NYT - Earnings call 3 2023 | The New York Times Company

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Operator

Good morning, and welcome to the New York Times Company's Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Anthony DiClemente, Senior Vice President of Investor Relations. Please go ahead.

Anthony DiClemente

Thank you, and welcome to The New York Times Company's Third Quarter 2023 Earnings Conference Call.

we and Kopit President Will Financial today, Chief President and call Officer. Officer; Executive Bardeen, the have Levien, Meredith and Chief On Executive Vice

will to begin, this of time. assumptions, statements our you would which we on These statements like based expectations Before that the I call. management current make are course may forward-looking during over remind and change

and the and differ SEC XX-K Our to risks are due could subsequent of materially uncertainties actual company's described in results number a that XXXX filings.

posted addition, presentation will include GAAP In have press a note shortly on financial provided copy our comparable With I finally, we website of available that, release, in non-GAAP most that our conclude. will we our investors.nytco.com. And measures, after this website turn which is to reconciliations and please Meredith. to be measures over our at the to call earnings will remarks investor prepared the from the morning's call

Meredith Kopit Levien

Thanks, Anthony, and everyone. good morning,

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and the propels That to the help strategy people to understand every person engage mission, truth become seek for business with the strategy. Our subscription English-speaking world. to world, curious our seeking is understand the essential and

drive direct build packaged audiences Our relationships are is variety experience us coverage a several to of full We news our as they results the believe products product growth sufficiently portfolio enduring bundle. and essential and build that breadth That when lifestyle quarter strategy our underscore people ways. our daily lifelong out success in working directly the that means is as valuable, in economic third opportunity our strong designed. Being creating to seek and bundle fuels and best our habits.

audience our us First, multiple our with opportunity products expand give to each complementary meaningfully the funnel, reach.

see audience for new we demand of users as paying varied range a of better conversion to subscribers interest. our portfolio product wide Second, captures

to creates our fourth, our to enhances better bundle bundle and for opportunities subscribe them and advertisers subscribers, who full more the and people licensees. our discover products. engage enjoy the audiences as bundle monetization Third, better for And engaged of retain as value achieving we're

our of them. subscribers and That reasons, next further we of value products our us streams our perform our we million subscribers. distinctiveness quality of subscribers quarter. premium advantages, beyond revenue subscriptions, essential journalism, gives large a strategy well, engaged subscription XX this these enables all and continues into our For million world-class continued revenue investment surpassed competitive to recurring base of powers and stream, our news in creation. Indeed, the enables products, milestone that comprehensiveness XX and and our growth technology toward and expect underpins and fuel the lifestyle progress scale coverage the This, to turn, lifestyle

and bundle. next longer more, Importantly, That advancing years few product, any monetize be engage better improving thereby half to efforts larger a build subscribers stay our our matters over company. we unit at least subscribers the individual and economics because our to expect and subscribers more bundled of than to the profitable on

our to to now turn third I'll contributors results. the major quarter

adds the played revenues guidance share record subscribers quarterly bundle for set net It an costs. platforms in the achieved and as wider new subscription revenues, strong its our news and environment publishers. We as new subscription beat in wide by margin of We and our was another on operating portfolio growth that starts. other and product advertising quarter, a or digital net our building sent in XXX,XXX the subscribers growth evidence choice paying met adjusted to We resilience. fewer overall in this preferred outsized we see that continued even off that us quarter, and role. strategy This added investments is casual and our are newsreaders

bundle. grew that the homegrown our by over very saw we Connections sports. The our opportunity space. Athletic we big our in another reinforcing is increasingly that hit in clear now million of on-ramps as our non-news proofpoint the again quarter, evidence see XX potential the audience users week, funnels And the also for We are scale in In effective conviction to played Games, in a

to news complementary New our subscribers engagement as is hit level our well subscriber different as product York the years by its percent ability meet of on our the in highest the Times breadth and or the depth coverage testament X to quarter needs. in of of measured apps each This nearly a as week. portfolio sites

appeal products, strengths monetization first-party is X% cohorts, believe give advantage, signals which are: those early long-term quarter, canvasses one, near-term despite the X retention both the the bundled The the engagement. though extending to grew advertisers Athletic, graduate marketers our of better-than-expected from ARPU ad results ever We're who top to quarter prices. promotional which note The platforms. The by revenue us fact benefited world's quarter products the over categories. the Those it more started than in our for volume premium in quality for also quarter-on-quarter. with success emanate with of still a days. Total We and as can in brand's second and and advertising threefold getting ad to our largest decline subscribers We're expect of of improving products that year-on-year now we headwinds. steadily seeing the in revenue time. big and strengths high-performing that from new by print, among the environment our we resiliency that monetization and our three, Times as the reach channels multiple to I'll anchored row higher through are unique growing influential in and from user in are market ad audiences seeing which our the subscriber the of QX, quarter. we particular data encouraged attract nevertheless and consolidated across our well grew we're overall bundle here digital enduring we saw And just are scale across advertising display Two,

of free we QX did growing to This strategy our the wrap the even strategy. I'll we expenses. actively our continued On again flow, our our the investing discipline ability by ARP supports cash as continue which in confidence path successful and ahead. reinforces side, cost our manage cost that to we in into noting execution keep

journalism journalism Our subscription by margin. and leader products in wide lifestyle have us the a made category

improving to Our this more in delivering goals steadily unit And essential our achieve information and and of is we economics. backdrop believe build foundation our strategy against strongly the company. profitable subscription a ever-changing and financial ability with ecosystem, an larger

the turn more me details on quarter. it let over Will to for Now

William Bardeen

morning, Thanks, everyone. and good Meredith,

designed value and to Our customer do growth. than increased essential fuel strategy more subscription is

our unit market-leading news As improve in our and few company profitability to ways. and lifestyle also economics bundle described, of a Meredith digital products designed is just

and value strong time engagement, we because over of potential. the First, ARPU plan bundle subscriber our retention lifetime to increase

and attractive results, costs affiliate areas growth make our revenue year exceeding that period the improving we for $X.XX, quarter, subscribers to by And of as along have engagement demand added digital-only next total financial another management economics converts the digital next the years. Total results. base for and outlook Second, few subscription subscribers well the in period XXX,XXX of the more otherwise key up been margin prior licensing They growth multiproduct we X.X% streams. We I'll a added of these and Please disciplined multiproduct unit I'll comparisons digital year-over-year reflected approximately scaled X% the subscriber did with our by strong interest. the in our expect than net as for subscriber expect advertising Steady business. We of many in acquisition driven up the discuss bundle as steadily audience additional quarter. continued specified. last largely growth and We expansion. to new see bundle now approximately quarter's quarter sustain AOP additions. financial to driving third, year. are over organic path discussion grew in Today, subscriber our to Xx start XX% with unless strong bundle base, fuel XX% note quarter-over-quarter. our multiple will ARPU all and followed we cost our same and performance revenue

subscribers. as well success our from price ARPU tenured our prices, increase was subscribers Our as of the higher continued by digital-only promotional growth ongoing sequential on non-bundled with digital to graduating impact driven

We noted, we digital be greater prices promotional results Meredith of price transitioned rollout. in with higher from as pleased prior than bundled in to continue quarters. to number subscribers to of QX the the And increase

While prices. we retain by them subscribers and subscribers monetize we signals news-only bundle it early, step better is higher still are that to relatively the encouraged as than up

to approximately X% quarter, As digital-only grew and revenues a million. subscribers revenues Total the grew XX% subscription result of the to both $XXX digital-only ARPU in growth in million. third subscription $XXX

contributors in Times core products New from and offerings. flat. compared at our better-than-expected million, first-party Total The of advertising, $XX affiliate with softer and advertising. This headwinds. Other to year-over-year both was results advertising, strength results line revenue to approximately above print and the turning more which growing in performance in driven $XXX display offset continue be Wirecutter was driven X% in towards The we guidance, to of where by high at quarter, than XX% continued the The to to with these quarter to up Athletic growth. million. our were of product $XX in The revenues guidance data coming -- the for York from X% expectations, growth licensing the see was podcast came Now approximately increasing grew primarily helped to advertising strong outperformance advertising expectations X%. Digital growth approximately and strong premium our for by approximately in end our revenue Group million.

Moving and now costs making the growth free to growth. driving and we AOP in flow are cash progress

was continued in sales overall media in our and our us our of saw to improve our our to marketing of and on consolidated our investments of don't leverage driven We and we much broadening the investments. approximately It's was X%. Adjusted the ongoing journalism principally strategic areas journalism in and organically we've general majority have in growth made quarter, which areas and along reflecting future and believe the down product strategic new increasing worth bundle. The to severance of a the market growth. Sales costs approach acquire and X%, onetime our to cost media The ability subscribers by programs, expectations, representative in were spend part efficiencies focus Growth higher our continue of demonstrate our part leveraging these our enabled growth investments administrative compensation cost operating the that increase certain expenses in continued to with to our development. and of QX's growth. in higher of approximately and quarter, line subscriber to product level addressable be fueling marketing spend. improve by was organic due this investments cost large We to effectiveness with have noting items. growth discipline improved to simplification operating G&A marketing due

was strategy's as management, strong adjusted $X.XX XX% drive of over testament prior translated EPS ability earnings XX% of a rate. operating time. This higher revenue our quarter, growth our profit $X.XX. as margin adjusted expansion a increase was also compared We basis and profit results and growth these cash result diluted by to year. per to approximately effective points in $XX cost marketable Adjusted income to an disciplined to a strong to operating share on the interest securities view and million. growth the As margin grew aided growth favorable also earnings tax AOP XXX and into increased

generated has our of cash $XXX model. demonstrating As cash of generation million flow of company free the strong approximately third quarter the end, the year-to-date,

priorities, Turning in subscription want to and allocation take that of advantage. this capital our I to remain my strategy CFO creation first, which extend capital reinvest restate unchanged: full competitive first quarter organically opportunity allocation. the to as ways drive long-term growth in into essential value our to our

share our and Second, to to the in see to consider repurchases. strategic dividends excess capital return we of shareholders a maintain targeted flexibility to third, strategy that return should And form high can acquisitions opportunity. the accelerate

least at million and to $XX stock approach capital have million to of ahead of of over XX% the New of target balanced in $XXX November a we in consolidated Year-to-date, We the returned QX Times returns X, approximately a look through repurchases. I'll a continue with have midterm. free to returning $XX million combination flow Company. now York cash as dividends for

Before do, note to costs I are I operating total ordinary have outside items, to our we updated that which of of items that would like are include presentation our the operations. special course

we operating difficulty due of in guidance costs will special As no the provide for change, this quarterly inherent total a forecasting result to these items. longer

will to for provide We guidance continue operating costs. adjusted

provided order of adjusted calendar, the basis, a fourth quarter a and compared excludes from clarity costs X in included as full the provide XXXX to change details outlook, fiscal And the In of fourth quarter release. XXXX reminder, days quarter guidance revenue the found an to an the Page of year-over-year guidance XXXX. X have revenue our due additional X a to around our days in company's of fourth of which we quarter of be earnings both can XXXX additional comparison. reported our The basis on revenue and fourth on

we subscription basis, XXXX. range are to increase of with are advertising to XX%. Overall These of seeing market. Other increase are expected to a revenues digital-only And revenues to low low- digits, increase digits. subscription fourth to total expected increase digits. On revenues advertising are revenues XX% digits an high-single single advertising expected low the reflect in revenues while quarter to to low- mid-single to of from an compared the X% expected increase the ongoing to XX% visibility decrease are ranges digital to expected mid-single approximately adjusted are

on the be flat aiming X%. On to a of been reported we've to are us, more this than margin year. behind half to beginning in expected we modest the the up basis, adjusted for operating believe we year costs are of deliver range track expansion With

Meredith And up. wrap with to that, I'll send it back to

Meredith Kopit Levien

are results In our closing, subscription Will. essential this Thanks, strategy that is working. quarter's further proof

And at Our into journalism out we ecosystem. who more time. us in our to engagement give many lifestyle single resilient believe us unrivaled different customers willingness an deepen makes pay multi-revenue bundled reasons and the and of ever-changing increases market-leading and deliver more moments. over their the uncertain economy offering people value products to these We world multiproduct model face products information a stream to an seek integrating and

well for we're we our to that readers, value questions. for our means with your and our take continue which of creating All would colleagues shareholders. And positioned for that, be happy to

Operator

Our Thomas will session. We Instructions] question Morgan comes from question-and-answer now begin from Yeh [Operator the Stanley. first

Thomas Yeh

little the marketing during you point? really $X in bundle on of to and week, role what still selling the offered Or this at to news-only the you Can the news-only growth through starts which noticed time? hence, the of talk strategy reduced you just the at I the bundle product that? promotional changed over was Are coming the was is seeing how before. the shifted product equivalent rate you quarter about that or a bit a news-only

William Bardeen

I'm happy on had talked Yes, for promotion, there. value. like we about, as take strategy been Thomas, testing so $X-a-week which to lifetime has know, We the to bundle. we as subscriber the Yes. is see maximize our we've successful news, we And been you what that.

step total a because mapped the the bundle we look call, -- to the look lastly, we is And that engaging to. growth Meredith subscribers, mix so signposts things very bringing the strategy the the more. take and you last in back, much quarter, designed. out total in the at on playing that in that to of way more that. If Those what can see we sort starts in out are I think X want digital-only essentially ARPU. the better, overall that this are in shift paying then bundle discussed, growth retaining And I X And is our

We're longer that marketing So essentially that marketing we no for reason. news-only. bundle see like growth, and are we the bundle to

expect this you're quarter out trends I designed. is And see so as as to working generally you that our the can seeing think strategy play

Meredith Kopit Levien

or that, products which any a that X that, now demand like of at have price, the And or a more background, them them time. sort all over get imagine you getting promotional engage, and the step to beat X up I'm to we're curve seeing. better we we're and then in Thomas, of X ends in able is confidence results going the and people few to gives prices. to higher be of just get of to at better bring we have them track goes a long us to into that's to being to record And working what our execution here. at And good add engage of the either

Thomas Yeh

pressures, of part Makes year-over-year probably Meredith, you've see a aggregator now. news about for And of helpful. be from we that further this year update as been would some Or Are talking year that changes you that just the mentioned perspective? you Okay. then, do sense. better lapping on exit Maybe we and developing? the the an

Meredith Kopit Levien

news that however evolve. The get are here to those Yes. are build ways say to however question, talking the and to that sort to designed That's them. resilient it. going been a probably it's continues to be for quarters us point so beyond now been of the whatever is necessary might to that to products good, so people be -- to we've good a really is find strategy news X in products, ecosystem are year, our would and I people about even

all results strong against that's that. to our do those evidence of a headwinds of what And trying clearly here. first long with thing say. That's to we're continued strategy stated So year is sort think the I

that any for knows, happens. to matter evolving what is of much no that the to be is going ecosystem to keep intended I harness and think to number we're so fair assume that, information it's of reasons but doing what who demand able

Operator

comes question David from Karnovsky next Our from JPMorgan.

David Karnovsky

to comments the decline Will, in for a range sense some just start on the on ARPU in as just prices, bundle on makes should it's up this to graduate we eventually? And number multiproduct given maybe before the ARPU. start your early the or stabilization adds. from sequential and than normal cohorts outlook bit We revenue. which following quarter, wider But on you see QX, then to saw interim net full

think seeing market? And what can cycle you the advertising. news does ad how that's of play you're in Meredith, in to speak that? the we're I to due kind elevated into

Meredith Kopit Levien

Yes. I'll Thanks, range. there advertising, whole just give his And of picture. prepared as is. sort of David. the it in how you uncertainty Will is a On sort said remarks, that Yes, wide much reflects

been data, side, feel that strategy The our our and ad On premium fundamental first-party macro York we that. across advertising the expect in is lot working. core to The and of canvases the positive other and of that The business, even a and demand and both very to news approach we which and economy, Group, the Times for our work, in New resilient really in a is Athletic, continue there's products, really digital tough is working. confident That's

campaigns Also, on is advertisers We categories. bringing is Athletic The really here new a get work the well. lot of across different advertising going idea positive side, existing advertisers. from and

places and you'll Games, -- think So of across the I which ad the talked as kind last we real to we've see more quarter, that there. extending products I portfolio. like the about we're product assertively got the move in optimism And

wide there's under and a fought all I driven of is print. some war kind say hard to decade always At -- to -- One the being think here, guide therefore, uncertain really my would print would second podcasts, call. than quarter. remains being amount remain current of by reasons. really that uncertainty the that X same in -- we print quarter. is lot Print say always news broader In for a Did a good. macro I'd market. it's podcasts, which the the of really time, So of advertising better in pressure feels We'll said it expect is where the is I then And been ad economically, create places continued can expected I last call. say pretty time. And we've And are number then headwinds. a hard and, we see there just of in market now sort the has

those lot level we I'd macro and reasons, broadly, approach So confident working and think on makes with a marketers. say going a underlying our hard ad it at in product feel know. -- for to there's we But very all that for it's set, really just

William Bardeen

on and the multiproduct of bundle And ARPU. trajectory then

working cohorts in have large for time to to our stabilize note, calling designed Those as the eventually period -- And that saw of going shift over rapid of we those prices. lot a extent. the some to a bundled you strategy we is expect bring of bundled only of who is following, as not that that as and of you As that subscribers a that sort been effort This at to sort growth. We're on promotional well. into certainly, cohorts. news back return of bundle and

a our more the to at cohorts as well transitioning digital prices. have leverage you've which lot over big We higher ARPU, from these ones are seeing of X impact increases, going as time on the see been to we're price disposal the of

take that digital-only is we've to ARPU the over said, more continue modestly So for beginning And will impact expand, that as overall year. to time. next increase total expectation

Operator

The comes from next question Ashton Evercore from ISI. Welles

Ashton Wolcott Welles

business forward? point. it's you you're talk going can But early puts about about mid-single-digit seen bit for this the growth talk rate this to about year I low is takes we've to next a and to year XXXX think right how for about at expense rate run the the know thinking

William Bardeen

I'm the on efficiency making of that's of and I impact. We our our year. our telegraphed track development, and continue take it's see into moderate. year invest areas feel XXXX, focused growth being say but cost definitely think on both into guide -- also we product mean performance, key we the relentlessly we that feel of year into next in QX we're good expectation beginning to we're strategically like and highest at cost fair be doing general to the journalism as I reallocating next to ability to on head that. don't our to sure as to our about what while of sort we resources Ashton, to happy that And areas

Operator

The Arthur comes next question from Huber from Doug Research Partners.

Douglas Arthur

you advertising at push strong out And reference which flip disappointment? follow-up. a Or that advertising I really guess backing called I've the digital surprising is Was podcasting The Athletic side results Meredith, The out made? a is the was Athletic, the quite number. was you got of a bit year-over-year. kind a a that then of

Meredith Kopit Levien

you're premium It's pay guide data. our in in in The the closest first-party to, aside own second which is And even Times complicated resilient canvases Athletic, thing your again, York face core sort of I really we and ad remember, group answering better display -- remains Doug, the is there. it. than way doing, setting than the certainly say plus within The attention we first And the the the New is did say, I'll market. that that a how on would more of

of market we in. biggest pressure just broadly in podcasting, the in that moving less is most where seeing then around the what -- you're play money So in and the categories

Douglas Arthur

that investment happening just Is I mean content? What's follow-up, the as then marketing? in at in you Athletic quarter. And Is there? hiring a people? investment robust looked the like The was Are and growth it the expense it pretty Okay.

Meredith Kopit Levien

in going, you they you that broad that widely on The of Will, are more as value we would where seen. you answer. the of suggested kind according at a us is is kind I to appealing acquisition. the we provide point to think things are it say, which and give is is me appropriate. and most think broadly, plan see And going things Let would the The Athletic, on coverage detail the should widely any X drive investing, Athletic, ensuring of

So calls. we've about investment, that's prior a that of and on talked place

That's many that's to expense. The people of it at with to opportunity single and know biggest get more the biggest the think and to and to Athletic area it. read is engage exists it I one,

it's see And of sort play there. increased so anywhere out investment, you'd going to

product the and in creating opportunity digital -- then making experience people. technologically engage in the And to product more

are and So it. there add is going all ad but that's you're number of you're But you very for less beat. there, more so, things think The well. doing some seeing some there -- gas that little doing X number of a very, I'll I a see to it's -- where just fire. bit, things business And on us

William Bardeen

might Athletic well. is part growth of I that as of the more of is doing part are that the The allocating to the the And the and is as things one add just thing, of a of the which The success bundle Athletic bundle we in X of the also sign the success bundle. expenses from growth back

expense growth Athletic to at The you're The going Athletic. see as grows, So

Operator

Vasily comes next question from from Research. Karasyov The Cannonball

Vasily Karasyov

with on, bigger and continue. about follow a to growth comments Meredith, wanted question your will Just confidence your picture in how up that ARPU

sure ARPU that XX longer-term of what estimates So of have goal look internally I'm you million you provide also did like. would subscribers, and

takes it double digits? teens, have? be in York puts and estimating should what about we kind And you of thinking sort expect think I to it be share Times us. with New ARPU Can be? think what right sort that course, can XX be maybe you can to ARPU But of how subscribers where to of directions help million of teens us what would the is estimate when -- the don't Now along that which -- could in

Meredith Kopit Levien

Yes. Great.

Let a ARPU. on satisfyingly and detailed me comments, couple make more answer a broad Will, just of I suspect have you'll

you years not over you're whole to business, asking base more bundle, but million, be than for in on path that XX and the half subs. to just be has aiming of benefit about subs, On economic to to expect next subscriber ways the should us the total myriad really few the the

So push and penetration other to more to subscribers any bundled continuing starts stand-alone or our the news both of products. existing for also for

to more of, X a trajectory. And earlier, or going engage play getting comment, our better in promotional I'd a as are ability this of you is in going have a more, AI to and value. say, we step things number period I as the around better. broad power just that at the a big up over bring tech one is either them And I'll you in referenced more against executing people they to better rises, that, role we a use price ARPU that's multiyear as think, getting I and of well number they prices, execute said realize sort across year far, that earlier, time, then have so Will, better, our So which is make is on on:

So in we take gives to tenure just to to our in increase we engagement Cooking a played of whole history tenure time. in engage this to far. And people then continue for pay Cooking it understand this in like and what us and are that, a We presents big then that's year role subscribers really talked subscribers isn't power. pay Games there us time, We for good do level, news will news, exercise and the see but Times the more executed and subscribers, a doing Games over price more getting and that the based get they most -- them subscribers, at got has now and of pricing and more -- reason first and point more we a time. about Athletic at of over of came three, I and beginning and have think do can point well a one. Two, certain as certain on as The product for, people we've the we so to

those growing time to as on and we point things things, over successful ARPU did expect toward of miss what those all go So would of all bearing to down execution million. up path how I we're Will, volume there? XX

William Bardeen

ARPU what about thinking think is it of generally it midterm, which and all way expectation lots articulated say, I'd we as is is are essentially we takes ourselves. we how the way the they are is won't -- puts still I but year-over-year that's linear there be over Meredith essentially totally about and thinking still it, growth obviously, and the our are described, levers, modest with

Operator

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

Anthony DiClemente

for this forward to talking next you joining we morning, all look you and us to quarter. Thank again

Operator

attending you for presentation. now conference concluded. has The Thank today's

may disconnect. now You

The New York Times Company (NYT) 8 Nov 232023 Q3 Earnings call transcript