Gannett, owner of USA TODAY, reported its first quarterly profit since its merger in 2019, as the company’s digital subscription strategy gained momentum and the economy improved, strengthening its advertising customers.
The media company, which also owns more than 250 other daily publications as well as several hundred weeklies, reported second quarter net profit of $ 15 million. S&P Global Market Intelligence analysts expected a net loss of $ 102 million.
A year earlier, as the U.S. economy reeled from widespread business closures aimed at curbing the spread of COVID-19, Gannett reported a net loss of $ 437 million in the second quarter.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $ 116 million, up 48% from the previous year.
Second quarter 2021 revenue increased 5% to $ 804 million from the previous year.
Like-for-like, circulation revenues fell by 9%, while revenues from advertising and marketing services increased by 20%. Digital sources now account for about a third of Gannett’s revenue.
“The strong second quarter 2021 results underscore the strength of our strategy and the execution of our team,” Gannett President and CEO Michael Reed said in a statement.
Gannett has grappled with the industry-wide challenge of declining print revenue for years, but has increased its paid digital subscriptions, which are seen as key to creating a path for growth.
The company, which began selling online subscriptions for USA TODAY in the second quarter, reported that the total number of digital subscriptions for Gannett rose to 1.4 million by the end of the second quarter, up from 41% compared to the same point last year.
Reed said in january that the company had set a goal of securing 10 million digital subscriptions within five years.
Investors have become increasingly optimistic about Gannett’s prospects, more than tripling the company’s stock price in the past 12 months.
Gannett’s stock rose 2.4% to close at $ 5.55 on Thursday.
Part of the optimism comes from the improvement in the company’s balance sheet. Gannett has taken several steps to improve cash flow since the pandemic began in 2020. These steps included refinancing a loan from private equity firm Apollo Global Management that enabled the merger of New Media Investment in late 2019. Group and the company previously known as Gannett. The new combined entity took the name Gannett.
The company has also taken steps to reduce overlapping costs following its merger, including shutting down some printing facilities and eliminating redundant executive positions.
Gannett said in May that he had met his goal of saving more than $ 300 million in annualized “synergies” by the end of 2021 and that he now plans to save $ 325 million.
In addition to continuing its digital subscription plan, Gannett announced a $ 90 million 5-year partnership with sports betting company Tipico in July.
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This article originally appeared on USA TODAY: Gannett Profits: Revenue and Digital Subscriptions Increase in Q2