Shares of The New York Times Co. (NYT -5.68%) were soaring today after the media company posted better-than-expected results in its second-quarter earnings report. Subscription and ad revenue continued to grow, and the company could be getting a benefit from news interest in the second Trump administration.
As of 2:30 p.m. ET, the stock was up 15.5% on the news.
Image source: Getty Images.
The NYT's strategy is paying off
The subscriber base for The New York Times increased by 220,000 in the quarter, and digital-only subscription revenue rose 15.1% to $350.4 million. That drove overall revenue up 9.7% to $685.9 million, which topped expectations at $669.7 million.
Digital advertising revenue rose 18.7% to $94.4 million, and the remainder of the business, which includes licensing, affiliate, and print, was stable.
Growing subscriptions helped expand margins, as adjusted operating margin rose 280 basis points to 19.5%, and adjusted earnings per share rose from $0.45 to $0.58, ahead of the consensus at $0.51.
CEO Meredith Kopit Levien said, "We had a great second quarter across the board, and our strategy continues to work as designed. We grew all of our major revenue lines, and we're generating significant free cash flow."
What's next for The New York Times Co.?
Management expects that momentum to continue into the third quarter, calling for digital revenue to increase 13%-16% and total subscription revenue growth of 8%-10%. It also sees adjusted operating costs up 5%-6%, indicating that profit margins should expand again in the third quarter.
By now, it's clear that the New York Times Co. has successfully made the transition to the digital era. If the company can continue to grow its subscriber base, the stock should move steadily higher.
