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NYT New York Times

Participants
Harlan Toplitzky VP, IR
Mark Thompson President and CEO
Roland Caputo EVP and CFO
Meredith Kopit Levien EVP and COO
Alexia Quadrani JP Morgan
Vasily Karasyov Cannonball Research
Craig Huber Huber Research Partners
John Belton Evercore
Doug Arthur Huber Research Partners
Kannan Venkateshwar Barclays
Call transcript
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Operator

Good morning, and welcome to The New York Times Company's Third Quarter 2019 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I'd now like to turn the conference over to Harlan Toplitzky, Vice President of Investor Relations. Please go ahead.

Harlan Toplitzky

Thank you, and welcome to The New York Times Company's Third Quarter 2019 Earnings Conference Call.

Executive we Caputo, Thompson, Chief Executive and Kopit today, Executive and Financial call Chief Meredith Roland and Officer; Vice Levien, the have President Mark Chief Officer; Operating On Officer. President Vice President and

remind differ I forward-looking will materially. the of to during our and that this management Before we call, like actual you begin, course would make statements results could

and are the risks uncertainties included our of impact business that Some our XX-K. in XXXX could

and which presentation we most at our include on will to in financial measures, our provided addition, the have In comparable our non-GAAP reconciliations earnings is website measures GAAP press investors.nytco.com. release, available

With over to that, call turn I the Mark Thompson. will

Mark Thompson

as Well, subscriptions history Thanks, company million more model We the the subscriptions, our digital total subscriptions for XXXX under subscriptions. very our have X indeed, was third of than and best a digital digital to Harlan, everyone. quarter a best in news quarter product, our X new million and fourth and good pay more million the than total QX whole. quarter encouraging morning, ever just for new, X now

turn We in the I'll a positive significant developments also to which number saw business, of other shortly.

advertising, better be QX though slightly in last too. we than did our expected is warned in We challenging as to digital call, going

investments The revenue in adjusted Overall that million revenue. with $XX X% decline million. advertising X% from product meant advertising in decreased grew overall combined development by and decline to company spite of operating in the XXXX $XX content profit digital

which XX% net themselves than XXX,XXX adds in more XXX,XXX were including higher we the digital news to with Cooking begin Overall, XXXX. which QX net the XXX,XXX adds and in more digital was our subscriptions added the XXXX, That core me new X/X equivalent Let QX were than products. subscriptions the than in M.I.T. quarter, of story. Crosswords, subscription

digital clearly we're subscription seeing So new model. acceleration in our

in of the cycle us environments intensities election present the XXXX, can of and the persist and Well, was itself, in of an course, quiet accounts start September. through the to look to in the into there remember, volume first, quarter, set in half news of it? liveliest a quarter one pickup year. August for after which second any The is news What dramatic a continued

and landmark But weight Times Times and on of journalism impeachment, the complexity on, than played reflection video impact of capabilities podcasting political, XXXX there's The comments. to growing and The to more the in stories, our so far our on America. the Take strength social now news Brexit, Project, TV. infographics, of and and have the slavery Boeing and cultural

work and making at If ability subscription. the to to optimize yet, well. towards you factor Outstanding more Times. it journalism more But paying our York user of major should there's the is haven't another customers you in advances to listen drawing New The journey read podcast. We're understanding and as and

momentum, and growth. want also deeper product fresh that In quarters, our But of York made number stories. Most a limited to a log into and have very in change to we if users The anonymous QX, our now pay Times model. register they than read significant New more journalists to testing given greater you've of use digital our the seen a and our platform expertise our subscription subscription have better cooperation data, teams recent between and in model in

change Now net adds in And our with more users subscribing. to it's encourage consider our the quarter. a content positive effect deeply these from engage easier logged-in this subscription for certainly and saw to during much we us

the of XXXX. unique adverse And development those second cycle we've only a funnel. In the the billing expectations. under expiration, users. loss $X not week concerns $X their A the $X offers. to their week encouragingly, introductory we change promising appreciable the an subscribers than who'd well words, led seen offer joined second but our top have a not is promotion any so still on early retention fractionally overall impact far of customers other who launched less on cohorts reached XX,XXX our in retaining pretty above Indeed, after begun those under just a so subscriptions days, It's week far, of they're

to overall number high the with quarter. another in in result, line a quarters, As was net the adds churn recent of factor contributing

full to most price and a the moving successfully others of these to a a migrating week week. subscribers $X substantial keeping small We're a proportion price of at $X directly intermediate while minority

achieve number quarter. marketing of assessing subscriptions learn noting per spend lifetime as fell roughly that the more with improved to We other we at to the retention net flat and to satisfied quarter. It's a record holding second very we while these costs the with continue these propensity, subscriber, ratio but results. worth better subscription and able and acquisition subscription new were we're get cost adjust in payments also words, will proportions acquisition early In value by subscriber

The relatively organic of marketing strengths of customer journalistic the overall deliver to subscription less did work pricing paid experience, more journey, and product conversion, results. and model, our of the quality, we needed

also We Crosswords. X of net had for strong smaller and products, adds subscription M.I.T. quarter another our Cooking

subscription healthy the of digital-only As XX.X%. in that and a result rose core, total revenue a the by strength

we potential reducing you messages our firming tests calls for I've of growth success recent deliver base our that us The haven't discrete update but to tenured in rise I core price price has Now segments growing about subscriber ability to a a XXXX. convinced an got morning, a our subscriptions. our talked we're and price risk in of such our for currently subscriber this for rise for confidence plans minimal momentum. execute new price rise can earnings subscribers different our of in rise new with

morning. announced often we question how expect But objective come of subscriptions run increasing goal subscription asked within I makes our the this we've these before new U.S., answer February, well the hitting from million subscriptions since total or we've to Our milestone of our many look XX to of outside rate in and by XXXX reach. want been this

my will first seventh arrival digital By number the of QX as the The to that Times CEO. By anniversary be of increase. subscribers QX The international XXXX, quarter, XX,XXX Next grown to had week had XXX,XXX, XXXX, Times. that we end tenfold at a

growing serious world. core and We're this around our the world. through finding for a by of the reports can growing engagement, capability market, undertaking demand strength and And journalism large-scale local in access personalization improving high-quality largely believe build-out rather marketing AI-assisted and around the we of strategies than we centers pricing news our cost international

quadrupling of the or subscribers of subscriptions of the more million of number overall U.S. of XX set expect the from We, customers. to a ourselves goal XXXX. outside XX% we to total come milestone so that by So therefore, or of X million international

we've York Before mention a with the take A development The form just the I is Times, will to users agreement and entirety. very unlocked agreement, ago the me News experience Times Facebook small in new move intended in positive the news their of curated so part whole, to advertising, of broader The a initiative offer digital the summaries our recent Facebook other sources. headlines, Under another to under will will for its Facebook in the X% from can some To turn Facebook quality namely of to from content do number as be read is have that links. so, users stories, make within that of assets. New reached weeks let selection Facebook stories, News. available to them short users

stories Facebook increment agreement News after in a Times. a and will bring of is Consumption multiyear support our The majority step chose pay fee, meter should for which our license model. users we subscription to the participate we deals. content a to new change overwhelming previous But compared model only reached to the of

the financial agreement important more significance. its is than the But strategic immediate of benefit

for received journalism a in platforms. previously major a Valley value various experiments first the time Times by has innovations Although and recognized multiyear we substantial that of launched digital Silicon to digital different its with participation platform payments the is fee. the -- This small

were I'll advertising main reasons advertising X%. decline by as year-over-year Digital a than little QX, X% less advertising turn by now. said, we the large-scale deals the to a large comp We deals tough we QX The print quarter. with I and lumpiness to and in fell or side fewer in predicted, achieved XXXX digital in that variability before. than the talked on about this

Roland Digital business. This advertising advertising with the you'll QX. in decided more including a brought Fake have million guidance, to several to hear revenue in into gives continue we some a close in XX% stand-alone As year QX as repeating. influencer We capabilities basis, individual comp: on to $XX daunting when partnerships, by Love, an last not QX. consolidate one We this face HelloSociety acquired nearly agency, into and that our like-for-like impact grew pattern even will our expect

advertising readers, in grow effort confident Finally, revenue agencies we to business our our quarters. advertisers the stringently. pixels our by more we to of we future and data, as tracking well impact too remain in quarter. digital ability an in beneficial Times believe to some to controlling time, are will and the will as Over but it But in users' protect be this have strategy our usage

over XG access This agreement deal recent to newsroom. offer to largest a with New America. across reached investment history, to commercial multiyear Times with deal Verizon addition weeks, in our support the and schools to in we've in in Title in X is million to in teachers I students our of agreements some Indeed, including York The free innovation Verizon high our

a believe opportunity big have that also data. around We we first-party

also with capabilities, them of our engaged we'll we that running in to is continues access digital data. more tailor it category. audience, valuable to of know about this most an in just messages promising Daily lots The to users, far new expand hit, our more advertising Our creative effectively inventory grow. rely to We're able audiences on millions this first-party And going in our astonishingly monster be room and we're have plans advancing model a our means and that to ways our and audio.

ourselves time, a advertising four increasingly there a for to experience years, we've trade-off between described At user engaged and And favor will we subscription a media as subscription-first revenue, same be side. is where the the the company. past made

take apps. Let's mobile

consumption gains millions, both advertising by to That within believe in single-digit digital and subscribe than of revenue that advertising will market beginning the propensity digital of Our decided journalism. we effort overall present iOS highest open experience, user our no XXXX, We've per the that that user time and longer made January in engagement users, we be by and apps up app in low but this to and the more will a result improve are in will programmatic an these the Android apps. loss drive the services higher retain.

XXXX this is Taking QX quarter that new working our industry. that it we We traditional the but of to news as a levers believe pull. many have is the summer strategic big a growth beyond whole, lever thesis not suggested pulled the model, further expectations registration but still far our with just scalable

me the Roland, you note, of hand the over the behind And let that to drivers more details has on of who quarter.

Roland Caputo

you, Mark, good morning, Thank everyone. and

said, pleased As to progress our continue we we with remain execute as Mark strategy. the we against making are

the diluted in the XXXX approximately lower $X.XX in was approximately of reported XX% revenue subscription with by million. which million period same with $XXX the growing in quarter, than Adjusted per $XX increased We earnings year. to profit million. revenues share is subscription prior $X.XX X% Total the in approximately digital-only third adjusted the compared $XX quarter, lower operating quarter,

and, in as partially increase side, in of as the in expensive implemented shift continued packages revenues print This less well delivery was to offset X.X% a the down by therefore, subscribers home home sales. moving number in subscription revenues that delivery decline early subscriptions, copy delivery On to subscription year. of frequent due was less a decrease a single were decline print price the

meaningful the retail Total of Starbucks compared a revenue chain of in was Subscription for declined had the distribution circulation percentage The This daily the on year, including decline. August, the approximately locations. prior quarter loss the copies, accounting all discontinued newspapers, X.X% declined with end circulation corporate-owned At New this distribution the impacted of point by channel. its of X.X%. impact at Times, immaterially while York X Sunday

$X period. from X% and a Quarterly number the the subscription subscribers, significantly promotional from compared mostly compared to was declined the prior XX% existing acquired the digital impact to year the during of as quarter, and approximately the ARPU news than ended large newly higher graduated promotion, prior benefit larger the to approximately subscribers whose prices offers week on

period promotional for of This the first also the late the August quarter September $X began XXXX. cohort and conclusion week subscriptions of included whose XX-week per in

the now their with cohort, second we're As we're cycle. the post-promotion has retention very who happy first billing Mark seeing said, from passed

full of While been price, a realized. many subscribers stepped a benefit otherwise have price, intermediate of were ARPU than an was up to to portion somewhat these stepped on this would providing smaller up cohort

The total to the proportion promotion subscriber of subscribers base to on grow. relative continues

at Given price, plan the beyond we use success subscribers intermediate an acquire to price profitable either retaining promotional introductory or to period, full experiencing in low step-up the we're to subscribers. their new initial continue price long-retaining

As such, on ARPU we pressure XXXX. expect to into downward continue

prices. year-over-year both from to graduate per the higher $X new subscribers ARPU as introductory moderate in the declines subsequent expect cohorts to and sequential We offer week somewhat of

and compared advertising by declines is by print in approximately revenue podcast. declined our in advertising year, direct declining by driven sold decrease X% platforms, in digital with partially core digital growth with continued prior X% largely offset The X%. revenue declining the Total advertising

print advertising in due result by luxury partially financial mainly advocacy growth the services, furnishings was the The declines and offset to category. categories, in home

Other our quarter. series, television revenues million, X The with aired Weekly, year, principally $XX new to compared in prior grew associated episodes driven revenue the the by with which XX%

laid growth increased costs, related by growth areas: require that quarter, would marketing. of of product operating The the and GAAP X.X% which in out accelerating million achievement goal. directly adjusted of in the costs goal rate operating milestone specifically subscription each X to XX was journalism, our we approximately in that towards subscriptions we noted by, at least When subscribers and this investment, XXXX,

higher employees digital production product Specifically, of of well costs both as in as increased also the staffing the costs higher. newsroom working to a development result costs, reflecting weekly. Growth content related as the grew drove costs in number in

were quarter that were to strong. the lower time We subscription incur so the same in that marketing additions able pleased are particularly spend slightly we at net

subscriptions product in while continuing investment to should Continued digital content over us time to moderate grow allow and marketing spending unabated.

the in While morning that the to investment in provided in cost we expect quarter, subsequent that this note to fourth to cost levels growth states earnings release our guidance in expect return considerably we we higher quarters. slow

special X our the million multi-employer gain a charge a restructuring $X to million related and liability in recorded from items pension quarter, We adjustment. $X plan a

Due basis, to we record third of approximately the large XX% first marginal going in benefit Our expect tax of variability tax the was to part the tax for in quarterly on to received effective teens. XXXX rate some we year our the quarter tax rate XX%. rate. dollar effective effective for we with a a On in quarter the be forward every XXXX, around be high expect full we rate income

the to balance Moving sheet.

$XXX XXXX, we into leaseback a related facility. increased marketable headquarters $XXX the sale and we at debt, ending entered million. million December Total in to the securities cash is balance Our the quarter, in during now entirely which revolving In to of repay $XXX quarter, our million. was which building, credit approximately intend

lock source need favorable Our and for accommodating terms the should the in an of an liquidity provided to opportunity a now future. credit in sheet strong market balance arise

mid-teens advertising revenues revenues with advertising Total to of conclude digits me to the quarter with to subscription fourth XXXX, in digital-only the digital revenues XXXX. decrease compared are expected the outlook Let XXXX. are our the in compared and quarter the expected to Overall the for revenue fourth fourth with low of in mid-teens. expected quarter of increase increase mid-single subscription with

quarter to adjusted the Weekly, agreement. licensing News are operating series, XX%, to Other due Both announced costs The recently higher with operating revenues as costs expected the drivers return our and the but, largely earlier, are fourth mentioned XX% expected are and the of revenue XXXX approximately the as of XXXX, expected growth. low increase from in to to in television in single Facebook to I levels continue invest compared increase subscription to digits we to digital

And questions. happy with to be that, open it to up we'd

Operator

Alexia first Quadrani the And JP comes from Morgan. question Instructions] [Operator with

Alexia Quadrani

couple that. subscription on and of helpful. your color the questions. the That's behind the you growth in comments Just thank very for a drivers Mark,

of as it the into if drivers appears about been I'm sub in curious that consumer, then, in quarter. of moderation the with growth natural you has that has I'm quarter. news me news quarter. statement Roland, the to the in about and in of terms just the some that ARPU talked And definitely elevated forward continued fourth mentioned agree begin the that off and, fourth fourth wondering the and we see all broadly behind if that. thinking elevated, you evidence going a to could cycle cycle leveling would You drivers

Mark Thompson

goes think about as way follows. news Well, the I the cycle I mean,

let's If we've Democrat we're very news. candidates both some levels stories, really pressed Right stories you very so a look model X numbers on picking that of numbers a news. of to and able to of big want sense, different product, which net seen But process, the very our different news subscribers impeachment levels as last, terms a of through in riders the the kind been say of the we've well. now, go domestic presidential lot recent say, intensities out has to on, strong new X of we've in of and seeing years, running I side to background our on, quarters, back to add runners over seen international up significant of and over coming and and

be and by I So busy relies entirely a we heading, we're We're sense, and the don't into my means primaries And remarks, not appear editor former forth. my heading, year. process would very I myself, very, that as I said and -- growth so in are is our start blur this I'm journalist seeing appear model think any would certain it a you is can't although going -- it on from election far news. period. Iowa the and think to to the the into away news

I international broad the demonstrated think appeal appeal the The for for very I Times, dependent cycle. news think underlying acceleration is that on we've Times. solely not And The

Roland Caputo

I the think again, to And we it new large a regarding working expect So is to the offer company. And week $X plan of X for we because in I linked. the mentioned, as future. promotional subscribers believe ARPU, to are questions the well we acquire continue continue these really numbers

expected that subscribers is of prices, of happens, of And mathematical ARPU. is number higher the transitioning to are to on folks and bring so the as number that than higher be the on much pressure that we result

However, as a begin and I that decline more to take in as price sometime to and $X step tenured a to higher a up XXXX rollout mentioned are will as that Mark of before, off we week believe will prices. And also, that, we planning from ARPU. pressure subscribers some mentioned, that increase more moderate folks also

Alexia Quadrani

clarification. just then follow-up, a And a

you full it in Roland, where then investment higher QX, of going levels costs, moderate lower kind of QX, versus or levels subsequent but... elevated it's think, but will quarters that to cost year means said be it's XXXX? I XXXX, in of increase I'm be assuming more -- back is to and versus in get

Roland Caputo

-- it's percent. to The latter. low growth QX, going be a low which so is relative a the Yes, to was very comment

Mark Thompson

from and without both the the is way comfort digital-product you gleaned QX a this from marketing Roland Yes. a If subscribers new were should add, take we And I and machine, I just significant which said, from machine, we're a drive able numbers scalable. do our machine what QX. building increasing is view costs of can to in we journalistic have and

significantly of model the We're to of as one number to with the think widening So scales. us of to improving set which to we a on give obviously and the which costs at building will of continue between growth see the product beginning and operating over time, the kind you the -- revenue our there a subscribers. model very of gap focused least scale leverage, But can begin capabilities, part us. progressively costs enables the the --

Alexia Quadrani

Thank very much. you

Operator

the you. And from Cannonball Thank Karasyov Research. Vasily comes with next question

Vasily Karasyov

the good focus driving increased paid year, on product the you this on were to Wanted about organically question, with Congratulations quarter. ask talking you morning. early than starts subscriber Good rather in starts.

I that the give moving us you So the part second QX update Roland, how of organic? it in versus impact help paid you and different in how And the question, between was costs? progressed starts simple wondering can of and of cohorts the you us P&L use for as understand just on an subscribers. it detail could as Is production marketing more expense if

Roland Caputo

I'll Sure, and Meredith then I'll let follow. start

Meredith Kopit Levien

Yes. to doing the we've that is part just stay The what simple and us think yes, pay is, people more work thesis answer of then first ultimately is a seen product question our get habit your the to of of to in the is I working. itself QX with and make

think and call the alluded in of had we Roland from the think organic I engine. his said starts -- to I that -- it the Mark Mark that just remarks percentage fact just coming throughout higher a

been think major work. to say that quarter. I were third in on the began time some land changes working really So that's we've there beginning to that I'll for three

first to to one to small to Mark more what get stories. the have majority register now pay of us, where log a encouraged read than described in as change, and coming we being the of number model people was The

frankly is that our did products product a year a in just restructure we're advance ago I The organization is now, digital to effects just one allowing beginning think other of faster us our more the that fruit effectively. and to bearing feel is which we digital

story, engage I'll then that beginning experimentation. news, thing getting stories, is more way at I that. testing, follow between just better what at people we're of is brand-new understand news, itself, So we're do that think how we and is that the products an the And the experience story, exclusive much a product say with more what and the last

Roland Caputo

currently back in which investment to this. want the So increase dimensions our is, One kind and on newsroom marketing and scale continue in P&L, I in SG&A spend to be is the But is regarding switch that you'll in our up you we heavily direct money. we development, how the that that to that P&L point for digital really up real that starts drive years product to invest marketing see weighted to two period is expenses difference -- dimension, the out affect in going marketing to we some simple costs production. costs more from of as shows show probably the our there's much

for in product drive starts Investment and periods. journalism multiple

we there's a journalism, make journalism, many better, As we drive the manifestation rules as come. we will believe business have digital better starts periods that of more that better and journalism model journalism, as around have we access for that an to

our And digital so grow areas the how would and changing of investing the talk we've marketing, we which about product development, also think believe out we -- three period digital in, we for those to if starting of our time, our areas investment you a talked of growth is and marketing the journalism, product over about time higher the a we're about high-growth into a period of with in repeatedly cycle product and the gearing journalism. time for ramping continual

Operator

Huber from comes Huber Research question next the Partners. And with Craig

Craig Huber

period that August and subscription in cycle of into second that quarter versus, in significantly the Did commensurate let's higher, early digital say, the half half mentioned pickup the your guess, new first in you you Mark, prepared your remarks growth see a in I September. was was? of the

Mark Thompson

its summer back-to-school middle as a the have news that that's a, of quiet relatively was X that went that and pickup the over idea haven't this disclose analysis to Sure. you a factors. it's, some And and there want there's apparent. model, sharp August, we in of pretty And early really of quarter. intensification at first kind it was say, head of would a in to quarter. of the though, done and talked the you it's perhaps, say, as the past about Craig, access separate were think beginning year. of I with about saying real the there the weeks became also We geared it, We try a up all of kind change say change which kind numbers, kicked that a built particularly we is I pickup. in before the detailed we this had that There to July, seasonality model of but that much want momentum won't those worth but some something effects And also that, second,. the it's, was X through I

there's to So factors I'd say. X state,

Meredith Kopit Levien

it's on worth log long-term engagement and and one is return saying a people then second And getting the that in register to strategy.

people to see building we which population time, who period happy that we're So are will long over convert a of is, happening. a of

just the not and is asked it's log convert; they engage. in at So they friction to it that of point where they're to that that register also begin

period when return. are they of engaging them and in a We effective they log more register in over and And then convert time. of sort

assumption gets over it better time. an that there's So

Mark Thompson

And logged is devices. back at on on this of the different benefit cohorts were, cohorts later. devices, it beginning and still registered better tracking later coefficients, seeing between arrived propensity can track say Because their in I terms on We're July. quite of they're we're that months still for weeks many, seeing another virtuous see cross-device can behaviors and use. cohorts logging and we're effects many who we heavily though, adding, those them to to worth we tracking. positive now want who how the these It's And so as are forth to from subscribe

is of for our all stuff this So model. encouraging

Craig Huber

in it you And but U.S. out think Is the there international? articles My still X sort also paywall. free about next how of of do forward? the question that going

Meredith Kopit Levien

It's actually dynamic now.

is pay somebody get to get to experimenting engagement the training and of ultimately to right at we're So stay. essentially what cocktail for, models and

varying to now what what And number your you on prior so us journey X you behavior your basically what of But see But depending with see articles. depending it's was, is, you'll take, between us, you XX. different number. journey a and come on different how may a

Craig Huber

if maybe spend. for your of marketing sort just kindly also, Then talk could about you outlook

a reaching say, and about million it's Might, the getting not here are of it's you you where in or much talked sort it? could if of ceiling add helping to how another, more You've million you much as $XX efficient. more past in terms spend you $X

Meredith Kopit Levien

basically answered question, ability organic I'll drive to say and in its pleased just this very Roland engine starts. we're to think see the I this improvement and in quarter

I opportunities that there the we be leverage, spend positive more. just And mechanism is But long rule one has demand where but we've think, that over for see them. operating to you, this I of don't effect seen, a tell think haul, we periods on to that now the model. I'll we'll when and spend want was finding out a of into will kind

and long I So it that wouldn't in plan off work. I call time. the is say the yet, to you've marketing, product long is say earlier, say, way still of sort and worth which mix I one but saying work. been over arc of funnel, trend way, work work, the digital same us up of at It's over also of the really long big spend that said itself, is I is in pays we're in our and you in repeatedly making look the it brand the product the as things haul, the period to is think of Roland our get a pleasing we're UX what do hearing would that's the ways making a the investment journalism been journalism, would more of

of can getting about middle-funnel and people think work, brand the long-term work, in to people the we an getting health particular way spend sort of shift is middle- or business. feel a So the we Times, that work, to The engage, upper-funnel that the more have investment that to

Roland Caputo

cost very closely. acquisition tracking subscriber lifetime very, we're value ratios And

Meredith Kopit Levien

Yes.

Roland Caputo

getting We're value. projecting at better lifetime

been numbers we we've do. variable much spend to we've One news is customers retention that week about about seen to get pleased of the on economically we that of as great the money we're the we where encouraged what sensibly our marketing now direct And a lifetime able weeks in. reasons $X having without We're some view the put value. so Meredith cost subscribers, will the early think that, says, to solidifies can as get

Craig Huber

across the devices, register they articles obviously all because content. free Guys, access moving before is asking you're that X towards to people XX to

devices XX per-device it's to historically? is that X as opposed out of So been across per-browser, to free there articles sort all like

Meredith Kopit Levien

to to after register. just said stories clarify, get X how So talking we're about I you XX, you when many

stay. now, basically articles and your you're you to journey, if training log log in story register particular and register is number understand And one of and that gets what you to to in So and doing on the after right engagement get you you based to then ultimately after more. have model pay to anonymous, what's a we're

Craig Huber

could. this that and question, U.S., final newsroom the maybe my increased the size guys the year where outside just Canada, at? Obviously, a should talking end little versus What of at, Australia of be say, started that the about the but bit. out year or you if And now could I you it you're right flush

Mark Thompson

Yes.

a many, are ultimately newsroom really Board, deliver to need, you a to journalism main many does at So how decision. to else one let take well. may as this anyone the world Meredith of Board This is me it into a world. want complex we play and I cover things is in look what that. look, and best better question big that there first. the a And go mean, the of factors add the publisher than

We the as question. we're believe for we to number the the we're Times going in personalization this X.X that to, mid-XXXXs think target believe on and massively to We were, to journalism we do already to the more. propensity improving their world. of endlessly XX over to tactics focus as it -- have chief. subscribers that, want bureaus million by have world do marketing is by York around earlier, subscriber entire not going and growth. to from scale that have and -- I it subscribers and don't populate to say said on-the-ground is talked We feed near-term to quadruple to million What We're X New for, the we're to we that achieve believe were, international through subscribe kind kind of to of international going to those superior pricing numbers. with example, or scale hope newsroom about costs I we as it have purely, a And do to economic so going it not continue not were,

need this who scripted it's find it's the given So television they do unlike, -- to market. to rather in a tend is local -- not screeners content significant drive for example, subscriptions

area to more business boots entire we we of need you improving say, and we So that, it flows from of news company time, remain to where area -- over subscribers achieve of model the want on the the on can that the were, wants appeal The quality though, -- great operating and in of from to the as our newsroom anywhere put journalism. provider Times basically think, where this is you think the that of great best another strategy can to the kind is we I the world and in achieve, if rest journalism, journalism, invest achieve the revenue relative any costs to leverage. we to ground the

Meredith Kopit Levien

to because would I are investment the think that's over time. of right. say, think period And long gotten where last just of long, journalism the I we very I in we've continued

become when and that itself and people we're investment a subscribers where us the the with experience, getting and engine investment. So an continued ultimately and continued assume about as we in of daily product improving in journalism subscribers, our habit product the and make talk primary focusing investment becoming stay we that's to engine digital

across sizable topics, you're with a I and we've products. to done we've as breadth journalism at audio And the really of our if paid a look new portfolio, you think to invest across think that's off. investment I in us in see made going continue

Craig Huber

appreciate I total sorry, you. the that. size, that Where though? I'm newsroom does put Thank

Mark Thompson

mean, can't our mark direct the the currently guidance a add give previous I on can't that. to We really newsroom. around I in we're X,XXX remarks.

Craig Huber

Okay. Thank you.

Operator

you. And Evercore. Thank John Belton next is the from question with

John Belton

X Thanks. I questions. have

forward? Facebook that multiyear Apple one you a And a maybe bit Will well, not News to participate decision Facebook talk agreement fee any contrast on expenses and as you license to little that impact compare product? mentioned the in ultimately have decision the the Can operating on going more just in participate about News. with here. on First, News Plus? And

think going My sheet. leaseback structure about plans with maturation do on forward? the on to what is Any you Roland And on balance of the the you. agreement? question Thank for the capital second optimal sale how update do

Meredith Kopit Levien

John. substantial for Times his take New right to We to a I'll York first to a the content. decided in participate one, as in increase It platform Mark what remarks. from use we've because the we alluded seen saw this, was

Facebook subscriptions important with money commit secondly, a step-change direct from and sense. before, and model in willing us this, our say And would it's of it really made to to seen the to driving think of I consistent that So then amount was represented platform was relationships. a we've what business so say, via I

is So from us largely back that operated and getting summaries send to is people what ultimately Facebook platforms. our owned links short and

we for So the we of drive model that ultimately the think our that's good business funnel helps and top have.

cost, your which no. answer think is second the about, As I to is is question what

Roland Caputo

is credit condo it the one -- building, buy John, lose that transaction. at point. In the the liquidity way as we'll debt-free replacing So, you at look that back the the to in in that of our we completion revolving facility, interest essence, with when essence, we, know, be

of outlook, focusing changes has in a independent conservative our in vagaries flexibility and drivers the as that's in our an invest we that when of in the on sheet of growth well want to shareholders. of the a continue our balance where none we we that transition. believe company believe the or for long-term outlook, the how want, is to the value that's period a us there's strategy. And all important of we really plenty industry invest industry current in However, marketplace, share having still Because very we're of vagaries and really served which to maximum transition, growth of having is we opportunity in the drivers

a think but room there's plenty organically. being repetitive here, of little to So we still invest

to which midsize in look our of potential acquisitions, continue be growth for to strategy. would all small We service

So a for now, not change. really

Operator

next Arthur comes Huber Doug And the with from Research question Partners.

Doug Arthur

you're us questions. of And your product? do you progress digital? terms you also, getting the feel leverage to in just new update in subscribers in that The some off Couple of can on terms Meredith, Weekly of The Weekly, podcasting

Meredith Kopit Levien

That's a Yes. I'll say, a The Times for to The have good everything else. envisioned to we addition just question. Weekly it be tool in marketing always very start good and on

before. with Hulu FX journalism we combination. choice bringing big go homes part was So and one very deep in It is of and big story at reporting a time into Times in certainly weren't that to probably our

New So say new The I York it's broadly, would audiences bringing to Times. yes,

and may we would so do ask the the remarks, room, to in continues back -- audio, that you're everywhere. I I -- say I asking again and but his any on grow. running The On go of in see We you this don't where question And Mark make kind think Daily got see way. audience moderating

grows, So programs. serving clip. Daily a as really as mechanism is for at business distribution the happening a nice grows, that's The the new great ad also and audience

the X point. be been The into Daily. basically XXXX feed might was of huge we're So at launched parent hit, a into, The XXXX, Daily this episodes of has which I X think the

because because was I Daily of think of feed immediately and launched so the good, top as listened-to as the it to went, far The it it podcasts. immediately the charts into went then

it's, in for send will alluded of this we I of audio near continuing that to that and expectation with stimulate The for will XXXX, our ways. Daily think long our a invest direct as indirect audio. into it's did with So things we're and term, our then business the lot into other very in say, think audio demand and is an of we strategy pretty And I have medium term, more I in really I aggressively sort put There's audio high-quality out world, ad good as newsroom. would subs having product world, before, the And the the we business. think an I that and newsroom, our envelope short, to And to working. into

Doug Arthur

I Great. mean, of Okay. step quarter to sort Roland, going preliminary And then, is terms obviously, flexibility to to reference you're wondering, the you in fourth of invest made opportunity. up marketing very and cost cost continue it's of XXXX. guide. alluded your the an to guidance, in I'm is I for it, there's Obviously, XXXX costs off if to mean content. the

sort that? point So of at it cost to too can we that, board? across mid-single-digit think the say early of growth sort this Or is of is

Roland Caputo

the our and we, I guide cost lower QX not give past not is we previous the most Well, had directly the to think to we but question, quarter, of mean, going to about tradition in continue. this but quarters, on don't back discussing guidance marketing for was than that's guidance,

same the on and is less that require efficiency will the in here we subs. better, our marketing, direct Specifically, dollars to the of marketing bring machine amount the getting believe side, on of

in this, spend However, of heavy-up brand But product aspect a investment, there that. digital the back is brand we of we X the said, development. will of from opportunities injection in will the to and of we the marketing open, of that a we're mean, company, are all Meredith a on on our therefore, a top do that investment that more the long-term areas to bit beneficial touched see to much funnel of to going keep marketing, an the believe the of and, what when I be option pivot investment growth the

the So you those We'll growth can amongst see. and in invest triangulate continue XXXX. numbers and spend in to

Doug Arthur

any any Okay. a you or follow-up benchmarks sort of there? audio. Can, terms subscriber just new Meredith, us numbers Great. can give of in there unique hit are numbers the on you've And,

Meredith Kopit Levien

have I'll I X on don't Daily. crossed we say call, a downloads for One, The may X billion things about it. but said remember, we prior

I So think...

Mark Thompson

or is old The I things think, a the interesting about, million Daily is X/X now, day. is month. that's about XX you'll and, or younger, this think Craig more a audience one think, demographic: like XX exciting than of years younger. And I listens old that know, listens of XX.X over publicly years talked the, now the We something million And X I regularly XX%

of, terms or the large our show, often on minutes the iTunes broader with typically completing in So but brand XX bringing of are millennials means Spotify, which a and smartphone. number in at of our funnel, who as the health a moment, on

in is, XX be it's I a really think minutes mean, on I exciting by honest. for And serious or doing of millennials engagement a to more smartphone the to journalistic world don't us. So product that, anyone is a thing

Meredith Kopit Levien

shouldn't but we're other inside efforts, like our for pick The favorites that the Daily. thing I to essentially I'll we our marketing add, subs products, running own ads from The only really audio drive

journalists more and expect our of they talking to their you work generally having they're about do do effect. can how So see those positive us And very are a them.

Operator

And the next with Barclays. question from is Kannan Venkateshwar

Kannan Venkateshwar

guys international would mentioned imply wrong, just I were subs not provided, you well. internationally on a quarter, had of rolled off clarification roughly promotions XX% you subs. that get the First, as Meredith, last total the numbers And wanted XXX,XXX to if international, know about which your I'm I XXX,XXX.

quarter when make of So last I couple this a follow number XX% apples-to-apples, sure up. I of which And I I have just at sub quarter. the to total we're XXX,XXX guys others, will the quoted at that look then versus looking you want

Meredith Kopit Levien

at Cooking, I it's, in the as Yes, got it's which set answers of our Crosswords forget think new question. Don't well, XX% think subs. first I we've numbers

Kannan Venkateshwar

Okay.

is say promotions wanted to off the clarification guys you perspective, a it from trend growing despite the that guess get. are just to I I So fair rolling That's internationally?

Meredith Kopit Levien

Yes. Yes.

Kannan Venkateshwar

Okay.

And second... then Okay.

Mark Thompson

me, Cooking? pardon higher Crosswords says first talking million, opposed my point, is, around about the got number, is, X as math which which Have that includes you million XX% we're and over about to X.X that's which mental

Kannan Venkateshwar

Yes. wanted promotional understand expecting with you it. Sure, coming, you there's it. a obviously obviously, have was this And are We from quarter, I guidance plan it. and roll-off And to what the guys a next perspective secondly, got to deal sure. for

you us think terms guess, to assumptions to for you of expect look the next or number you has could that are has attracting variables whether that And subs for matured? quarter QX? that how bit strength you the year growth the over a in through QX just over if this off replicate that, been as we when on promotion, a same eased I that at last well guys sub you saw it's that initially? is growth, as the related week about thinking guys yield in and revenue you a workhorse matured? numbers So in $X as help you promotion of trended time little obviously, so, is Are Or as did how it the

Meredith Kopit Levien

think the the and one stab I Roland some first take a and second I'll at may add one. take

about you about, on business, the the think I future what which you’re and how is asking the quarters next particularly Just drivers quarter. think of should

which both that. it anonymous think back here, have to cycle essentially, continue said, And to beginning to goes a we something flywheel I we're audience? large is I in there's and is I can build a news which think Mark

we've in the like Much and application become I of of think think and done New that. to or, sort York model I also things of then of you how stimulate friction, of that, can them to and up can should convert social own The tied we the numbers search get the to log think Once get cases, them ease is forward. going them? return can in, friction answers question in, that about So log we we a in can our there's that some the we the registered user ability audience get through promotion, Times? of

Mark Thompson

Thanks, Meredith.

is offer absolutely Kannan, X offer initial an is, observations or Just evidence -- firstly, not. seeing was wane X question, the and at no we fatigue, its words, attractiveness, -- other There's to as initially in your I of an we're me. answer mean, all. are part beginning is in attractive for if

On we're discovering and it, that evidence of of there's about kind because getting the offer. I the new think are people contrary, some subscribers

what part well of geometry says -- the thing the next interacting that's offer. numbers obviously, the other as The as changed there simple complexity is thing we've now done pay and the some with there of model the because, is we've

continued registered, a who and week done where of were higher we are month had growing and logged-in of month some able a -- price part rapidly lower we've we're larger any the have have from. higher we to as price, price get years, lower and on of the a So now typically, But much when part effectively for users and is got continued. to much, cohort it we've that with conversion That's interact also $X more offer. a now on

the model, difference going we're cohorts, year, we've retained a but So line said previous their -- a in per much week, in in through with is as that -- lot and I there's want retention. the $X say what the that there's as so yield, first to the no very

you would to we made and Clearly, a higher retain question we a how when retention, point where mean, subscribers But the going this initial more important the I really And price I is well being some more as we to at they signs asked say know add which guys has be, encouraging. the are of to scripts encouraging. but pay the Roland would say beginning of I more very my signs would to get say in remarks these see been call, ultimate and the going price. will don't from and mixture I through. they're what months to a through obviously, terms are of to go is in a of, these very yield want

Roland Caputo

folks for to a rates, together is again, Yes, bigger off to the ultimately the we digital we where once can of and all the between up this the have guidance back international, parts, the would of percentage revenue we're they moving quarter, I saying their base. we fourth add subscription you number signing all other only the want thing step retention comes believe if up, grow in that mid-teens our go how

we're together, all the growing without percentage that revenue, and that reducing. comes when So growing increase it still we're

Kannan Venkateshwar

about are Got there is order a base in you thinking it. how process of and guys change just tenured stepping you're sub it of what through. tenured us your is? question, is that about to percentage up? of -- is last think the actually What that? I some If And how on one could subs, thinking which Is that it implement gradual? kind Is mean, help product you

Meredith Kopit Levien

that, about much and time would to I engagements. won't say just We say but Yes.

us a time predictor they've of how a So if they best the long long someone's subscriber, and with retention have with time, long they. how they've been are been us been a engaged is

Kannan Venkateshwar

Okay. give how on But what any us is? big sense base -- you that can

Mark Thompson

who very, for experience we've think we know about want subscribers subscribers certain talking of mean, Kannan. a beyond to I point subscriber. XXX people very class want have years of been We that, nearly commonsensical. assumptions a don't our I retain And got, long to time. a are do I pretty say arguably, certain We're well. that with

Operator

for like this session. our the Toplitzky would back to conference turn any comments. And to concludes question-and-answer over closing Harlan I

Harlan Toplitzky

you for us this quarter. We Thank next to forward morning. again to look joining talking you

Operator

presentation. Thank you. concluded. The conference today's has Thank for you attending now

now You disconnect may lines. your