Lee Enterprises Reports 10.8% Revenue Decline in Q3, Achieves Net Income Recovery

Lee Enterprises, Inc. reported its financial results for the third quarter and nine months ended June 28, 2026, revealing a total operating revenue of $126.0 million, a decrease of 10.8% compared to $141.3 million in the same period last year. The decline was primarily driven by a 14.2% drop in print revenue, which totaled $54.4 million, and an 11.1% decrease in subscription revenue, amounting to $54.7 million. Digital revenue, while still a significant portion of the total, also saw a decline, with digital-only subscription revenue falling 7.0% to $21.8 million. The company reported a net income of $5.2 million, a notable recovery from a net loss of $1.7 million in the prior-year quarter.

In the nine-month period, total operating revenue was $378.0 million, down 10.7% from $423.2 million in the previous year. The company experienced a similar trend in advertising and marketing services revenue, which decreased by 10.0% to $174.3 million. Despite these revenue declines, Lee Enterprises achieved an operating income of $22.4 million, a significant turnaround from an operating loss of $3.2 million in the same period last year. This improvement was attributed to disciplined cost management and the absence of prior-year costs related to a cybersecurity incident.

Strategically, Lee Enterprises entered into a five-year management agreement with Hoffmann Media Group, effective June 1, 2026, to manage certain newspaper publications and digital properties. This agreement includes a fixed management fee and variable fees based on the EBITDA of the acquired publications. Additionally, the company successfully completed a private placement of 16 million shares of common stock, raising $50 million in gross proceeds, which has bolstered its liquidity position. The proceeds from this placement, along with a reduction in the applicable margin on its term loan from 9.00% to 5.00%, are expected to enhance financial flexibility.

Operationally, the company reported a decrease in print subscribers by 19.3%, bringing the total to 221,000, while digital-only subscribers fell by 12.8% to 584,000. The decline in customer counts reflects ongoing challenges in the print segment and the impact of inflationary pressures on subscription rates. However, total digital revenue, which includes digital advertising and services, accounted for 56.8% of total operating revenue, indicating a shift towards digital platforms.

Looking ahead, Lee Enterprises remains focused on its digital-first strategy, aiming to enhance subscriber experiences and expand its digital offerings. The company anticipates that cash generated from operations, combined with the recent financing, will be sufficient to meet its obligations over the next 12 months. However, it acknowledges ongoing risks related to market conditions, competition, and the management of declining print revenue and circulation subscribers.