NYT Shares Drop Despite Q2 Beat Due to Slower Subscription Forecast

The New York Times reported second-quarter revenue of $762.5 million, exceeding Wall Street expectations, but shares fell approximately 8.7% in premarket trading. The decline followed a company forecast that subscription revenue growth will slow to between 9% and 11% in the third quarter, down from 11.2% in the second quarter, according to reporting from TheWrap.

Revenue for the period increased 11.2% year over year, surpassing the $748 million projected by analysts surveyed by Yahoo Finance. Despite the top-line growth, net profit dropped 9.7% to $96.3 million, compared to $106.6 million in the previous year.

The company reported earnings per share of $0.57 on a diluted basis. Adjusted earnings per share were $0.69, which beat the $0.67 estimate from analysts surveyed by Yahoo Finance.

Digital Subscription and Advertising Growth

Growth in digital-only subscriptions and average revenue per user drove a 16.4% increase in digital-only subscription revenue, which reached $409.7 million. The New York Times added 280,000 digital-only subscribers during the quarter, bringing the total subscriber base to approximately 13.4 million.

Digital-only subscribers now represent roughly 12.8 million of that total base. Digital advertising revenue also saw a significant increase, climbing 20.7% to $111.4 million. The company noted that affiliate, licensing, and other revenue streams also grew during the second quarter.

Corporate Strategy and Future Outlook

President and CEO Meredith Kopit Levien attributed the results to the execution of the company’s business strategy and the value of its product offerings.

Q2 was another strong quarter for The Times, driven by the consistent execution of our strategy. Our results reflect the increasingly rare and valuable nature of our products, and the durability of our business model. Meredith Kopit Levien

Levien stated that the company intends to continue investing in independent journalism and lifestyle products while expanding its presence in video to reach more users in a shifting media environment.

While the company expects digital advertising revenue to maintain year-over-year growth, it provided updated guidance for capital expenditures and operating costs. The moderation of subscription revenue growth in the third quarter is expected to occur even as the company continues to gain new subscribers.