Q4 2023 New York Times Co Earnings Call

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Operator: Good morning, everyone, and welcome to the New York Times Company's fourth quarter and full year 2023 earnings conference call. All participants will be in a listen-only mode.

Good morning, everyone and welcome to the New York Times company's fourth quarter and full year 2023 earnings conference call.

All participants will be in a listen only mode.

Operator: Should you need assistance, please contact a conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your telephone keypad. For all your questions, you may press star and.

We can do a conference specialist by pressing the Star T followed by zero.

After todays presentation, there will be an opportunity to ask questions.

Ask a question you May press Star and then one on your telephone keypad.

So with your all your questions you May press star and two.

Operator: Please also note today's event is being recorded. And at this time, I'd like to turn the floor over to Anthony DiClemente, Senior Vice President of Investor Relations. Please go ahead.

Please also note today's event is being recorded.

This time I'd like to turn the floor over to Anthony Diclemente Senior Vice President of Investor Relations. Please go ahead.

Anthony Joseph DiClemente: Thank you, and welcome to the New York Times Company's fourth quarter and full year 2023 earnings conference call. On the call today, we have Meredith Kopit Levien, 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 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 2022 10-K and subsequent SEC filings. 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 and are available on our website at investors.nytco.com.

Anthony Joseph DiClemente: Thank you and welcome to the New York Times Company's fourth quarter and full year 2023 earnings conference call on the call today, we have Meredith Kopit, Levien, President and Chief Executive Officer, and Wilbur <unk> Executive Vice President and Chief Financial Officer, before we begin I would like to.

Anthony Joseph DiClemente: Remind you that management will make forward looking statements during the course of this call.

Anthony Joseph DiClemente: These statements are based on current expectations and assumptions, which may change over time.

Anthony Joseph DiClemente: Actual results could differ materially due to a number of risks and uncertainties that are described in the company's 2022 10-K and subsequent SEC filings. In addition, our presentation will include non-GAAP financial measures and we have provided reconciliations to the most comparable GAAP measures in our earnings.

Anthony Joseph DiClemente: Press release and is available on our website at investors <unk>.

Anthony Joseph DiClemente: Why T C O Dot Com. In addition to our earnings press release, we have also posted a slide presentation relating to our results also on our website at investors investors Dot N Y T. C O dot com. Finally, please note that a copy of the prepared remarks from this morning's call will be posted.

Anthony Joseph DiClemente: 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. Thanks, Anthony, and good morning, everyone.

Anthony Joseph DiClemente: To our Investor website. Shortly after we conclude with that I will turn the call over to Meredith.

Thanks, Anthony and good morning, everyone.

Meredith Kopit Levien: 2023 was a strong year for the Times that showcased the power of our strategy, to be the essential subscription for every curious person seeking to understand and engage with the world. Our news reports proved indispensable to so many people, providing original journalism across the full range of human experience. Our lifestyle products serve scaled audiences for games, sports, cooking, and shopping recommendations. By putting them all together and giving millions of people multiple reasons to turn to the Times every day, we delivered business growth and demonstrated our ability to penetrate a large market. We drove this performance amidst a tough year for the news industry, in which we and others faced persistent headwinds. We continue to see lower levels of casual news audiences due in part to the ongoing shifts from the largest tech platforms, and our ad business grappled with the heightened market volatility impacting publishers. Our strategy is designed to both counterbalance these headwinds and position us to be a category-leading global media subscription business. Let me share the highlights from the year.

Meredith: <unk> 23 was a strong year for the times that showcase the power of our strategy to be the essential subscription every curious person seeking to understand and engage with the world.

Meredith: Our news report provided at Peru, indispensable to 70 people, providing original journalism across the full range of human experience.

Meredith: <unk> style products serve scaled audiences for games sports cooking and shopping recommendations.

Meredith: By putting them, all together and giving millions of people multiple reasons to turn to the times every day, we delivered business credits and demonstrated our ability to penetrate our large market we.

Meredith: We drove this performance amidst a tough year for the news industry in which we and others faced persistent headwinds we continue to see lower levels of casual news audience is due in part to the ongoing shifts from the largest tech platform and our ads business grapples with the heightened market.

Meredith: Volatility impacting publishers our strategy is designed that counter balanced these headwinds.

Meredith: This should not be a category leading level media subscription business, let me share the highlights from the year.

Meredith Kopit Levien: We added 880,000 net new digital subscribers, bringing our total to nearly 10.4 million and progressing on the path to our next milestone of 15 million. The bundle accounted for a majority of our subscriber starts in the year. Bundle and multiproduct subscribers made up 41 percent of our subscriber base at year end, and those subscribers continue to be more engaged, better retained, and willing to pay more over time than single product subscribers. New York Times subscriber engagement, as measured by the share of subscribers on our products each week, reached its highest point in nearly three years by year end. And The Times now sees more digital engagement than any other American news source by total monthly time spent.

Meredith: We added 880000, net new digital subscribers, bringing our total didn't really pinpoint for myriad and progressing on the path to our next milestone of 15.

Meredith: Oh, yes.

Meredith: The bundle accounted for a majority of our subscribers in the ear bundle and multi product subscribers made up 41% of our subscriber base at year.

Meredith: And those subscribers continue to be more engaged better retaining and willing to pay more overtime than single product subscribers.

Meredith: New York time subscriber engagement as measured by the share of subscribers on our products. Each week reached its highest point in nearly three years by year end and the time now is more digital engagement than any other American news source.

Meredith: Hurdle monthly time spent.

Meredith Kopit Levien: We crossed a billion dollars in annual digital subscription revenue for the first time in 2023, and Consolidated ARPU has now grown year-on-year for three straight quarters. We see this as a testament to our well-honed pricing and merchandising strategy, which is made possible by the growing value we provide to consumers through our differentiated multiproduct offering. It was a challenging year in the ad market for publishers, but the core of our ad business, premium proprietary ad canvases enhanced with first-party data, proved resilient and continued growing. And we saw real momentum as we extended our ad products across the portfolio, particularly to sports and games, where we see a lot of running. It was also a record year for affiliate and licensing revenue.

Meredith: We cross a billion dollars in annual digital subscription revenue for the first time in 2023 and consolidated our two has now grown year on year for three straight quarters, we see this as a testament to our well honed pricing and merchandising.

Meredith: G, which is made possible by the growing value, we provide to consumers through our differentiated multi product offering.

Meredith: It was a challenging year in the AD market for publishers, but the core of our AD business premium a proprietary AD canvas is enhanced with first party data for resilience and continued growing and we saw real momentum as we extended our AD products across the portfolio, particularly.

Meredith: The athletic and games, where we see a lot of running room.

Meredith: It was also a record year for affiliate and licensing revenue.

Meredith Kopit Levien: Wirecutter outperformed expectations in every quarter, and in December, we announced a new multi-year licensing agreement with Apple News Plus for the Athletic and Wirecutter. Feels like this underline that our intellectual property has unique value recognized by some of the world's largest tech platforms. We exerted cost discipline throughout the year and substantially slowed overall expense growth while redirecting resources and continuing to invest in our areas of competitive advantage.

Meredith: Wire cutter outperformed expectations in every quarter and in December we announced a new multi year licensing agreement with Apple news plus for the athletic and wire cutter.

Meredith: Feels like that's underscored that our intellectual property has unique value recognized by some of the world's largest tech platform.

Meredith: We exert it cost discipline throughout the year and substantially slowed overall expense Brett wall redirecting resources.

Meredith: She is going to invest in our areas of competitive advantage.

Meredith Kopit Levien: All of this progress across the business drove strong earnings per share, adjusted operating profits, and free cash flow growth. In fact, in 2023, each hit their highest point since our transformation into a digital-first, subscription-first business began more than a decade ago. Inclusive of the athletics, we also expanded margin by 100 basis points.

Meredith: All of this progress across the business drove strong earnings per share adjusted operating profit and free cash flow breadth in fact in 'twenty two 'twenty three 2023 each hit their highest point since our transformation into a digital first subscription first business began.

Meredith: More than a decade ago inclusive of the athletic. We also expanded margin by 100 basis points, we delivered that improved profitability, even as our print business.

Meredith Kopit Levien: We delivered that improved profitability even as our print business continued to experience secular decline. Our results also reflect the cash-generative nature of our model and give us the confidence to announce the sixth consecutive annual increase in our dividends. This financial growth also positions us to continue investing in expert, independent journalism, which is central to how we expect to create value over the long term. I'll turn now to our fourth-quarter results. In Q4, we met or beat quarterly guidance on digital and total subscription revenue, other revenue, and adjusted operating costs. However, digital advertising came in slightly below the low end of our guidance, and total advertising came in below our guidance. We added 300,000 net new digital subscribers in the quarter. We attribute this strong performance to multiple distinct drivers.

Meredith: Can you to experience secular decline.

Meredith: Our results also reflect the cash generative nature of our model and give us the confidence to announce the sixth consecutive annual increase to our dividend.

Meredith: This financial crisis also positions us to continue investing in expert independent journalism, which is central to how we expect to create value over the long term.

Meredith: I'll turn now to our fourth quarter results.

Meredith: In Q4, we met or beat quarterly guidance on digital entitled subscription revenue other revenue and adjusted operating costs digital advertising came in slightly below the low end of our guidance and turtle advertising came in below our guidance.

Meredith: We added 300000 net new digital subscribers in the quarter. We attribute this strong performance to multiple distinct drivers. Those drivers include continued healthy demand for game peak season for cooking.

Meredith Kopit Levien: Those drivers include continued healthy demand for games, peak season for cooking, a more ambitious subscription gifting program propelled by our large base of existing subscribers, and a robust deal period for B2B subscriptions. This is all in addition to high existing subscriber engagement across a range of news topics. We also benefited from further improvements in how we use machine learning to maximize audience engagement and conversion. Consistent with our strategy, we grew audience for The Athletic, Cooking, Games, and Wirecutter in Q4. Audience growth on The Athletic, which recently passed its two-year anniversary on the Times, was particularly strong.

More ambitious subscription gifting program propelled by our large base of existing subscribers and a robust deal period for beta be subscriptions. This is all in addition to high existing subscriber engagement across a range of news topics.

Meredith: We also benefited from further improvements in how we use machine learning to maximize audience engagement and conversion.

Meredith: Consistent with our strategy, we grew audience for the athletic cooking games and wire cutter in Q4 audience growth on the athletic, which recently passed its two year anniversary with the times was particularly strong. This was thanks to our ongoing efforts to enhance coverage and.

Meredith Kopit Levien: This is thanks to our ongoing efforts to enhance coverage, improve our technical infrastructure, and make more stories available for sampling. We see a huge opportunity in sports and are making palpable progress on our ambition for The Athletic to become a top destination for sports news globally. Games benefited from consistency in the number of people who play Wordle every week and also from our hit homegrown puzzle, Connections, which now has over 15 million weekly players.

Meredith: Three of our technical infrastructure and make more stories available for sampling, we see a huge opportunity in sports and are making palpable progress on our ambitions for the athletics to become a top destination for sports news globally.

Meredith: Games benefited from consistency in the number of people who play Wordell every week and also from our hit homegrown puzzle connection, which now has over 15 million weekly players.

Meredith Kopit Levien: Total ad revenue in the quarter came in below our expectations, due primarily to a larger-than-anticipated print revenue decline. Our digital performance, including podcasts, was impacted by marketers avoiding some hard-news topics like the Middle East conflict. We are nonetheless confident in the long-term potential of our digital advertising business, and our core display offering was resilient as we extended our proprietary ad canvases and first-party data to more of our portfolio. Revenue beyond subscriptions and advertising grew 10% in the quarter, driven by a record-setting holiday season for Wirecutter and strength in licensing. Let me close with a few thoughts about what's ahead. At its core, our strategy is designed to make the Times an essential daily habit for many millions more people.

Meredith: Total AD revenue in the quarter came in below our expectations due primarily to a larger than anticipated print revenue decline, our digital performance, including podcast was impacted by marketers avoiding some hard news topics like the middle East conflict. We are nonetheless confident in the long term potential.

All of our digital advertising business and our core display offering was resilient as we extended our proprietary and add campuses and first party data to more of our portfolio.

Meredith: Revenue be honest subscriptions and advertising grew 10% in the quarter driven by a record setting holiday season for wire cutter and strength in licensing.

Speaker Change: Let me close with a few thoughts about what's ahead.

Speaker Change: At its core our strategy is designed to make the time and essential daily habit for many millions more people are top priority now is to continue making our journalism and lifestyle products. So valuable at scale that people seek us out directly.

Meredith Kopit Levien: Our top priority now is to continue making our journalism and lifestyle products so valuable at scale that people seek us out directly and build enduring daily habits. However, the information ecosystem evolves. While we expect many of last year's industry headwinds to persist, we believe our multi-product portfolio and multi-revenue stream model, combined with ongoing cost discipline, position us well to be a scaled market leader. Now, let me turn it over to Will for more details on our results, and I'll return after that with a few closing thoughts and take your question. Thanks, Meredith, and good morning, everyone.

Speaker Change: Build enduring daily habits, however, the information ecosystem evolves.

Speaker Change: While we expect many of last year's industry headwinds to persist, we believe our multi product portfolio and multi revenue stream model combined with ongoing cost discipline position us well to be a scaled market leader now let me turn it over to will for more details.

Will: On our results and I'll return after that with a few closing thoughts and to take your questions.

Will: Thanks, Meredith and good morning, everyone.

Will Bardeen: In 2023, the successful execution of our essential subscription strategy drove strong financial results despite a challenging and dynamic environment. Our portfolio of market-leading news and lifestyle products was designed to grow our subscriber base, increase subscriber engagement and lifetime value, and strengthen our multiple revenue streams. As our subscriber base has scaled, we've moderated our overall expense growth while continuing to prioritize strategic investments that help position us for long-term value creation. Our full year 2023 financial results demonstrate that our strategy is delivering as designed. We saw increases in revenue, AOP, EPS, and free cash flow, and we finished the year in an even stronger market position. Overall revenue for the year increased 5% as growth in digital subscription, affiliate, and licensing revenues more than offset ongoing declines in print.

Will: In 2023, the successful execution of our essential subscription strategy drove strong financial results, despite a challenging and dynamic environment.

Will: Our portfolio of market, leading news and lifestyle products was designed to grow our subscriber base increased subscriber engagement and lifetime value and strengthen our multiple revenue streams.

Will: As our subscriber base at scale, we've moderated our overall expense growth, while continuing to prioritize strategic investments that help position us for long term value creation.

Will: Our full year 2023 financial results demonstrate that our strategy is delivering as designed.

Will: We saw increases in revenue.

Will: EPS and free cash flow growth and free cash flow and we finished the year and an even stronger market position.

Will: Overall revenue for the year increased 5% as growth in digital subscription affiliate and licensing revenues more than offset ongoing declines in print.

Will Bardeen: Combined with moderating cost growth, this resulted in AOP growth of 12% year-over-year and expanded our AOP margin by approximately 100 basis points to over 16%. The cash generative nature of our business model was also evident. For the full year 2023, we generated approximately $338 million of free cash flow, up from approximately $114 million in the prior year.

Will: Combined with moderating cost growth. This resulted in a L. P growth of 12% year over year and expanded our op margin by approximately 100 basis points to over 16%.

Will: The cash generative nature of our business model is also evidenced.

Will: For the full year 2023, we generated approximately $338 million of free cash flow.

Will: From approximately $114 million in the prior year.

Will Bardeen: In addition to being driven by AOP growth, free cash flow benefited from lower cash taxes, lower CapEx, and lower working capital outflows compared to 2022. We returned approximately $114 million to shareholders in 2023 through a combination of $69 million in dividends and $45 million in stock repurchase. Over the last two years, we've returned nearly 61% of our free cash flow to shareholders.

Will: In addition to being driven by a O P growth free cash flow benefited from lower cash taxes, lower capex and lower working capital outflows compared to 2022.

Will: We returned approximately $114 million to shareholders in 2023 through a combination of $69 million in dividends and $45 million in stock repurchases.

Will: Over the last two years, we've returned nearly 61% of our free cash flow to shareholders.

Will Bardeen: As Meredith mentioned, we also announced a dividend increase of $0.02 to $0.13 per share, reflecting our confidence in the durability of our strategy. Now, I'll discuss the fourth quarter's key results, followed by our financial outlook for the first quarter of 2024. Please note that all comparisons are to the prior year period unless otherwise specified. As a reminder, due to a change in the company's fiscal calendar in 2022, there were five fewer days in the fourth quarter of 2023 compared to the fourth quarter of 2022. Page 23 of the earnings release published this morning includes a reconciliation of revenues excluding the estimated impact of the five fewer days in 2023.

Will: As Meredith mentioned, we also announced a dividend increase of <unk> to.

To <unk> 13 per share, reflecting our confidence in the durability of our strategy.

Will: Now I'll discuss the fourth quarter's key results followed by our financial outlook for the first quarter of 2024.

Will: Please note that all comparisons are to the prior year period, unless otherwise specified.

Will: As a reminder, due to a change in the company's fiscal calendar in 2022, there were five fewer days in the fourth quarter of 2023 compared to the fourth quarter of 2022.

Will: Page 23 of the earnings release published this morning includes a reconciliation of revenues excluding the estimated impact of the five fewer days in 2023.

Will Bardeen: My comments on both revenues and costs today will be on a reported basis, which includes the impact of the five fewer days. I'll start with a discussion of our subscription. We added approximately 300,000 net new digital subscribers in the quarter. As Meredith described, bundle and multi-product additions led the way and made up 41% of our total base at year-end, well along the path to exceeding 50% in the coming year. Total digital-only ARPU grew year over year for the third consecutive quarter to $9.24, an increase of approximately 3%. In Q4, we had the largest number to date of bundled subscribers transitioning to higher prices and benefited from the impact of our digital price increase on tenured single product subscribers. While it is still relatively early, we continue to be encouraged that bundle subscribers are retaining and monetizing better than news-only subscribers through these step-ups. As a result of both higher digital subscribers and digital-only ARCU in the fourth quarter, digital-only subscription revenues grew approximately 7% to $289 million, and total subscription revenues grew approximately 4% to $430 million.

Will: My comments on both revenues and costs today will be on a reported basis, which includes the impact of the five fewer days.

Will: I'll start with a discussion of our subscription business.

Will: We added approximately 300000 net new digital subscribers in the quarter.

Will: As Meredith described bundle and multi product additions led the way and made up 41% of our total base at year end, well, along the path to exceeding 50% in the coming years.

Will: Total digital only Arco grew year over year for the third consecutive quarter to $9.24 an increase of approximately 3%.

Will: In Q4, we had the largest number to date, a bundled subscribers transitioning to higher prices and benefited from the impact of our digital price increase on tenured single product subscribers.

Will: While it is still relatively early we continue to be encouraged that bundle subscribers are retaining and monetizing better than news only subscribers through these step ups.

Will: As a result of both higher digital subscribers and digital on the <unk> in the fourth quarter digital only subscription revenues grew approximately 7% to $289 million and total subscription revenues grew approximately 4% to $430 million.

Will Bardeen: Both were in line with the guidance we provided last quarter. Now turning to advertising. Total advertising revenues for the quarter were $164 million, a decline of approximately 8%, which was below our guidance. Digital advertising came in slightly below the low end of our guidance in the quarter, declining approximately 4% to $108 million.

Will: Both were in line with the guidance, we provided last quarter.

Will: Now turning to advertising.

Will: Total advertising revenues for the quarter were $164 million a decline of approximately 8% which was below our guidance.

Will: Digital advertising came in slightly below the low end of our guidance in the quarter declining approximately 4% to $108 million as advertising demand for some of our products was adversely impacted in the quarter by market or sensitivity to certain news content adjacencies.

Will Bardeen: As advertising demand for some of our products was adversely impacted in the quarter by marketer sensitivity to certain news content adjacent, other revenue exceeded our guidance, increasing approximately 10% to $82 million. Licensing was a strong contributor, and Wirecutter affiliate revenues benefited from a record-setting holiday season.

Will: Other revenue exceeded our guidance, increasing approximately 10% to $82 million.

<unk> was a strong contributor and wire cutter affiliate revenues benefited from a record setting holiday season.

Will Bardeen: Moving now to cost and the progress we are making in driving AOP growth and free cash flow growth. We continue to demonstrate cost discipline in Q4. Adjusted operating costs came in better than our guidance, decreasing by approximately 1%.

Will: Moving now to costs and the progress, we're making in driving growth and free cash flow growth.

Will: We continued to demonstrate cost discipline in Q4, adjusted operating costs came in better than our guidance decreasing by approximately 1%.

Will Bardeen: Even as overall adjusted operating costs declined, we continued to allocate resources to our most strategic investments, including world-class journalism and the technology and product development that unlocks its digital distribution. Investments in these areas have enabled us to increase the penetration of our addressable market, fuel organic subscriber growth, and improve our operating leverage. Cost of revenue declined approximately 3%. Our continued investments in journalism were more than offset by having five fewer days in the quarter as well as lower print production and distribution and advertising servicing costs. Sales and marketing costs were up approximately 9%. We saw high-return paid marketing opportunities in the quarter as the bundle continued to enable better marketing. Product development costs increased 5%, as we continue to strategically invest in the product and technology teams enabling our digital subscriber growth. General and administrative costs were down approximately 1% as we continue to drive efficiencies in non-strategic areas.

Will: Even as overall adjusted operating costs declined we continued to allocate resources to our most strategic investments, including World class journalism, and the technology and product development that unlocks its digital distribution.

Will: Investments in these areas have enabled us to increase penetration of our addressable market.

Will: Organic subscriber growth and improve our operating leverage.

Will: Cost of revenue declined approximately 3%.

Will: Our continued investments in journalism were more than offset by having five fewer days in the quarter as well as lower print production and distribution and advertising servicing costs.

Will: Sales and marketing costs were up approximately 9% we saw high return paid marketing opportunities in the quarter as the bundle continue to enable better marketing efficiency.

Will: Product development cost increased 5% as we continued to strategically invest into the product and technology teams, enabling our digital subscriber growth.

Will: General and administrative costs were down approximately 1% as we continued to drive efficiencies in non strategic areas.

Will Bardeen: As a result of revenue growth and disciplined cost management, AOP increased approximately 9% to $154 million. AOP margin was approximately 23% in the quarter, an increase of approximately 160 basis points compared to the prior year. This also translated into strong earnings growth as adjusted diluted EPS increased 11 cents to 70 cents. EPS growth in Q4 was also aided by higher interest income and a lower tax rate.

Will: As a result of revenue growth and disciplined cost management.

Will: Increased approximately 9% to $154 million.

Will: <unk> margin was approximately 23% in the quarter.

Will: An increase of approximately 160 basis points compared to the prior year.

Will: This also translated into strong earnings growth as adjusted diluted EPS increased 11% to 70.

Will: EPS growth in Q4 was also aided by higher interest income and a lower tax rate.

Will Bardeen: I'll now look ahead to Q1. Total subscription revenues are expected to increase 7 to 9 percent compared with the first quarter of 2023, and digital only subscription revenues are expected to increase 11 to 14 percent. Overall advertising revenues are expected to decrease mid-single digits, while digital advertising revenues are expected to increase low to high.

Speaker Change: I'll now look ahead to Q1 for the consolidated New York Times Company.

Speaker Change: Total subscription revenues are expected to increase 7% to 9% compared with the first quarter of 2023 and digital only subscription revenues are expected to increase 11% to 14%.

Speaker Change: Overall advertising revenues are expected to decrease mid single digits, while digital advertising revenues are expected to increase low to high single digits.

Will Bardeen: We continue to experience limited visibility in the advertising market, particularly around ongoing print decline. Other revenues are expected to increase mid-single digit. Adjusted operating costs are expected to increase 5 to 7 percent, which reflects an overall commitment to cost discipline as we pursue our growth strategy.

Speaker Change: We continued to experience limited visibility in the advertising market, particularly around ongoing print declines.

Speaker Change: Other revenues are expected to increase mid single digits.

Speaker Change: Adjusted operating costs are expected to increase 5% to 7%, which reflects an overall commitment to cost discipline as we pursue our growth strategy.

Will Bardeen: Our approach to costs has been to relentlessly reallocate resources from non-strategic work to areas of highest impact. At the same time, we intend to continue targeted strategic investments in independent journalism, news, and lifestyle products, and technology that position us for growth and market leadership over the long term. We expect that these investments will be reflected in the growth of our cost of revenue and product development expense. We expect AOP and earnings growth to be weighted to the back half of the year due to the seasonality of advertising and affiliate revenue. I'll close by noting that we remain on track to achieve our previously stated midterm targets for subscribers, AOP growth, and capital return. With that, I'll send it back to Meredith to wrap up.

Speaker Change: Our approach on costs has been to relentlessly reallocate resources from non strategic work to areas of highest impact.

Speaker Change: At the same time, we intend to continue targeted strategic investments into the independent journalism news and lifestyle products and technology that position us for growth and market leadership over the long term we.

Speaker Change: We expect that these investments will be reflected in the growth of our cost of revenue and product development expense lines.

Speaker Change: We expect Aoki and earnings growth to be weighted to the back half of the year due to the seasonality of advertising and affiliate revenue.

Speaker Change: I'll close by noting that we remain on track to achieve our previously stated mid term targets for subscribers A&P growth and capital returns.

Speaker Change: With that I'll send it back to Meredith to wrap up.

Meredith Kopit Levien: Thanks, Will. Our portfolio of differentiated news and lifestyle products is delivering growth and steadily improving unit economics. And we believe our multi-revenue stream model makes our business more resilient in a complicated environment. With this foundation, we believe strongly in our ability to create value through a premium product portfolio and world-class independent journalism, at a time when it is rarer and more needed than ever. And now we're happy to take it. Ladies and gentlemen, we'll now begin the question-and-answer session. To ask a question, you may press star and then 1 on your touch-tone telephone. If you are using a speakerphone, we do ask that you please pick up your handset prior to pressing the keys to ensure the best sound quality.

Meredith: Thanks will.

Meredith: Our portfolio of differentiated news and lifestyle products is delivering growth and steadily improving unit economics, and we believe our multi revenue stream model makes our business more resilient in a complicated environment.

Meredith: With this foundation, we believe strongly in our ability to create value through a premium product portfolio and world class independent journalism at a time when it is rare and more needed than ever and now we're happy to take your questions.

Speaker Change: Ladies and gentlemen, we will now begin the question and answer session. Basket question, You May Press Star and then one on your Touchtone telephone. If you are using a speaker phone. We do ask that you. Please pickup your handset prior to pressing the keys to ensure the best sound quality.

Operator: To withdraw your questions, you may press Standard, and we will pause momentarily to assemble the roster. And our first question today comes from Paul Messier from Morgan Stanley. Please go ahead with your question. Thanks so much.

Speaker Change: So withdraw your question you May press star into.

Speaker Change: We will pause momentarily to assemble the roster.

Speaker Change: And our first question today comes from Thomas <unk> from Morgan Stanley. Please go ahead with your question.

Meredith Kopit Levien: I wanted to ask you about the evolving relationship with big tech. I think you've historically approached commercial agreements with the philosophy of being able to drive engagement back to your own properties, and in light of some of the details around the open AI litigation and the deal with Apple News, can you maybe just help but dimensionize the structure of a licensing deal that you would see as not cannibalistic, and how do you kind of weigh the benefits and the offsets associated with an opportunity like that? Yeah, I'll start Thomas.

Thomas: Thanks, so much.

Thomas: I wanted to ask about the evolving relationship with Big Tech I think you've historically approach commercial agreements with the philosophy of being able to drive engagement back to your own properties and in light of some of the details around the <unk> litigation and the deal with Apple News can you, maybe just help us dimensionalize the structure of our.

Thomas: <unk> deal that you would see is proving not cannibalistic and how do you kind of weigh the benefits and the offsets associated with an opportunity like that.

Thomas: Yeah.

Meredith Kopit Levien: Good morning, Will. Will can come in behind me as he sees fit. We are, you know, you've seen the deals we've done over the last couple of years, and you're referring to the one I referenced in my prepared remarks that we just did with Apple, Apple News+, for the athletic and wire cutter. We're generally looking for three things. Does this make sense in the context of our essential subscription strategy, by which I mean, is it helping us in some way to build direct relationships? And that can be through, you know, in very direct ways, or through helping us grow our audience and awareness for our brands? In the case of this partnership we've just built with Apple News+ and the athletics, we certainly see it as doing that. And then we look at the dimension of, you know, our IP rights being sort of appropriately respected and used in a responsible way, and is there a fair value exchange?

Speaker Change: Start Thomas good morning, well well can come in behind me as he sees fit.

Speaker Change: We are you know you've seen the deals we've done over the last couple of years and you're referring to the one I referenced in my prepared remarks that we've just done with Apple and.

Speaker Change: Apple news plus for the athletic and wire cutter, we're generally looking for three things does this makes sense in the context of our essential subscription strategy by which I mean is it helping us in some way to build direct relationships and that can be.

Speaker Change: Through them, you know and very direct ways or through helping us grow audience and awareness for our brands in the case of this this partnership we've just built with Apple news plus and the athletic and we certainly see it as doing that and then we look at the dimension of our IP rights being sort of.

Speaker Change: Appropriately.

Speaker Change: Respected and used it in a responsible way and is there a fair value exchange and I would say anytime we look to engage with the big tech partner or any partner for that matter. Those are the considerations, we're making and I think we've got a.

Meredith Kopit Levien: And I would say, anytime we look to engage with a big tech partner or any partner for that matter, those are the considerations we're making. And I think we've got a good track record of doing deals that live up to those standards. Is attribution still critical to building and reinforcing the overall IP? Is that something that you would ever potentially forego in an AI situation that would be economical and still beneficial to you? I want to make sure I understand your question. Maybe try that one more time.

Speaker Change: Good track record of doing deals that that live up to those standards.

Speaker Change: Is that are abusing still critical to them to building and reinforcing the overall IP like is that something that you would ever potentially for a go and then AI situation that would be economic and still beneficial to you.

Speaker Change: Yeah.

Speaker Change: I want to make sure I understand your question.

Speaker Change: Maybe try that one more time.

Meredith Kopit Levien: Yeah, just in terms of branding and the idea that, historically, with Apple News, the ability for them to kind of ingest your content into their own platform has, I think, been a little bit of a barrier to your reasoning around licensing to them. I was just asking, I think, in the vein of kind of AI and the proliferation of some of that, the potential loss of attribution, if there ever is an economic model that makes sense for you to kind of work out with some of that. Yeah, I understand what you're saying.

Speaker Change: Yeah, just in terms of branding and this idea that I think historically with Apple news.

Speaker Change: <unk>.

Speaker Change: The ability for them to kind of Ingests your content into their own platform has I think been a little bit of a barrier to your reasoning around licensing to them.

Speaker Change: Just asking I think in the vein of kind of the AI and the proliferation of some of that and the potential loss of attribution if there ever is.

Speaker Change: The economic model that makes sense for you to kind of work out with some of that yeah, I understand what you're saying Oh I'll say two things.

Meredith Kopit Levien: I'll say two things, both kind of related to what I've already said. One is, I think the most important thing we can do as a business, and I talked about this a bit in my prepared remarks, is to have products that are so valuable at scale and kind of widely understood for their brand marks and their credibility and their trustworthiness. They provide that people are inclined to build a direct relationship with us and will come to us on a very regular basis.

Speaker Change: And it related to what I've already said one is I think the most important thing we can do as a business and I talked about this a bit in my prepared remarks is to have products that are so valuable at scale and kind of widely understood for their brand marks and the credibility and the trustworthiness.

Speaker Change: They provide that people are inclined to build a direct relationship with us.

Speaker Change: And it will will come to us on a very regular basis. So that's the main game. We are playing to the extent that there are other ways to tap into the vast arsenal of IP that we create every day that we've created for close to two centuries, we are open to that as.

Meredith Kopit Levien: So that's the main game we are playing to the extent that there are other ways to tap into the vast arsenal of IP that we create every day and that we've created for close to two centuries. We are open to that as long as there is a fair value exchange and it's supportive of the broader business model. Okay, that's helpful.

Speaker Change: As long as there is fair value exchange and in support of the broader business model.

Will Bardeen: And then maybe just to squeeze one last one in for Will, I wanted to revisit the capital allocation philosophy. You reiterated the 50% return of free cash flow over the medium term, but I think you've been pacing a little bit below that in 2023. Was there any specific reason that led to a pause in repurchase activity and potential uses of cash that you see as, you know, an attractive opportunity to maybe drive organic growth instead? Thank you so much.

Speaker Change: That's helpful. And then maybe just to squeeze one last one for well I wanted to revisit the capital allocation philosophy, you reiterated the 50% return of free cash flow over the medium term, but I think you've been pacing a little bit below that in 2023 was there any specific reason that led to a pause in repurchase activity and potential uses of cash that you see is.

Speaker Change: You know in attractive opportunities to maybe drive organic growth instead.

Speaker Change: Thank you so much.

Will Bardeen: Thanks, Thomas. I think you should just take our capital allocation strategy as unchanged, which targets 50% over the medium term. And we have said, you know, don't expect that sort of linearity to any quarter, even any year. Over the last two years, we've returned sixty one percent, a combination of dividends and share repurchases. And I think you can expect us to continue to track against our target over the midterm. Thanks, Thomas.

Speaker Change: Thanks, Thomas I think you should just take our capital allocation strategy.

Speaker Change: Can change that target 50%.

Speaker Change: Over the medium term and we have said don't expect.

Speaker Change:

Thomas: Sort of to be linear quarter or even a year.

Thomas: Over the last two years, we've returned 61% and a combination of dividends and share repurchases.

Thomas: And I think you can expect us to.

Thomas: To track against our target over over the midterm.

Operator: Operator, let's take our next question. Our next question comes from David Karnovsky from J.P. Morgan. Please go ahead with your question. Thank you.

Speaker Change: Thanks, Thomas operator, let's take our next question. Please.

Speaker Change: Our next question comes from David Karnofsky Karnofsky from Jpmorgan. Please go ahead with your question.

Meredith Kopit Levien: Meredith, I don't know what you're willing to say about the lawsuit with OpenAI, though any thoughts would be welcome, but maybe separate from that. Are you still in discussions with other AI platforms for potential licensing deals? And can you speak to how discussions might be going and the prospects for any agreements near term? And then Will, just a question on the Outlook: the Q1 cost growth looks to be a touch above the pace of the past few quarters. I know sometimes there's timing issues, but wanted to see if there was any call out here and if you could provide any view on the cost trend for the remainder of the year. I'll start.

David Karnofsky: Thank you Meredith I don't know if youre willing to say on the lawsuit with open AI, though any thoughts would be welcome, but maybe separate to that.

David Karnofsky: Are you still in discussions with other AI platforms for potential licensing deals and can you speak to how discussions might be going and the prospects for any agreements near term and then we'll just a question on the outlook for Q1 cost growth looks to be a touch above the pace of the past few quarters I know, sometimes there is timing issues wanted to see if there is.

David Karnofsky: Any call out here and if you could provide any view on the cost trend for the remainder of the year. Thanks.

Meredith Kopit Levien: Thanks for the question. And, as you suggest, we're in active litigation, so there's not much I'll say about the case specifically, but more broadly on making deals. And this goes a little bit to the way I answered Thomas's question.

Speaker Change: I'll start thanks for the question and as you suggest were inactive litigations that theres not much I'll say them about the case, specifically, but more broadly on on making deals and this goes a little bit the way I answered Thomas' question.

Meredith Kopit Levien: You know, you've seen the deals we've done over the last couple of years. You can imagine we are talking to potential partners all the time. And you've seen directly in the complaint that we're talking to potential generative AI partners. I'd say we are being really selective and thoughtful about what partnership makes sense for us in the context of our strategy and, you know, our rights to our IP being respected and fair value exchange for that IP. I'll take that cost growth guide question. I don't think there's anything specific that I'll specifically call out for Q1, simply to say that there can be some, you know, some variation quarter to quarter and cost growth that you've seen, you know, in the past, certainly can expect to see that occasionally.

Speaker Change: You've seen the deals we've done over the last couple of years you could imagine we are talking to potential partners. All the time and you've seen directly in the complaint that we're talking to potential generative AI partners I'd say, we're being really selective and thoughtful about what partnership makes sense for us.

Speaker Change: In the context of our strategy.

Speaker Change: And and you know our rates being respected too to our IP and fair value exchange for that IP.

Speaker Change: I'll take that cost growth guide question.

Speaker Change: I'm not I don't think there's anything.

Speaker Change: Specifically call out for Q1 simply to say that there can be some some variation quarter to quarter and cost growth that you've seen in the past and.

Speaker Change: Certainly can.

Speaker Change: Expect to see that occasionally, but overall I think the two themes I stated in my remarks of the things to focus on which is number one cost discipline. We're very very focused on it relentlessly reallocating resources to areas provides high impact and really focusing on leverage in G&A and sales and marketing.

Meredith Kopit Levien: But overall, I think the two themes I hit in my remarks are the things to focus on, number one being cost discipline. We're very, very focused on it, relentlessly reallocating resources to areas of high impact, and really focusing on leverage in GNA and the sales and marketing lines and getting efficiencies out of places like our print supply chain legacy areas. So that's theme number one. And then theme number two is that we will continue to make targeted strategic investments that we believe are creating value in our journalism and in our product development to really make sure we're investing for the long term and solidifying our competitive position. So I think those are the two themes to hit on there.

Speaker Change: Lines in Getty.

Speaker Change: Efficiency, you've got places like our print supply chain legacy area. So so that's the number one and then number two is that we will continue to make targeted strategic investments that we believe are creating value.

Speaker Change: Our journalism and in our product development.

Speaker Change: Really.

Speaker Change: Make sure we're investing.

Speaker Change: For the long term and solidifying our competitive position. So I think those are the two.

Will Bardeen: Thanks, David. Operator, we can go to our next question, please. Our next question comes from Ashton Welles from Evercore ISI. Please go ahead with your question. Thank you for the question. I think digital-only subscriber ARPU in Q4 was down modestly from Q3. What drove the sequential decline and how should we be thinking about ARPU growth in the first half of 2024 as more bundled subscribers are stepped up? And related to this, how are the bundle step-ups performing versus your expectations? Um, sure. Let me take that.

Speaker Change: <unk> seems to hit there.

Speaker Change: Thanks, David Operator, we can go to our next question. Please.

Speaker Change: Our next question comes from asking wells from Evercore ISI. Please go ahead with your question.

Asking Wells: Thank you for the question I think digital only subscribers <unk> in Q4 was down modestly from Q3.

Asking Wells: What drove the sequential decline and how should we be thinking about <unk> growth in the first half of 'twenty 'twenty. Four is more bundled subscribers are stepped up and related to this how are the bundle step ups performing versus your expectations.

Asking Wells:

Will Bardeen: I mean, I think the way to think about the sequential decline in ARPU is, you know, very much a reflection of things we've seen before, which is a good quarter of net ads, and given the nature of our promotional pricing strategy, you know, we expect to see that when that happens. I think the important thing for us to focus on, obviously, is the year-over-year ARPU growth in the quarter. And then looking forward, as we said, we expect modest year-over-year ARPU expansion for digital only subscribers. So that's the expectation going forward. I think we have talked about in my remarks the drivers of that expansion in Q4. And I think probably we're saying, you know, that first driver, which was those step-up, you know, the bigger bundle cohorts, as we've been bringing on more and more bundle subs, is going to be one of the main drivers in 2024 as well. And I said in my remarks that it's still early.

Speaker Change: Sure, let me take that I mean, I think the way.

Speaker Change: If you think about the sequential decline in <unk>.

Speaker Change: Very much.

Speaker Change: Flexion of things, we've seen before which is that.

Speaker Change: A good quarter of net adds and given the nature of our promotional pricing strategy.

Speaker Change: We expect to see that when that happens I think the.

Speaker Change: Important thing for us to focus on obviously the year over year ARPA growth in the quarter and then looking forward.

Speaker Change: As we said, we expect modest year over year <unk> expansion for digital only subscribers. So that's the expectation.

Speaker Change: Forward.

Speaker Change: Think we have talked to I talked about in my remarks, the drivers of that expansion in Q4, and I think probably we're saying the first driver which was the dose step.

Speaker Change: Step up.

Speaker Change: The bigger bundle cohorts as we've been bringing on more and more bundled subs is going to be one of the main drivers in 2024 as well.

Speaker Change: And I started my remarks.

Will Bardeen: So we have, you know, we'll have increasing numbers coming in throughout the year. But we remain encouraged by what we see, that bundle subscribers at those step-up moments are retaining better and monetizing better than those only subscribers. Thank you. Thanks, Ashton.

Speaker Change: It's still early so we have we'll have increasing numbers coming in.

Speaker Change: Throughout the year, but.

Speaker Change: We remain encouraged by what we see that bundled subscribers at those step up moments are retaining better and monetizing better than he's only subscribers.

Speaker Change: Thank you.

Speaker Change: Thanks, Ashton operator next question.

Operator: I'll prepare your next question. Our next question comes from Doug Arthur from Huber Research Partners. Please go ahead with your question. I have two questions.

Speaker Change: Our next question comes from Doug Arthur from Huber Research Partners. Please go ahead with your question.

Douglas Middleton Arthur: Yeah two questions.

Meredith Kopit Levien: Meredith, the deal with Apple News Plus that started late in the fourth quarter. Did you get any read through at all, or is it on the impact, or is it just too early? And what kind of expectations do you have?

Douglas Middleton Arthur: Meredith the the deal with Apple News plus that started late in the fourth quarter or did you get any read through at all or is it on the impact or is it just too early and what kind of all your expectations there.

Meredith Kopit Levien: Great question. Tiny impact. I think I'm looking at Will and Anthony, if they want to characterize that anymore, but tiny impact just based on the timing, and then obviously bigger impact to come. And the, There are a handful of things we're particularly excited about in this deal. One is, as we've talked about with you and others, we are very, very focused on building audience and brand awareness and using the athletic. And we see Apple News Plus as a great way to do that. Apple's doing a lot of interesting things in sports, a really good partner for us there. And The Times has very, very big ambitions for athletics in sports, and we see this as helping us achieve that. So it's good in any number of ways.

Speaker Change: Great question tiny impact I think.

Speaker Change: I'm looking at will it Anthony if they want to characterize that anymore, but tiny impact just based on the timing.

Speaker Change: And then obviously bigger impact to come.

Speaker Change: And then there are a handful of things, we're particularly excited about in the steel one is as we've talked about them with you and others. We are very very focused on building audience and brand awareness and use of the athletic and we see it.

Speaker Change: News classes, a great way to do that Apple's doing a lot of interesting things in sports really good partner for US there and the times is very very big ambitions for the athletic in sports and we see this as.

Speaker Change: Helping us achieve that so it's it's good in any number of ways and you'll you can expect to see the impact on a go forward basis.

Meredith Kopit Levien: And you can expect to see the impact on a go-forward basis. Okay, great. Thank you.

Speaker Change: Okay, great. Thank you.

Meredith Kopit Levien: Doug, did you have another question, or are you all set? Well, I just, I didn't want to beat a dead horse, but it seems like your digital advertising outlook for Q1 is, I wouldn't call it optimistic, but it's more constructive, I think, than what we just witnessed in the fourth quarter. I guess, I'm just trying to measure your conviction level. Yeah. Well, let me preface it by saying, you know, it's hard. Advertising is hard to call. We don't have a ton of visibility.

Speaker Change: So did you have another question are you all set well I just I didn't want to beat a dead horse, but it seems like your digital advertising outlook for Q1.

Speaker Change: Is I wouldn't call it optimistic, but it's more constructive I think than what we just witnessed in the fourth quarter as well I guess just trying to measure your your conviction level on that.

Speaker Change: Yeah.

Speaker Change: Well, let me preface preface it by saying you know, it's it's hard advertising, it's hard to call. We don't have a ton of visibility, but I'll I'll say a few things.

Speaker Change: We did.

Meredith Kopit Levien: But I'll say a few things. We did see in digital in the fourth quarter a fair amount of what I would describe as marketer news avoidance. You know, you had the war between Israel and Hamas break out in early October.

Speaker Change: See in digital in the fourth quarter, a fair amount of what I would describe as a marketer news avoidance. You know you had the war between Israel and Hamas breakout in early October and that you know that had an effect in both display and audio.

Meredith Kopit Levien: And at the same time, what you see us doing to lap up some of the demand to work with the Times, and we're doing this anyway, we are extending our ad products very aggressively to other parts of the portfolio beyond news. The sports and games have been real bright spots so far.

Speaker Change: And at the same time, what you see us doing to lap up some of the demand to work with the times that we're doing this anyway, we are extending our AD products very aggressively to other parts of the portfolio beyond news the athletic and games have been real bright spots so far.

Meredith Kopit Levien: And we, you know, we see a lot of running room in both of those places, essentially, in cooking and wire cutting as well. So I would say we are, you know, we're long on news over a medium and long-term time horizon. We also have a lot of other places to kind of lap up interest in working with the Times for marketers. And the core of the business, Doug, which is those premium ad canvases and first-party data, continues to be resilient. Thanks, Doug. Tom Furrier, let's take our next question, please.

Speaker Change: And we you know we see a lot of running room in both of those places them centrally and cooking and wire cutter as well. So I would say we are you know we're long on news over a medium to long term time horizon and we also have a lot of other places to kind of lap up interest in working with the times from.

Speaker Change: Marketers and the core of the business done them, which is there's premium at canvases and first party data continues to be resilient.

Speaker Change: Thanks, Doug and operator, let's take our next question. Please.

Operator: Our next question comes from Vasily Karasyov from Cannonball Research. Please go ahead with your question. Thank you. Good morning.

Speaker Change: Our next question comes from Vasili Carousel from Cannonball Research. Please go ahead with your question.

Vasily Karasyov: Thank you good morning, Meredith, So do I understand correctly that when you say in your prepared remarks.

Meredith Kopit Levien: Meredith, so do I understand correctly that when you say in your prepared remarks that the headwinds in the advertising market that will carry into this year, 2024, you mentioned current events, the Middle Eastern situation, and so on, are just advertisers not wanting to advertise next to content that's driven by current events? Or is there something more structural? Because you also mentioned publisher volatility, and I was wondering if you could explain a little more what that means. Yeah, listen. I think it's the volatile ad market that tends to hit publishers hard when it happens. We have a lot of what I'm going to call structural confidence in the core of our ad business, premium canvases and first-party data, and core New York Times, and now extending out to our other products with a lot of running room is really working.

Vasily Karasyov: Headwinds.

Vasily Karasyov: Advertising market that carry into this year 'twenty 'twenty four you mentioned the the current events that they made the list and situation and so on the just advertising. It's not one thing about that is next to the content driven by current events or is there something more structural.

Vasily Karasyov: Because you also mentioned publishing volatility and I was wondering if you could explain a little more what that can mean.

Vasily Karasyov: Yeah listen I think it was a.

Vasily Karasyov: Volatile that market that tends to hit publishers hard when it happens and we have a lot of what I'm going to call structural confidence in the core of our AD business.

Vasily Karasyov: Premium campuses and first party data and coordinate your times now extending out to our other products with a lot of running room is really working so that's the message I want to convey and I think I answered. The other part of your your question before to the extent you know you're asking how do we think about publishers.

Meredith Kopit Levien: So that's the message I want to convey. And I think I answered the other part of your question before, to the extent that you asked, you know, how do we think about publishers relative to platforms or any other places that are in the ad business in a big way? I would say, marketers use publishers differently than they use the big platforms.

Vasily Karasyov: Relative to platforms or any other places.

Vasily Karasyov: Is that or in the AD business in a big way I would say marketers use publishers they tend to differently than they use the big platforms. One of the things we that gives us a lot of confidence is while we tend to get more middle and upper funnel advertising, meaning.

Meredith Kopit Levien: One of the things that gives us a lot of confidence is while we tend to get more middle and upper funnel advertising, meaning sort of not direct response, more brand in most parts of our portfolio, our ads, because of the way we sequence ads and the first party data, are really performant. And what you're watching us do is extend those ads, you know, across more parts of the platform. And I would say there, we just have, it's early days on athletics and games and potentially cooking wire cutter. And we think we've got a lot of running room.

Vasily Karasyov: Sort of not direct response more brand in most parts of our portfolio our ads because of the the the way we sequence ads in the first party data our ads are really performing and what you're watching US do is extend those.

Vasily Karasyov: Across more parts of the platform and I would say there. We just have it's early days on athletic and games and potentially cooking wire cutter and we think we've got a lot of running room.

Meredith Kopit Levien: I'm actually going to use that as a segue to mention an experiment. But we're also, I'll go back to the question Thomas asked about at the beginning of the call. And I'll talk about ads here too, related to your question. And it's about AI. You know, we have been using AI in our ad business, sort of the whole way through with first-party data, and I think generative AI presents the opportunity for us to get even better at that. So you can assume we're beginning to experiment with generative AI in our ad products, at least as far as improving our ability to do contextual targeting at scale. And I think that just goes to, you know, our sort of structural confidence in the underlying structure of our ad business.

Speaker Change: I'm actually going to use that as a segue to mentioned an experiment where also the I'll go back to the question comments asked about at the top of the call and I'll talk about adhere to related to your question and and it's about AI.

Speaker Change: I've been using AI in our AD business.

Speaker Change: Certainly the whole way through with first party data and I think generative AI presents the opportunity for us to to get even better at that so you can assume we're beginning to experiment with generative AI and our AD products.

Speaker Change: At least as far as improving our ability to do contextual targeting at scale and I think that just goes to the.

Speaker Change: The sort of structural our confidence in the underlying structure of our AD business and I'll just mention again going back to Thomas' question.

Meredith Kopit Levien: And I'll just mention, again, going back to Thomas's question and the other question I got about generative AI. We are actively experimenting now, and you're going to see us do more and more of that with generative AI, kind of across the product set. So I'll mention in the fourth quarter, we put out an experiment, relatively small in the early days, but exciting in augmenting Spanish language translation for our content, which we're excited about. And you can imagine the implications of being able to do that at scale.

Speaker Change: And then the other question I got about generative Bay I am we are actively experimenting now and youre going to see us do more and more of that with generative may I kind of across the product set so I'll mention them in in the fourth quarter, we put out an experiment.

Speaker Change: Relatively small early days, but exciting in augmenting them Spanish language translation mm for our content, which we're excited about and you can you can imagine the implications of being able to do that at scale again, it's very early days and we.

Meredith Kopit Levien: Again, it's very early days, and we expect to get another experiment out into the market probably this quarter around synthetic voice, which would help us give people the ability to listen to a lot of the written New York Times. So that's in addition to using AI and beginning to use generative AI in how we target advertising.

Speaker Change: <unk> expect to get another experiment out into the market, probably this quarter around synthetic voice, which would help us give people the ability to listen to a lot of the written New York Times. So that's in addition to using AI and beginning to use gen or do they I.

Speaker Change: And how we target advertising.

Anthony Joseph DiClemente: Thank you very much. And ladies and gentlemen, with that, we'll be concluding today's question and answer session. I'd like to turn the floor back over to Anthony DiClemente for any closing remarks. That's it. Thank you all for joining us this morning, and we very much look forward to talking to you again next quarter. Take care. And ladies and gentlemen, with that, the conference has concluded. We thank you for attending today's presentation. You may now disconnect your lines.

Speaker Change: Thank you very much.

Speaker Change: And ladies and gentlemen, with that we'll be concluding today's question and answer session I'd like to turn the floor back over to Anthony Diclemente for any closing remarks.

Anthony Joseph DiClemente: That's it. Thank you all for joining us this morning, and we very much look forward to talking to you again next quarter.

Speaker Change: Take care.

Speaker Change: Okay.

Speaker Change: And ladies and gentlemen, with that the conference has concluded we thank you for attending today's presentation. You may now disconnect your lines.