Readers, readers everywhere are what The New York Times Company sees: 100 million, to be precise.
For now, the publisher has eight million subscriptions and expects to add as many this year as it did in 2019, when President Donald J. Trump dominated headlines and a pandemic had yet to melt the global economy. The company estimates that it will have 8.5 million by the end of 2021.
In a statement on Wednesday announcing the company’s second-quarter earnings results, Meredith Kopit Levien, the chief executive, said the performance was “a testament to the success of our strategy” of focusing on digital subscriptions. She put the potential market size of Times readers at 100 million, adding that there was an opportunity to continue to invest while “daily habits are up for grabs.”
The Times Company reported modest growth in the April-to-June quarter — typically its weakest — adding 142,000 new digital subscribers, with 77,000 for the News app and 65,000 for Cooking and Games. At the end of June, The Times had 7.9 million total subscribers, with 7.1 million paying for its digital products. Of the digital subscribers, 5.3 million subscribed to the News app.
The publisher reported $93 million in adjusted operating profit on $499 million in revenue. Investors were looking for $73 million in adjusted operating profit on $488 million in sales. The business altogether rose 24 percent from a year earlier, helped by a steady 16 percent increase in subscription dollars and a 66 percent boost in advertising as marketers returned to prepandemic spending levels.
Wall Street investors and news executives across the country consider The Times to be both a bellwether and a stand-alone: The company’s digital performance shows what’s possible for a news media organization in the age of Facebook and Google, but not everyone in publishing (digital or print) will be able to emulate its success. Online revenue at The Times — specifically advertising and subscriptions — jumped 41 percent, to $261 million.
For the current quarter that ends in September, the company expects digital subscription revenue to rise 25 to 30 percent from a year earlier and online ad sales to increase 40 to 45 percent. Total subscription revenue should bump up 13 to 15 percent and advertising 30 to 35 percent.
That’s most likely why the company’s stock, like that of a Silicon Valley behemoth, trades at a hefty premium.
Investors are paying about $41 for every $1 of expected profit to own Times stock. That’s more than what people are paying to own Facebook, at $21, and Google, at $25. Rupert Murdoch’s News Corp, which publishes The Wall Street Journal, trades at a commensurate $40 for every $1 of expected profit. Only shares in Netflix (another subscription service priced similarly to The Times) cost more, at $62 for every $1 of future income.
Even so, Times stock has dropped nearly 17 percent this year as a new administration took over the White House in January. The S&P 500 index, by comparison, has risen nearly 18 percent.
The Times continues to invest in its digital business and expects costs to increase 18 to 20 percent in the current quarter, with capital expenditures for the full year totaling $50 million. That pales next to the cash the company holds: $947 million at the end of June.