The New York Times Company (NYT) Earnings Call Transcript & Summary

All right. We're going to get started here. Before we get started, I'm going to read these disclosures. For important disclosures, please see the Morgan Stanley research disclosure website, morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, I'm really excited to welcome Meredith Kopit Levien, President and CEO of The New York Times.

Thanks for having me. Nice to be here.

Thank you so much for coming back. I thought I'd just start out maybe just talking about 2026 at a higher level. You've capped of, by all accounts, very successful 2025 with healthy subscriber growth, revenue growth, margin expansion to boot. Where do you see the biggest opportunities to really continue evolving your essential subscription strategy? And then within that context, maybe just talk about how you're seeing the evolution of the TAM that you set out from a subscriber point of view and across your verticals and content genres?

Happy to talk about both of those things. Let me start by saying I think successful execution of our essential subscription strategy has now powered a handful of advantages for The Times that you're going to see continue to play out. The first one gets a little bit at your -- the second part of your question, which is our news journalism broadly defined and our lifestyle products are all in really big markets with a lot of running room left to penetrate. That's true in news. It's true in lifestyle. It's true domestically. It's true internationally. So that's the first advantage, I think we've built our way into. Secondly, we have had more than a decade now, a very deliberate and sustained investment into the quality of those products. I think you see that if you're following the news in the last 36, 48 hours in news journalism, but it is true across all of our product set. I think our coverage engines are producing work that is just more rare and valuable and they're doing it at a time when others are retreating. So it makes -- kind of widens the gap and makes more need for it. Third, we've got a really good track record now of consistent innovation in our formats to meet kind of users where they are with the kind of experience they're looking for. And that has the potential to really drive engaged audience for The Times. And then lastly, our model now has multiple revenue streams based on that engagement with the potential to grow. So this year, what you're going to see us do is really lean into those advantages and capitalize on them even more. And we'll do that by continuing to sort of cover the world's most important stories in a differentiated way. We'll do that in more formats, especially video. Last year and this year, we've added consistently to each of our products, added value, new shows, games, new kinds of coverage. And we'll do all of that in service to getting more people to have a direct relationship and a daily habit with The Times. And to your question about the sort of TAM for The Times, I think the most important thing to say is the audience for The Times, the total audience is much larger than the total subscriber base for The Times, and we've got lots of signal that the TAM is at least as large as we've previously said. We've got something now like 150 million user registrations and counting. We have 50 million to 100 million people who come to our sites and our apps every week. We've got millions of people beyond our sites and apps who watch our shows and listen to our podcast, read our newsletters. And I just looked the other day, we have I think 120 million social followers, and that number is growing. And all of that just gives us a lot of confidence about that thing I said at the beginning, sort of further market -- a lot of room for further market penetration on the path to our next milestone of [ 15 million ] and beyond.

Got you. That's very helpful. I want to touch on all of that. But I think, in particular, this evolving relationship that the consumer has with news. Clearly, the news cycle is not letting up, and that is an opportunity for you to add differentiated value. But I do think there's also a growing concern about distrusted news, social media, AI concerns in terms of disruption. What capabilities does The New York Times have to have over the last 5 years to remain an indispensable source of information and value to the consumer?

Yes. Let me first say, we see persistent demand for our news report. It's true in big news moments like the one we're seeing now, but it's -- we see persistent demand for it kind of no matter what. That's the first and most important thing to say. And we've got a strategy that has been designed, to your point, to build resilience to all the things you're talking about, low trust, changing media habits, the platforms keeping more traffic to themselves. And that strategy has enabled us to have these products, including our world-class news coverage that are more rare and more valuable such that more people actually seek them out, they ask for them by name. They go directly to them in moments of real need. And we have a lot of confidence we'll be able to continue to do that. We've been in the business of building direct relationships and daily habits now for more than a decade. You asked about capabilities. I will say there are some capabilities already built into The Times. I touched on this a little bit in your first question, but I'll say a little bit more that are going to power -- we believe will power our growth from here. The first is we've got now 3,000 people doing world-class news journalism and the other kinds of content we make who are -- that is an engine that can point to wherever the story goes, issues of profound geopolitical consequence like we're seeing right now or in things happening in your everyday life. And that capability is already there. We've also got a product team and a track record of building destinations that are sort of worthy of coming to even when there are lots of alternative ways to get bits of the times here and there or get other kinds of information. And then the other sort of capability already built in that I think we don't talk about enough is our brand. We've got a world-class brand that's highly recognized and well known for quality and rigor, certainly for what it does in journalism and a brand that's expanding, which I think we'll talk about. As far as capabilities to add, we've talked a lot about adding a layer of video to everything that I just described. And I think that helps us in a number of ways, including getting one of the things you poked on in your question, which is just making more people see our work as easily accessible for them and trustworthy. You can see a reporter sort of at the scene of an event. You saw some of this in our coverage yesterday and today so far or with expertise to talk about that, you're more likely to trust them.

Got you. Before I get to the video journalism piece of this, I did want to ask about that brand in terms of the fact that increasingly, it does seem like you're able to grab subscribers through a number of different funnels, the bundle, first and foremost, but also some of these non-news products like games or cooking. Does that change the brand identity of New York Times over time? And how does that change maybe your go-to-market approach?

Yes, I would say we've got this very deliberate approach. We think about our brand a lot. We've got this parent brand, The New York Times, which has like universal awareness and a lot of understanding, although more opportunity for people to understand what it is. And then we've spent the last decade building a product experience that is about meaning even more than news to more people in more parts of their lives. And I would say those 2 ideas work really symbiotically. If you think about The Times brand, it really infuse everything else we do with an expectation of quality and rigor and authority. And my favorite example of that is games. People play our games because our games are great, but I think our games have become the cultural sensations they are in part because they're associated with this brand that's all about making you smarter every day. And it's those 2 things together that are really powerful. And then on the flip side, you may not think The New York Times is for you, but if you cook your family dinner every night or you love the NFL, we've got thousands -- many, many thousands of recipes, and we've got like 70 people covering the NFL. And ultimately, if we can make a relationship with you from that, we've got a better chance of having a relationship with you for the whole. And by the way, if we don't, you're still really valuable to us.

Great. Look, can you talk a little bit about that in terms of the ways that you might present organically opportunities for the consumer to move down the funnel, if they are coming from one channel, how you introduce them to the broader value proposition that might be?

Yes. So -- or even sort of within a channel. So let me say the first thing to think about there is we've got a really big top of the funnel. Just take those 150 million registered users. Our job is to call those people to action so they engage more and ultimately, hopefully, they convert, they pay, they stay, they pay more over time. And we have a lot of levers to do that. I'll give you a few examples of how we do it. In games, just over the last, I think, 2 years, you now have to register if you want to have your stats and streaks, you have to register to get a badge. So if you solve Wordle in 2, you get a badge, if you want to share your experience in certain ways with friends, you've got to be a registered user. And you've got to think we're adding value all the time to our products. This is true for games, it's true for all of our products. So there are more reasons to get people to register and then to get them to come back. The other thing I'll say is our sort of data science capabilities to target and communicate with people to call them back across the whole portfolio gets better and better. In news, that also applies. One of the things we're very focused on now is getting more people who are not already subscribers. I'd call this kind of middle funnel work to download and use our apps. Right now, our apps or news apps at core flagship. Times app is primarily used by subscribers, but we've got all these features where you're compelled to register because your today feed is more personalized and you've got a new feed where you can save things, and we even have features, journalistic features that are designed for a registered user to get more value out of them, like our 100 Best List in Culture. So we are already using levers to kind of get reengagement, and I think we have a whole lot more in front of us.

Got you. So talk about that top of funnel health then because I think last year, one of the big considerations that you were really focused on was navigating some of the changing relationships you have with big tech, and that was a headwind to traffic at a broader level. I think a lot of the initiatives you've been embarking on have helped stimulate engagement across these different channels within the existing user base. What else have you been able to do to increase the aggregate size of your audience in terms of just keeping that top of funnel healthy?

Yes. It's a great question. And I will say again, we see persistent demand for kind of everything we do and so much of our strategy for a decade now has been about making us less and less reliant on the intermediaries. And I think we've really made some progress to that. And 2 things are true at the same time. We've got the big tech platforms, including the AI companies who've used our work with -- in unlawful ways, keeping more audience to themselves, and you've seen us build resilience in the ways that we're describing. And I would say we have a lot of confidence in our ability to compel more engagement for our work. If you -- if I go back to the priorities that I talked about, continuing to do extraordinary coverage on a wider and wider set of issues, that plays a role in it. Doing that in more formats and particularly video is a way to bring new audiences in our video tab in the core app is a place where you can experience the whole of The Times is for free, and we're also taking that video. We produce so much more video and we can make it available now in places like TikTok and Instagram and YouTube, which ultimately are building awareness and the top of the funnel, part of building top of the funnel for The Times. So keep being great at the coverage, do it in more formats. I talked before about adding value to each one of our products. We're doing that in a very deliberate way to stimulate engagement for the people we already have, but also to drive new audience to us. We just launched a game called Crossplay in games first multiplayer game, deliberately multiplayer game, that's really intended to get at new people who may not otherwise play our games. Within cooking, we launched a show on YouTube called The Pizza Interview, which brings celebrities into our test kitchen and the device as they talk about their latest thing while making a pizza with our chefs. And the point of all that, I could give you lots and lots of other examples, is that new value brings new people into the ecosystem, and we have a lot of confidence we can continue to do that.

Got you. One particular area that it does seem like at least totally, you really are increasingly focused on is the video initiative. So I wanted to get your thoughts just broadly about how you think about the opportunity here, the size of this initiative in terms of how it gets you excited and how much do you think this could be as an investment opportunity, a growth opportunity relative to, say, like audio historically or podcasting? Like what -- how should we think about what you're seeing here is the opportunity?

Yes. Look, we think video is a really big -- has the potential to be a really big long-term opportunity to grow the engaged audience for The Times. It's hard stop. We're incredibly excited about it for that reason. And the aim, the way we talk about it inside The Times, is our aim is for The Times to be as preferred brand for watching the news and all the other things we do as we are for reading and listening. So our ambitions are big, and they're long-term gear. In terms of how to think about the opportunity, we know that many, many people now, the number of people who get their news and information in the other spaces we play in from video, particularly from the video platforms or from TV, it's enormous. So we see ourselves as pushing our work into an even bigger markets. And then in terms of how to think about kind of the opportunity, there are some things that are analogous to audio. I'm going to name the one that I think about all the time. If you listen to The Daily, The Daily has been around now for like close to a decade, I think maybe even a full decade. Originally, everybody thought the magic of it. It's a very, very successful show and people love the magic of it with the host or the format. In reality, the magic of The Daily was that every single day, we could plumb this huge newsroom with people all over the world. We made an emergency episode yesterday with David Sanger and Mark Mazzetti who are both experts on what is happening in the Middle East, we can plumb this giant newsroom. And I think -- and a lot of that, by the way, is a capability that's already there. And you should regard that there's an analogy there to what we're trying to do in video. And then I'll just say it's early days in terms of impact to audience, but we really like what we see so far in engagement with the video tab in our core app, even just watch this Iran story. I'm saying watch it. So much of the engagement with the journalism now is seeing things on the top of the home page now for much of the day yesterday. It was a series of photos and videos. So we're pleased with what we see so far. It's early, but we like it and the opportunity to take our work and put it off platform where we can build even more audience scale for it feels really exciting.

Do you see this taking a greater form where you get closer to something akin to what you might see on cable news now? Or is it still in a different direction where you're showing your work and leveraging video to really display the core investigative journalism that you can talk of?

Yes. We've been really careful to say we're not looking to sort of replicate something that's already out there. I think we all know the cable news does a lot of great things, and we also see the direction of travel. There is enormous opportunity and digital video to get a huge audience, and that's really where we're focused. And I do think last year, we did 2 things that were really foundational for The Times. You'll see more and more of it, but they're both worth naming. One, we arrived at these kind of scalable formats. You saw -- you see a lot of it today actually in covering what's happening in the Middle East. But reporter on -- what are those scalable formats, reporter on camera video, one; two, just we have journalists everywhere. They can now show you some of what's happening and you're getting tech server video just to take you to the place. And then we've also now got a real track record of launching shows, long-form shows, that are really touching culture. So I think that The Ezra Klein Show is one of our most successful shows in terms of audience growth. It is a big show that explores some of the biggest ideas on the political left. And we launched a show, I think, a year ago now called Interesting Times with Ross Douthat, which is exploring the biggest ideas on political rights, and that is a fast-growing show. So we're sort of able to do all of it. And the more that we can produce, the more we -- even long form in whatever form the journalism should take, we can also kind of chop that up and put it where the consumer is in a way that ultimately we believe will make them want more from The New York Times.

Okay. Makes sense. I want to circle back to that relationship with big tech and AI in particular. Last year, you signed an Amazon deal, which I think was your first really real foray into allowing someone to train on your content. And beyond the licensing revenue that you're getting it seemed like there was an angle that supported the opportunity to expand your reach in some ways as well. Maybe just talk about what you're hoping to see there and the evolution of these potential commercial agreements and whether or not it makes sense to...

Yes. We like the Amazon partnership for a lot of reasons. It's very early, so I can't be specific about anything related to audience. But what I will say is part of the opportunity in addition to the licensing is to be able to put our work in front of audiences and in ways we might not otherwise reach. So 2 examples of that are The Times appearing on Alexa devices or in Alexa Plus in ways where we might not otherwise. And I would say kind of broadly our theory of the case in working with any of these big tech partner has to follow 3 principles. Is there a sustainable fair value exchange? Do we have control over our work? And ultimately, is this good for our long-term strategy at The Times, which is about building engaged audiences for our work and direct relationships in daily habits?

Okay. Great. Last year, you also rolled out a family plan.

We did.

And it seems like it's gaining traction. I believe reported it's 3% of your digital subscriber base, roughly. Can you just maybe share any early learnings from that launch? And how should we think about the opportunity that you're trying to target here, whether there might be any evidence of cannibalization of existing subscribers that you might be switching into an add-on as opposed to a discrete?

Yes. Look, we were excited about the family plan before it launched. We like everything we've seen since we launched it. It's good. It's good. I'll say The Times is always a sort of inherently shareable experience. Think about people passing sections of the Sunday paper. This is that idea but it did much, much greater scale at real digital scale. And family plan is good for at least 3 things. One goes to your question about cannibalization. One, it's good for market penetration. So we are bringing -- you've got a subscriber to The Times bringing in more subscribers to The Times, that's very good. And particularly as you think about families, in some cases, bringing the next generation in. So it's good for that, too. It's good for revenue. The person who buys the family plan is paying a premium to have that plan. So it's ultimately good for subscriber revenue. And so far, it looks like it will be good for retention. I've long had this belief, and we believe in our products that it used to be if you used one more sort of desk or read from one more desk at the times, you were more likely to retain -- to sort of stay, stay longer pay more and then it was if you use more than one product, you're more likely. And now we really have a thesis that -- and if you do it with more of your friends and family, you're that much more likely to retain. So, so far, we like all of that.

Okay. Understood. Pricing in more general terms for the subscription product, as we think about how subscribers are coming through, whether it's on the bundle or some of these single product offerings, does this change your philosophy on how you might be structuring the relative value proposition that you're driving increased value potentially on a relative basis towards the bundle? How do we think about managing that dynamic?

Yes. I would say we've got a merchandising constructs that we've been at for a while now that's really working. We like it. We will continue to use it and that construct is aimed at our ultimate goal, which is healthy, long-term subscriber revenue growth. And it goes like this. We want to get as many people as we possibly can to buy our news entitled all access bundle. So as many people as we can, we want to do that. And we are also delighted to have every single product subscriber that we can possibly have. I'd regard it as all sort of working together, that kind of two-pronged approach working together to help us get at the whole of the demand curve, big markets, big demand curve to penetrate, the merchandising construct is allowing us to do both of those things. I think you're asking me, do we change? We're going to continue to do what we're doing here. Really working.

Okay. I do believe there's a broader sense that engagement is directly correlated with pricing power. So you've spoken, I think, historically about how healthy engagement trends are. Should we consider that as directionally correlated to your ability to graduate these subscribers as they move through their promotional pricing into higher tiers? And how would you say that, that rubric of when you trigger that graduation has changed?

Yes. Yes. Listen, to your original question, engagement is absolutely a leading indicator of willingness to pay in general and then willingness to pay more over time as you get more value. And I have a lot of confidence that we will continue to be able to graduate people to higher prices for 2 reasons. One, the products are just inherently all getting more valuable; and two, our ability to stimulate engagement in those products in a lot of the ways I talked about before, our capability there is getting better. It's worth saying just because you asked about pricing, that there are 2 ways people pay -- come to pay higher prices. One is we step them through a kind of very deliberate move from promotional to interim and higher prices. That continues to go well, and we're -- that system has not really changed. We get better and better at it. And the other is we consider list price increases when it makes sense in terms of the value. We're delivering. You should expect us to continue to deploy pricing both of those pricing strategies.

Okay. Got you. All right. Shifting to advertising. That's been a real source of meaningful upside and acceleration within your digital business. Can you maybe just help unpack the volume element versus the pricing growth and engagement trends obviously potentially a supporting factor to it relative to maybe ad load, I guess, in terms of just previously unmonetized services, like what exactly is driving this incredible strength that we're seeing?

Yes. We had a great year. We're optimistic and excited about the ad business going forward. As well, I'll break it down into 3 things. You're asking me about supply. What I'll say about ad supply, last year was a big year for new supply coming into games and sports in particular. This year, you're going to see us add supply incrementally in every part of the portfolio. So just as an example, Wirecutter towards the end of last year felt like an exciting place to add more ads. And then as far as medium- and long-term opportunities for advertising, video played a very minor role in our ad story last year, and we think over a long time horizon, that's going to be an important part of the ad story at The New York Times. So that's how I think of supply. In terms of demand, we have more products so we can get more share of wallet from the marketers we already have. Probably the most important thing is now that we have these big products that are building scale beyond news, we just appealed to a lot of different marketers. That's particularly transports, but it's true across the portfolio. The game sports, shopping. These are all big categories where marketers spend money. And I would add, because the sort of amount of supply we have and the breadth of that supply, we can just go after a whole new swaths of the market that we did not have -- we were not staffed to go after what I'd call sort of small and mid-market companies, and we've just built a team sort of more better staff to do that. So optimistic on the demand side. And the last thing I'll say, I always say that our ads work, so the marketers come back, our targeting capabilities get better and better.

You mentioned sports advertising. Do you think that's been an area of incredible strength across the industry. Are you seeing evidence that towards coverage like specifically The Athletic is a beneficiary of that same trend that we're seeing on the video side with actual live sports? And how should we think about the Olympics that's been going on and the World Cup that's coming as potentially like levers to really drive continued monetization of...

Yes. Short answer, Athletic was a really important part of the success story in advertising last year. We expect it to continue to be a really important part of it. I joked that I spent my whole career in news that it's very fun to be in sports. Marketers want to be around sports. We have a really high-quality product with really high-quality audience and high-quality engagement. And what I want to say is we believe we'll be in a position to keep growing that audience and engagement for the Athletic. That's a real focus. So we're excited about it. Big sporting events, sure, definitely good. And the combination of big sporting events that the athletic covers in a very deep way. There's a little bit of coverage from the times on the kind of more general interest topics and The New York Times together is a really nice combination.

Okay. Got it. Before we run out of time, I did want to hit on expenses and investment areas. I think there's been an increased focus in recent quarters on a little bit of an acceleration in expense growth relative to historical levels at a company level. How much is that really related to new product innovation initiatives that we just talked about or maybe just can you provide more details on what kind of incremental investments and what they're going towards?

Yes. Well, we've talked a bit about video as an important part of the incremental investment. Let me make a step back point, which is to say nothing is changing in our broader approach to building a larger and more profitable New York Times company. And I think we've got a very good track record now of investing into areas of opportunity, particularly in journalism, particularly in product innovation and format innovation, I'd regard video as like that. It's a particularly big and good long-term opportunity to build audience, but we are going to go about that and we are going about it in a really disciplined way. And what you're seeing now is we're kind of adding a layer to scale production in video. We are also very, very focused on building engaged audience for that video and have a track record of doing that well in all of our products and all of our formats. And when we do that, we believe we'll have an opportunity to monetize that. So we're going about all of this in a very disciplined way that aims to really build on the competitive advantage of The Times, but to do so in a way where revenue is growing faster than expenses.

What about on the marketing side? I think historically, that has been also a source of debate about the immediate effect you might be seeing from stimulating subscriber growth in the current quarter relative to maybe some of the longer-term effects of extending the lifetime subscriber value of an incoming subscriber whether that's related to brand building or consumer indication of the value, can you maybe just talk about how we should think about your need to continue educating the consumers about the enhanced value of your product as it continues to build?

Let me say, relative to marketing, the most important engine and relative -- the most important engine of demand of new subscriptions at The New York Times is what I would call product-driven growth. So the journalism and the product itself doing the work to drive the audience, the engagement, people to subscribe. Marketing, paid marketing remains a minority of how we drive people to start a subscription with The Times. A lot of the sort of focus and investment is on the journalism and the product to do it. When we do spend money on paid marketing, the majority of that spend goes to returns -- very returns-driven direct marketing, and we kind of get better and better at that. And from time to time, we do put brand work into the market. You saw some of it at the end of the year. Last year, we had a campaign called It's Your World to Understand, which really was meant to drive affinity for The Times and also get the fullness of our offering. And that can sometimes make it look kind of lumpy quarter-to-quarter. But overall, the broad message is we are still heavily leaned into a product-driven approach to growth and marketing represents not the majority of how we drive that growth, brand or direct.

Okay. Makes sense. I think we're out of time. Any last thoughts you want to leave investors with?

I think it's an extraordinary time in the world, and I think the rare and valuable news coverage from the New York Times is sort of showing what it can do in a moment like this, but that is true across our portfolio. I think the products are getting more rare, more valuable and have the opportunity to be more distinctive to our audience.

Thank you so much, Meredith. I appreciate your time.