LEE ENTERPRISES, Inc Q4 FY2024 earnings call

• Digital Transformation: Digital revenue surpassed 51% of total revenue in Q4 2024, digital subscription revenue grew 41% on a same-store basis, Amplify Digital Agency grew 11% for the fiscal year and 21% in the quarter. Achieved digital subscription unit target of 771,000 in 2024.
• Cost Management: 2024 business transformation effort yielded $82 million in cost savings, focus on sustainable revenue growth.
• Balance Sheet: Strong relationship with Berkshire, favorable credit agreement; monetizing non-core assets for debt repayment, with over $13 million in asset sales in 2024 and $25 million identified for monetization.
• AI Partnerships: Partnerships with Perplexity, ProRata AI, and Amazon Web Services to leverage AI for hyper-personalization, advertising, and content distribution, aiming to capture market share from legacy web media companies and enhance local market position.

In 2024 Q4, digital revenue reached 51% of total revenue, a 7-point improvement from the prior year quarter. Digital subscription revenue grew 41% on a same-store basis. Amplify Digital Agency (digital marketing services) grew 11% for the fiscal year and 21% in the quarter on a same-store basis, approaching $100 million annually. Total digital revenue for the fiscal year approached $300 million, with a 17% annual growth rate over the last three years. Print revenue is a legacy business with margins being managed, on a declining trend due to secular trends.

• 2025: Expect total digital revenue to grow in the range of 7% to 10%, and adjusted EBITDA to grow in the low single digits.
• Long-term (2028): Aim for total digital revenue of more than $450 million, fueled by Amplify Digital Agency growth, digital subscription growth, and AI revenue opportunities. Anticipate early economics from AI partnerships this fiscal year, with remodeling revenue over the next 24 months.

Factors such as changes in consumer behavior, technological advancements, and competitive pressures could cause actual results to differ from forward-looking statements. Legal battles and fair use lawsuits related to AI could be time-consuming and costly.

Q: Broadly, how to look at future savings and significant investment by partnering up with leading AI technology companies, impact on announcements, and digital subscription number?

A: Tim Millage said partnerships don't necessarily change forward-looking investment but provide access to AI tech. Les Alder Linde added partnerships minimize upfront costs via pay-per-use and revenue-sharing. Digital subscription is at 771,000.

Q: Is print revenue profitable on an operating basis?

A: Tim Millage said print business is profitable but on a declining trend due to secular trends, and referred to slide seven in the earnings supplement.