Good financial news about newspapers has been in short supply, but the New York Times provided some today, reporting 10.1 percent year-to-year revenue growth for the fourth quarter of 2017 and 7.7 percent for the full year.
The driver again was digital-only subscriptions, up nearly 100,000 for the quarter for news and another 57,000 for its crossword and cooking verticals. Executives said that new subscribers — the "Trump bump" cohort from 2016 elections — are actually renewing at higher rates than are typical and that the progression from discounted trial offers to full pay is also holding up well.
The Times now has more than 2.6 million digital-only subscribers, 3.6 million including print and the verticals.
As a result, digital subscription revenue increased $100 million for the full year. The company had announced a goal of growing digital revenue by $800 million by 2020, and is already at $600 million after just two years.
Advertising results were not nearly as positive, but not terrible either. Adjusting out an extra week in the quarter, print advertising was down 12.3 percent compared to the same period in 2016. That was an improvement on the 20 percent year-to-year decrease the company reported for the third quarter.
The company had warned that digital advertising would be flat or down in the quarter, but thanks to a strong December it was actually up 1.3 percent, excluding the extra week. Executives said that they expect softer digital ad results in the first quarter of 2018.
The profit picture was muddied by large pension and tax adjustment special items, causing a small loss. But continuing operations remain comfortably profitable and the company has more than $700 million in cash on hand. That means it could afford strategic acquisitions like its purchase 18 months ago of the product recommendation site, Wirecutter — or growth initiatives for its core news product.
CEO Mark Thompson said that the results are vindication in business terms of the company's investments in news quality, citing exhaustive Trump coverage and the first report of repeated sexual abuse by Harvey Weinstein as examples.
Thompson also expressed cautious optimism that changes at Google are supporting subscription growth and that Facebook will favor quality destinations like the New York Times as it continues tinkering with its news feed.
In the medium term, he said, the giant platform companies may even be willing to pay for displaying certain kinds of publisher-produced stories in video and other formats.
Investors reacted very positively to the report, with New York Times shares up 14 percent in noontime trading.