Lee Raises Fiscal 2026 Ebitda Outlook After Profit Return
The company now expects 22% to 28% year-over-year Adjusted EBITDA growth, after a $5 million net income in the quarter ended June 28, 2026.
Lee Enterprises (LEE) raised its fiscal 2026 Adjusted EBITDA outlook to 22% to 28% year-over-year growth after posting net income of $5 million in the third quarter ended June 28, 2026, its first profitable quarter since 2024.
The digital-first subscription platform, which serves 114 local markets, had previously guided to mid-single-digit year-over-year Adjusted EBITDA growth for the year. Excluding insurance proceeds tied to last year’s cyber event, the new range still translates to growth near 10%.
Adjusted EBITDA was $18 million, up 23% from a year earlier, or 19% excluding those reimbursements. That followed 95% year-over-year growth in the second quarter and 61% in the first. Adjusted EBITDA margin expanded 400 basis points to 15%.
President and Chief Executive Officer Nathan Bekke said the results reflected execution of the digital-first strategy, disciplined cost management and operational improvements. Chief Financial Officer Josh Rinehults said net income was driven by continued Adjusted EBITDA growth and lower interest expense after February’s $50 million private placement.
Interest expense declined 45%, or $5 million, from the prior-year quarter after the credit-agreement amendment cut the fixed rate to 5% from 9% for five years. The rate cut is expected to save about $18 million annually. Cash on the balance sheet was $59 million. Debt under the BH Finance credit agreement remained $455 million, or $395 million net of cash.
Total operating revenue was $126 million. Digital revenue was $72 million, or 57% of the total, up from 56% in the second quarter and 54% in the first. Digital mix rose 170 basis points from a year earlier.
Digital advertising and marketing services revenue was $45 million, 76% of total advertising revenue. Amplified Digital Agency revenue was $27 million. Digital services revenue, predominantly from BLOX Digital, was $5 million. Total print revenue was $54 million.
Digital-only subscription revenue was $22 million. Digital-only subscribers totaled 584,000 at quarter-end. Digital-only subscription revenue increased 12% annually over the past three years.
Operating expenses were $118 million and Cash Costs were $109 million, each down 14% from the prior year. Cash Costs declined because of reduced compensation and legacy print costs.
For the nine months ended June 28, 2026, the company received $6.4 million in business-interruption reimbursements related to the February 2025 cyber incident, recorded in operating expenses and included in Adjusted EBITDA. Remaining claims remain under review.
Bekke said the company announced a new management agreement with Hoffmann Media Group during the quarter, citing the value of Lee’s operating platform and digital expertise. He said the partnership would let Lee leverage technology and best practices while deepening a relationship aligned with long-term objectives.
The company is executing a strategic termination of its fully funded benefit pension plan, eliminating long-term volatility tied to interest rates, mortality assumptions and asset performance while preserving participant benefits. It does not expect pension contributions in the fiscal year. Capital expenditures were $1 million in the quarter; the company expects up to $7 million in fiscal 2026. Cash paid for income taxes is expected to total between $3 million and $9 million.
Bekke said the updated outlook reflects continued execution of strategy, sustained operational discipline and confidence in profitability through the remainder of the fiscal year. The company’s operational focus remains on improving profitability while investing in products, technology and journalism that support digital growth.