Lee Enterprises (LEE) Q1 2026 earnings summary

Executive summary

• Digital revenue reached 54% of total revenue in Q1 FY26, up from 21% in FY2020, with digital-only subscription revenue growing 5.3% year-over-year to $22.7 million.

• Adjusted EBITDA increased 61.4% year-over-year to $12.3 million, with margin expanding to 9.4%, driven by digital transformation and disciplined cost management.

• Completed a $50 million equity investment via private placement at $3.25 per share, materially strengthening the balance sheet and supporting digital transformation.

• Interest rate on $455 million debt reduced from 9% to 5% for five years, generating $18 million in annual interest savings.

• Net loss improved to $5.1 million from $16.2 million year-over-year, aided by cost reductions and insurance reimbursement.

Financial highlights

• Q1 FY26 total revenue was $130.1 million, with digital revenue at $70.3 million (54% of total), and print revenue down 16.1% year-over-year.

• Digital-only subscription revenue reached $23 million from 609,000 subscribers, up 5.3% year-over-year.

• Operating expenses decreased 15.5% to $125.9 million, and cash costs declined $17 million year-over-year, primarily from reduced headcount and legacy print costs.

• Net loss for Q1 FY26 was $5.1 million, improved from a $16.2 million loss in Q1 FY25.

• Received $2 million in business interruption insurance proceeds related to a prior cyber incident; excluding this, Adjusted EBITDA grew 35%.

Outlook and guidance

• Reaffirmed fiscal 2026 outlook for mid-single digit Adjusted EBITDA growth.

• Digital gross margin is projected to surpass SG&A costs in FY27, nearing digital sustainability.

• Targeting $450 million in digital revenue by 2030, with a goal of 90% digital revenue mix.

• Plans include further reductions in operating and capital spending, especially in print, and a focus on digital growth.