At the end of the second quarter, The New York Times Company reports they have reached approximately 9.88 million total subscribers across its print and digital products. This includes 9.19 million digital-only subscribers with about 3.30 million bundle and multiproduct subscribers. Total digital-only average revenue per user was $9.15, compared to ARPU of $8.83 for the second quarter of 2022.

The Times reports a net increase of 180,000 digital-only subscribers since the end of the first quarter and 780,000 more digital-only subscribers than the legacy media company had at the end of the second quarter of 2022. This gets The New York Times even closer to their goal of 15 million subscribers by the end of 2027.

“Our second-quarter results confirm our view that our essential subscription strategy is working as designed, with momentum in several key areas. We added 180,000 net new digital subscribers, with more than half of our digital starts taking the bundle for the second quarter in a row. More than a third of our nearly 10 million subscribers are now bundle or multiproduct subscribers,” said Meredith Kopit Levien, president and CEO of The New York Times Company, in an August 8, 2023 news release.

Total revenue for the second quarter

The Times also reported an increase in revenue. Total revenue for the period was $590.9 million, a 6.3% increase year-over-year. This includes subscription revenue of $409.6 million, a 6.8% increase year-over-year, advertising revenue of $117.8 million (flat), and other revenue (Wirecutter affiliate revenue, licensing revenue and TV and film revenues) of $63.5 million, a 16.1% increase year-over-year. Levien said digital subscription growth was due to subscriber volume and ARPU.

Subscription revenue from digital-only products was $269.8 million, a 13% increase year-over-year, and print subscription revenue was $139.8 million, a 3.5% decrease year-over-year. Overall, subscription revenue increased primarily due to a larger number of subscribers paying a higher subscription rate as their promotional pricing ends. There was also growth in the number of subscribers who upgraded to a bundle. In addition, there were price increases for digital news and Games subscribers.

The Times said they will report three digital-only subscription categories going forward: bundle and multiproduct, news-only, and other single-product.

“We believe continued strong execution of our bundle strategy positions us to be more resilient to external market dynamics while driving sustainable value creation. We are proud of the progress we are making to build a larger and more profitable company, which in turn allows us to continue to do the most ambitious, high-quality journalism across an ever-broadening range of topics and formats,” Levien added.

The Athletic

Revenue for The Athletic was $30.4 million for the period, a 55.3% increase. Subscription revenue was $24.6 million, a 44.4% increase. Advertising revenue was $5.4 million, compared to $2.5 million for the second quarter of 2022. The increase in ad revenue is attributed to the launch of display advertising in the third quarter of 2022. The Athletic had an 18.7% increase in operating costs due to higher sales and marketing costs, product development costs, and digital content delivery costs. These were partially offset by lower general and administrative expenses.

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Other quarterly highlights

The Times reported the following additional highlights for the second quarter.

• Operating profit of $55.8 million, compared to $51.7 million in the second quarter of 2022.
• Operating profit margin was 9.4%, slightly higher than 9.3% operating profit margin for the same period last year.
• Adjusted operating profit margin for The New York Times Group was $100.0 million, compared to $88.8 million for the same period last year.
• Adjusted operating profit for The Athletic was $(7.8) million, compared to $(12.6) million for the second quarter of 2022.
• The company reported diluted earnings per share of $0.28, compared to $0.37 for the same period last year.
• The Times reported capital expenditures of $5 million, half of what it was in the second quarter of 2022.
• For the second quarter of 2023, there was a $12.7 million impairment charge related to excess leased office space they are hoping to sublet.
• They also had a $34.2 million gain for an agreement to lease and sell four acres of land at their printing and distribution facility of College Point, New York.
• At the end of the quarter, The company had cash and marketable securities of $510.4 million, an increase of $24.1 million from the end of last year.

Outlook

The New York Times Company offered the following guidance for the third quarter of 2023.

• Digital-only subscription revenue: increase of 14% to 17%
• Total subscription revenue: increase 8% to 10%
• Digital ad revenue: increase mid-single digits
• Total ad revenue: flat
• Other revenue: increase of 13% to 16%
• Operating costs: increase of 5% to 7%
• Adjusted operating costs: increase of 5% to 8%

Insider Take

The New York Times reports another solid quarter, including subscriber and revenue growth. They also reported improvements in performance by The Athletic. The Athletic is still operating at a loss, but losses are improving and engagement and revenue are increasing. What the company didn’t mention in its earnings report were the transitions they made by laying off staff at The Athletic and moving sports coverage from The Times’ sports desk to The Athletic. The latter transition caused a lot of concern for the long-time sports reporters at The Times who accused the company of union busting because The Athletic is not a union shop, but The New York Times is.

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