The New York Times Company added another 260,000 digital subscribers in the third quarter, a 24% boost over the previous-year period, as the company grew its net income by nearly 20% to $64.1 million.
At the same time, the publication’s sales increased 7% year-over-year to $640.2 million. Wall Street investors and analysts seemed to want more from The Times, however, with Times shares dropping 7% on Monday morning after the release of its Q3 report.
Here are the top line results:
Net income: $64.14 million, up 19.6% from $53.6 million in Q3 of 2023.
Revenues: $640.2 million, up 7% from $598.3 million in 2023. Customers moving from promotional deals to higher priced subscriptions helped digital ARPU (average revenue per user) increase 1.8% annually to $9.45. Overall, digital subscriptions sales were up 14.2% year-over-year.
Total subscribers: 11.09 million, up 10% from 10.08 million in Q3 of 2023 and 2% from the second quarter of 2024. The vast majority of those subscribers — 10.47 million — are digital-only readers.
Diluted Earnings per share: 39 cents, up 21.9% year-over-year.
Meredith Kopit Levien, the NYT president and CEO, said on the Q3 earnings call on Monday that the Times was focused on making “audio a more direct driver of subscriptions.” In September, the Times announced it was looking to boost revenue by putting podcasts like “The Daily” behind a paywall.
The Times is making it easier for subscribers to sign up via Spotify and Apple’s podcast app, as well as by offering more audio content that features an “automated voice,” she said, noting that The Times’ 2024 election coverage had helped spur the paper’s subscriber growth.
“We believe that portfolio, and our ability to keep adding value to it over time, is what makes The Times resilient in a changing media landscape, and well-positioned to become a larger, more profitable company,” Levien said in a statement.
Digital ad sales growth was the best in two years for the paper, increasing nearly 9% year-over-year.
The media company also noted that it spent another $4.6 million in the quarter on pre-litigation costs related to its copyright infringement lawsuit against Microsoft and Open AI. The lawsuit, filed late last year, accused the two companies of “unlawful use of The Times’s work to create artificial intelligence products” that compete with the news outlet’s work and “threaten” its ability to provide independent journalism.
One takeaways from Q3 report was how The Athletic, the Times’ sports news outlet, is performing. The Athletic reported an adjusted operating profit of $2.6 million, compared to a loss of $7.9 million during the same time frame a year ago. In 2022, The Times bought The Athletic for $550 million in cash. Levien, on Monday’s call, attributed The Athletic’s growth to strong coverage around the 2024 Olympics, as well as English Premier League soccer and its NFL reporting.
The Times reported its Q3 earnings on the same morning that more than 600 tech employees went on strike. The main issues boil down to pay increases, return-to-office policies, and whether union members can get a “just cause” provision in their contract barring them from being fired unless it’s for “misconduct or another such reason.”
Despite the stock drop on Monday, NYT shares are still up 11% on the year. The paper has been relatively static in recent years, with its $53 share price on Monday up about 4.5% since Joe Biden took office in January 2021.
