Greetings and welcome to Gannett Co. Incorporated Third Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note, this conference is being recorded. I’ll now turn the conference over to your host, Matt Esposito, Head of Investor Relations. You may begin.

Thank you. Good morning, everyone, and thanks for joining our call today to discuss Gannett's third quarter 2024 financial results. Presenting on today's call will be Mike Reed, Chairman and Chief Executive Officer; Doug Horne, Chief Financial Officer; Kristin Roberts, Chief Content Officer; and Chris Cho, President of Digital Marketing Solutions. 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. 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 as defined under the US Federal Securities Laws, 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. Please keep in mind, all comparisons are on a year-over-year basis unless otherwise noted. 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 US GAAP measures in the earnings supplement. 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 audio cast are copyrighted material of Gannett and may not be duplicated, reproduced or rebroadcast without prior written consent. With that, I would like to turn the call over to Mike Reed, Gannett's Chairman and CEO.

Thank you, Matt. Good morning, and thanks for joining our third quarter earnings call. We continue to make solid progress in the third quarter across our key priorities. In Q3, adjusted EBITDA totaled approximately $63 million and grew nearly 6% year-over-year. Three out of four digital revenue categories saw strong growth and further trend improvement year-over-year. And as a result, total digital revenues surpassed 45% of total revenues, representing an all-time high. We also generated approximately $20 million of free cash flow, representing a significant increase of 168% compared to the prior year. In Q3, our audience surpassed 200 million average monthly unique visitors for the first time in our history, reflecting growth of over 7% compared to the prior year. This milestone of 200 million average monthly unique visitors demonstrates our ability to stay closely aligned with our audience's preferences. In the third quarter, a couple of drivers of audience for our network were political events, the Paris Olympics, and the kickoff to football season. We believe our audience results highlight our ability to create content that is both relevant and essential. And that includes being a leading sports content organization. And to further strengthen and leverage our market presence, we launched a partnership with BetMGM that is expected to provide additional content to our sports enthusiasts and enhance the monetization of our content platform. Subsequent to the quarter end, we completed our debt refinancing transactions, which extended our maturity runway, reduced potential future share dilution, and simplified our capital structure. We believe our ability to successfully refinance our debt reflects the strength of our long-term strategy and the progress we have made executing against our plans. Especially this year as we have intentionally had stabilization at the forefront of our collective efforts. That means we expect stabilizing revenue trends, growing adjusted EBITDA and free cash flow, and improving margins. 2024 is an important step in Gannett's trajectory, which we believe positions us well for sustainable revenue, adjusted EBITDA and free cash flow growth, which is expected to lead to significant value creation for our shareholders. While we are pleased to see improvement across most digital categories, our year-over-year total revenue was lower than expected, resulting from the sale and unwind of some non-strategic businesses and softer trends in our Newsquest and DMS segments. However, we are encouraged that same-store revenue trends showed consistent improvement throughout the quarter, with September emerging as our strongest month and we believe that is a positive indicator for the fourth quarter. Looking ahead to Q4, we believe we will drive improvement in total revenue trends as well as our digital revenue trends bringing us closer to our expected revenue inflection point. As a result, we are optimistic about finishing the year strong. Now I'd like to review some of the operational highlights of the third quarter. We are committed to a diversified monetization strategy that is intended to maximize the revenue opportunity across our entire audience and to tailor that opportunity based on individual customer habits. The outstanding audience results from Q3 have been instrumental in improving our top line trends and driving meaningful growth in three out of four digital revenue categories. Importantly, we believe our highly engaged audience is a powerful leading indicator of future revenue opportunities we are poised to unlock and as a result we are well positioned to drive further trend improvement moving forward. We also improved our engagement with that audience as we were able to achieve another quarter of double-digit page view growth compared to the prior year. We believe this heightened focus on monetizing the full spectrum of our audience through personalized experiences has driven significant wins across our digital business in Q3. One area worth highlighting is our digital-only subscription business. In Q3, we continued to achieve new highs with digital-only subscription revenue surpassing $50 million and digital-only ARPU climbing above $8. We have shared previously that we believe we have significant upside in this digital revenue category through both volume growth and pricing, which we saw in the third quarter. Q3 marked another quarter of sequential growth in digital-only paid subscriptions, as well as the second consecutive quarter of year-over-year subscription growth. Separately, our initiatives around audience expansion and increased engagement drove significant improvement in year-over-year digital advertising trends. Driving these fantastic audience results for Gannett is our Chief Content Officer, Kristin Roberts. I would like to turn the call over to Kristin to provide deeper insights into our audience results for the quarter. Kristin?

Thank you, Mike. Audience growth has been at the heart of our transformation. By listening to our audience and studying their behavior on our platforms, we've gained exceptional clarity on the content our readers desire. As a result, we have generated 14 consecutive months of at least one billion page views, and both USA TODAY and the USA TODAY NETWORK have become the industry leader in audience growth over the past year. At USA TODAY, we are committed to becoming the leading digital news and content destination in America. To fully harness this potential, we have intentionally returned to our roots as a facts-forward, down-the-center survey of our nation. There is a significantly underserved audience seeking a viewpoint that reflects the middle majority. And we believe we are capturing this opportunity. Notably, our decision more than a year ago to only recommend candidates in local and state elections has resonated well with our audience, resulting in record-breaking engagement with our political content. Why did we make this decision? Because we believe America's future is decided locally, one race at a time. Our local editors across the network have the discretion to endorse at a state or local level. Many have decided not to endorse individual candidates, but rather endorse key local and state issues on the ballot that impact the community. Our public service is to provide readers with the facts that matter and the trusted information they need to make informed decisions. That is our commitment to the nation. We also are building what we believe is the strongest sports coverage team in America through One Team Sports. Our ambition is to become the nation's dominant sports content organization. The power of our coverage was evident during the Paris Olympics, where USA TODAY generated over 200 million page views, an increase of 45% compared to our reporting of the Tokyo Olympics. We also have experienced remarkable success with the NFL. This approach has generated notable increases in audience, page views, and readership per story. We believe sports continues to present a promising opportunity to expand our audience, create personalized and relevant experiences, and develop journeys that are expected to maximize digital revenue per user and per visit. Another key part of our mission is to remain essential and indispensable to the communities we serve, especially during unprecedented natural disasters. Our local newsrooms, with support from USA TODAY and the Network, provided our readers with critical information before, during, and after Hurricane Helene and Milton. Our service approach to content prioritized their needs so that we were able to deliver life-saving information, such as availability of shelter, water sources, and food distribution centers. We also recognize that in the disaster zones, the community had no Wi-Fi and could not load web pages. So in addition to our regular coverage, the content team launched an SMS text service in both English and Spanish to provide weather updates, connect readers with resources, and answer any questions they might have. We recognize that relief and recovery efforts will take time as these communities rebuild and heal, and we will be there with them. We will be unwavering in our commitment to continue delivering on our public service mission. Back to you, Mike.

Thank you, Kristin. Congratulations to you and your team for your continued efforts in fulfilling our mission of service to our readers and viewers as the trusted source of news and information. The scale of our audience really evidences the relevancy of the content the team is producing. Now let's turn to our DMS business. And for that, I'll hand it over to Chris for an update on the quarter. Chris?

Thank you, Mike. In Q3, a more cautious sentiment was expressed by larger advertisers that operate in our home services vertical. We saw a contraction in the advertising spend rates from this cohort, which coincided with the inherently cyclical nature of this vertical that typically benefits from lower interest rates. Through customer interactions, it was evident that these larger advertisers were sensitive to the economic uncertainty as the Federal Reserve had not yet enacted any rate cuts. However, I am pleased to report that preliminary figures show that spending rates are improving in October. We've also seen external research and data that suggests a rebound in residential construction and renovation in the wake of recent rate cuts, which we believe will present an opportunity to return to growth moving forward. In addition to these positive catalysts, we have actions underway that further reinforce our optimism to drive trend improvement in Q4. Earlier this year, we implemented a verticalization focus, where we bring extensive knowledge and expertise in key verticals. We are encouraged by the solid momentum from this program, as we are successfully winning deals more effectively than last year. This is a promising development, and we expect to sustain this trajectory into Q4. We also launched new incentives and loyalty programs for our customers. The initial results have already shown strong potential, exemplified by record-high sales productivity, as well as improvements in customer retention. Equally important, we made solid progress across several key metrics in the third quarter that highlight the resilience of our DMS business. We continued to run our DMS business at high levels of profitability, and in Q3, adjusted EBITDA totaled $11.7 million. We are also pleased to see improvements in both client and budget retention. While average customer count contracted in Q3, we continue to retain accounts that fit our ideal customer profile. This is evident in our core platform ARPU, which maintained its record high of approximately $2,800, representing an increase of 5.3% year-over-year. We are also excited to report strong momentum in Q3 with our AI-powered solution, Dash. Since its launch four months ago, we have experienced good demand and received overwhelmingly positive feedback from our customers, which reinforces my confidence in its growth potential, especially considering new features and functionality that are expected to be deployed in Q4 and quarterly in 2025. Overall, I am pleased with the resilience of our DMS business displayed in the third quarter. When paired with our media offerings, we believe our Local IQ platform delivers unmatched marketing solutions supported by a scaled sales force. Our strategic plan involves executing on our core DMS solutions, while simultaneously expanding Dash, which we believe will increase our total addressable market and increase core platform revenue. We believe we have a significant opportunity ahead of us, and I look forward to updating you in Q4. Mike?

Thank you, Chris. It is nice to see the continued strong core platform ARPU, as well as the improved margins in our DMS business. I am confident that the actions your team are undertaking will return this business to top line growth. Shifting gears, we are excited about our new partnership with BetMGM, a leading sports betting and iGaming operator. As the preferred online sportsbook and casino partner for USA TODAY's sports, BetMGM will provide sports betting odds and insights to our highly engaged sports audience. We believe BetMGM is a strong complement to our existing portfolio of partners and presents a significant opportunity to drive further audience growth and engagement. As a result, we expect this collaboration to enhance the monetization of our content platform. Further, we are optimistic about additional partnership opportunities that are expected to be announced in the fourth quarter. Shifting gears again, a core component of our strategy is AI, which we believe presents a promising opportunity for us. By leveraging AI, we believe we can enhance operational efficiency and increase the monetization of both current and archived content. The anticipated long-term value from leveraging AI lies in forming strategic partnerships that align the unique strengths of Gannett with those of AI platforms. Through our flagship national brand USA TODAY, our network of 220 local U.S. properties and another 220 brands at Newsquest, Gannett represents a vast source of historical factual content, as well as relevant and essential current news and information that we believe represents a significant source of value in this new environment. Additionally, AI platforms provide computing power and cutting-edge technology we believe will be useful to accelerate Gannett's ability to develop and fully maximize AI use for our business. In the third quarter, we announced a partnership with Microsoft's Copilot Daily Briefing that leverages our content syndication for AI summarization. While the monetary value is modest, we are pleased to partner with leading organizations that are actively expanding their AI product offerings and capabilities, and we expect this revenue stream to increase as companies continue to evolve in their AI journeys. We believe our content provides immense value to the continued enhancement of these products. Additionally, we are actively engaging with several AI companies and anticipate forming additional partnerships that align closely with our strategic objectives, core values, and help us preserve the long-term value of our content. With that, I'd now like to turn the call over to Doug to provide additional detail and color around our third quarter financials, as well as the details on our updated full year 2024 guidance. Doug?

Thank you, Mike, and good morning, everyone. As Mike highlighted, we produced another quarter of strong financial results. For Q3, total operating revenues were $612.4 million, a decrease of 6.2%. However, it's important to note that some of our strategic decisions impacted revenue this quarter, such as the intentional closure or divestiture of certain businesses in our portfolio. But these actions were in line with our long-term strategy and did not negatively impact our adjusted EBITDA performance. While same-store revenues declined 5.3%, this was relatively in line with our performance in the first half of the year and a significant improvement of 310 basis points over last year's Q3 revenue trend. Also, within that overall result, we experienced strong growth in digital advertising, digital-only subscription, and our digital other category. While our DMS results did not experience the trend improvement we expected for the reasons that Chris mentioned, we believe the growth in digital-only subscription and digital advertising combined with the actions that are being taken to improve the DMS trends will result in improvements in top line trends to close out the year. Additionally, we believe that this perspective is supported by the fact that September marked our best performing month of the quarter, further reinforcing our optimism as we head into Q4. Adjusted EBITDA totaled $62.9 million in the third quarter, an increase of 5.6% or $3.4 million. Adjusted EBITDA margin was 10.3% in Q3 compared to 9.1% in the prior year quarter. The growth in adjusted EBITDA was fueled by the improved year-over-year revenue trends and strategic cost controls. Expense management remains a critical priority and in Q3 operating costs decreased 9.7% compared to the prior year. Total digital revenues in Q3 reached $277.4 million representing an increase of over 500 basis points and accounting for 45.3% of total revenues. In our digital business, three out of the four digital revenue categories improved year-over-year. Notably, digital advertising sustained its solid performance in Q3, up 4.9% driven by continued growth in page use and programmatic revenue. Our digital-only subscription business also recorded its strongest quarterly performance with robust growth across all key metrics. Digital-only subscription revenue reached a new high of $50.1 million, growing 25%. Digital-only ARPU also saw a new high of $8.16 increasing approximately 20% compared to the prior year period. Importantly, we achieved these results while also growing digital-only paid subscriptions sequentially as well as year-over-year. Looking at the domestic Gannett media segment, in Q3, adjusted EBITDA in the segment was $46.3 million, up 13.6% over the prior year period. Adjusted EBITDA margins expanded year-over-year by increasing by 190 basis points to 9.9%. Revenue trends in Q3 on a reported basis declined as compared to Q2. However, this is fully attributable to the impact of businesses we sold or shut down, including Action Printing, Imagine, and Review.com. As a reminder, these actions do not have a meaningful impact on the adjusted EBITDA results of the segment. Turning to Newsquest, for Q3, our top line growth is muted as a result of the temporary slowdown in print trends reflective of the local economy. However, we are pleased with our continued success in driving strong profitability within the segment. In Q3, adjusted EBITDA reached nearly $14 million, up 3% over the prior year, while adjusted EBITDA margins increased 50 basis points to 23.4%. In our digital marketing solutions business, total core platform revenue in the quarter totaled $119.2 million. DMS revenue declined slightly versus the prior year as a result of the continued impact of churn from lower spending accounts and added uncertainty in the home improvement sector due to the broader economic environment. Adjusted EBITDA for the segment totaled $11.7 million, representing a margin of 9.8%. We had approximately 14,300 core platform customers with core platform ARPU reaching approximately $2,800, which is up 5.3% over the prior year. Let's now shift to the balance sheet. At the end of the third quarter, our cash balance stood at $101.8 million, resulting in net debt of $959.6 million. Cash provided by operating activities totaled $33.7 million, an increase of $13.1 million. We also generated $19.8 million of free cash flow, bringing our year-to-date free cash flow to $54.6 million, which is up $10.9 million from the prior year period. We ended Q3 with approximately $1.06 billion of total debt. That pay down remains a high priority, and we continue to make meaningful progress during the period. In Q3, we repaid $28.5 million of debt, which combined with our adjusted EBITDA growth, reduced our first lien net leverage to 1.76x. In Q3, we completed four real estate and asset sales, totaling $13.4 million, bringing our year-to-date total to $19.3 million. We continue to have a number of asset sales in the pipeline. However, it is possible that some of these transactions may shift out of 2024 as the timing of potential deals remains fluid. As we continue to stabilize our business and build the foundation for sustainable revenue growth, we have also created a more balanced capital structure. Subsequent to the end of the third quarter, we successfully completed a comprehensive debt refinancing that extended the maturities of virtually all of our first lien debt to 2029. Furthermore, we effectively reduced the potential dilutive impact of the 2027 convertible notes by approximately 46%, which we believe has been an overhang on our share price. Also, we extended the maturity of 85% of the remaining convertible notes to 2031. As a result of the transaction, we expect to see an increase to our first lien net leverage due to a portion of our outstanding convertible notes shifting to first lien. We believe the opportunity to extend our maturity profile and the benefit of eliminating future dilution significantly outweighs the change in first lien net leverage. Debt repayment remains our number one capital allocation priority and we are still targeting first lien net leverage below 1x. Overall, we believe our ability to successfully refinance our debt is an important step in our long-term strategic plan. Turning now to guidance. Our 2024 full year outlook remains relatively unchanged. We are updating our expectation for total digital revenue growth to 6% to 7% to reflect current trends in our DMS business. We are also updating our 2024 free cash flow to reflect the impact of our Q4 debt refinancing. Beyond ’24, we believe that we are well positioned for sustainable growth in all key financial metrics and although the revenue inflection point is anticipated to come later than expected, we continue to project total revenue growth in 2025 which is consistent with our previous midterm guidance. We believe our results in the third quarter serve as a testament to the strength of our strategy and the progress we have made in stabilizing our business. We have shown resilience across various operating environments and as a result we are confident that we will close out the year strong. With our continued strong execution we believe we can create sustainable growth and significant value for our shareholders. I will now hand it back to the operator for questions and then we will go back to Mike for some closing thoughts.

Your first question for today is from Giuliano Bologna with Compass Point.

Good morning. It's great to see the continued progress involved in the platform, moving forward towards all the milestones you laid out. As a first question, you've seen some pretty good growth in monthly active users, and you're now surpassing 200 million monthly unique visitors. Yes, that seems like a very big milestone for the platform. I'm curious how you think that will impact your business and see if overall carries.

Yes, hi, Giuliano. Great to hear from you, and thanks for the question. Obviously, we're very pleased to see a 200 million number in the third quarter. That was fantastic and exceeded our expectations for the quarter. And our uniques, which we do report on every quarter, are an important indicator for us because it represents the scale of our audience. And that's important because that really reflects the total addressable market and the opportunity. The more scale we have, the bigger our opportunity is. But what becomes even more important is actually engagement because that drives enhanced monetization beyond just the scale of our audience. So obviously, scale drives more monetization, but engagement is even more so as it drives enhanced monetization. Each page view represents an opportunity to deliver a tailored monetization, whether through programmatic ads, premium ads from our local teams, our digital-only subscription offers, our recently launched Wine Club, or our partner e-commerce experience through our affiliate agreement. So as engagement grows, we can further customize these offerings, which will create a relevant journey for every single one of those monthly uniques. Our audience and unique visitors, for example, the 200 million in third quarter, that will bounce around a little bit based on news cycles. We did, as we indicated, have some favorable news cycles in the third quarter. The fourth quarter sets up well with the elections as well, but what becomes more important, as I'm mentioning here, is our engagement. That will really start to drive enhanced revenue. So the other thing that's really important, Giuliano, that I want to mention is that audience and engagement are both leading indicators. And we're seeing improved revenue as quarters go on, based on the audience that we've been engaging with and driving. And so we're encouraged by the audience numbers we've seen in Q2, Q3, and expecting Q4. And those will be leading indicators for improved revenue trends in the digital category in 2025. So overall, very pleased with the third quarter performance and being able to post a 200 million monthly unique number.

That's great. And then maybe shifting gears a little bit, you sold and closed some businesses this year that are non-strategic. I'm curious how you think about the assets that were sold kind of related to the revenue and EBITDA contribution from those businesses and how that will turn going forward. And maybe as a slight addition to that, I'm curious if there's where things stand on potential other asset sales and the timing of other asset sales.

Yes, I can take that, good morning. So during the quarter we made, and actually really throughout the year, we've made decisions to shutter or sell various businesses that did not fit well with the long-term strategy that we've outlined for a number of different reasons. And I would say coming into the year, when you look at the aggregate of everything we have taken action on, our expectations in terms of top line would have been about $65 million on an annualized basis. That would have broken down about 40% digital, about 60% non-digital in terms of the type of revenue. And again, that would have had a minimal expectation in terms of EBITDA. And I do think it's important to reinforce that these businesses were not at all core to our strategy. And just to give a couple of examples, one was a commercial printing business which really had no connection with our core operations. And one was something that was very dependent upon Google algorithms and the changes that happened there. So we feel that selling these allowed us to generate cash proceeds and we were able to pay down debt. And it allows us to focus, especially on those parts of the strategy where we expect growth going forward. In terms of asset sales, year-to-date, we've completed about $20 million of asset sales. And that includes obviously some of the things that we did this quarter. And in terms of pipeline, we have a number of deals in the pipeline. I would say some are on the smaller side, some are a little bit larger. And the smaller ones tend to be a little bit more predictable in terms of timing to close. The larger ones are a bit more variable. And so that's why we did talk a little bit about the fact that timing could shift into 2025. But certainly, we came into the year expecting, I would say, $45 million to $50 million in asset sale proceeds. And our objective and the objective we're still working towards is to achieve or exceed that level, although the timing may flex a bit.

That's very helpful. Then maybe pivoting to DMS, you guys highlighted a few specific sector trends in DMS' quarter. Can you give us more color on those comments and how those trends are evolving?

Yes, Giuliano, I'll jump in on that one. We did see the home renovation and home improvement category was a bit muted in the third quarter. We believe the continued heightened interest rate environment and the lagging home sales environment were big contributors to the softer spend in the quarter, and that really caused a couple points of degradation in our revenue. We do see that as temporary, and we actually see the recent rate cut that the Fed enacted as a positive catalyst for that sector. There are actually a number of reasons that make us optimistic about the DMS business going forward. Some are macro and some are company specific. From a macro perspective, based on the first rate cut, we're already seeing some increased spending from a couple of our larger customers in the home services vertical. That's really encouraging and should help Q4. And there's potential for more momentum in that regard as we see further rate cuts. Separately, turning to internal catalysts, we have several internal actions underway that we expect to further accelerate the business. A few examples are: we're taking a different approach to win customers, ensuring the campaigns create results more quickly; we're measuring the success of each client touchpoint more closely, which we believe will improve retention of the current customer base; and then we're starting to align compensation for our sales teams more to incentivize the success of our clients, so tying compensation for our internal folks touching the clients with our clients' success. We think that all of these actions, along with the improving macro environment, will lead to better Q4 trends, and certainly growth again as we look out into the future.

That's very helpful. And there's some commentary about 2025 revenue growth, and I'm curious if the expectations are laid out. Can you give us your thoughts on the milestones and what the inflection points look like in 2025?

Yes, absolutely. We're very confident that we are so close to the inflection point. And we're really happy this morning, based on current trends and how the fourth quarter started, that we were able to reaffirm our midterm guidance for 2025 and 2026, which does call for full year 2025 revenue growth over 2024. So we're really confident in where we are in our journey and in hitting that inflection point sometime in the first half of 2025. Some of the metrics that really give us confidence on this inflection point are: our audience engagement is driving positive momentum really across our digital business — we talked a lot about that on the call and earlier in my previous answer on the 200 million unique; strong digital advertising improvement, digital subscription improvement, digital other. Partnerships and syndication revenue are all experiencing steady growth. Each quarter we're adding new monetization opportunities to the platform which will further accelerate growth in 2025, reinforcing our digital flywheel that Kristin talks about. Our digital pricing strategy continues to be effective. ARPU is growing up 20% year-over-year and our digital subscriber base is growing. So we have a lot of confidence in further growth in 2025 in that category. And so with the monetization of our platform improving as we go into 2025 and returning DMS to growth, we are very confident in our ability to have full year revenue growth next year. And Giuliano, that's really the most important thing: an inflection point for one month of revenue is not as important as full year. If we can grow 2025 revenue, which our forecasts show we will over 2024, that's a real monumental inflection point for this company — to post annual revenue growth year-over-year. So we're excited about what we see for next year and excited about where we are from an execution standpoint.

Very helpful. And then as a final one, I'm curious if there's any update around the DOJ ad tech case against Google and the implications or potential returns to your case.

Sure, I can take that one. Obviously, given our case, we closely followed the DOJ's ad tech case against Google. And I would say overall, we believe the DOJ did an outstanding job putting on its case. We believe they presented a very strong and compelling argument as to Google's monopolistic behavior. In fact, one of our own employees, Tim Wolfe, who is a Senior Vice President of Revenue Operations for Gannett, was in fact the DOJ's first witness in their case. In terms of that action, the closing arguments were scheduled for Monday before Thanksgiving, and the judge has indicated that she hopes to issue a decision on liability by year-end and the remedies phase would follow post year-end. Also importantly, the ad tech case being brought by Texas and 17 other states is scheduled to begin on March 31st of next year. Overall, I think all of these things bring to light the control Google has over how publishers sell their ad slots and it forces publishers to sell increasing shares of that ad space to Google at depressed prices, and as a result there's been dramatically less revenue for publishers and rivals to Google's ad tech business while Google enjoys monopoly profits. So overall, the DOJ, the state attorneys general and Gannett are all seeking to restore competition that ultimately will allow journalism to flourish and on an overall basis we feel good about the progress to date.

Your next question for today is from Matthew Condon from JMP Securities.

Thank you for taking my question. My first one is just on the Microsoft deal which you guys announced in the quarter. I just wanted to find out what was different about your conversations with Microsoft as far as recognizing the value for your content? It maybe got you over the hurdle that you didn't see in your conversations with other AI companies in the past.

Yes. Hi, Matt. Good to hear from you and thanks for being with us today. I think one of the things about the Microsoft deal is that there was a very narrow slice of content that we were able to understand what the use of the content was and what kind of value we were getting for that. And so as we go forward the Microsoft deal is a great indicator of how we can slice and dice our content, use material more narrowly to generate fair value for a slice of content and also, we expect to do broader deals where we're fairly compensated for much more of our content. But the partnership with Microsoft, while it's modest from a revenue perspective, is a good example of the type of partnerships we're looking to strike. We have a longstanding relationship with Microsoft across our business. We're deploying Copilot licenses, for example, across a significant portion of employees. And we've participated in hackathons to prototype tools in our organization. We ideate with Microsoft about ways we can go deeper in AI. So this licensing agreement we have with them allows our content to feed their AI summarized Copilot briefings, which include links back to our original source content. It's currently, as I said, a narrow use of our content, but allows us to work with a long-standing partner to deepen our relationship and maintain the value of our content importantly. So we're confident in our ability to bring additional partnerships given what we believe is a very rich, unique, diverse nature of our content and our archives. And also because of our readiness and activity over the past year to build our AI products in-house. So we have been working with a wide range of AI partners, large and small, and we do expect to continue to announce deals as we go forward. So excited about this and it's just the beginning.

That's very helpful. And then my next one is just on the 203 million monthly uniques. I just wanted to ask, do you think how much of that is coming in because of the election cycle? And then what tools do you guys have at your disposal just to retain those users as they come in and think about next year — obviously, we pass through the election cycle.

Kristin, are you on? Do you want to take that?

I'd be happy to take that. The vast majority of what we've been seeing in our uniques over the course of the entire year is actually not related to politics. We've had a huge boost in our political readership and viewership, but what we've been doing over the course of the last year is finding opportunities to grow other segments of our readership base, so that these large news events become additive to what we consider to be our foundation. You will see over the course of the last year and a half steady growth, both in monthly page views, but also in monthly average uniques, and then large jumps where we have big moments like elections or a natural disaster or the Olympics. The results from 2024 are in fact not dependent on the political year. It's simply been additive. And so we continue to see that the tactics we're using — all built on the data we're studying on a daily basis to understand the behavior of our users on our platform and to understand what they need and want from us — are what's contributing to the steady, persistent, predictable, repeatable growth that we're seeing in audience, not just these one-off news events.

We have reached the end of the question-and-answer session, and now we'll turn the call over to Mike Reed for closing remarks.

Thank you. So thanks again, everybody, for joining. I just would close with mentioning we did have a solid third quarter. We had strong execution across most all of our key priorities and we're really optimistic as we head into Q4. As I mentioned earlier in my remarks, we do expect pretty broad-based improvement in trends across our financial metrics in the fourth quarter. Some final thoughts on Q3 that give us that optimism as we look forward. Number one, we generated again year-over-year adjusted EBITDA growth. It was our highest growth trend percentage of the year and we generated significant free cash flow. And as you heard from Doug, our free cash flow is up significantly over prior year. Our adjusted net loss in the third quarter was $6.1 million. And that improved $16.6 million over the prior year third quarter. We expect trend improvement again there in the fourth quarter. We have sustained digital revenue growth with three out of our four digital revenue categories showing year-over-year trend improvement. We're excited about what the fourth quarter holds there. As we just discussed quite a bit, we surpassed 200 million in average monthly uniques for the first time in the company's history in the quarter. We continue to delever through both adjusted EBITDA growth and debt repayment, further reducing first lien net leverage. We continue to maintain good liquidity with over $100 million in cash at the end of the quarter. In addition, as most of you know, subsequent to the third quarter being completed, we did successfully complete a comprehensive debt refinancing that extended our debt maturities and significantly reduced future dilution from the impact of our convertible notes. So we were really pleased to get that done. Each of these items reinforces our confidence as we head into the quarter and into 2025. As we stand here today, we believe we are well positioned to drive long-term value for our shareholders and the opportunity for growth is vast and we're just excited about what the future holds. Thanks for your time today. We look forward to updating you again on how the fourth quarter goes and how we close out the year. Thanks everyone.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.