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    TDAY
    Earnings call· Jun 2026(Q2 FY26)

    USA TODAY Co. Q2 FY26 earnings call TDAY

    Aug 6, 2026 Source

    Executive summary

    USA TODAY Co. Q2 FY26 — Digital Growth Engines Drive Reaffirmed Full-Year Outlook

    USA TODAY Co. reported Q2 FY26 results reflecting strategic progress in digital growth areas despite overall revenue variability. The company reaffirmed its full-year outlook, driven by strong performance in digital-only subscriptions and other digital revenues, alongside improving trends in LOCALiQ. Management emphasized leveraging AI partnerships like Palantir to enhance audience monetization and navigate evolving search dynamics, positioning for sustainable long-term value creation.

    Highlights

    5

    • Free cash flow increased 11% year-over-year to approximately $20 million.

    • Digital-only subscription revenue grew year-over-year for the second consecutive quarter, totaling $45.6 million.

    • Digital-only ARPU reached a record high of $10.47, increasing 34.4% year-over-year.

    • Digital other revenues, including AI partnerships and content licensing, grew 20.2% year-over-year to $20.4 million.

    • LOCALiQ's core platform revenue grew 7% to $106.3 million, with segment adjusted EBITDA expanding 560 basis points to 12.4% margin.

    Concerns

    4

    • Total revenues decreased 8.3% year-over-year to $536.3 million, or 6.1% on a same-store basis.

    • Total adjusted EBITDA decreased compared to the prior year, reaching $56.9 million with a 10.6% margin.

    • Digital advertising revenues decreased 9.2%, impacted by lower page views and the loss of a programmatic partner.

    • The company experienced variability in content licensing contributions and a continued shift in consumer behavior away from traditional search.

    Guidance & targets

    12
    CategoryTargetConfidence
    Full-year 2026 outlook
    Reaffirmed
    high materiality
    High
    Revenue trends
    Improve as the year goes on
    high materiality
    High
    Adjusted EBITDA
    Grow over the prior year
    high materiality
    High
    Net income
    Improve
    high materiality
    High
    Free cash flow growth
    Fourth consecutive year of growth
    high materiality
    High
    Digital-only subscription revenue
    Grow over the next several quarters and beyond
    medium materiality
    High
    Digital other revenue
    Expand throughout the year
    medium materiality
    High
    Digital advertising trends
    Improved
    medium materiality
    Medium
    Digital-only subscriber growth
    Path toward renewed subscriber growth
    medium materiality
    Medium
    AI licensing deals
    More deals coming this year
    high materiality
    High
    Google litigation remedies ruling
    Expected any time
    high materiality
    High
    Google summary judgment ruling (USA TODAY case)
    Expected September-ish
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    USA TODAY Media
    Second quarter revenue trends were primarily affected by the performance in digital advertising.
    Segment adjusted EBITDA margin: 10.6%
    		———$42 million
    Newsquest
    Revenue trends were impacted by the expected timing shift of a revenue-generating conference but reflects strong ongoing digital growth.
    Segment adjusted EBITDA margin: 24.2%
    		———$14.3 million
    LOCALiQ
    Revenue remained lower year-over-year, but Q2 reflected sequential growth in both core platform revenue and segment adjusted EBITDA, with margins expanding 560 basis points.
    Total core platform revenue: $106.3 millionTotal core platform revenue growth: 7%Segment adjusted EBITDA margin: 12.4%Core platform average customer count: 300 increaseCore platform average customer count growth: 2.8%Core platform ARPU: $2,908Core platform ARPU growth: 4.1%
    		———$13.2 million

    Operational metrics

    13
    Net income
    $9.1 millionsecond consecutive quarter of positive net income
    Q2 FY26

    Reported net income for the quarter.

    Adjusted net income attributable to USA TODAY Co.
    $11 million
    Q2 FY26

    Adjusted net income for the quarter.

    Total digital revenues
    $254.3 milliondecreased 4.2% YoY
    Q2 FY26

    Total digital revenues for the quarter, representing nearly half of total revenues.

    Digital-only subscription revenue
    $45.6 millionincreased 6.8% YoY
    Q2 FY26

    Digital-only subscription revenue for the quarter, showing continued growth.

    Digital-only ARPU
    $10.47increased 34.4% YoY
    Q2 FY26

    Digital-only average revenue per user reached a new record.

    Digital-only subscription volume decreases
    moderated further
    Q2 FY26

    Volume decreases in digital-only subscriptions moderated, indicating stabilization.

    Digital-only subscription start-to-stop ratio
    improved sequentially
    Q2 FY26

    The ratio of new subscriptions to cancellations improved sequentially.

    Digital other revenues
    $20.4 milliongrew 20.2% YoY
    Q2 FY26

    Strong growth in digital other revenues, including AI partnerships.

    Off-platform video views
    3 billionon pace to more than double last year's total
    H1 FY26

    Significant growth in off-platform video views, particularly on TikTok, indicating expanding content discovery.

    DeeperDive questions asked
    50 million
    since Sep 2025

    Total questions asked on the generative AI answer engine since its launch.

    DeeperDive average daily activity
    390,000
    daily

    Average daily interactions with the DeeperDive AI answer engine.

    Total debt paydown
    $17.7 million
    Q2 FY26

    Amount of total debt paid down during the quarter.

    Net debt
    $883.8 milliondecreased
    Q2 FY26 end

    Net debt balance at the end of the second quarter.

    Industry KPIs

    8
    MetricValueDetails
    Total revenue$536.3 millionUSD
    Net income EPS$9.1 millionUSD
    Adjusted EBITDA$56.9 millionUSD
    Total operating expenses—%
    Content title performance97 millionpage views
    Cash marketable securities$86.7 millionUSD
    Ai product feature adoption50 millionquestions
    Free cash flow operating cash flow$19.6 millionUSD

    Product announcements

    1
    ProductTypeDetails
    Marvel Comics on PLAY platformexpansion

    Deals & partnerships

    1
    PalantirApplying Palantir's AI-powered platform to audience data to strengthen collection, connection, and activation of audience data for monetization.

    Collaboration to build a common intelligence layer connecting audience, content, and first-party data to better understand users and translate insights into stronger engagement and monetization. Allows for rapid implementation of AI capabilities.

    Risks & headwinds

    5
    Variability in content licensing revenueQuarter-to-quarter

    Lumpiness in Q2 FY26

    Mitigation: Broadening portfolio of content licensing partners and growing commerce opportunities; reformatting content to be machine readable for future deals.

    Shift in consumer behavior away from traditional searchOngoing

    Continued shift observed in Q2 FY26; impacted digital advertising revenues (part of 9.2% decrease)

    Mitigation: Building direct relationships with audiences through newsletters, social platforms, and video content; investing in new channels; prioritizing quality engagement over volume of traffic; leveraging AI (DeeperDive) for deeper engagement.

    Loss of programmatic advertising partnerQ2 FY26 impact

    Contributed to 9.2% decrease in digital advertising revenues

    Mitigation: Focus on audience engagement and improved advertising trends expected in H2 FY26; improving RPMs and premium sales.

    Platform policy change impacting sponsored link partnersQ2 FY26 impact

    Contributed to 9.2% decrease in digital advertising revenues

    Mitigation: Focus on audience engagement and improved advertising trends expected in H2 FY26; improving RPMs and premium sales.

    Dependence on single platforms (e.g., Google)Past and ongoing

    Experienced risks firsthand in early 2025 with Google's manual actions delaying growth from content partnerships.

    Mitigation: Reducing reliance on any single platform; diversifying content distribution; building direct relationships; considering blocking Google crawlers if fair licensing deals are not reached.

    What to watch in Q3 FY26

    5

    Palantir partnership financial upside

    Next 2 quarters
    CurrentToo early to quantify
    TargetMore specific financial upside details

    Why it matters

    This partnership is expected to be a meaningful driver of ARPU across subscriptions, advertising, and e-commerce, and its quantification will validate the strategy.

    We hope over the next quarter and the next -- actually in the next 2 quarters, we're going to be able to really start to talk more specifically about the financial upside here.

    Q&A highlights

    7

    Can you elaborate on the Palantir partnership and its potential opportunity?

    The partnership leverages Palantir's AI platform to connect audience behavior, content engagement, and first-party data, enabling real-time monetization through personalized content, ads, and commerce. It aims to convert anonymous interactions into known relationships, increasing ARPU. The collaboration allows for faster implementation than internal builds, with management optimistic about significant financial upside, though specific numbers are not yet available.

    “this work with Palantir is really going to allow us to connect that audience behavior, content engagement and first-party data in a way that allows us to monetize each consumer on the platform at a much higher rate.”

    asked by Giuliano Anderes-Bologna · answered by Michael Reed

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Shift in Audience Engagement

    USA TODAY Co. is actively shifting its audience strategy away from reliance on traditional search and low-value traffic towards building direct, ongoing relationships with consumers. This involves expanding content discovery through social media, newsletters, and video, and prioritizing quality engagement over sheer volume of traffic. The company aims to convert anonymous interactions into known relationships, which are more monetizable across subscriptions, advertising, and e-commerce.

    02

    Palantir Partnership for Data Monetization

    The company is partnering with Palantir to apply its AI-powered platform to audience data. This collaboration aims to connect audience behavior, content engagement, and first-party data to create actionable intelligence in real-time. The goal is to deliver personalized content, advertisements, and commerce opportunities, thereby increasing ARPU across all digital revenue streams. This partnership is expected to accelerate the monetization of the company's vast data, converting anonymous interactions into known relationships more rapidly than internal development.

    03

    Digital-Only Subscription Momentum

    The digital-only subscription business continued its strong performance, with revenue growing year-over-year for the second consecutive quarter. Digital-only ARPU reached a record high of $10.47, a 34.4% increase year-over-year. Volume decreases moderated, and the start-to-stop ratio improved sequentially, reinforcing confidence in renewed subscriber growth in the coming quarters⏳. The strategy focuses on subscriber quality and economics over volume, with continued opportunities in pricing, packaging, and stacked products like the recent Marvel Comics addition to the PLAY platform.

    04

    AI Licensing and Content Reformatting

    USA TODAY Co. sees significant opportunity in AI licensing, expecting more deals this year as AI platforms expand. The company is proactively reformatting its content to be machine-readable, which is crucial for future licensing agreements and unlocking more value from existing deals. Management believes its industry-leading scale and trusted content position it well to negotiate recurring, long-term relationships that properly recognize the value it brings to AI platforms, while continuing to block unauthorized scrapers.

    05

    LOCALiQ Segment Improvement

    The LOCALiQ segment showed sequential growth and improving trends in Q2 FY26. Core platform revenue increased 7% to $106.3 million, and segment adjusted EBITDA expanded 560 basis points to a 12.4% margin. The average customer count for the core platform grew by 300, or 2.8%, and core platform ARPU reached a record quarterly high of $2,908. These indicators suggest stabilization and meaningful revenue opportunities in the second half of the year.

    06

    DeeperDive AI Answer Engine Success

    DeeperDive, the company's generative AI answer engine launched in September last year, has seen strong engagement with over 50 million questions asked and 390,000 daily interactions. This AI tool has demonstrated its ability to generate longer time on site, higher advertising revenue per session, and stronger subscription intent. As an early innovator in this space, USA TODAY Co. believes DeeperDive creates additional opportunities to unlock value across its advertising business and replicate engagement across its network.

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