New York Times Co. Reports Revenue Growth as Digital Subscriptions Rise
Posted May 3, 2018 10:01 a.m. EDT
Updated May 3, 2018 10:07 a.m. EDT
The New York Times Co. added 139,000 digital-only subscribers in the first quarter of 2018, a 25.5 percent increase from the same period a year ago, helping to fuel total revenue growth and offset a decline in digital advertising.
The company said Thursday that about 40,000 of the new subscribers came from digital products like the cooking and crossword apps. The gains helped push the company’s total digital-only subscribers to roughly 2.8 million.
The company said total revenue was about $414 million, a 3.8 percent increase from the first quarter of 2017. Subscription revenue increased 7.5 percent to about $260 million.
“We’re seeing good retention of new cohorts of subscribers and continue to believe there is a big opportunity to further grow this increasingly important part of our business,” Mark Thompson, the company’s chief executive, said in an earnings statement. “Subscription revenues accounted for nearly two-thirds of the company’s revenues, and as we continue to adapt our subscription model and introduce new products, we expect that trend to continue.”
Despite the growth in subscribers, however, the company saw a 6 percent decline in digital advertising revenue from the same period a year ago. It was the first time since the second quarter of 2016 that digital advertising declined. In the first quarter of 2017, digital advertising increased 19 percent, part of the so-called Trump bump.
Thompson said that the decline was “driven in part by the lumpiness of our growing strategic partnership business, and the fact that audiences in the quarter, while strong, did not quite reach the peaks of the immediate postelection and inauguration periods a year earlier.”
Digital advertising revenue was $46.7 million, making up 37 percent of the company’s total advertising revenue.
Thompson said he expected a continued decline in digital ad revenue into the second quarter but was confident it would return to “solid year-over-year growth in the third quarter.”
In a bit of a surprise, print advertising revenue stayed stronger than in years past, with Thompson calling it “the best since the third quarter of 2015.” With just a 2 percent decline year over year, the loss was significantly smaller than in the first quarter of 2017, when it slid by 18 percent from a year earlier.
The adjusted operating profit, the company’s preferred method of assessing performance, was $55.5 million in the quarter, about 10 percent higher than the $50.2 million of a year ago.
Operating costs in the first quarter were $378 million, nearly $11 million more than the first quarter of 2017, largely because of increased compensation costs.