NEW YORK TIMES CO

Overview

Fiscal year 2023 was composed of 52 weeks, and fiscal year 2022 was composed of 52 weeks and an additional five days. The following table presents our consolidated financial results:

(1) The year ended December 31, 2022 was recast to conform to the current presentation of total operating costs. See “Executive Overview” for more details.

P. 34 – THE NEW YORK TIMES COMPANY

Revenues

Subscription, advertising and other revenues were as follows:

Subscription Revenues

Subscription revenues consist of revenues from subscriptions to our digital and print products (which include our news product, as well as The Athletic and our Cooking, Games and Wirecutter products), and single-copy and bulk sales of our print products (which represent less than 5% of these revenues). Subscription revenues are based on both the number of digital-only subscriptions and copies of the printed newspaper sold, and the rates charged to the respective customers.

We offer a digital-only bundle that includes access to our digital news product (which includes our news website, NYTimes.com, and mobile and Audio applications), as well as The Athletic and our Cooking, Games and Wirecutter products. Our subscriptions also include standalone digital subscriptions to our digital news product, as well as to The Athletic, and to our Cooking, Games and Wirecutter products.

Subscription revenues increased $103.8 million, or 6.7%, in 2023 compared with 2022, primarily due to an increase in digital-only subscription revenues of $120.9 million, or 12.4%, partially offset by a decrease in print subscription revenues of $17.1 million, or 3.0% and the impact of five fewer days in the year. Digital-only subscription revenues increased primarily due to an increase in bundle and multiproduct revenues of $151.5 million and an increase in other single-product subscription revenues of $12.3 million, partially offset by a decrease in news-only subscription revenues of $42.9 million and the impact of five fewer days in the year. Bundle and multiproduct average digital-only subscribers increased 1,350,000, or 67.8%, while bundle and multiproduct ARPU decreased $2.80, or 17.7%. Other single-product average digital-only subscribers increased 420,000, or 20.1%, while other single-product ARPU decreased $0.22, or 5.8%. News-only average digital-only subscribers decreased 860,000, or 20.6%, while news-only ARPU increased $1.30, or 15.8%. Print subscription revenue decreased primarily due to a decrease in home-delivery subscription revenue, which was driven by a lower number of average print subscribers, reflecting secular trends and the impact of five fewer days in the year, partially offset by an increase in domestic home-delivery prices.

THE NEW YORK TIMES COMPANY – P. 35

The following table summarizes digital and print subscription revenues for the years ended December 31, 2023, and December 31, 2022:

A subscriber is defined as a customer who has subscribed (and provided a valid method of payment) for the right to access one or more of the Company’s products. The Company ended 2023 with approximately 10.36 million subscribers to its print and digital products, including approximately 9.70 million digital-only subscribers. Compared with 2022, there was a net increase of 880,000 digital-only subscribers.

Print domestic home-delivery subscribers totaled approximately 660,000 at the end of 2023, a net decrease of 70,000 subscribers compared with the end of 2022. Subscribers with a domestic home-delivery print subscription to The New York Times, which includes access to our digital products, are excluded from digital-only subscribers.

Beginning with the second quarter of 2023, we report three mutually exclusive digital-only subscriber categories: bundle and multiproduct, news-only and other single-product, which collectively sum to Total digital-only subscribers, as well as the ARPU for each of these categories.

The following table sets forth subscribers as of the end of the five most recent fiscal quarters:

P. 36 – THE NEW YORK TIMES COMPANY

The following table sets forth the subset of subscribers above who have a paid digital-only standalone subscription or a bundle subscription that includes the ability to access The Athletic as of the end of the five most recent fiscal quarters:

ARPU, a metric we calculate to track the revenue generation of our digital subscriber base, represents the average revenue per subscriber over a 28-day billing cycle during the applicable period. The following table sets forth ARPU metrics relating to the above digital-only subscriber categories for the two most recent fiscal years:

Total digital-only ARPU was $9.18 for December 31, 2023, an increase of 2.6% compared with December 31, 2022. The year-over-year increase was driven primarily by subscribers graduating from promotional to higher prices and price increases on tenured non-bundled subscribers.

Advertising Revenues

Advertising revenue is principally from advertisers (such as technology, financial and luxury goods companies) promoting products, services or brands on digital platforms in the form of display ads, audio and video ads, in print in the form of column-inch ads and at live events. Advertising revenue is primarily derived from offerings sold directly to marketers by our advertising sales teams. A smaller proportion of our total advertising revenues is generated through open-market programmatic auctions run by third-party ad exchanges. Advertising revenue is primarily determined by the volume (e.g., impressions or column inches), rate and mix of advertisements. Digital advertising includes our core digital advertising business and other digital advertising. Our core digital advertising business includes direct-sold website, mobile application, podcast, email and video advertisements (including direct-sold programmatic advertising). Direct-sold display advertising, a component of core digital advertising, includes offerings on websites and mobile applications sold directly to marketers by our advertising sales teams. Other digital advertising includes open-market programmatic advertising and creative services fees. NYTG has revenue from all categories discussed above. The Athletic has revenue from direct-sold display advertising (including direct-sold programmatic advertising), podcast, email and video advertisements and open-market programmatic advertising. Print advertising includes revenue from column-inch ads and classified advertising, as well as preprinted advertising, also known as freestanding inserts. There is no print advertising revenue generated from The Athletic, which does not have a print product.

THE NEW YORK TIMES COMPANY – P. 37

The following table summarizes digital and print advertising revenues for the years ended December 31, 2023, and December 31, 2022:

Digital advertising revenues, which represented 62.9% of the total advertising revenues in 2023, decreased $0.7 million, or 0.2%, to $317.7 million compared with $318.4 million in 2022. The decrease was primarily a result of the impact of five fewer days in the year and lower other digital revenues of $1.4 million, partially offset by higher revenues in core digital advertising of $6.3 million. Core digital advertising revenues increased due to higher direct-sold display advertising, partially offset by a decrease in podcast advertising revenues and the impact of five fewer days in the year. Direct-sold display impressions increased 17%, while the average rate decrease was de minimis. Other digital advertising revenue decreased primarily due to a decrease in creative services fees as a result of fewer advertising campaigns in 2023, partially offset by an increase in open-market programmatic advertising revenues. Programmatic impressions increased 54%, while the average rate decreased 28%.

Print advertising revenues, which represented 37.1% of total advertising revenues in 2023, decreased $17.4 million, or 8.5%, to $187.5 million compared with $204.8 million in 2022. The decrease in 2023 was due to a 6.3% decrease in print advertising rate and a 2.4% decrease in column-inches. Print advertising revenue in 2023 continues to be impacted by secular trends.

In addition, we believe the macroeconomic environment has had and may in the future have an adverse impact on both digital and print advertising spending. Additionally, we believe that there may be marketer sensitivity to some news topics, impacting overall advertising spend.

Other Revenues

Other revenues primarily consist of revenues from Wirecutter affiliate referrals, licensing, commercial printing, the leasing of floors in our Company Headquarters, television and film, retail commerce, our live events business and our student subscription sponsorship program. Digital other revenues, which consist primarily of Wirecutter affiliate referral revenue, digital licensing revenue and our student subscription sponsorship program, totaled $152.0 million and $114.6 million in 2023 and 2022, respectively. Building rental revenue from the leasing of floors in the Company Headquarters totaled $27.2 million and $28.5 million in 2023 and 2022, respectively.

Other revenues increased $32.1 million, or 13.8% in 2023 compared with 2022, primarily as a result of an increase in licensing revenues of $16.0 million, primarily related to a Google commercial agreement, partially offset by licensing revenue related to the Facebook News agreement, which ended in the fourth quarter of 2022; growth in Wirecutter revenues of $15.8 million driven by affiliate referral revenues, and an increase in books; television and film revenues of $5.4 million, partially offset by the impact of five fewer days in the year.

P. 38 – THE NEW YORK TIMES COMPANY

Operating Costs

Operating costs were as follows:

The components of operating costs as a percentage of total operating costs were as follows:

THE NEW YORK TIMES COMPANY – P. 39

The components of operating costs as a percentage of total revenues were as follows:

Cost of Revenue (excluding depreciation and amortization)

Cost of revenue includes all costs related to content creation, subscriber and advertiser servicing, and print production and distribution as well as infrastructure costs related to delivering digital content, which include all cloud and cloud-related costs as well as compensation for employees that enhance and maintain that infrastructure.

Cost of revenue in 2023 increased $40.1 million, or 3.3%, compared with 2022, largely due to higher journalism costs of $54.4 million, higher digital content delivery costs of $6.5 million, and higher subscriber servicing costs of $3.1 million, partially offset by lower advertising servicing costs of $14.7 million and lower print production and distribution costs of $9.2 million. The increase in journalism costs was largely due to higher compensation and benefits, which was driven by growth in the number of employees who work in our newsrooms, merit increases and higher content creation costs as a result of additional television episodes in 2023. The increase in digital content delivery costs was largely due to higher compensation and benefits driven by growth in the number of employees and higher cloud-related costs. The increase in subscriber servicing costs was largely due to higher credit card processing fees and third-party commissions due to increased subscriptions and an increase in the number of employees, partially offset by lower customer care costs. Advertising servicing costs decreased primarily due to fewer live events in 2023 and a decrease in the number of employees. The decrease in print production and distribution costs was primarily due to fewer print copies produced and lower compensation driven by production staffing efficiencies, partially offset by higher paper pricing.

Sales and Marketing

Sales and marketing include costs related to the Company’s subscription and brand marketing efforts as well as advertising sales costs.

Sales and marketing costs in 2023 decreased $7.3 million, or 2.7%, compared with 2022, primarily due to lower marketing costs of $14.9 million, offset by higher sales costs of $7.6 million. The decrease in marketing costs was primarily due to lower media expenses. The increase in sales costs was primarily due to higher compensation and benefits, largely driven by an increase in the number of sales employees.

Media expenses, a component of sales and marketing costs that represents the cost to promote our subscription business, decreased 12.3% to $117.7 million in 2023 from $134.1 million in 2022. The decrease was largely a result of lower brand marketing expenses.

P. 40 – THE NEW YORK TIMES COMPANY

Product Development

Product development includes costs associated with the Company’s investment in developing and enhancing new and existing product technology, including engineering, product development and data insights.

Product development costs in 2023 increased $24.6 million, or 12.1%, compared with 2022, largely due to growth in the number of digital product development employees in connection with digital subscription strategic initiatives.

General and Administrative Costs

General and administrative costs include general management, corporate enterprise technology, building operations, unallocated overhead, severance and multiemployer pension plan withdrawal costs.

General and administrative costs in 2023 increased $21.8 million, or 7.5%, compared with 2022, primarily due to higher compensation and benefits of $14.1 million driven by merit increases and incentive compensation, stock price appreciation on stock-based awards of $4.6 million as well as higher cybersecurity costs and software licenses of $3.1 million.

Depreciation and Amortization

Depreciation and amortization costs in 2023 increased $3.5 million, or 4.2%, compared with 2022. The increase was due to the impact from the additional month of The Athletic costs in 2023, as well as assets placed in service in connection with the improvements in our Company Headquarters in 2022.

Acquisition-Related Costs

In the second quarter of 2022, the Company recorded $34.7 million of acquisition-related costs, which primarily included expenses paid in connection with the acceleration of The Athletic stock options and legal, accounting, financial advisory and integration planning expenses. There were no such costs recorded in 2023.

Impairment Charges

In 2023, the Company recorded a $12.7 million impairment charge related to excess leased office space that is being marketed for sublet (the “lease-related impairment”).

In 2023 and 2022, the Company recorded impairment charges of $2.5 million and $4.1 million, respectively, related to an indefinite-lived intangible asset.

Multiemployer Pension Plan Liability Adjustment

In 2023 and 2022, the Company recorded favorable adjustments related to a reduction in its multiemployer pension plan liability of $2.3 million and $7.1 million, respectively.

In 2023 and 2022, the Company recorded charges of $1.7 million and $22.1 million, respectively, in connection with its withdrawal from multiemployer pension plans.

Segment Information

Since the acquisition of The Athletic in the first quarter of 2022, we have had two reportable segments: The New York Times Group (“NYTG”) and The Athletic. Management uses adjusted operating profit (loss) by segment in assessing performance and allocating resources. The Company includes in its presentation revenues and adjusted operating costs to arrive at adjusted operating profit (loss) by segment. Adjusted operating costs are defined as operating costs before depreciation and amortization, severance, multiemployer pension plan withdrawal costs and special items. Adjusted operating profit is defined as operating profit before depreciation and amortization, severance, multiemployer pension plan withdrawal costs and special items. Adjusted operating profit expressed as a percentage of revenues is referred to as adjusted operating profit margin.

Subscription revenues from and expenses associated with our bundle are allocated to NYTG and The Athletic. The Athletic was first introduced into our bundle in June 2022. Therefore, The Athletic’s results for 2022 include bundle revenues and expenses for only six months of the year, whereas 2023 includes bundle revenue and expenses for the entire year.

THE NEW YORK TIMES COMPANY – P. 41

Prior to April 1, 2023, we allocated bundle revenues first to our digital news product based on its standalone list price and then the remaining bundle revenues were allocated to the other products in the bundle, including The Athletic, based on their relative standalone list prices. Starting April 1, 2023, we allocate 10% of bundle revenues to The Athletic based on management’s view of The Athletic’s relative value to the bundle, which is derived based on analysis of various metrics, and allocate the remaining bundle revenues to NYTG.

Prior to April 1, 2023, we allocated to NYTG and The Athletic direct variable expenses associated with the bundle, which include credit card fees, third-party fees and sales taxes, based on a historical actual percentage of these costs to bundle revenues. Starting April 1, 2023, we allocate 10% of product development, marketing and subscriber servicing expenses (including the direct variable expenses referenced above) associated with the bundle to The Athletic, and the remaining costs are allocated to NYTG, in each case, in line with the revenues allocations.

For comparison purposes, the Company has recast segment results for 2022 to reflect the updated allocation methodology.

The results of The Athletic have been included in our Consolidated Financial Statements beginning February 1, 2022, the date of the acquisition. Results for the 12 months of 2022 included The Athletic for approximately 11 months, while results for the 12 months of 2023 included the Athletic for the full 12 months.

P. 42 – THE NEW YORK TIMES COMPANY

THE NEW YORK TIMES COMPANY – P. 43

The New York Times Group

NYTG revenues increased in 2023 to $2.3 billion from $2.2 billion in 2022. Subscription revenues increased 5.1% in 2023 to $1.6 billion from $1.5 billion in 2022 due to growth in subscription revenues from digital-only products, partially offset by decreases in print subscription revenues. Both digital and print subscription revenues were impacted by the five fewer days in 2023. Advertising revenues decreased 6.7% in 2023 to $477.3 million from $511.3 million in 2022 due to lower print advertising revenue, as well as lower digital advertising revenues, primarily as a result of lower revenues from podcasts, creative services and the impact of five fewer days in the year, which were partially offset by higher programmatic advertising. Print advertising revenue was impacted by secular trends. In addition, we believe the macroeconomic environment adversely impacted both digital and print advertising spending.

P. 44 – THE NEW YORK TIMES COMPANY

NYTG adjusted operating costs increased 2.2% in 2023 to $1.9 billion from $1.8 billion in 2022. The increase in costs in both periods was primarily related to growth in the numbers of employees who work in the newsroom as well as higher general and administrative and product development costs, partially offset by lower sales and marketing costs as well as advertising servicing costs.

NYTG adjusted operating profit increased 8.3% in 2023 to $421.3 million from $389.0 million in 2022. The increase in 2023 was primarily as a result of higher digital subscription and other revenues, partially offset by higher adjusted operating costs and lower advertising revenues.

The Athletic

The results of The Athletic have been included in our Consolidated Financial Statements beginning February 1, 2022, the date of the acquisition. Results for 2022 included The Athletic for approximately 11 months, while results for 2023 included the Athletic for the full 12 months.

The Athletic’s revenues increased 55.1% in 2023 to $131.3 million from $84.6 million in 2022. Subscription revenues increased 39.4% in 2023 to $100.4 million from $72.1 million in 2022, primarily due to the impact from the additional month of revenues in 2023, as well as the impact of additional months of bundle-related revenues in 2023 and growth in digital-only subscribers with The Athletic. Advertising revenues increased to $27.9 million from $12.0 million in 2022, primarily due to the launch of display advertising in the third quarter of 2022.

The Athletic’s adjusted operating costs increased 29.4% in 2023 to $162.7 million from $125.8 million in 2022. The increase in costs in 2023 was primarily due to higher sales and marketing costs, journalism costs and product development costs, primarily due to the impact from the additional month of costs in 2023, as well as the impact of the additional months of bundle-related costs.

The Athletic’s adjusted operating loss decreased 23.6% to $31.4 million in 2023 from $41.1 million in 2022, primarily as a result of higher digital subscription and advertising revenues partially offset by higher adjusted operating costs.

Other Items

See Note 7 of the Notes to the Consolidated Financial Statements for more information regarding other items.