New York Times(US:NYT)2024-11-04 18:19PART I Financial Information Item 1. Financial Statements This section presents The New York Times Company's unaudited condensed consolidated financial statements for Q3 2024, covering balance sheets, income, equity, and cash flows, with detailed accounting notes Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2024 (Unaudited) | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $794,980 | $781,653 | | Total Assets | $2,762,101 | $2,714,595 | | Total Current Liabilities | $589,598 | $611,559 | | Total Liabilities | $910,049 | $951,376 | | Total Stockholders' Equity | $1,852,052 | $1,763,219 | Condensed Consolidated Statements of Operations Q3 2024 vs Q3 2023 Statement of Operations (in thousands, except per share data) | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Total Revenues | $640,178 | $598,345 | | Subscription | $453,327 | $418,577 | | Advertising | $118,370 | $117,113 | | Operating Profit | $76,727 | $63,567 | | Net Income | $64,143 | $53,615 | | Diluted EPS | $0.39 | $0.32 | Nine Months 2024 vs 2023 Statement of Operations (in thousands, except per share data) | Metric | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | | Total Revenues | $1,859,290 | $1,749,937 | | Subscription | $1,321,654 | $1,225,709 | | Advertising | $341,244 | $341,124 | | Operating Profit | $204,456 | $147,242 | | Net Income | $170,100 | $122,510 | | Diluted EPS | $1.03 | $0.74 | Condensed Consolidated Statements of Comprehensive Income - Comprehensive income attributable to common stockholders was $72.6 million for Q3 2024, an increase from $54.4 million in Q3 2023 For the first nine months, comprehensive income was $181.2 million in 2024, up from $129.5 million in 202311 Condensed Consolidated Statements of Changes In Stockholders' Equity - Total stockholders' equity increased to $1.852 billion as of September 30, 2024, from $1.763 billion at the end of 2023 The increase was primarily driven by net income of $170.1 million, partially offset by dividends paid ($65.0 million) and share repurchases ($60.7 million)15 Condensed Consolidated Statements of Cash Flows Cash Flow Summary for the Nine Months Ended Sep 30 (in thousands) | Cash Flow Category | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $258,816 | $224,100 | | Net cash used in investing activities | ($197,459) | ($97,288) | | Net cash used in financing activities | ($144,641) | ($111,816) | | Net (decrease)/increase in cash | ($83,284) | $14,996 | Notes to the Condensed Consolidated Financial Statements - The company operates under two reportable segments: The New York Times Group ("NYTG") and The Athletic20 Revenue Breakdown by Type (Q3 2024 vs Q3 2023, in thousands) | Revenue Type | Q3 2024 | Q3 2023 | % Change | | :--- | :--- | :--- | :--- | | Subscription | $453,327 | $418,577 | 8.3% | | Advertising | $118,370 | $117,113 | 1.1% | | Other | $68,481 | $62,655 | 9.3% | | Total | $640,178 | $598,345 | 7.0% | Subscription Revenue Breakdown (Q3 2024 vs Q3 2023, in thousands) | Subscription Type | Q3 2024 | Q3 2023 | % Change | | :--- | :--- | :--- | :--- | | Digital-only | $322,198 | $282,228 | 14.2% | | Print | $131,129 | $136,349 | -3.8% | | Total | $453,327 | $418,577 | 8.3% | Advertising Revenue Breakdown (Q3 2024 vs Q3 2023, in thousands) | Advertising Type | Q3 2024 | Q3 2023 | % Change | | :--- | :--- | :--- | :--- | | Digital | $81,564 | $75,001 | 8.8% | | Print | $36,806 | $42,112 | -12.6% | | Total | $118,370 | $117,113 | 1.1% | - The company filed a lawsuit against Microsoft and OpenAI on December 27, 2023, for copyright infringement and other violations related to the use of its content in generative AI products78 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q3 2024 financial performance, highlighting strong digital-only subscriber and revenue growth, increased operating profit, and analysis of revenue, costs, segment performance, liquidity, and capital resources - Added approximately 260,000 net digital-only subscribers in Q3 2024, reaching a total of 10.47 million digital-only subscribers81 - Total digital-only Average Revenue Per User (ARPU) increased 1.8% year-over-year to $9.45, driven by subscribers graduating from promotional pricing and price increases for tenured subscribers8193 Q3 2024 Financial Highlights vs. Q3 2023 | Metric | Q3 2024 | Q3 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $640.2M | $598.3M | +7.0% | | Total Subscription Revenues | $453.3M | $418.6M | +8.3% | | Digital-only Subscription Revenues | $322.2M | $282.2M | +14.2% | | Operating Profit | $76.7M | $63.6M | +20.7% | | Adjusted Operating Profit | $104.2M | $89.8M | +16.1% | Results of Operations Digital-Only Subscribers by Category (in thousands) | Category | Sep 30, 2024 | Sep 30, 2023 | | :--- | :--- | :--- | | Bundle and multiproduct | 5,120 | 3,790 | | News-only | 2,110 | 3,020 | | Other single-product | 3,240 | 2,600 | | Total digital-only subscribers | 10,470 | 9,410 | - Digital advertising revenue increased 8.8% YoY in Q3 2024, driven by higher open-market programmatic revenues and direct-sold display advertising Print advertising revenue declined 12.6% YoY, reflecting ongoing secular trends9596 - Cost of revenue increased 6.7% in Q3 2024, primarily due to higher journalism costs ($14.5 million) from increased compensation and headcount, as well as higher subscriber servicing and digital content delivery costs100 - The Athletic segment reported an adjusted operating profit of $2.6 million in Q3 2024, a significant improvement from a loss of $7.9 million in Q3 2023, driven by a 29.8% increase in revenue112120 Liquidity and Capital Resources - As of September 30, 2024, the company had cash, cash equivalents, and marketable securities totaling $820.4 million130 - During the first nine months of 2024, the company repurchased approximately $60.3 million of its Class A shares As of September 30, 2024, approximately $190.2 million remained under the 2023 share repurchase authorization130 Free Cash Flow (Nine Months Ended Sep 30, in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $258,816 | $224,100 | | Less: Capital expenditures | ($21,115) | ($16,539) | | Free cash flow | $237,701 | $207,561 | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes to its market risks compared to the disclosures in its 2023 Annual Report on Form 10-K - There were no material changes in the company's market risks as of September 30, 2024, compared to December 31, 2023143 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of September 30, 2024, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of September 30, 2024145 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls146 PART II Other Information Item 1. Legal Proceedings This section discloses the company's legal actions, specifically highlighting the copyright infringement lawsuit against Microsoft and OpenAI regarding generative AI products - The company is pursuing a lawsuit against Microsoft and OpenAI for copyright infringement, unfair competition, and trademark dilution related to their generative AI products148 Item 1A. Risk Factors The company reports no material changes to the risk factors previously disclosed in its 2023 Annual Report on Form 10-K - No material changes to risk factors have occurred since the 2023 Annual Report on Form 10-K149 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's Q3 2024 share repurchase activities, including shares repurchased and remaining authorization Issuer Purchases of Equity Securities (Q3 2024) | Period | Total Shares Purchased | Average Price Paid Per Share | Approx. Value Remaining for Repurchase | | :--- | :--- | :--- | :--- | | Jul 2024 | 120,184 | $52.90 | $202,132,000 | | Aug 2024 | 110,582 | $54.00 | $195,861,000 | | Sep 2024 | 110,690 | $54.20 | $190,161,000 | | Total Q3 | 341,456 | $53.70 | $190,161,000 | Item 5. Other Information The company reports no adoption or termination of Rule 10b5-1 trading plans by directors or executive officers during Q3 2024 - No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during Q3 2024152 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including officer certifications and XBRL data files