All right. Why don't we get started? So, good morning. I'm PK Keller, and I'm an associate on the Media and Communications Research team here at UBS. Today we're joined by Trisha Gosser, CFO of USA TODAY Co. USA TODAY Co. operates a network of 200-plus local, regional, and national newspapers across the U.S., Newsquest in the U.K., and LOCALiQ, a digital marketing services business. So, Trisha, thanks for joining us today.
Yeah, thanks for having us.
So why don't we start by kind of outlining the company's strategy and your priorities for next year?
Yeah, absolutely. So our goal is to inform, inspire, and connect communities, and we do that through what we believe is the only local to national media organization in the country. Our focus is on unbiased journalism, content that brings people together in the center, and it's brought, it's created the largest digital audience of any media content creator in the country. We have 187 million unique visitors digitally to our properties every month. Like I said, that's the largest of any local provider, any national provider, and with that comes a lot of responsibility and a lot of opportunity, and in the last couple of years, our focus has really been about expanding that audience. We've been growing our audience on a very regular basis, and expanding the way that we monetize that audience. We're leaning fully into monetizing that audience across a full spectrum of opportunities.
When you reach that many people across the U.S. and the U.K., we have opportunities to serve them digital advertising, to serve them digital subscriptions, to find ways to monetize our content that we're already producing elsewhere on third-party platforms with AI licensing companies, and to really build a full funnel advertising suite as well. You mentioned our business, LocaliQ. It's about a $500 million digital marketing solutions business that's helped small and medium-sized businesses find, locate, keep, and grow their revenue. And so our focus is really on growing our audience on our platforms, engaging that audience more fully, and really leveraging the full monetization opportunity and suite we have against that, against that audience.
Great. So, you guys are still, you still have a majority of, you know, non-digital revenue you've spoken to, the different types of digital revenue that you're trying to drive, building out this kind of full suite of differentiated revenue streams. Can you talk about kind of how that digital mix evolves, getting to 50%, and where you're trying to kind of build the business in terms of if it's specific lines of revenue or if it's more about kind of the holistic view of the business?
Yeah, absolutely. It's really about a holistic view of the business. So we're very close to being 50% digital. We're about 47% digital revenue in Q3. We expect to approach that 50% digital mark in Q4 and then be over 50% digital in 2026. And that's a really pivotal moment for our company when you've got digital revenue as a predominant revenue source for you, and that's a growing business. You become a sustainably growing journalism and content business. Our goal is to leverage that audience that we have that large audience, the largest in the country, and monetize it fully. So when you have an audience that size, you know that not everybody is going to subscribe, and we want as many subscribers as we can, but that's not our only focus.
We know that we can fully monetize every opportunity we have with somebody who visits our platform, and that can be advertising revenue. It can be subscription revenue. It can be e-commerce. We have a growing and substantial e-commerce business, and like I said earlier, we also have the opportunity to take the content that we're already creating and find other avenues to monetize that, whether that's through syndication or licensing, and so it's really about taking that audience and orchestrating a full monetization of that. When we do that, you know, we're so close to that 50%. We really see us on this path of being a consistently growing content company.
Awesome, so going to licensing, you know, AI has been massive over the last few years. I think people have thought print media and legacy media companies are really exposed here, but USA TODAY has been very active in licensing its content. You know, you had the Perplexity deal that started in October. You just announced a new deal. Can you talk about kind of how AI applications are impacting the media industry, both from kind of the licensing perspective, and then are there other ways, you know, it can be a net positive to the business?
Yeah, absolutely. I think we're at a pivotal shift here for the media industry. You've certainly heard. You see the headlines that AI can be very disruptive to the media industry, and we're well aware of that. We are not seeing that. Our audience is growing on a consistent basis, and we are very focused on making sure that we're creating a very engaged audience. So we want people to come to us directly, not via search, and we are actively leaning into vehicles and avenues to make sure that people are coming to USA TODAY, and engaging with us directly. We also have implemented things like Taboola's Deeper Dive on our website, which is an AI search-like experience that exists on the USA TODAY platform.
So people don't have to go to other sites, to other AI search engines, to just come to USA TODAY and get our content in the format that they want it. So certainly it has the potential to be disruptive. We are well aware of that, and we are aware of the risks that it could be for the media industry, ourselves included. We are actively blocking AI scraping bots, the ones that we can. We're blocking 99% of verified AI bots coming to our sites right now. We mentioned on our Q3 earnings call that we're blocking something like 75 million AI scraping attempts on a monthly basis, regularly outside of Google, which we don't have the ability to block. Nobody in the industry has the ability to block. And with that comes the opportunity to really force the conversation on monetizing our content.
The vast majority of the AI scraping bots are local content. Like I said, it was 75 million in September. About 70 million of that was our local content. So we can see how valuable our unique content is to these AI engines, and we see a real opportunity to create a marketplace and monetization opportunities for publishers.
Got it. So can you touch a little bit more on the monetization side, the licensing deals? You know, you signed a lot. Are there kind of other avenues in terms of having, you know, just other avenues, I guess?
Yeah, absolutely. So we've signed some really important and meaningful AI monetization and licensing deals over the last several months. Perplexity was the largest that launched in Q4. You mentioned we just signed a licensing deal with Meta. We announced that last Friday. These are our two largest AI licensing deals that we've signed to date, along with deals with Microsoft and Amazon. I think this monetization marketplace is really developing. Our goal is to be in the conversations early to help shape what that marketplace could look like. I think AI licensing, AI companies, search engines, and publishers really realize that it is unbiased, factual, reliable content that's going to fuel the internet of the future. People are going to use AI search engines to get their content. You want it to be factual. You want it to be relevant. We are the largest content provider in the country.
We are going to be part of those conversations. We want to help shape those conversations. The way that we're monetizing this currently is we are licensing our content for AI companies to use for real-time use. We are also starting to explore monetizing our archives as well to allow AI engines to start to train their models, if they haven't already, so it's largely a licensing opportunity right now. You are starting to see, and we do have deals where we're sharing advertising revenue with some of these AI companies. I think that that piece of the marketplace is still developing. I think there's a substantial marketplace that can be developed, and our goal right now is to make sure we're helping to shape that, but also to make sure that we capture the long-term value of this.
And so you'll see that a lot of our contracts are three months, six months, one year to two years, because we really think the marketplace could look vastly different in a couple of years, and it is now.
Got it. So those are much shorter-term than I would have imagined. I think we've seen other licensing deals, maybe not on the AI side, but in the publishing industry, like multi-year deals. You know, that speaks to wanting to be ahead of the curve and knowing what this marketplace will be. Can you give us some insight on kind of from signing to, you know, operations within the company to monetization? What does that kind of timeline look like?
Yeah, it varies. One of the things I will say is that I think a lot of AI companies are still determining their monetization models right now as well. Very few of them are profitable, and they are still very much determining how they will reach profitability. And so that will also determine how the marketplace develops. And I think that's why you're not seeing some of the longer-term deals that maybe you do in more mature marketplaces elsewhere. The time from a conversation to a deal signed, it varies. It is an evolving space. And so I think the first one takes a little while, as you go through conversations. But we know what's important. We know that attribution is incredibly important to us. We know that fair compensation is important to us. And we're having conversations with companies who believe that's important as well. That helps those conversations move more quickly.
Great. So, you know, you've touched on licensing. You've touched on all these different digital revenue streams. I think one investors have looked at is advertising and you guys have spoken to that being, you know, a growth driver given your large audience that you have digitally. Can you talk about kind of the advertising ambitions you have as a company and how can you kind of more effectively capitalize on the engagement scale that you guys have?
Yeah, absolutely. So our ambition, as you, as you called it, is to make sure that we are fully leveraging and monetizing the scale and the quality of the audience that we have. You know, we have an incredibly large digital audience, and there's a lot of opportunity there to drive advertising revenue. We've seen good growth year- over- year over the last couple of quarters, and we expect that to continue. That comes from a couple of different places. First, we've always had a very strong programmatic channel. You know, we're in a lawsuit with Google, and we think there's a lot of opportunity there should that marketplace change in a more fair and equitable way, but outside of that, we're really leaning into USA TODAY as our brand, and who we are as a network, and there's an incredible amount of opportunity there.
You're starting to see national brands shift back towards publishing. Stagwell has published some really great research about the high, high ROI, and the safe space that journalism and content creators provide for brands. And so you're starting to see brands shift back towards publishers, into the media landscape. We're starting to see that, and we're starting to see that, on the back of our strong brand here at USA TODAY.
Got it. So I think my understanding is people have avoided, or advertisers have generally avoided news, maybe some of them, maybe not, because of the issues that they sometimes touch on. Do you think that's not really becoming a concern anymore?
I think there's two things there. First, where you've seen people shift their dollars to is a social media platform like TikTok or Instagram or Facebook. And I think we can all acknowledge that those issues that you talked about exist on those platforms and certainly less regulated and brand safe than they would on our platforms. So I think there's a realization that the things that brands are shifting away from exist on all the platforms that they've shifted to. Our content is much safer than perhaps you would find on a TikTok or on Instagram, for example. I also think that when you have a brand like USA TODAY, that it's not just journalism in its traditional sense. You know, we lean very heavily into sports. We have the second largest sports audience of anybody in the country behind only ESPN.
Sports content is a place that brands want to be around. We have a very large entertainment audience. That's a very strong vertical for us, so there's a lot of very safe content verticals that brands are coming to as well.
Got it. Okay. That makes the arguments make a lot of sense there. So you kind of touched on Google and the Google lawsuit. I know you guys had a recent, kind of court finding there, which you viewed as positive. Can you maybe outline us, you know, give us a little rundown of that, your view on it, and maybe kind of the long-term impacts, for your business and the ad tech space broadly?
Yeah, absolutely. So Google has certainly been found to run a monopoly in many places. They've done it in the search space, in a separate case. With the case that the DOJ brought several years ago in the ad tech space, Google was found to create a monopoly where publishers are selling their inventory, and we believe that Google maintains a monopoly in the ad tech space, controls how publishers can sell their inventory, creates depressed rates, and that negatively impacts publishers' revenue, and Google takes more of the profits. You mentioned a ruling in our case. So we brought a case against Google several years ago, a very similar, a little bit more expansive than what the DOJ had, that the DOJ was successful in prosecuting, with a ruling earlier this year.
The judge in our case, Judge Castel, issued a summary judgment ruling here in Q4, which says that yes, in fact, what was found in the DOJ case that Google did create a monopoly in the ad tech space, applies to our case. So all of those claims that we have brought, under that are similar to the DOJ, now shift from having to prove those claims. It's been accepted through that summary judgment. Now we just moved to the damages phase in that part of our trial. We have incremental claims that we've made above and beyond the DOJ. There's a state case with state attorneys general, that will move forward here, we believe, in Q4 early next year. We think that our case will go to trial at some point next year.
We see that the actions that Google has taken has, you know, interfered with billions of dollars of revenue just for Gannett or just for USA TODAY alone, given the size of our audience and the size of our digital advertising revenue. And so we're certainly seeking damages for the revenue that's been interfered with. But we also think that once we will learn remedies in the DOJ case here in the next several months, having a fair advertising ecosystem will benefit all publishers, USA TODAY included. And we're looking forward to operating in a more fair advertising tech space.
Great. That's great to hear. So I'd like to talk about kind of PLAY, which, you know, you talked about, you know, the kind of horizontal scale you guys have with the number of different publications. You talked about the different verticals, sports being very big, entertainment, and the different types of revenue. I think PLAY is new. This is games. Can you give us an update? It just launched in October. How is it going? How's engagement with the new service?
Yeah. We're really pleased with the way that PLAY is performing. You're right. We just launched it in October, so it's very early days. But PLAY is a hub for people to come for casual entertainment. It's games, it's puzzles, it's comics. And we're seeing incredible engagement on our PLAY site. What's interesting is that it allows a lot of different types of monetization against an audience. We're seeing increased engagement. We're seeing increased time spent on site. And there's many ways for people to engage with that vertical. You can have an ad-free version with a subscription. And so it introduces a new subscription offering into our portfolio. It introduces a subscription to an audience they may not typically subscribe to USA TODAY. We also have free versions, and we're really proud of the breadth of gaming that we have in an ad-supported manner.
So we're early, early days, but it does give people the opportunity to stay on our platform, take a break from news and content, and just have some casual entertainment on our site.
Got it. That's awesome. So you talked about kind of the engagement that it's bringing. Are you seeing it bring in kind of USA TODAY loyalists, people who have kind of been on the platform for a while, or is it opening up kind of a new audience that you haven't seen before?
Yeah. So we currently reach one in two adults in the United States. So we have a pretty significant scale of audience as it is. PLAY certainly brings in new audiences for us, but we're already reaching what I would say is a majority of Americans currently. And so it's really about engagement. It's about giving people a new experience on our site, on our mobile apps, and creating a new type of stickiness in that relationship. So we certainly hope that it brings in new eyeballs and new consumers, but it's really about increasing the engagement with 185 million people who are already on our platform.
Got it. All right, and then kind of on expanding the business by entering new verticals, do you think this is kind of a new growth factor for you guys in terms of kind of driving all of the new digital revenue streams? Is opening new verticals and new types of content that haven't previously been provided by you guys something that can drive growth going forward?
Absolutely. We think that, you know, content and journalism is our bread and butter, and it's incredibly important. But I think when you think about USA TODAY and our USA TODAY network, we're so much more than just traditional journalism, and I mentioned earlier, sports is a huge vertical for us, and we have ambitions to be the largest sports audience in the country, and there are other verticals that are very strong for us and that we are leaning into, and so sports is an example of that. Entertainment is an excellent example of that. People come to USA TODAY to live their life better, and so finance is an excellent example too, and people want to know how to manage their mortgage and which credit card they want, and so there's so many different verticals that we are, we have the right to win in.
A lot of them are video-first verticals as well. So when you think about sports, when you think about entertainment, those are really video-first verticals. And that's a way to really fuel our digital advertising revenue. So video CPMs are significantly higher than the traditional display advertising. And people are increasingly wanting to engage with content in a video-first manner. And so we're providing that. So absolutely, I think there's a lot of places we have the right to win, a lot of verticals that we're leaning into and expanding. That's really going to drive that audience growth that we've been seeing for many years and continue to drive improved engagement.
Got it. I love that you brought up video because video, I think, has been a large driver of kind of engagement and then monetization that kind of builds off of each other. You know, you look at the kind of companies that offer short-form video, and they have super high engagement relative to kind of other media providers. How large do you think the video opportunity is for you guys across all of the platforms, all of the publications?
Yeah, we think it's enormous. You know, one thing that's really interesting that our data shows is that people don't necessarily want to consume their news in video, but they want their content outside of news to be in video, and that's where USA TODAY is so strong. They want their sports to be in video. They want their entertainment news to be in video. They want their, how do I do this around the house? How do I live my life to be in video? and so when you have a brand like USA TODAY that is so much more than just the great journalism that we provide, there's an enormous opportunity to continue to expand relevant video on our sites, in the format that users want, and it's a great monetization opportunity for us.
Great. So, you know, you're transforming the company, going more digital than print for the first time ever. You have these new kind of revenue streams. And as part of that, you kind of recently rebranded from Gannett to USA TODAY. Is that kind of emblematic of kind of the new kind of growth factors that you have?
Absolutely. So USA TODAY is a brand that's been known for innovation from the very beginning. It was the first national news brand. It was the first digital news brand. And so it's really a brand that's known for being innovative and digital-first. And that's who we are as a company. We are innovative and we are digital-first. It's also a brand that's known for bringing America together. And that's something that we're passionate about too. So I think the rebrand to USA TODAY really leans into the cornerstone, our largest masthead within our portfolio. And it's really emblematic of where we're going as a digital-first company. We're really excited about it. And it's been a great change for us.
Great. So I think you guys mentioned on the third quarter earnings call, you had a $100 million cost savings program that's now fully implemented. Can you just remind us kind of what costs were taken out of the business? How do you think about kind of cost reduction going forward?
Yeah, absolutely. So, maintaining our costs, moderating our costs, optimizing our costs is something that we have always been good at here at USA TODAY. And so we did take out $100 million of annualized costs. That's fully in place in Q4 2025. The type of costs that we took out, we were really focused on finding efficiencies in our print business and also eliminating any duplication that we might still have in the organization, really optimizing back-of-the-house operations, and making sure that we're leveraging new technology to really automate across our business. The bigger things will be things like we closed two of our largest print facilities. So we'll continue to consolidate our print production. That really helps us find efficiencies in our print business. And so you'll start to see those expense reductions really fuel Q4.
We think it'll get us to EBITDA growth year- over- year in Q4 and then set us up well for 2026 as well.
Got it. So EBITDA growth in Q4. How do you think about, you know, EBITDA in 2026? You know, I don't want to touch on guidance prematurely, but I'd love to hear some thoughts.
No, it's a fair question. We certainly think that we're set up well to be a growing company in 2026. Our revenue trends are improving. We're starting to add these really high-dollar, high-margin AI licensing deals that are impactful in Q4 and more so in 2026. We've done cost takeout in Q4. So I think that sets us up for a really successful 2026.
Great. So taking out costs, I think you've also been very focused from a capital allocation perspective recently on kind of taking out debt. Do you think that's still the focus going forward?
Absolutely. Debt paydown remains our number one focus for capital allocation. We've done a really great job of reducing our debt over the past several years. We fell below $1 billion of debt for the first time since the acquisition in Q3. We're expecting to pay down more than $135 million of debt here in 2025. We think getting our first lien net leverage closer to one times is really important. So just like getting to 50% digital revenue is a huge milestone for the company, and we think really opens up shareholder value, getting to sustainably growing revenue is another milestone, but also getting to that first time, that one-time first lien net leverage is incredibly important. And we think that really unlocks some share price as well. So that remains our number one focus. Last year we did a refinancing.
We took on a bit more first lien debt, and that allowed us to extend our maturities and our debt, but also take out the potential for a lot of dilution in our convertible notes. So we're going to continue to address our debt. It's our number one priority. And as we get down to that first lien or that one-times first lien leverage, it will open up the opportunity to do a lot more with our cash, whether it's share buybacks or addressing the remaining convertible notes.
Got it. So I believe roughly a year ago, you guys sold some kind of assets based in Austin, Texas. How do you think about kind of asset sales going forward? Would that be more focused, you know, on the print side, or does it kind of matter? It's just the kind of price that you guys are getting and the value you're getting that is the driving factor?
Yeah. We're really happy with the size of our network. We're really happy with the size of our audience. We think that scale is important in this industry. And so we're not actively looking to divest any of our properties. That being said, if the right multiple comes along for the right property, we're always going to entertain that like we did with Austin. But you know, for now, we're really happy with the size of our audience, with the size of our network. And as our free cash flow continues to grow, you know, we have the ability to address our debt with the free cash flow that we're going to generate.
Great, so I guess, on the opposite, but same angle of that, how about acquisitions and kind of adding new networks?
Yeah, you know, I think that we'll be opportunistic if the right thing comes along and there was something that we need to tuck in. I think that we, again, have the right scale that we need, and we're finding that we can grow our business more quickly and with less capital through things like partnerships and licensing deals. And so I think our priority is going to remain on paying down debt with our cash.
Great. And, you know, I meant to touch on this earlier, but I think Newsquest has been growing very well in the UK. Can you kind of talk about what has kind of driven that outsized growth and how you expect that to go going forward?
Yeah. Newsquest is a fantastic business for us. They're the second largest publisher in the U.K. You're right. They are consistently either a flat to growing media company, and I think that that is really telling of the potential of our entire portfolio. It's a very profitable business, really high cash flow, and I think that they do an excellent job of representing the communities that they serve in the U.K. There's a lot of benefit in having the scale of the U.S. and the U.K. I think it helps in things like licensing deals, for example, where you can provide a great breadth of content, so Newsquest is an excellent business. It's a big part of our audience, and a big part of our growth going forward.
Great. So I guess kind of lastly, do you have kind of any additional comments or insights you'd like to leave with investors to kind of reinforce the optimism that you guys have for the business?
Yeah, we're really excited. I think we're really at a pivotal moment for us here at USA TODAY. You know, we've touched a little bit about the fact that we're approaching that 50% digital mark, and so we're going, you know, we're expecting to be a predominantly digital business here in 2026. We think with that comes overall growth in our total revenue, so we're a predominantly digital business, growing revenue, sustainably growing EBITDA. We've been growing our EBITDA for the last three years, growing our EBITDA, growing our free cash flow. That's a really valuable business. We've got the largest audience in the U.S. and across the U.K., and with that audience comes incredible opportunity to further monetize, whether it's through digital advertising or through AI licensing, and then we also think we're on the cusp of something changing in the digital ad tech space.
And when you have an audience of our size in digital advertising, of our scale, that's a real opportunity for us. And so we see all of these things, kind of converging at the same time along with continued debt paydown. And we think that there's so much opportunity for shareholder value as all of those things come together.
Great. Why don't we leave it there?
All right.
Thanks, Trisha.
Fantastic. Thank you.