NYT - Earnings call transcript Q1 2024 | The New York Times Company

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Operator

Good morning, and welcome to The New York Times Company's First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please also note, today's event is being recorded. At this time, I'd like to turn the floor over to Anthony DiClemente, Senior Vice President of Investor Relations. Sir, please go ahead.

Anthony DiClemente

Thank you, and welcome, everyone, to The New York Times Company's First Quarter 2024 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 which statements current you would may we on These statements like based and Before that the I call. management expectations make are course change forward-looking during time. remind assumptions, over

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

addition, to GAAP financial release provided our In our will and measures, non-GAAP press on our include the presentation website we have at which earnings measures reconciliations is available comparable investors.nytco.com. most in

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

that, with call I Meredith. to And the will turn over

Meredith Kopit Levien

Thanks, Anthony, everyone. good morning, and

demonstrate, QX start strong year. this our to a we're As off results

essential growth for media Our and become the positioning designed working the sustain to world engage dynamic subscription strategy is as seeking every curious to is us through understand to a and our person with environment.

describe me Let how.

addresses seek with audiences giant need out in different First, a sports, our these combined spaces. are to always meaning passionate a and world-class lives Each news in our products The games, products complementary advice distinctive reason large destination in cooking and there's attracting of Times. people's shopping

at the apps we time The each subscribers pandemic. since the during and surge on site are its subscribers Second, point deeply spending engaged. of highest our week is now saw our share

The that we're and value Times. long-term That's with relationships increasing their a users likelihood of building clear to sign delivering

our affiliate level licensing, expect fourth, in ARPU pricing diverse grow high designed use conviction levers. which we've of and monetization And we each as streams reinforces our year-on-year multiple beyond also to to see and multiple engagement power of digital-only in that growth strategically the revenue we XXXX. advertising, product deliver we portfolio Third, can our subscription we

our will of drive that many and our for engagement reach paths grows products type take rapidly revenue. in and execution and the opportunities big new to and to improving changing expect and business portfolio sum, landscape. year audiences profitability of cash free well deep we a That generation. positions In strong subscribers expansion management, focused margin strategy even disciplined as The resilient of advantage more propel With media our us flow well essential cost create of makes another subscription Times as

new We starts single the XX% surpass net growth quarter to subscribers. AOP our now Turning next to XXX,XXX in million results. was powered Bundle multiproduct bundle subscription growth steady subscriber growth of business. in multiproduct well digital our in quarter digital revenue half by subscribers expect end base, progress XX% product we digital of of the first next quarter, by and the had milestone We Volume subscribers the accounting as subscribers over the as subscribers bundle our driven subscribers now making and further to added year. and largely quarter multiproduct our and of represent the XX for first with quarter. and our by on significant a path

to society. the X unique for was Investigative Dreier children subscriber our was highest Pulitzer where deliver migrant working recognized Hannah contributor growth reforms struggles. products And in sweeping journalism Engelhart, ethical is news, war. work International the ensuing pervasive with showcase industry's portrait the and a won Monday, and aftermath past reporter her driving our unsafe of starts having emotional that mother's of into Prize in value. to investigative we Israel for The that to honor. conditions, the Gaza family's and Magazine, our led Prizes, with of legal, dementia documenting and the honored The this ways origins Katie her the received series awards Times business intimate the Reporting Core just government. Times many exploitation for That impacts

the is of extensive thousands photos, of world. the importance videos a from has This and and and of which included recognition real-time ongoing hundreds articles of our the of coverage reporting war, around

audio personally the science-backed Beyond more expanding are and making more we That it journalism includes continuously our listen and voice to a reporting to introducing includes it our report how illuminating life. of wellness, the and most via accessible into health day, tab core to comes by app. also ability urgent our automated by experimenting AI-powered evolving relevant stories of listen with producing the more report, news and introducing new in our ambitiously much

valuable products now homegrown our translates We March. and impact. The daily quarter in millions puzzles and how user released in for word weekly performance in another evidence of tens have and Strands, Games into more users provides the hit Wordle Connections creating with business game of further X of hunt

Our lots of more we to to opportunities have means deliver people. value here growth more

archive of we're the puzzles. Wordle to example, one the ability As X,XXX-plus for unlocking play subscribers full

increase our value, able to with on Given we games to time. the focus product continuing over engagement expect monetization very to strong be add and

of the steady to Madness impacting and free news in sports coaching as March changes, in news destination and drafts and ever awareness making other Athletic at QX, helping the advertising year. were Super growth of quarter-on-quarter, its for the our agency We're major of to fan value levels Bowl We're excited it's audience Athletic and become like giant The keeping a on always-on sports see excelling most where off. also both as and and we've we progress up interest teams. again by Athletic making ambition opportunity track top moments us been coverage is about fuel the next deliberate adding and The paying year-on-year in globally. on about profitability building

delivered another ARPU quarter the modest of year-on-year been targeting growth since we've We XXXX.

reason of to year. expansion, and slightly transition in came ARPU advertising subscribers the the guidance, successfully we'll higher Total this revenue durable ability better declining a print continued less than prices promotional thanks we're expected. growth primary driver than see Our confident ARPU prices, to on is

the feel some impact us the which of to topics QX, product we're our certain together demand seeing continue marketers products expanding a advertiser our ad so in steadily avoiding still, We across are entirety high-performing portfolio, optimism. of Even and we hard quarter. far give in news pickup last

growth flow. direct strong to areas. for This of be and of We increasing, to free in and driven recommendations research-backed products reminding which day business Wirecutter. build should products cover build costs rigorous so in resulted keep we're reallocating that will AOP they and wrap for capable and discipline, Revenue every and habits. healthy quarter we're relationships more cash on by to an strong beyond We are another quarter will people more disciplined you exceeded do and valuable name worthy scaled investing over of subscriptions by licensing together investments strategic by remain a guidance, and the of advertising asked what bigger I'll aggressively with value daily sought execution time. trying believe categories, even Wirecutter's to out,

multiple big our we make offerings growth more value plus with means levers positioned spaces combination these fueling streams. well The resilient world-class our believe multiple revenue creation. destination news market-leading products each lifestyle and for we of Together, in continued business have complementary

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

Roland Caputo

Thanks, Meredith, and good morning, everyone.

free position year stated, demonstrate growth, strong and QX us to flow the cash start to a financial and As year healthy of AOP expansion generation. results our deliver another Meredith margin

market-leading streams. working to Our subscriber our and as of portfolio subscriber products revenue lifestyle increase news is base, grow multiple strengthen and engagement designed our

We scaled, more even subscriber value growth as affiliates help offset revenues for increasing ongoing overall advertising our driving quarter continue in long-term moderated us by we've X% the base we prioritize first leverage has strategic grew print. overall expense position in investments approximately digital declines than our revenue subscription, as and licensing As to creation. that operating

approximately AOP XX.X%. basis margin and Combined with XXX XX% slower-than-expected to approximately points cost growth, quarterly AOP expanded by year-over-year by grew

we free repurchases dividends. approximately $XX $XX cash and continues share QX. strong This our in generation for flow shareholders expectations Our consistent $XX in to capital be in million included returned and with million allocation, to broader million

our of XXX,XXX comparisons are all XXXX of in discuss like compared quarter growth the to was unless results, with for start of a I'll our first added the with the that in XXXX. of multiple of our business. period first otherwise also day We coming additional digital products. leap portfolio with year. quarter the the net year being key from by outlook the subscription financial XXXX first prior across second followed Now sources new as to a note the quarter note there quarter Please one I'd specified. XXXX that I'll discussion subscribers quarter approximately result of

multiproduct now of higher nonbundled transitioning we as to year. to bundled increasing combined bundled subscribers seeing make with the at back points The number the a mentioned, our to up exceeding $X.XX XX% continue Total subscribers As from grew year-over-year end Meredith up path total the by digital-only base promotional along next ARPU XX% X.X% to and of step tenured, prices bundle the tailwind of year ARPU step-up of suggests year. and subscribers. to to raised the the prices subscribers prices throughout half higher on in promising we're monetization

that the single improve value our in expansion monetization portfolio in highlighted, ability over to higher that subscriber Meredith This improve midterm. levels to are for we of as driver one year-over-year product the engagement. reflected increasing and product the Additionally, pricing pattern ARPU we time and target continue seeing the is modest to of in our confidence is continue through

ARPU million, quarter, subscription last the digital of to XX% total guidance As subscribers we approximately grew were higher first a line both with digital-only X% provided to grew $XXX quarter. in in the million. subscription approximately Both $XXX revenues digital-only revenues and and result

of of for Total was $XXX than advertising. a guidance mid-single X.X%. better advertising performed was to better expected. turning This print Now slightly million, decline our advertising modestly decline the as revenue than digits quarter

exceeded our approximately approximately than licensing in better $XX drivers came be guidance, million Other X% the quarter, increasing strong X.X%. Digital growth as advertising in to to were guidance results our guidance continued Wirecutter operating increasing costs range to X% million. affiliate and $XX QX. increasing within revenues Adjusted revenues in by our of

areas to highest relentlessly resources to underlying reflect Our growth continued cost of QX impact. of discipline our reallocating in

some We in drive the unexpectedly that to outperformance compensation our guidance help benefit and relative favorable from benefited QX items also range.

largely revenue expectations, costs approximately content hiring Sales of increased X%, costs. due revenue to enabling due teams, decreased products investment acquisition and marketing as increased to journalism. invest X%, into costs digital to largely due continued growth. our development approximately of of costs our was lower the timing and to part Product organically. product favorable Cost Cost starts and drive continue subscriber technology strategically approximately of as our continue majority our to to XX% the we subscriber into in

Adjusted general that we down due a efficiencies. recorded and like in as to of to first quarter, $X administrative also X% in areas the business. continued note approximately we costs million certain reductions charge were approximately severance targeted of I'd the to drive

growth in income. in disciplined revenue earnings into growth diluted cost EPS steady $X.XX $X.XX. and QX higher EPS interest was adjusted increased also management growth Our translated as to QX strong by aided

revenues XX% quarter Our now approximately Total in tax single Times look with to expected expected subscription increase increase to was while second close are advertising XX%, Company. New expected of approximately digital-only I'll ahead quarter X% to XX%. subscription York are our consolidated increase And to X% XXXX. increase tax QX to advertising low ongoing rate digital digits of to for to the revenues to are the digits. expected are high-single revenues XX%. Overall rate compared the revenues expected marginal

operating expected comp in expected currently flat ad be growth product we're to benefits demand favorable in pickup revenues As extend to increase low seeing X% and are first-party beyond investing costs Other ad which are that Adjusted products don't unexpectedly so QX to to surfaces are our portfolio. that digits. anticipate across to single in increase and Meredith noted, performance QX. premium and more a continuing far expand our to cost reflects are the for we to a we X%, manner disciplined

no close we stated to midterm as expect now subscribers, we AOP essential and our capital to I'll half for due previously working be our by XXXX on to subscription profit remain that track our strong back AOP designed, growth weighted. targets noting achieve and With QX strategy earnings performance, in longer growth returns. our

take to happy your that, With we're questions.

Operator

[Operator David JPMorgan. Instructions] Our comes from question today first from Karnovsky

David Karnovsky

nicely sign-ups? and And for me. ultimately for opportunity translating you into subscriptions Meredith, bundle the to games? product. And Are here your to your then Just in margin Will, QX, remaining any was below on building year? on registrations high benefit? shift I came And to up -- the what to nicely you there you or given can outlook, timing advertising follow engagement view the was growth adjusted on cost just spoke in You any to X of? Wanted be the to wanted aware know Games the outlook. updated quarter, growth to the quarters very to do noted and in think speak this lower? have around you the about how also results some more for around

Meredith Kopit Levien

just they love say, on and in Thanks would App first love, into introduce things. Store Games coming for app And harness web, relationship they're point thing product Games and we power people or gives register. we That is because a us I'll subscription. subscription, in be buy can the them use That And that that effective a other bundled be we they and the direct the Games. and offer Games I is we get really the on it to to be -- have subs start have funnel, we a engaged. mean question, in David. downloading that deeply know subscription broadly, and potential it entry subscription. would that in with to to come and a the the -- the they that if we for times. to say, bundled say I in can over so or someone their we paying them come games ads in people can time, them I both We subs, into invested very relationship come in engagement finding sell them sell just monetization they

surface of continuous over And games, them so And you obviously, one high I'll area that just can and the in love and the that. often. power then that we've exercise new because engagement of with lots mean things of can much value there's the is do to so say, learned time engage with product model pricing have people addition the you

of there. running sort On paid just product have we in proposition I So games free say, room plenty of ad would that that to friendly we've got of to within lots games, a games. ads, optimism broad is more way introduce the

awesome year back will is the the of app Games One redesign. got a that in places and be focused in the half of is which the

for there would so you'll And haven't see you there's some ads say as of formats kinds just products that seen I room the before. different. obviously, because ad of are on Games well the lots experimentation the And within

about So we're very excited that.

William Bardeen

some we've which with quarter, cost for And the we're the quite costs, David, discussing been in overall in core its pleased on the discipline that performance time. reflects

expect Now the to quarter. we remarks, don't as guidance my due relative that benefit extend to outperformance our items I said in part in in to was some the low comp and also unexpectedly QX range beyond

what our focus which forward, really we in to growth reflects there, of X% is manner. investing on looking QX a X% to guide disciplined for believe So

will, context, we if that These And on by a organic areas differentiated maybe in sustainably, put couple disciplined step-back we're weighted points of our growth of growth expansion, And technology. which reallocating the in the of just and terms half given no that the to there, our saw in growth we're relentlessly strong you resources the product the expecting areas longer to focused what the our are the in made flow growth year. cash to on strong and and then back profit we're based mean of AOP we free to growth we QX and journalism be sort strategy. particular year, generation, -- impact, the high year subscriber margin expecting for we're overall of comment

Operator

comes Our Jason Citi. next from Bazinet question from

Jason Bazinet

digital going guys done are side, I those Would on summarizing for for what just what metrics guys roll that looking some you've as key some the looking off, the are promotions to of question. you're just measure very to promotions you a simple have the had changed? you success. those be promotions mind how And of

William Bardeen

we a subscriber strategy we of bring step-up bundled way of That can promotions a vast and is value input higher The quarter And is science offering increasing with pleased up you of that. this is that bundled then those And and dollar primary time numbers of step our into about for, lot on what we've carefully. fronts mean that -- take looking a subscribers, have promotional we're subscribers majority we think this to coming of general lifetime all of is the our we're the reiterating monetization. variety overall, base. I'll is very by Sure. about quarter, is which our imagine, we're as what prices. in driven And our said, to I modeling measuring the retention in a those week seeing we on throughout as and last them over very both as been that. data moments at year. maximizing

Operator

comes Our Karasyov Cannonball Vasily from next from question Research.

Vasily Karasyov

looks I Maybe talk versus higher comps. against down ask underlying for Meredith, by about you had wanted us could going and the to you growth to volume in little a a the detail expect tougher QX trends in like digital break more you that you price growth rate advertising. you because in are it to have

there that getting and you up what in you quarterly digital, maybe driving volume terms are help can And coming display in performance? us of that variance or understand are for comps if are easier So is both this for price. any

Meredith Kopit Levien

Yes.

what the which are we And the up prepared in I'll out you ad I just thing continuously we're feeling said the and remarks, I of that also say, be for think QX, that demand, rolling going important the pick guide. to is see sort of in is supply more in year. say demand most to my rest

the sports. So app high-performing games grow where lot the of places marketer ad demand, like that seeing portfolio and in to products our really we're bringing demand a seeing we're

ad mean And premium I first-party products, when say I high-performing canvases with data.

extending still message of than appeal get the demand just more than out. for really ways broad the a for the are of marketers in big portfolio multiple behind into of of We that And of us. put the multiple with in ahead other to kind sort idea plus The with makes that pickup that a And a process world. kind -- Times places of marketers to to parts

gives that us of All the optimism business. in ad

add are me beat, just which more one premium work first-party They be offering. the data publisher high the those context canvases may Let -- performing in are ad a ads of efficacious. and

we in them. a of So confidence lot have

Vasily Karasyov

you And a release? be high-performing they call say CPMs quick the higher out in that what referred ads, much to follow-up. fair display to ads that as Would than high-performing you it have that the

Meredith Kopit Levien

The of talking way we ad of core canvases. ad is the years sort think business about about premium that digital it, the been for we've now

unit different lot like of have for Frame, the bought is publishing that directly, now, of ad CPM And things. large of about industry. of programmatically, that's is that's sort in -- a generally a Flex what business talking the to. which high ways, business, lot context the that called can different And do a of but we've referring targeting is some building an the been unit a We mostly we're first-party core what with we're our canvas which that was data, years that's

Operator

Our Thomas Morgan Yeh next from question comes Stanley. from

Thomas Yeh

cadence coming help with the through cohorts Just that of on graduation Can eligible are us you following just of think wave the question. up graduation. the bundle up

it, to speed finer mentioned kind some growth the interpret right Will, ARPU on on pick to you put second on year-over-year in your it the greater half think, back is half? just should point opportunity in as of comment a subscriber I ARPU, up

William Bardeen

So Thomas, a couple of points there.

cohorts sort course through just sort of that of I the say getting bigger are on bundled is the cadence the think only that of year. the I'd color,

And coming we're through. we as know, and on more just So guide more don't ARPU. seeing then you

in I mentioned digital-only modest in what couple think essentially things us just we targeted, I total that a is are giving of have which that are general ARPU. growth year-over-year there confidence

X bundle and those so seeing we've And on things monetization. is the that retention step-ups are far been encouraging, the experience

the and things So plays is with And mentioned, the one we second, single-product cohorts, that's is amount us the we has that over and bigger confidence, as is in that us as that highlighted. is of that, confidence think also subscribers, out something ARPU engagement of bigger giving giving Meredith trajectory. as this increasing then which time

as time the and And over the opportunities us gives in more pattern, also that engagement we've found [indiscernible] pricing monetization.

among of X for those the we good target the levers, expectation put with the year-over-year given So several sort ARPU there we've about feel trajectory out ARPU modest expansion.

Thomas Yeh

I I there is stand-alone last pulled think safe Is the for sense. of tenured and more of the to? subs. the success say mean more kind you potentially given that Makes rollout year, front, Okay. of the it that on to spoke lever the that, engagement pricing that you for appetite

William Bardeen

continue continue a at safe really a to to levels that consumers value as that we time. at see We're engagement, always I to as as increasing pricing, us are that improve expect think way to value that's to in it's reflected value. looking continue over and into look meaning products monetization you should just use the experiencing and add lever, to and something that of say

Operator

Next comes Doug from Arthur from Research Partners. Huber question

Douglas Arthur

struck your got and I -- growth. more something that comment the follow-up. with traffic driving that mean, the rest obviously, the we've the down, I Is in think NYT. then that Will, you something XXXX something benefit In year? or will Is is of funnel, a for sales quarter. seen And I -- being the that before X% I the marketing the the was by know, don't you're of organic

William Bardeen

Yes.

we've subscribers the that always I clear think majority expect let to experienced I to experience of our me continue make and sure I'm in vast coming think organically.

spending. fluctuate, can marketing of I we're quarter, any -- think actually of given terms very we're the that amount on in

few see of and line in a can costs putting ones there. consider much but be certainly we we media subscriber just And acquisition focused quarter. one we're into marketing main when fluctuate will sales the And really for particularly how being attractive. the We're reasons, ROI that so leaning

that fluctuate about quarter. you've strategy time. our to I we you think a over seen, leverage have will is Overall, leverage to everything and around and way And that -- that said the our model continue can given we've as works so the to this we expect on line that on expect get seen

Anthony DiClemente

you a Did have follow-up?

Douglas Arthur

a just licensing of adjusted nitpick. have press very add is I Page item, a, the b, On that XX that new? Yes, to release, back small, And you've content is got this that, Is an EBITDA? $XXX,XXX.

William Bardeen

Okay.

So making were we're we describing. you just sure understand what

Douglas Arthur

I'm with broken Page schedule these costs on the looking XX out. at

William Bardeen

Yes.

licensing is represents So Times Athletic for use York The and The New at that Times. of what content athletic essentially intercompany between

Douglas Arthur

out mean, mean, I And I Okay. you're your cost -- laying look because here.

can to looks a think sort with it? fair normalized it of about way duplication it's this EBITDA Is We So that of later. like is add that in terms a back. deal --

William Bardeen

to then athletic. and It's expense Doug, to NYT, revenue the

for consolidated about we're same If But understand the to the you're sure can an right, follow talking we're impact. that's the thing. explanation. So that -- make we if company we wouldn't have

Anthony DiClemente

us you quarter. All all again you to thank for We this that, forward to morning. look right. with joining talking Well, next

Operator

today's thank for presentation. now and concluded. Ladies you attending has conference gentlemen, We the

You disconnect may your now lines.

The New York Times Company (NYT) 8 May 242024 Q1 Earnings call transcript