The New York Times Company added about 180,000 net digital subscribers alone in the second quarter of the year, but generated less digital ad revenue, it said Wednesday.
The Times now has 9.17 million paying subscribers. It has a target of 15 million by the end of 2027.
The company reported adjusted operating profit of $76 million, down 18% from the same quarter last year. It generated total revenues of $555.7 million, an increase of 11.5% over the previous year. Digital subscriptions accounted for $238.7 million of that revenue, an increase of 25.5%.
Operating profit was hit primarily by losses at The Athletic, the sports news website the Times bought in February for $550 million. The Athletic’s adjusted operating loss was $12.6 million for this quarter, from April to June, compared to about $19.4 million in the first quarter.
The Times reported 9.107 million subscribers at the end of the first quarter of 2022. This number was revised in this quarter’s results to 9.01 million.
A key part of The Times’ strategy is to make a distinction between subscribers and subscriptions. A Subscriber may be subscribed to several of the Company’s products, including The Athletic, Cooking, and Wirecutter. The Times is betting on bundling digital offerings with its reporting to reach new audiences with diverse interests.
“News remains at the heart of our value proposition, but together it helps to ensure that The Times is indispensable to a growing group of people, even when news engagement comes and goes,” said said Meredith Kopit Levien, President and CEO of The Times Company. , said in a call with analysts.
In the second quarter, the company saw its highest number of new subscribers at the All Digital Access level, which includes reporting from The Times, Games, Cooking, Wirecutter and The Athletic, Ms. Levien said.
The net gain of 180,000 digital-only subscribers was a 70% increase over the net gain in the second quarter of 2021. The company added significantly more in the first quarter of the year, 418,000. The Athletic added a net increase of 50,000 stand-alone subscribers in the last quarter.
The vast majority of Times subscribers pay for digital-only access. The number of print media subscribers continued to decline in the second quarter, down nearly 7% from a year earlier to about 761,000.
The Times Company’s digital ad revenue in the quarter fell 2.4% from a year earlier to $69.3 million as marketers cut spending amid economic uncertainty. Print advertising rebounded 15.1% to $48.1 million from the same quarter last year as the entertainment and luxury categories began to recover from the pandemic.
Total operating costs increased 19.6% to $504 million. The company also noted a $34.2 million gain from the sale of land at the Times printing plant in College Point, Queens.
The company said it expects digital subscription revenue in the third quarter to increase 21-25% from a year ago. He said he expects a flat or small decline in total ad revenue and a 9-13% increase in adjusted operating costs during this period.
Shares of the company were down about 1% in early trading on Wednesday.