New York Times(US:NYT)2023-05-10 14:58Financial Data and Key Metrics Changes - Adjusted diluted earnings per share was $0.19, down $0.02 from the prior year [19] - Adjusted operating profit was $54 million, a decrease of approximately $7 million compared to the same period in 2022 [19] - Free cash flow was approximately $45 million, compared to negative free cash flow of approximately $23 million in the same period of 2022 [20] - Total subscription revenues increased approximately 7%, with digital-only subscription revenue growing approximately 14% to about $259 million [21] - Digital-only subscriber ARPU increased approximately 130 basis points sequentially, but decreased approximately 1% year-over-year due to dilution from the Athletic [22] Business Line Data and Key Metrics Changes - The company added 190,000 net new digital-only subscribers, with a total of over 9.7 million subscribers [8][20] - The number of digital-only bundle and multiproduct subscribers grew by approximately 520,000 in the quarter [20] - Print subscription revenues declined approximately 4% due to lower volumes in home delivery and single copy [21] - Advertising revenue decreased approximately 9%, with digital advertising revenue primarily affected by lower revenue from podcasts and creative services [23] Market Data and Key Metrics Changes - Advertising was down more than expected, particularly in tech, finance, and media categories [13] - Athletic advertising revenue doubled over the last year, indicating strong growth despite market challenges [14] - Other revenues, including the Wirecutter affiliate business and licensing, increased approximately 16% to about $57 million [23] Company Strategy and Development Direction - The company aims to become the essential subscription for every curious English-speaking person, with a goal of reaching 15 million subscribers by year-end 2027 [7] - A coordinated pricing strategy was implemented to drive digital ARPU expansion while scaling subscribers [12] - The company is focused on growing its audience and enhancing engagement through various product offerings, including sports coverage and games [10][11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic pressures affecting the advertising business but remains optimistic about long-term growth [13] - The company expects total subscription revenues to increase by 6% to 8% in Q2 2023, with digital-only subscription revenue expected to rise by 12% to 15% [26] - Operating costs are expected to increase by approximately 6% to 8% compared to Q2 2022, but expense growth is anticipated to slow later in the year [27] Other Important Information - The company announced the appointment of Will Bardeen as the new CFO effective July 1, following a comprehensive search [17] - Roland Caputo, the outgoing CFO, will assist in the transition until the end of September [18] Q&A Session Summary Question: Clarification on bundled versus subscriber numbers - Management noted a strong quarter for bundles, with many upgrades contributing to subscriber metrics, which should positively impact ARPU [30][32] Question: Impact of reduced referrals from platforms - Management acknowledged the impact but could not quantify it, emphasizing ongoing efforts to build audience funnels [34] Question: Pricing initiatives and churn - Management confirmed successful price increases for approximately 550,000 subscribers, with positive retention results [36][37] Question: Athletic advertising rollout - Management reported positive growth in Athletic advertising, leveraging effective ad products and first-party data [42] Question: Modeling expenses and cost management - Management indicated a focus on maintaining flat growth in marketing spend while continuing to invest in journalism and product development [46][47]