Lee Enterprises (LEE) Q3 2026 earnings summary

Executive summary

• Net income reached $5.2 million in Q3 FY26, marking a return to profitability after prior losses, with five consecutive quarters of adjusted EBITDA growth and digital revenue now 57% of total revenue.

• Adjusted EBITDA grew 23% year-over-year to $18.4 million in Q3 FY26, with margin up 400 basis points to 15%, reflecting disciplined execution and operational transformation.

• Digital transformation accelerated, with digital revenue rising from 21% in FY2020 to 57% in Q3 FY26, and digital-only subscribers totaling 584,000.

• 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 with $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 revenue for Q3 FY26 was $126 million, down 8.7% year-over-year, with digital revenue at $71.6 million (56.8% of total).

• Adjusted EBITDA for Q3 FY26 was $18.4 million, up from $14.9 million in Q3 FY25, and $61 million over the last 12 months.

• Cash costs declined $19 million (14%) year-over-year, with reductions across SG&A and print expenses.

• Interest expense decreased $5 million year-over-year, nearly halved due to a lower interest rate from a strategic investment.

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

Outlook and guidance

• Improved full-year adjusted EBITDA outlook to growth in the range of 22%-28%.

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

• Management expects continued pressure on print and digital subscription volumes, partially offset by strategic rate increases.

• 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.