New York Times(US:NYT)2024-05-08 19:45PART I. FINANCIAL INFORMATION Item 1. Financial Statements The Q1 2024 financial statements show increased revenues and net income, with total assets at $2.62 billion and operating cash flow of $53.1 million Condensed Consolidated Balance Sheets Total assets decreased to $2.62 billion as of March 31, 2024, with liabilities and equity remaining stable Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 (Unaudited) | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $206,817 | $289,472 | | Total current assets | $681,160 | $781,653 | | Total assets | $2,622,822 | $2,714,595 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $544,717 | $611,559 | | Total liabilities | $874,860 | $951,376 | | Total stockholders' equity | $1,747,962 | $1,763,219 | Condensed Consolidated Statements of Operations Q1 2024 total revenues grew 5.9% to $594.0 million, with net income increasing 81.1% to $40.4 million Q1 2024 Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $594,015 | $560,739 | 5.9% | | Subscription Revenues | $429,005 | $397,542 | 7.9% | | Advertising Revenues | $103,711 | $106,241 | -2.4% | | Total Operating Costs | $545,696 | $532,839 | 2.4% | | Operating Profit | $48,319 | $27,900 | 73.2% | | Net Income | $40,417 | $22,321 | 81.1% | | Diluted EPS | $0.24 | $0.13 | 84.6% | | Dividends declared per share | $0.13 | $0.11 | 18.2% | Condensed Consolidated Statements of Cash Flows Net cash from operations was $53.1 million in Q1 2024, while investing and financing activities used significant cash Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $53,079 | $50,730 | | Net cash (used in)/provided by investing activities | $(66,391) | $22,175 | | Net cash used in financing activities | $(68,684) | $(58,530) | | Net (decrease)/increase in cash | $(81,996) | $14,375 | Notes to the Condensed Consolidated Financial Statements Notes detail accounting policies, revenue streams, segment performance, and $1.0 million in AI litigation costs - The company operates under two reportable segments: The New York Times Group ("NYTG") and The Athletic27 Q1 Revenue Breakdown (in thousands) | Revenue Type | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Subscription | $429,005 | $397,542 | | - Digital-only | $292,978 | $258,768 | | - Print | $136,027 | $138,774 | | Advertising | $103,711 | $106,241 | | - Digital | $63,026 | $61,271 | | - Print | $40,685 | $44,970 | | Other | $61,299 | $56,956 | | Total | $594,015 | $560,739 | Q1 Segment Performance (in thousands) | Segment | Revenues (Q1 2024) | Adjusted Operating Profit (Loss) (Q1 2024) | | :--- | :--- | :--- | | NYTG | $557,394 | $84,744 | | The Athletic | $37,184 | $(8,690) | - In Q1 2024, the company recorded $1.0 million in pre-tax costs related to its lawsuit against Microsoft and OpenAI for unauthorized use of its content in generative AI products56 Management's Discussion and Analysis of Financial Condition and Results of Operations Strong Q1 2024 performance driven by 9.91 million digital-only subscribers and 40.9% adjusted operating profit growth - The company ended Q1 2024 with approximately 9.91 million digital-only subscribers, a net increase of 210,000 from the end of 2023 and 890,000 year-over-year92105 - Total digital-only Average Revenue Per User (ARPU) increased 1.9% year-over-year to $9.21, driven by subscribers graduating from promotional pricing and price increases for tenured subscribers92111 - Adjusted operating profit (a non-GAAP measure) increased 40.9% to $76.1 million in Q1 2024 from $54.0 million in Q1 202392 Reconciliation to Adjusted Diluted EPS | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Diluted earnings per share (GAAP) | $0.24 | $0.13 | | Adjustments (Amortization, Severance, etc.) | $0.07 | $0.06 | | Adjusted diluted earnings per share (Non-GAAP) | $0.31 | $0.19 | Quantitative and Qualitative Disclosures About Market Risk No material changes in market risks were reported compared to the disclosures in the 2023 Annual Report on Form 10-K - As of March 31, 2024, there were no material changes in the company's market risks from those disclosed at year-end 2023180 Controls and Procedures Management concluded disclosure controls and procedures were effective, with no material changes to internal controls during Q1 2024 - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2024182 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls183 PART II. OTHER INFORMATION Legal Proceedings The company is actively pursuing a copyright infringement lawsuit against Microsoft and OpenAI regarding generative AI content use - The company filed a lawsuit against Microsoft and OpenAI on December 27, 2023, alleging copyright infringement and other violations related to the unauthorized use of its journalism and content for generative AI186 Risk Factors No material changes to the company's risk factors were reported compared to the 2023 Form 10-K disclosures - No material changes to the risk factors previously disclosed in the 2023 Form 10-K were reported186 Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 703,468 shares for $32.4 million in Q1 2024, with $218.0 million remaining for future repurchases Q1 2024 Share Repurchases | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | January 2024 | 122,324 | $49.05 | | February 2024 | 526,260 | $45.82 | | March 2024 | 54,884 | $43.71 | | Total Q1 2024 | 703,468 | $46.14 | - As of March 31, 2024, approximately $218.0 million remained available under the company's share repurchase authorization187188 Other Information No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the first quarter of 2024 - No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during Q1 2024189 Exhibits This section lists exhibits filed with the Form 10-Q, including officer certifications and Interactive Data Files (XBRL)