NEW YORK TIMES CO Q1 FY2025 earnings call

• Added 250,000 net new digital subscribers, with total subscriber base at 11.7 million moving toward 15 million total subscribers.
• Digital subscription revenue grew ~14%, digital advertising grew 12%, and affiliate/licensing revenues grew strongly.
• High engagement due to expert reporting and lifestyle products; video and audio innovation driving engagement.
• Stayed disciplined on cost growth while continuing to invest in journalism and product enhancements.

Subscription Business: Added approximately 250,000 net new digital subscribers in the quarter. Total digital-only ARPU grew 3.6% to $954. Digital-only subscription revenues grew approximately 14% to $335 million. Total subscription revenues grew approximately 8% to $464 million. Advertising: Total advertising revenues for the quarter were $108 million, an increase of approximately 4%; digital advertising revenues increased approximately 12% to $71 million. Affiliate, Licensing and Other: Affiliate, licensing and other revenues increased approximately 4% in the quarter to $64 million.

• Q2 2025: Digital only subscription revenues expected to increase 13%-16%, total subscription revenues 8%-10%, digital advertising high single digits, total advertising flat to low single digits, affiliate/licensing mid-single digits, adjusted operating costs 5%-6%.
• Full year: Expect healthy revenue growth, margin expansion, strong free cash flow generation, and on track for midterm targets related to subscribers, AOP growth, and capital returns.

Q: Good morning, everyone. Thanks for the question. I wanted to dig into the strength in digital ad revenue this quarter. So were there any areas in particular where you saw a pickup in activity? And then could you give us an update on what you've been seeing in that business since the tariff announcements?

A: Meredith Kopit Levien: I'm happy to take that. Good morning. Thanks for the question. I think broadly now, we are sort of talking about and thinking about our ad business the same way we think about our consumer business. We are in big categories with broad appeal to the end user, in this case, to the marketer. We've got engaged audiences that marketers can target. Effectively, we've got a suite of high-performing sort of well-owned ad products, and we're still in the relatively early days of extending those products across the portfolio. So we have a lot of confidence in the growth drivers and long term and the potential resilience of the business. And yeah, I don't know, Will, if you'd add anything to that.

Q: Thanks so much. Good morning. I wanted to ask about the news-only subscriber base, which I think saw the least attrition this quarter that we've seen since the bundle strategy really took off. Have we reached a greater level of stability on that cohort? And how much opportunity is there still to drive conversion of those legacy new subscribers into the bundle? And then in a similar vein, can you maybe just revisit your appetite for stand-alone product price increases and whether an uncertain economic environment changes that calculus at all?

A: Will Bardeen: Thanks, Thomas. I'll take that. So first, what you're seeing there with the news-only is our strategy working as designed as we've been telegraphing for quite some time. And I think sort of underlying -- the -- we've talked about how the -- there's a lot of value in the product. We're pleased with what we're seeing at pricing step-up moments news only has been one of the places where for tenured cohorts. We've at the right times when we see the opportunity. We've been asking those readers to pay a little bit more. So I think what you should expect to see there is a continuation of us exercising our strategy, and we continue to primarily market the bundle and over time, would expect more and more people to be on the bundle. So it's just our strategy working as designed there. With regard to price increases on single product. I simply sort of say that overall, I think both Meredith and I talked about the underlying drivers of the digital subscription business and of ARPU growth or ARPU is very strong. We're adding a lot of value to the products. Meredith talked about the great pipeline for the rest of the year. We've been seeing strong audience and subscriber engagement. We've been pleased with the pricing step-up performance, as I mentioned, and we continue to see lots of running room across the drivers. So I think you can expect us to continue to execute the strategy going forward that you've seen over the last couple of years.

Q: Hi. Thank you. Well, maybe just following up on some of the subscriber dynamics just on bundle and multiproduct ARPU. The number was lower quarter-over-quarter. I know there's a lot there under the surface. Maybe you could just unpack a bit the drivers in terms of promo net adds versus kind of the subs you're graduating. And then just a separate topic, Meredith, you talked a bit more recently, I think, about the importance of video on the platform. I don't know if you could dig in a bit on where you're seeing the most engagement and kind of what innovation is still available to you there?

A: Will Bardeen: Yeah. I can start with that question about the bundle ARPU in the trend there. Let me just say, overall, we're pleased with that year-over-year increase in total digital-only ARPU we delivered in Q1 and the health of its drivers, as I just said in my response to Thomas' question. And I've said this before, is that total digital-only ARPU number that we focus on. We break out those subscriber types to really help illustrate and understand how we're using the bundle in our full product portfolio to capture the entire demand curve. So I don't think there's sort of more to unpack there -- we've obviously provided Q2 guidance on digital subscription revenue growth, which is what we're trying to maximize over the long term, which is, of course, a function of both the growth in our subscriber base and ARPU. And specifically to ARPU, I've mentioned, sort of our confidence in the trajectory due to the value right into the products, the engagement, the pricing performance that we're encouraged by and the running room we see there.

A: Meredith Kopit Levien: Yeah. I'm happy to take the video. I can't remember if you asked video and audio. I'm happy to talk about both of them and will give me a good point kiosk, which is just the kind of value we're adding to the product. We are making a lot more video and audio, especially reporter video, which is a way for people to get a taste of a story and also see how a reporter got the story. So it both gives people a way into a story that may in and of itself be kind of enough to understand the story or it makes them interested to go and read further, and it also kind of does double duty in showing the work, which we think is really good for building trust. People love it. It's driving a lot of engagement I'd say we are also doing more embedded video and multimedia just as part of the report, so you see that if you are on our app every day. We're also doing more short-form video off platform. So we cut that from our longer work, and it helps us get new audiences engaged in the times, and we continue to expand podcast and podcast video. We launched and I said in my prepared remarks, we launched to show interesting times, which is both a video and an audio show with Ross Scout, we have a culture show coming this quarter, and we are also continuing to expand and improve automated voice. They can listen to more of the report in automated voice and the quality of that voice is getting better. And I would just say all of that is good for engagement, and it's making the report more accessible to people and making more people sort of understand what we do.

Q: Thanks so much. You guys have done incredibly well with your digital subscription strategy. I just had a question in terms of your tactics that you employ when someone comes off of the promo price. What happens then? Like how do you manage it? Because it's a big step up to the full price, which sort of belies the -- catch all the area under the demand curve. But at another level, maybe I missed it, but I just haven't heard you guys talk about how you sort of -- the tactics to graduate someone up to full price from promo price?

A: Will Bardeen: Yes. Thanks. I'm happy to take that, Jason. I mean I think in broad brush, we are bringing people in on the bundle, in particular on promotional price, as we've said. And we then take in a lot of signal and understand how well they're engaging. Overall, we have strong engagement. But as you can imagine, that engagement can vary depending on the nature of the subscriber. And so over time, what we're doing then is asking people to pay more when we're seeing the strength of that engagement. And so we have both sometimes bringing people at the step-up moment, whether that's 6 months or 12 months to the full price. And we also bring up people sometimes to intermediate prices, and every once in a while, we will decide to let people someone let someone stay on promotion longer as well. So there's a range of pricing, and we're continuing managing that. Underlying that is obviously the what we've talked about here, I just mentioned a couple of times, it was in our scripts, the value of the product that we continue to add value to it and continue to keep that engagement strong, look to keep driving daily habit. And with that, we feel really confident about our ARPU trajectory and the ability to bring people up to higher prices over time.

A: Meredith Kopit Levien: And I'll just add a bit that underlying all of that is very sophisticated data science that we're getting better and better at deploying and sort of executing around the tech is obviously getting better and better.

Q: Yes, two questions. Meredith, if you take the athletic digital ad revenues out, it looks like underlying was up 5.5%, if I have that right. Is that about what you expected? And any comment on that mid-single-digit underlying growth in digital?

A: Meredith Kopit Levien: I'll just say broadly, we feel optimistic about all the drivers in our ad business. We like the performance in the quarter. We like the trajectory we're on. And we like it and across the portfolio, and I'll just we're back to what I said in my prepared remarks about the ad business now really feeling strategically akin to the consumer business where we're in these broad spaces, news and sports and games and recipes and shopping advice of a lot of marketer appeal, a lot of engaged audience in all of those spaces, improving ability to target that audience and add products that we're still in early days of extending across the portfolio. So I would say the results are good. You see the guide, we kind of feel good about all of it.

Q: Okay. And just -- yes. The -- I think this is already asked, I'm not sure it was answered, but the single product sequential growth was slightly up. Was that a surprise? Or is that a seasonal thing with gifting around Christmas? Any comment on that?

A: Will Bardeen: I wouldn't provide any more color than what I've said. In any kind of given quarter, you can see some variations. Overall, what we're really focused on is what I mentioned, adding value to the products focused on that strength of subscriber engagement and then making sure with all of the data science that Meredith mentioned that we're bringing people up to higher prices, we're identifying -- partly by identifying areas of tenured cohorts that we see lots of signs, value the product so much that ask them to pay a bit more over time makes sense. And we can see -- continue to see running room across those drivers.