The New York Times Company — 2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023 (52 weeks). This is an annual filing; the supplied text does not provide a clear standalone fourth-quarter income statement or cash-flow summary. The comparable 2022 fiscal year included five additional days, which affects year-over-year comparisons.
Business context
The Company operates a global digital and print media business, with revenue primarily from subscriptions and advertising. Its offerings include The New York Times, The Athletic, Cooking, Games, Wirecutter and Audio. It ended 2023 with approximately 10.36 million total subscribers, including 9.70 million digital-only subscribers.
Financial performance
| Metric | 2023 | 2022 | Change |
|---|---|---|---|
| Revenue | $2.426 billion | $2.308 billion | +5.1% |
| Subscription revenue | $1.656 billion | $1.552 billion | +6.7% |
| Advertising revenue | $505.2 million | $523.3 million | -3.5% |
| Other revenue | $264.8 million | $232.7 million | +13.8% |
| Operating profit | $276.3 million | $202.0 million | +36.8% |
| Net income attributable to common stockholders | $232.4 million | $173.9 million | +33.6% |
| Diluted earnings per share | $1.40 | $1.04 | +34.6% |
| Operating margin | 11.4% | 8.7% | +2.7 percentage points |
- Subscriptions: Digital-only subscription revenue rose 12.4% to $1.099 billion, while print subscription revenue fell 3.0% to $556.7 million. Digital-only subscribers increased by approximately 880,000 year over year. Total digital-only ARPU rose 2.6% to $9.18; bundle and multiproduct ARPU declined 17.7% to $13.05.
- Advertising and other revenue: Digital advertising was nearly flat, down 0.2%; print advertising fell 8.5%. Other revenue growth reflected licensing and Wirecutter affiliate referral strength.
- Costs and adjusted results: Operating costs increased 2.1% to $2.150 billion. Adjusted operating profit, a non-GAAP measure, was $389.9 million, up 12.0%, and adjusted operating margin was 16.1%, versus 15.1%. Adjusted diluted EPS was $1.63, versus $1.32.
- Cash flow: Operating cash flow was $360.6 million, compared with $150.7 million in 2022. Free cash flow, defined by the Company as operating cash flow less capital expenditures, was $337.9 million, compared with $113.7 million.
- Liquidity and debt: Cash, cash equivalents and marketable securities totaled $709.2 million, up from $486.3 million. The Company reported no borrowings under its $350 million revolving credit facility; approximately $350 million was available, subject to facility terms. Current assets/current liabilities ratio was 1.28, versus 1.15.
- Capital returns and investment: 2023 dividends paid were $69.5 million and share repurchases were $44.6 million. The Company targets returning at least 50% of free cash flow to shareholders through dividends and repurchases over the next three to five years. It expects approximately $50 million of 2024 capital expenditures.
Material changes and unusual items
- Digital subscriber and bundle growth drove subscription revenue, while print subscriptions continued to decline. The Company’s 2027 subscriber aim is 15 million, compared with 10.36 million at year-end 2023.
- The Athletic reported $131.3 million of revenue and an adjusted operating loss of $31.4 million, narrower than its $41.1 million loss in 2022. Comparability is affected by 2022 including approximately 11 months of results and 2023 including 12 months, as well as changes to bundle revenue and cost allocation beginning in April 2023.
- 2023 included $15.2 million of impairment charges, including a $12.7 million charge for excess leased office space and a $2.5 million impairment of the Serial trademark. The Company also recorded a $2.5 million gain from the final liquidation of a joint venture and a favorable multiemployer pension liability adjustment, partly offset by withdrawal costs.
- Comparison with 2022 is affected by the five extra days in 2022 and by 2022 acquisition-related costs for The Athletic and a gain on the lease and planned sale of College Point land. Management estimates the five-day impact on revenue but does not estimate its effect on costs or operating profit.
Outlook, risks and contingencies
- Management plans continued investment in journalism, digital products, technology, data infrastructure and machine learning. It expects 2024 capital expenditures of approximately $50 million and anticipates pension contributions of approximately $13 million in 2024.
- Key risks include intense competition for audience, subscriptions and advertising; dependence on third-party platforms for traffic and discovery; secular print declines; macroeconomic pressure on advertising and consumer spending; and rising employee, printing and distribution costs.
- Generative AI presents risks to audience traffic, content monetization, intellectual property and brand trust. In December 2023, the Company sued Microsoft and OpenAI over alleged unauthorized use of its journalism and other content. The outcome and any recovery are uncertain.
- Approximately 43% of employees were union-represented. Contract negotiations were ongoing for certain groups, including Mailers and Wirecutter employees, and for technology employees’ initial agreement. The Company warned that labor disputes could disrupt operations or increase costs.
- Pension exposure remains significant: qualified plan assets exceeded their obligations by approximately $83 million, but non-qualified pension obligations were approximately $181 million and estimated multiemployer withdrawal liabilities were approximately $68 million. Two significant multiemployer plans were classified as critical and declining.
- The filing reports no cybersecurity incident with a material adverse effect as of its filing date. The Company identified cybersecurity, privacy, payment processing and regulatory compliance as continuing risks. It also reported that its financial statements received an unqualified audit opinion and internal controls over financial reporting were effective.
Investor verification priorities
- Confirm the five-day fiscal-calendar difference and separate it from underlying growth when evaluating revenue and operating trends.
- Assess the durability and economics of digital subscriber additions, including bundle ARPU, churn, promotional pricing and The Athletic’s path to profitability.
- Track whether digital advertising and licensing/affiliate growth can offset ongoing print subscription and advertising declines.
- Review free cash flow conversion, planned 2024 capital spending, shareholder returns and the Company’s use of its available credit facility.
- Monitor pension funding and multiemployer withdrawal liabilities, union negotiations, the office-space sublet impairment and the Microsoft/OpenAI litigation.