The New York Times Has A Growth Stock Problem

THE GIST

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There's nary escaped luncheon successful the quality concern these days. The New York Times connected Wednesday posted a cleanable bushed connected nett and revenue, and inactive got clobbered by the market. Why?

Despite a hectic quality rhythm with hotly contested primaries, the FIFA World Cup, and President Trump's on-again, off-again flirtation with shutting down the Strait of Hormuz, subscriber maturation slowed to a comparative trickle implicit the past quarter.

WHAT HAPPENED

Wall Street present values The New York Times much similar a bundle institution than a newspaper. That means adjacent a flimsy slowdown successful subscriber maturation tin erase hundreds of millions successful marketplace value.

Operating costs landed good supra guidance arsenic the insubstantial invested heavy successful video and advertisement sales, leaving investors little consenting to forgive slowing subscriber growth.

The Paper of Record posted an adjusted operating nett of $155 million, up 16%, connected $762 cardinal of revenue, up 11%. The paper added astir 280,000 subscribers, beneath statement estimates of 295,000 and good nether the 310,000 it added past quarter. Still, that's good supra the 230,000 it added successful the 2nd 4th of 2025.

One agleam spot: digital-only mean gross per user, a cardinal pillar of the company's subscription thesis, roseate 3% twelvemonth implicit twelvemonth to conscionable nether $10, portion integer advertizing gross surged 21% to $114 million.

Still, the slowdown forced the insubstantial to forecast digital-only subscription gross maturation of 12-15% successful Q3, apt beneath the 14% analysts expected.

The banal fell 16% intraday and is down 9.2% this year.

WHY IT MATTERS

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Subscriptions are the Gray Lady's halfway business. News is 1 progressively tiny portion of the coastal elitist manner bundle Sulzberger and Co. are slinging crossed integer doorsteps. Politics is the introduction point. The existent worth comes down the funnel, from garlicky citrus gochujang noodle recipes, Wordle, and stylish enactment container recommendations.

After a beardown tally subsidizing hard news-gathering, and enactment crowing that the 174-year-old insubstantial solved the news, cracks are showing successful the thesis that subscription bundles are a metallic bullet.

That, positive the information that LLMs are eating the classical bluish links of Google Search, which The Times inactive relies connected to nonstop invaluable eyeballs its mode that it tin merchantability ads against. CEO Meredith Kopit Levien admitted arsenic overmuch successful the net call.