The Times Turns Up the Volume: Video, the World Cup, and a Market That's Not Yet Sold
Strong Q2 results, a big bet on video, and a stubborn share-price drawdown — but the strategy is working, even if the tape isn't cheering yet.
NYT · Earnings Call · 2026-08-05
A Quarter Powered by the World Cup and a Video Bet
The New York Times reported a genuinely strong second quarter — consolidated revenues up 11%, digital advertising up 21%, and 280,000 net digital subscriber adds — but the market's reaction has been tepid, with the stock down ~17% over the last 90 days even after the print. The tension between solid fundamentals and a falling share price is the story here. Meredith Kopit Levien framed it as a quarter of progress across all priorities, but the World Cup was the clear accelerant for The Athletic and the broader portfolio. "Over 70 soccer experts from a 550-person sports newsroom covered the most interesting athletes, moments and stories from the tournament across 16 cities," she noted, adding that it drove the Athletic's biggest audiences ever. That event, in turn, contributed to digital ad growth that "again exceeded our expectations," as Will Bardeen put it. Yet the most consequential development may be the video journalism push. The company is now producing thousands of original videos per quarter, and this week launched a Shows tab in its flagship app. The investment is real — "a big long-term opportunity" in Meredith's words — and it's showing up in the cost lines, with adjusted operating costs up 10% partly due to video-related compensation and benefits. The bet is that video will deepen engagement with existing audiences and pull in new ones, eventually monetizing across subscriptions and advertising.The company is also experimenting with a local news product and new listening/commenting features — all part of a strategy to make the Times "more essential to more people." But the cost growth drew pointed analyst questions on the call, with Jason Bazinet asking whether the elevated sales and marketing is temporary or structural.We're now producing thousands of new videos each quarter to reach the enormous audience for video in all the places people watch, including our own destinations.
Digital Subscriptions: Still Strong, But the Guide Ticks Down
Digital-only subscription revenue grew 16.4% to $408 million in Q2, with ARPU up 3.1% — a healthy result driven by price increases and strong step-up performance. Total subscribers reached 13.4 million, on track for the 15 million target. Yet the Q3 guide for digital subscription revenue growth of 12% to 15% sits a notch below recent quarters, and Will Bardeen attributed part of that to the timing of last year's Mini paywall launch and mix effects. "A cohort impact of the paywalling of the Mini in last year's Q3... plays a bit of a role in the sub mix in the quarter." “We're focused on sustaining healthy underlying drivers of digital subscription revenue... meaning continuing to add significant value to our products.” — William Bardeen · 2026-08-05 The ARPU growth of 3.1% was a bright spot, supported by the digital bundle price increase to $30 and continued pricing step-ups. But the guide suggests that the company is being appropriately cautious about promotion timing and mix, even as it remains confident in the longer-term trajectory.The advertising story is even stronger in a relative sense: digital ads grew 20.7% to $114 million, with the company citing strong marketer demand and high-performing ad products. Meredith emphasized that the ad business now resembles the consumer business — "We are in big spaces with a lot of appeal to marketers, and we have ad products that really work." The growth came across the portfolio, including games, sports, and consumer goods, and the company is building a middle-market sales team to capture more wallet share.
A Market That's Not Yet Convinced
Despite the strong quarter, NYT shares have fallen about 17% over the past 90 days, trading 21% below their May peak. The market's skepticism likely reflects two concerns: the slightly softer Q3 subscription guide, and the rising cost base that is partly tied to the video investment. In prior quarters, the company has repeatedly defended its cost discipline — "we remain very focused on sustaining not just the healthy revenue growth, but also AOP growth and margin expansion" (component 3744283004944538271, from the Feb 2026 call). This quarter, the story is more nuanced: costs grew 10% in Q2, ahead of guidance, primarily due to variable compensation tied to outperformance, but also because of deliberate investments. “The reason for the sort of slightly higher cost growth in the quarter versus our guidance was primarily due to incremental variable compensation tied to financial outperformance.” — William Bardeen · 2026-08-05 That is a good-news problem — the company pays out more when it beats — but investors may be wondering whether the video investment will deliver the returns the company projects. Prior quarters have noted similar investment momentum: "We've turned most of our podcasts now into full-length shows" (component 3054848047571837211, from Nov 2025), and the company has been scaling reporter video and visual investigations steadily. Fundamentally, the company remains on a strong financial footing. Operating margin expanded to 13.8% in the latest 10-Q period (period_end=2026-05-01), and free cash flow generation has been robust. The company returned $92M in buybacks and $68M in dividends over the first half, consistent with its capital return pledge.Operating margin, now 13.8%, has been on a clear upward path — a sign that the multi-revenue stream model is working even as the company invests in video. The real question for investors is whether the video bet can unlock a new growth curve. So far, the market seems to be pricing in cautious optimism — the stock is down significantly, but not collapsing, and the company continues to beat its own expectations. The World Cup gave a taste of what sports and video can do, but the longer-term opportunity lies in making the Times a "preferred brand for watching news" as well as reading it.
In the end, this was a quarter where the company executed well against its stated strategy, even as the market waits for more evidence that the video investment will pay off. The strong ad growth, healthy subscriber adds, and disciplined cost management are all encouraging, but the stock's drawdown suggests that the Street wants proof that the video push will translate into sustained margin expansion. For now, the Times is playing the long game.