The New York Times (NYSE:NYT) impressed investors earlier this week when it reported stronger-than-expected fourth-quarter results. The stock surged nearly 13% on Wednesday as investors digested the implications of the company's robust performance and management's optimism for the company's future.
To get a better understanding of what has the Street excited, here are some key metrics from the quarter.
1. Revenue of $503 million
The New York Times' fourth-quarter revenue came in at $502.7 million, up 3.8% year over year. This easily beat a consensus analyst forecast for fourth-quarter revenue of $479.6 million. Further, the company's top-line performance is more impressive when adjusting to exclude the impact of an additional week in the fourth quarter of 2017. On this basis, revenue rose 10.4% year over year -- an acceleration over the company's 8% revenue growth in the third quarter.
2. Digital advertising revenue jumped 23%
This was a validating quarter for the company's digital advertising strategy, as digital advertising revenue during the period exceeded print advertising revenue for the first time ever. Digital advertising revenue rose 23% year over year, or 32% year over year when adjusting to exclude the additional week in the year-ago quarter.
Digital accounted for 54% of the quarter's advertising revenue, with print making up the rest.
3. 265,000 new digital subscribers
The New York Times added 265,000 new digital subscribers during the quarter -- far more than the 203,000 digital subscribers it added in Q3. As management noted in the company's fourth-quarter earnings release, this was "the biggest gain since the months immediately following the 2016 election." This brought total digital subscriptions to 3.4 million.
Impressively, nearly 80% of The New York Times' subscriptions are now digital.
4. Digital subscription revenue increased 9%
Revenue from The New York Times' digital-only subscriptions increased 9.3% year over year, or 17.9% when excluding the extra week in the year-ago quarter.
5. The New York Times' crossword and cooking products remain big hits
Of The New York Times' digital subscription revenue, 6% came from subscriptions to the company's crossword and cooking products. Though revenue from these products is still relatively small for the company, the category is seeing surging growth. Revenue from crossword and cooking subscriptions, or "other product subscription revenues," soared 41.3% year over year during the quarter.
6. Management is targeting 10 million subscriptions
With 2018 digital revenue at $709 million, The New York Times is already nearing a goal it set out for itself in 2015 to double its digital revenue from $400 million to $800 million by the end of 2020. Now that the goal is in sight, the company is setting a new public milestone. It wants to exceed 10 million subscriptions by 2025.
7. The company increased its dividend by 25%
Finally, investors should take note of The New York Times' dividend increase. The company increased its quarterly dividend by $0.01 per share to $0.05. This translates to $0.20 annually, giving the stock a 0.7% dividend yield -- small, but better than nothing.
Overall, the company's fourth-quarter results highlight how its long-term efforts to build out its digital business are paying off nicely.