NYT's subscriber base hit 13.4M after a 280K Q2 gain. Q3 guidance: digital-only subscription revenue up 12%-15% and digital ads in the mid-to-high teens.
The New York Times Co. (NYSE:NYT) added 280,000 net digital subscribers in the second quarter, lifting its total to 13.4 million. Revenue rose 11% in the quarter. Adjusted operating profit increased 16% to about $155 million, and adjusted diluted earnings per share climbed 19% to $0.69.
Chief Executive Officer Meredith Kopit Levien called Q2 "a great quarter" for The Times and said the company remains on track toward its next subscriber milestone of 15 million.
The digital-only subscriber base was up 13.3% from a year earlier at the end of the quarter, Chief Financial Officer Will Bardeen said. Average revenue per user rose 3.1%. He attributed the gain to a first-quarter price increase on a cohort of tenured bundle subscribers, plus better retention and pricing performance among subscribers coming off promotional offers. The company credited product expansion across news, sports, cooking and games for part of the digital subscription revenue gain.
Digital-only subscription revenue rose 16.4% to $408 million; total subscription revenue climbed 11.7% to about $538 million. Digital advertising increased 20.7% to $114 million, and total advertising reached $149 million, up 11.3%. Affiliate, licensing and other revenue added $75.5 million, about 7% higher. AlphaScala's NYT stock page carries an Alpha Score of 41 out of 100 with a Mixed label.
Both digital and total advertising growth exceeded the company's expectations in the quarter. Kopit Levien said the performance reflected marketer demand and strong engagement across the company's portfolio. She pointed to advertising products that generate results for clients. "Campaigns renew because the ads perform," she said.
Video has played only a minor role in advertising growth so far, she said. The company is still expanding production and engagement before it scales monetization.
Bardeen said higher-than-expected advertising revenue contributed to adjusted operating-cost growth of 10%, above the company's prior guidance. The primary reason, he said, was incremental variable compensation tied to the financial outperformance.
Sales and marketing costs also rose on promotional spending and higher advertising-related costs, Bardeen said. The company staffed a new middle-market advertising sales team during the quarter, he said, to pursue a segment it had not previously served.
Bardeen described marketing as a disciplined, variable lever rather than a structural shift in costs. Most subscription starts still come organically through the company's journalism and product investments, he said. Increased promotional spending around the World Cup contributed to The Athletic's largest audiences to date, Kopit Levien said.
The company is expanding video production to become "as preferred a brand for watching the news as it is for reading and listening," Kopit Levien said. The Times produces thousands of original videos each quarter, including reporter-led videos, news clips, visual investigations and longer-form shows.
During the quarter, the company launched a Shows tab in its flagship app, a destination for long-form programming in news, opinion, culture and lifestyle. The addition complements the existing Watch tab and the short-form video the company distributes across its own products and external platforms. Kopit Levien said the video strategy remains early, especially for longer-form shows. She sees an opportunity to reach new audiences and generate greater returns from the company's journalism investments over time.
She also said major technology platforms are sending less traffic to publishers. The Times is not immune, she said, and is working to reduce its reliance on intermediaries through differentiated coverage, direct relationships with audiences, app experiences and video.
The company recently announced a local-news product in at least one market. Kopit Levien described it as an experiment with a local participant, aimed in part at supporting local journalism more broadly.
First-half free cash flow came to about $266 million. The company returned roughly $160 million to shareholders over the period, including $92 million in share repurchases and $68 million in dividends. Bardeen said the total also benefited from seasonal working-capital timing and a tax-related benefit of about $60 million in 2026, most of which is not expected to recur after this fiscal year.
For the third quarter, the company expects digital-only subscription revenue to rise 12% to 15% and total subscription revenue to grow 9% to 11%. Bardeen attributed the subscription outlook to subscriber growth and the mix between higher-priced bundles and lower-priced single-product subscriptions. Pricing step-ups from subscribers moving off promotional offers are also contributing, he said.
The third-quarter advertising outlook calls for mid- to high-teens growth in digital and high single-digit to low double-digit growth for total advertising. Affiliate, licensing and other revenue is projected to rise by low to mid-single digits. A timing shift moved a Wirecutter affiliate partner's marketing promotion from the third quarter into the second, Bardeen said.
Adjusted operating costs are expected to rise 8% to 9% in the third quarter. The increase reflects continued investment in journalism and video, the company said.
Bardeen said the prior-year paywalling of The Mini affects the third-quarter subscription comparison. The move added lower-priced single-product subscribers to last year's third-quarter mix, he said.
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