Good morning, everyone, and welcome to The New York Times Company’s Second Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. Please also note today’s event is being recorded. At this time, I’d like to turn the floor over to Anthony DiClemente, Senior Vice President, Investor Relations. Please go ahead.

Thank you, and welcome, everyone, to The New York Times Company’s second quarter 2024 earnings conference call. On the call today, we have Meredith Kopit Levien, President and Chief Executive Officer; and Will Bardeen, Executive Vice President and Chief Financial Officer. Before we begin, I would like to remind you that management will make forward-looking statements during the course of this call. These statements are based on our current expectations and assumptions, which may change over time. Our actual results could differ materially due to a number of risks and uncertainties that are described in the company’s 2023 10-K and subsequent SEC filings. In addition, our presentation will include non-GAAP financial measures, and we have provided reconciliations to the most comparable GAAP measures in our earnings press release which is available on our website at investors.nytco.com. In addition to our earnings press release, we also have posted a slide presentation relating to our results on our website once again at investors.nytco.com. And finally, please note that a copy of the prepared remarks from this morning’s call will be posted to our investor website shortly after we conclude. With that, I will turn the call over to Meredith.

Thanks, Anthony, and good morning, everyone. It was a strong second quarter for the Times, one in which we made further progress on the path to becoming the essential subscription for every serious person seeking to understand and engage with the world. Our Q2 results demonstrate that our strategy continues to work as designed. Let me describe how. First, our world-class news destination combined with our distinctive products in games, sports, cooking, and shopping advice attracted large and passionate audiences in significant spaces. Together, these products gave many people multiple reasons to come to the Times and numerous pathways by which to do so. Second, our subscribers were deeply engaged. In Q2, we saw the share of subscribers on our sites and apps each week hit another multiyear high. That’s a clear sign that we’re delivering unique value to users and building long-term relationships with them. Third, we saw another quarter of increasing ARPU, further evidence of the distinctive nature of our journalism and that it’s increasingly valuable to people over time. That also supports our conviction that we can keep growing digital-only ARPU year-on-year as we use our multiple pricing and monetization levers. And fourth, growth in Q2 across digital advertising, affiliate, and licensing demonstrated the ability of our diverse product portfolio to power multiple revenue streams beyond subscription. In sum, our high-quality, increasingly diverse portfolio of products attracted tens of millions of people each week, engaged them deeply, and we’re showing that we can sustainably translate that interest into more direct relationships, more subscribers, growing revenue, and increasing profitability even as the market continues to experience significant audience headwinds driven by shifts in the platform landscape. Halfway through 2024, we are on track for another year of higher AOP and margin expansion as well as strong free cash flow generation. I’ll turn now to some of the details from the quarter, starting with subscribers. We added 300,000 net new digital subscribers marking further progress on the path to our next milestone of 15 million total subscribers. The key to driving subscriber growth is having products that are continuously becoming more differentiated and valuable. That starts with news where our ongoing investments in coverage mean the Times is well prepared to follow the story wherever it goes. In recent months, that’s ranged from the historic events unfolding around the U.S. presidential election to the ongoing wars in Gaza and Ukraine to intensifying weather to sweeping technological change. Alongside our broad and deep coverage of hard news, Times users are also benefiting from the increased client-backed health and wellness coverage I mentioned last quarter and an enhanced culture report. An example of the latter was last month’s ranking of the best book of the 21st Century, which was read by millions, and it included an array of features for people to create their own list and track what they read. We’re also driving engagement through format innovations that make our coverage more accessible and compelling, which includes live reporting that delivers real-time reporting and commentary during significant news moments and more prominent use of video to demonstrate the expertise and hard work of our reporters across beats. It also includes an expanded audio offering that makes much of our day-to-day coverage listenable and further experiments with AI-assisted translations into Spanish. Games had another strong quarter in Q2 and contributed to our business in multiple ways. It drove new stand-alone game subscribers with the valuable funnel for new bundle subscribers. It generated meaningful advertising revenue and has brought millions of prospects to the Times portfolio. Games had two notable product enhancements in the quarter. We brought our popular new word game Strands out of Beta and into our mobile games app, where we can reach an even bigger audience. And we added Wordle archives as a subscriber-only benefit, an example of the kind of feature that entices audiences to pay and stay. We also made palpable progress on the athletics journey to become a household name among sports fans in the quarter with strong coverage of the Copa America and the Euros and substantial growth in both audience and revenue. We completed the first phase of the athletics technical migration to the Times web domain in the quarter, which enables us to better connect the athletic to the rest of our products. Just a few weeks ago, we launched a new multi-format NFL franchise called Scoop City. All of that progress helps keep the athletic on track for profitability by next year and underscores the generational opportunity we see to build a top destination for sports fans globally. The quarter’s year-on-year ARPU growth I noted earlier was a function of our ongoing success in transitioning bundled subscribers to higher prices. This reflects our strategy and actions as we steadily add value to our journalism and products, which leads people to engage more and value them more. This strengthens our ability to transition subscribers to higher prices over time, and it gives us confidence that we’ll see continued year-on-year ARPU growth. Advertising revenue in the quarter was in line with guidance, reflecting growth in our sub-brands and a modest pickup in overall demand despite the continued impact of some marketers avoiding certain hard news topics. We continue to build new ad products that can drive even more value to marketers. Last month, we launched BrandMatch, an AI-powered tool to pair advertisers with the most relevant, high-performing content and audiences for their campaigns. Revenue beyond subscriptions and advertising exceeded guidance, driven by a strong quarter for Wirecutter and licensing. Wirecutter is providing product reviews across more categories, spotlighting more deals and delivering more advice to help people get the most out of what they buy, all of which increases its value over time. Our costs in the quarter reflected ongoing discipline even as we continue to invest in the areas that differentiate our journalism and products. That discipline, combined with strong execution, resulted in another quarter of AOP growth and healthy free cash flow generation. I’ll wrap by reminding you of what we’re working to do every day: make journalism and products so valuable that people will seek them out, ask for them by name, and form direct relationships and daily habits. The combination of our world-class news destination plus market-leading lifestyle products means we have complementary offerings in large spaces, each with multiple growth levers fueling multiple revenue streams. Together, we believe these make the Times resilient in a changing media landscape and well positioned for continued value creation. Now, let me turn it over to Will for more detail.

Thanks, Meredith, and good morning, everyone. As Meredith stated, our Q2 financial results keep us on track to deliver another year of healthy revenue growth, AOP growth, margin expansion, and free cash flow generation. Q2 also demonstrated how our portfolio of market-leading news and lifestyle products is working to drive these economics. Our growing subscriber base along with increasing subscriber engagement enabled us to strengthen our multiple revenue streams. As our subscriber base scales, we’ve driven operating leverage even as we continue to prioritize strategic investments aimed at further differentiating our high-quality journalism and digital products. We grew overall revenue in the quarter by approximately 6% and as increasing digital subscription, digital advertising, affiliate, and licensing revenue more than offset ongoing declines in print. AOP grew by approximately 14% year-over-year, and AOP margin expanded by approximately 110 basis points to 16.7%. Consistent with our capital allocation strategy and the strength of our free cash flow generation, we have returned $82 million to shareholders in the first six months of the year. This included approximately $42 million in share repurchases and $40 million in dividends. Now, I’ll discuss the second quarter’s key results, followed by our financial outlook for the third quarter of 2024. Please note that all comparisons are to the prior year period unless otherwise specified. I’ll start with the discussion of our subscription business. We added approximately 300,000 net new digital subscribers in the quarter with growth coming from multiple products across our portfolio. Bundle and multiproduct subscribers now make up approximately 45% of our total base along the path to exceeding 50% by the end of next year. Total digital-only ARPU grew 2.1% year-over-year to $9.34 as we continue to step up subscribers from promotional to higher prices and raised prices on tenured non-bundled subscribers. As Meredith highlighted, the value we’ve added to our products across our portfolio in Q2 led to higher levels of subscriber engagement. This strong subscriber engagement, combined with the encouraging results we’re seeing in pricing step-up points, gives us confidence that modest year-over-year ARPU expansion will continue for the remainder of the year. As a result of both higher digital subscribers and digital-only ARPU in the second quarter, digital-only subscription revenues grew approximately 13% to $305 million, and total subscription revenues grew approximately 7% to $439 million. Both were in line with the guidance we provided last quarter. Now turning to advertising. Total advertising revenues for the quarter were $119 million, an increase of approximately 1%. Digital advertising revenues increased approximately 8% to $80 million. Both digital advertising and total advertising revenues were within the guidance ranges we provided last quarter. Other revenues exceeded our guidance, increasing approximately 5% to $66 million, as Wirecutter affiliate and licensing revenues continued to perform well in Q2. Adjusted operating costs came in within our guidance range of 4% to 5%, increasing by approximately 4.4%. Looking at each of the lines, cost of revenue increased approximately 4%. Sales and marketing costs decreased approximately 1.5%. Product development costs increased approximately 11%, and adjusted G&A costs increased approximately 5%. Adjusted diluted EPS in Q2 increased $0.07 to $0.45, primarily driven by higher operating profit and higher interest income. I’ll now look ahead to Q3 for the consolidated New York Times Company. Digital-only subscription revenues are expected to increase 12% to 15% compared with the third quarter of 2023, and total subscription revenues are expected to increase 7% to 9%. Digital advertising revenues are expected to increase high single digits, and total advertising revenues are expected to be flat to increase low single digits. Other revenues are expected to increase 9% to 11% as we expect licensing and Wirecutter affiliate revenues to be even stronger drivers of growth in Q3. Adjusted operating costs are expected to increase 5% to 6%, which takes into account the opportunity we’re seeing in the quarter to lean into marketing investment during a period of strong returns. While cost growth rates can fluctuate quarter-to-quarter, particularly on individual lines, we remain focused on sustaining healthy revenue growth, AOP growth, and margin expansion for this year and beyond through a disciplined approach to cost management. We expect to continue investing in our high-quality journalism and digital product portfolio while reallocating resources to the areas that create the most value for our audience. I’ll close by noting that our results demonstrate our essential subscription strategy is working as designed, and we remain on track to achieve our previously stated midterm targets for subscribers, AOP growth, and capital returns. With that, we have to take your questions.

Our first question today comes from David Karnovsky from JPMorgan. Please go ahead with your question.

Hi, thank you. Just on the digital subscription guidance for Q3, it looks healthy, with acceleration over Q2 at the midpoint. Meredith, maybe you could speak to the factors influencing that. How much of the lift or growth you’re seeing there is a product of the promotional bundle subs graduating to the higher tiers? And what are you seeing for the cohort so far? And then just one for Will on the guidance, the acceleration in other revenue in the third quarter; maybe you can give some detail around that too. Thanks.

I’ll just make a broad comment, which is I think you’re seeing the model play out as designed, with net adds coming from a number of places, bundle and single product, and the trajectory of being able to transition those bundled subscribers to higher prices. Broadly going very well. Will, you might add the detail he’s asking in the second part of the question.

For other income, yes, David, as you know, that other revenue line has several different components, which can create some natural variability quarter-to-quarter. I think in Q3, in particular, Wirecutter affiliate revenue can be seasonally stronger in certain periods, and we’ve been investing there, as Meredith said in her prepared remarks, to create more value, and we’re seeing good returns. In addition, the timing of our licensing revenue can be somewhat lumpy. I think the important thing, stepping back, as we’ve said in our remarks, we expect both affiliate and licensing to deliver growth in 2024, and you’re seeing that in the Q3 guidance.

Great. Thanks so much. David, operator will take our next question.

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

Great. Thanks so much. Yes, I really appreciate all the insights on the ARPU expansion for the remainder of the year. Building on what Dave was asking, I noticed that the bundle and multiproduct ARPU saw a sequential uptick. I know that’s somewhat dictated by the influx of new starts on promotional rates going forward. But can you just give us an update on how the phasing of graduating promotional bundle subscribers has gone? I think you alluded to that cohort building in terms of just the eligibility through the year. Is that still the case? And then as a follow-up for Will, you mentioned leaning into marketing efforts. I think historically, during periods of elevated news cycle, you’ve actually kind of leaned off. I was just wondering if there’s any change in dynamic in terms of the ROI that you see from marketing spend. Appreciate it. Thank you.

Sure, Thomas. I’ll take both of those. So on the first one, you’ve highlighted that sequential growth in bundle and multi-product ARPU. We’re really pleased, as Meredith and I both said, with how the bundled step-ups are going for the cohorts, and that’s the primary driver of the increase in the bundle and multiproduct ARPU we’re seeing. Having said that, I just want to step back and say, as we’ve said before, we’re not overly focused on sequential growth in any one subscriber bucket. The really important metric that we are focused on and we want everyone to focus on is that year-over-year growth in total digital-only ARPU. So I’d say to leave it with our big picture: those ARPU increases reflect our strategy and actions as we steadily improve our journalism products, leading to greater engagement and value placed on the service. That strengthens our ability to transition subscribers to higher prices over time and gives us confidence that we’ll continue to see that year-over-year ARPU growth going forward.

I’ll add one little beat, which is just all the products are getting more valuable as we go, and our ability to get people to engage with them improves over time, which is why in our prepared remarks, we mentioned the strength of engagement.

Yes. And then on the marketing ROI, what I’d say is, what we’ve often said is that in practice, the growth rates can fluctuate quarter-to-quarter, as we’ve seen over the last several quarters in marketing spend. We’re really ROI focused on that. So while the vast majority of our starts are coming in organically, we always consider every quarter whether to lean in a bit when we see particularly strong returns. As I noted in my prepared remarks, that appears to be the case so far in Q3. So this may well be one of those quarters where we lean in. Stepping back, the most important thing anytime we’re talking about costs is to just keep in mind that we expect to see year-over-year AOP growth and margin expansion this year and beyond. That’s kind of the fundamental focus. We are really dedicated to our long-term investment strategy of investing in the high-quality journalism and digital product portfolio which enable us to drive growth. We are reallocating resources to the areas that create the most value for our audience.

Thanks a lot, Thomas. Operator will take the next question, please.

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

Yes. I appreciate the capital returns, the buybacks, and the dividends. But it seems like your cash balance has been gradually growing since you did the acquisition of the athletic back in the first quarter of 2022. So my question is, what do you think will end up happening with that cash?

Yes, I appreciate the question. We’re really pleased, as you can imagine, with the strong cash flow generation we’re seeing, and it’s only reinforcing our confidence in our capital allocation strategy, which remains unchanged. Let me just make sure I remind everyone that our top priority is first to continue that high return of organic investment to grow our essential subscription strategy. We see a lot of running room in those huge spaces we’re in. Second, as you noted, returning at least 50% of our free cash flow to shareholders in the midterm between stock buybacks and dividends. I think what you’re hitting on here is the value we also see in the third leg of our capital allocation strategy, which is maintaining a strong balance sheet that provides us with a lot of strategic optionality. We think that maintaining a strong balance sheet is an important advantage during a period of market dynamism where we see ourselves on the path to becoming among a small handful of scaled global digital subscription services, and that flexibility is really important.

Great. Thanks, Jason. Operator, next question?

Our next question comes from Vasily Karasyov from Cannonball Research. Please go ahead with your question.

Thank you. I wanted to ask you to provide more color on the variability of Wirecutter revenue from quarter to quarter and what drives that. Maybe that will help us better understand the acceleration in growth that you’re guiding to. And another question, Meredith, you touched on that advertisers are still avoiding certain categories of news. You mentioned that you are working on other products. Would it be correct to understand that you have figured out a way to work around this situation, given the strength of your advertising revenue this quarter, and the press release doesn't call out any weakness like it did last quarter? Thank you.

Yes. But good questions. For Wirecutter, I would say broadly, we’re very happy with that business. I think some of the variability is just how and when people shop, which follows the broad trends in the marketplace. We tend to see heightened activity around back to school in Q3. Around the holiday time, we typically see a lot of activity surrounding gift buying. I think the trajectory of the business reflects that. We’ve owned that company for, what, seven, eight years? We’ve been very deliberate about investing to harness what remains very strong demand for high-quality product reviews. So just bear in mind that quarter-to-quarter variability reflects overall trends in consumer shopping behavior. On advertising, several things can be noted. As Will said in his prepared remarks, we did see a modest pickup in demand in the second quarter, which was, of course, pleasing to see. There are several dynamics at play here. There is confidence in the basic strength of our ad products; our premium canvases with first-party data to the products we’ve been building and executing on for four or five years now work really well for marketers. We are extending those products to our sub-brands across the whole portfolio, including cooking and Wirecutter now in a bigger way. But I’d say that games and sports are where we’re seeing real strength. On the other side, we’ve continued to observe a degree of marketer avoidance regarding certain topics. But broadly, I would say we remain confident in the strength of our ad product portfolio. Specifically in the U.S., I think of BrandMatch, which I referred to in my prepared remarks — a new targeting tool set that is AI-powered and will operate alongside all the first-party data we have. I would say we’re quite optimistic that this will serve as a growth driver.

Great. Thanks, Vasily. Operator will take our next question please?

Our next question comes from Doug Arthur from Huber Research Partners. Please go ahead with your question.

Yes, thanks. Excuse me. Meredith, just a quick comment on The Athletic. It seems like the bottom line is moving to breakeven quicker than expected. Based on the subscriber numbers you provided for the bundled product, it looks better than expected or at least has a nice tone to it. So I’m wondering if you could discuss expectations for The Athletic's bottom line over the next year or so.

Yes. Great question. The broadest thing to say is we’re very happy with how it’s going. It’s a big important bet for us. We’re playing a very long game to be a household name among sports fans and to really build awareness and audience for The Athletic, which is going very well. I’d say it’s still relatively early concerning profit expectations. We were very descriptive about that at the point of acquisition two and a half years ago. I think we are well on that path. As you hear us talk about, we feel really good about where we are, and this past quarter was great; you saw some of that reflected in the quarter as we grew audience and revenue in sort of every dimension. So broadly, we’re happy with how it’s going and kind of well on track to what we initially outlined, looking to build something substantial in the world and at The New York Times as we aim to be a leading global destination for sports fans.

Great. Well, thanks, everyone, for joining our second quarter earnings call. We’ll see you next quarter.

Ladies and gentlemen, the conference call has now concluded. We thank you for attending today’s presentation. You may now disconnect your lines.