The New York Times Company added about 180,000 net digital subscribers in the second quarter of the year, but generated less revenue from digital advertising, it said on Wednesday.
The Times now has 9.17 million paid subscribers. It has a goal of 15 million by the end of 2027.
The company reported $76 million in adjusted operating profit, down 18 percent from the same quarter last year. It generated total revenue of $555.7 million, an increase of 11.5 percent from the previous year. Digital subscriptions accounted for $238.7 million of that revenue, an increase of 25.5 percent.
The hit to operating profit was mainly due to losses at The Athletic, the sports news website that The Times bought in February for $550 million. Adjusted operating loss at The Athletic was $12.6 million for this quarter, April through June, down from $19.4 million in the first quarter.
The Times reported 9.107 million subscribers at the end of the first quarter of 2022. That number was revised in this quarter’s results to 9.01 million.
A key part of The Times’ strategy is to make a distinction between subscribers and subscriptions. A subscriber may have a subscription to more than one of the company’s products, including The Athletic, Cooking, and Wirecutter. The Times is betting on bundling digital offerings with its news reporting to reach new audiences with a variety of interests.
“News remains central to our value proposition, but the package helps ensure that The Times is indispensable to an ever-widening group of people, even as news engagement ebbs and flows,” Meredith Kopit Levien, president and CEO of the Times Company. she said on a call with analysts.
In the second quarter, the company had the most new subscribers in the All Digital Access tier, which includes The Times news report, Games, Cooking, Wirecutter and The Athletic, Ms. Levien said.
The net gain of 180,000 digital-only subscribers was a 70 percent increase from the net gain in the second quarter of 2021. The company added many more in the first quarter of the year, 418,000. The Athletic added a net gain 50,000 independent subscribers in the most recent quarter.
The vast majority of The Times subscribers pay for digital-only access. The number of print subscribers continued to decline in the second quarter, down almost 7 percent from a year earlier, to about 761,000.
The Times Company’s digital advertising revenue for the quarter was down 2.4 percent from a year earlier, to $69.3 million, as marketers cut spending in the face of economic uncertainty. Print advertising recovered 15.1 percent, to $48.1 million, from the same quarter last year, as the entertainment and luxury categories began to recover from the pandemic.
Total operating costs increased 19.6 percent to $504 million. The company also made a $34.2 million gain from the sale of land at The Times printing facility in College Point, Queens.
The company said it expected digital subscription revenue in the third quarter to grow 21 percent to 25 percent from a year earlier. He said he expected a flat or small decline in total ad revenue and a 9 percent to 13 percent increase in adjusted operating costs in that period.
Shares of the company fell about 1 percent in early trading on Wednesday.