The New York Times Company — Q1 2024 Form 10-Q
Business context and period. The filing covers the unaudited quarter ended March 31, 2024, compared with the quarter ended March 31, 2023. The company reports two segments: The New York Times Group (NYTG) and The Athletic. Q1 2024 included an extra day because of the leap year; interim results may not indicate full-year performance.
Financial and operating performance
| Metric | Q1 2024 | Q1 2023 | Change |
|---|---|---|---|
| Revenue | $594.0 million | $560.7 million | +5.9% |
| Operating profit | $48.3 million | $27.9 million | +73.2% |
| Operating margin | 8.1% | 5.0% | +310 bps |
| Adjusted operating profit (non-GAAP) | $76.1 million | $54.0 million | +40.9% |
| Adjusted operating margin (non-GAAP) | 12.8% | 9.6% | +320 bps |
| Net income | $40.4 million | $22.3 million | +81.1% |
| Diluted EPS | $0.24 | $0.13 | +84.6% |
| Adjusted diluted EPS (non-GAAP) | $0.31 | $0.19 | +63.2% |
| Operating cash flow | $53.1 million | $50.7 million | +4.6% |
| Free cash flow (non-GAAP) | $46.7 million | $44.7 million | +4.3% |
Revenue mix. Subscription revenue rose 7.9% to $429.0 million, including digital-only subscription revenue up 13.2% to $293.0 million. Advertising revenue fell 2.4% to $103.7 million: digital advertising increased 2.9%, while print advertising declined 9.5%. Other revenue rose 7.6% to $61.3 million, driven mainly by licensing and Wirecutter affiliate referrals.
Subscribers. The company ended the quarter with approximately 10.55 million total subscribers, including 9.91 million digital-only subscribers, up 210,000 from year-end 2023 and 890,000 year over year. Bundle and multiproduct subscribers reached 4.55 million. Total digital-only ARPU increased 1.9% year over year to $9.21. Print subscribers were approximately 640,000, down 60,000 year over year.
Segments. NYTG revenue increased 4.6% to $557.4 million and adjusted operating profit increased 29.8% to $84.7 million. The Athletic revenue increased 33.0% to $37.2 million; its adjusted operating loss narrowed to $8.7 million from $11.3 million. Segment comparisons reflect a revised bundle revenue and expense allocation methodology, with prior-year results recast.
Costs, margins and earnings drivers. Operating costs increased 2.4% to $545.7 million. Higher journalism and product-development costs were partly offset by lower sales and marketing and general and administrative costs. Net income also benefited from higher interest income, which was $8.6 million versus $3.4 million; the effective tax rate declined to 27.4% from 29.7%.
Liquidity, capital resources and debt
- At March 31, 2024, cash and cash equivalents were $206.8 million; short- and long-term marketable securities totaled $479.4 million. Together these were $686.3 million, as reported by the company.
- Cash, cash equivalents and restricted cash declined $82.0 million during the quarter. Investing activities used $66.4 million, principally reflecting $60.5 million of net purchases of marketable securities and $6.4 million of capital expenditures. Financing activities used $68.7 million, including dividends, share repurchases and share-based compensation tax withholding.
- The company reported no outstanding borrowings or other debt. Its $350 million revolving credit facility had no borrowings, approximately $0.6 million of letters of credit outstanding, and the company was in covenant compliance.
- Management stated that cash, operating cash flow and other sources should be sufficient for financing needs over the next 12 months. It expects approximately $28 million of negative 2024 operating-cash-flow impact from required capitalization and amortization of research and development costs under tax law.
Outlook, risks and unusual items
- No specific revenue, earnings or margin guidance was provided in the supplied filing text. The company said it expects to continue comparable cash dividends, subject to board review; the quarterly dividend was increased to $0.13 per share and paid in April 2024.
- The company repurchased 703,468 Class A shares for approximately $32.4 million in Q1. Approximately $218.0 million remained under the 2023 authorization at March 31; an additional $5.0 million was repurchased through May 3, leaving approximately $213.0 million.
- Q1 included $1.0 million of costs for the company’s copyright and related lawsuit against Microsoft and OpenAI. The company seeks monetary and injunctive relief but cautions that success is not guaranteed. It reported no loss in excess of recorded amounts as reasonably possible for other legal matters.
- Management cited competition, possible economic weakness, interest rates, inflation and labor costs, geopolitical uncertainty, advertising-market volatility and marketer sensitivity to news topics. It also noted secular declines in print subscriptions and print advertising, and risks from generative AI, labor relations, technology infrastructure and litigation.
- Severance costs were $4.4 million, compared with $3.8 million a year earlier. Q1 2024 adjusted measures exclude specified items; these non-GAAP measures should be considered alongside, not instead of, GAAP results.
Most important facts for investors to verify
- Whether digital subscriber additions and pricing continue to offset declining news-only and print subscriber trends, and whether bundle ARPU stabilizes.
- Whether advertising weakness—especially in print—persists, and how licensing and affiliate revenue perform after their contribution to Q1 growth.
- Whether operating-cost growth, particularly journalism and product development spending, remains below revenue growth as the company invests in digital products.
- Progress and potential financial exposure from the Microsoft/OpenAI litigation, including future legal costs and outcomes.
- Cash-flow effects of incentive compensation, capital returns and the estimated $28 million R&D tax-related impact; confirm the company’s liquidity and capital-allocation assumptions.