By Eva Mathews
(Reuters) -The New York Times Co reported better-than-expected quarterly earnings on Wednesday, as a surge in marketing spend by companies emerging from the pandemic bolstered its digital ad business.
The publisher's digital ad revenue jumped 40.2% in the third quarter, putting it on a path to growth following a hammering at the peak of the pandemic when companies slashed their ad budgets to save up on cash.
The 170-year-old company started its digital transformation more than a decade ago, focusing on a subscription-first business model that helped it weather steep declines in advertising and print readership.
In the process, it beefed up the business by pumping its digital products with a rich lineup of news, crosswords, podcasts - including "The Daily" - and cooking recipes, while making them stand out with multimedia and interactive elements using pictures, graphics and videos.
The Times said it added 455,000 digital-only subscribers during the quarter, its highest this year as the news cycle gathered pace.
"While COVID remained the dominant story as it has for the last 20 months, a wide range of topics also captured the public's attention, including the Afghanistan withdrawal and the tragic events in Haiti, the resignation of New York's Governor and our ongoing climate reporting," Chief Executive Officer Meredith (NYSE:MDP) Kopit Levien said.
The Times allows readers to track the coverage of some important new items outside of its paywall, boosting traffic to its apps and websites, and leading to paid user conversions. It also launched paid subscriptions to its tech products review website, Wirecutter, in the third quarter.
The company posted an adjusted profit of 23 cents per share in the third quarter on revenue of $509.1 million. Analysts had expected a profit of 20 cents per share on revenue of $499.1 million, according to Refinitiv data.
Shares of the company were up 4% in trading before the bell.