 31, 2026, we prepaid $4.0 million under the 2029 Term Loan Facility, which was classified as financing activities in the Consolidated statements of cash flows.
Interest on the 2027 Notes and 2031 Notes is payable semi-annually in arrears, and the 2027 Notes and 2031 Notes mature on December 1, 2027, and December 1, 2031, respectively, unless earlier repurchased or converted. The 2027 Notes and 2031 Notes may be converted at any time by the Holders into cash, shares of our common stock, par value $0.01 per share (the "Common Stock") or any combination of cash and Common Stock, at the Company's election. The initial conversion rate for both the 2027 Notes and the 2031 Notes is 200 shares of Common Stock per $1,000 principal amount of the 2027 Notes and 2031 Notes, respectively, which is equal to a conversion price of $5.00 per share of Common Stock (the "Conversion Price"). For the three months ended March 31, 2026, no shares of Common Stock were issued upon conversion, exercise, or satisfaction of the required conditions of the 2027 Notes or the 2031 Notes.
Our 2029 Term Loan Facility, 2031 Notes and 2027 Notes all contain usual and customary covenants and events of default. As of March 31, 2026, we were in compliance with all such covenants and obligations.
Refer to Note 6 - Debt in the notes to the condensed consolidated financial statements for additional discussion regarding our debt.
Additional information
We continue to evaluate our results of operations, liquidity and cash flows, and as part of these measures, we have taken steps to manage cash outflow by rationalizing expenses and implementing various cost management initiatives. We do not presently pay a quarterly dividend and there can be no assurance that we will pay dividends in the future. In addition, the terms of our indebtedness, including the 2029 Term Loan Facility and the 2031 Notes Indenture have terms that restrict our ability to pay dividends.
Our Board of Directors has authorized the repurchase of up to $100 million (the "Stock Repurchase Program") of our Common Stock. Repurchases may be made from time to time through open market purchases or privately negotiated transactions, pursuant to one or more plans established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or by means of one or more tender offers, in each case, as permitted by securities laws and other legal requirements. The amount and timing of the purchases, if any, will depend on a number of factors, including, but not limited to, the price and availability of our shares, trading volume, capital availability, our performance and general economic and market conditions. The Stock Repurchase Program may be suspended or discontinued at any time. Further, future repurchases under our Stock Repurchase Program may be subject to various conditions under the terms of our various debt instruments and agreements, unless an exception is available or we obtain a waiver or similar relief.
During the three months ended March 31, 2026, we did not repurchase any shares of Common Stock under the Stock Repurchase Program. As of March 31, 2026, the remaining authorized amount under the Stock Repurchase Program was approximately $96.9 million.
We expect our capital expenditures for the remainder of 2026 to total approximately $46 million. These capital expenditures are anticipated to be primarily comprised of projects related to digital product development, costs associated with our technology systems, print facilities, office facilities and equipment upgrades.
Our leverage may adversely affect our business and financial performance and restricts our operating flexibility. The level of our indebtedness and our ongoing cash flow requirements may expose us to a risk that a substantial decrease in operating cash flows due to, among other things, continued or additional adverse economic conditions or adverse developments in our business, could make it difficult for us to meet the financial and operating covenants contained in our 2029 Term Loan Facility, the 2031 Notes, and the 2027 Notes. In addition, our leverage may limit cash flow available for general corporate purposes such as capital expenditures as well as share repurchases and acquisitions and our flexibility to react to competitive, technological, and other changes in our industry and economic conditions generally. We continue to closely monitor economic factors, including, but not limited to, the current inflationary market and changing interest rates, and we expect to continue to take the steps necessary to appropriately manage liquidity.
CRITICAL ACCOUNTING ESTIMATES
See our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2025 for a discussion of our critical accounting policies and use of estimates. There have been no material changes to our critical accounting policies and use of estimates discussed in such report.
USA Today Co. Inc. published this content on April 30, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on April 30, 2026 at 14:19 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]