New York Times missed its digital ad forecast. Profit still grew.
The company added 420,000 digital-only subscribers as advertising fell short of its summer outlook. The results show which business carried more weight.
The New York Times Company's digital advertising revenue rose 12% in the third quarter, below the mid-to-high-teens growth it forecast in August. Yet operating profit climbed to $121.9 million from $104.8 million.
Research by Ticker Byline shows that the larger digital subscription business met its original growth range, as did adjusted operating costs. The advertising miss came alongside a stronger result in the company's main revenue stream.
What met the forecast, and what did not
| Measure | Earlier forecast | Result |
|---|---|---|
| Digital advertising revenue | Mid-to-high teens | 12.0% |
| Digital subscription revenue | 12% to 15% | 14.6% |
| Adjusted operating costs | 8% to 9% | 8.7% |
Digital subscription revenue reached $421.3 million, almost four times the $109.9 million from digital advertising. The company added approximately 420,000 digital-only subscribers during the quarter, bringing that total to 13.22 million.
Total company revenue rose to $768.5 million from $700.8 million. Adjusted operating profit increased to $149.6 million from $131.4 million. It excludes depreciation and amortization, severance, pension-withdrawal costs and specified litigation costs.
A more restrained advertising outlook
For the fourth quarter, management expects digital advertising growth in the high-single to low-double digits. Its summer forecast for the third quarter had called for mid-to-high-teens growth.
The latest earnings release describes continued marketer demand and more advertising supply, but does not explain the gap between the earlier forecast and the third-quarter result.
Digital subscription revenue is expected to grow 12% to 15% in the fourth quarter, with adjusted operating costs rising 6% to 8%.
The cash comparison has its own context
Operating cash flow for the first nine months reached $462.2 million. After $26.4 million of capital spending, free cash flow was $435.8 million, up from $392.9 million a year earlier.
Management expects approximately $60 million of lower cash-tax payments for full-year 2026, a benefit already disclosed in August. It does not expect most of that benefit to continue beyond 2026. The prior-year nine-month operating cash figure included approximately $33 million from a lease and subsequent excess-land sale.
The New York Times company profile follows subscriber growth, cash and securities, share repurchases and the next quarterly expectations.