New York Times Co Reports Growth in Digital Subscriptions and Revenue in Q3 2023
New York Times Co (NYSE:NYT) surpasses 10 million total subscribers, driven by digital-only subscriber growth.
Digital-only subscription revenues rise by 15.7% year-over-year, contributing to a 9.3% total revenue increase.
Operating profit sees a significant 24.6% increase compared to the same quarter last year.
Free cash flow for the first nine months of 2023 reaches $207.6 million, a substantial improvement from $57.2 million in 2022.
On November 8, 2023, New York Times Co (NYSE:NYT) released its third-quarter earnings report, showcasing a milestone achievement of surpassing 10 million total subscribers, with approximately 210,000 net digital-only subscribers added since the second quarter of 2023. This growth was primarily attributed to the success of the company's bundle and multi-product subscriber additions.
Financial Highlights and Subscriber Growth
The company's digital-only average revenue per user (ARPU) continued its upward trajectory for the fifth consecutive quarter, reaching $9.28. This increase was a result of subscribers transitioning from promotional pricing to higher rates and price hikes for long-standing non-bundle subscribers. The rise in digital subscribers and ARPU contributed to a 15.7% year-over-year growth in subscription revenues from digital products.
Advertising revenues also saw a healthy increase of 6.0% compared to the same period last year, with digital advertising revenues growing by 6.7% due to the strength in core premium display advertising products. Despite these revenue increases, operating costs rose by 7.7% year-over-year, largely due to ongoing investments in journalism and product development.
Profitability and Earnings
Nevertheless, New York Times Co reported a 24.6% year-over-year increase in operating profit, reaching $63.6 million, and a 30.1% increase in adjusted operating profit, which amounted to $89.8 million. These improvements were driven by revenue growth and effective cost management. Diluted earnings per share (EPS) increased to $.32, up from $.22 in the previous year, with adjusted diluted EPS growing to $.37 from $.24.
The company's net cash from operating activities for the first nine months of 2023 was reported at $224.1 million, with free cash flow reaching $207.6 million, compared to just $57.2 million in the same period of 2022. This significant increase in free cash flow was partly due to a one-time payment related to The Athletic Media Company stock options in the prior year.
Outlook and Strategic Commentary
Meredith Kopit Levien, president and chief executive officer of New York Times Co, expressed satisfaction with the third-quarter results, highlighting the company's strategy to become an essential subscription for English-speaking individuals seeking to understand and engage with the world. She noted the strong performance of the multi-product bundle, which includes news, games, cooking, sports, and shopping advice, and its role in enhancing the company's resilience and profitability.
Looking ahead, the company provided guidance for the fourth quarter of 2023, anticipating increases in digital-only subscription revenues and total subscription revenues, with a flat to 2% increase in adjusted operating costs.
For value investors and potential GuruFocus.com members, New York Times Co's third-quarter earnings report underscores the company's successful digital transformation and its ability to grow its subscriber base and revenues in a challenging media landscape. The company's focus on high-quality journalism and product development, combined with prudent cost management, positions it well for continued growth and profitability.
For a more detailed analysis of New York Times Co's financials and future prospects, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from New York Times Co for further details.
This article first appeared on GuruFocus.
