New York Times(US:NYT)2023-02-27 16:00Subscriber Growth and Targets - As of December 31, 2022, The New York Times Company had approximately 9.55 million subscribers and 10.98 million paid subscriptions, marking the highest figures in its history[11]. - The company aims to reach 15 million total subscribers by the end of 2027, representing a growth target of approximately 57% from the end of 2022[13]. - Paid digital-only subscribers totaled approximately 8.83 million as of December 31, 2022, with international subscribers representing about 19% of this total[32]. - The company has identified a global market of at least 135 million adults willing to pay for English-language news and related content[13]. - The company has invested significantly in acquiring The Athletic and cross-product integrations to grow its subscriber base, which is crucial for future revenue[67]. - The company emphasizes subscriber growth over total subscriptions, indicating a strategic shift towards a "subscription-first" approach[201]. - Total subscribers reached 9,550 as of December 31, 2022, up from 7,578 in December 2021, indicating a growth of 26.0% year-over-year[200]. - As of December 31, 2022, the company had 8,830 digital-only subscribers, an increase from 6,783 in December 2021, representing a growth of 30.2% year-over-year[200]. Financial Performance - Total revenues increased 11.3% to $2.31 billion in 2022 from $2.07 billion in 2021, driven by a 14.0% increase in total subscription revenues to $1.55 billion[187]. - Operating profit decreased 24.6% to $202.0 million in 2022 from $268.0 million in 2021, with an operating profit margin of 8.7% compared to 12.9% in 2021[175]. - Diluted earnings per share from continuing operations were $1.04 in 2022, down from $1.31 in 2021, while adjusted diluted earnings per share increased to $1.32 from $1.28[175]. - The company aims to return at least 50% of free cash flow to stockholders through dividends and share repurchases over the next three to five years[180]. - As of December 31, 2022, the company had cash, cash equivalents, and marketable securities of approximately $486 million and was debt-free[179]. Advertising Revenue - Digital advertising accounted for approximately 61% of total advertising revenues in 2022, while print advertising represented about 39%[39][41]. - Total advertising revenues rose 5.2% to $523.3 million in 2022 from $497.5 million in 2021, supported by an 8.4% increase in print advertising revenues[187]. - Digital advertising revenues increased by 3.2% to $318.4 million in 2022, accounting for 60.9% of total advertising revenues[207]. - Print advertising revenues rose by 8.4% to $204.8 million in 2022, driven primarily by the entertainment and luxury categories[208]. - The Athletic contributed $12.0 million to digital advertising revenue in 2022, enhancing overall digital revenue growth[207]. - The company reported a decrease in programmatic advertising revenue by 19.8%, highlighting challenges in the macroeconomic environment affecting advertising spend[207]. Operational Strategy and Investments - The company plans to continue investing in journalism and product development to support long-term profitable growth while maintaining disciplined cost management[24]. - The company has invested significantly in technology and data management to enhance user experience and support subscriber retention[25]. - The company continues to innovate its advertising offerings, leveraging first-party data to enhance client advertising strategies[23]. - The company has invested significantly in enhancing its digital news product and integrating it into a multi-product digital bundle subscription package[106]. - The company intends to continue engaging in acquisitions and investments to diversify its portfolio and take advantage of growth opportunities[99]. Employee and Labor Relations - As of December 31, 2022, the company employed approximately 5,800 full-time equivalent employees, with over 2,600 involved in journalism operations[51]. - Approximately 42% of full-time equivalent employees were represented by unions as of December 31, 2022, including technology employees who formed a union in 2022[59]. - The company conducts pay-equity studies every two years to ensure equitable compensation practices across race and gender[54]. - The company has 13 active employee resource groups aimed at fostering a more inclusive workplace environment[54]. Challenges and Risks - The company faces competition from content providers, news aggregators, and social media platforms, which impacts its ability to attract and retain subscribers[65]. - The company is focused on reducing churn rates, which can be influenced by factors such as subscriber engagement and changes in pricing[71]. - Economic, public health, and geopolitical conditions may adversely impact the company's business and financial results, including advertising spending and subscriber retention[84]. - The company faces risks related to disruptions in its newsprint supply chain, which could significantly increase printing and distribution costs[91]. - The company is exposed to risks related to cybersecurity and data privacy, which could damage its reputation and financial results[128]. - The company may divest certain assets or businesses that no longer align with its strategic direction, which involves significant risks[104]. Environmental, Social, and Governance (ESG) Initiatives - The company is focused on improving its environmental, social, and governance (ESG) initiatives, which may require additional investments and could impact its reputation if not managed effectively[97]. Financial Obligations and Liabilities - The company has unfunded obligations totaling approximately $180 million for non-qualified pension plans as of December 31, 2022, which may adversely affect financial condition[120]. - The company has recorded significant withdrawal liabilities for multiemployer pension plans, which could impact future financial results[124]. - The company expects to make contributions of approximately $11 million in 2023 to satisfy minimum funding requirements for its pension plans[184].