The New York Times Company

05/06/2026 | Press release | Distributed by Public on 05/06/2026 13:21

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
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. Affiliate, licensing and other revenues primarily consist of 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"), and retail commerce. 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."
In the third quarter of 2025, the Company updated its internal reporting to reflect how the Company's President and Chief Executive Officer (who is the Company's Chief Operating Decision Maker) manages the business, and, as a result, the Company has determined it has one reportable segment and one reporting unit.
Financial Highlights
•Total revenues increased 12.0% to $712.2 million in the first quarter of 2026 from $635.9 million in the first quarter of 2025.
•Total subscription revenues increased 11.3% to $516.9 million in the first quarter of 2026 from $464.3 million in the first quarter of 2025. Digital-only subscription revenues increased 16.1% to $389.0 million in the first quarter of 2026 from $335.0 million in the first quarter of 2025. The Company added approximately 310,000 net digital-only subscribers compared with the end of 2025, bringing the total number of subscribers to 13.08 million subscribers, including approximately 12.52 million digital-only subscribers. Compared with the end of the first quarter of 2025, there was a net increase of 1,460,000 digital-only subscribers. Digital-only average revenue per user ("ARPU") increased 2.4% year-over-year to $9.77.
•Total advertising revenues increased 17.3% to $126.8 million in the first quarter of 2026 from $108.1 million in the first quarter of 2025, due to an increase in digital advertising revenues of 31.6% to $93.3 million.
•Affiliate, licensing and other revenues increased 7.8% to $68.5 million in the first quarter of 2026 from $63.6 million in the first quarter of 2025, as a result of higher licensing revenues.
•Operating costs increased 7.7% to $621.6 million in the first quarter of 2026 from $577.3 million in the first quarter of 2025. Adjusted operating costs, defined as operating costs before depreciation, amortization, severance, multiemployer pension plan withdrawal costs and special items (a non-GAAP financial measure discussed below under "Non-GAAP Financial Measures"), increased 9.4% to $594.3 million in the first quarter of 2026 from $543.2 million in the first quarter of 2025.
•Operating profit increased 54.5% to $90.6 million in the first quarter of 2026 from $58.6 million in the first quarter of 2025. Adjusted operating profit ("AOP"), defined as operating profit before depreciation, amortization, severance, multiemployer pension plan withdrawal costs and special items (a non-GAAP financial measure discussed below under "Non-GAAP Financial Measures"), increased 27.2% to $117.9 million in the first quarter of 2026 from $92.7 million in the first quarter of 2025.
•Operating profit margin (operating profit expressed as a percentage of revenues) increased to 12.7% in the first quarter of 2026, compared with 9.2% in the first quarter of 2025. Adjusted operating profit margin, defined as adjusted operating profit expressed as a percentage of revenues (a non-GAAP financial measure discussed below under "Non-GAAP Financial Measures"), increased to 16.6% in the first quarter of 2026, compared with 14.6% in the first quarter of 2025.
•Diluted earnings per share were $0.54 and $0.30 for the first quarters of 2026 and 2025, 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 financial measure discussed below under "Non-GAAP Financial Measures"), were $0.61 and $0.41 for the first quarters of 2026 and 2025, respectively.
Industry Trends, Economic Conditions, Challenges and Risks
We operate in a highly competitive environment that is subject to rapid and, at times, unpredictable change. We compete for audience, subscribers, advertisers and licensees against a wide variety of companies. Companies shaping our competitive environment include content creators, providers and distributors; news aggregators; search engines; social media platforms; streaming services; and AI companies, certain of which have attracted and any of which may further attract audiences, subscribers, advertisers and/or licensees to their platforms and away from ours. 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 and volatility, including the potential for a recession; expanded or retaliatory tariffs or taxes or other trade barriers; a competitive talent market; inflation; supply chain disruptions; high interest rates and interest rates volatility; and political and sociopolitical uncertainties and conflicts. These factors may result in declines and/or volatility in our results. Macroeconomic uncertainty has had in the past, and may have in the future, an adverse impact on both digital and print advertising spending. Additionally, we believe that there is marketer sensitivity to being adjacent to news or specific 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.
We actively monitor industry trends and 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, 2025.
RESULTS OF OPERATIONS
The following table presents our consolidated financial results:
For the Quarters Ended
(In thousands) March 31, 2026 March 31, 2025 % Change
Revenues
Subscription $ 516,871 $ 464,257 11.3 %
Advertising 126,824 108,076 17.3 %
Affiliate, licensing and other 68,541 63,577 7.8 %
Total revenues
712,236 635,910 12.0 %
Operating costs
Cost of revenue (excluding depreciation and amortization) 362,936 334,637 8.5 %
Sales and marketing 77,263 65,959 17.1 %
Product development 70,193 66,539 5.5 %
General and administrative 86,452 79,913 8.2 %
Depreciation and amortization 20,563 21,378 (3.8) %
Generative AI Litigation Costs 4,212 4,397 (4.2) %
Multiemployer pension plan liability adjustment - 4,453 *
Total operating costs 621,619 577,276 7.7 %
Operating profit 90,617 58,634 54.5 %
Other components of net periodic benefit costs (3,582) (4,638) (22.8) %
Interest income and other, net 11,283 9,972 13.1 %
Income before income taxes 98,318 63,968 53.7 %
Income tax expense 10,396 14,417 (27.9) %
Net income $ 87,922 $ 49,551 77.4 %
* 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 2026 and 2025). 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 application), 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.
The following table summarizes digital-only and print subscription revenues for the first quarters of 2026 and 2025:
For the Quarters Ended
(In thousands) March 31, 2026 March 31, 2025 % Change
Digital-only subscription revenues(1)
$ 389,044 $ 335,026 16.1 %
Print subscription revenues(2)
127,827 129,231 (1.1) %
Total subscription revenues $ 516,871 $ 464,257 11.3 %
(1)Includes 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 subscriptions.
Subscription revenues increased $52.6 million, or 11.3%, in the first quarter of 2026 compared with the same prior-year period, due to an increase in digital-only subscription revenues of $54.0 million, or 16.1%, partially offset by a decrease in print subscription revenues of $1.4 million, or 1.1%. Average digital-only subscribers increased 1,460,000, or 13.2%, and digital-only ARPU (as defined below) increased $0.23, or 2.4%. The year-over-year increase in digital-only ARPU was driven primarily by subscribers transitioning from promotional to higher prices and price increases on certain tenured subscribers. Print subscription revenue decreased primarily due to a lower number of average home-delivery print subscribers, reflecting secular trends, partially offset by an increase in domestic home-delivery prices.
A subscriber is defined as a user who has subscribed (and for whom a valid method of payment has been provided) for the right to access one or more of the Company's products. 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.
ARPU, a metric we calculate to track the revenue generation of our digital-only subscriber base, represents the average revenue per digital-only subscriber over a 28-day billing cycle during the applicable period.
The following table sets forth, for the five most recent fiscal quarters, (i) subscribers as of the end of the quarter and (ii) ARPU relating to digital-only subscribers for the quarter:
(In thousands) March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025
Digital-only subscribers(1)
12,520 12,210 11,760 11,300 11,060
Print subscribers(2)
560 570 570 580 600
Total subscribers 13,080 12,780 12,330 11,880 11,660
Digital-only ARPU(3)
$ 9.77 $ 9.72 $ 9.79 $ 9.64 $ 9.54
(1)Includes group corporate and group education subscriptions, and, as of the second quarter of 2025, subscribers related to family subscriptions. The number of group subscribers is derived using the value of the relevant contract and a discounted subscription rate. Each family subscription is priced higher than a comparable individual subscription and is counted as one billed subscriber and one additional subscriber to reflect the additional entitlements in these subscriptions.
(2)Subscribers with a domestic home-delivery or mail print subscription to The New York Times, which includes access to our digital products.
(3)Beginning in the second quarter of 2025, ARPU metrics are calculated by dividing the digital-only subscription revenues in the quarter by the average number of digital-only subscribers (calculated as the weighted average of each month's daily average subscribers) divided by the number of days in the quarter multiplied by 28 to reflect a 28-day billing cycle. This change had a de minimis impact on ARPU.
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.
The Company ended the first quarter of 2026 with approximately 13.08 million subscribers to its print and digital products, including approximately 12.52 million digital-only subscribers. Compared with the end of the fourth quarter of 2025, there was a net increase of approximately 310,000 digital-only subscribers. Compared with the end of the first quarter of 2025, there was a net increase of approximately 1,460,000 digital-only subscribers.
Print domestic home-delivery subscribers totaled approximately 560,000 at the end of the first quarter of 2026, a net decrease of approximately 10,000 subscribers compared with the end of the fourth quarter of 2025 and a net decrease of approximately 40,000 subscribers compared with the end of the first quarter of 2025.
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. Digital advertising includes revenue from display (which includes website and mobile applications), audio, email and video advertisements that are sold either directly to marketers by our advertising sales teams or, for a smaller proportion of advertising revenue, through programmatic auctions run by third-party ad exchanges. Digital advertising revenue also includes revenues generated by creative services fees. Print advertising includes revenue from column-inch ads and classified advertising, as well as preprinted advertising, also known as freestanding inserts.
The following table summarizes digital and print advertising revenues for the first quarters of 2026 and 2025:
For the Quarters Ended
(In thousands) March 31, 2026 March 31, 2025 % Change
Digital advertising revenues $ 93,255 $ 70,866 31.6 %
Print advertising revenues 33,569 37,210 (9.8) %
Total advertising revenues $ 126,824 $ 108,076 17.3 %
Digital advertising revenues, which represented 73.5% of total advertising revenues in the first quarter of 2026, increased $22.4 million, or 31.6%, to $93.3 million compared with $70.9 million in the same prior-year period. The increase was primarily a result of higher display revenues of $12.4 million, driven by strong marketer demand and growth in advertising supply, higher podcast revenues of $4.6 million, higher creative service fees of $2.7 million as a result of the volume of custom advertising campaigns and higher video revenues of $2.3 million. Display impressions increased 15%, while the average rate increased 5%.
Print advertising revenues, which represented 26.5% of total advertising revenues in the first quarter of 2026, decreased $3.6 million, or 9.8%, to $33.6 million compared with $37.2 million in the same prior-year period. The decrease was primarily due to a 13.5% decrease in revenues from column-inch ads, partially offset by a 4.3% increase in print advertising rate.
Affiliate, Licensing and Other Revenues
Affiliate, licensing and other revenues primarily consist of revenues from licensing, Wirecutter affiliate referrals, commercial printing, the leasing of floors in our Company Headquarters, and retail commerce.
Affiliate, licensing and other revenues increased $5.0 million, or 7.8%, in the first quarter of 2026 compared with the same prior-year period. The increase was primarily a result of higher licensing revenues.
Digital affiliate, licensing and other revenues, which consist primarily of Wirecutter affiliate referral revenue and digital licensing revenues, totaled $45.2 million and $40.1 million in the first quarters of 2026 and 2025, respectively.
Operating Costs
Operating costs were as follows:
For the Quarters Ended
(In thousands) March 31, 2026 March 31, 2025 % Change
Cost of revenue (excluding depreciation and amortization) $ 362,936 $ 334,637 8.5 %
Sales and marketing 77,263 65,959 17.1 %
Product development 70,193 66,539 5.5 %
General and administrative 86,452 79,913 8.2 %
Depreciation and amortization 20,563 21,378 (3.8) %
Generative AI Litigation Costs 4,212 4,397 (4.2) %
Multiemployer pension plan liability adjustment - 4,453 *
Total operating costs $ 621,619 $ 577,276 7.7 %
* 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 2026 increased $28.3 million, or 8.5%, compared with the same prior-year period. The increase was largely due to higher journalism costs of $24.6 million, higher digital content delivery costs of $2.1 million and higher subscriber servicing costs of $1.9 million. Advertising servicing 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, as well as higher outside services costs. The increase in digital content delivery costs was largely due to higher cloud-related costs. The increase in subscriber servicing costs was largely due to higher credit card processing fees and commissions due to an increase in subscriptions.
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 2026 increased $11.3 million, or 17.1%, compared with the same prior-year period. The increase was due to higher marketing costs of $6.4 million and higher sales costs of $4.9 million. The increase in marketing costs was primarily due to higher marketing and promotion expenses. The increase in sales costs was primarily due to higher compensation and benefits largely driven by growth in the number of employees and higher incentive compensation.
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 2026 increased $3.7 million, or 5.5%, compared with the same prior-year period. The increase in the first quarter of 2026 was largely due to higher compensation and benefits expenses of $1.7 million driven by higher benefits costs, as well as higher outside services costs of $1.1 million.
General and Administrative Costs
General and administrative costs include general management, corporate enterprise technology, building operations, unallocated overhead, severance and multiemployer pension plan withdrawal costs.
General and administrative costs in the first quarter of 2026 increased $6.5 million, or 8.2%, compared with the same prior-year period. The increase was primarily due to higher compensation and benefits of $4.0 million driven by incentive compensation, higher outside services expenses and other miscellaneous expenses of $3.5 million, partially offset by lower severance expense of $1.2 million.
Depreciation and Amortization
Depreciation and amortization costs in the first quarter of 2026 decreased $0.8 million, or 3.8%, compared with the same prior-year period.
Generative AI Litigation Costs
In the first quarters of 2026 and 2025, the Company recorded $4.2 million and $4.4 million, respectively, of pre-tax litigation-related costs in connection with certain lawsuits alleging unlawful and unauthorized copying and use of the Company's journalism and other content in connection with the 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 discrete, complex and unusual proceedings 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.
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.
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 item in 2026 consisted of:
•$4.2 million of Generative AI Litigation Costs ($3.1 million, or $0.02 per share, after tax).
The special items in 2025 consisted of:
•$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).
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 and special items. 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 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 2024 because, unlike other litigation expenses, which are not excluded, the Generative AI Litigation Costs arise from discrete, complex and unusual proceedings 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 including 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)
For the Quarters Ended
March 31, 2026 March 31, 2025 % Change
Diluted earnings per share $ 0.54 $ 0.30 80.0 %
Add:
Amortization of acquired intangible assets 0.04 0.04 -
Severance 0.01 0.02 (50.0) %
Non-operating retirement costs:
Multiemployer pension plan withdrawal costs 0.01 0.01 -
Other components of net periodic benefit costs 0.02 0.03 (33.3) %
Special items:
Generative AI Litigation Costs 0.02 0.03 (33.3) %
Multiemployer pension plan liability adjustment - 0.03 *
Income tax expense of adjustments (0.03) (0.04) (25.0) %
Adjusted diluted earnings per share(1)
$ 0.61 $ 0.41 48.8 %
(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
For the Quarters Ended
(In thousands) March 31, 2026 March 31, 2025 % Change
Operating profit $ 90,617 $ 58,634 54.5 %
Add:
Depreciation and amortization 20,563 21,378 (3.8) %
Severance 1,379 2,607 (47.1) %
Multiemployer pension plan withdrawal costs 1,167 1,229 (5.0) %
Generative AI Litigation Costs 4,212 4,397 (4.2) %
Multiemployer pension plan liability adjustment - 4,453 *
Adjusted operating profit $ 117,938 $ 92,698 27.2 %
Divided by:
Revenue $ 712,236 $ 635,910 12.0 %
Operating profit margin 12.7 % 9.2 % 350 bps
Adjusted operating profit margin 16.6 % 14.6 % 200 bps
* 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)
For the Quarters Ended
(In thousands) March 31, 2026 March 31, 2025 % Change
Total operating costs $ 621,619 $ 577,276 7.7 %
Less:
Depreciation and amortization 20,563 21,378 (3.8) %
Severance 1,379 2,607 (47.1) %
Multiemployer pension plan withdrawal costs 1,167 1,229 (5.0) %
Generative AI Litigation Costs 4,212 4,397 (4.2) %
Multiemployer pension plan liability adjustment - 4,453 *
Adjusted operating costs $ 594,298 $ 543,212 9.4 %
* 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, 2026, we had cash, cash equivalents and short- and long-term marketable securities of $1.1 billion.
We have paid quarterly dividends on the Class A and Class B Common Stock each quarter since late 2013. In February 2026, the Board of Directors approved a quarterly dividend of $0.23 per share, an increase of $0.05 per share from the previous quarter, which was paid in April 2026. 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 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. During the quarter ended March 31, 2026, repurchases totaled approximately $56.3 million (excluding commissions and excise taxes), which fully utilized the 2023 authorization, and we repurchased an additional $2.7 million (excluding commissions and excise taxes) between April 1, 2026, and May 1, 2026, leaving approximately $291.2 million remaining under the 2025 authorization.
On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was enacted into law. The OBBBA includes provisions retroactive to January 1, 2025, and, among other provisions, eliminates the requirement to capitalize and amortize domestic research and experimentation expenditures over five years. The OBBBA also provides an election for taxpayers to accelerate the remaining amortization of domestic research and experimentation expenditures that were previously capitalized for tax purposes over a two-year period. These changes resulted in lower cash tax payments of $65 million for the fiscal year ended December 31, 2025, and are expected to result in lower cash tax payments of approximately $60 million in total for the fiscal year ending December 31, 2026. The Company does not expect the majority of these cash flow benefits to recur beyond fiscal 2026.
Capital Resources
Sources and Uses of Cash
Cash flows provided by/(used in) by category were as follows:
For the Quarters Ended
For the Last Twelve Months Ended(1)
(In thousands) March 31, 2026 March 31, 2025 % Change March 31, 2026 March 31, 2025 % Change
Operating activities $ 92,236 $ 99,088 (6.9) % $ 577,637 $ 456,521 26.5 %
Investing activities $ (22,678) $ (8,340) * $ (235,654) $ (248,035) (5.0) %
Financing activities $ (139,156) $ (107,269) 29.7 % $ (338,026) $ (231,300) 46.1 %
(1)Last twelve months represents performance covering the preceding 12 months relative to the last day of the quarter.
* 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 decreased in the first quarter of 2026 compared with the same prior-year period primarily due to nonrecurring net proceeds from the sale of land in 2025, as well as higher cash payments for incentive compensation, partially offset by higher net income in the current year.
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 2026 was primarily related to $12.5 million in net purchases of marketable securities and capital expenditures of $10.7 million.
Financing Activities
Cash from financing activities generally includes borrowings under third-party financing arrangements, the issuance of long-term debt and funds from stock option exercises. Cash used in financing activities generally includes the repayment of amounts outstanding under third-party financing arrangements, the payment of dividends, the payment of long-term debt and capital lease obligations, and stock-based compensation tax withholding.
Net cash used in financing activities in the first quarter of 2026 was primarily related to share repurchases of $56.3 million, share-based compensation tax withholding payments of $52.4 million and dividend payments of $30.4 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 for the first three months of 2026 and 2025:
For the Three Months Ended
(In thousands) March 31, 2026 March 31, 2025
Net cash provided by operating activities(1)
$ 92,236 $ 99,088
Less: Capital expenditures (10,723) (9,237)
Free cash flow $ 81,513 $ 89,851
(1)Net cash provided by operating activities in the first three months 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 2026 was $81.5 million compared with $89.9 million in 2025. Free cash flow decreased primarily due to lower cash provided by operating activities, as discussed above.
The following table presents a reconciliation of net cash provided by operating activities to free cash flow for the last twelve months ended March 31, 2026 and 2025:
For the Last Twelve Months Ended(1)
(In thousands) March 31, 2026 March 31, 2025
Net cash provided by operating activities(2)(3)
$ 577,637 $ 456,521
Less: Capital expenditures (35,470) (31,986)
Free cash flow $ 542,167 $ 424,535
(1)Last twelve months represents performance covering the preceding 12 months relative to the last day of the quarter.
(2)Net cash provided by operating activities in the last twelve months ended March 31, 2026, was impacted by lower cash tax payments as a result of the OBBBA, as discussed above.
(3)Net cash provided by operating activities in the last twelve months ended March 31, 2025, included net proceeds of approximately $33 million in connection with the sale of excess land in 2025, as discussed above.
Net cash provided by operating activities increased in the last twelve months ended March 31, 2026, to $577.6 million compared with $456.5 million in the same prior-year period primarily due to higher net income and lower tax payments as a result of the OBBBA, as discussed above, partially offset by nonrecurring net proceeds from the sale of land in 2025. Free cash flow for the last twelve months ended March 31, 2026, was $542.2 million compared with $424.5 million in the last twelve months ended March 31, 2025. Free cash flow increased primarily due to higher cash provided by operating activities, as discussed above.
Restricted Cash
We were required to maintain $13.7 million of restricted cash as of March 31, 2026, and $15.0 million as of December 31, 2025, substantially all of which is set aside to collateralize workers' compensation obligations.
Capital Expenditures
Capital expenditures totaled approximately $11 million and $8 million in the first quarters of 2026 and 2025, respectively. The cash payments related to capital expenditures totaled approximately $11 million and $9 million in the first quarters of 2026 and 2025, respectively.
Revolving Credit Facility
On June 13, 2025, the Company entered into an amendment and restatement of its previous credit facility that, among other changes, increased the committed amount to $400.0 million and extended the maturity date to June 13, 2030 (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 both March 31, 2026, and December 31, 2025, there were no borrowings and approximately $0.4 million in outstanding letters of credit, with the remaining committed amount available. As of March 31, 2026, 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, 2025. Other than as described in Note 2 of the Notes to the Condensed Consolidated Financial Statements, as of March 31, 2026, our critical accounting policies have not changed from December 31, 2025.
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 audience and subscriber base; our dependence on third-party platforms for attracting, retaining and monetizing a significant portion of our users and for our ability to maintain and grow our licensing revenues; 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; the risks and challenges associated with investments we make in new and existing products and services; 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 or conditions; 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 expectations relating to governance, environmental and social matters, and any related reporting obligations; risks associated with acquisitions, divestitures, investments and other strategic transactions; 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 evolving 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 highly talented workforce; the impact of labor negotiations and collective bargaining agreements; potential limits on our operating flexibility due to the fixed nature of our employee-related and printing and distribution costs; the effects of the size and volatility of our pension plan obligations; liabilities that may result from our participation in multiemployer pension plans; 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, 2025, 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.
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