The New York Times Company (NYSE:NYT) Q1 2016 Earnings Conference Call - Final Transcript

May 03, 2016 • 11:00 am ET

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The New York Times Company (NYSE:NYT) Q1 2016 Earnings Conference Call - Final Transcript

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Executive
Mark Thompson

than for the core. The quarterly total went past $2 million for the first time in Q1. But at 59% growth year-over-year, it too is building strongly. From now on, we will disclose both the separate subscription counts and revenue figures for news and crossword and the combined totals. The combined digital-only subscription total for the quarter, therefore, was 1.357 million digital-only subscriptions. We expect this combined number to exceed 1.5 million by year's end. Digital advertising was a more uneven story.

Our headline result of roughly flat was a blend of continued success with smartphone, branded content and programmatic. Smartphone, for instance, more than doubled compared to Q1 2015, with pressure on web homepage and other web display. We remain bullish about our strategy, however, and believe that our timely pivot from traditional digital advertising towards branded content and marketing services, video and more seamlessly integrated ad formats on both mobile and desktop will deliver growth in the second half of 2016.

Late in the quarter, we brought HelloSociety, a social influencer network and the company's first acquisition in eight years, to add another element to the growing suite of content creation and distribution capabilities we can offer advertisers. Print advertising continues to experience strong secular headwinds, and was down 9% in the quarter. Print circulation was down just under 1% year-over-year, though total circulation was up because of success on the digital side. Revenues for the company as a whole were down 1% for the quarter, while adjusted operating profit was $52 million, down 13% compared to the same quarter last year, due to the advertising revenue weakness and the initial impact of investment associated with Our Path Forward.

On that topic, during the quarter, we announced our intention to invest more than $50 million over the next three years on exploiting the international digital potential of the New York Times. We have also announced the significant reorganization of the editing and preparation of the International New York Times, our global physical newspaper, to ensure its continued contribution. These two announcements, demonstrating a willingness to invest substantially in digital growth while applying rigor and realism to the economics of our mature print platforms, illustrate the approach we're taking everywhere.

As I noted in our last earnings call, we are fully committed to restoring the company to adjusted operating profit beyond 2016, and believe that we will achieve that through a combination of growing digital revenue and a continued focus on costs. We believe there is considerable scope of further savings in the company, and we will be going after it in the coming months. Encouraging and accelerating progress on digital subscriptions. Exciting developments, but more to do, on digital advertising. A commitment not just to build digital revenue but to manage our costs to defend and grow profitability. Those are my headlines this morning, so now over to Jim.

Executive
Jim Follo

Thanks Mark, and good morning, everyone. As Mark said, the first quarter reflects solid digital subscriber growth, but a