The New York Times Q3 2025: Contradictions Emerge on Advertising Strategy, Multi-Revenue Strategy, and Subscription Targets

Business Commentary:

* Subscriber Growth and Revenue Expansion: - The New York Times Company added 460,000 net new digital subscribers in Q3, bringing the total subscriber base to 12.3 million. - Digital subscription revenue increased by 14%, driven by strong audience engagement and expansion in video, audio, and AI offerings.

• Advertising Revenue Surge:
• Total advertising revenues for the quarter were $132 million, an increase of approximately 12% compared to the previous year.

• Digital advertising revenues increased by approximately 20%, attributed to strong marketer demand and new advertising supply.

• Video and AI Integration Strategy:

• The company significantly expanded its video journalism, making video a more prominent part of the flagship Times app.

• AI is now powering features like metric conversion on recipes and richer search on Wirecutter, enhancing user engagement and monetization.

• Affiliate Licensing and Other Revenues Growth:

• Affiliate licensing and other revenues increased by approximately 8%, primarily due to higher licensing revenues.

• This growth reflects the increasing value of the company's products and offerings.

• Strong Financial Performance and Cash Flow:

• Consolidated revenues grew approximately 9.5%, with AOP growing by approximately 26% and AOP margin expanding by approximately 240 basis points.
• The company generated approximately $393 million in free cash flow in the first nine months of the year, reflecting its capital-efficient model.
  

Contradiction Point 1

Advertising Strategy and Focus

It involves a shift in the company's advertising strategy, moving from a focus on market resilience and ad products to prioritizing engagement and brand building, which impacts revenue expectations and market positioning.

Can you discuss the opportunity in the video format, particularly in advertising and incremental investments? - Thomas Ye(Morgan Stanley)

2025Q3: The video format presents a significant opportunity for the company, with early focus on engagement and brand. Advertising will eventually be a part of it, but the current priority is expanding engagement. - Meredith Kopit Levien(CEO)

What drove digital ad revenue growth this quarter? How are recent tariff announcements being received? - Benjamin Soff(Deutsche Bank)

2025Q1: We approach our ad business similarly to our consumer business, focusing on big categories and broad marketer appeal. We have engaged audiences, a suite of high-performing ad products, and are in the early stages of extending those products across the portfolio, which gives us confidence in the long-term growth and resilience of our ad business. - Meredith Kopit Levien(CEO)

Contradiction Point 2

Multi-revenue Strategy and Affiliate Licensing

It involves differing expectations regarding the company's multi-revenue strategy and affiliate licensing revenues, which are crucial for diversifying revenue streams.

What drove the strong advertising performance, including market conditions and product innovations? What is the outlook for affiliate licensing and other revenue streams? - Curtucio Moralez(Evercore ISI)

2025Q3: The affiliate licensing and other revenue line is expected to grow long-term, supported by the multi-revenue stream strategy. - Will Bardeen(CFO)

Will Blackwell's Q4 revenue increase, and what is the expected Q4 gross margin? - Stacy Rasgon(Bernstein Research)

2025Q2: Affiliate licensing and other revenues benefited from the launch of the Amazon partnership in May. We expect this partnership to continue to play a role in this revenue line, and we'll provide updates as appropriate. - Will Bardeen(CFO)

Contradiction Point 3

Operating Expense (OpEx) Growth and Prioritization

It reflects a shift in emphasis on long-term investments and expense management, which could influence financial performance and operational focus.

What was the OpEx growth rate in Q4 and what drove it? - Benjamin Soff(Deutsche Bank)

2025Q3: The OpEx growth rate is driven by disciplined long-term investments in journalism, product development, and efficient cost management. - Will Bardeen(CFO)

What opportunities exist for video advertising in your digital strategy? - Vasily Karasyov(Cannonball Research)

2024Q4: We've made significant investments in technology and data, both of which have been very significant contributors to the business and will continue to be. - Will Bardeen(CFO)

Contradiction Point 4

Capital Allocation Strategy

It shows a change in the company's capital allocation strategy, moving from a focus on opportunistic capital return and M&A to prioritizing organic growth.

What was the OpEx growth rate in Q4 and what drove this increase? What's your current strategy for cash deployment and capital allocation? - Benjamin Soff(Deutsche Bank)

2025Q3: The capital allocation strategy remains consistent, focusing on organic growth and opportunistic capital return, with a high bar for M&A. - Will Bardeen(CFO)

What are your expectations for digital ad growth, and was the sequential growth in single product subscriptions unexpected or seasonal? - Doug Arthur(Huber Research Partners)

2025Q1: Our capital allocation strategy remains consistent, focusing on organic growth and opportunistic capital return, balancing both strategic needs and the opportunity to return capital to shareholders. - Will Bardeen(CFO)

Contradiction Point 5

Subscription Growth and Strategy

It involves differing subscription growth targets and strategy, which are critical for future revenue projections.

Can you explain the Watch Tab's functionality and its ad integration, and also provide insights into the growth of single-product subscriptions, particularly regarding the Mini Crossword and Pips? - David Karnivoski(J.P. Morgan)

2025Q3: 15 million by 2027 remains very much our aim, and we continue to see a real path to getting there. - Meredith Kopit Levien(CEO)

Can you provide an update on the expected timeline to reach 15 million subscribers? - Jason Boisvert Bazinet(Citigroup Inc)

2025Q2: With more than 9 million digital subscriptions, we are well on our way to our goal of 15 million subscriptions by 2027. - Meredith A. Kopit Levien(CEO)