On this page of StockholderLetter.com we present the latest annual shareholder letter from Gannett Co., Inc. — ticker symbol GCI. Reading current and past GCI letters to shareholders can bring important insights into the investment thesis.
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4/24/2024 Letter Continued (Full PDF)
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4/26/2023 GCI Stockholder Letter
• More "Publishing & Printing" Category Stockholder Letters
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GCI Benford's Law Stock Score = 99
4/24/2024 Letter Continued (Full PDF)
•
4/26/2023 GCI Stockholder Letter•
More "Publishing & Printing" Category Stockholder Letters•
GCI Benford's Law Stock Score = 99GCI Shareholder/Stockholder Letter Transcript:
Annual Report About Us Gannett Co., Inc. ( Gannett , we , us , our , or the Company ) is a diversified media company with expansive reach at the national and local level dedicated to empowering and enriching communities. We seek to inspire, inform, and connect audiences as a sustainable, growth focused media and digital marketing solutions company. We endeavor to deliver essential content, marketing solutions, and experiences for curated audiences, advertisers, consumers, and stakeholders by leveraging our diverse teams and suite of products to enrich the local communities and businesses we serve. Our Portfolio 96 ~187 million Pulitzer Prizes won since 1918 monthly unique visitors, on average(1) OVER 80% of our daily media brands domestically have been published for more than 100 years A reach of ~ 1 in 2 adults in the U.S. through our USA TODAY NETWORK(3) million 15+ thousand digital-only paid subscriptions in 2023 average monthly DMS core platform customers in 2023(2) $1.1billion in total digital revenues in 2023 or 39% of total revenues Our current portfolio of trusted media brands includes the USA TODAY NETWORK, comprised of the national publication, USA TODAY, and local media organizations in the United States (the U.S. ), and Newsquest, a wholly-owned subsidiary operating in the United Kingdom (the U.K. ). Our digital marketing solutions brand, LocaliQ, uses innovation and software to enable small and medium-sized businesses to grow, and USA TODAY NETWORK Ventures, our events division, creates impactful consumer engagements, promotions, and races. Our Commitment Through USA TODAY, our network of local properties, and Newsquest, we deliver highquality, trusted content with a commitment to balanced, unbiased journalism, where and when consumers want to engage. We have strong relationships with hundreds of thousands of local and national businesses in both our U.S. and U.K. markets due to our large local and national sales forces and a robust advertising and digital marketing solutions product suite. Our strategy prioritizes maximizing the monetization of our audience through the growth of increasingly diverse and highly recurring digital businesses. We expect the execution of this strategy to enable us to continue our evolution to a predominantly digital media company. We deliver value to our customers, advertisers, partners and shareholders with essential content, joyful experiences, and relevant digital solutions. (1) .Approximately 187 million average monthly unique visitors in 2023 with approximately 136 million average monthly unique visitors coming from our USA TODAY NETWORK (based on December 2023 Comscore Media Metrix ) and approximately 51 million average monthly unique visitors resulting from our U.K. digital properties (based on Adobe Analytics). (2) .Core platform customers is defined as customers utilizing the Company s proprietary digital marketing services platform that are sold by either our direct or local market teams. (3) Based on December 2023 Comscore Media Metrix . Letter to Shareholders Dear Shareholders, As a diversified media company with expansive reach, our goal is to empower communities to thrive. Gannett achieves this by inspiring, informing and connecting audiences as a sustainable, growthfocused media and digital marketing solutions company. We seek to drive audience growth and engagement by delivering broad content experiences to our consumers, while offering the products and marketing expertise our advertisers desire. The Company s strategy prioritizes recurring digital revenue growth, which is expected to lead to sustainable total revenue growth. Our anticipated growth extends beyond subscription relationships and involves driving audience growth through a more relevant and diversified portfolio, creating experiences and joyful content with various monetization opportunities, while maintaining a focus on the continued execution of our digital marketing solutions business. The execution of this strategy is expected to enable us to continue our evolution to a predominately digital media company. As a result, we are experiencing solid progress in our digital businesses, with total digital revenues of over $1 billion in 2023, by expanding our audience and increasing engagement, as well as improving the overall monetization of our audience. Equally important, our Digital Marketing Solutions ( DMS ) business continues to showcase remarkable resilience with continued growth in 2023 and strong fundamentals across several key metrics. Moving forward, we intend to create stockholder value through a variety of methods, including organic growth driven by our consumer and business-to-business strategies, as well as through paying down debt to strengthen our capital structure. The four key operating pillars of our strategy include: 1. Stable foundation for ongoing growth 2. Expanded reach with our customer segments 3. Diversified digital revenues 4. Foundational commitment to environmental, social and governance matters that impact our customers and communities Operational Highlights: We continued to make notable progress across our digital businesses in 2023. Our digital revenue strategy is rooted in audience expansion and increased engagement, as well as growing diversified platform monetization at each point in the consumer journey. We believe the greatest revenue opportunity lies in a comprehensive monetization strategy that maximizes revenue across the entire spectrum of our 187 million average monthly unique visitors(1). Gannett serves an engaged and expanding audience, which we believe offers us great potential for diversified, predictable and repeatable revenue growth. In 2023, Gannett grew its audience and engagement and continues to leverage data and AI to better engage with our audience. We believe we are well positioned to translate this growth into more advertising opportunities, more digital subscription opportunities, and further monetization through our growing partnership portfolio. In 2023, we refined our subscription acquisition efforts to attract and retain highly engaged, long-term and more profitable subscribers. This renewed focus on a more strategic acquisition and pricing model resulted in new highs in digital-only subscription revenue and digital-only average revenue per user ( ARPU ) in the fourth quarter of 2023. We believe we have continued upside in both areas as we maintain our focus on smarter customer acquisition, in-depth local Letter to Shareholders content, and effective pricing strategies. Equally impressive, our initiatives around audience expansion and increased engagement led to the best quarterly performance in our digital advertising business in the fourth quarter of 2023. Another key component to translate audience growth into increased monetization per user is partnerships. We made great strides with partnerships in 2023 as we aligned with brands that share our values, provide valuable content to our users and allow us to further diversify the monetization of our audience and content platform. Our five announced partnerships in 2023 have created a new digital revenue stream with significant potential and at a very high margin, which has become immediately accretive to our total revenue and free cash flow. While we expect to launch new partnerships in 2024, the more substantial revenue growth is expected to come from scaling our existing portfolio of partnerships, further embedding the content across our platform, and driving increased engagement. In parallel to the digital revenue growth in our media properties is the growth of our DMS business. Our DMS business continued to operate at a high level in 2023 with more than $475 million of highly recurring revenue, double-digit Adjusted EBITDA margins, healthy ARPU, and customer budget retention rates over 95%. Our strategic plan for 2024 involves continuing to optimize and grow our core DMS solutions through new verticals while at the same time expanding our product portfolio with AI-powered software solutions, which we believe will increase our total addressable market and core platform revenue. We believe the foundation for stability, and the fuel for investment in digital growth, is enabled through the continued optimization of our traditional print businesses. Our results in print subscription revenue continued to showcase promising improvements driven by the actions we have implemented to enhance the subscriber experience. As a result, our service levels and the percentage of open routes are at their best levels in two years, while the conversion to mail delivery has proven to be a consistent and effective delivery model to our consumers in the areas where staffing delivery routes is more of a persistent challenge. We believe our employees are our greatest asset and the foundation of our business is the people and employees who make our day-to-day operations possible. Inclusion, diversity, and equity ( ID&E ) are core pillars of our organization and in 2023 we continued to make great strides. In early 2024, we published our fourth installment of an annual report focused on our ID&E efforts. The 2023 Inclusion Report outlined then-current workforce diversity data, Gannett s inclusion goals that reach into 2025, as well as the steps we are taking to achieve our goals. Gannett remains consistent, committed, and intentional in our quest to be a leader in ID&E. In 2023, Gannett was recognized in the 2023 Best Places to Work for LGBTQ Equality. In 2023, for the sixth year in a row, Gannett received a perfect score of 100 on the Corporate Equality Index, the nation s premier benchmarking survey and report measuring corporate policies and practices related to LGBTQ workplace equality and inclusion. Gannett was also recognized for the third time by Forbes as one of America s Best Employers for Diversity. In addition, Gannett is a proud Gold recipient of Mental Health America s Bell Seal for Workplace Mental Health, awarded for our commitment to employee mental health and wellbeing. As a leading media organization, our longstanding corporate social responsibility position is driven by our deep commitment to our communities. We are dedicated to ensuring that we have mindful and ethical business practices that positively impact our world. In early 2024, we published our 2024 ESG Report detailing the progress we made on our U.N. Sustainable Development Goals ( U.N. SDGs ) that include Reduced Inequalities, Climate Action, and Peace, Justice, and Strong Institutions. The 2024 ESG Report included noteworthy highlights such as improvements to our workplace diversity, further reductions in our total paper consumption, and the successful completion of our inaugural climate disclosure project questionnaires for climate change and forests. Letter to Shareholders Gannett is committed to ensuring our coverage is widely available, actively promoted across our media sites and marketed to our millions of registered users. In January 2024, we published our network-wide 2023 Journalism Impact Report, which highlighted what we believe are the most influential articles we produced in 2023 and covers topics such as coverage on ID&E, as well as climate change. The Company commits to the ongoing publishing of an annual network-wide Journalism Impact Report, which surfaces the top stories we produced that led to action. Debt Paydown: In 2023 we continued to optimize our capital structure and repaid approximately $142 million of debt, reducing our first lien net leverage by approximately 25% in 2023 to 2.0x. We continue to focus on debt reduction and improvement in our capital structure and during 2024 we anticipate debt reduction of approximately $110 million through non-strategic asset dispositions and continued free cash flow improvement. 2024 and Beyond: We made excellent progress executing on our strategy to drive our digital transformation in 2023. Over the past year, we ve expanded our digital audience, improved engagement, grown the monetization of our audience, and driven significantly improved financial results over the prior year. As these results show, we are building momentum toward a sustainable digital growth business, with a strong balance sheet. We have a top tier, passionate leadership team, a dynamic content strategy, and a growing DMS business. We feel the momentum shifting at Gannett and we are heading into 2024 with incredible optimism. Sincerely, Michael E. Reed Chairman and Chief Executive Officer April 1, 2024 Cautionary Note Regarding Forward-Looking Statements: Certain items herein may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding our business outlook, digital revenue performance and growth, growth in our DMS segment, our total addressable market, core platform revenue, growth of and demand for our digital-only subscriptions, digital marketing and advertising services, digitalonly subscription revenue, audience growth, monetization strategy and opportunities, expectations regarding our free cash flows, revenues, cash flows, expectations regarding our growth rate, including growth in revenues and Adjusted EBITDA, our ability to create stockholder value, our expectations, in terms of both amount and timing, with respect to debt repayment, real estate and other non-strategic asset sales, economic impacts, our capital structure, our strategy, our environmental, social, and governance goals, our partnerships, our ability to achieve our operating priorities, growth of ARPU, our long-term opportunities, and future revenue trends and our ability to influence trends. Words such as expect(s) , plan(s) , believes(s) , anticipate , will , seek , intend , goal , should , and similar expressions are intended to identify such forward-looking statements. These statements are based on management s current expectations and beliefs and are subject to a number of risks and uncertainties. These and other risks and uncertainties could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond our control. The Company can give no assurance its expectations will be attained. Accordingly, you should not place undue reliance on any forward-looking statements contained herein. For a discussion of some of the risks and important factors that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time in the Company s most recent Annual Report on Form 10-K, our quarterly reports on Form 10-Q, and our other filings with the Securities and Exchange Commission. Furthermore, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this Annual Report. Except to the extent required by law, the Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company s expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.