New York Times Co: Form 10-Q for the period ended Mar 31, 2025

EXECUTIVE OVERVIEW

We are a global media organization focused on creating and distributing high-quality news and information that help our audience understand and engage with the world. We believe that our original, independent and high-quality reporting, storytelling, expertise and journalistic excellence set us apart from other sources and are at the heart of what makes our journalism worth paying for.

We generate revenues principally from the sale of subscriptions and advertising. Subscription revenues consist of revenues from standalone and multiproduct bundle subscriptions to our digital products and subscriptions to and single-copy and bulk sales of our print products. Advertising revenue is derived from the sale of our advertising products and services. The Company has changed the revenue caption on its Condensed Consolidated Statement of Operations from “Other” to “Affiliate, licensing and other” effective for the quarter ended March 31, 2025. Affiliate, licensing and other revenues include revenues from licensing, Wirecutter affiliate referrals, commercial printing, the leasing of floors in the New York headquarters building located at 620 Eighth Avenue, New York, New York (the “Company Headquarters”), retail commerce and our live events business. Our main operating costs are employee-related costs.

In the accompanying analysis of financial information, we present certain information derived from our consolidated financial information but not presented in our financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). We are presenting in this report supplemental non-GAAP financial performance measures that exclude depreciation, amortization, severance, non-operating retirement costs and certain identified special items, as applicable. In addition, we present our free cash flow, defined as net cash provided by operating activities less capital expenditures. These non-GAAP financial measures should not be considered in isolation from or as a substitute for the related GAAP measures and should be read in conjunction with financial information presented on a GAAP basis. For further information and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures, see “— Results of Operations — Non-GAAP Financial Measures.”

There was one fewer day in the first quarter of 2025 compared with the first quarter of 2024 as a result of 2024 being a leap year.

The Company has two reportable segments: The New York Times Group (“NYTG”) and The Athletic.

Financial Highlights

• The Company added approximately 250,000 net digital-only subscribers compared with the end of 2024, driven largely by bundle and multiproduct subscriber additions as well as other single products subscriber additions. The Company ended the first quarter of 2025 with approximately 11.66 million subscribers to its print and digital products, including approximately 11.06 million digital-only subscribers. Of the 11.06 million digital-only subscribers, approximately 5.76 million were bundle and multiproduct subscribers. Compared with the end of the first quarter of 2024, there was a net increase of 1,150,000 digital-only subscribers.
• Total digital-only average revenue per user (“ARPU”) increased 3.6% year-over-year to $9.54 driven primarily by subscribers graduating from promotional to higher prices and price increases on tenured non-bundled subscribers.
• Operating profit increased 21.3% to $58.6 million in the first quarter of 2025 from $48.3 million in the first quarter of 2024. Adjusted operating profit (“AOP”), defined as operating profit before depreciation, amortization, severance, multiemployer pension plan withdrawal costs and special items (a non-GAAP measure discussed below under “Non-GAAP Financial Measures”), increased 21.9% to $92.7 million in the first quarter of 2025 from $76.1 million in the first quarter of 2024. Operating profit margin (operating profit expressed as a percentage of revenues) increased to 9.2% in the first quarter of 2025, compared with 8.1% in the first quarter of 2024. Adjusted operating profit margin, defined as adjusted operating profit expressed as a percentage of revenues (a non-GAAP measure discussed below under “Non-GAAP Financial Measures”), increased to 14.6% in the first quarter of 2025, compared with 12.8% in the first quarter of 2024.
• Total revenues increased 7.1% to $635.9 million in the first quarter of 2025 from $594.0 million in the first quarter of 2024.
• Total subscription revenues increased 8.2% to $464.3 million in the first quarter of 2025 from $429.0 million in the first quarter of 2024. Digital-only subscription revenues increased 14.4% to $335.0 million in the first quarter of 2025 from $293.0 million in the first quarter of 2024.
• Total advertising revenues increased 4.2% to $108.1 million in the first quarter of 2025 from $103.7 million in the first quarter of 2024, due to an increase of 12.4% in digital advertising revenues, partially offset by a decrease of 8.5% in print advertising revenues.
• Affiliate, licensing and other revenues increased 3.7% to $63.6 million in the first quarter of 2025 from $61.3 million in the first quarter of 2024, as a result of higher Wirecutter affiliate referral revenues and higher licensing revenues.
• Operating costs increased 5.8% to $577.3 million in the first quarter of 2025 from $545.7 million in the first quarter of 2024. Adjusted operating costs, defined as operating costs before depreciation, amortization, severance, multiemployer pension plan withdrawal costs and special items (a non-GAAP measure discussed below under “Non-GAAP Financial Measures”), increased 4.9% to $543.2 million in the first quarter of 2025 from $518.0 million in the first quarter of 2024.
• Diluted earnings per share were $0.30 and $0.24 for the first quarters of 2025 and 2024, respectively. Adjusted diluted earnings per share, defined as diluted earnings per share excluding amortization of acquired intangible assets, severance, non-operating retirement costs and special items (a non-GAAP measure discussed below under “Non-GAAP Financial Measures”), were $0.41 and $0.31 for the first quarters of 2025 and 2024, respectively.

Industry Trends, Economic Conditions, Challenges and Risks

We operate in a highly competitive environment that is subject to rapid change. Companies shaping our competitive environment include content providers and distributors, news aggregators, search engines, social media platforms, streaming services and products and tools powered by generative artificial intelligence. Competition among these companies is robust, and new competitors can quickly emerge and have in recent years. We have designed our strategy to navigate the challenges and take advantage of opportunities presented by this period of transformation in our industry.

We and the companies with which we do business are subject to risks and uncertainties caused by factors beyond our control, including economic weakness, instability, uncertainty and volatility, including the potential for a recession; expanded or retaliatory tariffs or taxes or other trade barriers; a competitive labor market; inflation; supply chain disruptions; high interest rates; and political and sociopolitical uncertainties and conflicts. These factors may result in declines and/or volatility in our results. While we do not currently anticipate a material impact to the Company’s direct costs from the imposition of tariffs by the U.S. government, such tariffs and any retaliatory actions by foreign governments could result in increased costs and could negatively affect economic conditions, which could in turn adversely impact our subscription, advertising and/or affiliate, licensing and other revenues. We believe the macroeconomic environment has had, and may in the future have, an adverse impact on both digital and print advertising spending. Additionally, we believe that there may be marketer sensitivity to some news topics, impacting overall advertising spend.

The newspaper industry has transitioned from being primarily print-focused to digital, resulting in secular declines in both print subscription and print advertising revenues, and we do not expect this trend to reverse. Our printing and distribution costs have been impacted as a result of this transition, and may be further impacted in the future by higher costs, including those associated with raw materials, delivery and distribution and outside printing, or if they were to become subject to expanded or retaliatory tariffs (though newsprint is currently exempt from the proposed expansion of U.S. tariffs on goods from Canada).

We actively monitor industry trends, political and economic conditions, challenges and risks to remain flexible and to optimize and evolve our business as appropriate; however, the full impact they will have on our business, operations and financial results is uncertain and will depend on numerous factors and future developments. The risks related to our business are further described in the section titled “Item 1A — Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024.

RESULTS OF OPERATIONS

The following table presents our consolidated financial results:

(In thousands)

* Represents a change equal to or in excess of 100% or not meaningful.

Revenues

Subscription Revenues

Subscription revenues consist of revenues from subscriptions to our digital and print products (which include our news product, as well as The Athletic and our Audio, Cooking, Games and Wirecutter products), and single-copy and bulk sales of our print products (which represented less than 5% of our subscription revenues in the first quarters of 2025 and 2024). Subscription revenues are based on both the number of digital-only subscriptions and copies of the printed newspaper sold, and the rates charged to the respective customers.

We offer a digital-only bundle that includes access to our digital news product (which includes our news website, NYTimes.com, and mobile applications), as well as The Athletic and our Audio, Cooking, Games and Wirecutter products. Our subscriptions also include standalone digital subscriptions to each of these products.

Subscription revenues increased $35.3 million, or 8.2%, in the first quarter of 2025 compared with the same prior-year period, due to an increase in digital-only subscription revenues of $42.0 million, or 14.4%, partially offset by a decrease in print subscription revenues of $6.8 million, or 5.0%. Digital-only subscription revenues increased primarily due to an increase in bundle and multiproduct revenues of $55.4 million and an increase in other single-product subscription revenues of $6.6 million, partially offset by a decrease in news-only subscription revenues of $20.0 million. Bundle and multiproduct average digital-only subscribers increased 1,230,000, or 28.0%, while bundle and multiproduct ARPU increased $0.59, or 5.0%. Other single-product average digital-only subscribers increased 650,000, or 23.5%, while other single-product ARPU decreased $0.05, or 1.4%. News-only average digital-only subscribers decreased 760,000, or 28.9%, while news-only ARPU increased $1.24, or 11.4%. In calculating average digital-only subscribers for our subscriber categories, we use the monthly average number of digital-only subscribers (calculated as the sum of the number of subscribers in each category at the beginning and end of the month, divided by two). Print subscription revenue decreased primarily due to a decrease in home-delivery subscription revenue, which was driven by a lower number of average print subscribers, reflecting secular trends, partially offset by an increase in domestic home-delivery prices.

The following table summarizes digital and print subscription revenues for the first quarters of 2025 and 2024:

(In thousands)

(1) Includes revenue from bundled subscriptions and standalone subscriptions to our news product, as well as The Athletic and our Audio, Cooking, Games and Wirecutter products.

(2) Includes domestic home-delivery subscriptions, which include access to our digital products. Also includes single-copy, NYT International and Other subscription revenues.

A subscriber is defined as a customer who has subscribed (and provided a valid method of payment) for the right to access one or more of the Company’s products. The Company ended the first quarter of 2025 with approximately 11.66 million subscribers to its print and digital products, including approximately 11.06 million digital-only subscribers.

Compared with the end of the fourth quarter of 2024, there was a net increase of 250,000 digital-only subscribers. Compared with the end of the first quarter of 2024, there was a net increase of 1,150,000 digital-only subscribers.

Print domestic home-delivery subscribers totaled approximately 600,000 at the end of the first quarter of 2025, a net decrease of 10,000 subscribers compared with the end of the fourth quarter of 2024 and a net decrease of 50,000 subscribers compared with the end of the first quarter of 2024. Subscribers with a domestic home-delivery print subscription to The New York Times, which includes access to our digital products, are excluded from digital-only subscribers.

We report three mutually exclusive digital-only subscriber categories: bundle and multiproduct, news-only and other single-product, which collectively sum to total digital-only subscribers, as well as the average revenue per user for each of these categories.

The following table sets forth subscribers as of the end of the five most recent fiscal quarters:

(In thousands)

(1) Subscribers with a bundle subscription or standalone digital-only subscriptions to two or more of the Company’s products.

(2) Includes group corporate and group education subscriptions, which collectively represented approximately 6% of total digital-only subscribers as of the end of the first quarter of 2025. The number of group subscribers is derived using the value of the relevant contract and a discounted subscription rate.

(3) Subscribers with only a digital-only news product subscription.

(4) Subscribers with only one digital-only subscription to The Athletic or to our Audio, Cooking, Games or Wirecutter products.

(5) Subscribers with digital-only subscriptions to one or more of our news product, The Athletic, or our Audio, Cooking, Games and Wirecutter products.

(6) Subscribers with a domestic home-delivery or mail print subscription to The New York Times, which includes access to our digital products, or a print subscription to our Book Review or Large Type Weekly products.

The sum of individual metrics may not always equal total amounts indicated due to rounding. Subscribers (including net subscriber additions) are rounded to the nearest ten thousand.

“Average revenue per user” or “ARPU,” a metric we calculate to track the revenue generation of our digital subscriber base, represents the average revenue per digital subscriber over a 28-day billing cycle during the applicable quarter. The following table sets forth ARPU metrics relating to the above digital-only subscriber categories for the five most recent fiscal quarters:

ARPU metrics are calculated by dividing the digital subscription revenue in the quarter by the average number of digital-only subscribers divided by the number of days in the quarter multiplied by 28 to reflect a 28-day billing cycle. In calculating ARPU metrics, for our subscriber categories (Bundle and multiproduct, News-only and Other single-product), we use the monthly average number of digital-only subscribers (calculated as the sum of the number of subscribers in each category at the beginning and end of the month, divided by two) and for Total digital-only ARPU, we use the daily average number of digital-only subscribers.

Total digital-only ARPU was $9.54 for the first quarter of 2025, an increase of 3.6% compared with the first quarter of 2024. The year-over-year increase was driven primarily by subscribers graduating from promotional to higher prices and price increases on tenured non-bundled subscribers.

Advertising Revenues

Advertising revenue is primarily derived from advertisers (such as luxury goods, technology, and financial companies) promoting products, services or brands on digital platforms in the form of display, audio, email and video ads; in print in the form of column-inch ads; and at live events. Advertising revenue is primarily determined by the volume (e.g., impressions or column inches), rate and mix of advertisements. As of the first quarter of 2025, we have updated our discussion of digital advertising revenue and no longer distinguish between “core” and “other” digital advertising. Digital advertising consists of display (which includes website and mobile applications), audio, email and video advertising revenue from advertisements that are sold either directly to marketers by our advertising sales teams or, currently for a smaller proportion, through programmatic auctions run by third-party ad exchanges. Digital advertising revenue also includes creative services fees. NYTG and The Athletic have revenue from all categories discussed above. Print advertising includes revenue from column-inch ads and classified advertising, as well as preprinted advertising, also known as freestanding inserts. There is no print advertising revenue generated from The Athletic, which does not have a print product.

The following table summarizes digital and print advertising revenues for the first quarters of 2025 and 2024:

(In thousands)

Digital advertising revenues, which represented 65.6% of total advertising revenues in the first quarter of 2025, increased $7.9 million, or 12.4%, to $70.9 million compared with $63.0 million in the same prior-year period. The increase was primarily a result of higher display revenues of $9.9 million, driven by areas of strong marketer demand and new advertising supply, partially offset by lower creative services fees of $2.7 million as a result of the volume of custom advertising campaigns. Display impressions increased 20%, while the average rate increased 2%.

Print advertising revenues, which represented 34.4% of total advertising revenues in the first quarter of 2025, decreased $3.5 million, or 8.5%, to $37.2 million compared with $40.7 million in the same prior-year period. The decrease in the first quarter of 2025 was primarily due to a 7.8% decrease in column-inches. Print advertising revenues in 2025 continue to be impacted by secular trends.

We believe the macroeconomic environment has had, and may in the future have, an adverse impact on both digital and print advertising spending. Additionally, we believe that there may be marketer sensitivity to some news topics, impacting overall advertising spend.

Affiliate, Licensing and Other Revenues

Affiliate, licensing and other revenues include revenues from licensing, Wirecutter affiliate referrals, commercial printing, the leasing of floors in the Company Headquarters, retail commerce and our live events business.

Affiliate, licensing and other revenues increased $2.3 million, or 3.7%, in the first quarter of 2025 compared with the same prior-year period, primarily as a result of growth in Wirecutter affiliate referral revenues of $2.3 million, as well as higher content licensing revenues of $0.9 million, primarily related to a commercial agreement with Google and a licensing agreement with Apple.

Digital affiliate, licensing and other revenues, which consist primarily of Wirecutter affiliate referral revenue and digital licensing revenues, totaled $40.1 million and $35.8 million in the first quarters of 2025 and 2024, respectively.

Operating Costs

Operating costs were as follows:

(In thousands)

* Represents a change equal to or in excess of 100% or not meaningful.

Cost of Revenue (excluding depreciation and amortization)

Cost of revenue includes all costs related to content creation, subscriber and advertiser servicing, and print production and distribution as well as infrastructure costs related to delivering digital content, which include all cloud and cloud-related costs as well as compensation for employees that enhance and maintain that infrastructure.

Cost of revenue in the first quarter of 2025 increased $17.8 million, or 5.6%, compared with the same prior-year period. The increase was largely due to higher journalism costs of $9.8 million, higher subscriber servicing costs of $5.9 million and higher digital content delivery costs of $2.4 million. Advertising servicing costs and print production and distribution costs were relatively flat compared to prior year. The increase in journalism costs was largely due to higher compensation and benefits, which was driven by growth in the number of employees who work in our newsrooms, higher salaries, higher benefits costs and higher incentive compensation. The increase in subscriber servicing costs was largely due to higher third-party commissions due to an increase in subscriptions. The increase in digital content delivery costs was largely due to higher cloud-related costs.

Sales and Marketing

Sales and marketing includes costs related to the Company’s subscription and brand marketing efforts as well as advertising sales costs.

Sales and marketing costs in the first quarter of 2025 increased $0.8 million, or 1.3%, compared with the same prior-year period. The increase was due to higher sales costs of $0.4 million and higher marketing costs of $0.4 million.

Media expenses, a component of sales and marketing costs that primarily represents the cost to promote our subscription business, increased 4.7% to $31.3 million in the first quarter of 2025 from $29.9 million in the first quarter of 2024.

Product Development

Product development includes costs associated with the Company’s investment in developing and enhancing new and existing product technology, including engineering, product development and data insights.

Product development costs in the first quarter of 2025 increased $3.4 million, or 5.3%, compared with the same prior-year period. The increase in the first quarter of 2025 was largely due to higher compensation and benefits expenses of $2.0 million driven by higher benefits costs, as well as higher outside services costs of $0.6 million.

General and Administrative Costs

General and administrative costs include general management, corporate enterprise technology, building operations, unallocated overhead costs, severance and multiemployer pension plan withdrawal costs.

General and administrative costs in the first quarter of 2025 increased $1.1 million, or 1.4%, compared with the same prior-year period. The increase was primarily due to higher professional fees of $1.7 million, higher compensation and benefits of $1.4 million, which was driven by higher benefits costs and higher incentive compensation, partially offset by lower severance expense of $1.8 million.

Depreciation and Amortization

Depreciation and amortization costs in the first quarter of 2025 increased $0.7 million, or 3.2%, compared with the same prior-year period.

Generative AI Litigation Costs

In the first quarters of 2025 and 2024, the Company recorded $4.4 million and $1.0 million, respectively, of pre-tax litigation-related costs in connection with a lawsuit against Microsoft Corporation and Open AI Inc. and various of its corporate affiliates alleging unlawful and unauthorized copying and use of the Company’s journalism and other content in connection with their development of generative artificial intelligence products (“Generative AI Litigation Costs”). Management determined to report Generative AI Litigation Costs as a special item beginning in the first quarter of 2024 because, unlike other litigation expenses, the Generative AI Litigation Costs arise from a discrete, complex and unusual proceeding and do not, in management’s view, reflect the Company’s ongoing business operational performance. See Note 14 of the Notes to the Condensed Consolidated Financial Statements for additional information.

Multiemployer Pension Plan Liability Adjustment

In the first quarter of 2025, the Company recorded a $4.5 million charge related to a multiemployer pension plan liability adjustment.

Segment Information

We have two reportable segments: NYTG and The Athletic. Management uses adjusted operating profit (loss) by segment in assessing performance and allocating resources. The Company includes in its presentation revenues and adjusted operating costs to arrive at adjusted operating profit (loss) by segment. Adjusted operating costs are defined as operating costs before depreciation and amortization, severance, multiemployer pension plan withdrawal costs and special items. Adjusted operating profit is defined as operating profit before depreciation and amortization, severance, multiemployer pension plan withdrawal costs and special items. Adjusted operating profit expressed as a percentage of revenues is referred to as adjusted operating profit margin.

Subscription revenues from and expenses associated with our bundle are allocated to NYTG and The Athletic.

We allocate 10% of all bundle subscription revenues to The Athletic based on management’s view of The Athletic’s relative value to the bundle, which we derived based on analysis of various metrics, and allocate the remaining bundle revenues to NYTG.

We allocate 10% of product development, marketing and subscriber servicing expenses (including direct variable expenses such as credit card fees, third-party fees and sales taxes) associated with the bundle to The Athletic, and the remaining costs are allocated to NYTG, in each case, in line with the revenues allocations.

(In thousands)

(1) Intersegment eliminations (“I/E”) related to content licensing.

* Represents a change equal to or in excess of 100% or not meaningful.

(In thousands)

(1) Intersegment eliminations (“I/E”) related to content licensing recorded in Affiliate, licensing and other revenues.

* Represents a change equal to or in excess of 100% or not meaningful.

Adjusted operating costs (operating costs before depreciation and amortization, severance, multiemployer pension plan withdrawal costs and special items) details by segment

(In thousands)

(1) Excludes severance of $2.6 million and multiemployer pension withdrawal costs of $1.2 million for the first quarter of 2025. Excludes severance of $4.0 million and multiemployer pension withdrawal costs of $1.6 million for the first quarter of 2024.

(2) Excludes severance of $0.4 million for the first quarter of 2024. There were no severance costs in the first quarter of 2025.

(3) Intersegment eliminations (“I/E”) related to content licensing recorded in Cost of revenue (excluding depreciation and amortization).

* Represents a change equal to or in excess of 100% or not meaningful.

The New York Times Group

NYTG revenues increased 5.7% in the first quarter of 2025 to $588.9 million from $557.4 million in the first quarter of 2024. Subscription revenues increased 7.5% in the first quarter of 2025 to $431.5 million from $401.4 million in the first quarter of 2024, due to growth in subscription revenues from digital-only products, partially offset by decreases in print subscription revenues. Advertising revenues decreased 0.4% in the first quarter of 2025 to $97.7 million from $98.0 million in the first quarter of 2024 due to lower revenues from print advertising, which more than offset higher revenues from digital advertising. Print advertising decreased primarily as a result of a decrease in column-inches. Digital advertising revenues increased primarily as a result of higher display revenues, partially offset by lower creative services fees. Affiliate, licensing, and other revenues increased 3.0% in the first quarter of 2025 to $59.7 million from $58.0 million in the first quarter of 2024 due to higher Wirecutter affiliate referral revenues.

NYTG adjusted operating costs increased 5.6% in the first quarter of 2025 to $499.1 million from $472.7 million in the first quarter of 2024. The increase in costs in the first quarter of 2025 was primarily related to higher journalism, subscriber servicing, general and administrative, and sales and marketing costs.

NYTG adjusted operating profit increased 6.0% in the first quarter of 2025 to $89.8 million from $84.7 million in the first quarter of 2024. The increase in the first quarter was primarily as a result of higher digital subscription revenues, digital advertising revenues and affiliate, licensing and other revenues, partially offset by higher adjusted operating costs and lower print subscription and print advertising revenues.

The Athletic

The Athletic revenues increased 27.9% in the first quarter of 2025 to $47.6 million from $37.2 million in the first quarter of 2024. Subscription revenues increased 18.5% in the first quarter of 2025 to $32.7 million from $27.6 million in the first quarter of 2024, primarily due to growth in the number of subscribers with access to The Athletic (including through bundle subscriptions). Advertising revenues increased 82.5% in the first quarter of 2025 to $10.4 million from $5.7 million in the first quarter of 2024 due to higher revenues from display advertising. Affiliate, licensing and other revenues increased in the first quarter of 2025 to $4.4 million from $3.8 million in the first quarter of 2024, primarily due to an increase in licensing revenue.

The Athletic adjusted operating costs decreased 2.6% in the first quarter of 2025 to $44.7 million from $45.9 million in the first quarter of 2024. The decrease in costs in the first quarter of 2025 was primarily due to lower sales and marketing and general and administrative costs, partially offset by higher journalism and product development costs.

The Athletic adjusted operating profit increased in the first quarter of 2025 to $2.9 million from a loss of $8.7 million in the first quarter of 2024. The increase in the first quarter of 2025 is primarily due to higher digital subscription revenues, higher digital advertising revenues and lower adjusted operating costs.

NON-OPERATING ITEMS

Other Components of Net Periodic Benefit Costs

See Note 9 of the Notes to the Condensed Consolidated Financial Statements for information regarding other components of net periodic benefit costs.

Interest Income and other, net

See Note 7 of the Notes to the Condensed Consolidated Financial Statements for information regarding interest income and other, net.

Income Taxes

See Note 10 of the Notes to the Condensed Consolidated Financial Statements for information regarding income taxes.

NON-GAAP FINANCIAL MEASURES

We have included in this report certain supplemental financial information derived from consolidated financial information but not presented in our financial statements prepared in accordance with GAAP. Specifically, we have referred to the following non-GAAP financial measures in this report:

• adjusted diluted earnings per share, defined as diluted earnings per share excluding severance, non-operating retirement costs and the impact of special items;
• adjusted operating profit, defined as operating profit before depreciation, amortization, severance, multiemployer pension plan withdrawal costs and special items, and expressed as a percentage of revenues, adjusted operating profit margin;
• adjusted operating costs, defined as operating costs before depreciation, amortization, severance, multiemployer pension plan withdrawal costs and special items; and
• free cash flow, defined as net cash provided by operating activities less capital expenditures.

The special items in 2025 consisted of:

• a $4.5 million charge ($3.3 million or $0.02 per share after tax) related to a multiemployer pension plan liability adjustment; and
• $4.4 million of Generative AI Litigation Costs ($3.2 million or $0.02 per share after tax).

The special items in 2024 consisted of:

• $1.0 million of Generative AI Litigation Costs ($0.7 million or $0.0 per share after tax).

We have included these non-GAAP financial measures because management reviews them on a regular basis and uses them to evaluate and manage the performance of our operations. We believe that, for the reasons outlined below, these non-GAAP financial measures provide useful information to investors as a supplement to reported diluted earnings/(loss) per share, operating profit/(loss) and operating costs. However, these measures should be evaluated only in conjunction with the comparable GAAP financial measures and should not be viewed as alternative or superior measures of GAAP results.

Adjusted diluted earnings per share provides useful information in evaluating the Company’s period-to-period performance because it eliminates items that the Company does not consider to be indicative of earnings from ongoing operating activities. Adjusted operating profit and adjusted operating profit margin are useful in evaluating the ongoing performance of the Company’s businesses as they exclude the significant non-cash impact of depreciation and amortization as well as items not indicative of ongoing operating activities. Total operating costs include depreciation, amortization, severance and multiemployer pension plan withdrawal costs. Total operating costs, excluding these items, provides investors with helpful supplemental information on the Company’s underlying operating costs that is used by management in its financial and operational decision-making.

Management considers special items, which may include impairment charges, pension settlement charges, acquisition-related costs, and beginning in the first quarter of 2024, Generative AI Litigation Costs, as well as other items that arise from time to time, to be outside the ordinary course of our operations. Management believes that excluding these items provides a better understanding of the underlying trends in the Company’s operating performance and allows more accurate comparisons of the Company’s operating results to historical performance. Management determined to report Generative AI Litigation Costs as a special item and thus exclude them beginning in the first quarter of 2024 because, unlike other litigation expenses, which are not excluded, the Generative AI Litigation Costs arise from a discrete, complex and unusual proceeding and do not, in management’s view, reflect the Company’s ongoing business operational performance. In addition, management excludes severance costs, which may fluctuate significantly from quarter to quarter, because it believes these costs do not necessarily reflect expected future operating costs and do not contribute to a meaningful comparison of the Company’s operating results to historical performance.

Excluded from our non-GAAP financial measures are non-operating retirement costs which are primarily tied to financial market performance and changes in market interest rates and investment performance. Management considers non-operating retirement costs to be outside the performance of the business and believes that presenting adjusted diluted earnings per share excluding non-operating retirement costs and presenting adjusted operating results excluding multiemployer pension plan withdrawal costs, in addition to the Company’s GAAP diluted earnings per share and GAAP operating results, provide increased transparency and a better understanding of the underlying trends in the Company’s operating business performance.

The Company considers free cash flow, which is defined as net cash provided by operating activities less capital expenditures, to provide useful information to management and investors about the amount of cash that is available to be used to strengthen the Company’s balance sheet and for strategic opportunities including, among others, investing in the Company’s business, strategic acquisitions, dividend payouts and repurchasing stock. See “Liquidity and Capital Resources — Free Cash Flow” below for more information and a reconciliation of free cash flow to net cash provided by operating activities.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are set out in the tables below.

Reconciliation of diluted earnings per share excluding amortization of acquired intangible assets, severance, non-operating retirement costs and special items (or adjusted diluted earnings per share)

(1) Amounts may not add due to rounding.

* Represents a change equal to or in excess of 100% or not meaningful.

Reconciliation of operating profit before depreciation and amortization, severance, multiemployer pension plan withdrawal costs and special items (or adjusted operating profit) and of adjusted operating profit margin

(In thousands)

* Represents a change equal to or in excess of 100% or not meaningful.

Reconciliation of total operating costs before depreciation and amortization, severance, multiemployer pension plan withdrawal costs and special items (or adjusted operating costs)

(In thousands)

(1) Intersegment eliminations (“I/E”) related to content licensing.

* Represents a change equal to or in excess of 100% or not meaningful.

LIQUIDITY AND CAPITAL RESOURCES

We believe our cash balance and cash provided by operations, in combination with other sources of cash, will be sufficient to meet our financing needs over the next 12 months. As of March 31, 2025, we had cash, cash equivalents and short- and long-term marketable securities of $902.3 million.

We have paid quarterly dividends on the Class A and Class B Common Stock each quarter since late 2013. In February 2025, the Board of Directors approved an increase in the quarterly dividend to $0.18 per share, which was paid in April 2025. We currently expect to continue to pay cash dividends in the future, although changes in our dividend program will be considered by our Board of Directors in light of our earnings, capital requirements, financial condition and other factors considered relevant.

The Board of Directors approved Class A share repurchase programs in February 2022 ($150.0 million), February 2023 ($250.0 million) and February 2025 ($350.0 million). The authorizations provide that shares of Class A Common Stock may be purchased from time to time as market conditions warrant, through open market purchases, privately negotiated transactions or other means, including Rule 10b5-1 trading plans. We expect to repurchase shares to offset the impact of dilution from our equity compensation program and to return capital to our stockholders. There is no expiration date with respect to these authorizations. As of March 31, 2025, repurchases under these authorizations totaled approximately $293.5 million (excluding commissions and excise taxes), leaving approximately $456.5 million under the 2023 and 2025 authorizations. During the quarter ended March 31, 2025, repurchases under these authorizations totaled approximately $58.9 million, and we repurchased an additional $13.5 million (excluding commissions and excise taxes) between April 1, 2025 and May 2, 2025, leaving approximately $443.0 million remaining under the authorizations.

Capital Resources

Sources and Uses of Cash

Cash flows provided by/(used in) by category were as follows:

(In thousands)

* Represents a change equal to or in excess of 100% or not meaningful.

Operating Activities

Cash from operating activities is generated by cash receipts from subscriptions, advertising sales and affiliate, licensing, and other revenues. Operating cash outflows include payments for employee compensation, pension and other benefits, raw materials, marketing expenses and income taxes.

Net cash provided by operating activities increased in the first quarter of 2025 compared with the same prior-year period primarily due to higher net income and net proceeds in connection with the lease and subsequent sale of approximately four acres of excess land at our printing and distribution facility in College Point, N.Y., partially offset by higher tax payments.

Investing Activities

Cash from investing activities generally includes proceeds from marketable securities that have matured and the sale of assets, investments or a business. Cash used in investing activities generally includes purchases of marketable securities, payments for capital projects and acquisitions of new businesses and investments.

Net cash used in investing activities in the first quarter of 2025 was primarily related to capital expenditures of $9.2 million and $6.3 million in net purchases of marketable securities.

Financing Activities

Cash used in financing activities generally includes the payment of dividends, share-based compensation withholding tax payments and share repurchases.

Net cash used in financing activities in the first quarter of 2025 was primarily related to share repurchases of $59.0 million, share-based compensation tax withholding payments of $26.2 million and dividend payments of $22.1 million.

Free Cash Flow

Free cash flow is a non-GAAP financial measure defined as net cash provided by operating activities, less capital expenditures. The Company considers free cash flow to provide useful information to management and investors about the amount of cash that is available to be used to strengthen the Company’s balance sheet and for strategic opportunities including, among others, investing in the Company’s business, strategic acquisitions, dividend payouts and repurchasing stock. In addition, management uses free cash flow to set targets for return of capital to stockholders in the form of dividends and share repurchases.

The following table presents a reconciliation of net cash provided by operating activities to free cash flow:

(In thousands)

(1) Net cash provided by operating activities in the first quarter of 2025 included net proceeds of approximately $33 million in connection with the lease and subsequent sale of approximately four acres of excess land at our printing and distribution facility in College Point, N.Y., which was finalized in February 2025.

Free cash flow in the first quarter of 2025 was $89.9 million compared with $46.7 million in 2024. Free cash flow increased primarily due to higher cash provided by operating activities, as discussed above.

Restricted Cash

We were required to maintain $14.6 million of restricted cash as of March 31, 2025, and $13.9 million as of December 31, 2024, substantially all of which is set aside to collateralize workers’ compensation obligations.

Capital Expenditures

Capital expenditures totaled approximately $8 million and $7 million in the first quarters of 2025 and 2024, respectively. The cash payments related to capital expenditures totaled approximately $9 million and $6 million in the first quarters of 2025 and 2024, respectively.

Revolving Credit Facility

On July 27, 2022, the Company entered into an amendment and restatement of its previous credit facility that, among other changes, increased the committed amount to $350.0 million and extended the maturity date to July 27, 2027 (as amended and restated, the “Credit Facility”). Certain of the Company’s domestic subsidiaries have guaranteed the Company’s obligations under the Credit Facility. Borrowings under the Credit Facility bear interest at specified rates based on our utilization and consolidated leverage ratio. The Credit Facility contains various customary affirmative and negative covenants. In addition, the Company is obligated to pay a quarterly unused commitment fee at an annual rate of 0.20%.

As of March 31, 2025, and December 31, 2024, there were no borrowings and approximately $0.6 million in outstanding letters of credit, with the remaining committed amount available. As of March 31, 2025, the Company was in compliance with the financial covenants contained in the Credit Facility.

CRITICAL ACCOUNTING ESTIMATES AND POLICIES

Our critical accounting policies are detailed in our Annual Report on Form 10-K for the year ended December 31, 2024. Other than as described in Note 2 of the Notes to the Condensed Consolidated Financial Statements, as of March 31, 2025, our critical accounting policies have not changed from December 31, 2024.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Terms such as “aim,” “anticipate,” “believe,” “confidence,” “contemplate,” “continue,” “conviction,” “could,” “drive,” “estimate,” “expect,” “forecast,” “future,” “goal,” “guidance,” “intend,” “likely,” “may,” “might,” “objective,” “opportunity,” “optimistic,” “outlook,” “plan,” “position,” “potential,” “predict,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “would” or similar statements or variations of such words and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements are based upon our current expectations, estimates and assumptions and involve risks and uncertainties that change over time; actual results could differ materially from those predicted by such forward-looking statements. These risks and uncertainties include, but are not limited to: significant competition in all aspects of our business; our ability to grow the size and profitability of our subscriber base; our dependence on third-party platforms for attracting, retaining and monetizing a significant portion of our users; our dependence on user and other metrics that are subject to inherent challenges in measurement; numerous factors that affect our advertising revenues, including market dynamics, evolving digital advertising trends and the evolution of our strategy; damage to our brand or reputation from negative perceptions or publicity or otherwise; risks associated with generative artificial intelligence technology; economic, market and political conditions or other events; risks associated with the international scope of our business and foreign operations; significant disruptions in our newsprint supply chain or newspaper printing and distribution channels or a significant increase in the costs to print and distribute our newspaper; risks associated with environmental, social and governance matters; risks associated with litigation or governmental investigations; our ability to protect our intellectual property; claims against us of intellectual property infringement; our ability to improve and scale our technical and data infrastructure; security incidents and other network and information systems disruptions; our ability to comply with laws and regulations with respect to privacy, data protection and consumer marketing and subscriptions practices; payment processing risk; our dependence on continued and unimpeded access to the internet and cloud-based hosting services we utilize; risks associated with attracting and maintaining a talented and diverse workforce; the impact of labor negotiations and collective bargaining agreements; potential limits on our operating flexibility due to the nature of our employee-related costs; the effects of the size and volatility of our pension plan obligations; liabilities that may result from our participation in multiemployer pension plans; risks associated with acquisitions, divestitures, investments and similar transactions; the risks and challenges associated with investments we make in new and existing products and services; our ability to meet our publicly announced guidance and/or targets; the effects of restrictions on our operations as a result of the terms of our credit facility; potential limits on our future access to capital markets and other financing options; and the concentration of control of our company due to our dual-class capital structure.

More information regarding these risks and uncertainties and other important factors that could cause actual results to differ materially from those in the forward-looking statements is set forth in “Item 1A — Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Our Annual Report on Form 10-K for the year ended December 31, 2024, details our disclosures about market risk. As of March 31, 2025, there were no material changes in our market risks from December 31, 2024.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) as of March 31, 2025. Based upon such evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of March 31, 2025, to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no material changes to our risk factors as set forth in “Item 1A—Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024.