Q2 2025 New York Times Co Earnings Call
Operator: Good morning and welcome to The New York Times Company's second quarter 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal 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, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Anthony DiClemente, Senior Vice President of Investor Relations. Please go ahead.
Good morning and welcome to the New York Times companies. Second quarter 2025 earnings conference call.
All participants will be in a listen-only mode.
Should you need assistance please signal 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 then 1 on your telephone keypad to withdraw your question. Please. Press star then 2
Please note this event is being recorded.
Anthony Diclemente: Thank you. Welcome to The New York Times Company's second quarter 2025 earnings conference call. On the call today, we have Meredith 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 2024 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, which is available on our website at investors.nytco.com.
I would now like to turn the conference over to Anthony diclemente in the senior vice president investor relations. Please go ahead.
Thank you and welcome to the New York Times companies. Second quarter 2025 earnings conference. Call on the call today, we have Meredith kopit, levian president and chief executive officer and will bardee, 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 2024 10-K and subsequent SEC filings.
Anthony 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. 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.
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.nytimes.com.
In addition to our earnings press release, we have also posted a slide presentation relating to our results on our website at investors. Calm. 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.
Meredith Levien: Thanks, Anthony DiClemente, and good morning, everyone. We had a great second quarter across the board, and our strategy continues to work as designed. Our world-class news coverage and diverse portfolio of lifestyle products in big spaces are continuing to attract large audiences who engage deeply. We grew all of our major revenue lines, subscription, advertising, affiliate, and licensing, with real running room ahead. We are generating significant free cash flow, which, combined with a strong balance sheet, means we can keep investing in the unparalleled journalism and best-in-class product experiences that enable our leadership and underpin our enduring advantages. Our results so far this year demonstrate that we are well-positioned to keep delivering revenue and profit growth for the long term. Now, let me share a few highlights from the quarter. We added 230,000 net new digital subscribers, bringing our total subscriber base to approximately 11.9 million.
I will turn the call over to Meredith.
Thanks Anthony and good morning, everyone.
A great second quarter across the board and our strategy continues to work. As designed
our world-class news coverage and diverse portfolio of Lifestyle products in big spaces are continuing to attract large audiences, who engage deeply
We grew all of our major revenue lines: subscription, advertising, affiliate, and licensing with Real Running Room ahead, and we're generating significant free cash flow, which, combined with a strong balance sheet, means we can keep investing in the unparalleled journalism and best-in-class product experiences that enable our leadership and underpin earned advantages.
Our results so far this year demonstrate that we're well positioned to keep delivering revenue and profit growth for the long term.
Meredith Levien: That puts us further along the path to our next milestone of 15 million. This quarter, we crossed the threshold of having at least 50% of our subscribers on the bundle or multiple product, which is important because those subscribers engage more, stay longer, and pay more over time. Digital subscription revenue increased by over 15% in the quarter as more and more users experienced our world-class news coverage and the significant value we continue to add across our portfolio. We saw strong and consistent engagement across the enterprise, giving us confidence in our ARPU trajectory. That high engagement is the result of executing well against our priorities for the year.
Now, let me share a few highlights from the quarter. We added 230,000 net new digital subscribers, bringing our total subscriber base to approximately 11.9 million. That puts us further along the path to our next milestone of 15 million.
And this quarter, we crossed the threshold of having at least 50% of our subscribers on the bundle or multiple products.
Which is important because those subscribers engage more stay longer and pay more over time.
Digital subscription Revenue, increased by over 15% in the quarter as more and more users experienced. Our world-class news coverage and the significant value. We can continue to add across our portfolio and we saw strong and consistent engagement across the Enterprise giving us confidence in our our food trajectories
Meredith Levien: As a reminder, those priorities are to expertly and ambitiously cover the most important news, make our reporting more accessible to more people by expanding in Video and Audio, and make each of our products more valuable with new content, shows, features, Games, and other enhancements. All of that is intended to drive a larger engaged audience for The New York Times, including a larger pool of engaged prospects. Our Video expansion is worth highlighting here because it represents an important and ambitious approach to how we reach and engage people. The expertise and global presence of our newsroom, combined with increasing online Video consumption, create a big opportunity for The New York Times to capture a greater share of attention. We believe our efforts in this area can make watching The New York Times as natural and compelling an experience as reading and listening.
that high engagement is the result of executing well, against our priorities for these
As a reminder, those priorities are to expertly and ambitiously cover the most important news make our reporting more accessible to more people by expanding in video and audio and make each of our products more valuable with new content, shows features games and other enhancements.
All of that is intended to drive a larger engaged audience for the time including a larger pool of engaged prospects.
Our video expansion is worth highlighting here because it represents an important and ambitious approach to how we reach and engage people.
The expertise.
Global presence of our news.
Meredith Levien: To that end, we are rapidly scaling Video across three categories aimed at different user needs and moments. First, we are producing substantially more news videos that bring people into the major stories of the day, often by putting our reporters in front of the camera to explain and humanize their work. Second, we are producing more full-length shows, including video versions of podcasts like the Ezra Klein Show and Ross Douthat's Interesting Times and also Wesley Morris's Weekly Take on Culture. Third, we are using Video much more extensively to enhance the experience across our lifestyle products, including sports highlights from major leagues on The Athletic and new Video franchises on Cooking.
Consumption. Create a big opportunity for the time to capture, a greater share of attention. We believe our efforts in this area can make watching the times as natural and compelling and experienced as reading and listening.
To that end, we're rapidly scaling video across three categories into different user needs and moments.
First, we're producing substantially more news videos that bring people into the major stories of the day. Often by putting our reporters in front of the camera to explain and humanize their work.
Second, we're producing more full-length shows, including video versions of podcasts. Like the Ezra, Klein show, and Ross, Stout, that's interesting times. And also Wesley Mars's, weekly, take on culture
Meredith Levien: While we are still early in these efforts, they are already showing promise in building our presence and brand equity on video-first platforms and also creating a more compelling and engaging experience on our own sites and apps. Turning to advertising, we had a really strong quarter with digital advertising growing nearly 19% and total advertising growing more than 12%. This performance reflects how our strategy to create a larger, more durable digital ad business is working. That entails having a portfolio of compelling brands in spaces with broad marketer appeal, particularly Sports and Games, a large engaged audience that marketers can target effectively, and a growing supply of high-performing ad products across a range of formats. Licensing and affiliate revenues also grew in the quarter.
Third, we're using video much more extensively to enhance the experience, across our lifestyle products, including sports, highlights from Major Leagues, on the athletic and new video franchises on cooking.
While we're still early in these efforts, they are already showing promise in building our presence and brand equity on video first platforms and also creating a more compelling and engaging experience on our own site and apps.
Turning to advertising.
We had a really strong quarter, with digital advertising growing nearly 19% and total advertising growing more than 12%.
this performance reflects how our strategy to create a larger more durable, digital ad business is working
that entails having a portfolio of compelling Brands and spaces with broad marketer appeal, particularly Sports and games.
Engaged audiences audience, that marketers can Target effectively, and a growing supply of high performing ad products across a range of formats.
Meredith Levien: We signed a multi-year deal with Amazon in Q2 that marks our first agreement with generative AI at the center. It is a deal that will bring Times journalism and recipes and The Athletic sports coverage to wider audiences across Amazon's products, services, and proprietary foundation models. It reflects our longstanding openness to enter into commercial partnerships where there is fair value exchange and control over how our IP is used. At Wirecutter, we continue to see growth, particularly in expansion areas like gifts, apparel, and beauty. Finally, we maintained cost discipline in the quarter while strategically investing into our journalism and product experiences, which are the source of our long-term advantage. I will close with a few thoughts on our path ahead in the context of the current media environment.
Licensing and affiliate revenues also grew in the quarter.
We signed a multi-year deal with Amazon and Q2 that marks, our first agreement with generative AI at the center. It's a deal that will bring times journalism and recipes and the athletic sports coverage to wider audiences around Amazon's products services and proprietary Foundation models. And it reflects our long-standing openness to enter into commercial Partnerships, where there's fair value, exchange and control over how our IP is used.
At wire cutter, we continue to see growth particularly in expansion areas, like gifts apparel. And Beauty, finally, we maintained cost discipline in the quarter while strategically investing into our journalism and product experiences which are the source of our long-term advantage.
Meredith Levien: First and most importantly, we're confident that we're well-positioned to continue to grow despite the moves of big tech companies, which are leading to less and less traffic for publishers. That's because we see large and persistent demand for what we do and are becoming more differentiated in meeting that demand. It's also because our top priority is and has been for a long time now to build direct, engaged relationships with millions more people who seek us out, form a habit, and make room for our coverage and product in their lives. Every engaged audience member is valuable to us, and as we become more essential in their lives, they power all of our revenue streams: subscription, advertising, licensing, and affiliate.
I'll close with a few thoughts. On our path ahead in the context of the current media environment.
First and most importantly, we're confident that we're well positioned to continue to grow. Despite the moves of big tech companies, which are leading to less and less traffic for publishers, we see a large and persistent demand for what we do and are becoming more differentiated in meeting that demand. It's also because our top priority has been, and continues to be, to build direct engaged relationships with millions more people who seek us out, form a habit, and make room for our coverage and products in their lives.
Meredith Levien: All of that means we're confident that continued execution against our strategy will deliver even more value to even more people and result in a larger and more profitable business. With that, I'll turn it over to William Bardeen for more details on the quarter.
Every engaged audience member is valuable to us. As we become more essential in their lives, they power all of our revenue streams: subscription, advertising, licensing, and affiliates.
All of that means we're confident that continued execution against our strategy will deliver even more value to even more people and result in a larger and more profitable business.
Anthony Diclemente: Thanks, Meredith, and good morning, everyone. As Meredith described, our 2025 Q2 results demonstrate another strong quarter for subscriber growth, revenue growth, AOP growth, margin expansion, and free cash flow generation. The continued strength of our audience and subscriber engagement in the quarter helped power healthy growth across our multiple revenue streams. We also continued to operate efficiently while making disciplined investments aimed at further differentiating our high-quality journalism and digital products. Year over year, revenue grew nearly 10%, AOP grew by approximately 28%, and AOP margin expanded by approximately 280 basis points. We generated approximately $193 million of free cash flow in the first half of the year, which reflects our capital-efficient model. Over that same period, we returned approximately $134 million to shareholders, consisting of approximately $83 million in share repurchases and approximately $52 million in dividends.
With that, alternate over to will for more details on the quarter.
Thanks Meredith and good morning everyone as Meredith described our 2025. Second quarter results, demonstrate another strong quarter for subscriber growth. Revenue growth aop growth margin expansion and free cash flow generation.
The continued strength of our audience and subscriber engagement in the quarter, helps power Healthy Growth across our multiple revenue streams.
We also continue to operate efficiently while making disciplined Investments aimed at further differentiating, our high-quality journalism and digital products.
Year-over-year, Revenue, grew nearly, 10%. Aop grew by approximately 28%, and aop margin expanded by approximately 280 basis points.
We generated approximately 193 million of free cash flow in the first half of the year, which reflects our Capital efficient model.
Over that same period. We returned approximately 134 million to shareholders?
Anthony Diclemente: This is consistent with our capital allocation strategy of returning at least 50% of free cash flow to our shareholders over the midterm. Now I'll discuss the second quarter's key results, followed by our financial outlook for the third quarter of 2025. Please note that all comparisons are to the prior year period unless otherwise specified. I'll start with our subscription business. We added approximately 230,000 net new digital subscribers in the quarter, bringing our total subscriber count to approximately 11.9 million. Subscriber growth came from multiple products across our portfolio, particularly from growth in bundle and multi-product subscribers. I'll also note that we are in the early stages of rolling out our new family plan subscription offering. Total digital-only ARPU grew 3.2% to $9.64 as we stepped up subscribers from promotional to higher prices and raised prices on certain tenured subscribers.
consisting of approximately 83 million in share repurchases and approximately 52 million in dividends
This is consistent with our Capital, allocation strategy of returning, at least 50% of free cash, flow to our shareholders, over the midterm.
Now, I'll discuss the second quarter's key results followed by our financial outlook for the third quarter of 2025,
Please note that all comparisons are to the prior year period, unless otherwise specified.
I'll start with our subscription business.
We added approximately 230,000 net new digital subscribers in the quarter, bringing our total subscriber count to approximately 11.9 million.
Grabber growth came from multiple products across our portfolio. Particularly from growth in bundle and multi-product subscribers.
our also note that we are in the early stages of rolling out, our new family plan subscription offering,
Total digital only ARP who grew 3.2%.
Anthony Diclemente: We continue to be encouraged by the results we're seeing at pricing step-up points and are also pleased with the strong engagement we are seeing as we continue to add value to our products. As a result, we remain confident in our ARPU trajectory. With both higher digital subscribers and higher digital-only ARPU in the second quarter, digital-only subscription revenues grew approximately 15% to $350 million. Total subscription revenues grew approximately 10% to $481 million, which was in line with the guidance we provided for the quarter. Now turning to advertising. Total advertising revenues for the quarter were $134 million, an increase of approximately 12%, which is higher than the guidance we provided for the quarter. Digital advertising revenues also came in above the guidance we provided, increasing approximately 19% to $94 million. Digital advertising revenues increased primarily due to new advertising supply in areas of strong marketer demand.
To $9.64 as we stepped up subscribers from promotional to higher prices and raised prices on certain tenure subscribers.
So pleased with the strong engagement we are seeing as we continue to add value to our products.
As a result, we remain confident in our aru trajectory.
With both higher digital subscribers and higher. Digital only arpu in the second quarter, digital only subscription revenues grew, approximately 15% to 350 million.
Total subscription revenues grew approximately 10% to 481 million which was in line with the guidance we provided for the quarter.
Now turning to advertising.
total advertising revenues for the quarter were 134 million in increase of approximately 12%, Which is higher than the guidance, we provided for the quarter,
Digital advertising revenues also came in above the guidance. We provided increasing approximately 19% to 94 million.
Anthony Diclemente: Affiliate, licensing, and other revenues increased approximately 6% in the quarter to $70 million as licensing and Wirecutter affiliate revenues continued to perform well. Adjusted operating costs grew 6.1%. This was just above the 5% to 6% guidance range that we provided last quarter. Adjusted diluted EPS in Q2 increased $0.13 to $0.58, primarily driven by higher operating profit and higher interest income. I will now look ahead to Q3. Digital-only subscription revenues are expected to increase 13% to 16%, and total subscription revenues are expected to increase 8% to 10%. Digital advertising revenues are expected to increase low double digits, and total advertising revenues are expected to increase low to mid-single digits. Affiliate, licensing, and other revenues are expected to increase high single digits. Adjusted operating costs are expected to increase 5% to 6%.
Digital advertising revenues increased primarily due to new advertising Supply in areas of strong marketer demand.
affiliate licensing and other revenues increased approximately 6% in the quarter to 70 million as licensing and wire cutter affiliate revenues, continue to perform well
Adjusted operating costs from 6.1%. This was just above the 5 to 6%, guidance range that we provided last quarter.
Adjusted diluted EPS in Q2 increased 13 cents to 58 cents, primarily driven by higher operating profit and higher interest income.
I'll now look ahead to Q3.
Digital only subscription revenues are expected to increase 13 to 16% and total subscription revenues are expected to increase 8 to 10%.
Digital advertising, revenues are expected to increase low, double digits, and total advertising revenues, are expected to increase low to mid single digits.
Affiliate licensing and other revenues are expected to increase High single digits.
Anthony Diclemente: We intend to continue operating efficiently while making disciplined investments in our high-quality journalism and digital product experiences that add value for our audiences. I would also like to note that we expect to have only one recordable segment as of next quarter. In summary, our essential subscription strategy is working as designed. With a valued product portfolio, multiple revenue streams, significant free cash flow generation, and a strong balance sheet, we believe we are well-positioned to navigate a dynamic market environment. We continue to expect healthy growth in revenues and AOP, margin expansion, and strong free cash flow generation for the full year. With that, we are happy to take your questions.
Adjusted operating costs are expected to increase 5% to 6%.
We intend to continue operating while making disciplined investments in our high-quality journalism and digital product experiences that add value for our audiences.
I would also like to note that we expect to have only 1 reportable segments as of next quarter.
In summary, our essential subscription strategy is working as designed.
With a valued product, portfolio, multiple revenue streams, significant free, cash flow generation, and a strong balance sheet. We believe we are well, positioned to navigate a dynamic Market environment.
We continue to expect Healthy Growth in revenues and aop margin expansion and strong free cash flow generation for the full year.
With that, we're happy to take your questions.
Operator: We will now begin the question and answer session. To ask a question, you may press star and one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from David Karnofsky with J.P. Morgan Chase. Please go ahead.
We will now begin the question and answer session.
to ask a question, you may press star then 1 on your touchtone phone,
If you are using a speaker-phone, please pick up your handset before pressing the keys.
To withdraw your question. Please. Press star. Then 2
At this time, we will pause momentarily to assemble our roster.
David Karnofsky: Hey, thank you. Meredith, on advertising, the result was really standout for The New York Times or even compared to other digital platforms. I just want to see if you could expand on the acceleration here. What are the key factors driving this in terms of your own tech enhancements or maybe expanding inventory to The Athletic or Games?
The first question today comes from David Karnowsky with JP Morgan. Please go ahead.
Hey, thank you. Um, Meredith on Advertising. The result was really stand out, you know, for the times or even compared to other digital platforms, I just want to see if you could
Meredith Levien: Yeah, great question. Thanks, David. I would say the big picture on advertising is we increasingly see the ad business like we see the consumer business. We are in big spaces with really broad marketer appeal, particularly in lifestyle spaces like Games and Sports, in addition to news. Although the whole portfolio is really working for advertising, we've got a really big engaged audience across the portfolio that can be effectively targeted at scale with first-party data that we've spent years building and also now with our AI tool Brand Match. We've got a very wide suite of high-performing ad products. In particular, just in recent months, we've added more ad products that can be sort of executed more quickly and easily for marketers, which has really helped during times of uncertainty in the market. We're continuing to roll out new ad supply across the portfolio.
Expand on the acceleration here, what are the key factors kind of driving this in terms of, you know, your own Tech enhancements or maybe expanding inventory to the athletic or games.
Yeah, great.
Meredith Levien: All of that together allows us to be a real option for marketers who are looking for really high-quality brand association and also high reach and high impact. I would just say it feels like we have a lot of running room ahead on all that.
Helped, um, during times of uncertainty in the market, and we're continuing to roll out new ad Supply across the portfolio and kind of all of that together allows us, um, to be a real option for marketers, who are looking for, um, you know, really high quality brand Association and also High Reach and, and high impact. And I would just say it. Feels like we have a lot of running around ahead and all that.
David Karnofsky: Hey, then on the Amazon licensing deal, can you just speak to what you found appealing in terms of extending your editorial content to these platforms? With regards to Amazon using the material to train their AI models, what is it about the agreement, maybe in terms of either compensation or guardrails, that made you comfortable licensing your content in this way?
Okay. And then on the um, Amazon licensing deal.
Can you just speak to what you found appealing in terms of extending your editorial content to these platforms? And then with regards to the
Meredith Levien: Yeah, great, great question. I would say the deal is consistent with our sort of long-held principles about how we work with big tech companies and platforms. It provides fair value exchange in a way that feels sustainable, gives us control over how our work is used. It is consistent with our long-term strategy, which is about, you know, The New York Times being more essential to more people. I would say kind of more broadly, the deal reinforces our principle that our journalism and everything we do is worth paying for, and our intellectual property should be valued as such.
Amazon using the material to train their AI models. What is it about the agreement maybe in terms of either compensation or guardrails that made you comfortable licensing, your content this way.
Yeah, great. Great question. Um, I I would say the deal is consistent with our sort of long-held principles about how we work with, um, big big tech companies and platforms that provides fair value Exchange in a way that feels sustainable, um, gives us control over how our work is used. And it's it's consistent with our long-term strategy which is about, you know, the times being more essential to, to more people. And I would say
More broadly, the the deal reinforces our principle that, our our journalism and and everything we do is is worth paying for and our our intellectual property should be valued as such.
Anthony Diclemente: Great. Okay. Thanks, David. Operator, we will take our next question.
Great. Okay, thanks David. Um, operator will take our our next question?
Operator: The next question comes from Jason Bassinette with Citigroup. Please go ahead.
The next question comes from Jason basinet with Citigroup, please go ahead.
David Karnofsky: I just have two quick questions. You guys are making great progress on your goal towards 15 million subs, but I still get a lot of investors that just fret that you are not going to sort of hit that. So it sounds like you remain confident. Is there any update on the timing when you expect to hit 15 million?
I just had 2 quick questions. Um, you guys are making great progress on your goal, towards 15 million Subs, but I still get a lot of investors that just fret that you're, you're not going to sort of hit that so.
Meredith Levien: I'm happy to take that one. I'll just start by saying 15 million by 2027 remains very much our aim, and we continue to see a real path to getting there. Let me give you a sort of view of that path and the levers. As I think William Bardeen and I both said in our prepared remarks, we continue to see persistent demand for everything we do. We've got a sort of master brand and then sub-brands that people trust and love, and all those brands now represent kind of a level of quality and rigor that's well understood. We have world-class news coverage and leading products in really big spaces with a lot of running room, and our differentiation in those spaces is only getting more pronounced.
It sounds like you, you remain confident? Is there any updates sort of on the on the timing when you expect to hit 15 million
I'm happy to to take that 1 and I'll just start by saying 15 million by 2027 remains very much, our aim, and we can continue to see a real path to getting there. Um, let me give you a a sort of
View of that, that path and the levers as I think will, and I both set in our prepared remarks, we continue to see persistent demand for everything we do. We've got, you know, um, a sort of Master brand and then sub brands that people trust and love and they all those Brands. Now represent kind of a level of of quality and rigor, that's well, understood we have
Meredith Levien: I reiterated our priorities for this year, which hang from our long-term strategy, and those priorities are about making those products and that coverage more accessible to people and more valuable to people. I think probably the most important thing to say is that our audience of people who are registered with The New York Times, and that audience is still growing or just coming to our sites and apps on a weekly basis, is much larger than our current subscriber base. We have a lot of opportunity to call them back to us, call them to action, and ultimately convert them.
David Karnofsky: That's very helpful. Thank you.
Um, world-class news coverage and leading products and really big spaces with a lot of running room and our our differentiation in those spaces is only getting more pronounced. Um, we're you know, I I reiterated our priorities for this year which hang from our long-term strategy and those priorities are about making those products and that that coverage more accessible to people and more valuable to people. And I think probably the most important thing to say is that our audience of people who are registered with the times and that, that audience is, is still growing. We're just coming to our sites and apps, um, on a weekly basis is much larger than our current subscriber base and we have a lot of opportunity to call them back to us, call them to action, um, and ultimately convert them.
Anthony Diclemente: Jason, do you have a second question?
It's very helpful. Thank you.
David Karnofsky: The only other question I got from the investors is on the Amazon AI deal, if that was included in your guidance.
Jason, do you have a second question?
Anthony Diclemente: Will, why don't you go?
Well, the only other question I got from investors is on the Amazon. AI deal, if, if that was included in your in your guidance,
David Karnofsky: will take that. Yes, it is included in our guidance. I will just give a little more color on exactly how to think about that. We do not break out revenue by deal. We can say that that Amazon agreement was operational as of the end of May. As reflected in our guidance, we are showing an acceleration in the affiliate licensing other revenue line in Q3 to high single digits from what was 6% in Q2. That will be the first full quarter with that Amazon agreement, which is playing a role in that line. Always remember with affiliate licensing and other revenue, it has a lot of moving parts that can create some lumpiness. We certainly expect that overall line to be a growth driver, and Amazon is playing a role there.
Or.
Oh, I'll take that. Um, yeah. We we we um, it it is included in our guidance. Um, and I'll just give a, a little more color on exactly sort of how to think about that. Um, you know, we don't break out, you know, Revenue by deal. We can say that that Amazon agreement was operational as of the end of May,
Anthony Diclemente: Thank you. Thanks, Jason. Thank you. Operator, let's take our next question.
Moving parts that can kind of create some lumpiness, um, uh, but uh, but we certainly expect that that overall line to to be a growth driver and and Amazon's playing a role there.
Great. Thanks. Jason.
Operator: The next question comes from Benjamin Soff with Deutsche Bank. Please go ahead.
Thank you, operator. Let's take our next question.
The next question comes from Benjamin Sops, with Deutsche Bank, please go ahead.
Benjamin Soff: Yep. Good morning. Thanks for the question. You guys hit your target for 50% of the base being bundled this quarter. Can you reflect on the progress you've made with the bundle strategy to date and share some thoughts on where you think adoption of the bundle can go from here? I am also curious to hear about this new family plan subscription that you talked about. Thanks.
Meredith Levien: Yeah, great. Why don't I start on the bundle, and Will, you can add color on the family plan? I'll just start by saying we are really happy with our achievement of the 50% because bundle subscribers, you know, engage more, they stay longer, they pay more over time. You see that the LTV of bundle subscribers is very strong. You can see that in the fact that bundle ARPU was up this quarter. You can regard us as incredibly focused on the bundle continuing to be a primary catalyst for our growth. I'll say, we don't expect everyone to choose the bundle, but every subscriber has value to us, and we are getting better and better at driving bundle starts from single products. As to family plan, Will, you should talk about it, but very early, and we're super excited about that too.
Yeah, good morning. Thanks for the question. You guys hit your target for 50% of the days being bundled. This quarter. Can you reflect on the progress you've made with the bundle strategy today and share some thoughts on where you think adoption of the bundle can go from here? I'm also curious to hear about this new family plan subscription that you talked about, thanks.
Yeah, great. Um, why don't I start on the bundle and
Thing we are really happy with our achievement of the, of the um, 50% because bundle subscribers, you know, engage more, they stay longer, they pay more over time. And they'll you you see that the LGB of bundle subscribers is very strong. You can see that in the, um, in the fact that bundle ARP who was up this quarter, um, and you can regard us as incredibly focused, um, on the bundle continuing to be a, a primary Catalyst for our growth. I'll say, you know, we don't expect everyone to choose the bundle, um, but I'll, you know, every subscriber has value to us and
Anthony Diclemente: Yeah, we are excited about it, as Meredith Levien just said. As I mentioned in my remarks, it is just the early stages of rolling it out. I will provide a little bit more context. Our family subscription is a single subscription representing two subscribers, one build subscriber, and then one additional subscriber to reflect up to three additional entitlements. We are excited about its potential to help us in a few ways. It is definitely, we believe, something that can continue to enable us to penetrate that large addressable market that we definitely see there, strengthen subscriber retention, and improve monetization over the long term. We just think it is a natural way for, and always has been, by the way, for people to experience all the products across The New York Times as they have enjoyed The New York Times for many years with family and friends.
We are getting better and better at driving. Um, bundle starts from from single products, um, as a family plan, well you should talk about it but very early and we're super excited about that too. Yeah, yeah. We're excited about it as myth just said. And as I mentioned, my remarks, um, just the early stages of rolling it out, uh, but I'll, you know, provide a little bit more context. Um, our family subscription, it's a single subscription. Representing 2 subscribers 1, build subscriber and then 1 additional subscriber to reflect up to 3 additional entitlements, um, and we're excited about his potential to help us, um, you know, in a few ways. It's uh, definitely. We Believe something that can continue to, um, sort of enable us to penetrate that large addressable markets that we uh, definitely see there, um, strengthen subscriber retention and improve monetization over the long term. Uh, we just think it's a natural way for and always has been by the way for
People to experience.
Anthony Diclemente: So it is something we are excited about and more to come in future quarters on that.
Benjamin Soff: Great. Thank you.
All the products across the time, um, as they have for, um, enjoy the times for many years, um, with family and friends. So, uh, it's something, we're excited about, and more to come. And, and, and, and future quarters on the
Anthony Diclemente: Thanks, Ben. Operator, let's take our next question, please.
Thank you.
Thanks Ben.
Operator: The next question comes from Thomas Yeh with Morgan Stanley. Please go ahead.
Uh operator, let's take our next question, please.
Benjamin Soff: Thanks so much. Good morning. Meredith Levien, on your earlier point about your larger user base, you've spoken about traffic headwinds related to the AI overviews in the past. Can you maybe just talk about whether you've seen these trends intensify in recent months and what you're doing differently to drive that top-of-funnel health that you mentioned as a priority?
The next question comes from Thomas here, with Morgan Stanley. Please go ahead.
Meredith Levien: Yeah, happy to do that, Thomas. I will say, you know, we see two things as being true at the same time. The tech companies are making moves that continue to result in less traffic to publishers and products like ChatGPT and Google's AI overviews, and now AI mode are playing a significant role in that. We have spent many years executing on a strategy of building coverage and products that are worthy of direct relationships and daily habits. Our success at that has made us resilient in a dynamic ecosystem. I am confident that we are going to continue to demonstrate that resilience as we execute on our strategy and all the priorities I talked about.
Yeah, happy to do that Thomas. Oh oh.
Benjamin Soff: Okay, great. Maybe a more in the weeds one, I noticed the length of bundle promotional pricing varies at times in terms of the offer that you are providing consumers. Sometimes it is six months, sometimes it is a year. Anything to note there in terms of your selling strategy and your approach to acclimating consumers towards the value of the bundle? Should we think about the cadence of eligible price graduations still building through the year and into the next?
So you know, we see 2 things, as being true, with the same time, the tech companies can or making moves that continue to result in less traffic to Publishers and products like chat, gbt and Google's Ai overviews, and now ai mode or playing a significant role in that, and we have spent many years, executing on the strategy of building coverage and products that are worthy of direct relationships, and daily habits. And our success at that has made us resilient in a dynamic ecosystem. And I'm confident that we're going to continue to demonstrate that that resilience as, as we execute on our strategy and all the priorities, I talked about,
Okay, great. Um, and then maybe, uh,
More in the weeds 1. I I noticed the length of bundle promotional pricing varies at times in terms of the offer that you're providing consumers. Sometimes it's 6 months, sometimes it's a year anything to note there in terms of your selling strategy and your approach to acclimating consumers towards the value of the bundle. Should we think about the Cadence of eligible price graduations, still building through the year and into the next?
Anthony Diclemente: Thomas, maybe I will take that. We have talked about this in the past, and the shortest thing I will say is we do not have any change to our approach here. We have been for some time now, having this sort of business as usual, be it a six-month promotion with the sort of a promotional opportunity being a 12-month. It is all a system that is just a way of continuing to make sure we are tackling the whole demand curve, getting people engaged in the bundle. That is, we like all our subscribers. I guess we like our bundle subscribers a little bit more where that is our sort of hero product that we are trying to get people on.
Promotion uh with the sort of the promotional opportunity of being a 12-month. Um it's all a system to you know, that that is just a way of continuing to make sure we're um tackling the whole demand curve.
Anthony Diclemente: Then once we get them on, we are doing everything we can to engage them as quickly as possible and deeply as possible across as many products as possible. Then we have these, depending on when they come on, either the six-month or the 12-month opportunity to staff them to pay a bit more if they see that value. So that is no change to our strategy there. We are continuing to operate it. As I said in my remarks, we continue to be quite pleased about the performance at these step-up moments, the graduation to higher prices, as well as when we ask of some groups of tenured single product subscribers to pay more over time as well.
Benjamin Soff: Understood. That's helpful. Thank you so much.
Getting people engaged in the bundles. That's, you know, we, we like all our subscribers, um, I guess we lack our bundles subscribers, a little bit more, where, where that is, our sort of, um, you know, hero product that we're trying to get people on. And then once we get them on, we're doing everything we can to engage them as quickly as possible and deeply as possible across as many products as possible. Uh, and then we have these, depending on when they come on, either the 6-month or the 12-month, um, opportunity to, um, staff them to pay a bit more as they see that value. So, so that's, uh, no change to to our strategy there. We're continuing to operate it. And as I said, in my remarks, we're we continue to be quite pleased, um, about uh, the performance. Um, at the step-up moments um graduation to to higher prices, as well as when we asked um of some groups of 10 or single products subscribers uh, to pay more over time as well.
Anthony Diclemente: Thank you, Thomas. Operator, let's take our next question, please.
Understood that's helpful. Thank you so much.
Thank you, Thomas.
Operator: The next question comes from Kannan Venkateshwar with Barclays Bank. Please go ahead.
Operator to see our next question, please.
David Karnofsky: Good morning, and thanks for taking the questions. I just wanted to follow up on the AI licensing opportunity since we're all trying to better understand the implications for The New York Times Company as well as the industry. Maybe can you elaborate on why Amazon was the right partner for you and whether we should think of this deal as being the first of perhaps more to come now that you've set a tangible set of guardrails for others to adapt and perhaps follow? Just on the financial impact, I realize that the affiliate licensing and other revenue line is a bit lumpy, but it's certainly encouraging to see the expected acceleration from 6% in Q2 to high singles in Q3.
The next question comes from Cut gun morale with evercore. Isi, please go ahead.
David Karnofsky: Should we think about the implied Q3 contributions as remaining largely steady as you move forward throughout the deal, or are there escalators or other factors that could change the financial contributions? Anything you could share would be helpful. Thank you.
Good morning and thanks for taking the questions. I just wanted to follow up on the AI licensing opportunity, since we're all trying to better understand the implications for the company as well as the industry. So maybe can you elaborate on why Amazon was the right partner for you? And whether we should think of this deal as being the first of perhaps more to come. Now that you've set a tangible set of guard rails for others to adapt and perhaps follow. And just on the financial impact, I realized that the affiliate licensing and other Revenue line is a bit lumpy but it's certain encouraging to see the expected acceleration from 6% in the second quarter to high singles in the third quarter.
Meredith Levien: Why don't I start on the first part of the question, and then Will can take the second part of the question? I would just say, in general, we continue to be open to doing deals, doing the right kinds of deals. Our approach to licensing is grounded in three principles. Is it consistent with our long-term strategy to be more essential to more people? Do we see fair value exchange in a way that feels sustainable, and do we have control over how our content is used across the scope of use? I will add two more things just because I think you are getting at willingness. I think we have a track record of doing deals with big tech companies when the terms are right.
Should we think about the implied Q3 contributions as remaining largely Steady As you move forward throughout the deal or are there escalators or other factors that could change the financial contributions? Just anything you could share, would be helpful. Thank you. What what?
And then we'll we'll can take the second part of the question. I would just say, in general, we continue to be, um, open to doing deals doing the right kinds of deals. Um, our approach to licensing, um, is, you know, grounded in sort of 3 principles as it consistent with our long-term strategy, to be more essential to more people. Do we see?
Meredith Levien: We also continue to believe that enforcing our rights is important to ensuring a sustainable path to fair value exchange for the long term. So very, very open to it, pleased with this, looking forward to more. Will, you should comment on the second part.
Anthony Diclemente: On the second part, look, I certainly appreciate the question. We have said everything about the terms of the deal already that we are prepared to say. I gave my previous response on how that has impacted Q2 and then the guide for Q3. So I do not have anything more to add. Thank you. Thanks. Thanks, Kat Gunn. Operator, we have time for one last question or one last analyst to ask a question. Go ahead.
Fair value, Exchange in a way that feels sustainable and do we have control over how, um, how our content is used across across the scope of use. I'll, I'll add sort of 2 2 more things just because I think you're getting it willingness I think we have a track record of doing deals with with big tech companies when the terms are right? Um and we also continue to believe that enforcing our rights is is important to ensuring a sustainable path to fair, value exchange for the long term. So very, very open to it pleased with this. Looking forward to more. Will you should? You should comment on the second part? Yeah, on the second part. Look, I certainly appreciate the question. We we've set everything about the terms of the deal already that that we're prepared to say. Um, and, you know, I, I gave my previous response on on how that's
Um, you know, uh, impacted a, a, a Q2 and then, um, and then the guide for Q3. So I don't have anything more to add.
Thank you. Thanks. Thanks. Thanks, um.
Operator, we have time for 1, uh, last question.
Operator: The last question today comes from Douglas Arthur with Huber Research Partners. Please go ahead.
Or 1 last analysts to ask a question, go ahead.
Douglas Arthur: Oh, thanks for fitting me in. Meredith, can you be a little bit more specific in terms of this traffic question on what you consider direct or organic traffic, and how do you define that? What percent?
The last question today comes from Doug. Arthur with Uber research Partners, please go ahead.
Uh, thanks for filling me in.
Uh Meredith can you be a little bit more specific in terms of this traffic question on what you consider direct or organic traffic? And how do you define that?
What, what, what percent?
Meredith Levien: I would say it's a great question. We think of direct as, you know, people seeking us out, asking for us by name, sort of behaving in a way that reflects the fact that they have made room for us in their lives and that they have a habit with us. The Times has been on a very long journey to drive more of that. That's, you know, a huge underpinning of our essential subscription strategy, which we're, you know, three, four years into. You can go all the way back to sort of 2015, 2016 when we said sort of the most important things we can do to propel the business were to be essential in more people's lives and to have that reflected in a direct relationship and a daily habit. That's really what we're getting at.
I would say it's it it's a great question. Um, we think of direct
Pinning of our essential subscription strategy which were you know 3 4 years into and and you can go all the way back to sort of 2015 2016. Um,
Meredith Levien: I would say, you know, ensuring that we have products that have sufficient gravity to do that is really important. You know, we've got 150 million registered users and counting, and we've got extraordinary apps, particularly our core news app, and also now our Games app, our Cooking app, The Athletic app. I think those apps present, you know, a big opportunity to continue to build direct relationships and deliver on them in a way that people really make room for us in their lives in a way that has them kind of seeking out The New York Times.
When we we said, sort of the most important things we can do to propel the business or to be essential, and more people's lives and to have that reflected in a direct relationship in a daily habit. So that that's really what we're getting at. And I would say, you know, ensuring that we have products that have sufficient gravity to to do that. Um is really important. Um you you know, we've got 150 million registered users and Counting and we've got extraordinary apps particularly our our core news app. Um, and also now our games app, our cooking app, the athletic app um and I think those apps, um, present, you know, a a a big opportunity to continue to build direct relationships and and deliver on them in a way that people, um, people really make room for us, in their lives, in a way, that has them kind of seeking out the New York Times.
Operator: This concludes our question and answer session. I would like to turn the conference back over to Anthony DiClemente for any closing remarks.
This concludes our question and answer session. I would like to turn the conference back over to Anthony De Clemente for any closing remarks.
Anthony Diclemente: Great. That is it. We really appreciate your participation. Thanks for joining us this morning, and we will see you next quarter.
Great. That's it. We really appreciate your participation. So thanks for joining us this morning and we'll see you next quarter.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect