NYTimes Earnings Boosted By Digital Bundle

 

The New York Times Co beat Wall Street estimates for quarterly earnings on Wednesday as more people signed up for its digital subscription bundles, offsetting a slowdown in ad sales and helping the newspaper unveil a $250 million share buyback, reports Reuters.

The Times has in the past few years embarked on a bundling push, combining its core news reports with digital content ranging from podcasts to cooking recipes and games in hopes of getting more revenue from readers.

The company's shares rose 10% to $40 as the publisher added 240,000 digital-only subscribers in the fourth quarter, compared with 180,000 in the third quarter.

For the year, the newspaper added more than a million subscribers, the second most since 2020 when the pandemic dominated headlines. It has a goal of 15 million subscribers by 2027.

"With each passing quarter, we saw more proof that there is strong demand for a bundle of our news and lifestyle products," Chief Executive Meredith Kopit Levien said.

In the December quarter, the New York Times' revenue was $667.5 million, beating the $646.4 million estimated by analysts. Adjusted profit of 59 cents per share was also above estimates of 43 cents.

Its digital advertising revenue was flat in the quarter and the company expects the measure to decrease by "low-single digits" in the first quarter, mirroring the weakness seen at other ad-reliant companies such as Snap Inc.

The Times face pressure from an activist investor, ValueAct, to more aggressively sell its bundled subscriptions, which include Cooking, Games and Wirecutter as well as the core digital news app. ValueAct disclosed in August that it had built a nearly 7 percent stake in The Times.

The company said it expected digital subscription revenue in the first quarter of 2023 to increase 13 to 16 percent from a year ago, though it forecast a decrease in advertising revenue.

The Athletic, which The Times bought for $550 million, continued to lose money, with an adjusted operating loss of $6.9 million in the fourth quarter. It has lost about $36 million since the acquisition. In 2021, before The Times acquired it, The Athletic lost $55 million. It generated $85.7 million in revenue in 2022, up from about $65 million the year before.

What The New York Times owns. In addition to the newspaper, website and app, The New York Times Company owns Wirecutter, The Athletic, NYT Cooking and NYT Games, which includes Spelling Bee and Wordle. Each product operates independently and is sold as a separate subscription or as part of a bundle with the news site and app. (Wordle is free.)