The New York Times Company (NYSE:NYT) Q2 2025 Earnings Call Transcript

The New York Times Company (NYSE:NYT) Q2 2025 Earnings Call Transcript August 6, 2025

The New York Times Company beats earnings expectations. Reported EPS is $0.505, expectations were $0.5.

Operator: Good morning, and welcome to The New York Times Company’s Second Quarter 2025 Earnings Conference Call. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Anthony DiClemente, Senior Vice President, Investor Relations. Please go ahead.

Anthony Joseph DiClemente: Thank you and welcome to The New York Times Company’s Second Quarter 2025 Earnings Conference Call. On the call today, we have Meredith Kopit Levien, President and Chief Executive Officer; and Will Bardeen, Executive Vice President and Chief Financial Officer. Before we begin, I would like to remind you that management will make forward-looking statements during the course of this call. These statements are based on current expectations and assumptions, which may change over time. Our actual results could differ materially due to a number of risks and uncertainties that are described in the company’s 2024 10-K and subsequent SEC filings. In addition, our presentation will include non-GAAP financial measures, and we have provided reconciliations to the most comparable GAAP measures in our earnings press release which is available on our website at investors.nytco.com.

In addition to our earnings press release, we have also posted a slide presentation relating to our results on our website at investors.nytco.com. And finally, please note that a copy of the prepared remarks from this morning’s call will be posted to our investor website shortly after we conclude. With that, I will turn the call over to Meredith.

Meredith A. Kopit Levien: Thanks, Anthony, and good morning, everyone. We had a great second quarter across the board, and our strategy continues to work as designed. Our world-class news coverage and diverse portfolio of lifestyle products in big spaces are continuing to attract large audiences who engage deeply. We grew all of our major revenue lines, subscription, advertising, affiliate and licensing with real running room ahead. And we’re generating significant free cash flow, which, combined with a strong balance sheet means we can keep investing in the unparalleled journalism and best-in-class product experiences that enable our leadership and underpin enduring advantages. Our results so far this year demonstrate that we’re well positioned to keep delivering revenue and profit growth for the long term.

Now let me share a few highlights from the quarter. We have 230,000 net new digital subscribers, bringing our total subscriber base to approximately 11.9 million. That puts us further along the path to our next milestone of 15 million. And this quarter, we crossed the threshold of having at least 50% of our subscribers on the bundle or multiple products. which is important because those subscribers engage more, stay longer and pay more over time. Digital subscription revenue increased by over 15% in the quarter as more and more users experienced our world-class news leverage and the significant value we continue to add across our portfolio and we saw strong and consistent engagement across the enterprise, giving us confidence in our ARPU trajectory.

That high engagement is the result of executing well against our priorities for the year. As a reminder, those priorities are to expertly and ambitiously cover the most important news make our reporting more accessible to more people by expanding in video and audio and make each of our products more valuable with new content, shows, features, games and other enhancements. All of that is intended to drive a larger engaged audience for the time, including a larger pool of engaged prospects. Our video expansion is worth highlighting here because it represents an important and ambitious approach to how we reach and engage people. The expertise and global presence of our newsroom combined with increasing online video consumption create a big opportunity for The Times to capture a greater share of attention.

We believe our efforts in this area can make watching The Times as natural and compelling an experience as reading and listening. To that end, we’re rapidly scaling video across 3 categories in the different user needs and moments. First, we’re producing substantially more news videos that bring people into the major stories of the day, often by putting our reporters in front of the camera to explain and humanize their work. Second, we’re producing more full-length shows, including video versions of podcasts like the Ezra Klein Show and Ross Douthat’s Interesting Times and also Wesley Morris’ weekly take on culture. Third, we’re using video much more extensively to enhance the experience across our lifestyle products. including sports highlights from major leads on the athletic and new video franchises on cooking.

While we’re still early in these efforts, they are already showing promise in building our presence and brand equity on video- first platforms and also creating a more compelling and engaging experience on our own sites and apps. Turning to advertising. We had a really strong quarter with digital advertising growing nearly 19% and total advertising growing more than 12%. This performance reflects how our strategy to create a larger, more durable digital ad business is working. That entails having a portfolio of compelling brands in spaces with broad, marketer appeal, particularly sports and games, a large engaged audience that marketers can target effectively and a growing supply of high-performing ad products across the range of formats. Licensing and affiliate revenues also grew in the quarter.

We signed a multiyear deal with Amazon in Q2 that marks our first agreement with generative AI at the center. It’s a deal that will bring Times journalism and recipes and the athletic sports coverage to wider audiences across Amazon’s products, services and proprietary foundation models and it reflects our long-standing openness to enter into commercial partnerships where there is fair value exchange and control over how our IP is used. At Wirecutter, we continue to see growth, particularly in expansion areas like gifts, apparel and beauty. Finally, we maintained cost discipline in the quarter while strategically investing into our journalism and product experiences, which are the source of our long-term advantage. I’ll close with a few thoughts on our path ahead in the context of the current media environment.

First and most importantly, we’re confident that we’re well positioned to continue to grow despite the moves of big tech companies which are leading to less and less traffic for publishers. That’s because we see large and persistent demand for what we do and are becoming more differentiated in meeting that demand. It’s also because our top priority is and has been for a long time now to build direct engaged relationships with millions more people who seek us out, form a habit and make room for our coverage and products in their lives. Every engaged audience member is valuable to us. And as we become more essential in their lives, they power all of our revenue streams, subscription, advertising, licensing and affiliates. All of that means we’re confident that continued execution against our strategy will deliver even more value to even more people and result in a larger and more profitable business.

With that, I’ll turn it over to Will for more details on the quarter.

William Bardeen: Thanks, Meredith, and good morning, everyone. As Meredith described, our 2025 second quarter results demonstrate another strong quarter for subscriber growth, revenue growth, AOP growth, margin expansion and free cash flow generation. The continued strength of our audience and subscriber engagement in the quarter help power healthy growth across our multiple revenue streams. We also continue to operate efficiently while making disciplined investments aimed at further differentiating our high-quality journalism and digital products. Year-over-year, revenue grew nearly 10%, AOP grew by approximately 28% and AOP margin expanded by approximately 280 basis points. We generated approximately $193 million of free cash flow in the first half of the year, which reflects our capital-efficient model.

Over that same period, we returned approximately $134 million to shareholders, consisting of approximately $83 million in share repurchases and approximately $52 million in dividends. This is consistent with our capital allocation strategy of returning at least 50% of free cash flow to our shareholders over the midterm. Now I’ll discuss the second quarter’s key results, followed by our financial outlook for the third quarter of 2025. Please note that all comparisons are to the prior year period unless otherwise specified. I’ll start with our subscription business. We added approximately 230,000 net new digital subscribers in the quarter, bringing our total subscriber count to approximately 11.9 million. Driver growth came from multiple products across our portfolio, particularly from growth in bundle and multiproduct subscribers.

I’ll also note that we are in the early stages of rolling out our new family plan subscription offering. Total digital-only ARPU grew 3.2% to $9.64 as we stepped up subscribers from promotional to higher prices and raised prices on certain tenured subscribers. We continue to be encouraged by the results we’re seeing at pricing step-up points and are also pleased with the strong engagement we are seeing as we continue to add value to our products. As a result, we remain confident in our ARPU trajectory. With both higher digital subscribers and higher digital-only ARPU in the second quarter, digital-only subscription revenues grew approximately 15% and to $350 million. Total subscription revenues grew approximately 10% to $481 million, which was in line with the guidance we provided for the quarter.

Now turning to advertising. Total advertising revenues for the quarter were $134 million, an increase of approximately 12%, which is higher than the guidance we provided for the quarter. Digital advertising revenues also came in above the guidance we provided, increasing approximately 19% to $94 million. Digital advertising revenues increased primarily due to new advertising supply in areas of strong marketer demand. Affiliate, licensing and other revenues increased approximately 6% in the quarter to $70 million as licensing and Wirecutter affiliate revenues continued to perform well. Adjusted operating costs grew 6.1% this was just above the 5% to 6% guidance range that we provided last quarter. Adjusted diluted EPS in Q2 increased $0.13 and to $0.58, primarily driven by higher operating profit and higher interest income.

I’ll now look ahead to Q3. We Digital-only subscription revenues are expected to increase 13% to 16%, and total subscription revenues are expected to increase 8% to 10%. We Digital advertising revenues are expected to increase low double digits and total advertising revenues are expected to increase low to mid-single digits. Affiliate licensing and other revenues are expected to increase high single digits. Adjusted operating costs are expected to increase 5% to 6%. We intend to continue operating efficiently while making disciplined investments in our high-quality journalism and digital product experiences that add value for our audiences. I would also like to note that we expect to have only 1 reportable segment as of next quarter. In summary, our essential subscription strategy is working as designed.

With a valued product portfolio, multiple revenue streams, significant free cash flow generation and a strong balance sheet, we believe we are well positioned to navigate a dynamic market environment. We continue to expect healthy growth in revenues in AOP, margin expansion and strong free cash flow generation for the full year. With that, we’re happy to take your questions.

Q&A Session

Operator: We will now begin the question-and-answer session [Operator Instructions]. The first question today comes from David Karnovsky with JPMorgan.

David Karnovsky: Meredith, on advertising, the result was really stand out for the times or even compared to other digital platforms. I just want to see if you could expand on the acceleration here? What are the key factors kind of driving this in terms of your own tech enhancement [indiscernible].

Meredith A. Kopit Levien: We increasingly see the ad business likely see the consumer business. We are in big spaces with really broad marketer appeal, particularly in lifestyle spaces like games and sports in addition to news, although the whole portfolio is really working for advertising. We’ve got a really big engaged audience across the portfolio that can be effectively targeted at scale with first-party data that we’ve spent years building and also now with our AI tool brand match, we’ve got a very wide suite of high-performing ad products. And in particular, just in recent months, we added more ad products that can be sort of executed more quickly and easily for marketers, which has really helped during times of uncertainty in the market.

And we are continuing to roll out new app supply across the portfolio. And kind of all of that together allows us to be a real option for marketers who are looking for really high-quality brand association and also high reach and high impact. And I would just say, it feels like we have a lot of running room ahead on all that.

David Karnovsky: Okay. And then on the Amazon licensing deal, can you just speak to what you found appealing in terms of extending your editorial content to these platforms. And then with regards to the Amazon using the material to train their AI models. What is it about the agreement maybe in terms of either compensation or guardrails that made you comfortable licensing your content in this way?

Meredith A. Kopit Levien: Yes. Great, great question. I would say the deal is consistent with our sort of long-held principles about how we work with big tech companies and platforms. It provides fair value exchange in a way that feels sustainable, gives us control over how our work is used, and it’s consistent with our long-term strategy, which is about The Times being more essential to more people. And I would say, kind of more broadly, the deal reinforces our principal, that our journalism and everything we do is worth paying for and our intellectual property should be valued as such.

Anthony Joseph DiClemente: Great Thanks, David. Operator, we’ll take our next question.

Operator: The next question comes from Jason Bazinet with Citigroup.

Jason Boisvert Bazinet: I just had 2 quick questions. You guys are making great progress on your goal towards 15 million subs, but I still get a lot of investors that just treat that you’re not going to sort of hit that. So it sounds like you remain confident. Is there any update sort of on the timing when you expect to 15 million?

Meredith A. Kopit Levien: I’m happy to take that one. And I’ll just start by saying 15 million by 2027, remains very much our aim, and we continue to see real path to getting there. Let me give you a sort of view of that path and the levers, as I think Will and I both said in our prepared remarks, we continue to see persistent demand for everything we do. We’ve got a master brand and then sub brands that people trust and love, and they — all those brands now represent kind of a level of quality and rigor that’s well understood. We have world-class news coverage and leading products in really big spaces with a lot of running room and our differentiation in those spaces is only getting more pronounced. I reiterated our priorities for this year, which hang from our long-term strategy and those priorities are about making those products and that coverage more accessible to people and more valuable to people.

And I think probably the most important thing to say is that our audience of people who are registered with The Times, not that audience is still growing or just coming to our sites and apps on a weekly basis is much larger than our current subscriber base, and we have a lot of opportunity to call them back to us, call them to action and ultimately convert them.

Anthony Joseph DiClemente: Jason, do you have a second question?

Jason Boisvert Bazinet: Well, the only other question I got from investors is on the Amazon AI deal, if that was included in your guidance.

William Bardeen: I’ll take that. Yes, we — it is included in our guidance. And I’ll just give a little more color on exactly sort of how to think about that. we don’t break out revenue by deal. We can say that, that Amazon agreement was operational as of the end of May. So as reflected in our guidance, we are showing an acceleration in the affiliate licensing other revenue line in Q3 to high single digits from what was 6% in Q2, and that will be the first full quarter with that Amazon agreement, which is playing a role in that line. Just always remember with affiliate licensing and other revenue, it has a lot of moving parts that can kind of create some lumpiness. But we certainly expect that overall line to be a growth driver, and Amazon is playing a role there. .

Anthony Joseph DiClemente: Thanks Jason. Operator let’s take our next question.

Operator: Next question comes from Benjamin Soff with Deutsche Bank.

Benjamin Soff: You guys hit your target for 50% of the base being bundled this quarter. Can you reflect on the progress you’ve made with the bundle strategy to date and share some thoughts on where you think adoption of the bundle can go from here? I’m also curious to hear about this new family plan subscription that you talked about.

Meredith A. Kopit Levien: Yes. Great. Why don’t I start on the bundle? And Will, you can add color on the family plan, I’ll just start by saying we are really happy with our achievement of the 50% because bundled subscribers engage more, they stay longer, they pay more over time. And you see that the LTV of bundled subscribers is very strong. You can see that in the fact that bundle ARPU was up this quarter. And you can regard us as incredibly focused on the bundle continuing to be a primary catalyst for our growth. I’ll say we don’t expect everyone to choose the bundle but every subscriber has value to us, and we are getting better and better at driving bundle starts from single products. As a family plan, Will, you should talk about it. But very early, and we’re super excited about that, too.

William Bardeen: Yes. Yes, we’re excited about it, as Meredithjust said. And as I mentioned in my remarks, just the early stages of rolling it out, but I’ll provide a little bit more context. Our family subscription, it’s a single subscription representing 2 subscribers, 1 build subscriber and then 1 additional subscriber to reflect up to 3 additional entitlements. And we’re excited about its potential to help us. In a few ways, it’s definitely, we believe, something that can continue to sort of enable us to penetrate that large addressable market that we definitely see there, strengthen subscriber retention and improve monetization over the long term. We just think it’s a natural way for, and always has been, by the way, for people to experience all the products across the times as they have — for enjoyed the times for many years with family and friends. So it’s something we’re excited about and more to come in future quarters on that.

Anthony Joseph DiClemente: Thanks Ben. Operator, let’s take our next question please.

Operator: The next question comes from Thomas Yeh with Morgan Stanley.

Thomas L. Yeh: Meredith, on your earlier point about your larger user base, you’ve spoken about traffic headwinds related to the AI overviews in the past. Can you maybe just talk about whether you’ve seen these trends intensify in recent months and what you’re doing differently to drive that top of funnel health that you mentioned as a priority?

Meredith A. Kopit Levien: Yes. Happy to do that, Thomas. So we see 2 things as being true. At the same time, the tech companies are making moves that continue to result in less traffic publishers and products like chat GPT and Google’s AI overviews and now AI mode are playing a significant role in that. And we have spent many years executing on the strategy of building coverage and products that are worthy of direct relationships and daily habits and our success at that has made us resilient in a dynamic ecosystem. And I’m confident that we’re going to continue to demonstrate that resilience as we execute on our strategy and all the priorities I talked about.

Thomas L. Yeh: Okay. Great. And maybe more in the weeds one. I noticed the length of bundled promotional pricing varies at times in terms of the offer that you’re providing consumers, sometimes it’s 6 months, sometimes it’s a year. Anything to note there in terms of your selling strategy and your approach to acclimating consumers towards the value of the bundle. Should we think about the cadence of eligible price graduations still building through the year and into the next?

William Bardeen: Thomas, maybe I’ll take that. We’ve talked about this in the past. And I mean, the shortest thing I’ll say is we don’t have any change to our approach here. We have been for some time now, having the sort of business as usual, be a 6-month promotion with the sort of the promotional opportunity being at 12 months. It’s all a system that is just a way of continuing to make sure we’re tackling the whole demand curve, getting people engaged in the bundle. That’s — we like all our subscribers. I guess we like our bundled subscribers a little bit more where that is our sort of hero product that we’re trying to get people on. And then once we get them on, we’re doing everything we can to engage them as quickly as possible and as deeply as possible across as many products as possible.

And then we have these depending on when they come on, either the 6-month the 12-month opportunity to ask them to pay a bit more as they see that value. So that’s no change to our strategy there. We’re continuing to operate it. And as I said in my remarks, we’re — we continue to be quite pleased about the performance at the step-up moments, graduation to higher prices as well as when we ask some groups of tender — single-product subscribers to pay more over time as well.

Anthony Joseph DiClemente: Thank you, Thomas. Operator let’s take our next question, please.

Operator: Next question comes from Kutgun Maral with Evercore ISI.

Kutgun Maral: I just wanted to follow up on the AI licensing opportunities since we’re all trying to better understand the implications for the company as well as the industry. So maybe can you elaborate on why Amazon was the right partner for you? And whether we should think of this deal as being the first of perhaps more to come now that you’ve set a tangible set of guardrails for others to adapt and perhaps follow. And just on the financial impact I realize that the affiliate licensing and other revenue line is a bit lumpy, but it’s certainly encouraging to see the expected acceleration from 6% in the second quarter to high singles in the third quarter. Should we think about the implied Q3 contributions is remaining largely steady as you move forward throughout the deal? Or are there escalators or other factors that could change the financial contributions? Just anything you could share would be helpful.

Meredith A. Kopit Levien: Why don’t I start on the first part of the question and then Will can take the second part of the question. I would just say, in general, we continue to be open to doing deals doing the right kinds of deals. Our approach to licensing is grounded in sort of 3 principles. Is it consistent with our long-term strategy to be more essential to more people. Do we see fair value exchange in a way that feels sustainable? And do we have control over how our content is used across the scope of use. I’ll add sort of 2 more things just because I think you’re getting at willingness. I think we have a track record of doing deals with big tech companies when the terms are right. And we also continue to believe that enforcing our rates is important to ensuring a sustainable path to fair value exchange for the long term. So very, very open to it. pleased with this. Looking forward to more. Will you should comment on the second part.

William Bardeen: Yes. On the second part, look, I certainly appreciate the question. We’ve said everything about the terms of the deal already that we’re prepared to say. And I gave my previous response on how that’s impacted Q2 and then the guide for Q3. So I don’t have anything more to add.

Anthony Joseph DiClemente: Thanks, Kutgun. Operator, we have time for one last question or one last analyst to ask a question. Go ahead.

Operator: The last question today comes from Doug Arthur with Huber Research Partners.

Douglas Middleton Arthur: Meredith, can you be a little bit more specific in terms of this traffic question on what you consider direct organic traffic? And how do you define that? What percent .

Meredith A. Kopit Levien: I would say, it’s a great question. We think of direct as people seeking us out, asking for us by name, sort of behaving in a way that reflects the fact that they have made room for us in their lives and that they have a habit with us. And the times has been on a very long journey to drive more of that. That’s a huge underpinning of our essential subscription strategy, which we’re 3 years into. And you can go all the way back to sort of 2015, 2016, when we said sort of the most important things we can do to propel the business were to be essential in more people’s lives and to have that reflected in a direct relationship in a daily habit. So that’s really what we’re getting at. And I would say, ensuring that we have products that have sufficient gravity to do that is really important.

You know we’ve got 150 million registered users and counting, and we’ve got extraordinary apps, particularly our core news app and also now our games app, our cooking app, the athletic gap. And I think those apps present a big opportunity to continue to build direct relationships and deliver on them in a way that people really make room for us in their lives in a way that has them kind of seeking out The New York Times.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Anthony DiClemente for any closing remarks.

Anthony Joseph DiClemente: Great. That’s it. We really appreciate your participation. So thanks for joining us this morning, and we’ll see you next quarter.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.