New York Times(NYT) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Report Overview The New York Times Company achieved strong Q2 2025 results with significant growth in subscribers, revenues, and profitability across all segments Key Highlights The New York Times Company reported a strong second quarter for 2025, with growth across all major revenue streams and significant free cash flow generation. The company's strategy of investing in journalism and its product portfolio continues to drive subscriber growth and increased profitability, with operating profit rising 34.2% year-over-year - The company added approximately 230,000 net new digital-only subscribers in Q2 2025, bringing the total to 11.88 million subscribers[4] - The CEO highlighted that the company's strategy is working as designed, leading to growth in all major revenue lines and significant free cash flow, enabling continued investment in journalism and product development[3] Q2 2025 Key Performance Indicators (YoY) | Metric | Q2 2025 Value | YoY Change | | :--- | :--- | :--- | | Total Digital-Only ARPU | $9.64 | +3.2% | | Digital Subscription Revenues | - | +15.1% | | Digital Advertising Revenues | - | +18.7% | | Operating Profit | $106.6 million | +34.2% | | Adjusted Operating Profit | $133.8 million | +27.8% | | Diluted EPS | $0.50 | +$0.10 | | Adjusted Diluted EPS | $0.58 | +$0.13 | Summary of Quarterly Results This section provides a five-quarter overview of key operational and financial metrics, highlighting consistent growth in subscribers and profitability Quarterly Performance Trends This section presents a five-quarter summary of key operational and financial metrics, illustrating consistent growth in subscribers, digital revenues, and profitability. Q2 2025 saw total revenues reach $685.9 million, a 9.7% year-over-year increase, with adjusted operating profit growing 27.8% to $133.8 million Key Metrics Comparison (Q2 2024 vs Q2 2025) | Metric | Q2 2024 | Q2 2025 | YoY Change | | :--- | :--- | :--- | :--- | | Digital-only subscribers (millions) | 10.21 | 11.30 | +10.7% | | Total digital-only ARPU | $9.34 | $9.64 | +3.2% | | Digital-only subscription revenues ($M) | $304.5 | $350.4 | +15.1% | | Digital advertising revenues ($M) | $79.6 | $94.4 | +18.7% | | Total revenues ($M) | $625.1 | $685.9 | +9.7% | | Operating profit ($M) | $79.4 | $106.6 | +34.2% | | Adjusted operating profit ($M) | $104.7 | $133.8 | +27.8% | | Diluted EPS | $0.40 | $0.50 | +25.0% | | Adjusted diluted EPS | $0.45 | $0.58 | +28.9% | Consolidated Financial Results The company's consolidated financial performance in Q2 2025 demonstrates robust growth in digital subscribers and revenues, alongside managed increases in operating costs Subscribers and Average Revenue Per User (ARPU) The company's digital-only subscriber base grew to 11.30 million, a net increase of 1.08 million year-over-year. Total digital-only ARPU rose by 3.2% to $9.64, primarily due to subscribers moving from promotional to higher-priced plans and price increases for tenured subscribers - At the end of Q2 2025, the company had 11.88 million total subscribers, with 11.30 million being digital-only[9] - Digital-only subscribers increased by 230,000 compared to Q1 2025 and by 1,080,000 compared to Q2 2024[10] - The 3.2% YoY increase in total digital-only ARPU to $9.64 was driven by subscribers transitioning off promotional pricing and targeted price increases[12] Revenue Analysis Total revenues for Q2 2025 increased by 9.7% to $685.9 million. This growth was propelled by a 15.1% rise in digital-only subscription revenues and an 18.7% increase in digital advertising revenues. Print subscription revenues saw a slight decline Q2 2025 Revenue Breakdown (YoY) | Revenue Stream | Q2 2025 ($M) | Q2 2024 ($M) | YoY Change | | :--- | :--- | :--- | :--- | | Digital-Only Subscription | $350.4 | $304.5 | +15.1% | | Print Subscription | $131.1 | $134.8 | -2.8% | | Total Subscription | $481.4 | $439.3 | +9.6% | | Digital Advertising | $94.4 | $79.6 | +18.7% | | Print Advertising | $39.6 | $39.6 | -0.1% | | Total Advertising | $134.0 | $119.2 | +12.4% | | Affiliate, Licensing & Other | $70.5 | $66.6 | +5.8% | | Total Revenues | $685.9 | $625.1 | +9.7% | - Digital advertising growth was mainly due to new advertising supply in areas of strong marketer demand[14] Operating Costs Total operating costs rose 6.2% year-over-year to $579.3 million, while adjusted operating costs increased 6.1% to $552.1 million. The increase was primarily driven by higher journalism costs, subscriber servicing costs, and sales and marketing expenses, including a 15.9% rise in media expenses to promote subscriptions - Total operating costs included $3.5 million in Generative AI Litigation Costs in Q2 2025, compared to $2.0 million in Q2 2024[17] Q2 2025 Operating Costs Breakdown (YoY) | Cost Category | Q2 2025 ($M) | Q2 2024 ($M) | YoY Change | | :--- | :--- | :--- | :--- | | Cost of revenue | $338.8 | $322.8 | +5.0% | | Sales and marketing | $69.2 | $61.3 | +12.8% | | Product development | $63.9 | $62.2 | +2.8% | | General and administrative | $82.6 | $76.9 | +7.4% | | Total Operating Costs | $579.3 | $545.7 | +6.2% | Business Segment Results Both the New York Times Group and The Athletic segments demonstrated strong revenue growth, with The Athletic achieving a significant turnaround to profitability The New York Times Group (NYTG) The NYTG segment reported an 8.1% increase in revenues to $632.4 million and a 19.5% increase in adjusted operating profit to $128.0 million. Growth was driven by strong performance in digital subscription and digital advertising revenues, which offset a decline in print subscription revenue NYTG Segment Performance - Q2 2025 (YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenues | $632.4 | $585.2 | +8.1% | | Subscription Revenues | $446.8 | $410.0 | +9.0% | | Advertising Revenues | $119.9 | $112.1 | +7.0% | | Adjusted Operating Costs | $504.4 | $478.1 | +5.5% | | Adjusted Operating Profit | $128.0 | $107.1 | +19.5% | The Athletic The Athletic segment achieved a significant milestone, reporting an adjusted operating profit of $5.8 million, a substantial turnaround from a $2.4 million loss in the prior-year quarter. Total revenues grew by 33.4% to $54.0 million, fueled by strong growth in advertising (up 98.8%) and subscriptions (up 18.1%) The Athletic Segment Performance - Q2 2025 (YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenues | $54.0 | $40.5 | +33.4% | | Subscription Revenues | $34.6 | $29.3 | +18.1% | | Advertising Revenues | $14.1 | $7.1 | +98.8% | | Adjusted Operating Costs | $48.3 | $42.9 | +12.5% | | Adjusted Operating Profit/(Loss) | $5.8 | ($2.4) | +$8.2M | Other Financial Information and Liquidity The company demonstrated strong bottom-line growth with increased EPS and maintained a robust financial position with significant cash reserves and free cash flow Income, Taxes, and Earnings Per Share (EPS) Higher pre-tax income led to increased income tax expense, with the effective tax rate rising to 25.7%. The company delivered strong bottom-line results, with diluted EPS increasing by 25% to $0.50 and adjusted diluted EPS growing by 28.9% to $0.58 year-over-year - Net interest income increased to $9.8 million from $8.7 million YoY, due to higher cash balances and interest rates[28] Q2 2025 Earnings Per Share (YoY) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Diluted EPS | $0.50 | $0.40 | +25.0% | | Adjusted Diluted EPS | $0.58 | $0.45 | +28.9% | Liquidity and Capital Management The company maintains a robust financial position, ending the quarter with $951.5 million in cash and marketable securities. Free cash flow for the first half of 2025 was strong at $193.2 million. The company also increased its credit facility to $400 million and continued its share repurchase program, buying back $23.6 million in stock during the quarter - Cash and marketable securities increased to $951.5 million as of June 30, 2025[31] - The company amended its credit facility, increasing the amount to $400 million and extending the maturity to 2030. No borrowings were outstanding[32] - Free cash flow for the first six months of 2025 was $193.2 million, compared to $119.3 million in the same period of 2024[33] - The company repurchased 460,136 shares for approximately $23.6 million in Q2 2025, with $422.2 million remaining under the repurchase authorization[34] Outlook The company anticipates continued strong growth in digital revenues for Q3 2025 and provides full-year projections for key financial items Third-Quarter 2025 Guidance For the third quarter of 2025, the company anticipates continued strong growth, particularly in its digital businesses. Digital-only subscription revenues are expected to increase by 13% to 16%, and digital advertising revenues are projected to grow in the low-double-digits Q3 2025 Guidance (YoY Growth) | Metric | Expected Increase | | :--- | :--- | | Digital-only subscription revenues | 13% - 16% | | Total subscription revenues | 8% - 10% | | Digital advertising revenues | Low-double-digits | | Total advertising revenues | Low-to-mid-single-digits | | Affiliate, licensing and other revenues | High-single-digits | | Adjusted operating costs | 5% - 6% | Full-Year 2025 Projections The company provides full-year 2025 pre-tax projections for key financial items, expecting approximately $80 million in depreciation and amortization, $40 million in net interest income, and $40 million in capital expenditures Full-Year 2025 Projections (Pre-tax) | Item | Projected Amount | | :--- | :--- | | Depreciation and amortization | ~$80 million | | Interest income and other, net | ~$40 million | | Capital expenditures | ~$40 million | Financial Statements and Supplemental Data This section provides detailed financial statements, including consolidated operations, subscriber metrics, and reconciliations of non-GAAP financial measures Condensed Consolidated Statements of Operations The consolidated statements of operations provide a detailed view of the company's financial performance for the second quarter and first six months of 2025. For Q2, total revenues grew 9.7% to $685.9 million, while operating profit increased 34.2% to $106.6 million, resulting in a net income of $82.9 million Q2 2025 Statement of Operations Highlights (YoY) | Line Item ($ thousands) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total revenues | $685,873 | $625,097 | +9.7% | | Total operating costs | $579,322 | $545,687 | +6.2% | | Operating profit | $106,551 | $79,410 | +34.2% | | Income before income taxes | $111,664 | $87,083 | +28.2% | | Net income | $82,945 | $65,540 | +26.6% | Supplemental Subscriber and ARPU Information This section offers a granular breakdown of the digital subscriber base and ARPU. As of Q2 2025, of the 11.30 million digital-only subscribers, 6.02 million were bundle and multiproduct subscribers. Bundle ARPU was the highest at $12.52, while news-only ARPU stood at $12.28 Digital-Only Subscriber Breakdown (in thousands) | Subscriber Type | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Bundle and multiproduct | 6,020 | 5,760 | 4,830 | | News-only | 1,690 | 1,790 | 2,290 | | Other single-product | 3,590 | 3,500 | 3,100 | | Total digital-only | 11,300 | 11,060 | 10,210 | Digital-Only ARPU Breakdown | ARPU Type | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Bundle and multiproduct | $12.52 | $12.38 | $11.96 | | News-only | $12.28 | $12.12 | $11.26 | | Other single-product | $3.51 | $3.54 | $3.65 | | Total digital-only ARPU | $9.64 | $9.54 | $9.34 | Reconciliation of Non-GAAP Financial Measures This section provides detailed reconciliations of non-GAAP measures to their most comparable GAAP counterparts. For Q2 2025, adjusted diluted EPS of $0.58 is reconciled from a GAAP diluted EPS of $0.50, and adjusted operating profit of $133.8 million is reconciled from a GAAP operating profit of $106.6 million. Free cash flow for the first six months was $193.2 million Q2 2025 Reconciliation of GAAP to Adjusted Diluted EPS | Description | Per Share Amount | | :--- | :--- | | Diluted EPS (GAAP) | $0.50 | | Amortization of acquired intangible assets | $0.04 | | Severance | $0.01 | | Non-operating retirement costs | $0.04 | | Special items (Generative AI Costs) | $0.02 | | Income tax expense of adjustments | ($0.03) | | Adjusted diluted EPS (Non-GAAP) | $0.58 | Q2 2025 Reconciliation of GAAP to Adjusted Operating Profit ($ thousands) | Description | Amount | | :--- | :--- | | Operating profit (GAAP) | $106,551 | | Depreciation and amortization | $21,396 | | Severance | $1,000 | | Multiemployer pension plan withdrawal costs | $1,338 | | Generative AI Litigation Costs | $3,490 | | Adjusted operating profit (Non-GAAP) | $133,775 | Reconciliation to Free Cash Flow - First Six Months 2025 ($ thousands) | Description | Amount | | :--- | :--- | | Net cash provided by operating activities | $212,726 | | Less: Capital expenditures | ($19,573) | | Free cash flow | $193,153 |