The New York Times Financial Analysis

The New York Times Company is one of the most well-known media companies in the world with numerous well known brands. First and foremost is its namesake, The New York Times. It also operates numerous other brands, including:

  • Wirecutter, a product review site, which it bought in 2016 for a little more than $30 million
  • The Athletic, a sports news publication, which it bought in 2022 for $550 million
  • Cooking, which is an in-depth recipes business
  • Games, which is a collection of games like Crossword, Wordle, etc.

The New York Times Company has been a subscription-first company for years now, but has retained a very healthy advertising business.

Full Year 2024

Revenue (in thousands)Q1 2024Q1 2023% Change
NYTG
Subscription$401,370$374,1567.3%
Advertising$98,004$102,090-4.0%
Other$58,020$56,5362.6%
Total$557,394$532,782
The Athletic
Subscription$27,635$23,38618.2%
Advertising$5,707$4,15137.5%
Other$3,842$420
Total$37,184$27,95733.0%
The New York Times Company
Subscription$429,005$397,5427.9%
Advertising$103,711$106,241-2.4%
Other$61,299$56,9567.6%
Total$594,015$560,7395.9%

Types of Subscribers

(in thousands)Q1 2024Q4 2023Q3 2023Q2 2023Q1 2023Q4 2022
Digital-only Subscribers9,9109,7009,4109,1909,0208,830
Bundle and Multiproduct4,5504,2203,7903,3003,0202,500
News-Only2,5002,7403,0203,3203,5803,920
Other Single-Product2,8602,7402,6002,5802,4202,410
Print Subscribers640660670690710730
Total Subscribers10,55010,36010,0809,8809,7309,550
Digital-Only Subscribers with The Athletic4,9904,6504,1803,6403,2702,680

ARPU

(in thousands except ARPU)Q1 2024Q4 2023Q3 2023Q2 2023Q1 2023Q4 2022
Digital-only subscriber ARPU:
Bundle and Multiproduct$11.79$12.13$12.81$13.40$14.33$15.20
News-Only$10.88$10.38$10.05$9.29$8.69$8.49
Other Single Product43.59$3.56$3.48$3.57$3.67$3.65
Total Digital-Only ARPU$9.21$9.24$9.28$9.15$9.04$8.93

Operating Costs

Operating Costs (in thousands)Q1 2024Q1 2023% Change
Cost of revenue (ex. D&A)$292,457$284,3232.9%
Sales and Marketing$55,481$58,932-5.9%
Product Development$54,865$50,8327.9%
G&A$69,847$73,408-4.9%
Depreciation & Amortization$20,706$20,840-0.6%

Full Year 2023

Revenue (in thousands)Q4 2023Q4 2022% ChangeQ3 2023Q3 2022% ChangeQ2 2023Q2 2022% ChangeQ1 2023Q1 2022% Change
NYTG
Subscription$403,575$390,5853.3%$392,937$361,4888.7%$385,037$366,6205.0%$373,466$361,6023.30%
Advertising$154,170$173,865-11.3%$108,672$108,1340.5%$112,329$114,832-2.2%$102,090$114,490-10.80%
Other$80,613$73,7639.3%$62,294$54,43914.4%$63,128$54,68215.4%$56,536$49,17615.00%
Total$638,358$638,213$563,903$524,0617.6%$560,494$536,1344.5%$532,092$525,2681.30%
The Athletic
Subscription$26,869$ 23,50714.3%$25,640$ 21,18421.0%$ 24,553$ 16,99944.4%$24,076$10,377–%
Advertising$9,912$ 5,30786.8%$8,441$ 2,333$ 5,441$ 2,547$4,151$1,780–%
Other$1,732$ 509$361$ 102$ 365$420–%
Total$38,513$ 29,32331.3%$34,442$ 23,61945.8%$ 30,359$ 19,54655.3%$28,647$12,157–%
The New York Times Company
Subscription$430,444$414,0923.9%$418,577$382,6729.4%$409,590$383,6196.8%$397,542$371,9796.90%
Advertising$ 64,082$179,172-8.4%$117,113$110,4676.0%$ 117,770$ 117,3790.3%$106,241$116,270-8.60%
Other$81,689$74,27210.0%$62,655$ 54,54114.9%$ 63,493$ 54,68216.1%$56,956$49,17615.80%
Total$676,215$667,5361.3%$598,345$547,6809.3%$590,853$555,6806.3%$560,739$537,4254.30%

Operating Costs

Operating Costs (in thousands)Q4 2023Q4 2022% ChangeQ3 2023Q3 2022% ChangeQ2 2023Q2 2022% ChangeQ1 2023Q1 2022% Change
Cost of revenue (ex. D&A)$321,151$332,129-3.3%$311,135$294,8565.5%$309,923$300,5833.1%$306,852$281,3659.1%
Sales and Marketing$68,317$62,4649.4%$62,635$64,732-3.2%$62,241$62,769-0.8%$67,034$77,588-13.6%
Product Development$58,262$55,4565.1%$57,433$50,47413.8%$56,047$50,82210.3%$57,062$47,43320.3%
G&A$75,845$76,791-1.2%$81,870$71,97013.8%$72,273$69,1414.5%$81,051$71,35713.6%
D&A$21,942$21,5042.0%$21,475$21,760-1.3%$21,858$20,7045.6%$20,840$18,68611.5%

Q1 2023 Commentary

  • This was the quarter of price increases for the subscription business. We can see that playing out with digital-only subscriber ARPU increasing from $8.93 to $9.04 quarter-over-quarter, a $0.11 increase. Compare that to Q2-Q4 where it only grew by $0.10. There are two contributors to this:
    • Strong growth in the digital-only bundle and multi-product subscribers category. In Q4 2022, that was 2,500,000, whereas in Q1, that grew to 3,020,000. If this continues to grow faster than digital-only subscribers with news, it’s indicative of the marketing funnels working to get more users upgraded to the more expensive package.
    • About 550,000 subscribers saw their price increased in Q1 2023, with 500,000 being news-only. The company anticipates an additional 700,000 people in multi-product seeing their price increase in Q2 with a total of 1.5 million subscribers by end of year. This will contribute to ARPU continuing to rise and I anticipate ARPU will return to the pre-Athletic acquisition highs.
  • Q1 is historically a weak quarter from an advertising perspective, but it’s clear that the macroeconomic environment is impacting the company. Ironically, The Athletic’s ad business being so nascent and growing helped offset some of the overall drop in ad revenue for the company.
    • During the quarter, The New York Times Co. hired Joy Robbins, formerly the CRO at Washington Post, to be Global Chief Advertising Officer. As CEO Meredith Kopit Levien explained, “Joy is our first outside executive hire in advertising in a decade and has hit the ground running with our strong team.”
  • On the cost side, the business is getting more expensive to run, which is expected. Journalism costs are included in “cost of revenue,” since that is the primary product people are subscribing for. At the same time, sales and marketing dropping by 13.6% year-over-year while subscriptions continue to grow is a sign of a healthy business.
  • Platform referral traffic was a topic from one of the analysts when he asked, “you’ve made several references over the quarter that the big platforms were sending less leads to The Times. Can you quantify that impact of that versus year-over-year or quarter-over-quarter.”
    • Kopit Levien didn’t offer any specific numbers, but she said one thing that’s important for operators to consider: “Four of our five products are also destinations.” Brand matters and NYT&Co is leaning into that to ensure its business stays strong whether platforms play friendly or not.

Full Year 2022

Revenue (in thousands)Q4 2022Q4 2021% ChangeQ3 2022Q3 2021% ChangeQ2 2022Q2 2021% ChangeQ1 2022Q1 2021% Change
NYTG
Subscription$389,991$351,20511.0%$360,997$342,6095.4%$366,620$339,2178.1%$361,602$329,0849.9%
Advertising$173,865$176,759-1.6%$108,134$110,887-2.5%$114,832$112,7741.8%$114,490$97,11617.9%
Other$73,763$66,26811.3%$51,439$55,607-2.1%$54,682$46,50617.6%$49,176$46,8455.0%
Total$637,649$594,2327.3%$523,570$509,1032.8%$536,134$498,4977.6%$525,268$473,04511.0%
The Athletic
Subscription$24,101–%$21,675–%$16,999–%$10,377–%
Advertising$5,307–%$2,333–%$2,547–%$1,780–%
Other$509–%$102–%–%–%
Total$29,917$24,110$19,546$12,157–%
The New York Times Company
Subscription$414,092$351,20517.9%$382,672$342,60911.7%$383,619$339,21713.1%$371,979$329,08413.0%
Advertising$179,172$176,7591.4%$110,467$110,887-0.4%$117,379$112,7744.1%$116,270$97,11619.7%
Other$74,272$66,26812.1%$54,541$55,607-1.9%$54,682$46,50617.6%$49,176$46,8455.0%
Total$667,536$594,23212.3%$547,680$509,1037.6%$555,680$498,49711.5%$537,425$473,04513.6%

Types of Subscribers

(In thousands)Q4 2022Q3 2022Q2 2022Q1 2022Q4 2021
Digital-only subscribers8,8308,5908,4108,2306,783
Print subscribers730740760780795
Total subscribers9,5509,3309,1709,0107,578

Additional Subscriber Numbers

(in thousands except ARPU)Q4 2022Q3 2022Q2 2022Q1 2022Q4 2021
Digital-only subscriber ARPU$8.93$8.87$8.83$9.13$9.60
Digital-only bundle and multiproduct subscribers2,5002,1301,9801,8351,607
Digital-only subscribers with news6,3706,2106,1406,1015,826
Digital-only subscribers with The Athletic2,6802,2901,6901,216

Operating Costs

Operating Costs (in thousands)Q4 2022Q4 2021Q3 2022Q3 2021Q2 2022Q2 2021Q1 2022Q1 2021
Cost of Revenue (ex. D&A)$332,129$280,235$294,856$256,978$300,583$251,358$281,365$250,997
Sales and Marketing$62,464$97,472$64,732$83,767$62,769$53,555$77,588$60,153
Product Development$55,456$41,591$50,474$40,638$50,822$39,699$47,433$38,943
G&A$76,791$66,846$71,970$64,418$69,141$62,283$71,357$56,577
Depreciation & Amortization$21,504$13,973$21,760$14,326$20,704$14,486$18,686$14,717

Q4 2022 Commentary

  • Subscription revenue continues to climb, which is a function of two things: ARPU growth & top-line subscriber growth.
    • First, ARPU is incrementally moving up after the completion of The Athletic deal. In Q4 2021, it was $9.60, but The Athletic is a less expensive product, which is expected to pull down ARPU. Incrementally increasing ARPU is indicative of the company getting more people into the bundle of products and moving more people out of lower-priced trials.
    • Second, The New York Times has grown the subscriber base from 9,010,000 in Q1 2022 to 9,550,000 in Q4 2022 (this includes The Athletic acquisition).
  • The Athletic remains a money loser, and has cost the company a collective $35,874,000 since the acquisition closed. However, there are signs of The Athletic playing its part as part of the bundle as well as a standalone business.
    • There are 2,680,000 Digital-only subscribers with The Athletic. This is up from only 1,216,000 in Q1 and 1,690,000 in Q2.
    • There is a nascent, but growing advertising business. In Q4, 2022, The Athletic generated $5,307,000 in advertising revenue. This is currently only 3% of how much The New York Times Group generates, but for a business that billed itself as “anti-advertising,” it’s a step in the right direction.
  • At the company level, advertising remains a slow growing part of the business. Despite an otherwise tough advertising market, the company realized 1.4% growth quarter-over-quarter to $179,172 million.
    • Meredith Kopit Levien, CEO, said on the earnings call: “Advertising revenues exceeded our expectations in the quarter in both digital and print, demonstrating the enduring value of our first-party data and premium ad products and the appeal of the Times brand to a wide range of marketers even in a challenging macroeconomic environment.”
  • A major contributor to profitability for The New York Times was a major reduction in sales & marketing operating costs year-over-year. The company’s ability to improve ARPU and grow subscribers while reducing sales & marketing costs is a function of a sticky, in-demand product.
    • Kopit Levien said: “Over the last year, we’ve talked about being ready to begin leveraging the investments we’ve been making for years in our journalism and digital product experiences, and as a result, slow cost growth. We’ve done so now for the second quarter in a row. We’ve become more effective at driving subscription growth through our organic audience engine and digital product work, allowing us to substantially reduce marketing spend.”