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(Reuters) – The New York Times Co beat Wall Street estimates for quarterly earnings on Wednesday as more people signed up for its digital subscription bundles, offsetting a slowdown in ad sales and helping the newspaper unveil a $250 million share buyback.
The Times has in the past few years embarked on a bundling push, combining its core news reports with digital content ranging from podcasts to cooking recipes and games in hopes of getting more revenue from readers.
The company’s shares rose 10% to $40 as the publisher added 240,000 digital-only subscribers in the fourth quarter, compared with 180,000 in the third quarter.
For the year, the newspaper added more than a million subscribers, the second most since 2020 when the pandemic dominated headlines. It has a goal of 15 million subscribers by 2027.
GRAPHIC: The Times’ bundling strategy pays off (https://www.reuters.com/graphics/NEWYORKTIMES-RESULTS/egpbyaqxkvq/chart.png)
“With each passing quarter, we saw more proof that there is strong demand for a bundle of our news and lifestyle products,” Chief Executive Meredith (NYSE:MDP) Kopit Levien said.
Activist investor ValueAct Capital Management, which has an over 7% stake in the company, has pressed the publisher to aggressively offer its all-access digital bundle that includes product review website Wirecutter and sports news site The Athletic.
In the December quarter, the New York Times’ revenue was $667.5 million, beating the $646.4 million estimated by analysts, according to Refinitiv. Adjusted profit of 59 cents per share was also above estimates of 43 cents.
Its digital advertising revenue was flat in the quarter and the company expects the measure to decrease by “low-single digits” in the first quarter, mirroring the weakness seen at other ad-reliant companies such as Snap Inc (NYSE:SNAP).
The buyback announced on Wednesday is for the New York Times’ Class A shares, and the company said it aims to return 50% of free cash flow to shareholders in the form of dividends and share repurchases over the next three to five years.
