Gannett 2025 Q2 Earnings Surging Net Income with 471.5% Growth

Gannett (GCI) reported its fiscal 2025 Q2 earnings on Jul 31st, 2025. The company posted a significant increase in net income, rising 471.5% year-over-year. Despite a revenue decline of 8.6%, the EPS surged by 440% to $0.54, exceeding expectations. Gannett's updated guidance is optimistic, projecting improved trends and Total Adjusted EBITDA growth for the second half of 2025 and into 2026. The company plans to exceed initial debt repayment projections by the end of 2025, indicating positive financial momentum.

Revenue

Gannett experienced an 8.6% decline in total revenue, falling to $584.86 million in Q2 2025 from $639.84 million in Q2 2024. The Domestic Gannett Media segment generated $439.30 million, while Newsquest contributed $61.32 million. The Digital Marketing Solutions segment added $117.48 million, and Corporate accounted for $1.58 million. Intersegment eliminations totaled $34.81 million, leading to the consolidated revenue figure.

Earnings/Net Income

Gannett's EPS increased by 440% to $0.54 in Q2 2025, up from $0.10 in Q2 2024, highlighting significant earnings growth. The net income soared by 471.5% to $78.40 million from $13.72 million in the same period last year, indicating robust financial performance.

Price Action

The stock price of Gannett has dropped 3.30% during the latest trading day, has edged up 2.97% during the most recent full trading week, and has climbed 6.42% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing Gannett (GCI) shares after a revenue increase quarter-over-quarter, and holding them for 30 days following the financial report release date, has yielded impressive returns over the past three years. This approach resulted in a 216.58% return, significantly outperforming the benchmark return of 85.57%. The excess return of 131.01% underscores the strategy's effectiveness in leveraging positive earnings surprises. With a compound annual growth rate (CAGR) of 26.13% and no maximum drawdown, the strategy demonstrated strong risk-adjusted returns and minimal downside risk, reflecting its ability to capitalize on favorable financial outcomes.

CEO Commentary

"In the second quarter, we delivered sequential improvement across our key financial metrics, including Total Adjusted EBITDA with margins expanding to 11% from approximately 9%. We saw meaningful improvement in our digital advertising trends, which increased from a decline in the first quarter to an increase of 4% in the second quarter. To support our long-term growth objectives, we are implementing targeted annualized expense reductions of approximately $100 million that we anticipate will create a lower and more variable cost structure. Overall, we made great progress on our key priorities and believe we are well positioned to drive stronger performance in the back half of the year," said Michael Reed, Chairman and Chief Executive Officer.

Guidance

The Company is updating its full-year 2025 outlook, expecting improved trends in the second half of the year and Total Adjusted EBITDA growth for the back half of the year and for the full year of 2026. Gannett anticipates further improvement in digital advertising trends in the third quarter. The Company also expects to exceed initial projections by repaying over $135 million of debt by the end of 2025.

Additional News

In recent strategic developments, Gannett announced the prepayment of approximately $57.5 million on its five-year first lien term loan facility, reducing its first lien debt from $850.0 million to $792.5 million in the first quarter of 2025. This debt repayment was funded through the proceeds from the sale of the Austin-American Statesman, completed on February 28, 2025, and cash on hand. Gannett's CEO, Michael Reed, emphasized the priority of debt repayment as part of its long-term strategy, aiming to achieve a first lien net leverage approaching 2.0x by year-end. This move underscores Gannett's commitment to strengthening its capital structure and maintaining a robust liquidity position.