The New York Times Company announced Wednesday that digital-only subscriptions jumped 36% during the quarter. This offsets a nearly 7 percent decline in print subscriptions in the previous year. However, digital advertising revenue fell 2.4%.
Yahoo Finance reported that the company earned adjusted earnings of 24c per share. This is a 12 cent decrease from last year but still a solid increase on the average 19c per share analysts expected. From $498.5million in the 2021 quarter, the total revenue for the quarter rose 11.5% and reached $555.7 million. Analyst expectations were for revenue of $552.2 million. This was an average increase.
This included a 13.1% increase in subscription revenue to $383.6million and a 4.1% increase in advertising revenue up to $117.4million.
Digital advertising revenue declined 2.4% to $69.3million, but it was still up 3.4% over the previous quarter. This was offset by an increase of 15% in print advertising revenue to $48.1million. All subscription gains were digital.
“Our advertising revenue is cyclical and it’s subject to significant fluctuations as a result of exogenous conditions,”During the conference calls with analysts, Meredith Kopit Levien, President and CEO, spoke out to discuss the results. Digital advertising saw “real pressure”The quarter was dominated by finance, streaming, and tech.
“Having been in and around the ad business for a long time, I would call the patterns we’re currently seeing in line with what we’d expect given the macroeconomic uncertainty,” Levien said, adding, “We fully expect digital advertising to be a growth driver over the midterm.”
The company finished the quarter with 9.17million paid subscribers, an increase of 30%. But that only included 760,000 print subscribers. This is a 6.7% drop from the 2021 2nd quarter. The number of digital-only subscribers rose 36% from 6.2 million to 8.4 million last year. Digital subscriptions increased 82,000 compared to the previous quarter. Print subscriptions decreased by 20,000.
On a net basis the company added 387,000 new digital subscribers. “We are feeling confident that our churn number is manageable,”According to the CEO. “And there’s nothing in the quarter that we’re seeing that makes us overly concerned about churn.”
The bright spot in the results was 26% growth in multiproduct subscribers. These are those who sign up to The Athletic, a sports-focused outlet that was purchased on February 1, along with games, cooking and Wirecutter items. The company refers to this as The Athletic. “bundle.”
“We’re really pushing the bundle,” Levien said. “We’re intervening in the news flow to get people to buy the bundle instead and having real success with that… We’re incredibly focused on that at this point.”
Levien indicated that while the Times does not provide data on how long their readers spend on their sites, Levien said that it was a quarter. “relatively strong period”for subscriber engagement, which was roughly in line last year.
The digital side of the business, which includes the Athletic, saw an average revenue per user drop by 1.2% to $9.04 (a 5.3% decrease since the first quarter). According to Wordle, the company believes that Wordle’s acquisition on January 31 has led to an increase in the popularity of games which has resulted in more users.
Levien also mentioned the growing number of Times newsletters as an example of a marketing tactic. “real progress”To increase subscriber engagement and retention
The 19.6% increase in operating costs was not enough to offset the higher overall revenue. Operating profit fell 29.5%, to $51.7million. Adjusted Operating Profit fell 18%, to $76.2 Million.
The Athletic reported an adjusted operating loss (adjusted) of $12.6million for the quarter. The Athletic’s declines reflect expected operating losses. The Athletic’s performance is expected to improve in the second half of the year, executives said.
The New York Times Group’s adjusted operating profit slipped 4.4% to $88.8 million.
Levien stated that the company anticipates slowing spending growth in the second-half due to the slowing economy. “The big difference is going to be in our marketing spend,”During the conference call, Roland Caputo, CFO, stated. “We don’t expect to slow cost growth in journalism or in our engineering.”
The net income of the company was $61.8million, or 37c per share. This is an increase of 13.7% over $54.3 million (32c per share) in 2021’s second quarter. The results included a $34.2 million, or 15 cents per share, gain related to a deal to lease and subsequently sell four acres in Queens, New York, adjacent to the company’s printing and distribution facility.
New York Times shares fell 23 cents to $30.91 in morning trading. The stock has dropped 36% in the past year.
