Business Context and Reporting Period
Company: The New York Times Company (NYT)
Filing Type: Form 10-Q (Quarterly Report)
Reporting Period: Quarter ended March 31, 2026
Business Overview: A global media organization generating revenue primarily through digital and print subscriptions, advertising, and affiliate/licensing activities. The Company operates as a single reportable segment.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $712.2 million | $635.9 million |
| Operating Profit | $90.6 million | $58.6 million |
| Net Income | $87.9 million | $49.6 million |
| Diluted EPS | $0.54 | $0.30 |
| Operating Cash Flow | $92.2 million | $99.1 million |
| Free Cash Flow | $81.5 million | $89.9 million |
| Cash & Marketable Securities | $1.1 billion | N/A |
| Debt (Credit Facility) | $0 outstanding | $0 outstanding |
Subscriber Metrics: Total subscribers reached 13.08 million (12.52 million digital-only). Digital-only Average Revenue Per User (ARPU) increased 2.4% year-over-year to $9.77.
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 12.0% year-over-year. Subscription revenue grew 11.3% (driven by a 16.1% increase in digital-only subscriptions), while advertising revenue surged 17.3% (driven by a 31.6% increase in digital advertising).
- Profitability Expansion: Operating profit increased 54.5% to $90.6 million. Operating margin expanded to 12.7% from 9.2% in the prior year. Adjusted Operating Profit (non-GAAP) rose 27.2% to $117.9 million.
- Cost Management: Total operating costs increased 7.7%, primarily due to higher journalism costs ($24.6 million increase) and sales/marketing expenses. Depreciation and amortization decreased slightly by 3.8%.
- One-Time Items: The prior year (Q1 2025) included a $4.5 million multiemployer pension plan liability adjustment and $33 million in net proceeds from a land sale, which are not present in the current period.
Outlook, Risks, and Unusual Items
- Capital Allocation: The Company fully utilized its $250 million 2023 share repurchase authorization in Q1 2026 ($56.3 million spent). Approximately $293.9 million remains available under the 2025 authorization. The quarterly dividend was increased to $0.23 per share.
- Generative AI Litigation: The Company recorded $4.2 million in litigation costs related to lawsuits against Microsoft/OpenAI and Perplexity AI regarding unauthorized use of content. Management classifies these as special items.
- Tax Legislation: The "One Big Beautiful Bill Act" (OBBBA) enacted in July 2025 is expected to reduce cash tax payments by approximately $60 million in fiscal 2026.
- Risks: Key risks include competition from AI companies and aggregators, secular declines in print advertising, supply chain disruptions for printing, and the outcome of ongoing intellectual property litigation.
Investor Verification Checklist
- Subscriber Quality: Verify the sustainability of the 16.1% digital-only subscription growth and the 2.4% ARPU increase amidst a competitive landscape.
- Advertising Trends: Assess the durability of the 31.6% digital advertising revenue growth, which was driven by display, podcast, and video segments.
- Litigation Exposure: Monitor the status of the Generative AI lawsuits against Microsoft, OpenAI, and Perplexity, as outcomes could impact future revenue or result in significant costs.
- Cost Structure: Review the trajectory of journalism and cloud infrastructure costs, which drove the 8.5% increase in cost of revenue.
- Cash Flow Normalization: Note that Q1 2025 operating cash flow included a one-time $33 million land sale; Q1 2026 cash flow reflects normalized operations.