Greetings, and welcome to the Gannett Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Matthew Esposito. Thank you. You may begin.

Thank you. Good morning, everyone, and thank you for joining our call today to discuss Gannett's second quarter 2023 financial results. Presenting on today's call will be Mike Reed, Chairman and Chief Executive Officer; Doug Horne, Chief Financial Officer; Kristin Roberts, Gannett Media 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, 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. 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 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 interest in Gannett. The webcast and audio cast are copyrighted material of Gannett and may not be duplicated, reproduced or rebroadcasted without prior written consent. With that, I would like to turn the call over to Mike Reed, Gannett's Chairman and CEO.

Thanks, Matt. Good morning to everyone, and thanks for joining us on our Q2 earnings call this morning. We are pleased to report a strong quarter of improving financial results for Gannett. In Q2, adjusted EBITDA reached $71.2 million and grew by 40% year-over-year. We also generated $38 million of free cash flow in the quarter, reflecting a significant increase of approximately 190% compared to Q2 of last year. We believe our strategic initiatives continue to play a crucial role in driving sequential improvements in same-store revenue trends. As a result, our total digital revenues, which returned to growth in Q2, now account for nearly 40% of total revenue, representing an all-time high. Our cost controls remain strong, and we continue to work diligently on our optimization efforts. All of these items, adjusted EBITDA growth, sustained improvement in same-store revenue trends, expansion of digital revenue and significant free cash flow generation are expected to continue in the second half of the year. And as a result, we are again raising our guidance for the fiscal year 2023. Importantly, on total digital revenues, we returned to growth in the second quarter. And importantly on that, with June specifically being our best month in the quarter. We further expect digital revenue growth trend improvement in the third quarter. We also repaid $15 million of debt in the quarter, which combined with our adjusted EBITDA growth has materially reduced our first lien net leverage to $2.26 billion and we expect this figure to fall well below 2x by the end of 2023. We believe we are making great progress on our strategy, and our results signify a notable turning point in our business trajectory. Consistent with what you've heard from us over the last few quarters, we continue to implement necessary actions to…

At Gannett, you are going to have this extraordinary opportunity to work with a talented team serving communities nationwide. Throughout my career, I've been a part of content organizations that lead the way in creating innovative business models and in driving growth, right. I joined Gannett because I believe the potential here is truly unparalleled. Gannett serves an engaged and expanding audience, which we believe offers us unlimited potential for diversified, predictable and repeatable revenue growth. The exciting part about that growth is that it benefits our company and our shareholders, while empowering us to make substantial investments in journalism that delivers on our purpose as a local news organization. Together, this allows us to better serve our communities. I've already seen remarkable progress in my brief time here. As Mike mentioned, we've created a notable increase in new audience used in June alone, and we've repurposed funds to make significant investments in content by hiring more journalists with more to come. We're still in the early stages, but I'm excited about our potential to achieve profitable growth while sustaining and strengthening journalism. My passion for leading Gannett down this path is unwavering, and I am confident in our success. Back to you, Mike.

Thank you, Kristen. And now I'd like to pass it over to Chris Cho, who is now leading our local IQ business. Chris?

Thank you, Mike. I am excited to join Gannett and LocaliQ. I'm deeply impressed by the collective talent and the innovative products and solutions offered. The passion to drive growth for our customers' businesses is truly inspiring, and I look forward to leveraging my experience building and nurturing tech-enabled businesses to contribute to our continued success. In the upcoming quarters, our team will work to develop short- and long-term plans as we lay out comprehensive strategies for maximizing our freemium business and start developing new product offerings that more deeply entrench ourselves in our customers' operations. Our unwavering commitment to our customers will drive us forward as we continually obsess over meeting their needs. Together, we will embark on a journey to develop new and creative solutions that cater to their evolving requirements and ensure their ongoing success. I believe the journey ahead is exciting, and I'm eager to contribute my expertise to our collective growth and success. Mike?

Thanks, Chris. And before I turn it over to Doug, just want to say how excited we are to have Kristin here as well as MTS and Jason and can't wait to see the impacts they make to our business, not only over the couple quarters but over the coming years. And now, I'll turn it over to Doug for additional color around the second quarter of 2023.

Thank you, Mike, and good morning, everyone. As Mike mentioned, we are very pleased with the strong performance and financial results in the second quarter, which demonstrates solid progress against our strategic priorities. For Q2, total operating revenues were $672.4 million, a decrease of 10.2% as compared to the prior year or 8.6% on a same-store basis. This represents a 70 basis point sequential improvement from Q1 revenue trends, and we expect significant improvement in the year-over-year revenue trend during the second half of the year. Company-wide, we continue to modulate our cost base in alignment with revenue trends. In Q2, operating expenses declined 14% year-over-year, and we continue to work strategically to implement transformative cost initiatives. Notably, in Q2, we outsourced certain technology functions and we expect to see the benefit from these cost optimization efforts in the upcoming quarters. We will continue to exercise prudent cost management with an emphasis on optimizing those centralized costs in order to preserve our resources in the markets we serve and to invest in key areas for future growth. As a result, adjusted EBITDA totaled $71.2 million in the second quarter of 2023, an increase of approximately 40% or $20.3 million year-over-year. Adjusted EBITDA margin was 10.6% compared to 6.8% in the prior year quarter, representing an improvement of 380 basis points. The growth in adjusted EBITDA was fueled by the improving revenue trends, strategic cost controls and the continued operational progress against our goals. As a result of our performance in the first half of the year, we continue to expect meaningful adjusted EBITDA growth in 2023. Total digital revenues returned to overall growth in Q2 and were $262.1 million, up 0.8% year-over-year on a same-store basis. In the second quarter, our total digital revenues accounted for 39% of our total…

Okay. Great. Thank you. So I'm incredibly proud of the strong performance we achieved in the second quarter and really the first half of the year. The unwavering focus and dedication of the team here at Gannett has led to a high level of operating performance this year, resulting in solid financial results. We believe, we are in a favorable position, as you've heard this morning, as we move into the second half of the year backed by a number of catalysts. Let me do a quick review -- a quick review of a few of those catalysts, achieving significant adjusted EBITDA and free cash flow growth, driving digital revenue growth, now approximately 40% of our total revenue and that percentage will keep going up, improving same-store revenue trends on a sequential basis. Sustaining growth in our digital-only subscription revenues while increasing digital-only ARPU through a renewed content strategy and revitalized focus on local markets, achieving record highs in DMS core platform revenue and ARPU, while sustaining strong adjusted EBITDA, rapid deleveraging through adjusted EBITDA growth and debt repayment, and finally, adding four dynamic leaders to our business in Kristin Roberts, MTS Patel, Jason Taller and Chris Joe. With these catalysts driving us forward we are excited and confident about the opportunities that lie ahead. The remarkable progress achieved during Q2 fills us with pride and we are determined to continue delivering solid results and unlocking significant shareholder value throughout the remainder of 2023 and of course, beyond. Thanks, everyone, for joining us today. We look forward to updating you again in three months on our progress in the third quarter. Thank you.

Thank you very much, sir. Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.