Lee Enterprises’ Earnings Call: Digital Growth and Strategic Moves

Lee Enterprises ((LEE)) has held its Q4 earnings call. Read on for the main highlights of the call.TipRanks Black Friday Sale Claim 60% off TipRanks Premium for the data-backed insights and research tools you need to invest with confidence. Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off Lee Enterprises’ recent earnings call conveyed a generally positive sentiment, underscoring the company’s robust digital revenue growth and effective cost management strategies. Despite facing challenges from a cyber incident that impacted key projects, the company demonstrated significant achievements in digital transformation and secured favorable financial agreements, contributing to an optimistic outlook. Strong Digital Transformation Progress In fiscal 2025, Lee Enterprises reported a total revenue of $562 million, with digital revenue accounting for 53% of this figure. The digital subscription revenue saw a 16% year-over-year increase on a same-store basis, and the Ampli Digital Agency surpassed $100 million, marking a 5% growth. These figures highlight the company’s successful strides in digital transformation. Digital Revenue Growth The company achieved a total digital revenue of $298 million in fiscal 2025. Over the past three years, digital subscription revenue has grown by 32% annually, while digital advertising revenue contributed $184 million. This growth underscores Lee Enterprises’ strong digital revenue trajectory. Successful Cost Management Lee Enterprises achieved $40 million in annualized cost reductions in Q2, with an additional $10 million entering fiscal 2026. This resulted in a 5% decrease in cash costs compared to the previous year, reflecting the company’s effective cost management strategies. Favorable Credit Agreement The company secured a credit agreement with Berkshire Hathaway, providing a 25-year runway, a fixed interest rate, and no financial performance covenants. This agreement offers strategic financial stability, enhancing Lee Enterprises’ financial position. Balance Sheet Flexibility Lee Enterprises executed a strategic termination of its fully funded defined benefit pension plan, enhancing balance sheet flexibility and eliminating long-term volatility. This move is part of the company’s broader strategy to strengthen its financial foundation. Cyber Incident Impact A cyber incident in February posed challenges, affecting several key projects in 2025 and impacting digital revenue and margin growth. Despite this setback, the company remains committed to its digital transformation goals. Limited Debt Reduction The company reduced its debt by approximately $3.5 million in fiscal 2025 through operations and asset sales. However, some debt increase occurred due to cyber incident-related waivers, indicating a mixed outcome in debt management. Forward-Looking Guidance Looking ahead, Lee Enterprises aims to achieve $450 million in digital revenue by 2030. The company plans to increase digital subscription revenue to $175 million and digital advertising revenue to over $250 million by the same year. Additionally, a $50 million common stock rights offering has been announced to support debt reduction and further digital transformation efforts. In summary, Lee Enterprises’ earnings call highlighted a positive sentiment, driven by strong digital revenue growth and effective cost management. Despite challenges from a cyber incident, the company remains on track with its digital transformation goals, supported by strategic financial agreements and forward-looking plans for continued growth.