Greetings. Welcome to the Gannett Company Q3 2025 Earnings Call. Please note, this conference is being recorded. I will now turn the conference over to your host, Matt Esposito, Head of Investor Relations. You may begin.

Thank you. Good morning, everyone, and thank you for joining our call today to discuss Gannett's third quarter 2025 financial results. Presenting on today's call will be Mike Reed, Chairman and Chief Executive Officer; Trisha Gosser, Chief Financial Officer; and Kristin Roberts, President of Gannett Media. 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 and our full year 2025 business outlook. 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 U.S. 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 Securities and Exchange Commission. 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, total 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. 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 Gannett securities. The webcast and audio cast are copyrighted material of Gannett and may not be duplicated, reproduced or rebroadcasted without our prior written consent. With that, I would like to turn the call over to Mike Reed, Gannett's Chairman and CEO.

Thank you, Matt, and good morning, everyone. I'd like to start this morning by drawing your attention to some very notable highlights from the third quarter and subsequent to the quarter end. First, we accomplished a significant milestone within the quarter with our total debt falling below $1 billion for the first time since our merger in late 2019. And we are nearing another milestone with total digital revenues growing to 47% of total company revenues in the quarter, an all-time high, and we believe that we'll close in on 50% in the fourth quarter. Our $100 million cost program is now fully implemented. And as a result, we expect to start realizing the full benefit in Q4, and that is expected to drive significant year-over-year growth in adjusted EBITDA in the quarter. We had a few large digital clients shift spending from the third quarter to the fourth quarter, and those clients have begun their campaigns in October. While that influenced Q3 results, it positions us well for a strong fourth quarter. And finally, we were pleased with Judge Castell's partial summary judgment ruling earlier this week in our lawsuit against Google. The decision represents an important step forward as it establishes liability on certain claims. We remain encouraged by the continued legal progress addressing Google's monopolistic practices and are optimistic about what this means for both Gannett and the broader publishing industry. Turning to the business, we remain confident in our strategy, our execution and the sustained progress we are making toward our long-term growth objectives. Let me call out a few more important highlights from the third quarter. Our audience grew sequentially on what was already an extremely large base, and we delivered another quarter of year-over-year growth in digital advertising revenues. In our digital-only subscription business, digital-only ARPU reached a new high, and we saw digital-only subscription revenue improve in Q3 from Q2, movement in the right direction after our strategy shift this year. And our DMS business saw improved year-over-year trends in core platform revenue and average customer count, while core platform ARPU remained near all-time highs. Subsequent to the quarter end, we had a couple of nice developments on the licensing front. First, on October 8, we had the full launch of our Perplexity deal timed with the launch of their Comet browser. And we are very excited to announce this morning our new AI licensing deal with Microsoft. This new deal is timed with Microsoft to support the upcoming launch of its publisher content marketplace, which you'll hear more about later in the call. We are hopeful to keep building on our growing portfolio of AI licensing deals with the announcement of additional partnerships. Debt reduction continues to be a top priority for us. And for the first time since our merger in 2019, total debt fell below $1 billion, which marks a significant milestone in strengthening our balance sheet and reducing leverage. With regard to financial performance in the third quarter, it's important to note that revenue was influenced by several large customers shifting their spending from Q3 into Q4, the largest of which was Perplexity. Adjusted EBITDA was impacted in the quarter by approximately $7 million versus our expectations, driven by revenue moving into Q4 and incremental expenses, primarily a pull forward of expenses associated with our cost reduction actions, including medical and benefit-related costs tied to employee exits from the organization. While these factors created some noise in the quarter, most of our key fundamentals and metrics remain strong and the drivers we were most excited about for the second half of the year continue to hold, including the momentum across our audience in terms of growth and engagement, our diversified growing digital product portfolio as well as our $100 million cost reduction program. With these items in place, we expect to drive meaningful year-over-year adjusted EBITDA growth in Q4, along with solid growth in total digital revenues and free cash flow. Based on what we are seeing already in October, we expect to deliver a strong fourth quarter. Now let's discuss a few key operational highlights from the third quarter. Our digital strategy focuses on expanding our audience, deepening engagement and maximizing monetization across the customer journey. In Q3, we continued to drive one of the largest digital audiences in the media industry with 187 million average monthly unique visitors, which grew more than 3% compared to Q2. This significant scale, combined with our unique ability to stay closely aligned with our readers' preferences, drove another quarter of at least 1 billion page views per month domestically. As a result, digital advertising revenues recorded another quarter of year-over-year growth. And moving forward, we expect to accelerate this momentum into Q4 as several new advertising deals have now moved through the pipeline. Separately, the focus in 2025 on the quality of our digital subscriber acquisition strategy is showing positive results. Digital-only ARPU achieved a new high of $8.80 in the third quarter, up approximately 8% year-over-year. Q3 also returned to sequential growth over Q2 for digital-only subscription revenue. While it will take a few more quarters to return to volume growth, these wins show that our intentional actions are working. And moving forward, we will continue focusing on acquiring high-value subscribers in our core local markets, where we offer a differentiated product, trusted brand and create meaningful value for our customers as evidenced by the growth in digital-only ARPU. With the innovative work Kristin and her teams are doing to expand our content experiences and product portfolio, we believe we have a strong value proposition for our consumers and advertisers. And with that, I will turn the call over to Kristin to share more work underway to strengthen our media business.

Thank you, Mike. Gannett Media continues to lead with purpose by providing essential content that informs, engages and entertains audiences across the country. By listening to our audience and leveraging data to understand how they interact with our platforms, we maintained our position as one of the nation's leading news and information providers among content creators. We also continue to keep our readers deeply engaged as we delivered another quarter with more than 1 billion page views per month across our network. As we enter the final months of the year, we recognize that sustaining audience growth and engagement requires an innovative approach. Video is undeniably the most critical format for our future as Americans increasingly turn to video platforms for their news and information. Thanks to the work our unified video team has done over the past year, we are well positioned to meet audiences where they are and deliver content in the format they prefer most. One of the areas where we have seen tremendous success with video is through our sports coverage and OneTEAM Sports. In the third quarter, we launched a comprehensive suite of sports hubs for the Big Ten, SEC and NFL that brings fans closer to the action through vertical video and story carousels that create an immersive mobile native experience. These hubs also feature real-time scores, player stats and standings that give fans immediate access to the information they care about most. Early results show that time spent within these hubs is double compared to traditional browsing on our platforms, along with higher engagement levels, which in turn creates a promising opportunity to further monetize our loyal sports audience. We're taking the same approach to new categories that spark passion and loyalty, whether it's entertainment or our recently launched USA TODAY Pets, which debuted in July with new branding, a fresh design and a video-first content strategy that spans the full journey of pet ownership. As we grow this passionate audience, our teams are expanding monetization opportunities through affiliate partnerships and sponsorships, while enhancing the platform with new features such as vertical video support and additional storytelling formats that are designed to deepen engagement and give our readers more reasons to register and subscribe. On that note, our digital-only paid subscription volumes continue to reflect the deliberate actions of our refined acquisition strategy. I'm encouraged to see new highs in digital-only ARPU, which drove sequential growth in digital-only subscription revenues from Q2 to Q3. As I mentioned on the prior call, games remain a key focus for us in the back half of the year, and that progress is evident with the launch of PLAY, a unified digital hub for casual entertainment and gaming. Designed to align with the daily habits of USA TODAY readers, PLAY brings together everything from morning horoscopes and comics to afternoon puzzles in one convenient destination. What's most exciting is the promising upside we see in games as a new consumer revenue stream. Nearly 1/3 of our readers already play games online, but only a small share are currently doing so on PLAY. That means every incremental gain in engagement has an outsized impact. For instance, if we can get 1 more percent of our audience to play games at our current play ARPU rates, that equates to an additional $10 million annually in digital-only subscription and digital advertising revenue. Overall, this presents a great opportunity to expand our audience, deepen engagement and drive incremental revenue as we continue introducing new features and promoting PLAY across our network. Across every initiative, from video to new verticals to games, our teams are working with creativity, focus and urgency to meet audiences where they are and deliver experiences that truly resonate. I want to thank our teams for their continued collaboration and determination. We are building meaningful momentum, and I am confident that our collective efforts are setting the stage for a strong finish to the year. Back to you, Mike.

Thanks, Kristin. It's exciting to hear about all you and your teams have going on and especially exciting to see our PLAY business launch, which we believe has tremendous potential. Now shifting gears to AI. The value of real-time trusted content continues to increase, and we are excited to partner with Microsoft on the upcoming launch of their publisher content marketplace. We are proud to be one of the select few U.S. publishers participating in their pilot program with Microsoft Copilot. And this exciting new initiative represents one of the first large-scale efforts to fairly compensate publishers for AI usage of their content to ground AI-powered features and results with trusted output. With regard to our AI content monetization strategy, in addition to creating valuable trusted content at scale and licensing at fair value is our new approach to deploying technology to block AI bots that try to scrape our content. Today, we are blocking over 99% of AI verified bots other than Google that try to scrape our content without licensing agreements in place. In September alone, we blocked 75 million AI bots across our local and USA TODAY platforms, the vast majority of which were seeking to scrape our local content and about 70 million of those came from OpenAI. This is a clear signal of just how valuable our content is to these AI engines, especially our local content, which we are uniquely positioned to deliver at scale. We will continue to partner with and provide access to companies that are interested in licensing our content responsibly and fairly. However, current structures limit publishers' ability to control how some major platforms such as Google use unlicensed content, an issue we continue to advocate for as part of building a fair and transparent AI ecosystem. Additionally, in Q3, we announced that DeeperDive, our industry-first Gen AI answer engine is now fully implemented on USA TODAY. Following a successful beta in Q2, DeeperDive brings the power of Gen AI conversations directly on USA TODAY's platform for all users, tapping into years of proprietary real-time, high-quality content created by journalists and editors at USA TODAY and across the USA TODAY Network. Since launching in mid-September, readers have asked more than 3 million questions with average daily activity well over 50,000 interactions. These early results show strong traction and highlight the meaningful opportunities to drive higher readership, deeper engagement and, in turn, enhanced monetization on our platform. Now turning to our DMS segment. We continue to see encouraging stabilization across our key metrics with year-over-year trend improvement on our core platform, which includes revenue and average customer count, while ARPU remained near all-time highs. These gains reflect the positive impact of our strategic initiatives such as AI smart bidding and enhancements to our AI-powered software solution, Dash. For those who have been following our progress, I would like to provide a quick update on where these key initiatives currently stand. Starting with AI smart bidding. Search remains a key lead gen tool for our SMBs, and we've created greater efficiencies through the use of AI smart bidding. The adoption continues to ramp. And by year-end, we expect close to half of our U.S. budgets to be leveraging it. We are seeing encouraging results so far as it delivers a better cost per lead compared to traditional integration strategies. Turning to Dash. We continue to see strong momentum with our voice and SMS agents managing a growing volume of customer interactions. Our voice agents are managing 15% of calls for enabled customers. As a result, we are driving greater efficiency and simplifying daily operations for the SMBs we serve. In parallel, for customers whose needs fall outside our core platform's ideal profile, particularly larger bespoke or media-heavy programs, we are increasingly serving them through capabilities in our Media segment. This approach puts each customer on the best fit solution, protects platform unit economics and enables us to grow DMS at the company level while concentrating incremental investment where ROI is highest on our own platform. Together, these efforts are building a stronger, stickier and more resilient DMS business, and we see a clear path to sustained growth. I'd now like to turn the call over to Trisha to provide additional details and color around our 2025 third quarter financials.

Thank you, Mike, and good morning, everyone. Please keep in mind, all comparisons are on a year-over-year basis unless otherwise noted. In the third quarter, total revenues were $560.8 million, a decrease of 8.4% or 6.8% on a same-store basis. Despite the static revenue trends in Q3, we expect notable improvement in the fourth quarter, which is driven by a more significant impact from AI licensing revenue and larger digital advertising campaigns, along with targeted subscription pricing adjustments and platform enhancements. In Q3, operating costs and SG&A expenses decreased approximately 8%, reflecting our ongoing focus on disciplined cost management. That being said, Q3 expenses reflect incremental costs associated with our cost reduction program, which removed $100 million in annualized costs from our base. We believe the reduction of expenses, primarily associated with our headcount reductions, also accelerated some costs into the third quarter in areas such as medical and other benefit-related programs, which traditionally we would have expected to incur in the fourth quarter. Total adjusted EBITDA was $57.2 million in the third quarter, representing a 10.2% margin. These results were impacted by the timing of large drivers of revenue and adjusted EBITDA that shifted into the fourth quarter as well as the expense impacts I just mentioned. Many of our most profitable revenue drivers will contribute more meaningfully in Q4 rather than Q3, and our cost reduction program is fully in place as we enter the fourth quarter. As a result, we expect robust year-over-year growth in adjusted EBITDA in the fourth quarter as well as our third consecutive year of full year adjusted EBITDA growth. Total digital revenues in the third quarter were $262.7 million, a decrease of 5.3% or 4.1% on a same-store basis and represented 47% of total company revenue. Within digital, advertising revenues increased 2.9%, driven by a continued improvement in client retention and our large audience base. We anticipate even stronger results in the fourth quarter, fueled by strong advertiser response to our sports, pets and other high engagement verticals. In Q3, digital-only subscription revenues totaled $43.7 million, representing sequential growth of 2.4%. As a reminder, we faced our toughest year-over-year comparisons in Q3 as we cycled the prior year's benefit from system conversions and grace relief. Digital-only paid subscriptions also continue to reflect the intentional actions to optimize our acquisition costs by prioritizing long-term monetization versus shorter-term volumes. We believe these deliberate actions are paying off, evidenced by digital-only ARPU achieving a record high of $8.80 and growing approximately 8%. We expect digital-only ARPU to increase in the upcoming quarters as we maintain our focus on attracting and retaining more profitable subscribers. Looking at the Domestic Gannett Media segment. In Q3, segment adjusted EBITDA was $35.4 million, representing a margin of 8.5%. Revenue trends in Q3 on a reported basis continue to reflect the sale of the Austin American-Statesman in Q1 and businesses divested in late 2024. Turning to Newsquest. In Q3, segment adjusted EBITDA totaled $14.6 million, up 4.6%, while segment adjusted EBITDA margins increased 50 basis points to 23.9%. Revenue trends also posted their second consecutive quarter of growth, increasing 2.5% year-over-year. In our Digital Marketing Solutions segment, Core Platform revenue in the third quarter was $114 million. Segment adjusted EBITDA was $9.8 million. We ended the quarter with approximately 13,400 core platform customers and core platform ARPU remained near record highs at approximately $2,800, which reflects growth of 2%. We see encouraging signs of stabilization. And in Q4, we expect year-over-year improvement in both core platform revenue and segment adjusted EBITDA. And to better serve our customers in certain categories, particularly large multi-location businesses, we have transitioned some of these clients to be serviced through our Media segment, where they can leverage additional tools and capabilities. Now let's shift to the balance sheet. At the end of the third quarter, our cash balance was $75.2 million and outstanding net debt was approximately $921 million. Debt reduction remains a top priority, and we continue to make meaningful progress during the period. In Q3, we repaid $18.5 million of debt and generated $4.9 million of free cash flow. For the 9 months, we have repaid $116.4 million in debt, which brings our total debt to below $1 billion, and we expect to repay over $135 million in debt during 2025. As we look at the full year, several large revenue drivers that were originally expected to contribute to the third quarter are now expected to start in the fourth quarter. As a result, we now anticipate digital revenue to be down in the low single digits for the full year on a same-store basis, with growth in the low single digits in the fourth quarter. We believe the expected strength of the fourth quarter, combined with continued expense discipline, positions us to achieve full year growth in adjusted EBITDA and 30% growth in free cash flow. We know there is more work ahead to strengthen our financial results, but the third quarter also underscores the progress we're making to build a more durable and diversified business. With the scale of our audience, the strength of our brands and the ability to leverage our content across multiple revenue streams, we believe Gannett is well positioned to create lasting value. Combined with an ever-improving balance sheet and a disciplined focus on the execution of our strategy, we believe we are laying the foundation for long-term value creation. 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.

Congrats on the continued execution, especially on securing another important AI licensing deal. As a first question, you referenced some of the developments this week in the Google antitrust lawsuit that you have outstanding. Can you share what the development was and how you think it impacts the case and how the case should move forward as a result of that development?

Good morning, Giuliano. Thank you. I want to highlight that this is a significant advancement for Gannett in our case against Google. This past Tuesday, Judge Castell, the federal judge in New York, issued a summary judgment in our favor against Google. The court supported the Department of Justice's earlier findings that Google has unlawfully monopolized the digital advertising market, ruling that Google cannot contest these issues in our case. This is a major victory for us. Essentially, it establishes liability for key elements of our claims, and the focus of the case now shifts to damages and remedies. Additionally, we believe this ruling could expedite the case, enabling us to focus on showcasing the harm suffered and the compensation we are seeking. Overall, this ruling is a notable win for Gannett, establishing liability and potentially accelerating our progress toward a fairer digital marketplace. We're very optimistic about this week's developments while remaining focused on the next steps in the process.

That's very helpful. Maybe shifting gears a little bit. You noted some of the large revenue drivers shifting, yes, from 3Q into 4Q. Can you unpack what's driving that timing and whether it reflects broader trends you're seeing in advertiser demand or digital monetization or one-time shift?

Yes, I want to highlight that the recent changes we observed in October are mainly due to a timing shift. Starting with Perplexity, this was simply a delay related to their product launch. We signed the agreement with them at the beginning of the third quarter, but their common browser launch, originally set for September, was postponed to early October. This meant that the revenue we anticipated for September from that deal actually began in October. It's really just a timing issue linked to the product launch. The positive aspect is that the launch occurred in early October, and we are now benefiting from the partnership with Perplexity, which will positively affect our fourth quarter. Additionally, we experienced several digital advertising deals that shifted from Q3 to Q4 spending. The good news is that these deals are successfully running in October, contributing to revenue this month. We believe this is purely a timing shift for both the advertising clients and Perplexity. While we are disappointed with the impact on the third quarter, we are very optimistic about the benefits it will bring in the fourth quarter.

That is very helpful. I appreciate it. I guess can you give some more color on the incremental expenses that you incurred during the third quarter? And do you think any of these will continue to have an impact going forward?

Hey, good morning, Giuliano, this is Trisha. Yes, the biggest component of the incremental expenses that we saw compared to what our expectations were for the quarter were associated with the headcount reductions that we completed in the quarter. So that was tied to that $100 million cost takeout that we did. So we saw things like medical and other employee benefits programs spike up in the quarter. And we really think that, that was tied to people exiting the organization. And to your question about whether we think that continues, I don't think so. I actually think it has the ability to have a favorable impact on Q4. Generally, we see a spike in claims towards the end of the year, and we really think that, that was pulled forward into the third quarter as people exited the organization. The other thing I would highlight that's really important is that cost program is now fully implemented. So we're going to see the full benefit of that impact in the fourth quarter, and that really should set us up to have a strong year-over-year EBITDA growth in the fourth quarter.

That is very helpful. I appreciate that. And then next question, given that the digital revenue mix is now approaching 50% of revenue, how do you see that evolving into '26? And what gives you confidence in the durability of those revenue streams?

Yes. As you know, in Q3, we were about 47% of total revenues coming from our digital businesses. We expect that to be closer to 50% in the fourth quarter and then expect that to surpass 50% in 2026. And I think it's important to note that the makeup of our digital revenue is much more diverse today than it has ever been. You heard Mike talk about Perplexity launched earlier this month. We announced a Microsoft AI licensing deal just this morning. We've signed agreements with AI licensing partners throughout the year. We think there are more AI deals to be coming in the coming quarters and months. You heard Kristin reference the launch of PLAY, and we think that could be a good contributor from both the digital advertising and a subscription standpoint. And so we continue to develop these new revenue streams that can be created from the content and the core competencies we already have, creating high-quality content at scale and attracting this massive audience. And so we have all these new revenue streams taking hold, and we're also seeing some progress in our foundational revenue streams. The DMS initiatives that Mike mentioned, the fact that our digital-only subscription ARPU continues to grow and to reach new highs as our strategy takes hold. Our digital advertising deals have been strong as we enter the fourth quarter, and that ladders on top of what's already been a growing business. So we've got this really diverse digital revenue profile. We've got this really strong audience and the direction of each of these components is headed in the right direction, and that gives us a lot of optimism on the fourth quarter, but getting to that 50% plus composition in 2026.

That's very helpful. And then maybe the last one, touching on the AI side. You referenced the new AI partnership, including Microsoft. Can you elaborate on how those partnerships translate to monetization? And what do you see as next steps?

Sure.

Thank you, Giuliano. I'm happy to discuss the value of these partnerships. A healthy future for AI on the web relies on high-quality, trustworthy, and factual content. As AI agents become central to how people discover and consume content, we believe that publishers are crucial in determining the value of their content in these experiences. Microsoft is focused on creating a scalable and fair solution to ensure that publishers are compensated fairly for their premium content offerings. They are piloting a publisher content marketplace with select U.S. publishing partners to learn and shape the tools, policies, and pricing models for this new era. We are excited to participate in building that marketplace alongside Microsoft and other partners. Our licensing deals vary; some involve direct licensing fees while others include revenue-sharing components, all designed to enhance our monetization of existing content at fair value. We see significant long-term potential in this space. The AI content marketplace is still evolving, and the ultimate monetization models are not fully defined. Our strategy is to engage early, help shape the framework, and ensure that our agreements protect the long-term value in this developing ecosystem. Overall, we view these partnerships as foundational steps toward a more sustainable and balanced digital ecosystem where publishers are rewarded for their contributions. I hope that clarifies things.

Your next question for today is from Matt Condon with Citizens.

My first one is, just can you elaborate on what you're seeing as far as traffic coming from these AI platforms? Are you seeing meaningful click-through rates and meaningful traffic coming to your sites from these platforms, then thinking specifically about Perplexity just as that deal is launched in the early days here?

Yes, Matt, thanks for your question. There isn't significant traffic coming from AI search companies, which is why the monetization value for publishers like Gannett relies on licensing our content. AI search platforms provide the full answer directly on their sites, unlike traditional search engines like Google that direct users back to publisher sites through clickable links. Therefore, our focus has been on securing monetization and licensing deals, as we don't anticipate traffic returning to us. Additionally, we're blocking 99% of AI bots attempting to scrape our content, except for necessary platforms like Google, which we can't block due to our need for search traffic from them, despite their inability to differentiate between content authorized for blue links and that for AI. In short, there's minimal traffic from AI search platforms, underscoring the importance of our licensing deals. However, we are also blocking scrapers, meaning those sites need to compensate us for using our content. We are actively exploring ways to engage consumers directly and encourage them to visit our platform, including through social media. Finally, despite the lack of traffic from AI search platforms, we are not facing overall traffic issues. This morning, we reported an average of 187 million unique visitors in the third quarter, an increase from 181 million in the second quarter. We are successfully creating valuable content and attracting consumers to our platform.

Great. And maybe just a follow-up on that. It's just obviously, one of the major companies that you're blocking is OpenAI. And can you just talk about just their willingness to come to the table, maybe other AI platforms that you don't have partnerships today, their willingness to come to the platform and negotiate deals where you do feel like you'll get fair value for your content. Just how is that pipeline developing here today?

Yes. OpenAI is the biggest offender in terms of trying to scrape our content. We have blocked 75 million AI bots, with about 70 million of those being from OpenAI. To be precise, it was actually 69.9 million bots that were blocked while seeking our local content. We blocked them nearly 70 million times in September alone. OpenAI is not currently willing to agree to a fair deal. We are still in discussions with them and will continue to block their attempts. The significant number of scrapes shows that there is value in our content. So, short answer, we haven't reached a good agreement with them yet, but we are hopeful. Our objective is to proactively create the right solutions with our AI partners, as mentioned in Kristin's discussion. We would like to pursue this collaborative approach with OpenAI.

That's interesting. And then maybe just shifting gears here to the DMS side of the business. Can you just elaborate on what you were talking about, about pushing certain clients to the Media segment? Talk about the benefits there are both for those clients and for Gannett, just, yes, how just how that strategy will develop over the long term.

Yes. Matt, this is Trisha. Good morning. I think there's 2 things here. First is how do we invest with the highest ROI in our platform? Who is the right ideal customer for our DMS platform? And how do we focus our investments to make sure that we are delivering the best experience and the lowest cost per lead for those customers on our platform? And we think we've identified what that ideal customer profile looks like. For those who sit outside of that, so you heard us talk about really large customers that are multi-location. There are tools on the market today that allow us to do that more quickly, get those campaigns up and running with more speed and to manage many, many different locations at scale, still leveraging some of the knowledge we have within the company and within the platform. But rather than develop that on our own platform, we're starting to leverage some tools in the media space that allow us to serve not just the ideal customer on our DMS platform, but a broader category of DMS advertisers. We also see that there's a percentage of DMS customers who want a predominant media buy. So a lot of our customers buy across our platform. But when somebody wants a predominant media buy with DMS, we can use some of these tools to service that buy more effectively. So it's really about how do we get the most value out of our platform and how do we deliver the best experience for our customers.

Great. That's very helpful. And then maybe just one last one for me. Just great to see debt below $1 billion for the first time since the merger. Can you just talk about where we sit today as far as real estate and asset sales and further debt paydowns?

Yes. So we're at $116 million of debt paydown through the year. We feel very comfortable that we'll get to $135 million or above for the full year. We still have a few small to midsized real estate deals in our pipeline that we expect to get through Q4, maybe Q1. We know we've talked about this before. We will always have some things in our portfolio that we're able to monetize. But I think once we get through this next chunk, we've largely monetized our real estate portfolio. But we also see that we're generating a good amount of free cash flow. We have several drivers for improved free cash flow next year. This year, we'll be up 30%. Next year with a lower debt balance and lower interest rates as well as the improving trends in our revenue and our EBITDA, we'll have a significant amount of free cash flow to address our debt. So there's always something in our portfolio. But I think from the real estate perspective, we've got one more small chunk, and then we've largely monetized that.

Your next question is from William Kavaler with Odeon Capital.

Going back to licensing, this is obviously becoming a critical or is expected to become a critical revenue stream. Do you guys have any intention of breaking out that licensing revenue so that we can kind of look at that, say, like a library cash flow kind of revenue stream?

Yes. Great question. I think 2 thoughts there. One, and Kristin mentioned this earlier too, is the business model for our AI partners is still developing. And I think the long-term play for us on how we monetize the AI partnerships with the most upside is still developing. And so I think we want to see how those 2 things develop, and it does have to become a bit more of a meaningful piece of our overall revenue streams. But the short answer to your question is, yes, I could see us breaking licensing fees out at the right time as it becomes a more significant part of our overall digital revenue stream and as we have more confidence in what the sustainable revenue model is for us.

We have reached the end of the question-and-answer session, and I will now turn the call back over to Mike for closing remarks.

Thank you for being with us today. As we conclude, I want to share a few thoughts to summarize this morning's discussion. We're very optimistic about a strong fourth quarter, and as we approach a month into it, we're encouraged by what we're seeing in October. To summarize, some clients have shifted their digital spending from the third quarter to the fourth quarter, and we will fully benefit from our $100 million cost reduction program during this time. This comes in the context of what is typically a strong quarter for us due to seasonal factors, so we have high expectations. We're excited to have our Perplexity licensing deal operational as of October and are pleased to announce a new licensing deal with Microsoft. Additionally, we anticipate announcing a couple more AI partnerships in the coming months or quarters, and we're encouraged by the prospects in that area. We're also enthusiastic about strengthening our balance sheet and reducing debt, particularly with our total gross debt dropping below $1 billion. With declining interest rates and lower debt balances, we expect significant reductions in our interest costs in 2026, contributing to our free cash flow growth next year. This growth will allow us to pay down debt beyond our usual amortization. Finally, we're pleased with Judge Castell's ruling on Tuesday in favor of our partial summary judgment in our case against Google, which establishes liability and advances our case towards a damages trial for our key claims. We're hopeful for a trial date soon. Overall, we believe this positions us well for a strong fourth quarter and a bright future, and we look forward to sharing our fourth quarter results with you early next year. Thank you for joining us today.

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