The New York Times (NYT) Banks on Subscription Revenues in 2023

The New York Times Company NYT has been diversifying the business, adding revenue streams, realigning the cost structure and streamlining operations to increase efficiency. The company is not only gearing up to become an optimum destination for news and information but also focusing on lifestyle products and services.

This New York-based company has been keeping pace with changing times by utilizing technological advancements to reach the target audience more effectively. Its business model, with a greater emphasis on subscription revenues, bodes well for 2023.

Subscription Revenues – the Driving Factor

The New York Times Company ended the fourth quarter of 2022 with roughly 9.55 million paid subscribers, with about 10.98 million paid subscriptions across its print and digital products. Of the 9.55 million subscribers, approximately 8.83 million were paid digital-only subscribers, with roughly 10.26 million paid digital-only subscriptions. There was a net increase of 240,000 digital-only subscribers and 240,000 digital-only subscriptions compared with the preceding quarter.

 

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Net increases of 1,010,000 and 1,100,000 were registered in digital-only subscribers and digital-only subscriptions, respectively, compared with the end of the fourth quarter of 2021. These exclude about 1,029,000 subscribers and 1,161,000 subscriptions that were added as a result of the buyout of The Athletic in the first quarter of 2022.

In the fourth quarter of 2022, subscription revenues grew 17.9% year over year to $414.1 million. The upside was primarily due to an increase in the number of subscribers to the company’s digital-only products, the benefits of subscriptions graduating to higher prices from introductory promotional pricing, the inclusion of subscription revenues from The Athletic and the impact of additional six days in the quarter. Subscription revenues from digital-only products jumped 31% to $269.2 million.

Management envisions first-quarter 2023 subscription revenues to increase about 6-9%, with digital-only subscription revenues anticipated to rise approximately 13-16%.

Wrapping Up

With rapid digitization in the core areas of advertising and the growing inclination of readers toward the Internet, newspaper companies have been diverting resources toward online publications. The New York Times Company has been making consistent efforts to rapidly adjust to the changing face of the multiplatform media universe.

The New York Times Company’s business model puts it in a better position to navigate through the current macroeconomic conditions. The company has been enhancing its reach through strategic buyouts and investments in games, sports and lifestyle. It is aiming for 15 million subscribers by 2027.

Shares of this Zacks Rank #1 (Strong Buy) company have advanced 18.4% in the past six months compared with the industry’s growth of 23.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.

3 More Stocks Worth Looking

Some other top-ranked stocks are Salesforce CRM, IMAX Corporation IMAX and Aspen Technology AZPN.

Salesforce, which provides customer relationship management technology, carries a Zacks Rank #2 (Buy). CRM has a trailing four-quarter earnings surprise of 13.2%, on average.

The Zacks Consensus Estimate for Salesforce’s current financial-year revenues and EPS suggests growth of 15.6% and 3.1%, respectively, from the year-ago period. CRM has an expected EPS growth rate of 16.8% for three to five years.

IMAX Corporation operates as an entertainment technology company globally. IMAX carries a Zacks Rank #2.

The Zacks Consensus Estimate for IMAX Corporation’s current financial-year revenues and EPS suggests growth of 17.1% and 121.4%, respectively, from the year-ago period. IMAX has an expected EPS growth rate of 20% for three to five years.

Aspen Technology, a global leader in industrial software, presently carries a Zacks Rank of 2. AZPN has a trailing four-quarter earnings surprise of 5.2%, on average.

The Zacks Consensus Estimate for Aspen Technology’s current financial-year revenues suggests growth of 65.1% from the year-ago period’s number. AZPN has an expected EPS growth rate of 17.5% for three to five years.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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