The New York Times Co. stock ( NYSE: NYT ) is modestly higher after its second-quarter earnings best profit expectations again and a double-digit revenue gain topped consensus.
Revenues grew 11.5% to $555.7M, and digital subscriptions again outperformed, rising 25.5% to $238.7M. It posted its first decline in digital advertising revenue since 2020, though, as it joined advertising-exposed peers in facing up to a broad slowdown. Total ad revenue rose just over 4%.
Adjusted operating profit dipped 4.4% to $88.8M as the higher revenues were more than offset by higher costs. At its recent acquisition The Athletic, operating loss was $12.6M.
The company added about 180,000 net new digital-only subscribers (a 70% improvement year-over-year), and 230,000 subs vs. the end of the first quarter.
The macro slowdown in its business is playing out largely as expected, CEO Meredith Kopit Levien said on the company's conference call, and the company is slowing costs accordingly. She added that The Athletic is performing better than expected.
One key success story came in getting more people to buy the company's all-access bundle, she said. "News remains core to our value proposition. But the bundle helps ensure that The Times is indispensable to an ever-widening group of people – even as news engagement ebbs and flows."
New starts to the bundle hit a record in Q2, and it made up a majority of the quarter's total net subscriber additions, she added. The Athletic saw 50,000 stand-alone net adds, a 50% improvement year-over-year.
Overall, the company ended the quarter with about 9.17M paid subs across print and digital, 8.41M of them paid digital only subscribers with 9.81M digital-only subscriptions, and they're "well on our way to our next mile marker of 15M subscribers by the end of 2027," Kopit Levien said.
For the third quarter, the company expects total subscription revenue will rise 5-7% year-over-year, with digital-only sub revenue up 10-14%. Ad revenues, meanwhile, are expected to decline in the low to mid-single digits, with digital ads down 4-8%. Other revenues are expected to fall about 5%.
Adjusted operating costs are expected to increase in the mid-single digits; cost growth for the group is expected to "slow considerably" in the second half of the year.
NYT is reaffirming full-year profit guidance; it continues to expect growth in adjusted operating profit but that growth won't entirely offset near-term dilutive impact of The Athletic.
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New York Times stock rises as it adds subs in face of ad slowdown