10-K: USA TODAY Co. Reports 2025 Net Income Amid Digital Shift

USA TODAY Co. reported a net income of $1.7 million in 2025, a significant improvement from a $26.4 million loss in 2024, driven by strategic digital diversification despite overall revenue declines.

Summary

• USA TODAY Co. (formerly Gannett Co., Inc.) achieved a net income attributable to the company of $1.7 million in 2025, a substantial improvement from a net loss of $26.4 million in 2024.
• Total revenues for 2025 decreased by 8% to $2.302 billion from $2.509 billion in 2024.
• Digital revenues, a core strategic priority, reached 46% of total revenues in 2025, totaling $1.056 billion, though this was a 4% decrease from $1.104 billion in 2024.
• Print and commercial revenues continued to decline, falling 11% to $1.246 billion in 2025 from $1.406 billion in 2024.
• The company averaged 186 million unique visitors across its USA TODAY Media and Newsquest segments in 2025.
• Digital-only subscriptions reached approximately 1.5 million as of December 31, 2025, surpassing print subscriptions.
• The company repaid $135.5 million of long-term debt in 2025, reducing total outstanding debt to $954.2 million.
• Cash provided by operating activities increased to $114.4 million in 2025 from $100.3 million in 2024.
• A pre-tax gain of $20.8 million was recognized from the sale of the Austin American-Statesman in February 2025.
• The company's pension plans were overfunded by approximately $171.2 million as of December 31, 2025, and a non-cash pension settlement gain of $11.8 million was recognized in 2025.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as moderately positive. While the company achieved net income and improved cash flow, overall revenue decline and a decrease in consolidated digital revenues suggest ongoing challenges in its core business transformation. Debt reduction and strategic digital focus are positive, but the path to sustainable growth remains complex.

Positives

• Achieved a net income of $1.7 million in 2025, a significant turnaround from a $26.4 million loss in 2024.
• Digital revenues now constitute 46% of total revenues, demonstrating progress in the digital-first strategy.
• Repaid $135.5 million of long-term debt in 2025, strengthening the capital structure and reducing total debt to $954.2 million.
• Cash provided by operating activities increased to $114.4 million in 2025, indicating improved operational cash generation.
• The company's pension plans are overfunded by $171.2 million as of December 31, 2025, and a non-cash pension settlement gain of $11.8 million was recognized.
• Newsquest segment digital revenues increased by 3% to $81.5 million in 2025, with digital-only subscriptions growing by 26%.
• LocaliQ segment's Core platform ARPU increased by 1.2% in 2025, reflecting improved monetization per customer.
• A gain of $20.8 million was realized from the sale of the Austin American-Statesman, contributing positively to net income.

Negatives

• Total revenues decreased by 8% in 2025, from $2.509 billion to $2.302 billion, indicating continued overall revenue challenges.
• Consolidated digital revenues decreased by 4% in 2025, from $1.104 billion to $1.056 billion, despite being a strategic focus.
• Print and commercial revenues experienced a significant 11% decline in 2025, from $1.406 billion to $1.246 billion.
• USA TODAY Media segment's digital revenues decreased by 6% and print and commercial revenues decreased by 13% in 2025.
• LocaliQ segment's digital revenues decreased by 6% in 2025, primarily due to a 7% decline in core platform average customer count.
• Integration and reorganization costs were $31.6 million in 2025, reflecting ongoing restructuring efforts.
• Asset impairments of $2.2 million were recorded in 2025, related to monetizing non-strategic assets.

Risks

• Operating in a highly competitive business environment, requiring continuous adaptation and development of new products and services.
• Significant indebtedness could adversely affect business or financial condition, limiting flexibility and increasing vulnerability to economic changes.
• Reliance on a single creditor for a majority of indebtedness, whose interests may diverge from stockholders.
• Potential inability to raise funds necessary to repurchase 2027 or 2031 Notes upon a fundamental change, leading to defaults.
• Unsuccessful execution of the digital revenue strategy and optimization of revenue streams could lead to persistent revenue declines.
• LocaliQ segment's dependence on online media acquired from third parties (Google, Facebook, Microsoft), whose adverse actions or restrictions could harm the business.
• Required changes in practices for enhanced data privacy could materially impact advertising revenues and customer acquisition efficiency.
• Volatility in the U.S. and global economies, macroeconomic events, and geopolitical factors can adversely impact business, financial condition, and results of operations.
• Revenue generation is highly sensitive to the strength of local economies and demographics.
• Deterioration in the collectability of accounts receivable under adverse economic conditions.
• Damage to reputation or brand could impair the ability to grow user base, advertiser relationships, and partnerships.
• Risks associated with international operations, including legal, political, economic, and currency fluctuations.
• Cybersecurity incidents and threats, including attempts to manipulate news reporting, could lead to liabilities, litigation, and reputational damage.
• Evolving privacy and security-related laws and data security requirements may increase compliance costs and potential liability.
• Challenges in effectively managing, governing, and scaling the adoption and use of AI and other new technologies could affect competitive position and reputation.
• Dependence on third-party technology platforms, search results, and algorithms for content distribution, with changes potentially affecting traffic and financial performance.
• Significant increases in newsprint costs or disruptions in the supply chain could materially affect business and results of operations.
• The value of goodwill and intangible assets may become impaired, leading to non-cash charges to earnings.
• Potential for additional tax liabilities due to complex and evolving tax laws and interpretations.
• Inability to protect intellectual property rights could lead to asset value loss and competitive harm.
• Exposure to environmental and employee safety and health laws and regulations, potentially incurring significant compliance expenditures and liabilities.
• Requirement to use a portion of cash flows for pension and postretirement plans, diverting funds from operations, with difficult-to-estimate future contributions.
• Loss of key personnel, reduced staffing levels, or inability to attract/retain skilled employees could adversely affect business operations and growth.
• Reliance on equity-based compensation may result in stock price pressures, dilution, and increased share usage during depressed stock prices.
• Unionized employees could lead to labor disputes or restrictions on operational efficiency.
• Former Manager (FIG LLC) is not liable for certain acts or omissions prior to termination of the management agreement, potentially exposing the company to liabilities.
• Stock price is subject to volatility, and there is no assurance of adequate liquidity.
• Sales or issuances of Common Stock, including upon conversion of convertible notes, could adversely affect the market price and dilute existing stockholders.
• Provisions in the company's charter and bylaws and Delaware law may prevent or delay an acquisition, potentially decreasing the trading price of Common Stock.
• Inadequate capital availability could materially and adversely affect the ability to compete.

Future Outlook

The company expects continued uncertainty and volatility in the U.S. and global economies, which will impact its business. It anticipates newsprint price increases in 2026 due to shortages. The company plans to continue expanding mail delivery for publications in 2026 and expects capital expenditures of $55 million to $65 million for digital product development, technology systems, and facility upgrades. The company also expects to continue implementing cost reduction initiatives to offset print revenue declines.

Management Comments

• "We are committed to inspiring, informing and connecting audiences as a sustainable, growth-focused media and digital marketing solutions company."
• "Our strategy is rooted in three operating pillars: (i) expanding our reach and engagement, (ii) diversifying our digital revenues, and (iii) strengthening our capital structure."
• "As a result, in 2025, total Digital revenues... grew to 46% of our total revenues, or $1.1 billion."
• "We remain focused on reducing debt, generating consistent cash flow, and creating flexibility to reinvest in growth initiatives."
• "We believe this disciplined approach supports our ability to innovate and adapt while ensuring long-term financial health."
• "We believe our ability to realize benefits from our cost reduction initiatives will be necessary to offset the continued secular decline in our legacy print business revenue streams."
• "We expect continued uncertainty and volatility in the U.S. and global economies which will continue to impact our business."

Industry Context

StockSavvy.ai notes that USA TODAY Co.'s strategic shift towards digital revenue, now comprising 46% of total revenues, aligns with broader industry trends of declining print media and increasing digital consumption. The company's focus on AI-powered solutions in its LocaliQ segment and content partnerships reflects the industry's rapid adoption of emerging technologies. However, the overall revenue decline and challenges in digital advertising, despite growth in digital subscriptions, highlight the intense competition from social media platforms and large tech companies like Google, Facebook, and Microsoft, which continue to exert significant control over content visibility and monetization. The ongoing litigation against Google underscores the industry-wide struggle for fair compensation for original content in the digital ecosystem.

Comparison to Industry Standards

• USA TODAY Co. claims to be the leading news media publisher in the U.S. in terms of circulation and has the largest digital audience in the News and Information category (excluding news aggregators), surpassing Fox News Media, CNN Network, New York Times Digital, or WashingtonPost.com based on December 2025 Comscore Media Metrix Desktop + Mobile metrics.
• The company's digital revenue percentage of 46% in 2025 indicates a strong digital transformation effort, comparable to other legacy media companies striving to pivot from print-centric models.
• LocaliQ's average customer budget retention rate of 95% in 2025 suggests strong client satisfaction and competitive performance in the SMB digital marketing solutions space, where customer churn can be high.

Management Changes

Corporate Governance

Legal Proceedings

• The company filed a civil action against Google LLC and Alphabet Inc. on June 20, 2023, in the U.S. District Court in the Southern District of New York, alleging anticompetitive monopolization of advertising technology markets and deceptive commercial practices. The company intends to vigorously pursue this action, but the outcome and impact are currently unpredictable.

Related Party Transactions

• A majority of the company's outstanding indebtedness is held by entities controlled, managed, or advised by a large financial sponsor (Apollo Global Management Inc. affiliates). This creditor also holds a majority in aggregate principal amount of the outstanding 2031 Notes and provided incremental debt financing for the Detroit News Transaction.
• FIG LLC, the former manager of the company, held stock options exercisable for 4,716 thousand shares of Common Stock as of December 31, 2025. The Termination Agreement ensures indemnification obligations to FIG LLC and its affiliates survived the termination of the Former Management Agreement.

Stakeholder Impact

• Shareholders: Potential for dilution from convertible notes (up to 52% if all 2027 and 2031 Notes convert under maximum increase scenarios) and future equity raises. Stock price volatility is a risk. No dividends are currently planned or restricted by debt covenants.
• Employees: Ongoing cost control initiatives have led to reduced headcount and workforce, potentially impacting productivity and morale. Investment in skill development and AI training is aimed at upskilling the workforce. Unionized employees represent a portion of the workforce, with potential for labor disputes.
• Customers (Audiences): The digital-first strategy aims to provide relevant content and expanded offerings, enhancing engagement. However, declining print circulation may impact traditional readers. LocaliQ aims to support SMBs with innovative digital marketing solutions.
• Advertisers: The company seeks to be an attractive marketing partner through its scaled audience and full-funnel solutions. Declines in advertising spend due to macroeconomic conditions and competition from digital platforms pose challenges.
• Creditors: Debt repayment efforts and consistent cash flow generation aim to strengthen the capital structure. However, high indebtedness and restrictive covenants impose limitations. A single large financial sponsor holds a majority of the debt, potentially influencing company decisions.

Next Steps

• Continue to expand mail delivery for publications in 2026.
• Invest approximately $55 million to $65 million in capital expenditures during 2026 for digital product development, technology systems, print facilities, and office equipment upgrades.
• Vigorously pursue the civil action against Google LLC and Alphabet Inc. for anticompetitive practices.
• Continue to optimize the geographic footprint of production resources and transport of printed products.
• Continue to implement cost reduction initiatives to offset the decline in legacy print business revenue streams.

Key Dates

Recommendation

USA TODAY Co. shows a mixed financial picture. The return to net income and improved operating cash flow are positive indicators, demonstrating progress in its digital transformation and debt reduction efforts. However, the continued decline in overall revenues, including a slight dip in consolidated digital revenues, suggests that the company is still navigating a challenging media landscape. The significant debt load and reliance on a single major creditor, coupled with intense competition and macroeconomic uncertainties, present notable risks. While the strategic pivot to digital and AI-powered solutions is promising, the execution and market acceptance of these initiatives are critical. For a seasoned investor, the current situation warrants a 'hold' recommendation, as the company is in a transitional phase with both significant upside potential from its digital strategy and substantial risks from legacy business declines and market competition. Further evidence of sustained digital revenue growth and improved profitability is needed before a more aggressive stance.

Keywords

Media Company, Digital Marketing, SEC Filing, 10-K, USA TODAY, Newsquest, LocaliQ, Digital Revenue, Print Media, Financial Performance, Debt Management, Corporate Governance, Risk Factors, Artificial Intelligence, Cybersecurity, Subscriptions, Advertising, Shareholder Value