The New York Times Company (NYT) Q4 2019 earnings summary

Executive summary

• 2019 accelerated the subscription-first digital strategy: more than 1 million net digital subscriptions added, ending at 5.3 million total subscriptions, including 4.4 million digital subscriptions and 850,000 print subscriptions.

• Annual digital revenue reached ~$801 million, exceeding the $800 million goal a year early; management cited confidence in the target of 10 million subscriptions by 2025.

Financial highlights

• Revenue rose 3.6% YoY to $1.812 billion; subscription revenue increased 4.0% to $1.084 billion, other revenue rose 33.8% to $197.7 million, and advertising fell 4.9% to $530.7 million.

• Operating profit declined 7.7% to $175.6 million as higher costs and lower print ad and subscription revenue outweighed digital subscription and other-revenue growth; net income rose 9.8% to $140.0 million.

• Diluted EPS from continuing operations was $0.83 vs. $0.75; adjusted diluted EPS, excluding severance, non-operating retirement costs and special items, was $0.92 vs. $0.81.

• Total operating costs increased 4.9% to $1.635 billion, reflecting newsroom and product hiring, marketing and content costs; adjusted operating costs rose 5.2% to $1.564 billion.

Outlook and guidance

• Long-term subscription goal is 10 million by 2025; plans called for continued investment in journalism, product innovation, audience engagement and brand marketing.

• Expected 2020 minimum-funding contributions to qualified pension plans are approximately $9 million; management expects liquidity and operating cash flows to meet financing needs over the next 12 months.

• Management anticipated transient COVID-19-related advertising headwinds but did not expect the outbreak to significantly affect the digital growth strategy; the outlook was based on information available in March 2020.