New York Times earnings benefit from ad market rebound, shares surge
Reuters
Published Nov 08, 2023 07:42AM ET
Updated Nov 08, 2023 11:50AM ET
By Arsheeya Bajwa
(Reuters) -New York Times rode on a recovery in the advertising market and rising subscriptions for its higher-priced bundles to surpass quarterly revenue estimates on Wednesday, sending shares of the publisher more than 7% higher.
The Times has in recent years leaned on its combined offerings of news, entertainment and lifestyle articles and podcasts - what it calls a bundle - to help move closer to its goal of 15 million subscribers by 2027.
It added 210,000 digital-only subscribers in the September quarter to hit a total of 9.7 million, compared with an addition of 180,000 in the previous three months.
Revenue was $598.3 million, above analysts' average estimate of $589.4 million, according to LSEG data.
"In the third quarter, we saw the largest-ever volume of bundled subscribers graduate from promotional to higher prices," CEO Meredith (NYSE:MDP) Kopit Levien said.
The company expects at least half of its subscribers over the next few years to be on the bundle, Levien added, with subscription revenue, which rose 9.4%, accounting for more than two-thirds of the total.
The company also earned more average revenue per user for bundled subscriptions at $12.81, compared with a total digital-only ARPU of $9.28.
The Times saw quarterly advertising revenue increase 6% year-over-year to $117.1 million, exceeding market expectations as well, in a sign that the ad sales market is on the rebound. Tech giants Meta (NASDAQ:META) and Alphabet (NASDAQ:GOOGL) also saw their advertising businesses bounce back.
Still, NYT expects total advertising revenue to decrease 4-8% in the fourth quarter and sees a low-to-mid-single-digit decline in digital ad revenue.
"I don't think there will be a decline in digital advertising, I think they're being conservative," said Cannonball Research analyst Vasily Karasyov.
Digital ad revenue may end up in growth, Karasyov added.
Revenue from the Athletic, its games and sports news offering, jumped nearly 46%.
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NYT reported adjusted earnings of 37 cents per share, beating estimates of 29 cents.
Written By: Reuters
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