New York Times at Citi’s 2025 Conference: Digital Growth Ambitions

On Thursday, 04 September 2025, The New York Times Company (NYSE:NYT) presented at Citi’s 2025 Global Technology, Media and Telecommunications Conference. CFO Will Bardeen outlined the company’s strategic transformation, focusing on its digital subscription model, advertising growth, and AI strategy. While the tone was optimistic, challenges such as the decline in print media were acknowledged.

Key Takeaways

• The New York Times aims to reach 15 million subscribers by 2027, driven by its "essential subscription strategy."
• Digital advertising revenue grew nearly 20% last quarter, aided by AI-enhanced targeting.
• The print business is in decline, but still managed for value with high-value subscribers.
• The company is investing in technology and product development to drive growth.
• A strong balance sheet supports strategic optionality, including potential M&A opportunities.

Strategic Transformation and Digital Subscription Model

• The New York Times began its digital transformation in 2010, launching a paywall in 2011.
• Expanded into lifestyle products, acquiring Wirecutter in 2016 and The Athletic recently.
• The "essential subscription strategy" is built on news, lifestyle products, and an integrated bundle.
• Digital subscription revenue increased by 14% last year, with an AOP growth of 17%.
• The company is expanding into audio and video formats, with a focus on international growth.

Subscriber Growth and Value-Based Pricing

• The New York Times ended the last quarter with 11.9 million subscribers.
• A sophisticated value-based pricing strategy maximizes long-term revenue, adjusting prices based on engagement.
• The company focuses on long-term revenue growth rather than guiding on ARPU.

Advertising Business

• Digital ad growth was nearly 20% in the last quarter.
• The bundle strategy is now a significant driver of ad business growth.
• The company leverages first-party data and AI to enhance ad targeting.
• Attracting new advertisers due to its presence in sports and games.

AI Strategy

• The New York Times has a deliberate approach to AI, focusing on strategic alignment and content control.
• Recently partnered with Amazon on an AI-centered deal.
• Licensing is seen as a potential growth driver.

Marketing Spend and Product Development

• Marketing spend is approximately 5% of revenues, focusing on returns-driven paid media and brand marketing.
• Product development costs are comparable to sales and marketing expenses.
• Emphasizes technology, app designs, and data/tech platforms.

Print Business and Capital Allocation

• The print business is in secular decline but managed for value.
• Aims to return at least 50% of free cash flow to shareholders.
• Prioritizes investment in organic growth and maintains a strong balance sheet for strategic optionality.

In conclusion, the full transcript of the conference call provides further insights into The New York Times’ strategic direction and financial performance.

Full transcript - Citi’s 2025 Global Technology, Media and Telecommunications Conference:

Unidentified speaker, Analyst: Very excited to have The New York Times and, Will Bardeen, CFO of The New York Times joining us today. Thank you for joining us.

Will Bardeen, CFO, The New York Times: Thank you. I’m very glad to be here.

Unidentified speaker, Analyst: Yeah. This is great. I don’t think we’ve ever done a fireside. No. Alright.

I will try not to screw it up. I guess I’m gonna I’m I’m relatively new to your story. I I don’t know exactly how many years we’ve covered it, but when I went through sort of at least backward looking sort of your strategy, and I was talking with Anthony about this, he said, oh, yeah. He says, you know, you’ve got a pretty good handle in terms of what we’re doing. He says, you know, you really need to meet Will because he was really the architect of this before he became our CFO.

So I would love to just start if you could just give us even just to paint the context, roll the clock back. You’re sitting there with this iconic brand. You know, presumably, you have some mandate to pivot to digital. Like, just walk us through, like, what was up on the whiteboard? You know, what was the hypothesis?

Then what were the broad contours of your strategy a few years ago, and how has it evolved to where we sit today? What things have you learned along the way?

Will Bardeen, CFO, The New York Times: Oh, well, I could spend the next thirty five minutes, talking about that. It’d be fun. But, yeah. So so as you know, I’ve been the, in the CFO seat for for about the last a little over the last two years. But I started as head of strategy for New York Times back in 2010.

And so I was part of the, you know, the leadership team, that drove the digital transformation, and that means everything from launching the digital paywall in for news in 2011 to developing cooking and games as stand alone paid products. We really got that going around 2015, buying Wirecutter in 2016, the acquisition of The Athletic just a few years ago. And all of that was an effort, a very deliberate effort to transform the business into a, a global digital subscription leader, sort of united, by the brand of The New York Times and the, the value proposition and and the mission. You know, what I’d say is, you know, fast forward now fifteen fifteen years, and we now have a sort of a name for this, you know, as of 2025. We call it the essential subscription strategy, and it’s it’s called the essential subscription strategy essential.

We could because we believe we’re now essential and aspire to be essential in many people’s daily lives. And it has three pillars. So the first pillar is being the best news destination in the world. The second pillar is surrounding that news destination with leading lifestyle products in these huge spaces that are essential in a lot of people’s lives beyond news, sports, games, cooking, shopping advice, and then connecting these products together into an integrated bundle. And so, you know, we it’s been fifteen years.

We can imagine all the things we we envisioned, all the things we’ve learned. I think, you know, one thing I’d highlight is the central thesis that we had when we embarked on this strategy, has completely proven out. And what I mean by that by that thesis is that independent, you know, fact based expertly reported human made journalism of the highest quality combined with cutting edge digital technology could be a great business model and drive significant shareholder value creation. And I think, you know, just last year, you can see that with our, digital subscription revenue growth of 14%, AOP growth of 17%. First two quarters of this year, you can see us sort of continuing at at a similar pace.

And, you know, I would say there are lots of things you learn that that you weren’t necessarily surprised by. That was a conviction we have that’s proving true. There are a lot of other things that I would say, I’m sort of pleasantly surprised. You can imagine sort of having this strategy, but you’re always looking towards sort of the rolling next five years, you know, where what levers of growth do you have next. And the the thing I’ve been so pleasantly surprised about with this, long term strategy is just how many times we’re just uncovering and unlocking new growth levers around the central idea.

And so here we are, 2025. Look looking ahead, let me just talk about maybe a few of those. So number one, let’s take journalistic innovation, format innovation. So when we started, we were it was the New York Times. We thought about ourselves.

I think most people thought of us as primarily text bake, may may maybe photo and and multimedia. But we’re now scaling in audio. We’re scaling in video. So the current you know, sort of the present, it’s happening rapidly, but certainly the future of the New York Times is not just reading us. It’s listening to us and it’s watching us.

Secondly, I talked about the products. So we started as this digital news product. We now have these leading products in these big complementary lifestyle spaces. And those appeal to not just people in The United States. One of the big sort of pleasant surprises when we rolled out the bundle was just seeing how resonant the bundle was internationally.

Not necessarily what we’d expected when we when we put it together, and that’s giving us a lot of excitement for international growth. And then finally, I’ll just highlight the economics. So, you know, we called it the essential subscription strategy. We call it that. Digital subscriptions absolutely at the center of our our model, but we have advertising affiliate and licensing revenue streams now, very strong revenue streams that are part of a multi revenue stream model.

And each of these revenue streams are high incremental margin revenue streams. So we’re really pleased to sort of see that. So when you add it all together, the thing that I’m kind of continue to be energized by having been with this journey for so long is just how many more growth levers we continue to see coming out of this strategy. And it just gives us a lot of confidence for the ability to continue to grow revenue, AOP and expand margins for the long term.

Unidentified speaker, Analyst: Okay. I’m not I don’t want to put words in your mouth, but I I wanna can I just probe on this strategy a little bit? Because the way I would have described it, looking from the outside, right, with no information is a little bit differently than that. So in 02/2010, I think the hypothesis was people are not gonna pay for news. Right?

I think that was sort of the governing thought. There were no analogs. Right? Everything was free, and you’re never gonna get anyone by the paywall. So I looked at your strategy as how can we take a consumer that has a narrow interest with cooking, with sports, with games, and at least begin to get our hooks in them and then sort of open up into a broader portfolio of everything that The Times has to offer.

And so it’s all about sort of casting a wide net, piquing someone’s interest, and then expanding that relationship in a classic software sentence, land and expand. Right? Is that the is that the wrong way to describe what you’re doing?

Will Bardeen, CFO, The New York Times: I I wouldn’t call it the wrong way. I appreciate the notion. I would say maybe coming from the fact that we were a newspaper that thought of ourselves as meaning always a lot in sort of a general way to a lot of people. But I think, you know, what I’d highlight the the nuance in there is a newspaper, a news organization was always made up of a lot of different things

Unidentified speaker, Analyst: Yeah.

Will Bardeen, CFO, The New York Times: That connected sort of in different ways to different people, and we very much realized that from the very beginning. So part of this was how can we rebuild those that collection of needs so that the person who really is interested in sports, so the person who’s really they have a reason to subscribe. And so in that sense, I I I take a little bit of your point, but we’ve always seen it as a very expansive strategy. I mean, delightfully, we kind of continue to be more and more surprised about how expansive we we think we can make it, but, but that was always the case. And it was really the pillars of it were journalism, high quality journalism, the kind I described is worth paying for.

Yep. Two, we can and should have direct relationships for that. And three, that we should anchor that habitual behavior we’re cultivating across all these needs with a subscriber relationship as an as the economic anchor. And so everything else has been built around those three principles.

Unidentified speaker, Analyst: That’s great. I have the pleasure of speaking to a lot of bearish investors on your stock. And surprisingly, one of the things that comes up over and over again is The New York Times is not gonna hit this 15,000,000 subscriber number by 2027. And and you guys seem totally, like, unfazed by this line of inquiry. It’s just and and to me, I think it personally, I just think it’s sort of irrelevant because it’s a KPI that’s out there, and it’s an aspiration.

You know, I’m just more focused on your free cash flow. But can you just address sort of, you know, when you laid out that 15,000,000 subs by 2027, you know, was that an aspiration? Is it a hard target? You know, how confident do you feel in your ability to hit it? Is it even important to you?

Will Bardeen, CFO, The New York Times: Sure. I mean, it it’s an aspiration to an you know, 15,000,000 by the 2027 is something we absolutely are are still aiming for. We see a real path to get there. And I I do wanna highlight to the point about how many people we we think we can, ultimately get to subscribe. We see it as just a milestone along the way.

No. I appreciate, there’s an investor debate. As, you know, you, Jason, have to at least make make assumptions about how how quickly we’re gonna we’re not gonna penetrate the market, and all that. So, you know, what I’d what I’d maybe do is just highlight why we have so much confidence in the levers to drive subscriber growth at these kinds of level levels. And the first one is we think that TAM is absolutely there.

We have a 150,000,000 plus registered users and growing. We have 50 to a 100,000,000 users coming to us every week. So we just see persistent demand for for what we do across the whole portfolio. We ended last quarter at 11,900,000 total subscribers. And so, you know, just sort of simple math, you know, this is still a reasonably small percentage of of this engaged reach and audience that we that we have.

The second thing I’ll say, and this has been the case now, you know, over the last fifteen years, so I it’s just something I have a lot of pattern recognition for. We continue we, The New York Times, continues to become more and more differentiated within this TAM. The New York Times brand, we’ve earned for decades the, sort of this this reputation for quality and rigor. And even just as importantly, while so many other people in the market are not only not investing, sometimes disinvesting, we’ve just been deliberately and in a disciplined way continuing to invest into these incredibly valuable products to mean more things to more people, across more demos, more geographies. And then, you know, the third thing that may be not quite as apparent from the outside is how much part of our deliberate investment strategy as well has been going into building really, world class, technology capabilities.

And so what that enables us to do, is make sure we’re using every kind of tool in the in in the toolbox to, help drive engagement, drive conversion of this TAM. That’s everything from, you know, we have really sophisticated AI machine learning models. They’re helping us do, run a dynamic paywall. We have value based pricing. It’s very sophisticated value based pricing approach, which I imagine we might talk a little bit more about.

And and then things like personalized content recommendation. I mean, there are plenty of other digital subscription leaders who in in other categories who are, who who do a lot there, but that’s something we’re we’re continuing to drive as well. So when you add all that up, we are, you know, pretty confident that, that we’ve got a lot of levers to continue to penetrate the TAM.

Unidentified speaker, Analyst: Okay. That’s great. I risk sort of trying to explain something complicated in words that should be done with pictures, but I’m gonna try and do this. When I went back and looked at, you know, long like, I think roughly 2,010 to 2,020 on your news only pricing and news only volume, there is this very clear relationship. As you lowered prices, you got more volume.

When you rejiggered your disclosures where we started to get bundled and news only, again, for a couple years, there’s this very clear relationship is as you raised news only prices, fewer subs, as you dropped bundled prices, more subs. It just screamed elasticity of demand to me all over. And this is a couple years ago, and, Anthony said to me, he’s like, yeah. But you haven’t given us any credit for any data point that isn’t on this p times q chart. And I said, well, that’s because, you know, we’ve gone twelve years without you putting up a data point that’s off the p times q chart.

Right? It’s just an elasticity story. In the last four quarters, maybe five, you’re putting up data points that are off that sort of demand curve, right, where you’re getting prices that are higher than you’ve ever got, right? I mean, not in absolute terms, but you’re getting higher prices without degradation in quantity. And that seems new to me.

Maybe it’s about a year old. Do you look at the data the same way? Do you feel like the last four or five quarters are as important as they seem to

Will Bardeen, CFO, The New York Times: me on that side? Well, the way I describe it is our our sort of approach and strategy to pricing and everything is it’s always been about how can we sort of maximize our potential long term revenue growth. Yes. Obviously, you know, p times q is is is part of that equation. And so with you know, you’re sort of you know, then we sort of there’s some we described our strategy.

There’s some confusion about how it’s working. So by by exposing those those buckets, I think it was hopefully helpful in in in in seeing some of the the data of of how it works. That’s great. Now the way I would describe what what that is, in other words, what we’ve always been doing and because it’s been a deliberate sort of strategy been refining, why you sort of see these dynamics, it’s it’s a reflection of a very sophisticated value based pricing approach that I don’t know how common this is actually, which is one of the reasons why maybe it’s a it was it was a little hard to decipher. But what we’re trying to do is

Unidentified speaker, Analyst: capture sort of at all times, aim to capture the entire demand curve for everything that we offer.

Will Bardeen, CFO, The New York Times: And we have this rich products. We have standalone products all the way up to the full bundle. And the way we’ve done that is we we it’s a it’s a few steps. So we bring, decipher. People in.

Most people, not all, but most people were bringing in on promotional pricing. And we’re doing that, because we’re not always sure whether they are gonna fully appreciate the value of everything that we have. We ideally want them in on the bundle. That’s the best way to to to get them exposed to the value, but we will, you know, we’ll we’ll take subscribers however they wanna come in. They’re all great.

And then what we’re doing is during this promotional period, we are doing everything we can to introduce them to everything we do, and we’re looking at their engagement. And we have really sophisticated, you know, ML models understanding what kind of engagement is happening. And then when we get to a certain point based on the offer that someone came in on, we’ll, we’ll raise ask them for for more money. And, many, many people were asking them to go all the way up to the full price. But based on the engagement behavior we’re seeing, it’s important to recognize sometimes we bring people up to intermediate prices, and occasionally, we’ll be also just extending someone’s promotion because we think that’s the best way for this group of of subscribers to, maximize lifetime value.

And then it’s also important to recognize because it’s an important part of the the story that that for these cohorts of of really tenured subscribers who it’s absolutely clear they’re appreciating the full value of the times of the times, everything we offer, all the value we’re adding, we then raise prices or at least consider raising prices over time. And so all of this is is sort of a way of making sure we are capturing that that full demand curve. And what’s giving us confidence, we don’t guide on ARPU. We we we think of this, you know, as an important metric, but what we’re really focused on is is is long term revenue growth. So we don’t guide on ARPU, but but we have a lot of confidence in that sort of high quality subscriber growth that’s reflected in being able to grow grow both subscribers and ARPU.

And that confidence is based on the fact that we just continue to add lots of value into the products, that we’re seeing really strong engagement in response to the value we’re adding. And everywhere, watching these step up points really closely all the time, and we continue, we’ve said this repeatedly, we continue to be pleased with what we’re seeing when we ask people to pay more money. We’re seeing really good retention performance, really good monetization performance. So that’s just giving us a lot of confidence that this model is working well and we just continue to refine it and we’re continuing to get more data that enables us to do it even better and better over time.

Unidentified speaker, Analyst: So in this sense, the fact that your business is becoming more digital, gives you just much more signal from the consumer that you never really had?

Will Bardeen, CFO, The New York Times: Absolutely. Absolutely the case. Okay. I’m going to

Unidentified speaker, Analyst: shift to digital ads. Think you did almost 20% digital ad growth in the last quarter, much better than you’ve done for quite some time. I think better than a lot of investors were expecting. I guess the question is, was there something different or unusual about this quarter? Like, I mean, is that normal?

It feels like pretty extraordinary.

Will Bardeen, CFO, The New York Times: Well, our head of advertising is here, Joy, so I would say it’s, it’s because of Joy. Okay. And it it she is great, and she’s been here a couple of years, and and I do think, you know, leadership matters. But what I I like, I have been here fifteen years as well, and I’ve seen a lot of cycles, of advertising. I do think there’s something here that’s really exciting that’s that’s worth calling out.

And and the way I would describe it is, you know, we designed the bundle. We called it the essential subscription strategy. We we designed it for consumers. And what I think we’re seeing and finding now is that the very elements that make the consumer subscription strategy work, we now can identify sort of the analogous, drivers in the ad business, and it’s really exciting. So, you know, kind of what do I what do I mean by that?

I’ll I’ll break it into just kind of three categories. The first is advertising supply. The second is advertising demand, and then the third is ad performance. So when I say advertising supply, we’ve got this now bundle of lots of engaged consumers across all of these big spaces, not just news, but sports, games, shopping advice, cooking. And as we’ve expanded all of this audience, we’ve been rolling out supply to all this engaged audience.

So, you know, more ad supply. Great. The the the second thing, though, is just just as important. This is an integrated system. A lot of the supplies coming in to these categories, mentioned sports, games, shopping advice, cooking, these are categories of a lot of marketer demand.

And so what does that mean? It it it expresses in a couple ways. One, our traditional existing advertisers find more reasons to spend with us where there’s better chance of getting more of of of of their investment dollars. But we’re also seeing net new advertisers into the brand who may not have considered the times top of mind before because of our presence in sports, the scale that we’re in in games. So people are starting to come and just ask for the athletic and ask for games, and we are, able to to to to to satisfy that in ways we hadn’t.

And then the third piece, is all these are related, as I said, it’s a system, is ad performance. Because we have all those registered users I talked about, all the subscribers. This is immense amounts of first party data. It enables us to target effectively. We have high performing ad products and one of the many places we’ve been, investing into AI, we also then can use AI tools to essentially, enhance our targeting capability to other parts of the inventory.

And so this is an integrated system, in quarters where everything’s working, it can be drive some pretty impressive growth. And I think, you know, when we look at each of those drivers and levers, know, people often ask the question, what inning are you in? You know, we do see lots of running room. We just think this is a really powerful model. You know, I always we we only guide advertising a quarter ahead.

It’s it’s obviously there are a of other factors in advertising, macro, etcetera. But this is to me a a fundamentally exciting sort of development for our ad business that’s been a long time coming. It’s built built sort of on the back of on this bundle strategy, and it’s giving us more optimism, me more optimism as someone who’s been here, about this sort of long term growth potential of advertising than I’ve I’ve ever had.

Unidentified speaker, Analyst: That’s great. You mentioned using AI to sorta help fuel your ad business. I wanna flip it around and talk about AI as a source of revenue. I candidly get a little bit confused when I listen to The Wall Street Journal or I listen to Gannett or I listen to you and that. There doesn’t seem to be a through line, like anything that’s consistent at the at the AI paying money to publishers to tap into the reservoir of content, nor is there any sort of consistency in terms of I think other publishers are sort of thinking about how to partner or not partner sue AI firms.

So can you just start at a high level and just remind us, like, what is your philosophy regarding AI? Do you feel like we’re at a point where there will be some harmonious relationship between these AI firms and publishers, or is it still very much a TBD?

Will Bardeen, CFO, The New York Times: I I’m happy to to to describe I mean, I will say sort of our approach is has been very consistent and very deliberate. And so let me describe what I mean by that because AI is, you know, an in technology and then, you know, a lot of potential, but it’s not the first sort of big platform development that we’ve we’ve been navigating. Right? So so so the way I’d I’d I’d say it is that, you know, we have a deliberate approach to to doing deals with platforms and always have, that we think gives us a really good chance to capture significant opportunity here. We have really valuable IP that is valuable to others.

At the same time that, you know, we’re managing risks. I don’t want to pretend there aren’t risks to this this dance. The, and those principles are really clear for us and they have been for for quite some time. So the first thing is we do deals that we believe are consistent with our strategy. I’ve described our strategy.

And what I mean by that is, you know, ultimately, we think this any deal we do is gonna have to support, over the long term, more engaged habitual direct relationships with the brand and products of the New York Times. So that’s sort of number one. Number two is we expect to require control over the way our content is used. And number three is for the use of that content based on the use, we expect, sustainable and fair value exchange. And so, those three principles have governed how we do deals with platforms in the past.

We are, we just did one with Amazon. That’s the first that was sort of centered around AI specifically. But but what I’d say is, you know, we’re certainly open to doing more deals as long as those principles are met. At the same time, it’s really important and always has been, this is not new that we’re enforcing our rights. And so, you know, we we’re doing both of those at the same time.

Now in terms of, you know, what it means for, you know, revenue and the model, you know, I just we we’ve said, and I’ll continue to say we believe we have a multi revenue stream model for which licensing can be an important growth growth driver. And if we follow these principles, which we intend to, then we believe it’s only gonna be sort of supportive and helpful to our long term strategy. So for us, it’s consistent and we’ll let let others do do what they they do as well.

Unidentified speaker, Analyst: Great. I’m gonna shift and talk about your marketing spend. You spend about 5% of your revenues, I think, on external marketing. There’s a little bit of a of, I think, a adverse reaction in your stock. I think it was in fourth quarter when the marketing spend was a little bit at least the market perceived it was elevated.

It’s since sort of quieted down a bit. But I know investors are so focused on this metric. I would just love for you to just share about, you know, what is your philosophy regarding marketing spend? What are the metrics that you’re looking at, the channels you’re using? And I think you guys just launched a pretty interesting new ad campaign Correct.

Yeah. Which implies there there might be a new a new chapter in terms of how you’re thinking about getting new customers and then use the times.

Will Bardeen, CFO, The New York Times: Yeah. No. I’m glad you you saw that. It’s not a new chapter, but let me explain, maybe a little more about our approach to marketing, but then also sort of how marketing fits because I actually think that’s, in some ways, the the the most important thing to to describe. So so for the I’d highlight for the purposes of this, you know, two types of marketing.

You know, one is returns driven paid media, and the other is brand marketing. The I’ll start with returns driven paid media. That’s the bulk of what what we invest in with marketing. So I’ll start there. And it’s exactly based on the description what you’d expect, meaning we’re closely tracking the ROIs.

How do we do that? We’re estimating lifetime value of the subscribers we acquire. We’re looking at the cost required of the cost to acquire the subscriber, and we are making sure that we believe we’re getting a a really good return on the capital. We’re investing into that marketing, because there are lot of factors that impact returns in every given quarter. We that’ll fluctuate accordingly.

But overall, we think it’s a great use of our capital to when we have those opportunities, we’ll do them. And the last thing to say is this is an area like many I’ve talked about where we think AI and AI is allowing us to continue to work on improving the efficiency of our spend, which we can then use to either put more capital to work or, get better returns on the spend we’re doing. So that’s the return driven paid media. And then we use for that, by the way, search social channels like nothing too revolutionary there. We’re always looking for the opportunities.

The second category, brand marketing you mentioned, we that is, you know, even more lumpy because we’re not always doing it. We are in market right now with an exciting, brand campaign.

Unidentified speaker, Analyst: It’s good, by the way.

Will Bardeen, CFO, The New York Times: Oh, good. I’m glad glad to hear that. Yeah. No. It’s we’ve got great brand marketers.

So so when we find the right idea, we do think brand marketing can be really valuable and important to help with awareness, to help with new product launches. So you you know, you potentially see that in any given quarter, and and that’ll be a bit lumpier. But I think the important sort of thing to do with our marketing is just to frame it that it’s an important and valuable lever. We clearly spend and invest into it, But it’s not our our our model is not fundamentally reliant on that. We most of what our investment, most of what our attention is, it’s we called it product driven growth in the past.

It’s about the investments to the journalism and the product. And that’s sort of represented by the fact that the vast majority of the starts we get are organic, meaning we are not using marketing to drive those starts directly. They’re coming organically. They’re people, because they’re, either coming directly or through other channels to our stories that we’re putting out every day, the product features that are engaging people and bringing them back. And it’s that, sort of disciplined investment that represents the core of how we sort of expect strategically to grow over the long term with marketing being a really important and valuable lever alongside that.

Unidentified speaker, Analyst: So that leads this is my next question. I was looking at your product development costs. In 2019, they were about half of what your sales and marketing budget is and now the two are almost comparable.

Will Bardeen, CFO, The New York Times: Is that what you’re referring to? That’s exactly exactly what I’m referring to is is that. So the two pillars, journalism and product development. And product development is, you know, basically means all of the sort of technology we’re investing in as well as the people who are, you know, very good at at developing that technology. And it’s everything from, you know, our our app designs to, the, you know, new formats format innovation to the data and tech platforms that, you know, enable us to take all this data and and get so much insight and run machine learning models, and, you know, all the AI I’ve been talking about.

So the ability to have us sort of be managing dynamic paywalls and content, you know, recommendation, ad targeting. So all of this is is part of that investment. And, you know, I think the way that we the reason why we we think this is just such great investment is, you know, you’re you’re seeing the results in the metrics that we care about in the engagement of users in the base of sub growth through conversion, retention, and really importantly, leverage. I mean, is where we believe not just by looking at that line, it’s really powering the entire model. And so by, we have the kind of luxury in many ways.

We have the scale, the audience and subscriber scale, as well as the resources to invest into this. And, you know, we can invest, you know, relatively sort of large amounts in absolute dollars relative to others, but given our scale, it’s not that significant. So we’re able to get real leverage and you can see sort of ultimately one of the reasons we continue to be confident in driving our profit growth and margin expansion is because of the results of that product development.

Unidentified speaker, Analyst: That’s great. So this feels like more of a Wall Street question, I’m going to ask it because I get it all the time from investors. And I think what what some investors are fishing for is this sort of discontinuity in your p and l, and they’re like, my gosh. What happens if the print business goes away? Like, is this gonna be a bad day or a good day?

Or what does the p and l look like if I artificially slice the revenues and income statement, digital on one side, print on the other. And so I would just love a perspective from you in terms of how you guys think about that print business. Do you have sort of internal numbers where you can measure with some precision you know, if print is still profitable? And do you do you see a time in five years or ten years or fifteen where there where there won’t be a print business?

Will Bardeen, CFO, The New York Times: So we we measure print like everything very closely. So we we we certainly understand the the economics of print. And what I’d say is is is not gonna be too dissimilar to what what we’ve long said, which is is that, you know, it’s it’s no secret prints in secular decline. We expect that decline essentially just to continue. And we’ve sort of put that into all of our economic expectations.

So it’s always built into our guidance and in our our targets when we put those out in 2022. And, you know, the thing that I I do wanna make clear because, know, we’re we’re not in print as a charity sort of nostalgia case. These are, really valuable subscribers. They’re advertisers that still really love print as well. And, and so we continue to manage the business, for that value and the sort of, sort of continued sort of sense that it’s sort of always been mischaracterized for us, by the way.

I don’t want this isn’t for the whole industry. It’s not for other companies, but for us, that sort of sense that print is, you know, on the last gas is is is far from the case. And we continue to just manage it to get the value out of it as long as that customer demand is there. It’s a very high value product for us.

Unidentified speaker, Analyst: Okay. My last question on uses of cash. You guys have said you returned roughly 50% of your cash in the form of buybacks and dividends. But I can’t help but notice, I mean, least on our numbers, dollars 1,000,000,000 ish of cash, short term, long term in securities that you have on hand today. You guys have always said you’re very disciplined in your M and A.

And I think historically, you’ve always been very conservative in terms of how you think about the right amount of cash to hold on the balance sheet. But what can you just frame for us for the cash that you’re going to generate going forward that’s not used for dividends, not used for buybacks? Are you still on the hunt for sort of intelligent m and a? Is that the right way to think about it? Or should investors think maybe more cash will get returned to shareholders than the 50%?

Will Bardeen, CFO, The New York Times: Totally totally appreciate the question. You know, first, we’re really pleased to have such a cash generative model. That’s great. And our no change to our capital allocation strategy. We think it’s a very, good strategy for long term, returns, attractive returns on capital.

So what is that? We’re investing first and foremost into the organic growth of the business, everything we talked about. Secondly, we’re returning, significant capital to shareholders. We have, a target out of, returning at least 50% of our free cash flow and emphasis on at least. I mean to the very specific point of your question, we also have a very strong a strong balance sheet.

And what I what I’d say about that is at a time of such sort of dynamic change in the industry, we see value to to to to the optionality. And what do we mean by optionality? So I do wanna make clear part of that optionality is is potentially increasing returns to shareholders. Should we see the the opportunity, to do that, attractively? And then the other, is is potentially m and a as as you described.

And as as we’ve said and you just said, we have a really high bar for m and a. What does that mean? I mean, I was the head of, strategy and corporate developments for a long long time, so I’m happy to sort of do a little bit little bit more there to to shed more light on that. It’s got to be any m and a consistent with our our brand, supportive of accelerating that essential subscription strategy, that strategy we’ve described. And, and promises or, we expect, particularly high returns, risk adjusted returns on capital.

And, you know, what does it mean to support the strategy? I mean, I think you’ve seen on our track record what that looks like. We consider, you know, whether we there’s an opportunity to to to add in a product that adds value to the bundle. So we did that with the athletic. We did that with wire cutter.

We consider whether in a space we’re already in, whether there’s something we could buy that could help sort of supercharge growth in that category. We did that with Wordle very effectively with, games. And then we’re always considering whether there’s some sort of capability that might you know, we could build it, we could we could buy it. And we we did that with a company in audio called Autumn, which helped us with our audio capability. So, you know, that that just sort of gives an example.

So there’s no we’re very strategically disciplined. So that’s just a, you know, sort of, we consider it. But when we kind of step back and and and think about where we are, we love the spaces we’re in. They’re they’re big spaces. The strategy is working as designed.

We don’t feel like we need anything. But at a time of such, you know, dynamism in the industry, having that strong balance sheet and these resources, we think having the optionality has real value over the long term to create attractive returns on capital to our shareholders.

Unidentified speaker, Analyst: That’s great, Will. Thank you so much for the time. Thank you.

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