The New York Times Company — FY 2022 Form 10-K
Business context and reporting period. The company is a global media business whose principal revenues come from subscriptions and advertising, across The New York Times, The Athletic, Cooking, Games, Wirecutter and print products. This filing covers the fiscal year ended December 31, 2022. FY 2022 included 52 weeks plus six additional days; FY 2021 included 52 weeks. The Athletic, acquired February 1, 2022, is reported as a separate segment. The filing provides annual results, not a clear standalone set of fourth-quarter financial metrics.
Key financial metrics
| Metric | FY 2022 | FY 2021 | Change |
|---|---|---|---|
| Total revenue | $2.308 billion | $2.075 billion | +11.3% |
| Subscription revenue | $1.552 billion | $1.362 billion | +14.0% |
| Advertising revenue | $523.3 million | $497.5 million | +5.2% |
| Operating profit | $202.0 million | $268.0 million | -24.6% |
| Net income | $173.9 million | $220.0 million | -20.9% |
| Diluted EPS | $1.04 | $1.31 | -20.6% |
| Adjusted operating profit (non-GAAP) | $347.9 million | $335.4 million | +3.7% |
| Operating margin / adjusted operating margin | 8.7% / 15.1% | 12.9% / 16.2% | -420 / -110 bps |
| Operating cash flow | $150.7 million | $269.1 million | -44.0% |
| Free cash flow (non-GAAP) | $113.7 million | $234.5 million | — |
FY 2022 GAAP operating profit included acquisition-related costs, pension-plan adjustments and an impairment charge. Adjusted measures exclude specified items and should be considered alongside GAAP results. The company estimated that the extra six days added $30.5 million to reported revenue; excluding that estimate, revenue increased 9.8% to $2.278 billion.
Revenue, subscribers and operating developments
- Digital-only subscription revenue rose 26.5% to $978.6 million; print subscription revenue declined 2.5% to $573.8 million. Excluding the acquisition’s reported subscribers, digital-only subscribers increased by approximately 1.01 million year over year.
- At year-end, the company reported approximately 9.55 million subscribers and 10.98 million paid subscriptions, including 8.83 million digital-only subscribers. Digital-only subscriber ARPU was $8.93 in Q4, versus $9.60 at FY 2021 year-end.
- Advertising increased overall, but digital advertising growth was modest: digital advertising rose 3.2% and print advertising 8.4%. Direct-sold digital display impressions rose 33%, while average rates fell 16%; open-market programmatic revenue declined 19.8%.
- The Athletic contributed $85.7 million in revenue and recorded a $35.9 million adjusted operating loss for the period included after acquisition. It generated $73.2 million in subscription revenue and $12.0 million in advertising revenue.
- Total operating costs rose 13.8% to $2.053 billion, including higher journalism, technology, subscriber servicing, print production and distribution costs. Technology costs rose 24.5% to $377.2 million.
Liquidity, debt and capital allocation
- Year-end cash, cash equivalents and marketable securities totaled $486.3 million, down from $1.074 billion; the company reported no borrowings under its $350 million revolving credit facility. Approximately $550 million of cash funded The Athletic acquisition.
- Current assets were $655.7 million and current liabilities $571.2 million, a current ratio of 1.15. The company said available liquidity and operating cash flow should meet financing needs over the next 12 months and beyond.
- FY 2022 cash from operations was $150.7 million; capital expenditures were $37.0 million. Management expects approximately $50 million of capital expenditures in 2023.
- The company targets returning at least 50% of free cash flow to stockholders through dividends and repurchases over the next three to five years. It paid $56.8 million in dividends and repurchased $105.1 million of shares in 2022. In February 2023, it raised the quarterly dividend to $0.11 per share and authorized an additional $250 million repurchase program.
Outlook, risks and unusual items
- Management aims to reach 15 million total subscribers by year-end 2027, from approximately 9.55 million at 2022 year-end. It plans continued investment in journalism, product integration, technology, data infrastructure and The Athletic, while pursuing disciplined cost management.
- The company expects the 2023 tax treatment of research and development costs to reduce operating cash flow by approximately $45 million; the comparable 2022 effect was approximately $60 million. The actual 2023 impact depends on R&D spending.
- Significant risks include competition for audiences, subscribers and advertising; subscriber churn and ongoing print declines; macroeconomic and advertising-market weakness; inflation and print supply/distribution costs; labor negotiations and potential work stoppages; cybersecurity, privacy and third-party technology risks; and challenges integrating and growing The Athletic.
- Approximately 42% of employees were union-represented. A NewsGuild agreement covering about 22% of employees had expired, negotiations were ongoing, and negotiations for technology employees’ initial agreement were also underway.
- FY 2022 unusual items included $34.7 million of Athletic acquisition-related costs, a $4.1 million impairment of a Serial podcast intangible, a $22.1 million multiemployer pension withdrawal charge partly offset by a $7.1 million pension-liability adjustment, and a $34.2 million gain on a land lease and planned sale. Management recorded $74 million of multiemployer pension withdrawal liabilities; additional exposure may arise as plan assessments are finalized.
- Pending legal matters could materially affect an individual reporting period, although management did not believe their ultimate resolution was likely to materially affect financial position. The auditor gave unqualified opinions on the financial statements and internal controls; the internal-control assessment excluded The Athletic, which represented 21% of assets and 4% of revenue.
Important facts for investors to verify
- Whether subscriber growth, bundle adoption and ARPU trends support the 15-million-subscriber objective, including the quality and retention of acquired Athletic subscribers.
- Whether operating cash flow and margins stabilize as acquisition, technology, compensation and print-related costs evolve; compare GAAP results with management’s non-GAAP measures.
- Whether advertising performance, particularly digital rates and programmatic demand, improves or weakens amid economic and platform changes.
- The realization of expected benefits from The Athletic relative to its ongoing operating loss and the acquisition’s substantial goodwill and intangible assets.
- Changes in liquidity after capital returns, planned capital spending, tax-related cash costs and pension contributions, as well as developments in labor negotiations and multiemployer plan liabilities.