Lee Enterprises (LEE) investor relations material

Executive summary

• Net income reached $5.2 million in Q3 FY26, marking a turnaround from prior losses and the first positive quarter since 2024.

• Achieved fifth consecutive quarter of adjusted EBITDA growth, up 23% year-over-year to $18.4 million, with margin improving by 400 basis points to 15%.

• Digital revenue now represents 57% of total revenue, up from 21% in FY2020, with 584,000 digital-only subscribers and strong digital advertising and subscription performance.

• Entered a long-term management agreement with Hoffmann Media Group, creating a recurring management fee revenue stream and validating the scalability of the operating model.

• Liquidity improved to $59 million in cash, supported by a $50 million private placement and a reduction in term loan interest rate from 9% to 5%.

Financial highlights

• Total operating revenue for Q3 FY26 was $126 million, with digital revenue at $72 million (56.8% of total); adjusted EBITDA for Q3 was $18.4 million, up from $14.9 million in Q3 FY25.

• Cash costs declined 14%-15% year-over-year, with reductions across SG&A, compensation, and print expenses.

• Interest expense declined 45% year-over-year, from $10.1 million to $5.6 million, due to a lower interest rate.

• Ended the quarter with $59 million in cash, up from $14 million a year ago.

• Debt outstanding was $455 million; net debt (debt minus cash) was $395 million.

Outlook and guidance

• Full-year adjusted EBITDA outlook raised to 22%-28% year-over-year growth.

• Digital gross margin projected to surpass SG&A costs within three years, nearing digital sustainability.

• Cost discipline and digital transformation remain priorities, with further reductions in operating expenses anticipated.

• Liquidity is expected to be sufficient to fund operations and obligations for at least the next 12 months.