USA TODAY Co Inc (TDAY) 2023 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Gannett Third Quarter of 2023 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded.

女士們、先生們，美好的一天，歡迎參加 Gannett 2023 年第三季財報電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。

It is my pleasure to introduce your host, Mr. Matthew Esposito, of Investor Relations. You may go ahead, sir.

我很高興向您介紹主持人，投資者關係部的 Matthew Esposito 先生。你可以繼續了，先生。

Thank you. Good morning, everyone, and thank you for joining our call today to discuss Gannett's third quarter 2023 financial results. Presenting on today's call will be Mike Reed, Chairman and Chief Executive Officer; Doug Horne, Chief Financial Officer; Kristin Roberts, Gannett Media Chief Content Officer; and Chris Cho, President of Digital Marketing Solutions.

謝謝。大家早安，感謝您今天加入我們的電話會議，討論 Gannett 2023 年第三季的財務表現。董事長兼執行長 Mike Reed 將出席今天的電話會議；道格‧霍恩，財務長； Kristin Roberts，Gannett Media 首席內容長；以及數位行銷解決方案總裁 Chris Cho。

If you navigate to the Gannett website, you will find that we have posted an earnings supplement in addition to our earlier press release. We will be referencing it today on the call as it provides you with additional detail on this quarter's performance.

如果您造訪 Gannett 網站，您會發現除了先前的新聞稿外，我們還發布了收益補充資料。我們將在今天的電話會議上引用它，因為它為您提供了有關本季業績的更多詳細資訊。

Before we begin, please let me remind you that this call is being recorded. In addition, certain statements made during this call are or may be deemed to be forward-looking statements, including those with respect to future results and events and are based upon current expectations. These statements involve risks and uncertainties that may cause actual results and events to differ materially from those discussed today. We encourage you to read the cautionary statement regarding forward-looking statements in the earnings supplement as well as the risk factors described in Gannett's filings made with the SEC. Except as required by law, we undertake no obligation to publicly update or correct any of the forward-looking statements made during this call.

在我們開始之前，請允許我提醒您，此通話正在錄音。此外，本次電話會議期間所做的某些陳述是或可能被視為前瞻性陳述，包括有關未來結果和事件的陳述，並且基於當前的預期。這些陳述涉及風險和不確定性，可能導致實際結果和事件與今天討論的結果和事件有重大差異。我們鼓勵您閱讀有關收益補充中前瞻性陳述的警告聲明以及 Gannett 向 SEC 提交的文件中所述的風險因素。除法律要求外，我們不承擔公開更新或更正本次電話會議期間所做的任何前瞻性陳述的義務。

In addition, we will be discussing non-GAAP financial information during the call, including same-store revenues, free cash flow, adjusted EBITDA, adjusted EBITDA margin and adjusted net income attributable to Gannett. You can find reconciliations of our non-GAAP measures to the most comparable U.S. GAAP measures in the earnings supplement.

此外，我們將在電話會議中討論非公認會計準則財務信息，包括同店收入、自由現金流、調整後 EBITDA、調整後 EBITDA 利潤率和調整後歸屬於 Gannett 的淨利潤。您可以在收益補充中找到我們的非 GAAP 指標與最具可比性的美國 GAAP 指標的調整表。

Lastly, I would like to remind you that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase any interest in Gannett. The webcast and audiocast are copyrighted material of Gannett and may not be duplicated, reproduced or rebroadcasted without prior written consent.

最後，我想提醒您，本次電話會議中的任何內容均不構成出售要約或徵求購買 Gannett 任何權益的要約。網路廣播和音訊廣播是 Gannett 受版權保護的資料，未經事先書面同意，不得複製、複製或轉播。

With that, I would like to turn the call over to Mike Reed, Gannett's Chairman and CEO.

說到這裡，我想將電話轉給 Gannett 董事長兼執行長 Mike Reed。

Thanks, Matt. Good morning to all of you, and thanks for joining our call this morning.

謝謝，馬特。大家早安，感謝您今天早上加入我們的電話會議。

We continued to make progress in the third quarter across our key priorities. We saw solid adjusted EBITDA growth of 15% year-over-year, we saw further growth in digital revenues and we meaningfully reduced our debt and leverage. We also grew our audience by 7% year-over-year on what is already a large base.

第三季我們在關鍵優先事項上繼續取得進展。我們看到調整後 EBITDA 年比穩定成長 15%，我們看到數位收入進一步成長，並且我們有意義地減少了債務和槓桿。我們的受眾群體在已經很大的基礎上也比去年同期成長了 7%。

Within the quarter, we repaid $65 million of debt, which, combined with our adjusted EBITDA growth, reduced our first lien net leverage below 2x. We also maintained a strong liquidity position of $109 million at the end of the third quarter.

在本季內，我們償還了 6,500 萬美元的債務，再加上調整後的 EBITDA 成長，我們的第一留置權淨槓桿率降至 2 倍以下。截至第三季末，我們也維持了 1.09 億美元的強勁流動性部位。

Equally important, digital revenues surpassed 40% of total revenues, growing 3% year-over-year on a same-store basis, and we expect this trend of growth to continue in Q4.

同樣重要的是，數位收入超過總收入的 40%，同店年增 3%，我們預計第四季這一成長趨勢將持續。

In Q3, we saw audience growth and engagement improve, and we achieved a record high in digital-only subscription ARPU, resulting in ongoing digital-only subscription revenue growth.

在第三季度，我們看到觀眾成長和參與度提高，純數位訂閱 ARPU 創歷史新高，導致純數位訂閱收入持續成長。

We continued to grow our DMS business at healthy margins. Since the end of the third quarter, we also announced additional partnerships to further diversify the monetization of our audience. At the core of our future growth lies the mission to expand our audience and maximize meaningful monetization avenues, and we are pleased with the progress made in the third quarter.

我們繼續以可觀的利潤成長 DMS 業務。自第三季末以來，我們也宣布了更多合作夥伴關係，以進一步實現受眾多元化。我們未來成長的核心是擴大受眾群體和最大化有意義的貨幣化途徑的使命，我們對第三季的進展感到滿意。

While we made great strides on our strategic priorities, we must acknowledge the complex economic environment in which we are operating. We believe there are signs that consumers are beginning to feel the cumulative impact of higher interest rates and continued inflation, which has led to an overall reduction in consumer confidence. As a result, the small and medium-sized businesses we serve have become more cautious in their approach to advertising expenditures than we had previously seen. While these headwinds impacted our top line performance, we still achieved sequential improvement in same-store revenues for the third consecutive quarter. We will remain diligent in our approach to planning, considering what remains an uncertain environment.

雖然我們在戰略重點方面取得了巨大進步，但我們必須承認我們所處的複雜經濟環境。我們認為，有跡象顯示消費者開始感受到利率上升和持續通膨的累積影響，導致消費者信心全面下降。因此，我們服務的中小企業在廣告支出方面變得比我們以前看到的更加謹慎。儘管這些不利因素影響了我們的營收業績，但我們的同店營收仍連續第三個季度實現較上季改善。考慮到仍然存在不確定的環境，我們將繼續勤奮地制定計劃。

We have reduced our full year 2023 outlook, but our view on net income and adjusted EBITDA is not markedly different than the outlook we gave to start the year. We will continue to exercise prudent cost management to drive our expected meaningful full year growth in adjusted EBITDA.

我們下調了 2023 年全年展望，但我們對淨利潤和調整後 EBITDA 的看法與我們年初給出的展望沒有明顯不同。我們將繼續實行審慎的成本管理，以推動調整後 EBITDA 實現預期的全年有意義成長。

Our digital revenue growth is based on the growth of and maximizing the revenue per user on our media platform. While digital-only subscription revenue growth remains a key element, we are combining it with a focus on overall monetization. We have an impressive digital audience, and that audience is growing. We are beginning to see positive returns from our investments in content as evidenced by our large organic audience growing 7% year-over-year to 189 million average monthly unique visitors, of which 138 million of those visitors come from our USA TODAY NETWORK as measured by comScore and 51 million from our U.K. digital properties.

我們的數位收入成長是基於媒體平台上每個用戶收入的成長和最大化。雖然純數位訂閱收入成長仍然是一個關鍵因素，但我們將其與整體貨幣化的重點結合起來。我們擁有令人印象深刻的數位受眾，而且該受眾還在不斷增長。我們開始看到內容投資的正面回報，我們的大量自然受眾年增 7%，平均每月獨立訪客數達到 1.89 億，其中 1.38 億訪客來自我們的《今日美國》網絡（經測量）由comScore 提供， 5100 萬來自我們的英國數位資產。

We believe the largest opportunity for revenue and profit growth, along with shareholder value creation, lies in a comprehensive strategy that monetizes that full audience at various stages of their journey with us. This encompasses digital subscription revenue, digital advertising revenue, affiliate and e-commerce revenue and future product innovation. A singular focus on any one of these revenue streams comes with degradation to the overall opportunity. Therefore, we are focused on a holistic monetization strategy that ensures we maximize the revenue opportunity across the entire spectrum of our audience.

我們相信，收入和利潤成長以及股東價值創造的最大機會在於制定全面的策略，使所有受眾在與我們合作的各個階段都能獲利。這包括數位訂閱收入、數位廣告收入、聯盟行銷和電子商務收入以及未來產品創新。單一地關注這些收入來源中的任何一個都會導致整體機會的退化。因此，我們專注於整體貨幣化策略，以確保我們最大限度地提高整個受眾群體的收入機會。

The focus in 2023 on the quality of our digital subscriber acquisition strategy continues to show positive results. In the quarter, we saw a modest sequential growth in digital-only paid subscriptions and substantial growth in digital-only subscription ARPU. Q3 actually reflects our highest digital-only subscription ARPU to date and is rooted in the highly local and relevant content our teams produce. We believe there is meaningful additional upside for both digital-only subscription and ARPU growth, and we anticipate continued digital-only subscription revenue growth as we maintain our focus on smarter customer acquisition, in-depth local content and effective pricing strategies.

2023 年，我們對數位訂戶獲取策略品質的關注繼續顯示出積極的成果。本季度，我們看到純數位付費訂閱量出現小幅較上季成長，純數位訂閱 ARPU 大幅成長。第三季實際上反映了我們迄今為止最高的純數位訂閱 ARPU，並且植根於我們團隊製作的高度本地化和相關的內容。我們相信純數位訂閱和 ARPU 成長都具有有意義的額外上升空間，並且隨著我們繼續專注於更明智的客戶獲取、深入的本地內容和有效的定價策略，我們預計純數位訂閱收入將持續成長。

Another key component to translate audience growth into increased monetization per user is through the creation of additional meaningful revenue streams on our platform. We continue to make strides with partnerships as we are aligning with brands that share our values and are expected to expand our audience.

將受眾成長轉化為每個用戶貨幣化增加的另一個關鍵因素是在我們的平台上創造額外的有意義的收入流。我們在合作夥伴關係方面繼續取得長足進步，因為我們正在與擁有共同價值觀並有望擴大受眾的品牌結盟。

Over the past year, affiliate revenue started to be realized with the implementation of gambling.com to provide relevant content for sports enthusiasts and Forbes Marketplace for personal finance content. We recently announced two more partnerships with Jackpocket and Red Ventures that will further expand the monetization opportunities of our growing audience.

在過去的一年裡，隨著為運動愛好者提供相關內容的gaming.com和為個人理財內容提供福布斯市場的實施，聯盟收入開始實現。我們最近宣布與 Jackpocket 和 Red Ventures 建立另外兩個合作夥伴關係，這將進一步擴大我們不斷增長的受眾的變現機會。

As the exclusive digital lottery courier of the USA TODAY NETWORK, Jackpocket will reach a broad audience across the country and provide a fun and convenient way for the USA TODAY NETWORK audience to order lottery tickets right from their phones. The Jackpocket deal leverages the extensive lottery-related content we already produce within a single hub.

作為《今日美國》網絡的獨家數位彩票快遞公司，Jackpocket 將覆蓋全國範圍內的廣大受眾，並為《今日美國》網絡的受眾提供一種通過手機訂購彩票的有趣且便捷的方式。 Jackpocket 交易利用了我們已經在單一中心內製作的廣泛的彩票相關內容。

Additionally, we executed a partnership with Red Ventures, one of the largest independent affiliate marketing companies with brands such as CNET, Bankrate and The Points Guy. The multiyear venture will help consumers find the best broadband service providers for home and small businesses through original content and Red Ventures' patented technology. This initiative is expected to launch in Q4.

此外，我們也與 Red Ventures 建立了合作關係，Red Ventures 是最大的獨立聯盟行銷公司之一，旗下品牌包括 CNET、Bankrate 和 The Points Guy。這項為期多年的合資企業將透過原創內容和 Red Ventures 的專利技術，幫助消費者為家庭和小型企業找到最好的寬頻服務提供者。該措施預計將於第四季啟動。

These partnerships are expected to drive audience growth and engagement along with high-margin revenues. We expect the affiliate revenue stream to become a much more significant contributor to overall revenue over the next few years.

這些合作夥伴關係預計將推動觀眾成長和參與度以及高利潤收入。我們預計，未來幾年，聯盟行銷收入流將成為整體收入的更重要貢獻者。

Before reviewing our LOCALiQ business, I'd like to actually turn the call over now to Kristin Roberts, our Chief Content Officer, who will discuss the exciting momentum we are seeing in our audience growth. Kristin?

在回顧我們的 LOCALiQ 業務之前，我想現在將電話轉給我們的首席內容官 Kristin Roberts，她將討論我們在受眾增長方面看到的令人興奮的勢頭。克里斯汀？

Thank you, Mike.

謝謝你，麥克。

The purpose of Gannett Media is to operate a sustainable business model for independent journalism, content, news and information that is essential in the communities we serve. Our goal is audience growth. This is foundational. The larger we make our audience, the more we can drive predictable and recurring revenue across multiple channels.

Gannett Media 的宗旨是為獨立新聞、內容、新聞和資訊運作可持續的商業模式，這對於我們所服務的社區至關重要。我們的目標是觀眾成長。這是基礎。我們的受眾群體越大，我們就越能透過多個管道獲得可預測的經常性收入。

We're beginning to see meaningful returns from our investments, reflecting dramatic gains in the efficiency of our content team. This is evident through the remarkable momentum we have observed in terms of increased page views and readership per story.

我們開始看到有意義的投資回報，反映出我們內容團隊效率的顯著提升。我們觀察到每個故事的頁面瀏覽量和讀者人數增加的驚人勢頭，這一點顯而易見。

As we continue our journey, we will dramatically expand our brand beyond a content company. Essential news will remain central to our strategy. But more of our content will be focused on creating joy for our audience. For example, lifestyle and indulgence content have been remarkably successful in attracting significant readership, which in turn contributes to our overall revenue. And we've only scratched the surface of our potential in this area. We are hiring two full-time reporters to cover Taylor Swift and Beyonce, and we will explore additional opportunities to establish similar roles that cover influential personalities and popular topics.

隨著我們繼續我們的旅程，我們將極大地將我們的品牌擴展到內容公司之外。重要新聞仍將是我們策略的核心。但我們更多的內容將專注於為觀眾創造歡樂。例如，生活方式和放縱內容在吸引大量讀者方面非常成功，這反過來又為我們的整體收入做出了貢獻。我們僅觸及了這領域潛力的冰山一角。我們正在聘請兩名全職記者來報導泰勒絲和碧昂絲，我們將探索更多機會建立類似的角色，涵蓋有影響力的人物和熱門話題。

Looking ahead to 2024, we have ambitious plans to expand our reach and our impact in new verticals while we double-down on verticals that are already essential to our audience. This includes a focus on growing our loyal sports audience, which reached 54 million unique visitors at the end of Q3 according to comScore, as well as the audience that comes to us for relevant and valuable content. This comprehensive approach will enable us to provide diverse, engaging content that caters to the wide range of interest within our audience, which is expected to further solidify our position in the market.

展望 2024 年，我們制定了雄心勃勃的計劃，擴大我們在新垂直領域的影響力和影響力，同時加倍努力發展對我們的受眾來說已經至關重要的垂直領域。這包括重點發展我們忠實的體育觀眾（根據 comScore 的數據，第三季末獨立訪客數量達到 5400 萬），以及向我們尋求相關且有價值的內容的觀眾。這種全面的方法將使我們能夠提供多樣化、引人入勝的內容，以滿足受眾的廣泛興趣，預計這將進一步鞏固我們在市場上的地位。

The most exciting part is that we're just getting started. We plan to maintain our momentum as we enter the next phase of our transformation by building experiences that create habits and reduce churn.

最令人興奮的部分是我們才剛開始。我們計劃透過建立培養習慣和減少客戶流失的經驗，在進入轉型的下一階段時保持勢頭。

I look forward to providing additional detail on our growth on future calls. Back to you, Mike.

我期待在未來的電話會議上提供有關我們發展的更多詳細資訊。回到你身邊，麥克。

Thanks, Kristin. As you can tell, we have a lot of great things going on in content that's driving audience growth, which is going to really lead to much more revenue upside in the future.

謝謝，克里斯汀。如您所知，我們在內容方面發生了很多偉大的事情，這些事情正在推動觀眾成長，這將真正帶來未來更多的收入成長。

Now I'd like to turn to LOCALiQ, our digital marketing solutions business. In the third quarter, we recorded core platform revenue of $120.8 million, an increase of 1.8% year-over-year. We continued to generate double-digit adjusted EBITDA margins while serving over 15,000 customers on our platform. We reported year-over-year growth in both core platform ARPU and budget retention. We continued to expand our DMS product offerings through our freemium experience, which contributed to our DMS registered users surpassing 185,000 in the third quarter. Our registered user count has consistently shown impressive growth as demonstrated by the tenfold increase from 18,000 registered users in the prior year quarter. These premium registered customers are in addition to our core platform customers.

現在我想談談 LOCALiQ，我們的數位行銷解決方案業務。第三季度，我們的核心平台營收為1.208億美元，年增1.8%。我們繼續創造兩位數的調整後 EBITDA 利潤率，同時在我們的平台上為超過 15,000 名客戶提供服務。我們報告了核心平台 ARPU 和預算保留率的同比增長。我們透過免費增值體驗繼續擴大 DMS 產品範圍，這使得我們的 DMS 註冊用戶在第三季超過 185,000 名。我們的註冊用戶數量持續呈現令人印象深刻的成長，比去年同期的 18,000 名註冊用戶成長了十倍。這些優質註冊客戶不屬於我們的核心平台客戶。

I'd now like to hand the call over to Chris Cho, who joined in Q2 as the President of LOCALiQ, and he'll share a few remarks on the business and provide insight into some of the strategic initiatives we have in motion. Chris?

我現在想將電話轉交給 Chris Cho，他於第二季度加入，擔任 LOCALiQ 總裁，他將分享一些有關業務的評論，並深入了解我們正在進行的一些戰略舉措。克里斯？

Thank you, Mike.

謝謝你，麥克。

In the third quarter, our DMS business maintained strong fundamentals, although our growth was tempered. Through customer interactions, we noted a cautious sentiment among our largest customer segment, Home Services, regarding economic uncertainties tied to rising raw material costs and lower consumer demand. However, we are pleased to see improvements in both client and budget retention along with improvements in how we operate. For example, we have created a blueprint for our digital factory line and identified several fulfillment processes that can be enhanced through technology. Our goal is to streamline operations, remove redundancy and ultimately translate these efforts into enhanced profitability and an improved customer service experience.

第三季度，儘管成長有所放緩，但我們的 DMS 業務仍保持強勁的基本面。透過客戶互動，我們注意到我們最大的客戶群家庭服務對與原材料成本上升和消費者需求下降相關的經濟不確定性持謹慎態度。然而，我們很高興看到客戶保留和預算保留的改善以及我們運作方式的改善。例如，我們為數位工廠生產線創建了藍圖，並確定了幾個可以透過技術增強的履行流程。我們的目標是簡化營運、消除冗餘並最終將這些努力轉化為更高的獲利能力和更好的客戶服務體驗。

In addition, growth in DMS requires an increase in our mastery over the core digital advertising and marketing business. To ensure sustainable growth, we will accelerate new product development as well as focus on several key areas such as automation for efficient campaign management, innovative bundling to enhance customer outcomes and retention and ongoing improvements in reporting and intelligence capabilities.

此外，DMS 的成長需要我們加強對核心數位廣告和行銷業務的掌握。為了確保永續成長，我們將加快新產品開發，並重點關注幾個關鍵領域，例如用於高效活動管理的自動化、用於提高客戶成果和保留率的創新捆綁以及報告和情報能力的持續改進。

Furthermore, we are collaborating across the Gannett network, sharing best practices and unifying systems to reduce costs and improve efficiencies in order entry and billing. With renewed operational discipline, we believe our business is poised to reliably grow top line revenue over the long term and add new customers. Mike?

此外，我們正在 Gannett 網路中進行協作，共享最佳實踐並統一系統，以降低成本並提高訂單輸入和計費的效率。透過更新的營運紀律，我們相信我們的業務將能夠長期可靠地成長營收並增加新客戶。麥克風？

Thank you, Chris. We're so glad to have Chris onboard leading our LOCALiQ business, and we're really excited to see how that business develops and grows. Thanks for the update, Chris.

謝謝你，克里斯。我們很高興 Chris 加入領導我們的 LOCALiQ 業務，我們非常高興看到該業務如何成長和壯大。感謝您的更新，克里斯。

Overall, we had a solid third quarter with strong execution across our key financial metrics. We saw significant improvement in net income, sustained growth in adjusted EBITDA and continued expansion of our digital revenues. Our same-store revenue trends improved for the third consecutive quarter. And year-to-date, we've generated $43 million of free cash flow, which is up $46 million compared to the prior year.

整體而言，我們的第三季表現穩健，關鍵財務指標執行力強勁。我們看到淨利潤顯著改善，調整後 EBITDA 持續成長，數位收入持續擴張。我們的同店營收趨勢連續第三個季度有所改善。今年迄今為止，我們已經產生了 4,300 萬美元的自由現金流，比前一年增加了 4,600 萬美元。

We also continued to improve our capital structure through significant debt reduction while maintaining a healthy balance sheet and strong liquidity position. Importantly, we expect to end the year with growth in both total digital revenues and adjusted EBITDA. We expect significant free cash flow generation and meaningful debt reduction and first lien net leverage below 2x. This momentum fuels our enthusiasm for ongoing revenue trend improvement and future growth opportunities.

我們也透過大幅削減債務，持續改善資本結構，同時維持健康的資產負債表和強勁的流動性狀況。重要的是，我們預計到年底數位總收入和調整後的 EBITDA 都會成長。我們預期自由現金流將顯著產生，債務將大幅減少，第一留置權淨槓桿率將低於 2 倍。這種勢頭激發了我們對持續收入趨勢改善和未來成長機會的熱情。

With that, I'd now like to turn the call over to Doug Horne to provide additional detail and color around our 2023 3rd quarter financials as well as the details on our updated full year 2023 guidance. Doug?

現在，我想將電話轉給 Doug Horne，以提供有關我們 2023 年第三季財務狀況的更多詳細資訊和顏色，以及我們更新後的 2023 年全年指導的詳細資訊。道格？

Thank you, Mike, and good morning, everyone. As Mike mentioned, we produced another solid quarter of financial results.

謝謝你，麥克，大家早安。正如麥克所提到的，我們又取得了穩健的季度財務表現。

Let's begin with our consolidated results. And just to note, all comparisons are on a year-over-year basis, unless otherwise noted. For Q3, total operating revenues were $652.9 million, a decrease of 9.1% or 8.4% on a same-store basis. This represents a 20 basis point sequential improvement from Q2 revenue trends, marking the third consecutive quarter of improvement. With that said, the improvement was smaller than we anticipated as the benefit from our growth initiatives was partially offset by a more challenging operating environment. However, I am pleased to report that many of the strategic actions and initiatives we have in place are yielding positive results.

讓我們從我們的綜合結果開始。需要注意的是，除非另有說明，所有比較都是按年比較。第三季總營業收入為 6.529 億美元，下降 9.1%，同店下降 8.4%。這意味著較第二季營收趨勢較上季改善了 20 個基點，標誌著連續第三季出現改善。話雖如此，改善幅度小於我們的預期，因為我們的成長計畫帶來的好處被更具挑戰性的營運環境部分抵消了。然而，我很高興地報告，我們採取的許多策略行動和舉措正在產生積極成果。

On the cost side, we continue to align our expense structure with recent revenue trends. In Q3, operating expenses decreased approximately 17%, reflecting our commitment to prudent cost management as well as the successful execution of our cost optimization efforts. We anticipate additional benefits from these efforts in the upcoming quarters and remain committed to preserving our resources in the markets we serve while also investing in key areas for future growth. The decline in operating expenses also reflected a significant reduction in integration and reorganization costs during the quarter.

在成本方面，我們繼續根據最近的收入趨勢調整我們的費用結構。第三季度，營運費用下降約 17%，反映了我們對審慎成本管理的承諾以及成本優化工作的成功執行。我們預計這些努力將在未來幾季帶來更多好處，並繼續致力於保留我們所服務市場的資源，同時投資於未來成長的關鍵領域。營運費用的下降也反映出本季整合和重組成本的大幅下降。

Adjusted EBITDA totaled $59.5 million in the third quarter, an increase of 15% or approximately $8 million. Adjusted EBITDA margin was 9.1% compared to 7.2% in the prior year quarter. The growth in adjusted EBITDA was driven by our strategic cost controls and the continued operational transformation. We are also pleased to see deflationary pressures for certain raw materials, and we anticipate these cost savings will contribute favorably to our operating expense trends moving forward. In the fourth quarter, we will cycle some of the larger temporary cost savings from the prior year. But as a result of our cost efforts this year, we still expect meaningful adjusted EBITDA growth in 2023.

第三季調整後 EBITDA 總計 5,950 萬美元，成長 15%，約 800 萬美元。調整後 EBITDA 利潤率為 9.1%，去年同期為 7.2%。調整後 EBITDA 的成長是由我們的策略成本控制和持續的營運轉型所推動的。我們也很高興看到某些原材料面臨通縮壓力，我們預計這些成本節省將有利於我們未來的營運支出趨勢。在第四季度，我們將循環使用上一年的一些較大的臨時成本節省。但由於我們今年的成本努力，我們仍然預計 2023 年調整後 EBITDA 會出現有意義的成長。

Total digital revenues in Q3 were $263.6 million, up 2.7% on a same-store basis and up 1.9% sequentially. In Q3, total digital revenue surpassed 40% of our total revenues. Digital advertising within total digital revenues also returned to growth in September for the first time in more than a year. The improvement in digital advertising was primarily driven by increased inventory tied to growing page views, which are a result of our content strategy. This is a promising sign, which we believe positions us well for ongoing digital revenue growth.

第三季數位總營收為 2.636 億美元，同店成長 2.7%，季增 1.9%。第三季度，數字總收入超過了我們總收入的 40%。數位廣告總收入在 9 月也恢復成長，這是一年多來的首次。數位廣告的改善主要是由於與頁面瀏覽量成長相關的庫存增加所推動的，這是我們內容策略的結果。這是一個充滿希望的跡象，我們相信這使我們能夠為持續的數位收入成長做好準備。

Turning to the media segment. Our digital-only subscription revenues surpassed $40 million and grew 16% on a same-store basis. Our digital-only paid subscriptions continue to reflect the intentional actions to optimize our acquisition costs by prioritizing long-term monetization versus shorter-term volumes.

轉向媒體領域。我們的純數位訂閱收入超過 4,000 萬美元，同店成長 16%。我們的純數位付費訂閱繼續反映了透過優先考慮長期貨幣化而不是短期銷售來優化我們的獲取成本的有意行動。

Despite a slight decrease in digital-only paid subscriptions, we are encouraged by the sequential growth in the third quarter after 2 quarters of small declines. We believe these deliberate actions are paying off evidenced by digital-only subscription ARPU achieving a record-high of $6.82 and growing 14% compared to the prior year. We expect ARPU to increase in the upcoming quarters as we maintain our focus on attracting and retaining more profitable subscribers.

儘管純數位付費訂閱量略有下降，但經過兩季的小幅下降後，第三季的環比成長令我們感到鼓舞。我們相信這些深思熟慮的行動正在取得成效，純數位訂閱 ARPU 達到 6.82 美元的歷史新高，與前一年相比增長了 14%。我們預計 ARPU 在未來幾季將會增加，因為我們將繼續專注於吸引和留住利潤更高的用戶。

Print advertising revenue decreased 11.1% on a same-store basis due to ongoing secular declines. However, our print advertising revenue trends improved 100 basis points compared to the same period in the prior year. Our results in print circulation remained consistent with the trends we saw at the end of Q2. We do expect further trend improvement in the upcoming quarters as a result of our continued efforts to improve the subscriber experience.

由於持續的長期下滑，印刷廣告收入以同店計算下降 11.1%。然而，我們的印刷廣告收入趨勢與去年同期相比提高了 100 個基點。我們的印刷發行量結果與第二季末的趨勢保持一致。由於我們不斷努力改善用戶體驗，我們預計未來幾季的趨勢將進一步改善。

We believe our investments in addressing open routes and distribution challenges are yielding results evidenced by the percentage of open delivery routes decreasing over 20% versus the same period in the prior year. Additionally, our conversion to mail delivery is expected to deliver a more consistent service level to our consumers in those areas where staffing delivery routes is more of a persistent challenge. At the end of the third quarter, we successfully converted 11 markets to mail delivery with plans for approximately 30 more markets before the end of the year and additional markets in 2024.

我們相信，我們在解決開放航線和配送挑戰方面的投資正在取得成果，開放配送路線的百分比與去年同期相比下降了 20% 以上。此外，我們向郵件投遞的轉變預計將為那些人員配置投遞路線更具持續性挑戰的地區的消費者提供更一致的服務水準。截至第三季末，我們成功將 11 個市場轉為郵件遞送，並計劃在年底前將更多市場轉為郵件遞送，併計劃在 2024 年將更多市場轉為郵件遞送。

In Q3, our other revenues category, which includes commercial printing and delivery as well as other digital syndication and affiliate revenues, experienced trends that negatively impacted our overall revenue. While we saw growth in our affiliate revenues, this overall revenue stream experienced a 6.2% decline on a same-store basis. The decline was caused by lower commercial print volumes as a result of the secular trends and digital syndication revenue driven by lower partner monetization of our content.

在第三季度，我們的其他收入類別，包括商業印刷和交付以及其他數位聯合和附屬收入，經歷了對我們的整體收入產生負面影響的趨勢。雖然我們的聯盟行銷收入有所成長，但同店整體收入流卻下降了 6.2%。下降的原因是長期趨勢導致商業印刷量下降，以及合作夥伴內容貨幣化率下降所推動的數位聯合收入。

Moving now to our digital marketing solutions business. Total revenue in the third quarter was $121.9 million, an increase of 1.9% on a same-store basis. Adjusted EBITDA for this segment was $13.6 million, representing a margin of 11.1% in the third quarter. The results in our digital marketing solutions business reflect the consumer and advertiser trends that were mentioned earlier. However, we believe our continued focus on improved execution, along with the development of additional products and features, will increase our addressable market and help us navigate and mitigate these headwinds moving forward.

現在轉向我們的數位行銷解決方案業務。第三季總營收為1.219億美元，同店成長1.9%。該部門調整後 EBITDA 為 1,360 萬美元，第三季利潤率為 11.1%。我們的數位行銷解決方案業務的結果反映了前面提到的消費者和廣告商趨勢。然而，我們相信，我們繼續專注於提高執行力，以及開發更多產品和功能，將擴大我們的潛在市場，並幫助我們應對和減輕這些不利因素。

Average monthly customer count remained stable compared to Q2 but decreased 3% to the prior year period due to the previous optimization of our product portfolio, which eliminated lower margin offerings. Core platform ARPU grew 5% versus the prior year period and remain near record highs. Additionally, our Q3 customer budget retention was 95.4%, representing an increase of 20 basis points.

與第二季相比，平均每月客戶數量保持穩定，但由於我們先前對產品組合進行了優化，消除了利潤率較低的產品，因此比去年同期下降了 3%。核心平台 ARPU 較上年同期成長 5%，並維持在歷史高點附近。此外，我們第三季的客戶預算保留率為 95.4%，增加了 20 個基點。

Let's now shift to the balance sheet. At the end of the third quarter, our cash balance stood at $109.2 million, translating to net debt of approximately $1 billion. We generated $7.4 million of free cash flow in the third quarter, bringing our year-to-date free cash flow to $43.7 million, which is up $46.7 million from the prior year period. We anticipate additional free cash flow growth in Q4 with an estimated conversion rate of at least 30%.

現在讓我們轉向資產負債表。截至第三季末，我們的現金餘額為 1.092 億美元，相當於淨債務約 10 億美元。第三季我們產生了 740 萬美元的自由現金流，使年初至今的自由現金流達到 4,370 萬美元，比去年同期增加了 4,670 萬美元。我們預計第四季自由現金流將進一步成長，預計轉換率至少為 30%。

I'm pleased to report that our first lien net leverage is now below 2x. This reflects $65.3 million of total debt paydown in the third quarter as well as improved adjusted EBITDA performance. Notably, our Q3 debt reduction of $65.3 million is the highest quarterly paydown figure in 2 years. During October, we repaid an additional $6.2 million on our term loan using the proceeds from real estate asset sales. Year-to-date, we have repaid $124 million of debt. Debt repayment remains a top priority for us. And as a result, we expect our first lien net leverage to remain below 2x at year-end.

我很高興地報告，我們的第一留置權淨槓桿率現在低於 2 倍。這反映了第三季 6,530 萬美元的總債務償還以及調整後 EBITDA 業績的改善。值得注意的是，我們第三季的債務減少額為 6,530 萬美元，是兩年來最高的季度還款額。 10 月份，我們利用房地產資產銷售收益額外償還了 620 萬美元的定期貸款。今年迄今為止，我們已償還了 1.24 億美元的債務。償還債務仍然是我們的首要任務。因此，我們預計到年底我們的第一留置權淨槓桿率將維持在 2 倍以下。

In Q3, we completed 8 real estate and other asset sales totaling $51.5 million, bringing our year-to-date total for real estate and other asset sales to $82.7 million. We continually review our full product portfolio, and we will continue to sell noncore assets, which will allow for flexibility and for reinvestment in the business as well as ongoing debt repayment.

第三季度，我們完成了 8 筆房地產和其他資產銷售，總計 5,150 萬美元，使年初至今的房地產和其他資產銷售總額達到 8,270 萬美元。我們不斷審查我們的完整產品組合，我們將繼續出售非核心資產，這將提供靈活性、業務再投資以及持續的債務償還。

Turning now to guidance. Based on the trends you heard from Mike and Chris, we now expect our 2023 full year adjusted EBITDA to be in the range of $270 million to $290 million as compared to $257 million in 2022. Free cash flow is expected to be in the range of $65 million to $85 million, representing a significant increase to our 2022 results. Our outlook also reflects an assumption that same-store revenue trends will be down between 8% and 9% for the annual period, but we are expecting fourth quarter trends generally in line with those of the third quarter, indicating a further reduction in revenue losses compared to the first half of the year.

現在轉向指導。根據您從 Mike 和 Chris 那裡聽到的趨勢，我們現在預計 2023 年全年調整後 EBITDA 將在 2.7 億至 2.9 億美元之間，而 2022 年為 2.57 億美元。自由現金流預計將在6500 萬美元至8,500 萬美元，比我們2022 年的業績大幅成長。我們的展望也反映了這樣的假設：全年同店收入趨勢將下降 8% 至 9%，但我們預計第四季度趨勢與第三季度基本一致，顯示收入損失進一步減少與上半年相比。

In the third quarter, we made continued progress on our long-term digital growth strategy. We believe this progress demonstrates the traction we have gained, further validates the company's strategic plan and represents just the beginning of the value we expect to capture over time, our commitment to the successful execution of our strategy and, most importantly, our readers and customers is unwavering. We believe these priorities will keep us firmly on the path to achieving our transformation goals and delivering significant long-term shareholder value.

第三季度，我們的長期數位成長策略持續取得進展。我們相信這一進展證明了我們所獲得的吸引力，進一步驗證了公司的戰略計劃，並且代表著我們期望隨著時間的推移獲得的價值的開始，我們對成功執行戰略的承諾，最重要的是我們的讀者和客戶是堅定不移的。我們相信，這些優先事項將使我們堅定地走在實現轉型目標並提供顯著的長期股東價值的道路上。

I will now hand it back to the operator for questions. And then after questions, we will go back to Mike for some closing thoughts.

我現在將其交還給接線員以供提問。提問結束後，我們將回到麥克那裡，聽聽他的一些結束語。

(Operator Instructions) Our first question comes from Doug Arthur of Huber Research Partners.

（操作員說明）我們的第一個問題來自 Huber Research Partners 的 Doug Arthur。

Just on the digital subscription strategy, I mean, that $40 million in quarterly run rate is a nice achievement. It looks like you've regained some momentum on sub growth. You sort of pivoted 1 year to 1.5 years ago toward higher pricing, slower growth to sort of maximize return. Is there a point in time where you pivot again to kind of growing aggressively the number of subs to kind of ramp this up? Or are you satisfied with the trend right now?

就數位訂閱策略而言，我的意思是，4000 萬美元的季度運行率是一個不錯的成就。看起來你已經恢復了子增長的一些動力。 1 到 1.5 年前，你轉向提高定價、放慢成長速度，以最大化回報。是否有一個時間點你會再次轉向積極增加潛艇數量以提高這一點？或者你對現在的趨勢滿意嗎？

Yes. Doug, thanks for the question. Our focus, and we believe the single biggest opportunity for our company from a growth perspective and a profit perspective, is actually the monetization of that full audience of 189 million uniques, which is growing. Only a certain number are going to pay for digital subscription. So a more wholesome or holistic monetization strategy on the full audience and making sure that full audience not only grows but is more engaged with us leads to the biggest revenue opportunity going forward. So we'll take a very balanced approach to growing that digital subscriber base with growing ARPUs but, in addition, growing our digital advertising business growing our affiliate revenue and e-commerce business and being able to launch new products on such a substantial audience base that's growing. So it's really a holistic approach to monetizing the entire audience versus any one singular approach.

是的。道格，謝謝你的提問。我們的重點，我們相信，從成長角度和利潤角度來看，我們公司最大的機會實際上是 1.89 億獨立用戶的全部受眾的貨幣化，而且這一數字還在不斷增長。只有一定數量的人會支付數位訂閱費用。因此，針對全體受眾採取更健康或更全面的貨幣化策略，並確保全體受眾不僅成長，而且與我們更加互動，從而帶來未來最大的收入機會。因此，我們將採取一種非常平衡的方法，透過不斷增長的ARPU 來擴大數位用戶群，此外，我們還將發展我們的數位廣告業務，增加我們的聯營收入和電子商務業務，並能夠在如此龐大的受眾基礎上推出新產品正在成長。因此，與任何單一方法相比，這實際上是一種透過整個受眾獲利的整體方法。

Okay. And then my final question, just in terms of the revised guidance, I mean, what are the surprises there? Is it sort of the economic retail woes in print? Is it the fact that you're annualizing the big cost cuts a year ago? What's sort of been the big surprise in terms of lowering your full year guide from where it was?

好的。然後我的最後一個問題，就修訂後的指導而言，我的意思是，有哪些驚喜？這是印刷業零售業的經濟困境嗎？是因為您將一年前的大幅成本削減按年計算了嗎？降低全年指引值有什麼大的驚喜？

So I think what's really changed, Doug, we've seen the consumers start to feel squeezed and that's impacting discretionary spend in certain categories, one of which is home services, which happens to be a category that's a good category for us. While we see short-term weakness in that category from what the consumers are actually experiencing, we don't expect that to be a long-term thing. And home services is a great category that we expect to continue to return to normal operating for us as we go forward in 2024. So short-term headwinds, the consumers feeling some pain for sure, higher interest rates, a little bit less access to capital for discretionary spend in the home services category, but we don't see it as being anything too significant as we look out to 2024.

所以我認為真正改變的是，道格，我們看到消費者開始感到受到擠壓，這影響了某些類別的可自由支配支出，其中之一是家庭服務，這恰好是一個對我們來說很好的類別。雖然我們從消費者的實際體驗中看到該類別的短期疲軟，但我們預計這不會是長期的事情。家庭服務是一個很好的類別，我們預計到 2024 年我們將繼續恢復正常運作。因此，短期的不利因素是，消費者肯定會感到一些痛苦，利率上升，獲得服務的機會有點少家庭服務類別中可自由支配支出的資本，但我們認為2024 年的前景不會太重要。

Ladies and gentlemen, it appears we have reached the end of our question-and-answer session. I will now hand over to Mike Reed for closing remarks.

女士們先生們，我們的問答環節似乎已經結束了。我現在請麥克·里德致閉幕詞。

Thank you. So Gannett and our digital transformation strategy absolutely requires long-term thinking even as we navigate short-term volatility. Over the past 18 months, we've implemented several initiatives aimed at building a solid foundation, investing in key growth areas and executing on our transformation objectives. As we head into Q4 and beyond, we will build on that progress and accelerate our efforts to further drive the speed of our transformation.

謝謝。因此，甘尼特和我們的數位轉型策略絕對需要長期思考，即使我們要應對短期波動。在過去 18 個月中，我們實施了多項舉措，旨在奠定堅實的基礎、投資於關鍵成長領域並執行我們的轉型目標。進入第四季及以後，我們將在此基礎上繼續努力，進一步加快轉型速度。

I want to share some thoughts with you that are important and give us great optimism when we look to the future company we are building. We continue to make meaningful progress in reducing debt and leverage, reducing first lien net leverage below 2x was a nice milestone this past quarter. We continued to grow adjusted EBITDA in the third quarter, and we expect to see adjusted EBITDA growth for the full year of 2023. We expect to generate significantly more free cash flow in 2023 than in the prior year.

我想與您分享一些重要的想法，這些想法讓我們在展望我們正在建立的未來公司時感到非常樂觀。我們繼續在減少債務和槓桿方面取得有意義的進展，將第一留置權淨槓桿率降低到 2 倍以下，這是上個季度的一個很好的里程碑。我們第三季調整後 EBITDA 持續成長，預計 2023 年全年調整後 EBITDA 將成長。我們預計 2023 年將產生比前一年顯著更多的自由現金流。

Our digital revenues surpassed 40% of total revenue in the third quarter. Our digital revenues have returned to growth, and we saw that growth trend increase a bit in Q3 sequentially from Q2.

第三季我們的數位收入超過了總收入的 40%。我們的數位收入已經恢復成長，我們看到第三季的成長趨勢比第二季略有增加。

With all the various initiatives we have in place, many of which you heard about on the call this morning, we expect to see expansion of that growth trend in 2024, and we expect digital revenues to continue to become a larger percentage of our overall revenues.

透過我們採取的各種舉措（其中許多舉措您在今天早上的電話會議上聽說過），我們預計這一增長趨勢將在2024 年擴大，並且我們預計數位收入將繼續在我們的整體收入中佔據更大的比例。

Our paid digital subscription strategy this year is showing encouraging results. We saw significant increases in ARPU and digital-only subscription revenue. Digital-only subscription ARPU hit an all-time high for us. However, we believe there is still considerable upside to ARPU and to our paid digital subscriber base.

今年我們的付費數位訂閱策略取得了令人鼓舞的成果。我們看到 ARPU 和純數位訂閱收入顯著增加。純數位訂閱 ARPU 創下歷史新高。然而，我們相信 ARPU 和我們的付費數位用戶群仍有相當大的上升空間。

Our content strategy is also showing very promising results. We are seeing our audience grow along with engagement. And we believe this will lead to better monetization opportunities as we focus on total digital audience monetization across several different revenue streams.

我們的內容策略也顯示出非常有希望的結果。我們看到我們的受眾隨著參與度的增加而成長。我們相信，這將帶來更好的貨幣化機會，因為我們專注於跨多個不同收入流的總數位受眾貨幣化。

Our focus on external trusted content partners is also showing positive results. We have signed four partnerships this year. Two are brand new, but for the two launched earlier this year, we are seeing better audience engagement than we originally expected. As these partnerships continue to mature, we expect meaningful revenue growth from them, and as I mentioned earlier, this is very high-margin revenue.

我們對外部可信任內容合作夥伴的關注也取得了正面的成果。今年我們已經簽署了四項合作關係。其中兩款是全新的，但對於今年早些時候推出的兩款，我們發現觀眾參與度比我們最初預期的要高。隨著這些合作關係的不斷成熟，我們預計他們的收入將實現有意義的成長，正如我之前提到的，這是非常高利潤的收入。

The strategic initiatives we are implementing to evolve this business to a digital business are working. The initiatives we have in place to grow EBITDA and free cash flow are working. The fast pace of debt and leverage reduction is working. We'll navigate any near-term uncertainty that we need to while staying focused on our transformational actions. We believe our current strategy will result in a sustainable revenue and profit growth business, and we are optimistic about the future as well as our ability to create value for our shareholders as we execute on these plans.

我們正在實施的旨在將該業務發展為數位業務的策略性舉措正在發揮作用。我們為增加 EBITDA 和自由現金流而採取的舉措正在發揮作用。債務和槓桿率的快速削減正在發揮作用。我們將在專注於我們的轉型行動的同時，應對我們需要的任何近期不確定性。我們相信，我們目前的策略將帶來可持續的收入和利潤成長業務，我們對未來以及在執行這些計劃時為股東創造價值的能力持樂觀態度。

Thanks for your time today, and we look forward to updating you again as we close the year of 2023. Thank you all.

感謝您今天抽出時間，我們期待在 2023 年即將結束之際再次向您更新最新消息。謝謝大家。

Thank you, sir. Ladies and gentlemen, that concludes today's event. Thank you for attending, and you may now disconnect your lines.

謝謝你，先生。女士們、先生們，今天的活動到此結束。感謝您的出席，您現在可以斷開線路了。