NYT Q4 Deep Dive: Video Investments and Cost Guidance Prompt Market Caution

Newspaper and digital media company The New York Times (NYSE:NYT) reported revenue ahead of Wall Street’s expectations in Q4 CY2025, with sales up 10.4% year on year to $802.3 million. Its non-GAAP profit of $0.89 per share was in line with analysts’ consensus estimates.

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StockStory’s Take

The New York Times’ fourth quarter was shaped by strong digital subscription and advertising momentum, but the market responded negatively, reflecting investor concerns about margins and cost trends. Management attributed revenue growth to robust subscriber engagement and a surge in digital advertising, particularly as new products and ad supply drove marketer demand. CEO Meredith Kopit Levien highlighted that “every part of our portfolio contributed,” with products like games, The Athletic, and Cooking helping expand the company’s reach. However, higher operating costs—mainly linked to incentive compensation from financial outperformance and stepped-up video production—drew scrutiny. CFO Will Bardeen acknowledged that expenses exceeded prior guidance, emphasizing the company’s ongoing investments in journalism and digital product experiences.

Looking ahead, The New York Times’ forward guidance is anchored in expanding video journalism, scaling digital products, and disciplined capital allocation. Management expects continued subscriber and revenue growth, supported by ongoing investment in new content formats and pricing initiatives, such as the digital bundle price increase. While management remains confident in the trajectory of average revenue per user (ARPU) and digital advertising, Bardeen cautioned that cost growth will remain elevated in the near term as the company ramps up video investments and marketing. Levien noted, “We see a long-term opportunity to establish The Times as a preferred brand for watching news,” but acknowledged the need to balance investment with cost discipline.

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to broad-based digital engagement, new video initiatives, and strategic pricing actions, but higher costs—especially for incentive compensation and video—tempered margin expansion.

• Digital advertising acceleration: Management cited a 25% increase in digital ad revenue, driven by new ad supply, enhanced targeting tools, and higher marketer demand across multiple products. Levien explained that the team is “now at scale in multiple spaces that are very appealing to [marketers].”
• Subscriber growth from diverse products: Strong net new digital subscriptions were supported by growth in non-news offerings such as games, The Athletic, Cooking, and Wirecutter. Levien noted that “all of our products played some role in the quarter,” with each contributing to subscriber funnel expansion and engagement.
• Video journalism ramp-up: The company significantly increased production of reporter videos, visual investigations, and video versions of hit podcasts, launching a new watch tab in the core app. Levien described video as a major strategic investment, aiming to make The Times a preferred brand for digital news consumption.
• Strategic pricing actions: Management implemented price increases, including raising the digital bundle price from $25 to $30 for tenured subscribers, and reported encouraging retention and engagement at higher price points. Bardeen emphasized that pricing step-ups are “additive out of the gate to revenue.”
• Cost discipline and incentive compensation impact: While maintaining an emphasis on cost control, Bardeen acknowledged that incentive compensation related to financial outperformance and increased investment in video led to higher-than-anticipated costs. He stressed that the company would continue to balance investment and efficiency to drive operating margin expansion over time.

Drivers of Future Performance

Management’s outlook for the coming year focuses on video expansion, diversified digital revenues, and cautious cost management amid ongoing investment in content and technology.

• Video and content investment: The New York Times plans to further scale video journalism and new content formats, believing this will drive deeper engagement and attract new audiences. Levien called video “a really big long-term opportunity,” and Bardeen emphasized that increased production costs will impact near-term expense growth.
• Pricing and ARPU trajectory: Management expects digital subscription revenue growth to benefit from pricing actions, especially the digital bundle price increase. Bardeen noted that while ARPU may fluctuate quarter to quarter due to mix and timing, strong engagement and product value should sustain a positive ARPU trajectory.
• Advertising and multi-revenue model: The company anticipates continued digital advertising growth, underpinned by improved ad targeting, additional supply from new products, and broader marketer appeal. Management highlighted the resilience of its multi-revenue stream approach, with advertising and subscription models working together to expand the overall customer funnel.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will be closely monitoring (1) the adoption and engagement of new video formats across The Times’ core app and external platforms, (2) the impact of pricing actions on subscriber retention and ARPU, and (3) the trajectory of operating costs as video and content investments continue. Progress in scaling non-news products and any developments in the company’s approach to AI integration will also be key signposts for future performance.

The New York Times currently trades at $66.75, down from $72.21 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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