New York Times Q4 2024 Earnings Report

New York Times EPS Results

• Actual EPS: $0.80
• Consensus EPS: $0.74
• Beat/Miss: Beat by +$0.06
• One Year Ago EPS: N/A

New York Times Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $725.93 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

New York Times Announcement Details

• Quarter: Q4 2024
• Date: 2/5/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, February 5, 2025
• Conference Call Time: 8:00AM ET

New York Times (NYSE:NYT), together with its subsidiaries, creates, collects, and distributes news and information worldwide. The company operates through two segments, The New York Times Group and The Athletic. It offers The New York Times (The Times) through company's mobile application, website, printed newspaper, and associated content, such as podcast. The company also offers The Athletic, a sports media product; Cooking, a recipe product; Games, a puzzle games product; and Audio, an audio product. In addition, it offers a portfolio of advertising products and services to advertisers, such as luxury goods, technology, and financial companies, to promote products, services or brands on digital platforms in the form of display ads, audio and video, in print in the form of column-inch ads, and at live events; and Wirecutter, a product review and recommendation product. Further, the company licenses content to digital aggregators in the business, professional, academic and library markets, and third-party digital platforms; articles, graphics, and photographs, including newspapers, magazines, and websites; and for use in television, films, and books, as well as provide rights to reprint articles, and create and sell new digests. Additionally, it engages in commercial printing and distribution for third parties; and operates the NYTimes.com website. The company was founded in 1851 and is headquartered in New York, New York.

New York Times Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Good morning, and welcome to The New York Times Company's Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Anthony Vicomente, Senior Vice President, Investor Relations. Please go ahead.

[Anthony DiClemente, SVP - Investor Relations at The New York Times]

Thank you, and welcome to The New York Times Company's fourth quarter and full year twenty twenty four earnings conference call. On the call today, we have Meredith Kopit Levian, President and Chief Executive Officer and Will Bardeen, Executive Vice President and Chief Financial Officer. Before we begin, I would like to remind you that management will make forward looking statements during the course of this call. These statements are based on our current expectations and assumptions, which may change over time. Our actual results could differ materially due to a number of risks and uncertainties that are described in the company's twenty twenty three ten K and subsequent SEC filings.

[Anthony DiClemente, SVP - Investor Relations at The New York Times]

In addition, our presentation will include non GAAP financial measures and we have provided reconciliations to the most comparable GAAP measures in our earnings press release, which is available on our website at investors.nytco.com. In addition to our earnings press release, we have also posted a slide presentation relating to our results on our website at investors.nytco.com. And finally, please note that a copy of the prepared remarks from this morning's call will be posted to our investor website shortly after we conclude. With that, I will turn the call over to Meredith.

[Meredith Kopit Levien, President & CEO at New York Times]

Thanks, Anthony, and good morning, everyone. The fourth quarter capped another strong year for the time in which we made further progress toward becoming the essential subscription for every curious person seeking to understand and engage with the world. In 2024, we added over 1,100,000 digital subscribers, putting us further on the path to our next milestone of 15,000,000 total subscribers. Digital subscription revenue, the largest engine of our growth, increased 14% and we delivered consistently high subscriber engagement in news and across the portfolio, which contributed to strong increases in digital advertising, wire cutter and licensing. LC revenue growth paired with a disciplined approach to investing drove higher adjusted operating profit, margin expansion and increased free cash flow.

[Meredith Kopit Levien, President & CEO at New York Times]

These results demonstrate that our strategy is working as designed. Our market leading news and premium lifestyle products proved more valuable to more people in 2024. That was evident in high engagement across the portfolio, which fueled our multi revenue stream model and enhanced our durability even in a dynamic information ecosystem. So we begin 2025 with real momentum, which gives us confidence that we can deliver another year of healthy growth in subscribers, revenue and profitability as well as robust free cash flow. I'll turn now to our results in the fourth quarter.

[Meredith Kopit Levien, President & CEO at New York Times]

We added 350,000 net new digital subscribers in the quarter. Digital subscriber revenue growth accelerated to 16%, driven by increases in both subscribers and ARPU. Our bundle continued to be a major engine of subscriber additions and is well on its way to becoming a majority of the subscriber base. Bundle growth was propelled by our news product and also each part of our lifestyle portfolio, which is a key element of our strategy in action. Each part of our portfolio also contributed to digital advertising revenue in Q4, which was up 9.5%.

[Meredith Kopit Levien, President & CEO at New York Times]

This was particularly true of games and the athletic where we have strategically expanded ad supply. We also benefited from continued enhancements to our ad products and the growing sophistication of our targeting capabilities such as our AI powered brand match. These results demonstrate the effectiveness of our ad products and the value of our diversified portfolio to marketers, and we delivered them even as some advertisers continue to avoid our news topic. Revenue beyond subscriptions our news topic. Revenue beyond subscriptions and advertising increased meaningfully.

[Meredith Kopit Levien, President & CEO at New York Times]

Wirecutter had another great quarter, including its best Cyber Week sales period ever, driven by new coverage areas, format expansion and deeper engagement. Finally, AOP grew and margins expanded even as we continued to invest in our strategic areas for growth, namely our world class journalism and premium product experiences. Before I close, I'll share some reflections on the year we just finished and our priorities for further growth from the year. This year, we'll build on what we accomplished in 2024, which was a standout year for the Times in terms of delivering value to

[Meredith Kopit Levien, President & CEO at New York Times]

our

[Meredith Kopit Levien, President & CEO at New York Times]

users. Despite a challenged and changing ecosystem, the Times grew its audience in 2024 and once again ranked first among digital news destinations in time spent per visitor. Our world class news coverage led on the biggest stories from the news coverage led on the biggest stories from the election to AI to the wars in The Middle East and Ukraine, and we significantly evolved every product in our portfolio. We relaunched our core news app with expanded surface area for discovery and engagement. We released a new version of our award winning games app to much success.

[Meredith Kopit Levien, President & CEO at New York Times]

We continued to expand national sports coverage on the athletic and also made it easier to follow the teams you love and we enriched the cooking experience with more easy to make recipes and short form video. As a result, our journalism and products were more essential and more relevant than ever before. Tens of millions of people came to the Times every week to understand the world, play our games, follow the teams they love, figure out what to make for dinner and shop smarter. Our goal for 2025 is to deliver value at even greater scale and to be so distinctive that even more people seek us out directly and build daily habits with us. To that end, here's where we'll focus.

[Meredith Kopit Levien, President & CEO at New York Times]

First, we'll continue to comprehensively cover the most important stories from the new administration to the economy, from the impact of the changing climate with a world class team of expert journalists and the deep reporting, independence and ambition The Times is known for. Second, we'll keep adding and innovating in video and audio to make our reporting more accessible to more people. Last year, one in three visitors to our home pages watched video and over half of our news report was listenable via AI powered automated voice. In 2025, we'll go further with multi format journalism and give people more ways to discover and get immersed in the times. Third, we're focused on making each of our products more valuable to more people and have a robust pipeline of new content, shows, features, games and other enhancements in store for 2025.

[Meredith Kopit Levien, President & CEO at New York Times]

And finally, all of that is meant to drive a larger engaged audience for the Times with a particular focus this year on growing the engaged prospect pool for each of our products. We believe those priorities, expert journalism delivered in more formats and increasingly valuable product experiences that appeal to larger audiences are the way to inspire millions more people to build a direct daily habit with us. And strong execution in each of these areas is how we expect to create a larger and more profitable company. With that, I'll turn it over to Will for further details on the quarter.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

Thanks, Meredith, and good morning, everyone. In 2024, we drove strong results, including another year of healthy revenue growth, AOP growth, margin expansion and strong free cash flow generation. As Meredith said, we continued to grow our subscriber base over the course of the year, adding 1,100,000 digital subscribers, while also delivering strong subscriber engagement along with ARPU increases. This led to an increase of approximately 14% in digital subscription revenue and helped power growth across our multiple revenue streams. We grew overall revenue in the full year by approximately 7% as growth in digital subscription, digital advertising, affiliate and licensing was partially offset by ongoing declines in print.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

These healthy revenue results coupled with our disciplined approach to costs throughout the year drove operating leverage. AOP grew by approximately 17% year over year in 2024 to $455,000,000 and AOP margin expanded by approximately 150 basis points to 17.6%. We delivered these results even as we continued to prioritize strategic investments aimed at further differentiating our high quality journalism and digital products. Due to our capital efficient model, a large majority of our AOP converts to free cash flow. We generated approximately $381,000,000 of free cash flow in 2024.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

Over that same period, we returned approximately $168,000,000 to shareholders. This included approximately $85,000,000 in share repurchases and approximately $83,000,000 in dividends. Consistent with our capital allocation strategy, today we announced an increase in the quarterly dividend from $0.13 to $0.18 as well as a new share repurchase authorization of $350,000,000 Now, I'll discuss the fourth quarter's key results followed by our financial outlook for the first quarter of twenty twenty five. Please note that all comparisons are to the prior year period unless otherwise specified. I'll start with a discussion of our subscription business.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

We added approximately 350,000 net new digital subscribers in the quarter, bringing our total number of subscribers to 11,400,000 with growth coming from multiple products across our portfolio. Bundling multi product subscribers now make up approximately 48% of our total subscribers, well along the path to exceeding 50% by the end of next year. Total digital only ARPU grew 4.4% to $9.65 as we continued to step up subscribers from promotional to higher prices and raise prices on tenured non bundled subscribers. The value we've added to our products combined with the encouraging results we're seeing at pricing step up points gives us confidence in the continued strength of our ARPU trajectory. As a result of both higher digital subscribers and digital only ARPU in the fourth quarter, digital only subscription revenue came in at the high end of the guidance range we provided last quarter, growing approximately 16% to $335,000,000 Total subscription revenues grew approximately 8% to $467,000,000 which was in line with the guidance we provided last quarter.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

Now turning to advertising. Total advertising revenues for the quarter were $165,000,000 an increase of approximately 1%. Digital advertising revenues increased approximately 9.5% to $118,000,000 Other revenues outperformed in the quarter, increasing approximately 16% to $95,000,000 as Wirecutter affiliate revenues and licensing revenues continued to perform well. Adjusted operating costs grew 6.5% in the quarter. This was slightly above our 5% to 6% guidance range as we opportunistically increased marketing investments during the period of high expected ROI.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

Looking at each of the lines, cost of revenue increased approximately 5%, sales and marketing costs increased approximately 21%, product development costs increased approximately 6% and adjusted G and A costs decreased approximately 1%. Adjusted diluted EPS in Q4 increased $0.1 to $0.8 primarily driven by higher operating profit and higher interest income. I'll now look ahead to Q1 for the consolidated New York Times company. Digital only subscription revenues are expected to increase 14% to 17% compared with the first quarter of twenty twenty four and total subscription revenues are expected to increase 7% to 10%. Digital advertising revenues are expected to increase high single digits and total advertising revenues are expected to range from a low single digit decrease to a low single digit increase.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

Other revenues are expected to increase mid single digits. Adjusted operating costs are expected to increase 5% to 6% as we continue to invest in our high quality journalism and digital product portfolio to add value for our audience while maintaining a disciplined approach to costs. In summary, our strong economic results in 2024 demonstrate our essential subscription strategy is working as designed. The strategic priorities for the coming year that Meredith highlighted are all aimed at building a larger and more engaged audience over time, growing our subscriber base and powering our multiple revenue streams. In 2025, we expect healthy growth in revenues and AOP as well as continued margin expansion and strong free cash flow generation.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

We remain on the path to achieving our mid term targets for subscribers, AOP growth and capital returns. With that, we're happy to take your questions.

[Operator]

Our first question today comes from Benjamin Faugh from Deutsche Bank. Please go ahead with your question.

[Benjamin Soff, Analyst at Deutsche Bank]

So as you mentioned, you had an Analyst Day a couple of years ago where you provided multiyear guidance. Now in 2025, we're entering that window. You've obviously accomplished a lot over the past few years and the entire landscape has evolved. So I was hoping you could reflect a bit on how the business has changed and how we should be thinking about those long term targets? And then, I have a follow-up.

[Meredith Kopit Levien, President & CEO at New York Times]

Hi, Benjamin. Thanks for the question. I'm happy to start and Will, you should feel free to add anything. I will say first that we have a lot of confidence in our strategy to be the essential subscription. We feel strongly that that strategy is kind of working as designed.

[Meredith Kopit Levien, President & CEO at New York Times]

And I think you see that in the results and in the forward outlook that Will and I have both attempted to paint a picture of here for 2025. I think we are sort of existing and delivering on that strategy in a really dynamic and kind of rapidly evolving ecosystem. And I think the idea that we are first and most focused on building news coverage and products that are so good that people seek them out and ask for them by name and make room for them in their lives is the thing that's making us resilient even in that dynamic ecosystem. You're seeing that play through in consistently strong engagement across our portfolio and in the revenue that that enables in digital subscriptions and advertising and affiliates and licensing. So we feel very confident about where we are and where we're going and

[Meredith Kopit Levien, President & CEO at New York Times]

believe we're

[Meredith Kopit Levien, President & CEO at New York Times]

going to continue to be building a larger and more profitable company. But we'll feel free to add anything I may have missed there.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

I think the only thing to say based on what the question is given the success of the strategy so far and our confidence and the priorities that Meredith laid out, we believe we're on the path to achieving our midterm targets as previously stated for subscriber safety growth and capital returns.

[Benjamin Soff, Analyst at Deutsche Bank]

Great. And then for the bundled product, you saw ARPU inflect to positive growth this quarter. It's a big milestone. Do you anticipate that bundled ARPU can grow sustainably from here or will it vary depending on the cadence of sub growth and the promos you're running?

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

Yes, I can take that. I mean, I think that's I always say when you ask about one of those specific categories, the best metric to watch is really total digital only ARPU. Having said that, we're really pleased with how the bundled step ups are going. That's been the primary driver of that increase in bundled and multi product ARPU you're seeing. And that really just reflects the strategy in action as we steadily improve the journalism and the products.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

People are engaging more and they're placing higher value on the service, on the bundle in particular as you noted, which is been strong and we expect to continue to be the case. And then that strengthens our ability to transition subs to higher prices over time and gives us confidence that we can have a strong ARPU trajectory going forward. So there's nothing I would say to you to call out one way or the other, just that we continue to have a lot of confidence in the strength of the multi product ARPU and just our ARPU trajectory overall.

[Anthony DiClemente, SVP - Investor Relations at The New York Times]

Thanks for the questions, Ben. Operator, we'll take our next question, please.

[Operator]

Our next question comes from Thomas Yee from Morgan Stanley. Please go

[Operator]

ahead with your question.

[Thomas Yeh, Analyst at Morgan Stanley]

Thanks. Good morning. Meredith, you mentioned you're focused on growing the engaged pool across verticals. Is that a top of funnel comment on registered users? And how does that translate into the different types of investments, whether that's more content or tech or maybe a different approach to marketing?

[Thomas Yeh, Analyst at Morgan Stanley]

And then dovetailing that with the marketing expense in the quarter, maybe for Will, I noticed the sequential step up on paid media expenses. Can you dig a bit into the nature of your philosophy around ROI expectations on performance marketing and how we should think about the timing of when you might realize the ROI on that? Thank you.

[Meredith Kopit Levien, President & CEO at New York Times]

Yes. Thanks, Thomas. That's a great question. I think the best way to answer what you're asking is we feel like there's real running room in every direction of the portfolio to grow engaged audience and to get more people into a direct relationship with The New York Times and to have a multi day habit with us. And I'll just touch on how we intend to do that in each part of the portfolio.

[Meredith Kopit Levien, President & CEO at New York Times]

In news, it's really about continuing to employ the world's best journalists and deploy them on the biggest and most important stories. What's changing in our ability to do that is that we can do it now in more and more formats. Last year was a very big year for us in terms of more video and audio, and you'll see us continue that in 2025. And I think that's kind of self evident if you use our products, but you can expect a lot more of that from us in 2025. And that's your question about sort of where in the funnel is that.

[Meredith Kopit Levien, President & CEO at New York Times]

I think that makes Times journalism appealing to more people. So top of the funnel and it makes them more engaged, middle of the funnel. So we see that really in news. In games, we've got a robust pipeline for both feature development on the games we already have and also a very good track record now of building new games and games are also great in every part of the funnel. So they bring a lot of new people to us, but they're very habit forming, also probably self evident.

[Meredith Kopit Levien, President & CEO at New York Times]

So I'd say they're running room in all parts of the portfolio. Sports, we continue to be early. It is a huge market. We've been pleased all year long with growth in the athletics audience. You can expect us to continue to be very focused there.

[Meredith Kopit Levien, President & CEO at New York Times]

I'd say maybe even more than any other products on top of funnel, making sure people know the athletic exists, and is a great reason to come to the time. So very good progress there so far and a lot more to come. And then I'll just say, shouldn't count out Cooking and Wirecutter and even our podcast and sort of ability to get at people through what they listen to. So running room in every direction and specifically to your question, at the top of the funnel, in the middle of the funnel. And of course, we're always very focused on subscriber engagement and getting people to stay, pay more overtime, stay longer.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

And Thomas, I can take the media spend, media investment question. We were pleased in the quarter, you noted that increase in year over year investment. Pleased with the role that that played and has been played in the quarter and has been playing overall. I always want to step back when I talk about the Vee investment and just remind you and everyone else that the significant majority of our subscribers start come organically. That's the core of the model and we continue to believe it will be given all the targeted strategic investments we've made and continue to make into the journalism and the product development.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

Regarding the media investment specifically, there's no change to our approach there. We're very ROI focused. And so what you're seeing is not a change in our ROI demands and the expectation of higher ROI. But as we've always said, we consider leaning in when we see opportunities given what's happening for a variety of factors in the market to take advantage of really attractive ROI. So that's what was reflected in Q4.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

And I think you can expect as we've said in any given quarter, those levels will fluctuate depending on what we're seeing. And in terms of timing of realization, having given sort of specifics on that, but needless to say, it's not in the quarter itself that we're spending the money. It plays out over multiple quarters. And given the sort of longevity of our experience with the model, we have a lot of confidence in our ability to step people up and just the overall value of the product leading to price and power over time. We have a lot of confidence in our LTV models to give us a sense of that expected ROI is real.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

So I'll leave it there for now.

[Operator]

Our next question comes from David Karnovsky from JPMorgan. Please go ahead with your question.

[David Karnovsky, Senior Research Analyst at JP Morgan]

Hey, thanks. The digital ads, Meredith wanted to see if you could just expand on the rollout on lifestyle products to date. Curious how visible those ads are, say, on athletic and gains relative to what you would see on news? And then I think growth has largely come from increasing programmatic supply. Should we think of that as the driver ahead?

[David Karnovsky, Senior Research Analyst at JP Morgan]

And then just a separate question, your cash and securities balance is approaching $1,000,000,000 dollars Assuming no further change in capital allocation, how do we kind of think about the optionality here? Is there potential for M and A, for instance, that we should be thinking about? Any color would be great. Thanks.

[Meredith Kopit Levien, President & CEO at New York Times]

Yes. I'll do the first question. I'll do a little bit on the second question and see if Will wants to add anything. On digital advertising, it's a good year in digital advertising and we are excited about the new year we've entered in part for the reason you're pressing on. We continue to feel like there's more supply ahead to roll out.

[Meredith Kopit Levien, President & CEO at New York Times]

And I would say, it's not just a supply story, there's real demand for our lifestyle products. I think marketers like working with The Times. We have a great audience broadly for the enterprise news on our lifestyle products. And we now have very effective ad products that we've got years of experience in first party data and targeting. We've got this great new AI product and brand match and we have these big beautiful canvases in news and across the portfolio that we're still rolling out.

[Meredith Kopit Levien, President & CEO at New York Times]

As far as sort of what's ahead, I would say more supply to come on games, more places where you'll see us have that experiences. And in sports, I'll just go, I think in my answer to Thomas' question, I'll say, we still have a very big opportunity with the athletic to build audience and awareness and get people just to engage with product at all. What we kind of love where we are with that and there's a lot still ahead. And as audience for us on The Athletic, it's not perfectly linear, but you can imagine advertising growth to continue there as well as a result of that. On your precise question of should we expect it to be more programmatic, I would regard programmatic as like a method for buying.

[Meredith Kopit Levien, President & CEO at New York Times]

We are seeing growth and improvement in the way we execute programmatically, but I'd say the opportunity is in both direct sold and programmatic. The multi product portfolio gives us a lot of the sort of strength of the product set, the breadth of the portfolio gives us optionality and lots of opportunity in both directions, direct and programmatic. So that's my answer on advertising. Just very broadly thinking about the balance sheet and you, I think, used the word kind of optionality. Yes, I do think it gives us a lot of come in that ecosystem.

[Meredith Kopit Levien, President & CEO at New York Times]

We have a very clear strategy. We're come in that ecosystem. We have a very clear strategy. We're very well positioned, but we like the optionality the balance sheet gives us in that context. So, Will, I don't

[Meredith Kopit Levien, President & CEO at New York Times]

know if you want to say more about that.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

I just might add a few things, which is this is all our philosophy here is all part of the very disciplined approach to capital allocation, which we've laid out. Might be just worth just recalling that here our top priority is always to combine with high return organic investment into our central subscription strategy to really continue to grow into that opportunity. And then after that, we intend to return at least 50% of our free cash flow to shareholders at the mid term. Just noting the announcement today of the $0.05 increase to the quarterly dividend as well as the new repurchase authorization of $350,000,000 in addition to the approximately $155,000,000 ish left on our prior authorization is enabling us to make sure that we're delivering on that strategy.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

Part of the strategic optionality is at least 50% going forward. And then to the point Meredith made, having that optionality at this time of dynamic change, M and A is always something we consider. I want to reiterate that we have a really high bar for that. In the past, you've seen us whether it's Wirecutter, Whirl or The Athletic, the opportunities align with brands, how to accelerate the strategy and provide a very attractive risk adjusted return on invested capital.

[Anthony DiClemente, SVP - Investor Relations at The New York Times]

Great.

[Anthony DiClemente, SVP - Investor Relations at The New York Times]

Thanks a lot, David. Operator, we'll take our next question, please.

[Operator]

Our next question comes from Cukun Mehraal from Evercore ISI. Please go ahead with your question.

[Kutgun Maral, Director at Evercore ISI]

Good morning. Thanks for taking the questions.

[Kutgun Maral, Director at Evercore ISI]

I wanted to follow-up on

[Kutgun Maral, Director at Evercore ISI]

the engagement front and was hoping you could expand on the strength you called out earlier. Maybe you can unpack the trends you're seeing particularly post election. It seems like we're perennially in unprecedented times and presumably this adds to the value of your products, but perhaps you could help us think about the opportunities you see with the current dynamics and how it shapes your efforts to continue pushing the bundle and perhaps this year lean more into monetization?

[Kutgun Maral, Director at Evercore ISI]

Thank you.

[Meredith Kopit Levien, President & CEO at New York Times]

Yes. Thanks for the question. I would say, generally, engagement among prospects and subscribers is sort of the high octane gas in the tank that fuels the whole model. And we feel very good that engagement has been consistently strong and I gave an answer to a previous question about those sort of different parts of the portfolio. We still have opportunity to build that engagement in every part of the portfolio.

[Meredith Kopit Levien, President & CEO at New York Times]

I think that's one of the things that makes the times very unique. I'd say we are bullish that there is persistent demand for what we do journalistically. I feel very confident that the investments we've continued to make in our coverage engine and in format innovation are really enabling us to meet the moment, journalistically on all the big storylines right now, including a new administration in Washington. But well beyond that, the AI story, we had lots and lots of coverage about SEEKSEK last week, the LA wildfires, I think the Times had standout coverage there. We are really well prepared to cover the big story wherever it goes.

[Meredith Kopit Levien, President & CEO at New York Times]

And as I said earlier, to get that coverage to people in lots of new and different ways and we're going to continue to be very aggressive in our format of innovation, particularly around video and audio. And then I'll just say the broader portfolio and model is really designed to harness demand wherever it might come from. So we've got this incredible roster of habit forming games and we've got a ton of running room in sports for the passionate fan and even the less passionate fan who's just interested in the biggest stories in sports and same for cooking and wire cutter. So we have a lot of optimism about our ability to consistently engage people and find new ways to do that even in a changing market.

[Anthony DiClemente, SVP - Investor Relations at The New York Times]

Great. Thanks, Ketan. Operator, next question please.

[Operator]

Our next question comes from Vasily Karasyov from Cannonball Research. Please go ahead with your question.

[Vasily Karasyov, Founder & Senior Analyst at Cannonball Research]

Thank you. Good morning. Meredith, I wanted to follow-up on your comments about advertising revenue and ask you this. Obviously, you have a lot of engaged audience and impressions for sale. And the press release calls out display as the main driver of advertising digital advertising revenue growth.

[Vasily Karasyov, Founder & Senior Analyst at Cannonball Research]

Do you see any opportunities for other formats like video, for example, that would allow you to charge higher CPM, probably step up growth in that revenue line? And if you could share with us what you think opportunities are and what you're working on, that would be great. Thank you.

[Meredith Kopit Levien, President & CEO at New York Times]

Yes. Thanks for the question, Vasily. I would say that we see a lot of opportunity everywhere in advertising. You call out CPM in general. We've got a business where I think the CPMs have been consistently strong.

[Meredith Kopit Levien, President & CEO at New York Times]

We don't get into detail there, but we've got a high value ad product set. And particularly on the direct sold side and we are a majority direct sold business. We have been I've been in and around this business for a very long time. We have been able to maintain high CPM. So I'd say even the sort of broader display canvases are strong from a CPM standpoint.

[Meredith Kopit Levien, President & CEO at New York Times]

And we will continue to make those products performance for marketers with data that gets better and better. And our ability to target in sort of steadily improving ways helps keep CPM strong. And I would just say there's a lot of running room there on just making sure those display canvases are still valuable. You asked about video. I think you see us taking those display canvases and experimenting more aggressively with different formats that in some cases include video.

[Meredith Kopit Levien, President & CEO at New York Times]

And then I would say, audio has continued to be a very important part of the ad proposition at the times. And there, we obviously, there's podcast advertising, but I think we're still there's still quite a bit of format innovation come in audio advertising. So virtually any space that you can imagine digital advertising playing in as to format, you can regard the times as experimenting with. And the last thing I'll say is, we've got this really unique complementary product portfolio where people come and do different things. So watching a recipe be made, playing a game, reading a news or sports story or listening to a news or sports story, those are very different activities.

[Meredith Kopit Levien, President & CEO at New York Times]

And I would say the ads that go with those things can be pretty varied as a result.

[Anthony DiClemente, SVP - Investor Relations at The New York Times]

Great. Thanks, Vasily. Operator, let's take one last question.

[Operator]

And our final question comes from Doug Arthur from Huber Research Partners. Please go ahead with your question.

[Douglas Arthur, Managing Director at Huber Research Partners]

Yes. Good morning. Will, just leaning into this your answer on the media expense line item. I mean, when you talk about opportunity, did you see like a sudden surge in traffic to the site and so you stepped on the gas? I mean, what's sort of the chicken and the egg there?

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

Thanks, Doug. I appreciate why you're asking the question. The dynamics in any given quarter that we're playing in are there are a lot of dynamics going on that impact the subscription business overall and certainly the market in which we're doing the paid acquisition as well. So we don't really like to kind of speculate on specific dynamics. I think the key thing to say is we have a team that is really focused every day, every week on really looking at how we're performing.

[William Bardeen, Executive VP & Chief Financial Officer at New York Times]

We are a lot on our investment. And so we're constantly looking at that. We're willing to put more investment in when we see really attractive returns developing. And just the same, we're equipped to pull out if we see the opposite happening. And I think what we see reflected in that investment in Q4 was a view that we had some real opportunity there and we wanted to take advantage of it.

[Anthony DiClemente, SVP - Investor Relations at The New York Times]

Great. We want to thank everyone for joining us this morning for our earnings call and we'll talk to you again next quarter.

[Operator]

And ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.

Participants

Executives

• Anthony DiClemente, SVP - Investor Relations
• Meredith Kopit Levien, President & CEO
• William Bardeen, Executive VP & Chief Financial Officer

Analysts

• Benjamin Soff, Analyst at Deutsche Bank
• Thomas Yeh, Analyst at Morgan Stanley
• David Karnovsky, Senior Research Analyst at JP Morgan
• Kutgun Maral, Director at Evercore ISI
• Vasily Karasyov, Founder & Senior Analyst at Cannonball Research
• Douglas Arthur, Managing Director at Huber Research Partners