Hello, welcome to The New York Times Company's first quarter 2021 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch-tone phone. To withdraw your question, please press star, then two. Please note, today's event is being recorded. I would now like to turn the conference over to Harlan Toplitzky, Vice President of Investor Relations. Mr. Toplitzky, please go ahead. Thank you, and welcome to The New York Times Company's first quarter 2021 earnings conference call. On the call today, we have Meredith Kopit Levien, President and Chief Executive Officer, and Roland Caputo, Executive Vice President and Chief Financial Officer. Before we begin, I would like to remind you that management will make forward-looking statements during the course of this call. These statements are based on our current expectations and assumptions, which may change over time. Our actual results could differ materially due to a number of risks and uncertainties that are described in the company's 2020 10-K and subsequent SEC filings. In addition, our presentation will include non-GAAP financial measures, and we have provided reconciliation to the most comparable GAAP measures in our earnings press release, which is available on our website at investors.nytco.com. With that, I will turn the call over to Meredith Kopit Levien. Thanks, Harlan, and good morning. The Times finished the first quarter with more than 7.8 million paid subscriptions across our digital and print products, more than 100 million registered users, and an average weekly audience of 76 million readers. That foundation, plus our unmatched journalistic breadth in a market of at least 100 million people who are expected to pay for English language journalism grounds our conviction that we can substantially and profitably scale paid subscriptions over time. Our strong financial results in the first quarter demonstrate the success of our strategy and the promise of our large and growing digital subscription business. We recorded adjusted operating profit of $68 million, an improvement of more than 50% compared to the first quarter of 2020. Digital subscription revenue increased 38% in the quarter, and we added 301,000 net new digital subscriptions across news, Cooking, Games, and audio. Our first quarter results also reflect a real improvement in digital advertising. That improvement was driven by a brisk market and our work last year on refining the competitiveness of our offering and the margin profile of our business. Digital advertising growth over Q1 in both 2020 and 2019 demonstrates the advantage of our subscription-first strategy to our advertising business. In our last earnings call, I noted that fluctuations in the news cycle can lead to considerable variability in net digital subscription additions from quarter- to- quarter. In February and March, our audiences declined from their historic highs last year, and we saw fewer net subscription additions in the latter part of the quarter. We expect moderated growth to continue through the second quarter, traditionally our softest of the year. With lower forecasted second quarter performance, we now expect annual total net subscription additions to be in the range of our 2019 performance, which prior to 2020, was our best year for net additions. There is no doubt that the news cycles of the last five years, capped by last year's tumultuous presidential election, racial reckoning, and the COVID-19 pandemic, created unprecedented demand for Times journalism, and therefore accelerated subscription growth. At the same time, with each passing quarter, we've improved many aspects of our underlying model. While we don't know which storylines will drive the next big news cycle, we do know that the size of our newsroom, its range of expertise, and our continued investment in meeting more needs position us to capture that demand whatever its source. In the last few months, the breadth and reach of our journalism was on full display. While a group of data journalists in one part of our newsroom continued to update the world's most comprehensive COVID case tracker, our parenting team captured the ethos of what it feels like to be a mother right now with their breakout multimedia feature, The Primal Scream. Our metro reporters led the coverage of the multiple scandals rocking Albany, while our longtime beat reporter covering Premier League football broke the news of the Super League that wasn't. Our feature-length documentary, Framing Britney Spears, which aired on FX and Hulu, had a huge cultural impact. The world is getting no less complex, and the need for understanding will only grow. Outstanding journalism that helps people understand the world is central to our model, and it will continue to be the primary draw for the majority of our audiences and paying customers. It won't be the only draw. 10 million people a week now come to The Times for needs beyond news, seeking recipes, puzzles, and shopping advice. Taken individually, NYT Games and NYT Cooking are among the largest journalism-backed subscription services in America, and our plans for expanding our subscription portfolio through Wirecutter and Audm reflect our deeply held belief that The Times can play an even bigger role in the lives of tens of millions of people. Combined with the differential value and demand advantages of our core news product, we believe these offerings should enable The Times to become a larger and more profitable business as we scale. I'll turn now to our underlying subscription drivers in the quarter and some specifics about our work ahead. While total audience, registered readers on site, and subscriber engagement are somewhat lower this year than last, these metrics are all higher than 2019. We now have a significant base of people who read The Times every day, a base that is substantially larger than before the pandemic. This is a result of our continued strength in news, the shift we made almost two years ago to a registration-based model, and the fact that we acquired so many new registered users in 2020. Many of those registered users are now interacting with us in new ways, which point to our opportunities for growth. For example, we saw a meaningful uptick in the range of storylines that drove user engagement in the first quarter, a positive development given the strong correlation we've described in the past between experiencing the breadth of our reports and subscribing. Our live coverage, with which we've been experimenting aggressively since late 2019, now plays a significant role ensuring strength at the top of our funnel as well as repeat engagement. 10 million readers came to The Times for coverage of Derek Chauvin's trial, with our live experience driving much of that readership. More than a third of our registered users and subscribers engage with this coverage on a weekly basis, with that number expected to increase thanks to a steady rollout of new innovations. The Times has always had a large number of regular newsletter readers, and our newsletter audience has grown significantly since we began asking users to register. 15 million people read a Times newsletter every week, including five million who start their day with our flagship newsletter, "The Morning." More than 85% of our newsletter readers are not yet paying Times subscribers, so newsletters represent a promising opportunity in our subscription funnel, both to encourage registered users to subscribe and as a source of subscription value. At nearly 1.7 million subscriptions and counting, Cooking and Games are succeeding as products in their own right with a lot of runway ahead. What's particularly encouraging is their ability to enhance The New York Times's value in users daily lives. In the last few months, we've begun to experiment with how we sell our multi-product bundle in new ways. Early tests are promising, and we plan to introduce a more substantial overhaul to how we price and merchandise over time. We expect the bundle to benefit conversion, retention, and long-term monetization. I'll turn now to advertising. In the first quarter, we recorded $59 million of digital advertising revenue, a 16% increase over the first quarter of 2020, and encouragingly, a 7% increase over the same period in 2019. This is the last quarter that we were comparing against revenues from the marketing services business we've now exited, and also from the removal of open market programmatic advertising in our apps. The actual improvement in digital advertising versus last year is even stronger. Our growth in registered users has propelled the rapid expansion of our first-party data products, which are proving effective for marketers while affording readers privacy from third-party trackers. Demand for these products is strong, driving 20% of our digital advertising revenue in the first quarter, compared with less than 10% in the same period last year. As of the first quarter, we have fully eliminated our reliance on third-party data targeting in direct sold advertising. Audio advertising sales also continue to be strong, as total audio listeners grew 30% in the quarter versus last year, driven by the addition of Serial and This American Life to our portfolio. Our productions beyond The Daily, including Sway with Kara Swisher, The Argument with Jane Coaston, and The Ezra Klein Show, are also performing well with both listeners and advertisers. Print advertising was still relatively weak in the quarter. While we expect some categories to recover in the latter half of the year, we do believe that some of the pandemic losses should be regarded as structural. Based on all of this, plus low comparables in the second quarter and the fact that our digital advertising business is now larger than print, we expect a material acceleration in our ad business in the second quarter. Before I turn things over to Roland, I want to mention our continued focus on our people and our culture. I've described this next decade in the Times business as being about scaling our strategy of journalism worth paying for. To do that, we need a culture that attracts, develops, and retains top talent, not just in our newsroom, but across all of our disciplines. Our culture has enabled the world's most admired and influential news report, and it's also helped create an innovative and thriving digital business. Success from here will require that we nurture the best aspects of that culture and also evolve it. In both cases, we are making steady progress. In the last quarter, we launched a multi-year plan to build a more diverse, equitable, and inclusive The New York Times that reflects the global audience we serve and supports our mission and business ambitions. We also continued to advance our underlying tech strategy, which reflects the increasing importance of engineering excellence to our growth. Finally, we've begun to define the future of our workplace to offer more flexibility while preserving the kind of physical togetherness that enables much of our team-oriented creative work. I'm confident that all of this will propel our strategy and our growth for years to come. With that, I'll turn it over to Roland. Thank you, Meredith, and good morning, everyone. Adjusted diluted earnings per share was $0.26 in the quarter, $0.09 higher than the prior year. We reported adjusted operating profit of approximately $68 million, higher than the same period in 2020 by $24 million. We added 167,000 net new subscriptions to our core digital news product and 134,000 net new subscriptions to our stand-alone digital products for a total of 301,000 net new digital-only subscriptions. As of the end of the quarter, we had nearly 900,000 Games subscriptions and slightly more than 800,000 Cooking subscriptions. The international share of total new subscriptions remained at 18% as of the end of the quarter. Total subscription revenues increased more than 15% in the quarter, with digital-only subscription revenue growing 38% to nearly $180 million. The continued acceleration in the rate of year-over-year digital subscription revenue growth from 18% in the first quarter of 2020 to 37% by the fourth quarter and now 38% in the first quarter of 2021 was a result of three factors. First, the large number of new subscriptions we have added in the past year. Second, ongoing strength in retention of the dollar per week promotional subscriptions who have graduated to higher prices. Finally, the positive impact from our digital subscription price increase, which began late in the first quarter of 2020. As you'll note in the guidance we gave, we expect that rate of growth to slow, beginning with the second quarter as we begin to comp against the strong 2020 results. Digital news subscription ARPU for the quarter increased approximately one percentage point compared to the prior quarter and declined approximately six percentage points compared to the prior year, which represents a significant improvement in both trends. This improvement was primarily a result of subscriptions graduating from their introductory price to either full price or an intermediate step-up in the quarter, as well as the continued benefit from price increases on our more tenured full price subscriptions. ARPU related solely to domestic news subscriptions increased 1% versus the prior quarter and declined approximately 4% versus the prior year. We expect to continue demonstrating pricing power throughout 2021 as the impact from subscriptions graduating from discounted promotions and the price increase on tenured digital subscriptions provides a tailwind to digital news ARPU throughout the year. On the print subscription side, revenues were down nearly 4%, largely due to a decline in single copy and international bulk sales. Revenue from domestic home delivery print subscriptions grew a half percent in the quarter as home delivery price increases more than offset year-over-year subscription declines. Total daily circulation declined 12% in the quarter compared with prior year, while Sunday circulation declined 2%. As a reminder, the first quarter of 2020 was only partially impacted by the pandemic-related business closures, increased levels of remote working, and reductions in travel that negatively affect newsstand sales. Total advertising revenues declined approximately 8.5% in the quarter as print continued to be severely impacted by reduced spending by advertisers during the pandemic despite digital advertising's return to growth. Digital advertising grew approximately 16% in the quarter compared with the prior year, primarily as a result of higher direct sold advertising, including traditional display and podcasts, as compared to the weak digital advertising revenue seen in March of last year at the outset of the pandemic. It's worth noting that this is the last quarter that we are comparing against revenues from the marketing services business we've now exited and also the removal of open market programmatic advertising in our apps. Excluding the nearly $3 million in revenues we earned from those areas in the prior year period, our digital advertising growth rate versus last year would have been 23%. Our first quarter digital advertising revenue is better than the guidance we gave in early February. This was largely the result of better-than-expected revenue from technology and media advertisers in targeted ad products and audio. Meanwhile, print advertising declined approximately 32%, with entertainment, travel, and luxury categories hit hardest. Other revenues declined 10% compared with the prior year to $47 million, primarily as a result of fewer television episodes, as well as lower revenues from live events, commercial printing, and building rental revenue. These declines were partially offset by an increase in Wirecutter affiliate referral revenue. Adjusted operating costs were higher in the quarter by 1.4%. Cost of revenue increased approximately 3% as a result of growth in the number of newsroom, Games, Cooking, and audio employees, cost in connection with audio content, a higher incentive compensation accrual versus zero in Q1 2020, and higher subscriber servicing and digital content delivery costs. This was partially offset by lower print production and distribution expenses, lower content costs related to fewer television episodes, and lower travel and entertainment costs. Sales and marketing costs decreased approximately 18%, driven by lower media expenses and advertising sales costs. Product development costs increased by approximately 26%, largely due to growth in the number of engineers employed and a higher incentive compensation accrual than we had recorded in the first quarter of 2020. It's also worth reiterating that we plan to continue adding to headcount in this area over the foreseeable future, as we expect to continue leaning into our investments in product development, as well as in our core news and standalone journalism to drive growth. General and administrative costs increased by 7%, largely due to a higher incentive compensation accrual and increased headcount. Our effective tax rate for the first quarter was 18.7%, which was lower than the statutory tax rate, largely due to a benefit from stock price appreciation on stock-based awards that settled in the quarter. As we've said previously, we expect our tax rate to be approximately 27% on every dollar of marginal income we record, with significant variability around the quarterly effective rate. Moving to the balance sheet, our cash and marketable securities balance ended the quarter at $891 million, an increase of $9 million compared with the fourth quarter of 2020. The company remains debt-free with a $250 million revolving line of credit available. Let me conclude with our outlook for the second quarter of 2021. Total subscription revenues are expected to increase approximately 15% compared with the second quarter of 2020, with digital-only subscription revenue expected to increase approximately 30%. Overall advertising revenues are expected to increase approximately 55%-60% compared with the second quarter of 2020, and digital advertising revenues are expected to increase approximately 70%-75%, mainly as we compare against a quarter that was severely impacted by the pandemic. Other revenues are expected to increase in the low single digits. Both operating costs and adjusted operating costs are expected to increase in the mid to high teens compared with the second quarter of 2020, as we continue investing into the drivers of digital subscription growth and comp against the low spending of the second quarter of last year that resulted from actions taken during the early weeks of the pandemic. With that, we'd be happy to open it up for questions. Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw you question, please press star then two. At this time we will pause momentarily to assemble our roster. This morning's first question comes from John Janedis with Wolfe Research. Hi, good morning. Meredith, given your slightly moderated tone for subscribers this year, can you talk about your confidence level around the longer-term opportunity? I know you've talked about 20 million or more subs over, say, longer term. Does that still seem doable? Big picture, how tied is the growth to the news cycle? Good morning, John. Both good questions. My short answer to your first question is absolutely no change in our level of confidence in the long-term opportunity. We see no reason why we can't have a subscriber base that's two, three, four times what we have today. We remain incredibly excited about that long-term opportunity. On your second question, I think you're asking me the degree to which the news cycle plays a role. Just ask the second question again. I want to make sure I heard it right. Yeah. Just based on the comments around late 1Q and 2Q and knowing it's seasonal. Obviously, there's been a lot of talk about a slowing news cycle and how that impacts subs. I guess one narrative would be, if the news cycle slows, is there more of a longer-term discussion here that we should have around, say. Yeah. Subscriber acquisition? Yeah. Let me say a couple things about that. The first one is, of course, the news cycle plays a role and has played a role. In many ways, the various stories in the last five years, which is really the stories of the last year, have been an accelerant to the model. I would say two other things are happening that are really significant. One, quarter-over-quarter, year-over-year, we are getting better at the underlying sort of mechanics. We're getting better at the underlying engine of driving subscription and building habit. As I said in my prepared remarks, we feel really pleased with where we are today from an engagement standpoint and a daily habit standpoint versus 2019. We feel very confident that there's still wide interest in news. I'll say two more things. I don't think the world is getting any less interesting. I don't think it's getting any less complex. We fully expect, even as the tide goes out on one set of stories, that it always comes back in on another set. We are not worried that there won't be high demand for news, even as the storylines change. I talked in my prepared remarks about the enormous investment we've made in our newsroom, and we're not prepared to meet some of that investment. We're prepared to meet that demand wherever the story goes. I'll say we've also put quite a bit of investment into meeting news needs in new or in different ways. I mentioned real-time coverage, live news. That's a need where I'd say people didn't come to The Times first before 2019 in a really big way. If something was happening, unfolding in real time, you might have turned on cable news or gone to Twitter. We are getting much better. Still lots of room to go, getting much better meeting that need today. We are getting much better at meeting the need for the daily habit of showing up in your inbox with the morning newsletter and newsletters beyond that. I'm really confident that we're going to keep meeting the need for understanding in news. We're going to add and innovate how we do that. That news will continue to be the central engine of the model and a real creator of demand that helps us sell the whole bundle. Got it. Thanks. Maybe can you talk about media expenses going forward? Do they start to tick up significantly to drive or re-accelerate subscriber growth? Can you give any more color on churn? Sure. I'll answer the first question and the second one, Roland may have color to add to both. On media, I'll just remind you that the vast majority of our subs come in through organic means, what actually does a little bit to the point I made before. We are still getting most of our subs not through paid media. In periods of slower news cycle or less high news demand, we also end up buying less media because the rate of return isn't as good. The overarching engine is much, much more reliant on organic means. I'd say on churn, we're broadly very happy with churn. When we compare ourselves to other content-based digital media companies, we think our overall retention and monthly churn are at a world-class level. Versus last year, I'd say that the newest cohort, we had a huge surge in new subs last year, and the newest cohort, folks who came in last year, are retaining slightly less well than in the past, but I'd say not in a troubling way, and we're broadly very happy with what we've seen on churn. Roland, I don't know if you want to add to either of those points. No, I actually really think you hit all the major points. Nothing to add on that one. Thank you. Thank you. The next question comes from Alexia Quadrani from JP Morgan. Thank you very much. Just a couple questions. First, if you could maybe elaborate a little bit on what the demos look like in the new subscribers in Q1, if it's any different than the past, sort of mix of U.S., international, that sort of color. Then secondly, Meredith, I think the outlook for digital advertising has changed on and off throughout the years as the world has evolved, and the model has changed a bit. I'm curious, I know you mentioned it's being very healthy outlook for digital advertising for the remainder of the year. I'm curious if your long-term view of digital advertising has changed at all or maybe you can update us on how you see that, how the outlook there is. Sure. I'm happy to talk about both of those. Thanks, Alexia. On demos, in general, I think I give a version of this answer every quarter. In general, in very high news periods where we're bringing a lot of people in, the audience tends to be getting a little bit younger and a little bit more varied geographically, and that holds up both domestically and internationally. We've been sort of steadily tacking toward more of the new subscribers coming in being under 40 and more from parts of the country and the world where we've not been hugely penetrated. In quarters where there's sort of less high news demand, it tends to go the other way. I'd say very broadly, The Times is continuing to bring in younger subscribers and subscribers from more varied places. There was nothing that happened in the first quarter that changed that trajectory. I think I've also said in the past, we don't ask a ton of questions demographically of our new subscribers. We do more of that over time than in the beginning, so our data isn't great here, but they're generally younger, generally more varied as we grow the base. On advertising, I'll say a few things. Our ad team did very good work last year in a really difficult ad market and margin profile of the business. I'll be specific about that. We exited our less profitable marketing services business. We had a thesis, gosh, five, six years ago, that that could be really additive in our ad business. In fact, what we've learned is that the demand is really highest for our media products, which is just fundamentally a higher margin endeavor. Demand is getting stronger and stronger for our first-party data product, which, because we're a registration-based model, we're now making faster than expected progress on. The creative work that we still do a bunch of creative work, but we did that previously through fairly cumbersome lower margin marketing services businesses. Now we're able to do that work in a way that is nearly always appended to media and therefore at a deal level, we like the margin better. That's all a long-winded way of saying, we like the profile of the ad business, the digital ad business, better than we have in some time. I still would say, no question, it's the secondary endeavor. The main idea here remains scaling our direct-to-consumer digital subscription business. I do think now we've gotten those two businesses. The real thing we pulled off last year is we have those two businesses running entirely on the same high-octane gas, which is registered, logged-in users whose data we can use in privacy-forward ways. We like that a lot. I think overall, it does mean a better business. It is still not the main idea, not the main growth driver. If I could just squeeze in one more. Sure To your comments earlier about churn just tweaking up just slightly. Yeah. Which is understandable given the huge number of subscribers that came on last year. I'm just curious if it changes at all, or has you revisit the algorithm in terms of the price hikes coming off of the promotional rates, given that tweak in churn or not necessarily? Yeah. I'll say two things. Roland should add more color here. We're very comfortable with where churn is. I'll just say again, it's been one of the biggest accomplishments the last four or five years. We've dramatically improved retention and reduced churn, and we're very comfortable with everything we see in the model and where it is. It's exactly right. You bring in a giant surge of new people in a single year, they're slightly less qualified. The newest cohort is sort of slightly less sticky, but only slightly. Churn broadly is still a very good story. Our algorithms are getting a lot better. That's the point. You train the models, and they get smarter. We also like what we're seeing, and Roland touched on this in his prepared remarks. Our pricing strategy and our ability to use algorithms to determine who goes to full price and who doesn't is working very well. Roland, I don't know if you want to add any more color to that. Sure. Hi, Alexia. We're still really comfortable with our pricing strategy and the way we're going about it with the modeling. As a matter of fact, we actually are testing a second intermediate price, which sits somewhere between the intermediate step-up price we've been using and full price to try to take a little bit even more advantage of the demand curve. We haven't increased or decreased the number of folks. The model hasn't increased or decreased the number of folks that it is sending to full price. Still comfortable with the model. No problems there. Thank you very much. Thanks, Alexia. Thank you. The next question comes in from Kannan Venkateshwar with Barclays. Thank you. Roland, just to follow up on the previous comment you made on the intermediate price. Is there any difference in the kind of subscription that people get for the intermediate price, or is it just some kind of a bridge till you step people up to full price? Broadly, when you think about price increases over the course of this year, I guess there is a cohort that already has which came in in 2018 during the promotional phase, which has either seen a price increase already or will see a price increase over the course of the year, which is the second time their price will be raised, I guess, in the last two years. Could you talk about the churn of that particular cohort and how that's behaving and retaining? Lastly, I'll follow up with advertising after that. Okay. Good question. Actually, there's not a differentiated experience for subs across this pricing range. We're really trying to do is not push price on someone who's not apt to accept the price increase as much as someone else would. We're trying to divide the population in that way. There's no difference in the subscription experience that someone going all the way to full price versus someone going to a midpoint price receives. Your second question was sort of about that second moment, that second price increase. Our experience to date with that is we're very comfortable with that. It is another test of that person's elasticity of demand. We do see a bit of drop-off there, but we're perfectly comfortable with the level that we're seeing there. Of course, we will take action to lean a little bit into trying to save the person and keep them with the brand than pushing the price, because we're still more interested in scaling than monetization at this point. Hey, Roland, the only thing, and Kannan, the only thing I would add to that is that we also, and I keep saying a version of this, but we get sort of steadily better. Well, we get steadily better at retaining subscriber engagement as well, and the product proposition keeps getting better. We're investing in the newsroom, we're investing in the digital product experience, and over time, that has a positive effect. Got it. Then on the advertising front, Meredith, a lot of the comments that you've made, it sounds like some of these improvements are structural and therefore there could be a bit more correlation between subscriber growth and advertising going forward, and we should see less volatility. Is that the right way to read your comments on advertising and should that be more linear going forward? I think that is strategically correct with a couple of caveats. I'd say having a very large now, we also said today for the first time, we have 100 million registered users, so a large registered user base, with whom we have direct relationships, is extremely important. Not just the subscriber base, I would say it's the audience, the engagement, the fact that these people are fully addressable to us and we have data on them. That is all very positive. That's what I mean when I say the ad business and the subs business now run on the same high octane gas. That is a yes to the question you're asking. Yes, I do think that bodes well for advertising. Having come and sort of grown up in the ad business and run our ad business, I will also say we have a highly competitive product versus other publishers and probably any traditional media company, highly competitive. We are still in a world where you've got Google and Facebook and Amazon now increasingly. You've got these giant platforms, with a particular offering at scale, and at a price that is unmatched. I'd say we're very confident about our ability to win share. We are very confident now that in a brisk market, there's a lot of business to be won. That's going very well. We think we've got the right proposition. I would just say the ad market is a finicky thing and you've still got other companies that kind of dominate the dynamics. We temper our excitement about it with that in mind. It's a demand-driven market, more than a supply-driven market. We have awesome supply, probably better than anybody else's, but it's a demand-driven market. Got it. Thank you so much, guys. Thank you. The next question comes from Craig Huber with Huber Research Partners. Great. Thank you. I've got a few questions, if I could. Maybe to start, I want to ask you, if I could, about your marketing costs. They were down, as you know, 21% year-over-year to $36 million. What should we expect for that dollar amount going forward for your marketing spend? How much of that decrease by design in your marketing costs you think ended up hurting the number of new ads for digital subscriptions in the first quarter? How much of a correlation do you think there is there? I'll give a short answer. Roland gives the longer answer. The short answer is that's by design, and I'll just point back to what I said, I think in answer to John's question, which is the biggest engine we have is organic. When that engine, when the news cycle slows a little bit, marketing actually becomes much, much less efficient, and you don't see us spending more money because it's less efficient. As things pick up, you'll see us spending more money again. Roland, you can give an even more colorful answer, I think. Yeah, no, I think that's generally right. We don't see that the cutback in marketing spend hurt our net adds at all. If you go back and look at the comps, we did really pull back dramatically, if you go through last year in the early half. I think you'll probably see us reintroducing some marketing spend as we get into the second quarter. Again, we gauge it based on how well we think it's going to perform in market. My next question, guys. For potential price increases on the digital front for the remainder of the year, can you give us just a sense of how you think about phasing that in over the course of the year? How many people are you expecting to hit with a higher price increase? Just trying to get a sense here for modeling purposes. Yeah. For modeling purposes, you'd think about 100,000 folks per quarter, in that range, would be seeing I'm assuming you're talking about the tenured price increase. Yes. Yeah. Obviously, that's not a very big number. You're saying 400,000 roughly for the year. Yeah. Four and change for the year. That's telling me that you're obviously trying to volume here, you're not trying to scare anybody away. Well, we look at a whole set of attributes that determine when we pull the trigger on the tenured price increase. Our current outlook is that a little bit over 100,000 a quarter is what we think we'll see for the rest of the year. Roland, let me just add, that is for tenured subs. Yes. We also obviously have an enormous number of people stepping up in price, which Roland has just described. The number of people stepping up off of the big year we had last year in terms of new subscribers, you can imagine, is going to be very large. We're estimating for the full year. That's 1.5 million or 1.6 million folks will see an increase from their promotional price. Also on the cost front, you've obviously said you thought cost for this upcoming quarter would be up, I think you said mid to high teens. I want to get to the bottom of this. Yeah. In the first quarter, you said it would be up mid-single digits. It is up about 1.5%. What is the delta there, please? Yeah. What did you not spend as much on as you originally thought when you told them? It really came down to media spend and a bit of the hiring ramp. Okay. I guess my last question, Meredith, you mentioned registered users now are about 100 million. What is the daily visitors on average that you guys have now to the main website or main app, or monthly? What's that number at right now on your data? That's a good question. We don't answer that one, but what I'll say is, we have more people who use The New York Times every day now than we've had at any point in our history. We've not disclosed that number. Okay. Thank you. Higher is the answer. Okay. Thank you. The next question comes from Thomas Yeh with Morgan Stanley. Hi. Good morning. Thanks for taking my question. Yeah. Following up on the 100 million+ registered user base, can you talk a bit about any of the strategies that you're undertaking around encouraging sign-ups through that funnel? Beyond article limits that were implemented some years ago and engaging users with more content, what are some of the mechanisms you're building to convert those free users? Yeah. Any update on your prior guidance for modest operating profit growth, given the strength in 1Q and 2Q guidance on the financials? How should we think about the cadence of some of the investments you're making, and should we expect some of those investments to accelerate in the back half? Thank you. Sure. Let me take the second question first, which is just to say, as I said in my prepared remarks, we are building a business with an underlying model and a strategy that should propel a larger and more profitable business over time. I wouldn't regard what we said in the last call as guidance, so much as direction of travel. Nothing has changed in terms of our assumption of the direction of travel, and I said that in a couple places in the prepared remarks. On your first question, I'm making sure you guys can still hear. You know what? I just got a note from my team. You can't hear me. Give me one second, and I'm going to answer the other question. I'm just going to take my headphones off and pick up my phone. Hold up. Old school. Holding the phone now. On your first question, I'll say a few things, and you can tell me if this is in the zone of what you're asking about. 100 million registered users now. We still do bring in a good number of new registered users every week. There is still more activity happening on driving registrations. I'd say the thing that's going to change now is that's less of a focus. Last year's enormous audience and news cycle presented an opportunity for us to really scale that. We are incredibly focused now on getting those registered users to return. I mentioned in my prepared remarks a number of the sort of zones of opportunity. We've got a huge zone of opportunity in email. 50 million people opening, reading Times email every week. Five million people who use The Daily. I'm sorry, not The Daily, The Morning, on a very regular basis. There's a really big opportunity in email to have it be a more intentional driver in the funnel from registration to subscription, and you're going to see us get just much more intentional and focused on that. Another place where you'll see activity with registered users is. We have very high engagement in our app, and once we get a registration, we're much more able to direct people to download the app and begin to use the app. You'll see more activity there. Something I mentioned in the prepared remarks, and I think I've probably said in every one of these calls for some time, we know that people experiencing the breadth of our report, so more topics, more different storylines, it's a behavior that correlates with paying and staying. You can imagine that we're working to stimulate that now that we've got registered users and they're addressable to us. I'd say generally, you'll see us shifting from driving more reggies, although I don't want to suggest we're anywhere near the top or not, to getting registered users to return. Just the last bit there is, and maybe this is implied, but registered users convert, obviously at a significantly higher rate than anonymous users. That's why the focus there. Yep, that makes sense. Maybe if I can squeeze one last in. Meredith, can you opine on the evolution of regulatory events in Australia around news on big tech platforms and any read-throughs you might have on a kind of broader opportunity there? Thank you. Sure. Try not to opine about. I will give you the state of things. I should say one more thing on the last question. Roland touched on this before, but one of the other things that the really big registered user base gives us is the opportunity to keep training our algorithms and I think I said a version of this in the prepared remarks or I've said it in prior calls, we've got a dynamic meter now, so we are able to customize when we actually ask a registered user to subscribe. We've got machine learning that's getting better at how we do that. I should have said that before as well. On the platforms, I'll say we continue to watch with real interest everything that's happening in the legislative and regulatory environment. I'd say there has broadly, for the last couple of years now, been a shift in the direction of platforms seeking and being willing to make commercial agreements in the form of licensing arrangements with publishers. We obviously have one of those arrangements now with Facebook for their news tab, and we certainly don't rule out there being more there. We're watching that with interest. We have a really clear strategy that we're in the business of scaling our direct-to-consumer digital subscriptions, and that to do that, we need direct relationships with users, and we want people to experience our journalism on our destination, where we think they get the best of it, the best experience of it, our work in context. We also believe that platforms get a lot of value from publishers, get a lot of value from the original work and news that courses through their systems. We think the compensation has to be right. We think about all those things when we consider whether and how to work with a platform. I'd say I don't rule out more to come there, but have nothing to report. Great. Thank you so much. Very helpful. Thank you. You're welcome. Oh, sorry. Yeah, thank you. The next question comes from Doug Arthur with Huber Research Partners. Yeah, thanks. Two questions. You have a comment in the press release about a sizable and sustained investment in the journalistic engine. Meredith, is the newsroom now over 1,800? Are you adding more resources there? Can you comment on that? Sure. Good morning. I've said this a few times in the past. The newsroom now is well over 1,700, and I'd say that number doesn't include many of the people we have making recipes and puzzles and producing Wirecutter's product reviews. Depending on, we even think about what do we call the newsroom? You can assume that, particularly in the standalone products area, that we are continuing to invest in the content, and we've said that before. As far as investing in the newsroom itself, so the work of our core news report, we have continued to invest, I'd say thoughtfully, and we will continue to invest thoughtfully, and that investment tends to go to ensuring we can cover the biggest stories of our time in a leading way, and then also meeting more news needs. I described our budding engine for real-time coverage and live coverage. That's been an area of investment, although there I'd say that's as much about digital product and engineering investment as it is about adding more journalists. We've made a big investment in audio journalism. I named some of the podcasts that are starting to do really well from a listener standpoint and also from an advertising standpoint. That's how I'd regard investment into the newsroom. To the extent you're asking me about, does that scale with our expectations of subs scaling, I'd say no, not at the same pace. We really like where we are in terms of the breadth of expertise in our newsroom. We're certainly going to keep adding to it, but not at the same level that we're scaling the subscriber base. Okay, great. Just one quick follow-up. My recollection is you shut down a couple of in-house advertising operations last year. What's the impact on the year-over-year comp and revenues for 2021 in digital advertising from sort of the timing? Yeah. Of that and the impact going forward. Roland might give a slightly more precise answer here, but I think what I said in my prepared remarks is, the comp, we would've been up somewhere in the neighborhood of like 23% in digital advertising, if we'd not been comping against the closure of the last of our marketing services business. Also the fact that we took open market programmatic out of our apps, that was the big comp as well from the first quarter. Okay, great. Thank you. You're welcome. Thank you. The next question comes from Vasily Karasyov from Cannonball Research. Hi, Vasily. Good morning. Thank you. I have a question about the outlook for subscriber additions this year. Can you tell me please, what changed and what was wrong with your model, or where did you have to adjust your model from February when you were talking about adding between 19 and 20 number of subs, years 19 and 20. Sure. Now? Yes. Happy to jump in. And then- Yes what that factor is, and is it possible that that factor will change in a quarter or two? Like how fluid that is? Let me answer the second part of the question first, which is, it is of course possible that it changes. We've said this in the past and I'll say again, there is sort of more underlying stability in the whole thing because of the registration model, but we said there could be considerable variability from quarter to quarter, and what we saw in the first quarter was really strong January and then the sort of change in the news cycle, combined with the opening up of activities that people could do sort of following a year of quarantine, combined with better weather, combined with the prevalence of vaccines. That all sort of happened at once, and I'd say it came a little faster than we were expecting, probably because of the compounding effects of all of those things at once. The reason we've suggested that it could continue into the second quarter is because the second quarter traditionally tends to be just a slower period for audience and news engagement. I'll say, as I said, I think in answer to an earlier question, we have seen periods where the tide has gone out, a little bit on one particular storyline or a few storylines, and it always comes back, and we regard the underlying drivers as very strong in comparison to 2019. I'd say we've got plenty of room ahead, to optimize the model and optimize the funnel on our roadmaps now. I think I said this before, but it's hard to say. Obviously the news cycle plays a big role in the model, and so too does our work on the underlying mechanics of it. It's hard to tease those things apart. It's hard not to regard this as a moment in time right now. Thank you. A quick question. Why did you feel like you needed to disclose the number of registrations, the 100 million? I don't think you talked about it before, with this level of precision. Yeah. I think you were saying that you have very large database. Can you give us an idea? Yeah. That's a great question. Listen, we really believe that the registration model has just improved our ability to get at those users and get them to form a habit and ultimately pay and stay. Honestly, we were waiting for it to be a big enough number that it felt worthy of sharing. We don't think we're done, just to be clear, at 100 million. As I said earlier, we're still getting more registrations. At 100 million, that gives us a really sizable population around whom we can intervene to stimulate return and draw people in in new ways. We disclosed it because we want to make the point that it's a really important part of the model. It's really working, and it's a base on which we're building lots of other optimizations. I mentioned our algorithms getting smarter about when to ask people to pay. I mentioned our newsletters having more use today than at any other point. I mentioned how important it is to get people to download and use the app, and the registration model helps us do all those things. We really exposed it, one, because it's now the size that we're very excited about, and two, we think it's a really important factor in the underlying model, and it gives us a lot of confidence about how we grow from here. Thank you very much. You're welcome. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Harlan Toplitzky for any closing remarks. Thank you for joining us this morning. We look forward to talking to you again next quarter. Thank you. The conference has now concluded. Thank you for attending today's presentation. 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