Release Date: November 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- New York Times Co (NYT, Financial) surpassed 11 million total subscribers, with more than 5 million subscribing to the bundle or multiple products.
- Digital subscription revenue growth accelerated to over 14% year-on-year, driven by strong subscriber engagement and increasing ARPU.
- Digital advertising revenue increased by nearly 9%, reflecting strong performance across lifestyle products and a broader ad offering.
- The company added 260,000 net new digital subscribers in the quarter, advancing towards the milestone of 15 million total subscribers.
- New York Times Co (NYT) generated approximately $238 million of free cash flow in the first nine months of the year, returning $122 million to shareholders through share repurchases and dividends.
Negative Points
- The company continues to face audience headwinds due to shifts in the platform landscape, including reduced traffic from platforms and AI-driven content delivery.
- Print advertising revenue continues to decline, impacting overall advertising revenue growth.
- A work stoppage by a union representing certain technology employees commenced, potentially affecting operations and results.
- The company plans to discontinue supplemental disclosure of subscribers with entitlements to The Athletic, which may reduce transparency.
- Despite strong digital growth, the overall revenue increase was only 7%, indicating challenges in offsetting declines in other areas.
Q & A Highlights
Q: Can you talk about the strength in digital advertising and the rollout on the games app with advertising?
A: Meredith Kopit Levien, CEO, explained that digital advertising growth came from adding more ad products to lifestyle products, making them more valuable to marketers. New ad supply has been rolled out across all lifestyle products, including games and The Athletic, which are significant opportunities for growth.
Q: Can you discuss the increase in bundle ARPU and the path to year-over-year growth?
A: William Bardeen, CFO, emphasized the focus on long-term revenue growth rather than ARPU alone. The bundle and promotional step-ups are performing well, and the company is confident in its ability to continue modest ARPU expansion by adding value and raising prices on tenured subscribers.
Q: How does a heavy news cycle impact subscription volatility, and what role does the holistic bundle offering play?
A: Meredith Kopit Levien, CEO, stated that the model is designed to harness demand from various sources. The company is improving at engaging subscribers through innovative news products and formats, which helps mitigate volatility from news cycles.
Q: Are AI-driven search results impacting traffic, and how is the company addressing this?
A: Meredith Kopit Levien, CEO, acknowledged that AI products contribute to audience headwinds but emphasized that the strategy focuses on building resilience by creating products that people seek out directly, fostering direct relationships and daily habits.
Q: Can you explain the sequential trends in subscriber growth and the impact of price increases on churn?
A: Meredith Kopit Levien, CEO, expressed satisfaction with the net ads and the value subscribers bring. The focus is on driving strong engagement and using lifestyle products as funnels for the bundle, which supports both volume and revenue growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
