LEE · Lee Enterprises, Incorporated

Lee Enterprises delivered robust Q2 FY2026 results, with Adjusted EBITDA surging 95% year-over-year to $15 million, including $4 million from insurance reimbursements related to the prior year's cyber event; excluding these, underlying growth was still 45% YoY, marking the fourth straight quarter of comparable Adjusted EBITDA expansion. Total operating revenue declined to $122 million from $137 million, but digital revenue mix strengthened significantly to 56% ($68 million), up 270 basis points YoY, with digital advertising and marketing at 74% of total ad revenue and digital-only subscriptions growing 17% annually over three years to serve 591,000 subscribers. Print revenue fell to $54 million amid ongoing shift away from legacy operations. Operating expenses dropped 20% to $114 million (Cash Costs down 15% to $112 million), aided by $4 million insurance proceeds and $1 million cyber reimbursements, with exclusions showing 17% reduction. Net loss narrowed sharply to $2 million (86% improvement), bolstered by higher EBITDA, lower interest post-credit amendment, and cost discipline. CEO Nathan Bekke highlighted momentum in digital transformation, cost alignment with revenue mix, and benefits from February's $50 million private placement, which cut interest rates from 9% to 5% on $455 million BH Finance debt, projecting $18 million annual savings. Balance sheet strengthened with $53 million cash (up $49 million YoY), net debt $402 million, minimal $1 million capex, and strategic pension plan termination for flexibility. Management reaffirms mid-single digit FY2026 Adjusted EBITDA growth, emphasizing scalable digital revenue sustainability without long-term print reliance, as presentation materials underscore nearing digital gross margins exceeding SG&A within three years.