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    LEE
    Earnings call· Jun 2026(Q3 FY26)

    LEE ENTERPRISES Q3 FY26 earnings call LEE

    Aug 6, 2026 Source

    Executive summary

    Lee Enterprises Q3 FY26 — Strong Adjusted EBITDA Growth and Digital Transformation Momentum

    Lee Enterprises delivered a strong Q3 FY26, marked by significant adjusted EBITDA growth and a return to net income, driven by disciplined cost management and an accelerating digital transformation. The company also announced a new capital-light management agreement with Hoffman Media Group, validating its operating model and creating a recurring revenue stream, positioning it for continued digital-first growth and enhanced financial flexibility.

    Highlights

    5

    • Generated $5 million in net income in Q3 FY26, marking the first positive net income since FY24.

    • Adjusted EBITDA grew 23% year-over-year to $18 million in Q3 FY26.

    • Year-to-date adjusted EBITDA increased 51% or $15 million year-over-year.

    • Cash costs declined 15% or $19 million in Q3 FY26, driven by SG&A and print-related expense reductions.

    • Cash balance finished at a healthy $59 million, compared to $14 million a year ago.

    Concerns

    1

    • Evolving advertising environment

    Guidance & targets

    2
    CategoryTargetConfidence
    Full-year Adjusted EBITDA growth
    22% to 28%
    high materiality
    High
    Digital revenue and digital gross margin support for business
    Fully support the business
    high materiality
    High

    Operational metrics

    22
    Digital-only subscribers
    584,000
    Q3 FY26

    Focus on expanding this high-value subscriber base.

    Digital revenue
    $284 millionSustained growth
    LTM

    Providing an increasingly stable recurring foundation for long-term financial performance.

    Digital revenue mix
    57%increase of 170 basis points year-over-year
    Q3 FY26

    A clear and measurable reflection of the execution of our long-term strategy.

    Digital revenue mix
    76%
    Q3 FY26

    An even larger percentage of our advertising business.

    Digital subscription revenue CAGR
    20%
    last 3 years

    Demonstrates sustained growth.

    Amplified Digital Agency growth
    3%
    annually

    Demonstrated remarkable resilience.

    Cash costs decline
    $19 million15% decline
    Q3 FY26

    With meaningful reductions across the board, across SG&A and print-related expenses.

    SG&A reduction
    $32 million
    YTD June

    Largest contributor to cash cost decline, driven primarily by lower corporate overhead and ongoing operational efficiencies.

    Print costs reduction
    $20 million
    YTD June

    As we continued to optimize our print operations and align our cost structure with the ongoing shift toward a more digital-centric revenue mix.

    Interest expense decrease
    $4.6 millionYoY
    Q3 FY26

    Nearly cut in half as a direct result of the interest rate reduction tied to February's strategic investment.

    Annual interest savings
    $18 million
    annual

    Expected from interest rate reduction from 9% to 5%.

    Total interest savings
    $90 million
    next 5 years

    Expected from interest rate reduction.

    Debt paid down
    $1 million
    Q3 FY26

    Amount of debt paid down in the third quarter.

    Debt paid down
    $1 million
    YTD

    Amount of debt paid down year-to-date through Q3 FY26.

    Debt paid down subsequent to quarter end
    $2 million
    subsequent to Q3 FY26

    Additional debt payment made after the end of the third quarter, bringing total YTD to $3 million.

    Total debt reduction
    $121 million
    since March 2020

    Reduced outstanding debt since refinancing.

    Business interruption insurance proceeds
    $560,000
    Q3 FY26

    Related to last year's cyber event.

    Adjusted EBITDA margin improvement
    400YoY
    Q3 FY26

    Driven by decisive cost actions.

    Debt agreement cash cap
    $64 million
    current

    Excess cash balance above this mark will go toward debt paydown.

    Identified non-core assets for monetization
    $20 million
    current

    Assets estimated at this value currently identified, with 1 sale closed since quarter end, to accelerate deleveraging.

    Digital advertising sequential revenue growth
    10%sequential
    Q3 FY26

    Reflecting improving sequential revenue trends.

    Print advertising sequential revenue improvement
    1%sequential
    Q3 FY26

    Reflecting early signs of stabilization within the advertising division.

    Industry KPIs

    5
    MetricValueDetails
    Total revenue$517 millionUSD
    Net income EPS$5.2 millionUSD
    Adjusted EBITDA$18 millionUSD
    Cash marketable securities$59 millionUSD
    Free cash flow operating cash flow—

    Product announcements

    2
    ProductTypeDetails
    Hudl partnershipexpansion
    Community Center, America's 250th, VidMax, All Accessexpansion

    Deals & partnerships

    1
    Hoffman Media GroupLong-term management agreement to operate Hoffman Media Group's portfolio of local media brands.long-term

    Lee will manage Hoffman Media Group's portfolio, leveraging Lee's strengthened digital capabilities, optimized operations, and experienced management team. This validates Lee's operating model and creates a capital-light growth opportunity.

    Risks & headwinds

    1
    Evolving advertising environmentongoing

    unquantified

    Mitigation: Prioritizing recurring high-margin opportunities, strengthening the quality of the revenue base, and focusing on profitable growth rather than simply revenue growth.

    What to watch in Q4 FY26

    5

    Full-year Adjusted EBITDA growth

    next quarter
    CurrentYTD 51% increase
    Target22% to 28% growth

    Why it matters

    This is a key profitability metric and indicates overall business health and execution against the company's strategy.

    Given the strength of our year-to-date results, we are improving our full-year adjusted EBITDA outlook to growth in the range of 22% to 28%.

    Q&A highlights

    2

    How much debt was paid down in the third quarter and year-to-date?

    In Q3, $1 million in debt was paid down, which is also the year-to-date amount. An additional $2 million was paid subsequent to quarter-end, bringing the total to $3 million year-to-date.

    “So in the third quarter, we paid down a total of $1 million, which is actually what we've paid around the same number year-to-date. Subsequent to the end of the third quarter, we've made an additional $2 million debt payment to bring the total to $3 million to date.”

    asked by Jared Marks · answered by Unknown Executive

    2 min read5 chapters

    Detailed Narrative

    01

    Digital Transformation and Revenue Mix Shift

    Lee Enterprises continues its digital transformation, with digital revenue now representing 57% of total company revenue in Q3 FY26, an increase of 170 basis points year-over-year. Digital revenue also accounts for 76% of the advertising business. This shift signifies a fundamental evolution from print dependency to a digital-first model, providing a more stable and recurring revenue foundation for long-term profitability.

    02

    Strong Profitability and Cost Management

    The company reported $5.2 million in net income for Q3 FY26, its first positive net income since FY24 and largest since FY22. This was driven by a 23% year-over-year growth in adjusted EBITDA to $18 million, alongside a 400 basis point improvement in adjusted EBITDA margin. Decisive cost actions led to a 15% ($19 million) decline in cash costs, with significant reductions in SG&A ($32 million year-to-date) and print-related expenses ($20 million year-to-date).

    03

    Strategic Partnership with Hoffman Media Group

    Lee entered a long-term management agreement with Hoffman Media Group, a premier media network. This partnership validates Lee's operating model and creates a recurring management fee revenue stream, offering a capital-light growth opportunity. It allows Lee to monetize its operational expertise and platform beyond its owned portfolio, with potential for additional upside as Hoffman Media Group expands.

    04

    Strengthened Balance Sheet and Financial Flexibility

    The company ended Q3 FY26 with a healthy cash balance of $59 million, significantly up from $14 million a year ago. Since March 2020, outstanding debt has been reduced by $121 million. A recent strategic investment lowered the interest rate from 9% to 5%, expecting to generate $18 million in annual interest savings, or $90 million over the next five years. Lee is also monetizing $20 million in non-core assets to further accelerate deleveraging.

    05

    Subscription and Advertising Strategy

    Lee's strategy focuses on expanding its digital-only subscriber base, which reached 584,000, by improving conversion, engagement, and retention. In advertising, the company prioritizes profitable, high-margin opportunities, with its Amplified Digital Agency driving sequential digital advertising revenue growth of 10%. New initiatives like the partnership with Hudl and platforms such as Community Center are enhancing content offerings and creating premium advertising inventory.

    AI-generated summary of the company’s earnings call. Not investment advice.