THE New York Times on Wednesday posted slower digital subscriber growth for the fourth quarter and issued a lackluster ad revenue growth forecast, sending its stock down 10 percent.
The slow growth was despite a busy news cycle last year, driven by geopolitical tensions, United States President Donald Trump’s changing trade policies and public concern about climate change.
Publishers are grappling with shrinking trust in news and declining web traffic as search engines such as Google prioritize artificial intelligence (AI) chatbots for answering queries. They are also facing tough competition for digital ad budgets in a crowded market.
To boost ad dollars, NYT has been doubling down on video content on its flagship NYT app. It has launched a TikTok-like Watch tab in a bid to enhance retention and engagement with short-form videos.
The Times expects current-quarter subscription revenue growth to be between 9 percent and 11 percent, compared with analysts’ average estimate of a 9.2 percent rise, according to data compiled by Visible Alpha.
Bundling of sports content from The Athletic, games such as Wordle and other offerings including product-review section Wirecutter have helped NYT draw in users.
The company added about 450,000 digital-only subscribers in the fourth quarter, compared with a Visible Alpha estimate of 304,111 additions, pushing its digital subscription revenue up 13.9 percent.
NYT had, however, added 460,000 digital-only subscribers in the prior quarter.
Of its total 12.21 million digital-only subscribers, about 6.48 million were bundle and multiproduct subscribers. Including print, its overall subscriber count now stands at 12.78 million.
Operating costs for the company rose 10.5 percent or 9.7 percent on an adjusted basis, in the fourth quarter, partly due to litigation charges related to the copyright cases on AI companies.
NYT reported an adjusted profit of 89 cents per share for the fourth quarter, exceeding analysts’ average estimate of 87 cents, according to data compiled by LSEG.
Its revenue rose 10.4 percent to $802.3 million, beating estimates of $791.3 million.