Usa Today Co., Inc. ((TDAY)) has held its Q2 earnings call. Read on for the main highlights of the call.

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Usa Today Co., Inc. used its latest earnings call to strike a cautiously optimistic tone about its digital transformation. Executives acknowledged revenue and traffic pressures but pointed to rising subscription value, stronger free cash flow and improving digital monetization as evidence the strategy is working. Advertising headwinds remain, yet management sees them as manageable and expects conditions to improve later this year.

Free Cash Flow Growth and Profitability

Usa Today Co., Inc. delivered a solid cash performance in Q2, generating roughly $19.6–$20.0 million of free cash flow, up about 11.2% year over year. The company also posted a second straight quarter of positive GAAP net income at $9.1 million, with adjusted net income of $11 million, while operating cash flow climbed 8.6% to $35.4 million.

Digital-Only Subscriptions Momentum

Digital-only subscription revenue reached $45.6 million in the quarter, an increase of 6.8% from a year earlier as the mix shifts toward higher-value readers. Average revenue per digital-only subscriber hit a record $10.47, up 34.4% year over year, and management said improving start-to-stop ratios suggest subscriber volumes are stabilizing and poised for future sequential growth.

Digital Other, Licensing and Commerce Growth

The company’s digital other segment, which includes AI partnerships, content licensing, syndication and commerce, continued to scale as a key growth driver. Revenue in this bucket rose 20.2% year over year to $20.4 million, and leadership expects licensing deals and commerce initiatives to expand further and provide a growing stream of higher-margin income.

LOCALiQ Sequential Recovery and Record ARPU

LOCALiQ, the company’s digital marketing platform for local businesses, showed tangible recovery with core platform revenue of $106.3 million, up 7% sequentially. Average customer count increased by 300, or 2.8%, while core platform ARPU reached a record $2,908, up 4.1%, helping segment adjusted EBITDA rise to $13.2 million and margins expand about 560 basis points to 12.4%.

Audience and AI Product Traction

Off-platform video growth remained strong, with 3 billion off-platform views in the first half and TikTok alone exceeding 1 billion views, reflecting a shift in consumer behavior. The DeeperDive AI answer engine logged more than 50 million questions and roughly 390,000 average daily interactions, boosting time on site, ad revenue per session and subscription intent, while a new data partnership is aimed at accelerating real-time monetization.

Expense Discipline and Balance Sheet Moves

Operating expenses fell 7.8% year over year as management continued to tighten costs across the legacy and digital businesses. The company ended the quarter with $86.7 million in cash and reduced total debt by $17.7 million to $970.5 million, bringing net debt down to $883.8 million and signaling ongoing focus on balance-sheet repair.

Overall Revenue Decline

Despite progress in select digital lines, total revenue for Q2 came in at $536.3 million, down 8.3% from the prior year and 6.1% on a same-store basis. Management attributed the decline to persistent advertising headwinds and shifting audience behavior, noting that quarter-to-quarter variability remains as the business transitions away from legacy print and traditional search-driven traffic.

Digital Advertising Weakness

Digital advertising revenues fell 9.2% year over year, pressured by lower page views and the loss of a programmatic advertising partner. Executives also highlighted a platform policy change that hurt a sponsored link partner, adding another headwind to already soft digital ad demand and underscoring the risks of relying on external platforms.

Total Adjusted EBITDA Pressure

Total adjusted EBITDA for the quarter was $56.9 million, implying a margin of 10.6% and representing a decline versus the year-ago period. Even so, the company reiterated expectations for adjusted EBITDA to grow for the full year, arguing that mix shift toward higher-margin digital subscriptions, licensing and LOCALiQ should offset near-term pressure.

Traffic, Unique Visitor Declines and Discovery Shift

The company reported a material drop in monthly unique visitors compared with both the prior quarter and last year, reflecting a broader shift in how consumers discover news and information. Management described a move away from traditional search toward off-platform discovery and one-and-done search queries that are harder to monetize, reinforcing the push into video, social channels and AI-powered engagement tools.

Quarterly Variability from Licensing Timing

Executives cautioned that the timing of content licensing deals and events can create notable swings in quarterly performance, pointing to an outsized licensing contribution in the first quarter and a revenue-shifting conference at Newsquest. Such lumpiness is expected to continue, making investors’ focus on underlying digital trends more important than any single quarter’s top-line print.

Leverage Remains Elevated

While the company is paying down debt, leverage remains a key risk to monitor, with total debt at $970.5 million and net debt at $883.8 million. Management framed ongoing free cash flow generation and margin improvement as the primary tools to reduce this burden over time, but acknowledged that the capital structure still adds financial risk in a volatile advertising environment.

Forward-Looking Guidance and Digital Recovery Plans

Looking ahead, Usa Today Co., Inc. reaffirmed its full-year 2026 outlook, projecting meaningfully better same-store revenue trends versus 2025, year-over-year adjusted EBITDA growth with margin expansion and continued double-digit free cash flow growth. These goals assume a stronger back half as revenue mix shifts away from search dependence and are underpinned by growing digital-only subscriptions, expanding digital other revenues, LOCALiQ momentum and potential upside from AI and data initiatives.

Usa Today Co., Inc.’s earnings call painted a picture of a media company in the midst of a difficult but promising transition. Revenue and traffic pressures, particularly in digital advertising, are real, yet rising subscription economics, improving cash generation and disciplined cost management suggest the business is building a more durable digital model for long-term investors.