New York Times Beats Q4 Expectations On Sustained Digital Growth
New York Times’ (NYSE:NYT) stock hit a ten-year high after reporting solid fiscal fourth quarter results on February 8. The company’s stock rallied by nearly 10% after the Q4 results announcement, and has gained more than 30% since the beginning of 2018. NYT again reported unprecedented growth in digital subscriptions, which helped the company stabilize its subscription revenues in the fourth quarter. The company’s total subscription revenues increased 19% year-over-year (y-o-y) in the quarter, with digital-only subscription revenue growing strongly at 51% y-o-y to $96 million. However, NYT’s advertising revenue declined 1% y-o-y, as 9% growth in digital advertising was offset by continued headwinds in print advertising (-8%). Overall, the company’s revenues grew 10% y-o-y to $484 million, driven by very strong digital revenues. In terms of total subscriptions, the company now has around 3.6 million total subscriptions (print and digital).
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Digital Subscriptions Boost Subscription Revenues
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NYT’s digital-only subscriptions grew 42% y-o-y in the quarter, a net increase of 157,000 digital subscriptions, of which digital news products saw a net addition of 99,000 new subscriptions in this quarter. This increase in new subscribers in Q4 led to growth in NYT’s overall circulation revenues, which contribute more than half of the company’s total revenues. On the print circulation side, revenues were down slightly as declines in single-copy revenue were mostly offset by higher home delivery revenue.
Print Advertising Headwinds Continue In Q4
NYT’s lower print advertising revenue was mainly due to declines in the luxury, entertainment, retail and real estate categories, partially offset by growth in the technology and telecom categories. The increase in the company’s digital advertising was driven by gains in smartphone branded content, marketing services and programmatic.
Future Outlook
Going forward, NYT expects its total subscription revenues to increase in the mid-to-high-single digits, compared to the first quarter of 2017, with digital-only subscription revenue expected to increase approximately 25%. However, the company also expects its overall advertising revenue to decline in mid-to-high-single digits y-o-y, with digital advertising revenues declining slightly.
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