What Happened?
Shares of newspaper and digital media company The New York Times (NYSE: NYT)
fell 15.3% in the morning session after the company's weak second-quarter earnings report, as a significant drop in cash flow and a decelerating growth outlook overshadowed beats on revenue and profit expectations.
While revenue grew 11.2% year-on-year to $762.5 million and adjusted EPS came in at $0.69, both topping analyst estimates, investors focused on underlying weaknesses. The company's free cash flow margin, a measure of its cash profitability, plunged to 1.3% from 15.1% in the same quarter last year. Furthermore, looking ahead, analysts expect revenue growth to slow to 7.3% over the next 12 months. This combination suggested that despite the headline beats, the company's financial health and growth trajectory were moderating, causing the market to react negatively.
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What Is The Market Telling Us
The New York Times’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. Moves this big are rare for The New York Times and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 15.2% on the news that the company reported strong second-quarter financial results that surpassed Wall Street expectations and provided an optimistic forecast for future growth. The media company posted revenue of $685.9 million, a nearly 10% jump from the previous year.
Adjusted earnings reached $0.58 per share, which beat analysts' projections. This performance stemmed from solid growth in its digital business, where it added approximately 230,000 new digital-only subscribers. Looking ahead, the publisher also forecasted third-quarter subscription revenue growth above market estimates. Management credited this positive outlook to the strength of its bundled offerings, which combined its core news with popular products like The Athletic and Wordle.
The New York Times is down 8.6% since the beginning of the year, and at $63.80 per share, it is trading 25.7% below its 52-week high of $85.86 from April 2026. Despite the year-to-date decline, investors who bought $1,000 worth of The New York Times’s shares 5 years ago would now be looking at an investment worth $1,360.
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