Though it is hard to top the early-pandemic metrics of 2021, The New York Times started out 2021 with a strong first quarter. This included growth in multiple categories including subscription and total revenue, operating profit, net income and earnings. For the period ended March 28, 2021, the company reported total revenue of $473.0 million, a 6.6% increase year-over-year. Net income for the quarter was $41.1 million, a 25.1% increase year-over-year. Diluted earnings per share were $0.24, a 20.0% increase year-over-year.

Subscription revenue

Subscription revenue was $329.1 million, a 15.3% increase year-over-year. This growth was attributed to digital-only subscription products including news, Games, Cooking and Audm, as well as subscriptions moving from initial promotional pricing to regular subscription pricing. Digital-only revenue was $179.6 million, a 38.1% increase. Print subscription revenue was $149.5 million, a 3.8% decrease, primarily due to lower single-copy and bulk sales. Revenue from domestic home delivery print subscription products increased 0.5%.

During the first quarter of 2021, the legacy media organization grew to more than 7.8 million paid subscriptions (print and digital), more than 100 million registered users, and an average weekly audience of 76 million readers. Paid digital-only subscriptions were 6.99 million, a net increase of 301,000 subscriptions (167,000 digital news and 134,000 from Cooking, Games and Audm) from the end of the fourth quarter of 2020.

“That foundation, plus our unmatched journalistic breadth and a market of at least 100 million people who are expected to pay for English-language journalism, grounds our conviction that we can substantially and profitably scale paid subscriptions over time,” said Meredith Kopit Levien, president and CEO of The New York Times Company, in a May 5, 2021 news release. “The fundamental drivers of our business — audience, registered readers, and subscriber engagement — are stronger than in 2019 and position us well for long-term growth.”

“We’ve made a sizable and sustained investment in our journalistic engine — an engine that powers the largest and most successful digital subscription business in journalism. While we don't know which storylines will drive the next big news cycle, we do know that the size of our newsroom, its range of expertise, and our continued investment in meeting more needs position us to capture that demand, whatever its source,” Kopit Levien said.

First quarter highlights

Other highlights from the first quarter include the following:

• Advertising revenue was $97.1 million, an 8.5% decrease.
• Digital advertising revenue was $59.5 million, a 16.3% increase, and representing 61.3% of total advertising revenue.
• Print advertising revenue decreased, especially in the entertainment, travel and luxury categories.
• Other revenue was $46.8 million, a 10.0% decrease, due to fewer TV episodes, lower revenue from live events, commercial printing and building rental income. This revenue loss was partially offset by affiliate revenue gains from Wirecutter.
• Total operating costs were $421.4 million, a 1.2% increase year-over-year. While sales and marketing costs decreased, product development costs increased 25.6% to $38.9 million, and general and administrative costs increased 7.0% to $56.6 million.
• At the end of the quarter, the company had cash and marketable securities of $890.7 million, compared to $882.0 million as of December 27, 2020.

Outlook

The New York Times provided the following guidance for the second quarter of 2021:

• Approximately 15% growth in total subscription revenue, including digital-only subscription growth of approximately 30%
• Growth of 55% to 60% for total advertising revenue with digital advertising revenue increasing 70% to 75%
• Low single-digit growth for other revenue
• Operating costs and adjusted operating costs are estimated to increase in the mid- to high-teams due to investments in digital subscription growth drivers.
• Capital expenditures of approximately $50 million

On the earnings call, Kopit Levien talked about the organization’s focus on people and culture.

“I’ve described this next decade in The Times’s business as being about scaling our strategy of journalism worth paying for. To do that, we need a culture that attracts, develops and retains top talent — not just in our newsroom but across all of our disciplines. Our culture has enabled the world’s most admired and influential news report, and it’s also helped create an innovative and thriving digital business. Success from here will require that we nurture the best aspects of that culture, and also evolve it. In both cases, we are making steady progress,” Kopit Levien said.

Insider Take

Looking at the total number of subscribers, The New York Times’ subscription growth is slowing, but it continues to gain ground in terms of revenue. The organization’s goal is to hit 10 million subscribers by 2025, and it seems well poised to do that. They also have the resources, the reputation and diversified revenue streams (e.g., various subscription products, advertising, affiliate revenue, events, etc.) to keep the company on an upward trajectory. They seemed to have successfully weathered COVID- and election-related advertising swings and are in a position to growth ad revenue, particularly on its podcasts and through via Audm. This year looks to be a strong one for The New York Times with a new leader at the helm.