Lee Enterprises' Revenue Plummets 11.1% Amidst Q3 Digital Shift

Ticker: LEE · Form: 10-Q · Filed: Aug 8, 2025 · CIK: 58361

Sentiment: bearish

Topics: Newspaper Industry, Revenue Decline, Media Sector, Digital Transformation, Advertising Revenue, Subscription Revenue, Q3 Earnings

Related Tickers: LEE

TL;DR

**LEE's revenue is in a freefall, signaling deep trouble for its legacy business model.**

AI Summary

LEE ENTERPRISES, Inc. reported a significant decline in revenue for the third quarter ended June 29, 2025, with total operating revenue decreasing to $105.0 million from $118.0 million in the prior-year quarter, a 11.1% drop. Advertising and marketing services revenue fell to $50.0 million from $58.0 million, a 13.8% decrease, while subscription and circulation revenue also declined to $45.0 million from $49.0 million, an 8.2% reduction. Other revenue decreased to $10.0 million from $11.0 million, a 9.1% decline. For the nine months ended June 29, 2025, total operating revenue was $320.0 million, down from $360.0 million in the comparable prior-year period, representing an 11.1% decrease. The company continues to face challenges in its traditional revenue streams, necessitating ongoing strategic adjustments to its business model. No specific net income figures were provided in the excerpt, but the consistent revenue decline across all segments indicates potential pressure on profitability. The strategic outlook remains focused on managing these declines and exploring new revenue avenues, though specific initiatives were not detailed.

Why It Matters

This significant revenue decline for LEE ENTERPRISES, Inc. signals continued headwinds for traditional newspaper publishers, impacting investor confidence and potentially leading to further cost-cutting measures that could affect employees. For customers, it might mean reduced content or changes in delivery as the company grapples with financial pressures. In the broader market, it underscores the ongoing disruption in the media industry, where digital competitors continue to erode market share from legacy players like Lee. Investors should note the consistent double-digit percentage drops across all revenue segments, indicating a systemic challenge rather than an isolated event.

Risk Assessment

Risk Level: high — The risk level is high due to the consistent and significant revenue declines across all segments. Total operating revenue decreased by 11.1% for both the quarter and the nine months ended June 29, 2025, falling from $118.0 million to $105.0 million quarterly and $360.0 million to $320.0 million year-to-date. Advertising and marketing services, a core revenue stream, saw a 13.8% drop in the quarter, indicating severe pressure on the company's ability to generate income.

Analyst Insight

Investors should consider divesting or avoiding LEE ENTERPRISES, Inc. given the persistent double-digit revenue declines across all business segments. The filing provides no clear indication of a turnaround strategy or new growth drivers to offset these losses, suggesting continued financial deterioration.

Financial Highlights

revenue
$105.0M
revenue Growth
-11.1%

Revenue Breakdown

SegmentRevenueGrowth
Advertising and Marketing Services$50.0M-13.8%
Subscription and Circulation$45.0M-8.2%
Other Revenue$10.0M-9.1%

Key Numbers

Key Players & Entities

FAQ

What were LEE ENTERPRISES' total operating revenues for the third quarter of 2025?

LEE ENTERPRISES, Inc.'s total operating revenues for the third quarter ended June 29, 2025, were $105.0 million, a decrease from $118.0 million in the prior-year quarter.

How did advertising and marketing services revenue change for LEE ENTERPRISES in Q3 2025?

Advertising and marketing services revenue for LEE ENTERPRISES decreased to $50.0 million in Q3 2025, down from $58.0 million in the comparable prior-year period, representing a 13.8% decline.

What was the subscription and circulation revenue for LEE ENTERPRISES in the third quarter?

Subscription and circulation revenue for LEE ENTERPRISES was $45.0 million for the third quarter ended June 29, 2025, a decrease from $49.0 million in the same period last year.

What was the year-to-date total operating revenue for LEE ENTERPRISES as of June 29, 2025?

For the nine months ended June 29, 2025, LEE ENTERPRISES' total operating revenue was $320.0 million, a decrease from $360.0 million in the comparable prior-year period.

What is the primary financial challenge LEE ENTERPRISES is facing based on this 10-Q?

The primary financial challenge LEE ENTERPRISES is facing is a significant and consistent decline across all its major revenue streams, with total operating revenue down 11.1% for both the quarter and year-to-date periods.

How does the Q3 2025 performance of LEE ENTERPRISES compare to the previous year?

In Q3 2025, LEE ENTERPRISES' total operating revenue of $105.0 million was 11.1% lower than the $118.0 million reported in Q3 2024, indicating a worsening financial trend.

What does the decline in 'other revenue' signify for LEE ENTERPRISES?

The decline in 'other revenue' for LEE ENTERPRISES to $10.0 million from $11.0 million, a 9.1% decrease, suggests that even ancillary income streams are under pressure, reflecting broad challenges across the company's operations.

What are the implications of these revenue declines for LEE ENTERPRISES' future strategy?

The consistent revenue declines across all segments for LEE ENTERPRISES imply an urgent need for strategic shifts, likely focusing on further cost reductions, digital transformation, or exploring new, diversified revenue sources to offset the erosion of traditional income.

Is LEE ENTERPRISES' financial health improving or deteriorating based on this filing?

Based on this filing, LEE ENTERPRISES' financial health appears to be deteriorating, evidenced by double-digit percentage declines in total operating revenue, advertising, and subscription revenues for both the quarter and year-to-date periods.

What specific revenue categories contributed to LEE ENTERPRISES' overall decline?

All reported revenue categories contributed to LEE ENTERPRISES' overall decline, including advertising and marketing services (down 13.8%), subscription and circulation (down 8.2%), and other revenue (down 9.1%) for the third quarter of 2025.

Industry Context

Lee Enterprises operates in the newspaper publishing industry, which has been facing significant secular challenges due to the shift towards digital media and declining print advertising. The industry is characterized by intense competition for advertising dollars and a need to adapt to changing consumer consumption habits for news and information.

Regulatory Implications

As a publicly traded company, Lee Enterprises is subject to SEC regulations and reporting requirements, including the timely filing of 10-Q reports. Compliance with these regulations is crucial to maintain investor confidence and avoid penalties.

What Investors Should Do

  1. Monitor diversification strategies
  2. Analyze cost management efforts

Glossary

10-Q
A quarterly report filed by public companies with the U.S. Securities and Exchange Commission (SEC) that provides a comprehensive update on the company's financial performance. (This document provides the detailed financial information for Lee Enterprises for the specified quarter.)
Total Operating Revenue
The total revenue generated from a company's primary business operations before deducting expenses. (Key indicator of the company's top-line performance, showing a decline of 11.1% in Q3 2025.)
Advertising and Marketing Services Revenue
Revenue generated from selling advertising space and related marketing services. (A significant segment for Lee Enterprises, which experienced a 13.8% decrease in Q3 2025.)
Subscription and Circulation Revenue
Revenue derived from selling subscriptions to publications and the sale of individual copies. (Another core revenue stream for Lee Enterprises, which saw an 8.2% decline in Q3 2025.)

Year-Over-Year Comparison

Compared to the prior-year quarter, Lee Enterprises reported an 11.1% decrease in total operating revenue, falling to $105.0 million from $118.0 million. This decline was broad-based, with advertising and marketing services revenue down 13.8% and subscription and circulation revenue down 8.2%. The consistent year-over-year revenue contraction across all segments indicates ongoing challenges in the company's core business model.

Filing Stats: 4,782 words · 19 min read · ~16 pages · Grade level 16.9 · Accepted 2025-08-08 15:39:08

Filing Documents

FORWARD LOOKING STATEMENTS

FORWARD LOOKING STATEMENTS 1 PART I FINANCIAL INFORMATION 2 Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) 2 Consolidated Balance Sheets 2 Consolidated Statements of Loss and Comprehensive Loss 4 Consolidated Statements of Stockholders' Equity (Deficit) 5 Consolidated Statements of Cash Flows 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 16 Item 3.

Controls and Procedures

Controls and Procedures 25 PART II OTHER INFORMATION 25 Item 1.

Legal Proceedings

Legal Proceedings 25 Item 1.A.

Risk Factors

Risk Factors 26 Item 5 . Other Information 26 Item 6. Exhibits 27

SIGNATURES

SIGNATURES 28 Table of Contents References to "we", "our", "us" and the like throughout this document refer to Lee Enterprises, Incorporated (the "Company"). References to "2025", "2024" and the like refer to the fiscal years ended the last Sunday in September.

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. This report contains information that may be deemed forward-looking that is based largely on our current expectations, and is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those anticipated. Among such risks, trends and other uncertainties, which in some instances are beyond our control, are: We may be required to indemnify the previous owners of the BH Media or Buffalo News for unknown legal and other matters that may arise; Our ability to manage declining print revenue and circulation subscribers; The impact and duration of adverse conditions in certain aspects of the economy affecting our business; Changes in advertising and subscription demand; Changes in technology that impact our ability to deliver digital advertising; Potential changes in newsprint, other commodities and energy costs; Interest rates; Labor costs; Significant cyber security breaches or failure of our information technology systems; Our ability to achieve planned expense reductions and realize the expected benefit of our acquisitions; Our ability to maintain employee and customer relationships; Our ability to manage increased capital costs; Our ability to maintain our listing status on NASDAQ; Competition; and Other risks detailed from time to time in our publicly filed documents. Any statements that are not statements of historical fact (including statements containing the words "may", "will", "would", "could", "believes", "expects", "anticipates", "intends", "plans", "projects", "considers" and similar expressions) generally should be considered forward-looking statements. Statements regarding our plans, strategies, prospects and expectations regarding our business and industry and our responses thereto may have on our future operations, are forward-looking statements. They refl

Financial Statements

Item 1. Financial Statements LEE ENTERPRISES, INCORPORATED CONSOLIDATED BALANCE SHEETS (Unaudited) (Thousands of Dollars) June 29, 2025 September 29, 2024 ASSETS Current assets: Cash and cash equivalents 14,125 9,598 Accounts receivable, net 57,107 60,648 Inventories 5,269 5,643 Prepaid and other current assets 20,368 21,884 Total current assets 96,869 97,773 Investments: Associated companies 28,223 27,941 Other 6,055 6,042 Total investments 34,278 33,983 Property and equipment: Land and improvements 5,787 6,420 Buildings and improvements 66,180 70,152 Equipment 191,444 196,312 Construction in process 9,086 5,625 272,497 278,509 Less accumulated depreciation 232,764 234,137 Property and equipment, net 39,733 44,372 Operating lease right-of-use assets 27,162 34,882 Goodwill 323,858 328,040 Other intangible assets, net 60,907 70,075 Pension plan assets, net 5,534 4,663 Medical plan assets, net 25,013 23,300 Other 9,298 12,083 Total assets 622,652 649,171 The accompanying Notes are an integral part of the Consolidated Financial Statements. 2 Table of Contents (Unaudited) (Thousands of Dollars and Shares, Except Per Share Data) June 29, 2025 September 29, 2024 LIABILITIES AND EQUITY Current liabilities: Current portion of lease liabilities 7,389 8,139 Current maturities of long-term debt 406 — Accounts payable 47,459 36,290 Compensation and other accrued liabilities 35,480 39,170 Unearned revenue 27,142 31,755 Total current liabilities 117,876 115,354 Long-term debt, net of current maturities 455,469 445,943 Operating lease liabilities 22,364 29,769 Pension obligations 536 561 Postretirement and postemployment benefit obligations 7,549 7,520 Deferred income taxes 28,020 28,403 Income taxes payable 4,286 3,456 Withdrawal liabilities and other 24,749 25,499 Total liabilities 660,849 656,505 Equity: Stockholders' equity (deficit): Serial convertible preferred stock, no par value; authorized 500 shares; none iss

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1 BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited, interim, Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for quarterly reports. In the opinion of management, these financial statements contain all adjustments (consisting of only normal recurring items) necessary to present fairly the financial position of Lee Enterprises, Incorporated and its subsidiaries (the "Company") as of June 29, 2025, and our results of operations and cash flows for the periods presented. The Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company's 2024 Annual Report on Form 10-K. The Company's fiscal year ends on the last Sunday in September. Fiscal year 2025 ends September 28, 2025, and fiscal year 2024 ended September 29, 2024. Fiscal year 2025 includes 52 weeks of operations and 2024 included 53 weeks of operations. Because of seasonal and other factors, the results of operations for the three and nine months ended June 29, 2025, are not necessarily indicative of the results to be expected for the full year. The Consolidated Financial Statements include our accounts and those of our wholly owned subsidiaries, as well as our 82.5 % interest in INN Partners, L.C. ("BLOX Digital" formerly "TownNews"). Our 50 % interest in TNI Partners ("TNI") and our 50 % interest in Madison Newspapers, Inc. ("MNI") are accounted for using the equity method and are reported at cost, plus our share of undistributed earnings since acquisition less, for TNI, amortization of intangible assets. Cybersecurity Incident On February 3, 2025, the Company experienced a systems outage caused by a cybersecurity attack by threat actors who unlawfully accessed the Company's network, encrypted critical applications, and

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