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USA TODAY Co., Inc. Q2 2026 10-Q Summary

Business Context and Reporting Period

This report covers the quarterly period ended June 30, 2026. USA TODAY Co., Inc. is a diversified media company operating through three reportable segments: USA TODAY Media (U.S. local and national news), Newsquest (U.K. news), and LocaliQ (digital marketing solutions). The company continues to navigate a transition from legacy print revenue to digital growth while managing significant debt obligations and restructuring costs.

Key Financial Metrics (Six Months Ended June 30, 2026)

Material Changes vs. Prior Period

• Revenue Decline: Total revenues decreased 6% year-over-year (YoY) to $1.08 billion. This was driven by an 11% decline in Print and commercial revenues ($568.6M vs. $640.6M), partially offset by flat Digital revenues ($516.2M vs. $515.8M).
• Profitability Compression: Net income dropped 59% YoY to $29.0 million. The prior year included a significant one-time tax benefit and a $20.8 million gain on the sale of the Austin American-Statesman, neither of which were present in the current period.
• Cost Reductions: Integration and reorganization costs fell 79% to $4.5 million (from $21.8 million), reflecting the completion of major restructuring programs. Depreciation and amortization decreased 27% due to the absence of accelerated depreciation from facility shutdowns recognized in 2025.
• Asset Monetization: The company recognized a $7.6 million gain on the sale of assets in the first half of 2026, compared to a $22.3 million gain in the same period of 2025.

Outlook, Risks, and Management Commentary

• Segment Performance:
  • USA TODAY Media: Digital-only subscription revenue grew, driven by a 41% increase in Average Revenue Per User (ARPU), though print advertising and circulation continued to decline.
  • Newsquest: Revenues increased 2% YoY, aided by favorable foreign currency exchange rates, though print advertising declined due to the absence of a major conference.
  • LocaliQ: Revenues declined 9% due to a reduction in customer count, though Core Platform ARPU increased 3%.
• Debt and Liquidity: The company holds $950.1 million in debt, primarily the 2029 Term Loan Facility ($710.1M). The facility requires quarterly amortization of $17.7 million. The company remains in compliance with all covenants but faces restrictions on dividends and share repurchases based on leverage ratios.
• Legal Contingency: The company is pursuing a civil action against Google LLC and Alphabet Inc. regarding anticompetitive practices. This is accounted for as a gain contingency; no gain is recognized until resolved.
• Capital Allocation: No shares were repurchased under the $100 million stock repurchase program in the first half of 2026. Approximately $96.9 million remains authorized. Capital expenditures for the remainder of 2026 are expected to total approximately $30 million.

Investor Verification Checklist

• Print Revenue Trajectory: Verify the sustainability of the 11% decline in print revenues and the effectiveness of cost-cutting measures in offsetting this secular decline.
• Digital Growth Drivers: Assess the durability of the 39-41% increase in Digital-only ARPU and whether it can compensate for volume declines in subscriptions.
• Debt Service Capacity: Monitor the company's ability to meet the $17.7 million quarterly amortization on the 2029 Term Loan Facility given the current operating cash flow of ~$55 million semi-annually.
• One-Time Items: Adjust financial models to exclude the 2025 tax benefits and asset sale gains to establish a normalized earnings baseline.
• Google Litigation: Track the status of the lawsuit against Google, as a potential settlement could provide a significant, albeit uncertain, cash infusion.