The New York Times Company (NYSE:NYT) Q4 2015 Earnings Conference Call - Final Transcript

Feb 04, 2016 • 11:00 am ET


The New York Times Company (NYSE:NYT) Q4 2015 Earnings Conference Call - Final Transcript


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Good morning. My name is Mike and I will be your conference operator today. At this time, I would like to welcome everyone to the New York Times Company Q4 and Full Year 2015 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions)

Thank you. I will now turn the call over to Harlan Toplitzky, Executive Director of Financial Planning and Analysis. You may begin your conference.

Harlan Toplitzky

Thank you, and welcome to the New York Times Company's fourth quarter and full-year 2015 earnings conference call. On the call today, we have Mark Thompson, President and Chief Executive Officer; Jim Follo, Executive Vice President and Chief Financial Officer; and Meredith Kopit Levien, Executive Vice President and Chief Revenue Officer.

(Forward-looking Cautionary Statements)

With that, I will turn the call over to Mark Thompson.

Mark Thompson

Thanks, Harlan and good morning, everyone. Well, as you can see from the results we released this morning, we had a strong quarter and an encouraging 2015 and we begin 2016 with high hopes for the future. Let me deal first with the quarter, briefly review the past year as a whole, and then turn to 2016 and beyond.

In Q4 2015, we saw adjusted operating profit of $118 million, a 13% increase versus the prior year, driven by solid growth in digital advertising and consumer revenues, as well as good cost management. We had another quarter of strong net gains in digital earning subscriber numbers, with an additional net 53,000 subscribers. It was the biggest quarterly addition to three years and represented a 20% growth in subscriber numbers compared with the same quarter in 2014.

Continued improvement in retention and growth of international subscribers and the success of target pricing to specific market segments like college students all helped us maintain momentum. We believe our digital pay model has great potential and that is being borne out in the acceleration we're seeing in our year-over-year subscriber growth numbers, as well as the related revenue growth.

In our last earnings call, we predicted a return to revenue growth for digital advertising in the fourth quarter and we achieved that. Indeed, we did somewhat better than we predicted, posting a 11% year-over-year digital advertising revenue increase in Q4.

Rapid growth in mobile ad revenue was an important factor, as was intense demand for the production and distribution of branded content. Important also was the November launch of the New York Times VR app, not to mention the distribution of more than 1 million Google cardboard virtual reality viewing devices to our subscribers.

Total revenues for the quarter were flat at $445 million, with strong digital performance offsetting a moderate print advertising decline, as well as a slight decline in print circulation revenue. Significant cost control also accounts for the substantial increase in profitability.

Let me now consider 2015 as a whole. In the fall we published our path forward, a