Newspaper and digital media company The New York Times (NYSE: NYT) met Wall Street’s revenue expectations in Q1 CY2025, with sales up 7.1% year on year to $635.9 million. Its non-GAAP profit of $0.41 per share was 19.9% above analysts’ consensus estimates.

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StockStory’s Take

The New York Times' first quarter performance was shaped by continued expansion in digital subscriptions and growth across its diverse product portfolio. CEO Meredith Kopit Levien emphasized the company's ability to attract a broad audience with both news and lifestyle offerings, highlighting high engagement stemming from coverage of major global events and the popularity of its games and sports content. Management noted that the increase in digital-only subscribers was supported by disciplined efforts to step up prices for tenured cohorts and enhancements that increased product value. CFO Will Bardeen attributed higher operating margins to efficiency measures and a focus on disciplined investments, particularly in journalism and digital experiences. This approach, management said, enabled the company to generate substantial free cash flow while supporting multiple revenue streams.

Looking ahead, The New York Times' guidance for the remainder of the year is anchored by expectations for continued growth in digital subscriptions and advertising, with management citing strong engagement and ongoing product enhancements as key factors. CFO Will Bardeen stated, “We remain confident in our ARPU trajectory,” referencing steady subscriber engagement and a pipeline of new features and content. The company also expects digital advertising to sustain its momentum, supported by a growing suite of ad products and the ability to target engaged audiences. Management acknowledged market uncertainties, but believes the company’s essential subscription strategy and disciplined cost management will support margin expansion and strong free cash flow. Investments in video, audio, and lifestyle products are expected to further diversify and strengthen revenue streams throughout the year.

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to robust digital subscriber growth, higher audience engagement across products, and disciplined pricing strategies that contributed to margin expansion.

• Digital subscriber momentum: The company added 250,000 net new digital subscribers, with management attributing growth to both news coverage and lifestyle products such as games, cooking, and sports. High engagement during major news cycles and new features within the product suite supported this expansion.

• Advertising revenue diversification: Digital advertising grew 12%, which management linked to strong marketer demand and improvements in ad targeting. CEO Meredith Kopit Levien highlighted the appeal of a large, engaged audience and a broad set of advertising products, noting ongoing efforts to extend these offerings across the portfolio.

• Product innovation focus: Management pointed to new video and audio initiatives, including reporter-led video content and automated audio powered by artificial intelligence (AI). These enhancements are intended to make reporting more accessible and increase user engagement, with on-platform engagement for both formats more than doubling year over year.

• Bundle strategy effectiveness: The company continued to prioritize its bundle offering, which now represents nearly half of its total subscribers. Management described this as evidence of successful execution, with ongoing conversion of news-only subscribers to multiproduct bundles and disciplined use of pricing step-ups for long-tenured cohorts.

• Disciplined investment and cost control: Cost growth was kept below management’s original range despite continued investment in journalism and product development. CFO Will Bardeen noted that this enabled operating margin expansion and significant free cash flow generation, including a one-time benefit from asset sales.

Drivers of Future Performance

Management’s outlook is shaped by anticipated growth in digital subscriptions, evolving advertising dynamics, and continued investment in content and technology.

• Sustained digital subscription growth: Management expects digital-only subscription revenue to increase as the company continues to add value through product enhancements, new content, and ongoing conversion of subscribers to bundles. They attribute this growth to high engagement and a strong pipeline for additional features throughout the year.

• Advertising revenue outlook: The company anticipates digital advertising revenues will rise at a high single-digit rate, driven by broad marketer demand and the expansion of ad products. Management highlighted that the ability to target engaged audiences and capitalize on new advertising supply are central to this outlook, though they noted that broader market conditions could introduce volatility.

• Cost discipline and investment balance: Management plans to maintain a disciplined approach to operating costs while investing in journalism and digital products. They believe this balance will support margin expansion and free cash flow generation, even as the company navigates an uncertain economic environment. The impact of external factors, such as tariffs, was described as immaterial to date.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will be monitoring (1) the pace of digital subscriber additions and success in converting news-only users to bundles, (2) the trajectory of digital advertising growth amid shifting marketer demand and advertising product rollouts, and (3) the ability to maintain margin expansion while investing in journalism and technology. The impact of new video and audio initiatives on engagement and revenue will also be a key focus.

The New York Times currently trades at a forward P/E ratio of 25.8×. In the wake of earnings, is it a buy or sell? The answer lies in our full research report (it’s free).

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