New York Times(US:NYT)2025-08-06 18:20Part I: Financial Information Item 1. Financial Statements The financial statements detail the company's financial position as of June 30, 2025, showing slight asset decrease, strong Q2 revenue and profit growth, and increased operating cash flow for H1 2025 Condensed Consolidated Balance Sheets Total assets slightly decreased to $2.81 billion as of June 30, 2025, driven by lower current assets, while liabilities decreased and equity increased Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $855,002 | $936,322 | | Total Assets | $2,805,036 | $2,841,479 | | Total Current Liabilities | $577,985 | $613,529 | | Total Liabilities | $869,328 | $914,270 | | Total Stockholders' Equity | $1,935,708 | $1,927,209 | Condensed Consolidated Statements of Operations Q2 2025 total revenues grew 9.7% to $685.9 million, with operating profit up 34.2% and net income rising 26.6% Q2 2025 vs Q2 2024 Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $685,873 | $625,097 | 9.7% | | Subscription Revenues | $481,420 | $439,322 | 9.6% | | Advertising Revenues | $133,974 | $119,163 | 12.4% | | Operating Profit | $106,551 | $79,410 | 34.2% | | Net Income | $82,945 | $65,540 | 26.6% | | Diluted EPS | $0.50 | $0.40 | 25.0% | Six Months 2025 vs 2024 Performance (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $1,321,783 | $1,219,112 | 8.4% | | Operating Profit | $165,185 | $127,729 | 29.3% | | Net Income | $132,496 | $105,957 | 25.0% | | Diluted EPS | $0.80 | $0.64 | 25.0% | Condensed Consolidated Statements of Cash Flows Net cash from operations significantly increased to $212.7 million in H1 2025, while investing cash outflow decreased and financing cash outflow increased Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $212,726 | $133,310 | | Net cash used in investing activities | ($52,082) | ($96,170) | | Net cash used in financing activities | ($161,751) | ($102,342) | | Net decrease in cash | ($1,107) | ($65,202) | - The increase in cash from operating activities was primarily due to higher net income and net proceeds of approximately $33 million from the sale of land in College Point, N.Y51179 Notes to the Condensed Consolidated Financial Statements Notes detail accounting policies, revenue disaggregation showing strong digital growth, segment performance with The Athletic achieving profitability, and ongoing litigation costs - The company has two reportable segments: The New York Times Group ("NYTG") and The Athletic3080 Q2 2025 Revenue Breakdown (in thousands) | Revenue Stream | Q2 2025 | % of Total | | :--- | :--- | :--- | | Subscription | $481,420 | 70.2% | | Advertising | $133,974 | 19.5% | | Affiliate, licensing and other | $70,479 | 10.3% | | Total | $685,873 | 100.0% | Q2 2025 Subscription & Advertising Revenue Split (in thousands) | Category | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Digital-only subscription | $350,353 | $304,501 | 15.1% | | Print subscription | $131,067 | $134,821 | (2.8)% | | Digital advertising | $94,422 | $79,575 | 18.7% | | Print advertising | $39,552 | $39,588 | (0.1)% | - The company incurred $3.5 million in Q2 2025 and $7.9 million in H1 2025 for litigation costs related to its lawsuit against Microsoft and OpenAI regarding generative AI57 - The Board of Directors approved a new $350.0 million Class A share repurchase program in February 2025 As of June 30, 2025, approximately $432.9 million remained available under all authorizations7475 Q2 2025 Segment Performance (in thousands) | Segment | Total Revenues | Adjusted Operating Profit (Loss) | | :--- | :--- | :--- | | NYTG | $632,397 | $127,987 | | The Athletic | $54,038 | $5,788 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes strong Q2 2025 results to digital strategy, with 230,000 new digital subscribers, increased ARPU, and The Athletic achieving profitability Executive Overview and Financial Highlights Q2 2025 saw 230,000 net digital-only subscriber additions, reaching 11.30 million, with ARPU up 3.2% and adjusted operating profit increasing 27.8% - Added approximately 230,000 net digital-only subscribers in Q2 2025, ending the quarter with 11.30 million digital-only subscribers96 - Total digital-only average revenue per user (ARPU) increased 3.2% year-over-year to $9.6496 - Adjusted operating profit (AOP) increased 27.8% to $133.8 million, and the AOP margin expanded to 19.5% from 16.7% in Q2 202496 - Digital-only subscription revenues grew 15.1% to $350.4 million in Q2 202596 Results of Operations Q2 2025 total revenues rose 9.7%, driven by digital subscription and advertising growth, despite a decline in news-only subscribers, while operating costs increased 6.2% Digital-Only Subscribers by Category (in thousands) | Category | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Bundle and multiproduct | 6,020 | 4,830 | | News-only | 1,690 | 2,290 | | Other single-product | 3,590 | 3,100 | | Total digital-only subscribers | 11,300 | 10,210 | Digital-Only ARPU by Category | Category | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Bundle and multiproduct | $12.52 | $11.96 | | News-only | $12.28 | $11.26 | | Other single-product | $3.51 | $3.65 | | Total digital-only ARPU | $9.64 | $9.34 | - Digital advertising revenue growth was driven by a 33% increase in display impressions, while the average rate decreased 1%115 - Media expenses, a component of marketing costs, increased 15.9% to $31.9 million in Q2 2025 due to higher subscriber acquisition spending131 Segment Information NYTG revenues grew 8.1% to $632.4 million, while The Athletic's revenues surged 33.4% to $54.0 million, achieving a $5.8 million adjusted operating profit Q2 2025 vs Q2 2024 Segment Performance (in thousands) | Segment | Revenues (Q2'25) | Revenues (Q2'24) | % Change | Adj. Op. Profit (Q2'25) | Adj. Op. Profit (Loss) (Q2'24) | | :--- | :--- | :--- | :--- | :--- | :--- | | NYTG | $632,397 | $585,156 | 8.1% | $127,987 | $107,102 | | The Athletic | $54,038 | $40,504 | 33.4% | $5,788 | ($2,402) | - The Athletic's advertising revenue grew 98.8% to $14.1 million in Q2 2025 from $7.1 million in Q2 2024146155 - The company allocates 10% of all bundle subscription revenues and associated costs (product development, marketing, subscriber servicing) to The Athletic8182142 Liquidity and Capital Resources The company maintains strong liquidity with $951.5 million in cash, $193.2 million free cash flow, and increased its credit facility to $400 million - As of June 30, 2025, the company had cash, cash equivalents, and short- and long-term marketable securities of $951.5 million174 Free Cash Flow (in thousands) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $212,726 | $133,310 | | Less: Capital expenditures | ($19,573) | ($14,054) | | Free cash flow | $193,153 | $119,256 | - In June 2025, the company increased its revolving credit facility to $400.0 million and extended the maturity to June 2030 No borrowings were outstanding as of June 30, 2025187188 - The company repurchased approximately $82.5 million of its Class A stock in the first six months of 2025, with $432.9 million remaining under its repurchase authorizations as of June 30, 2025176 Item 3. Quantitative and Qualitative Disclosures About Market Risk No material changes in market risks were reported compared to the prior annual report - As of June 30, 2025, there were no material changes in the company's market risks from December 31, 2024193 Item 4. Controls and Procedures Disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of June 30, 2025195 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls196 Part II: Other Information Item 1. Legal Proceedings The company is actively pursuing a copyright infringement lawsuit against Microsoft and OpenAI regarding generative AI, with core claims proceeding - In December 2023, the company filed a lawsuit against Microsoft and OpenAI for copyright infringement, unfair competition, and other claims related to their use of the company's content in generative AI products199 - In March 2025, a court dismissed the unfair competition and DMCA claims (with leave to replead the latter) but allowed other disputed claims, including direct copyright infringement, to proceed199 Item 1A. Risk Factors No material changes to previously disclosed risk factors were reported for the quarter - No material changes to risk factors were reported for the quarter200 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 460,136 Class A shares for $23.6 million in Q2 2025, with $432.9 million remaining for future repurchases Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 258,952 | $48.85 | | May 2025 | 60,273 | $52.26 | | June 2025 | 140,911 | $55.32 | | Total Q2 2025 | 460,136 | $51.30 | - As of the end of Q2 2025, approximately $432.9 million remained available for repurchase under the company's publicly announced plans201202 Item 5. Other Information No Rule 10b5-1 trading plans were adopted or terminated by directors or executive officers during Q2 2025 - No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the second quarter of 2025203 Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including the amended Credit Agreement, officer certifications, and XBRL data