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Newspaper and digital media company The New York Times (NYSE:NYT) reported results in line with analysts' expectations in Q1 CY2024, with revenue up 5.9% year on year to $594 million. It made a non-GAAP profit of $0.31 per share, improving from its profit of $0.19 per share in the same quarter last year.
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The New York Times (NYT) Q1 CY2024 Highlights:
- Revenue: $594 million vs analyst estimates of $591.8 million (small beat)
- EPS (non-GAAP): $0.31 vs analyst estimates of $0.20 ($0.11 beat)
- Lowered full year guidance for subscription revenue growth to 7% year on year at the midpoint (8% previously)
- Gross Margin (GAAP): 46.7%, up from 45.3% in the same quarter last year
- Free Cash Flow of $46.66 million, down 64.2% from the previous quarter
- Subscribers: 9.91 million
- Market Capitalization: $7.61 billion
MediaThe advent of the internet changed how shows, films, music, and overall information flow. As a result, many media companies now face secular headwinds as attention shifts online. Some have made concerted efforts to adapt by introducing digital subscriptions, podcasts, and streaming platforms. Time will tell if their strategies succeed and which companies will emerge as the long-term winners.
Sales GrowthExamining a company's long-term performance can provide clues about its business quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. The New York Times's annualized revenue growth rate of 6.8% over the last five years was weak for a consumer discretionary business. Within consumer discretionary, a long-term historical view may miss a company riding a successful new product or emerging trend. That's why we also follow short-term performance. The New York Times's annualized revenue growth of 7.2% over the last two years aligns with its five-year revenue growth, suggesting the company's demand has been stable.
We can better understand the company's revenue dynamics by analyzing its number of subscribers, which reached 9.91 million in the latest quarter. Over the last two years, The New York Times's subscribers averaged 14.7% year-on-year growth. Because this number is higher than its revenue growth during the same period, we can see the company's monetization of its consumers has fallen.
This quarter, The New York Times grew its revenue by 5.9% year on year, and its $594 million of revenue was in line with Wall Street's estimates.
Cash Is KingIf you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills.
Over the last two years, The New York Times has shown decent cash profitability, giving it some reinvestment opportunities. The company's free cash flow margin has averaged 10.9%, slightly better than the broader consumer discretionary sector.
The New York Times's free cash flow came in at $46.66 million in Q1, equivalent to a 7.9% margin and in line with the same quarter last year.
Key Takeaways from The New York Times's Q1 Results We were impressed by how significantly The New York Times blew past analysts' EPS expectations this quarter. We were also excited its operating margin outperformed Wall Street's estimates. On the other hand, its number of subscribers unfortunately missed. Additionally, the company slightly lowered its full year outlook for subscription revenue growth. Overall, we think this was a mixed quarter. The stock is up 1.5% after reporting and currently trades at $46.95 per share.