Good morning, and welcome to The New York Times Company Fourth Quarter 2025 Earnings Conference Call. All participants will be in a listen-only mode. Please note this event is being recorded. I would now like to turn the conference over to Anthony DiClemente, Senior Vice President, Investor Relations. Please go ahead. Thank you.

And welcome to The New York Times Company's fourth quarter and full year 2025 Earnings Conference Call. On the call today, we have Meredith Kopit Levien, President and Chief Executive Officer, and Will Bardeen, Executive Vice President and Chief Financial Officer. Before we begin, I would like to remind you that management will make forward-looking statements during the course of this call. These statements are based on current expectations and assumptions, which may change over time. Our actual results could differ materially due to a number of risks and uncertainties that are described in the company's 2024 10-Ks and subsequent SEC filings. In addition, our presentation will include non-GAAP financial measures, and we have provided reconciliations to the most comparable GAAP measures in our earnings press release, which is available on our website at investors.nytco.com. In addition to our earnings press release, we've also posted a slide presentation relating to our results on our website at investors.nytco.com. And finally, please note that a copy of the prepared remarks from this morning's call will be posted to our investor website shortly after we conclude. With that, I will turn the call over to Meredith.

Thanks, Anthony, and good morning, everyone. 2025 was a great year for The New York Times. Thanks to strong execution against a clear long-term strategy. We added 1,400,000 net new digital subscribers, bringing total subscribers to 12,800,000. This puts us further down the path to our next milestone of 15,000,000 subscribers and beyond. Engagement across the portfolio was strong, which contributed to significant growth in digital advertising. We generated more than $2 billion in total digital revenues for the first time. Also grew adjusted operating profit more than 20% and expanded margin to 19.5%. Our fourth quarter results were a fitting capstone to the year and reflect contributions from every part of our portfolio. We added 450,000 net new digital subscribers in the quarter and digital subscription revenues grew 14%. Advertising beat our expectations with digital advertising up 25% and total advertising increasing 16%. Licensing, affiliate, and other revenues also grew. We delivered this growth by engaging and monetizing audiences across multiple products and revenue streams, which is a clear example of our strategy in action. AOP grew and margins expanded in the quarter even as we continue to invest in our world-class journalism and premium product experience. Let me spend a few minutes putting these results in a broader strategic context as we begin the year. The information ecosystem is changing rapidly, and the challenges media companies face remain steep. We're operating in a polarized, low-trust environment shaped by a few powerful platforms whose actions create headwinds for publishers. We believe that The Times is well-positioned to navigate these trends. Given the differentiated value we have developed based on years of strategic investment, there are even bigger opportunities ahead, and we are confident that we can pursue them ambitiously and profitably thanks to the durability of our essential subscription…

In 2025, we delivered strong results, including another year of healthy revenue growth, AOP growth, margin expansion, and strong free cash flow generation. As Meredith said, we continue to grow our subscriber base over the course of the year, adding 1,400,000 digital subscribers. We also grew total digital-only ARPU and drove strong subscriber engagement. This led to an increase of approximately 14% in digital subscription revenues and helped power our multiple revenue streams, including digital advertising, which increased 20%. We grew overall revenue in the full year by approximately 9% as increases in digital revenues were partially offset by ongoing declines in print. These healthy revenue results coupled with our disciplined approach to cost throughout the year drove operating leverage. AOP grew by approximately 21% year over year in 2025 to $550 million. AOP margin expanded by approximately 190 basis points to 19.5%. We delivered these results even as we continue to prioritize strategic investments aimed at further differentiating our high-quality journalism and digital products. We generated approximately $551 million of free cash flow in 2025. That strong free cash flow generation primarily reflected our robust AOP and our capital-efficient model. We also benefited during the year from lower cash taxes due to the change in tax law for R&D expenditure deductions, as well as from the net proceeds of the sale of excess land at our printing facility. Over the course of the year, we returned approximately $275 million to shareholders. This included approximately $165 million in share repurchases and approximately $110 million in dividends. Today, we announced an increase in the quarterly dividend from $0.18 to $0.23, consistent with our capital allocation strategy. I'll note that as of year-end, we had $350 million remaining on our share repurchase authorization. Now I'll discuss the fourth quarter's key results, followed…

To ask a question, press * then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. The first question today comes from David Karnovsky with JPMorgan. Please go ahead.

Thank you. Meredith, when we look at that 20% digital ad growth last year, just with hindsight, is it possible to kind of break that out between kind of new supply, new products, or just engagement? And then kind of how much opportunity you see on these fronts? And then for Will, the adjusted cost guide for Q1 is a bit above recent trends. So I wanted to see if you could unpack some of the drivers there. And you mentioned video specifically. I'm not sure if there's a way for you to kind of dimensionalize the impact there. Thank you.

Yes. Good morning. I'll start on ads. I mean, the first thing to say is we were very happy with the performance last year, and I'd say we feel good about what we see as sort of all three elements of the ad business in terms of supply, which you asked about. We did add more ad supply in a number of places last year. And I would say as we have more opportunities to engage the audience, we should have more to add new and different kinds of supply. And I'll also say on supply, we have a really good track record of, and we did a lot of this last year, making the supply we already have more valuable, and that's with data and improvements to campuses and overall performance. In terms of demand, I would say that picture has improved. It's improved in a couple of ways. One, you know, we can do bigger deals with the marketers we already work with because there's more to offer. And two, and I've talked about this for a while now, I think we appeal to more marketers because we're now at scale in multiple spaces that are very appealing to them. And then the last thing to say, and I think I said a version of this for years, our ad products really work. They're performing. And so because of that, marketers come back and they buy more, and that's, I would say, thanks to the quality of both the canvases and the sort of way we apply those canvases and also to our targeting tools. And then lastly, I would just say we really believe in our leadership and the team, and execution has been kind of strong across the board. Will, I think the next part of the question.

Yeah, to take the question, David, on the cost guide. So looking forward on cost and investments, I think the most important thing to say is that our overall approach isn't changing. So we don't guide beyond the quarter, but we remain focused over the long term on sustaining healthy revenue growth, AOP growth, and margin expansion. In other words, growing revenues faster than growing costs. And we do that by managing costs very closely while also making strategic investments that continue to differentiate us. And as Meredith and I both said in our remarks, as you mentioned in your question, that does include investment into video, which we're excited about. You know, we ramped that up, particularly in the back half of '25. The Q1 expense guide reflects year-over-year impact of that ramp of volume and video production at both The Times and The Athletic across the portfolio. Also, you know, just full cost, we also continue, as we've said in the past, to value the flexibility to lean into areas like sales and marketing when there are good returns in the market, where we see a good opportunity to run a brand campaign. But stepping back, with respect to cost investments, our overall resource allocation approach reflects ongoing cost efficiency combined with that thoughtful investment into the journalism and digital product experiences that we really think are going to add value to our audiences over time. And it's that disciplined approach that enables us to continue to target not just healthy revenue growth, but also year-over-year AOP growth and margin expansion for '26 and beyond.

Great. Thanks a lot, David. Operator, we'll take our next question, please.

The next question comes from Benjamin Soff with Deutsche Bank. Please go ahead.

Good morning. Thanks for the question. I wanted to ask first about capital allocation. You had another healthy year of free cash flow. Your balance sheet is obviously in a pretty strong position. So what are your latest thoughts on capital allocation as we head into 2026? How do you think about perhaps updating your shareholder return target as you continue to build up cash? And then I wanted to ask about password sharing. To date, you primarily focused on approaching that with a carrot, not a stick. Can you talk about how you think about password sharing on your platform broadly? And the different tools that might be available to help unlock that opportunity? Thank you.

Sure. I'll take the capital allocation question, and Meredith can take the password sharing question. Definitely appreciate the question. We're clearly pleased with both the strong free cash flow generation and the strong balance sheet. At this time, what I'd say is no change to our strategy here. We believe our capital allocation strategy continues to serve us well. And recall, the top priority on that is continuing high-return organic investment into our essential subscription strategy. And I think you hear with some of our remarks today and as we've been narrating over the last call or two, video is an exciting opportunity for us there. And then after that, we intend to return at least 50% of our free cash flow to shareholders over the midterm. That's our stated target. And you've seen and continue to see a balance as we are on pace for that target between dividends and share repurchases. I note today in my remarks, the $0.05 increase to the dividend from $0.18 to $0.23 and this track record of repurchases with $350 million of the authorization remaining at the end of the year. And then we like having a strong balance sheet. It's a dynamic time in the media industry, so we're comfortable with that. Any M&A would have a very high bar. We're very pleased with the pace of our strategy and the spaces we're in. So that's sort of the specifics to say we're pleased with our capital-light allocation strategy and nothing to change at this time.

Great. Why don't I take password sharing? I think there's two answers to that. The first one is to say, and I talked about this in my prepared remarks, we still regard ourselves as playing in these very big spaces, you know, news, coverage broadly defined, and then sports, games, recipes, shopping, bikes, all of which have a lot of running room in them. So we see a really big market opportunity and regard ourselves as, you know, still having lots of room to penetrate there. So that should give you a sense of how we think about password sharing as, like, potentially an opportunity down the line, but we're still in a phase of really wanting to bring more people into using and engaging with The Times. And the way we've done that, you know, so far, like, in the last six or nine months is with our family plan, which we are incredibly excited about. So that's almost like the carrot version of password sharing. The family plan is going very, very well. And I would say it's got three elements to it that really work for us. One, it is a sort of further penetration move, and it is helping us do that. People are bringing new people into an opportunity to engage with The Times, and we're very excited about that. That's our own subscribers getting other people in their lives to subscribe. And a lot of the things we do at The Times are sort of fundamentally shared or shareable experiences. The second thing to say with the family plan is it is priced at a premium, it's just, like, additive out of the gate to revenue and the same, you know, again, the carrot version of using password sharing crackdown as the stick. And then the third thing to say is, like, a broad point that a whole model runs on very strong engagement from people, and the family plan is yet another way to improve engagement of our subscribers and ultimately retention. We've long had the insight if we can get you. First, it was to read across more topics. You'd be more likely to stay longer, pay more over time. And then if we could get you to engage with more products, that was true. And now it's if we can get you to do it with the people you love and interact with, that is also true. So our version for now in a sort of moment where we still feel like we're relatively early in market penetration of dealing with what you're describing as password sharing is the family plan. But I don't rule out something else to offer it.

Thanks, Ben. Operator, next question, please.

The next question comes from Thomas Yeh with Morgan Stanley. Please go ahead.

Thanks so much. One more on the video journalism initiative, which sounds like an area you're really deciding to lean in on. I think to date, you've been adding more videos of reporters explaining their work as kind of a brand trust or social media marketing tool. Can you just talk about how you see the evolution of that product towards something you mentioned maybe closer to what we see on linear TV and how that fits into the investment needs that Will referred to? On the non-news single product growth, that was again a pretty big contributor to subscriber growth this quarter. I know you'll change the disclosure going forward, but maybe one last time, can you add color on what's been driving that strength across games or athletic and what you're seeing there? Thank you.

Yeah. I'm good morning, Thomas. I'm happy to take both of those. The first thing to say about video, and I think you got in both of our prepared remarks, is we just see it as a really big long-term opportunity to establish The Times as the preferred brand for watching news in addition to reading and listening to that news. And there are sort of three parts to it, one of which you're asking about specifically: production, and then engagement and monetization. In terms of production, which is what I think you're pushing on, you can regard us as being in a phase where we're really beginning to scale it. And I think to your point, what we feel really good about from 2025 is we've arrived at sort of two things. One, scalable formats, and I'll name them, and also kind of video language for The Times that feels like it's really, really working. So what does that look like? You mentioned reporter videos. We are scaling that up. And one of the inherent advantages we have in the model is an enormous one of the world's most robust reporting forces. So you can imagine how that scales. In addition to reporter video, I think we've really distinguished ourselves in our still, you know, in early days of it with what we call visual investigations. You've seen a lot of that recently. That is something we're doing more and more of. I think that becomes even more important in sort of a low-trust environment. We're just showing more, so they're straightforwardly showing more of what is happening when a reporter is on the scene somewhere in news clips. And then we've made a really deliberate effort to turn our hit podcast, in most cases, into full-bore video shows,…

Great. Thank you, Thomas. Operator, next question, please.

The next question comes from Ketan Mamrall with Evercore. Please go ahead.

Good morning and thanks for taking the questions. One on ARPU and a follow-up on costs. On the digital-only subscriber ARPU side, growth has historically been a highlight over the last few quarters, up in the 3% to 4% range. That growth decelerated a bit more than expected in the quarter. Based on your Q1 outlook, it certainly seems like overall digital-only subscription revenue growth will remain healthy. But any more color on ARPU specifically and the moving pieces for 2026 would be appreciated. And to follow-up with another question on costs, Will, I appreciate that you don't guide beyond the quarter, but I think despite the very attractive strength in net adds, advertising, free cash flow, and other parts of the story, there'll be some consternation on costs. So I just wanted to see if there's anything more you can share on the trajectory over there. Should the takeaway be that the high single-digit growth range exiting 2025 into 2026 is perhaps the new normal? Or should we expect a deceleration back to the mid-single-digit range in the back half of the year as you begin to lap some of these investments in video? Thanks.

Yes, I'll take both of those. Why don't I just start with the second one? I think the key thing to say there is simply that we remain very focused on sustaining not just the healthy revenue growth, but also AOP growth and margin expansion. So very disciplined on costs and investments. And I described that in my remarks. I think that's the framework that I want to make sure to leave you with that we're very focused on. Move to ARPU. I totally appreciate the question. We sort of provide, as you noted, quarterly guidance on digital subscription revenue growth, which is the thing that we're trying to maximize over the long term. And that's a function of both our sub base and our ARPU. And as you've seen and expect to continue, ARPU growth in any given quarter can fluctuate for a variety of reasons. Those can be the volume and mix of sub additions, and where the, you know, what's the nature of the sub? Are they on a promotion? Are they tenured? Are they international, domestic? We have some different pricing. And then the timing of targeted price increases can play a role as well. So you noted in our guidance, we're expecting strong digital sub revenue growth in 2026. And I think it's maybe worth calling out as we begin '26 some of the color you asked for, we do expect in particular to see the benefit of an increase in the digital bundle price to $30 from $25. A ten-year cohort of bundled subscribers began paying those higher prices in Q1. And as we'd expected from some of our earlier testing, we tend to test all of our pricing. The results so far are very encouraging. So we don't guide to ARPU specifically. Overall, we continue, as I said, to be pleased with the health of the ARPU drivers. And we see multiple factors that are giving us confidence in our ARPU trajectory over time. At the basic level, we're continuing to add value to our products. They become more valuable. We're seeing strong audience and subscriber engagement. So an appreciation among our audience for that value. And then we remain pleased with the performance of our pricing step-up points, including when we raised prices on some groups of tenured subscribers.

That's great. Thank you, Ketan. Operator, next question.

The next question comes from Jason Bazinet with Citi. Please go ahead.

Sorry to do this, another one on costs. So you said in the fourth quarter, the expenses were a bit higher because of incentive comp. But going forward, it's more of the investments you're making. The incentive comp just sort of spread across all the cost items you disclosed? Or is it isolated in one? And same thing on the video investments. Are those across?

Yeah. Appreciate the question. Yeah. So let me take the Q4 dynamic there. As I said, the primary reason for the difference between the guidance and what we came in at was higher expenses associated with incentive compensation programs and our financial outperformance. Now I'll note here that, for example, having such strong advertising revenue performance, meaningfully higher than our expectations in Q4, which is a very big ad quarter, has an impact on the full year and multiyear financials that are tied to our incentive plan. And that did impact, to your question, all four of our expense lines in the quarter. G&A was where that impact was the most obvious. But it might also be helpful for me in response to your question to note that it's also kind of its impact on the sales and marketing line in particular. As we disclosed in our earnings release, our marketing media expenses in the quarter were only 1.8%. So higher compensation expenses were also a factor in why that overall sales and marketing line was up over 11.5% in Q4, and it plays it's really in all those lines. So that's kind of that main story in Q4. Underlying that, you know, included we had started to ramp up our video investments and continue to make disciplined investments in those areas that are positioning us for sustainable growth for the long term. And I think that I've already talked about that in the context of the guide going forward.

Great. Yep. Thanks. Thanks so much, Jason. Operator, we'll take our next question, please.

The next question comes from Kanan Venkatesh with Barclays. Please go ahead.

Thank you. Meredith, when we look at the growth in advertising, obviously, it looks like there's a lot of upside there. I mean, something that you could see as potentially a way to manage your ARPUs and the. In other words, instead of raising price, would you use some of the advertising to essentially make the product affordable for customers, you know, courier subscribers, a bit faster by leaning in on advertising? So it'd be great to get your thoughts on that. And then on the AI front, I mean, obviously, there's a lot of litigation expense building on that. But would you be able to get some sense of timelines around this as to when you expect resolution? And when we think about the puts and takes, obviously, there's some licensing fees you could get out of some of these models, but at the same time, how do you view the threats from AI? Longer term? Like, how do you weigh the opportunity versus cost in that front? Thank you.

Yeah. Thanks, Kanan. Let me start on the AI question. And then I think I heard you on the advertising question. If not, you can try and answer it. You can redirect me if I didn't hear you quite right. I would say on AI, you know, we continue to see headwinds. We've been talking about that for a while now. But our strategy of building differentiated products at scale, which are worthy of seeking out and building habits with, make us really resilient to headwinds and are rapidly changing and pretty low-trust ecosystem. And over the long term, we believe what we do is going to be even more valuable to consumers and to business partners and ultimately even the LLMs themselves in an information ecosystem where it's harder and harder to find things that are true and valuable and worthwhile. So, you know, and we're already using, and we've talked about this in prior calls, we're using AI to make our work more accessible, do a number of things in the subscription model. We've got an AI-powered ad product that is really working. So we're already sort of harnessing AI in effective ways to make the business more productive and build our engaged audience. I think the question, do you want to try one more time on the ad question just to make sure I heard it right, and then I'm happy to answer it.

I mean, basically, the question is, you can get ARPU through advertising or through subscription fees. So is there a path where you, because your advertising revenues are growing faster, you grow prices lower and therefore, you know?

I see what you're asking. Yeah. Yeah. Yeah. Let me just say broadly, one of the things that we are most excited about in terms of our strategy and our model, and I talked about this in my prepared remarks, one of the unique advantages that The Times has is we have this multi-revenue stream model, and you saw that really working. And so, you know, we particularly as we focus on building a larger and more valuable New York Times company, the sort of what powers that is building our engaged audience. And having an opportunity to monetize that audience, particularly as we're building in early chapters through advertising, is awesome. And you're really seeing that play out. And I could talk about that literally in every part of the portfolio, and every part of the portfolio contributed to the ad success in 2025, and we expect every part of the portfolio to play a role going forward. But in places like games, we've got, I think we have 11 games now, and six of them, maybe off by one, I think, are free games. And we, you know, monetize the enormous amount of engagement we get with our free games, first through advertising, and that's a great and exciting aspect of the business. And as we build The Athletic and really widen people's understanding of the power of The Athletic, if you're a sports fan and what it can do, it really makes the audience bigger. We've been very, very happy with what it can do as a commercial business, as an ad business. So I'd regard it as a whole system working together. And ultimately, what we're doing is also building funnels for future subscription growth, and it all kind of works together. It's all very deliberate.

Okay. Great.

Thanks, Kanan. Operator, let's take one final question.

The final question comes from Doug Arthur with Huber Research. Please go ahead.

Last but not least. Just on that single product growth, which there's been quite a few questions on. I mean, I guess the question is, do you remain confident that it's sort of expanding the funnel, expanding the TAM, and you are getting or do have the potential to convert strongly engaged single product users to, you know, more valuable bundle type subscription? Is that working? And then I've got a follow-up.

My short answer on that, Doug, is yes. We, you know, this is a whole system. All of the products beyond news broadly defined are playing a role in the funnel. We really like what we see in terms of how it's working in the subscription funnel and ultimately bringing people in, you know, into initial products and then being able to engage them more over time. And as we engage them more, they become more valuable to us in multiple ways. So yes, yes, yes, yes to what you're asking. And I'll just add on the back of that.

Absolutely to the subscription business. And as Meredith said, the power of those multiple products from games to The Athletic in supporting the ad results we're seeing is also part of the encouraging story that we're telling.

And cooking and Wirecutter too? Yep.

So do you, you said you had one last follow-up?

Yeah. There's been chatter in the press about the contract negotiations with the News Guild. I guess, focus on remote work guidelines. Is there anything to see there? Is there anything you can comment on?

We have a long history of working with a number of unions at The Times and productive relationships with all of our unions, and we are, I think, well-prepared to move through this contract period as we have been in the past. And we're very confident that The Times will continue to be a great place for, in this case, journalists and ad people who are most of the folks represented in the current negotiation to work.

This concludes our question and answer session. I would like to turn the conference back over to Anthony DiClemente for any closing remarks.

Great. Well, thank you, everyone, for joining us for the call, and we'll see you next quarter.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.