Our second quarter financial results outpaced expectations with revenue growing 6.8% year-over-year on a same-store basis, and adjusted EBITDA growing 48% as compared to the prior year second quarter.
Adjusted EBITDA of $116 million in the second quarter brings our LTM adjusted EBITDA to $453 million.
Within the quarter, the company repaid approximately $46 million in debt under our 5-year Term Loan B. This was done with asset sales and with excess cash flow.
This brings our total principal balance under our term Loan B below $1 billion.
We also finished the quarter with $159 million of cash on hand.
As a result, our digital revenue is now 32.2% or about 1/3 of total revenue.
And importantly, the digital category is growing strongly, up 33% in Q2 over prior year.
We ended the second quarter with approximately 1.4 million digital-only subscribers, adding 160,000 new net subscribers in the quarter.
This subscriber growth for the company outpaced our previous high, which we set during the first quarter of this year, with 120,000 net new adds.
With the 174 million unique visitors per month in the quarter, as measured by Comscore, Gannett has the sixth largest digital reach across all domestic peers.
With a subscriber model at USA TODAY, a new subscription product, a portfolio of new content subscription products in the pipeline and data, driving our decisions based on what our consumers and customers are engaging with, is leading to steady progress toward our goal of 10 million digital-only subscribers by 2025.
Just to remind you, the USA TODAY NETWORK includes over 250 local media markets as well as our USA TODAY publication.
In addition, the Louisville Courier Journal was named a finalist for two politer price categories, breaking news and public service for its coverage and relentless investigation into the fatal shooting of Breonna Taylor and the ensuing 180 days of unrest.
We have historically retained 96% to 97% of customer revenue month-to-month, akin to a SaaS or subscription product.
There are over 30 million small businesses in the U.S., and those businesses are increasingly dependent on a digital strategy to grow their businesses and more importantly, to generate and manage leads.
Our platform for our Digital Marketing Solutions segment generated revenue of $110 million in the second quarter, and that represented double-digit growth up 21.5% compared to the prior year on a same-store basis, and importantly, up 7.6% sequentially to Q1.
Our core platform business, which we view as customers using our proprietary digital marketing services platform, grew 33% over the prior year, accompanied by significant improvement in ARPU, which we also saw, we saw a 12% sequential growth in terms of revenue over the first quarter, and that was in line with customer growth sequentially of 13% from the first quarter.
Our margins were 11.4% in the second quarter.
That's up from 9% in the first quarter and represents our strongest quarterly performance to date for this segment.
Within the second quarter, we've added content to Sunday newspapers in 19 markets and will further expand that to more markets in the third quarter.
With this announcement, Typical became the exclusive sports betting and iGaming provider for Gannett in the U.S. The 5-year agreement includes $90 million in media spend by Typical with Gannett, along with incremental incentives payable to Gannett for customer referrals and the ability for Gannett to acquire up to a 4.99% stake -- equity stake in Typical U.S. With a highly engaged audience of more than 46 million sports fans, over 500 dedicated sports journalists and more than 200 sports sites in our portfolio, Gannett is uniquely positioned to reach sports and gaming enthusiasts.
We held 81 events in the second quarter, with approximately 20% of them held in person.
Our 81 events is up from 13 events in Q1 of this year and up from 75 events in Q2 of 2020.
The slight increase in the number of events from Q2 2020 to this quarter resulted in 4.4% revenue growth versus the prior year in our events category.
For Q2, total operating revenues were $804.3 million, which was an increase of 4.9% as compared to the prior year quarter.
On a same-store basis, operating revenues increased 6.8% as compared to the prior year quarter, which was the quarter most significantly impacted by the COVID-19 pandemic.
Adjusted EBITDA totaled $115.8 million in the quarter, which was up $37.8 million or 48.4% year-over-year.
The adjusted EBITDA margin was 14.4%, up from 10.2% in the prior year quarter and 12.9% in Q1.
These are strong results, particularly considering that the prior year benefited from approximately $150 million of largely temporary cost reductions put in place in response to the pandemic.
On the bottom line, we achieved $15.1 million of net income and $30.1 million of adjusted net income attributable to Gannett in the second quarter.
The Publishing segment revenue in the second quarter was $724.5 million, up 4.2% as compared to the prior year quarter and up 5.6% year-over-year on a same-store basis.
Current advertising revenue increased 10.7% compared to the prior year on a same-store basis as a result of the pandemic's impact in the prior year.
Digital advertising and marketing services revenues increased 35.9% on a same-store basis, reflecting strong operational execution from our national and local sales teams.
Despite a slightly smaller audience base compared to last year's peak new cycle, which was driven by the pandemic and the political environment, digital media revenue increased 46.9% versus the prior year.
National sales of digital advertising grew 77% as compared to the prior year and over 49% on a 2-year basis.
Digital classified revenues declined 19% on a same-store basis.
While this is a significant improvement as compared to the Q1 results of down 31.3%, digital classified was negatively impacted in the period as a result of lower automotive business, which is reflective of supply constraints impacting the automotive industry.
Digital marketing services revenue in the Publishing segment grew 41% year-over-year and 17.2% quarter-over-quarter.
Moving now to circulation, where revenues decreased 9.2% compared to the prior year on a same-store basis, which compares favorably with Q1 same-store trend of down 12.9%.
Also with regard to single copy, it is still significantly impacted by the ongoing pressure of the pandemic as a result of lower business travel, but it continued to show improvement year-over-year and was down 5.1% on a same-store basis as compared to down 31.5% in Q1.
Record digital-only subscriber growth yielded 40% growth in digital-only revenue.
Digital-only subscribers grew 41% year-over-year to approximately 1.4 million subscriptions.
Adjusted EBITDA for the Publishing segment totaled $114.2 million, representing a margin of 15.8% in the second quarter.
That represents an expansion of 120 basis points over Q1 and the prior year.
For the Digital Marketing Solutions segment, total revenue in the first quarter was $110 million, an increase of 21.5% on a same-store basis and a substantial improvement in year-over-year trends.
As compared to Q1 2021, revenue grew $7.8 million or 7.6% on growing client counts -- or client accounts.
Those that utilize our proprietary digital marketing services platform increased from 13,600 clients in Q1 to 15,300 clients in Q2, a 12.7% sequential increase.
Comparing to the prior year quarter, the core business, which accounts for 95% of the revenue in the Digital Marketing Solutions segment, increased 32.9% year-over-year.
While the average client count declined year-over-year from 16,100 in Q2 of 2020 to 15,300 in 2021, that decline is attributable to the alignment of the product suite and platforms that took place in late Q3 2020, bringing together the legacy ThriveHive and ReachLocal systems onto a single platform.
Several low dollar and low-margin products were eliminated from the portfolio, which had the impact of reducing overall client count by approximately 2,500 customers.
The more focused combined products will help fuel the year-over-year growth and the increase in ARPU from $1,600 per month in Q2 of 2020 to $2,300 per month in Q2 of 2021.
Adjusted EBITDA for the Digital Marketing Solutions segment totaled $12.5 million, representing a strong margin of 11.4% in the second quarter, above our Q4 2020 and Q1 2021 levels and the strongest margin to date within the segment.
Our Q2 net income attributable to Gannett was $15.1 million and includes $48.2 million of depreciation and amortization.
In Q2, our interest expense was approximately $35 million, which is down 39% from the prior year.
Our cash balance was $158.6 million at the end of Q2, resulting in net debt of approximately $1.3 billion.
Our ending Q2 cash balance was impacted by an optional $35 million debt repayment we made during the quarter.
Capital expenditures totaled approximately $8.2 million during Q2, reflecting investments related to digital product development, technology and operating infrastructure.
Free cash flow in the second quarter was $23.1 million, which reflects interest payments of approximately $36.4 million.
Free cash flow in the quarter was burdened from a working capital perspective by approximately $42 million as a result of the timing of our employee payroll and seasonality associated with accounts receivable.
We ended the quarter with approximately $1.5 billion of total debt, comprised primarily of $991 million of 5-year term loan and $497 million of the 2027 convertible notes.
During the quarter, we repaid $450 million of debt funded through $11.2 million of real estate sales and excess cash flow.
We continue to optimize our real estate and asset portfolio, and we completed 28 real estate transactions for approximately $11 million in proceeds during the quarter.
Additionally, we expect to generate $80 million to $100 million of incremental asset sales during the second half of this year, of which approximately $20 million has already been completed in July.
We remain confident in our ability to achieve our first lien net leverage goal of below 1 times adjusted EBITDA by the end of 2022.

Summary:
Our second quarter financial results outpaced expectations with revenue growing 6.8% year-over-year on a same-store basis, and adjusted EBITDA growing 48% as compared to the prior year second quarter.
And importantly, the digital category is growing strongly, up 33% in Q2 over prior year.
Our core platform business, which we view as customers using our proprietary digital marketing services platform, grew 33% over the prior year, accompanied by significant improvement in ARPU, which we also saw, we saw a 12% sequential growth in terms of revenue over the first quarter, and that was in line with customer growth sequentially of 13% from the first quarter.
For Q2, total operating revenues were $804.3 million, which was an increase of 4.9% as compared to the prior year quarter.
On a same-store basis, operating revenues increased 6.8% as compared to the prior year quarter, which was the quarter most significantly impacted by the COVID-19 pandemic.