การแถลงผลประกอบการไตรมาส 3 ปี 2026 ของ NYT: ยอดสมาชิกดิจิทัลเพิ่มขึ้น 14.6%

ประเด็นสำคัญ

• เดอะ นิวยอร์ก ไทมส์ คอมพานี (The New York Times Company) รายงานรายได้ไตรมาส 3/2026 ที่ 769 ล้านดอลลาร์ เพิ่มขึ้น 10% เมื่อเทียบรายปี ขณะที่กำไรจากการดำเนินงานที่ปรับปรุงแล้ว (AOP) เพิ่มขึ้น 14% สู่ประมาณ 150 ล้านดอลลาร์
• รายได้จากค่าสมัครสมาชิกแบบดิจิทัลอย่างเดียวเพิ่มขึ้น 14.6% สู่ 421 ล้านดอลลาร์ บริษัทมีจำนวนผู้สมัครสมาชิกแบบดิจิทัลอย่างเดียวสุทธิเพิ่มขึ้นประมาณ 420,000 ราย ส่งผลให้ฐานผู้สมัครสมาชิกทั้งหมดเพิ่มขึ้นเป็น 13.8 ล้านราย
• รายได้เฉลี่ยต่อผู้ใช้ (ARPU) ของผู้สมัครสมาชิกแบบดิจิทัลอย่างเดียวเพิ่มขึ้น 1.4% สู่ 9.93 ดอลลาร์ โดยได้รับแรงหนุนจากผู้สมัครสมาชิกที่เปลี่ยนจากโปรโมชันข้อเสนอพิเศษไปสู่ราคาที่สูงขึ้น รวมถึงการปรับขึ้นราคาอย่างต่อเนื่อง
• รายได้จากการโฆษณาดิจิทัลเพิ่มขึ้น 12% สู่ 110 ล้านดอลลาร์ ซึ่งต่ำกว่าช่วงประมาณการของบริษัทเล็กน้อย ฝ่ายบริหารระบุว่าความคลาดเคลื่อนดังกล่าวมีสาเหตุหลักมาจากความยากในการคาดการณ์ช่วงเวลาที่จะรับรู้รายได้จากการโฆษณาภายในไตรมาส
• กระแสเงินสดอิสระนับตั้งแต่ต้นปีจนถึงปัจจุบัน (YTD) สูงถึงประมาณ 436 ล้านดอลลาร์ บริษัทได้ส่งคืนเงินทุนให้แก่ผู้ถือหุ้นประมาณ 276 ล้านดอลลาร์ ผ่านการซื้อหุ้นคืนมูลค่า 171 ล้านดอลลาร์ และเงินปันผลมูลค่า 105 ล้านดอลลาร์
• สำหรับไตรมาส 4/2026 ฝ่ายบริหารคาดว่ารายได้จากค่าสมัครสมาชิกแบบดิจิทัลอย่างเดียวจะเติบโต 12% ถึง 15% และต้นทุนการดำเนินงานที่ปรับปรุงแล้วจะเติบโต 6% ถึง 8%

ข้อมูลทางการเงินหลัก

ผลการดำเนินงานทางธุรกิจและการปฏิบัติงาน

การเติบโตของค่าสมัครสมาชิกยังคงเป็นปัจจัยหลักในการขับเคลื่อนรายได้ ฝ่ายบริหารกล่าวว่าการมีส่วนร่วมและการรักษาฐานลูกค้ายังคงแข็งแกร่งในทุกกลุ่มผลิตภัณฑ์ การเติบโตของรายได้จากค่าสมัครสมาชิกสะท้อนถึง 3 ปัจจัย ได้แก่ จำนวนผู้สมัครสมาชิกใหม่ในช่วง 12 เดือนที่ผ่านมา สัดส่วนระหว่างผู้สมัครสมาชิกแบบแพ็กเกจราคาสูงกับผู้สมัครสมาชิกแบบผลิตภัณฑ์เดียวราคาต่ำกว่า และผลการดำเนินงาน ณ จุดปรับขึ้นราคา

บริษัทยังคงลงทุนในเนื้อหาวิดีโออย่างต่อเนื่องทั้งรายการรูปแบบยาว การสืบสวนเชิงทัศนภาพ เนื้อหาที่ดำเนินรายการโดยผู้สื่อข่าว และรายการสั้น โดยฝ่ายบริหารมองว่าวิดีโอเป็นแนวทางระยะยาวในการขยายการมีส่วนร่วม เข้าถึงผู้ชมกลุ่มใหม่ และเพิ่มประสิทธิภาพในการสร้างรายได้

ธุรกิจโฆษณาได้รับประโยชน์จากอุปสงค์ของผู้ทำการตลาดและพื้นที่โฆษณา (Inventory) ที่เพิ่มขึ้น ฝ่ายบริหารกล่าวว่าการเพิ่มอุปทานในอนาคตจะเป็นไปในลักษณะค่อยเป็นค่อยไปและกระจายไปยังทุกกลุ่มผลิตภัณฑ์ โดย The Athletic ยังคงมีส่วนสำคัญอย่างยิ่งต่อการเติบโตของโฆษณาและการมีส่วนร่วมของผู้สมัครสมาชิก แม้ว่าบริษัทจะไม่ได้ระบุอัตราการเติบโตแยกต่างหากก็ตาม

ข้อริเริ่มผลิตภัณฑ์ใหม่ ได้แก่ ฟีเจอร์ติดตามการเลือกตั้งกลางเทอมเฉพาะในแอปพลิเคชันหลัก เกมเพิ่มเติมเฉพาะผู้สมัครสมาชิก เครื่องมือ Cooking พลัง AI สำหรับปรับแต่งสูตรอาหารที่คิดค้นโดยมนุษย์ รวมถึงวิดีโอและกิจกรรมถ่ายทอดสดที่ขยายเพิ่มเติมภายใน The Athletic

แนวทางและประมาณการจากฝ่ายบริหาร

สำหรับไตรมาส 4/2026 ฝ่ายบริหารได้ให้แนวโน้มเมื่อเทียบรายปีไว้ดังนี้:

ฝ่ายบริหารคาดว่าจะยังคงลงทุนในด้านสื่อสารมวลชน ผลิตภัณฑ์ดิจิทัล และวิดีโอ ต่อไป ขณะเดียวกันก็รักษาวินัยด้านต้นทุน ทั้งนี้ บริษัทระบุว่ายังคงดำเนินงานได้ตามเป้าหมายระยะกลางสำหรับจำนวนผู้สมัครสมาชิก การเติบโตของ AOP และผลตอบแทนต่อเงินทุน

ความเสี่ยงและประเด็นสำคัญที่ต้องจับตา

ฝ่ายบริหารยอมรับว่าการเปลี่ยนแปลงที่ทำโดยบริษัทเทคโนโลยีขนาดใหญ่จำนวนน้อยรายยังคงส่งผลให้ปริมาณเข้าชม (Traffic) ของผู้เผยแพร่สื่อลดลง โดย นิวยอร์ก ไทมส์ ก็ได้รับผลกระทบเช่นกัน แม้บริษัทจะย้ำว่าโมเดลธุรกิจของตนพึ่งพาการมีส่วนร่วมโดยตรงของผู้สมัครสมาชิกเป็นหลักก็ตาม

เอเจนต์ AI ส่วนบุคคลยังคงเป็นความไม่แน่นอนที่เกิดขึ้นใหม่ ฝ่ายบริหารกล่าวว่าจนถึงขณะนี้ยังไม่พบผลกระทบที่วัดค่าได้ แต่กำลังเฝ้าระวังการเปลี่ยนแปลงในเทคโนโลยีและพฤติกรรมผู้บริโภค ทั้งนี้ บริษัทสามารถอนุญาต จำกัด หรือบล็อกเครื่องมืออัตโนมัติบางประเภทไม่ให้มีปฏิสัมพันธ์กับแพลตฟอร์มของตนได้

การเปรียบเทียบผลการดำเนินงานด้านโฆษณาในไตรมาส 4 จะท้าทายยิ่งขึ้น เนื่องจากรายได้โฆษณาดิจิทัลในช่วงเดียวกันของปีก่อนเติบโตถึง 25% และได้รับประโยชน์จากการเพิ่มขึ้นของพื้นที่โฆษณาเชิงโครงสร้าง ฝ่ายบริหารยังตั้งข้อสังเกตอีกว่ารายได้จากการโฆษณาเป็นเรื่องยากที่จะคาดการณ์ได้อย่างแม่นยำในแต่ละไตรมาส

ค่าตอบแทนและค่าใช้จ่ายด้านผลประโยชน์พนักงานในไตรมาส 4 อาจแปรผันตามผลประกอบการทางการเงิน เนื่องจากเป็นทั้งไตรมาสที่ใหญ่ที่สุดของบริษัทและเป็นไตรมาสสุดท้ายของปี

ประเด็นสำคัญจากการถาม-ตอบกับนักวิเคราะห์

• เอเจนต์ AI: ฝ่ายบริหารระบุว่ายังเร็วเกินไปที่จะประเมินผลกระทบในระยะยาว และจนถึงตอนนี้ยังไม่พบผลกระทบต่ออัตราการยกเลิกบริการหรือพฤติกรรมการยกเลิกสมาชิก
• การเพิ่มขึ้นของผู้สมัครสมาชิก: บริษัทระบุว่าจำนวนผู้สมัครสมาชิกเพิ่มขึ้นสุทธิประมาณ 420,000 ราย เกิดจากการมีส่วนร่วมและการรักษาฐานลูกค้าในวงกว้าง มากกว่าจะเกิดจากผลิตภัณฑ์ใดผลิตภัณฑ์หนึ่งหรือเหตุการณ์ข่าวเฉพาะเจาะจง
• การแชร์รหัสผ่าน: ฝ่ายบริหารอธิบายว่าแนวทางของบริษัทเน้นการส่งเสริมแพ็กเกจครอบครัว (Family Plan) มากกว่าการกวาดล้างการแชร์รหัสผ่าน โดยแพ็กเกจดังกล่าวเปิดให้ผู้สมัครสมาชิกสามารถเพิ่มผู้ใช้รายอื่นเข้าในบัญชีได้
• การโฆษณา: ฝ่ายบริหารไม่ได้ระบุว่าการพลาดเป้าเล็กน้อยของประมาณการโฆษณาดิจิทัลเกิดจากการเปลี่ยนแปลงของปริมาณเข้าชมที่ขับเคลื่อนด้วย AI หรือการมีส่วนร่วมที่ลดลง แต่อ้างว่าเป็นความผันผวนปกติในการคาดการณ์รายไตรมาส
• การจัดสรรเงินทุน: การลงทุนเพื่อการเติบโตจากภายใน (Organic investment) ยังคงเป็นสิ่งสำคัญอันดับแรก บริษัทอาจเร่งการซื้อหุ้นคืนเมื่อเห็นโอกาสผลตอบแทนที่น่าดึงดูด และจะพิจารณาการควบรวมและซื้อกิจการ (M&A) ที่เป็นไปตามมาตรฐานความเหมาะสมของแบรนด์ คุณค่าเชิงกลยุทธ์ และผลตอบแทนที่ปรับด้วยความเสี่ยงแล้ว
• การกำหนดราคาและสัดส่วนผลิตภัณฑ์: ฝ่ายบริหารคาดว่ารายได้จากค่าสมัครสมาชิกดิจิทัลจะยังคงสะท้อนถึงการเติบโตของผู้สมัครสมาชิก สัดส่วนผลิตภัณฑ์ และการปรับขึ้นราคา โดยได้รายงานการรักษาฐานลูกค้าที่แข็งแกร่งในกลุ่มผู้สมัครสมาชิกที่เพิ่มเข้ามาหลังจากปรับ Mini ให้อยู่หลังระบบจัดเก็บเงิน (Paywall) ในไตรมาส 3/2025

บันทึกการประชุมแถลงผลประกอบการฉบับเต็ม

บทถอดเสียงฉบับเต็มของการประชุมทางโทรศัพท์ผลประกอบการ

คำชี้แจงจากฝ่ายบริหาร

Operator

Good morning, and welcome to The New York Times Company's Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Anthony DiClemente, Senior Vice President, Investor Relations. Please go ahead.

Anthony DiClemente

Thank you, and welcome to The New York Times Company's Third Quarter 2026 Earnings Conference Call. On the call today, we have Meredith Kopit Levien, President and Chief Executive Officer; and Will Bardeen, Executive Vice President and Chief Financial Officer. Before we begin, I would like to remind you that we'll be making forward-looking statements, including about our business, strategy and performance based on our current expectations. Our actual results could differ materially due to a number of risks and uncertainties described in the company's 10-K and subsequent SEC filings. We'll also be referencing non-GAAP financial measures for which there are reconciliations to GAAP measures in our earnings release at investors.nytco.com. And with that, I will turn the call over to Meredith.

Meredith Kopit Levien

Thanks, Anthony, and good morning, everyone. Q3 was another strong quarter for The Times in which we demonstrated the essential nature of our journalism and lifestyle products to people everywhere. Our work continued to engage large audiences and drive value creation, and we made progress on all of our priorities for the year. Let me take you through them. First, we continue to cover the most important stories around the globe independently and with rigor.

Our journalists reported in myriad ways on geopolitical conflicts across multiple continents, consequential elections at home and abroad, reverberations in the economy and the growing impact of AI on society. We also had exclusive verified footage of the glacier flood that triggered tragic floods in Nepal, and we demonstrated the unique convening power of The Times and culture with our ranking of the 100 Best TV shows at the 21st century selected by influential artists and creative leaders.

Second, we presented our coverage in all the ways people want to engage with it and made more progress expanding video. Our long-form shows, including the interview, the Ezra Klein show and podcasts are increasingly important venues for newsmakers who know they'll be watched by big influential audiences. We continue to grow our stable of short-form video series with new dispatches from the host of The Daily and fashion critic Vanessa Friedman. And for those of you who are long-time followers of Deal Book will celebrate 25 years of the franchise later this month with a blockbuster interview lineup that includes JD Vance, Zohran Mamdani, Christine Lagarde, Sam Altman, Elon Musk and Hailey Bieber.

Third, we continue to add value in every part of our portfolio. We created a dedicated space for the midterm elections within our flagship app, showing the battle for Congress through data visualization, pooling, spending analysis and more. Our games team gave subscribers even more reasons to engage with a weekly drop of subscriber-only puzzle. We launched a new AI-powered tool in cooking that helps home cooks adapt our human crafted recipes. Wirecutter anointed its first Hall of Fame featuring product picks that have stood the test of time and the athletic welcomed the return of the NFL with the second season of its weekly show on Amazon and increased video and live activities in the app.

Now let me highlight our results from the quarter. Digital subscription revenues grew 14.6% as we continue to become even more essential to even more people. We added 420,000 net new digital subscribers bringing our total subscriber base to $13.8 million and keeping us on track to our next milestone of $15 million and beyond. Digital advertising again delivered double-digit growth at 12% and total advertising grew as well. We were pleased with these results and are confident in the long-term trajectory of our ad business which is buoyed by a clear strategy, strong marketer demand for our products and high engagement.

Affiliate, licensing and other revenues also grew in the quarter. We continue to exercise cost discipline while making targeted investments into our biggest strategic opportunities in the quarter, including video, our ability to lean into advantages namely our world-class journalism and leading lifestyle products is what will allow us to extend our strong market position and keep building a larger and more profitable company. I'll close by once again noting that we delivered our Q3 results against the backdrop of a rapidly changing information ecosystem shaped by a small number of big tech companies those moves continue to result in less traffic to publishers.

The Times isn't immune to that impact. But our essential subscription strategy, which is about human-made journalism and product experiences that people seek out directly and make room for in their lives, provides powerful advantages that we believe will only deepen with time. Our world-class news coverage and lifestyle products exist in giant spaces. Within those spaces, we have unmatched engines for producing independent journalism and original content that is increasingly rare and valuable. We have a track record of harnessing technology to do that across all the forms and formats that make people pay attention, engage deeply and share widely.

And we have multiple complementary revenue streams that give us diverse ways to monetize consistently high audience engagement. Taken together, these advantages mean we are well positioned to continue making the New York Times essential for every person seeking to understand and engage with the world and to create more value for users, for shareholders and for society. And with that, I'll turn it over to Will.

William Bardeen

Thank you, Meredith, and good morning, everyone. As Meredith described, our third quarter results reflected continued strength and progress across our business. I'll begin today with a discussion of the quarter's financial results, followed by our financial outlook for the fourth quarter of 2026. All comparisons are to the third quarter of 2025 unless otherwise specified. Total consolidated revenues increased 10% to $769 million. Our revenue growth was powered by double-digit gains in both digital subscription revenues and digital advertising revenues. AOP grew 14% to approximately $150 million, even as we continue to make disciplined investments aimed at further differentiating our high-quality journalism and digital products. .

Adjusted diluted earnings per share increased $0.09 to $0.68 compared with $0.59 in the prior year period. Turning to subscribers and subscription revenues. As Meredith said, we added approximately 420,000 net new digital-only subscribers in the quarter. Average digital-only subscribers increased 13.1% year-over-year driven by multiple products across the portfolio as well as strong retention. Digital-only ARPU was $9.93, up 1.4% year-over-year. ARPU growth was supported by subscribers moving from promotional rates to higher prices as well as from ongoing price increase programs. We continue to be pleased by performance at our pricing step-up points, and we believe this reflects that our subscribers appreciate the significant value we're adding to our products.

Digital-only subscription revenues grew 14.6% year-over-year to $421 million and total subscription revenues increased 10.7% to approximately $548 million. Both digital-only and total subscription revenues were within the guidance ranges we provided for the quarter. Now turning to advertising. Total advertising revenues increased 7.8% to $143 million, within our guidance range. Digital advertising revenues increased 12% to $110 million driven by marketer demand and growth in advertising supply. This was slightly below the guidance range. Affiliate licensing and other revenues increased 6% to $78 million, slightly above our guidance range. Turning to operating costs. Total adjusted operating costs grew 8.7% in the quarter to $619 million, which was within our guidance range.

Cost growth was driven primarily by compensation and benefits expenses associated with investments in our journalism and digital products, including our video initiatives as well as higher G&A costs and higher marketing and promotion costs. Turning to free cash flow and capital returns. Our capital-efficient model continues to generate healthy free cash flow and we maintain a strong balance sheet. We have generated approximately $436 million of free cash flow year-to-date and ended the third quarter with approximately $1.3 billion in cash and marketable securities.

Over that same period, we've returned approximately $276 million to shareholders, consisting of approximately $171 million in share repurchases and approximately $105 million in dividends. This is consistent with our capital allocation strategy, which includes returning at least 50% of free cash flow to our shareholders over the midterm. As we've discussed previously, our capital allocation framework includes a process that enables us to accelerate share repurchases when we believe there are attractive return opportunities, and we saw that in Q3. Now looking ahead to the fourth quarter of 2026. Digital-only subscription revenues are expected to increase 12% to 15% and total subscription revenues are expected to increase 9% to 11%.

Digital advertising revenues are expected to increase high single digits to low double digits, and total advertising revenues are expected to increase mid-single digits. Affiliate licensing and other revenues are expected to increase low single digits to mid-single digits. Adjusted operating costs are expected to increase 6% to 8%. We intend to continue operating efficiently while making disciplined investments in our high-quality journalism and digital product experiences that adds value for our audiences and help reinforce and expand our competitive advantages.

As we've discussed, video in particular remains an important area of strategic investment being reflected in our results and in our guidance. In summary, our large market opportunity, differentiated competitive position, multi-revenue stream model and disciplined cost management give us confidence in our ability to continue to execute our strategy and create long-term value for our shareholders. We also remain on the path to achieving our midterm targets for subscribers, AOP growth and capital returns. With that, we're happy to take your questions.

Operator

[Operator Instructions] The first question today comes from David Karnovsky with JPMorgan.

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David Karnovsky

Meredith, there's been a lot of investor focus on personal AI agents and whether this will influence subscribers to probably reconsider subscriptions or seek better rates? I think that's for the times, but just generally across publishing. It'd just be great to hear your thoughts on this. whether you're seeing any measurable change in churn or cancel flow behavior on the web or phone and just how you think about the right approach generally to dealing with agents going forward?

Meredith Kopit Levien

Yes. Great question, and the first thing to say is it's early days with agents and they seem like they could be an important force, but the story of exactly how they're going to do that. I think it's still to be written, still unfolding. So far, we're not seeing an impact, but it's always the case with any kind of big technological change. We are actively watching how the technology and consumer behavior are going to evolve here, and we're continually evaluating how third-party automated tools interact with all of our platforms.

And it's just worth saying we have the ability to commit, to restrict or to block specific tools. And maybe just to make a step back point, our whole strategy here is to have differentiated coverage and products that are really valuable to people at scale, however the tech and the ecosystem evolve, and I have a lot of confidence we're going to continue to do that.

Anthony DiClemente

Great. Thanks for the question, David. Operator, let's go to our next question.

Operator

The next question comes from Cameron Manson Peroni with Morgan Stanley.

Unknown Analyst

Two, if I could. One, just wondering if you could give some color as we look at the strong net add result this quarter, on anything qualitative on kind of planned mix and what led to that strength? And then on the expense outlook for Q4, curious anything on kind of investment areas as we close out the year? And then any color around kind of gating factors that might dictate where in the growth outlook range you shake out.

Meredith Kopit Levien

Yes. Great. Why don't I take the first part of the question, and I -- Will take the second. I'll just say we were really pleased with the strong net add growth in the quarter and the growth came from strong engagement and retention kind of across the portfolio, and that is really the model working as it met as it's designed. And I'll just say that what is the model is to have news journalism and lifestyle products that are increasingly rare and valuable to people at real scale. And as I alluded to in my prepared remarks when I refer to our priorities, we keep adding value in every part of the portfolio and it really curves our confidence in our ability to keep growing subscribers.

William Bardeen

Great. And then on the cost outlook, I mean, you'll note in Q3, we came in at 8.7%, sort of right in the middle of our Q3 guide. And that's obviously, when we create a guide sort of we'd frame it around the midpoint. So as it relates to Q4 guidance, the only thing I'll say about Q4, it tends to be a quarter where compensation and benefits costs can vary based on the financial performance in the quarter, both because it's the biggest quarter of the year and because it's the last quarter of the year, just something to know about. And kind of one of the reasons you'll see it just a wider guide, but the basic framework for our guidance is unchanged. And just overall on cost investments, whether it's Q4 or beyond, the most important thing to say is the overall approach hasn't changed. So what does that mean?

We're focused on closely managing costs while also making those long-term strategic investments that differentiate us and build on our competitive advantages. This year, in particular, you saw us continuing, I highlighted in my remarks investments in video. And it's that disciplined approach that enables us to continue to target not just healthy revenue growth, but also year-over-year AOP growth for 2026 and also beyond. .

Anthony DiClemente

Great. Thanks for the question, Cameron, next question, please.

Operator

The next question comes from David Plaus with Bank of America.

David Plaus

Just 2, if I may. First one on digital advertising. Digital advertising growth obviously is still strong, but you did come in slightly below the guide in 3Q, and obviously, you're facing tough comps in the second half of this year. Just how much room do you have to push more ad load in areas like games? And how do you think about when to add that inventory. And second one, if I may, just on password sharing crack down, there's been reporting that potentially there's been an initiative on password sharing. Can you talk about what, if any, the your strategy is there? And what potential tailwind that could be to subs?

Meredith Kopit Levien

Yes. I'm happy to take both of those. Will, feel free to add any color. Let me start on the ad question. We were pleased with the ad performance in the quarter. Total ads came in within the guidance range on the sort of slate miss on digital over the guidance range. I'll just say, and I accept this for years, exactly where ads are going to land in the quarter could be hard to predict. And as you know, and you're sort of alluding to this in your question, the comps get tougher as the year goes on. Q4 is our biggest quarter and as the year and last year, I remind you, we grew 25%. And last year, we benefited from the sort of structural supply increases in certain parts of the portfolio, you're asking me about ad load. I will just say we do expect to continue to add supply. It will be more incremental and more across the portfolio. We've been saying that for a while now. .

And I think the most important thing to say on ads is we continue to be really confident and optimistic about our ad business as a long-term growth driver because we're in these big spaces that marketers want to be in. We have where there's a lot of demand, we have really differentiated consumer products in those spaces. We have scale of engagement and strong targetability and all of that sort of means marketers keep coming back, the ads work. It's a really, really unique platform. So that's my answer on ads. Here's what I'll say on password sharing, which is what I think you're asking me about, 2 things there. One, what you might be referring to is we continue to be really excited about our family plan, which allows people to sort of in the sunshine add people to their account in a way that we just think it's like net positive in every way to our model.

So that's probably what you're seeing us to market assertively and that does come with -- again, it's in the sunshine. So sort of almost the opposite of cracking down on passwords. And the other thing I'll say there is we still think we've got a big TAM to penetrate Family Plan is one of the ways that we're doing that and what you see us doing is sort of aiming to keep penetrating that TAM in all the ways we're doing. And so that's -- I don't know if that's what you're referring to, that's how I would answer the question.

Anthony DiClemente

Good. Great. Thanks, David. .

Operator

The next question comes from Benjamin Soff with Deutsche Bank.

Benjamin Soff

Thanks for the question. It sounds like you recently consolidated your video operations teams into 1 unified team. Can you share an update on the progress of the video strategy? And are the investments to stand up video is still growing? Or how you reach the steady state there?

Meredith Kopit Levien

I'll take that one. And let me just start by saying we've got really big ambitions in video for The Times to be as preferred a brand a lot as it is to read and listen and this is kind of long bet that we can grow engagement from the audience we have and also grow audience because we're going to engage new people in different ways. I'm not sure what you're referring to operationally. We've been in a sort of steady state of scaling production in the newsroom of video and that's happening in myriad ways. So we've got a big and expensive shows group and where I referred to that in my prepared remarks, where we're putting a lot of resource and energy into a growing stable of shows. That are getting more and more cultural resonance.

We also continue to have a big effort on visual investigations, which we've referred to in prior quarters in prepared remarks. We also, I referred today in my prepared remarks, to a very big effort in the development of short form video. We've talked about that pretty extensively. So a lot of reporter video. And then also now, we're rolling out more sortable some short-form video franchises, like the one I mentioned from our fashion critics Vanessa Friedman. We've got another one coming from one of the hosts of the daily so all that, I would just say reflects a sort of big effort to sort of harness the investment we've already made in extraordinary journalists and journalism and put it into new forms. And I think you've heard both Will and I talk about this is a key area of investment and we expect it to drive more engagement and ultimately, over time, we expect that to enhance our monetization.

Anthony DiClemente

Great Thanks, Ben.

Operator

The next question comes from Kutgun Maral with Evercore ISI.

Kutgun Maral

I wanted to ask about capital allocation. The financial model and growth outlook is quite strong, particularly in AOP and free cash flow. As we look to 2027, it's hard not to see that you'll have a significant amount of balance sheet flexibility. Will you alluded to this in your prepared remarks, but how should we think about the scope for ramping capital returns with, for example, an ASR? And how do you balance that flexibility that seems like you'll certainly have in '27 with your M&A appetite? .

William Bardeen

Yes. Thanks. I appreciate the question. Obviously, we're pleased to have healthy cash flow generation and a very strong balance sheet, which means we've got financial flexibility, as you know. We're really thoughtful and disciplined in our approach to capital allocation, and it's all aimed at delivering attractive long-term returns for our shareholders. And for us, that means, as I think you know, continuing to prioritize organic long-term growth investment above everything, but also accelerating our capital return as well as considering strategic M&A. You referred to -- I mentioned this in my prepared remarks, that our framework for capital return includes a process that enables us to opportunistically accelerate share repurchases when we believe there are particularly attractive return opportunities. We saw that in Q3.

And so with that acceleration have at this point, returned about 60% of our free cash flow so far this year. And I think you can expect, based on that framework that, that could happen again in the future if we see attractive return opportunities. And then as far as M&A, while our growth investments are primarily organic, given the huge spaces we're in, as Meredith had said, the running room we see -- we're always on the market considering potential M&A opportunities that might meet our high bar. And just to be clear about what we mean by our high bar, that's sitting with our brand and quality standards, accelerating our strategy and providing an attractive risk-adjusted return on capital. So to sort of sum it up that the discipline in our capital allocation framework means that we're aiming for the most attractive long-term returns on capital through both strategic growth investment and capital return, it's not either or it's both.

Anthony DiClemente

Great. Thank you, Kutgun for the question.

Operator

The next question comes from Jason Bazinet with Citi Group.

Jason Bazinet

I just had 2 quick questions. On the advertising side, I guess we all got accustomed to you guys beating your guidance comfortably on ads. I just wonder, would you say the miss this time was more a function of something like AI overviews, sort of impinging on indirect traffic? Or was it just the broader engagement issue? Like how would you sort of describe the underlying cause. And then second, on expense growth, I heard your comments will around G&A and incentive comp. Can you maybe just -- if you stripped out the incentive comp stuff that distorts 4Q give us a sense of what the underlying cost growth is to help us inform cost growth for next year?

Meredith Kopit Levien

I'll take the first part of the question. Will, maybe you take the cost bit. I think I may have said this before, but I'm going to say again, I would regard where we came in digital advertising in the quarter relative to our guidance as being more about exactly where ads landing in quarters being hard to predict. And I think he gave the context in the question, which is it was hard to predict in the prior 2 quarters. I wouldn't make more of it than that. And I'll just add because you're asking about kind of the role of the changing environment, which I've not referred to a number of times in my prepared remarks, it's just worth saying our economic model here at the time is really driven a lot by subscriber engagement that is for both subs and ads so you hear us talk about consistently strong subscriber engagement, and that plays a big role in the ad model too. And I continue to be really optimistic about as a long-term growth driver for the time. Will.

William Bardeen

Yes. Just a couple of things on your expense question. I just wanted to make clear sort of the G&A expense growth comment was really about Q3. It was a bit higher in the quarter, specifically because of some higher professional services and onetime promotional expenses related to the 175th anniversary of the company, I think G&A as you've seen over some time, and certainly, we expect it to continue to be an area where we're really focused on efficiency. In terms of the guide and your question about incentive costs, what I really need to indicate there is more the variability. At this stage, it's just hard for us to call exactly where it lands because at the end of the year, it's our biggest quarter and based on how our compensation works, depending on where revenue lands, you can have some variability there.

But I answered the question before about our guide. That's the only thing we guide to and its overall framework of us continuing to have a real focus on efficiency while also make disciplined strategic investments for long-term sustainable growth. So that's what you're seeing in our guide and what you should expect to see going forward.

Anthony DiClemente

Great. Thanks Jason.

Operator

The next question comes from Kannan Venkateshwar with Barclays.

Kannan Venkateshwar

Thank you. Meredith, on the advertising side, you guys came in a little bit lower. I just wanted to understand if any of that is driven by engagement trends and what you guys are seeing in general learning engagement in Q4 as well? And if -- AI in some ways has affected traffic across your products? And then secondly, I mean, when you think about the pricing versus sub model, the subscriber growth model going forward. How should we think about that in terms of contribution to revenue. And your net add strength was pretty strong despite tougher comps year-over-year. So could you talk about what drove that growth?

Meredith Kopit Levien

Yes. Kannan, let me take the first part of the question, Will maybe take the second part of the question. At the risk of repeating myself, I will just say version of what -- how I answered the prior question, a lot of our economic model is driven by consistently strong subscriber engagement and then it is true for subs, it is also true for ads. And I think the risk of saying that twice, I think that plays a role in our ad strategy and growth. And in terms of where we came in relative to the guide, I think it's just exactly where a land in the quarter can be hard to predict. So I don't I don't think there's much more sort of to see there. Will, maybe you take the other part of the question? .

William Bardeen

Yes, sure. I mean I'd sort of say -- I mean, look, you highlighted this, we're pleased with our growth in digital subscribers and digital subscription revenue in Q3. And both is the way to sort of think about that in Q3 and also going forward, we've been breaking the way we understand digital subscription revenue growth into 3 basic categories. So first is sub growth over the prior 12 months, even as sub additions can vary quarter-to-quarter.

Second is mix. So the mix of those subscribers between higher-priced funnel subs and lower-priced single-priced subs. And then third is the pricing step-up performance. And by step-up, I mean, 2 things. How well are subs transitioning off promotion to higher prices as well as the timing and performance of any price increases. So as I noted in my prepared remarks, we saw a 13% year-over-year increase in average subscribers. ARPU growth, getting us the rest of the way to that 14.6% digital subscription growth in the third quarter, the high end of our guidance range. We mentioned in the last call that we had anticipated a cohort impact from the paywalling of Mini in last year's Q3. And regarding the volume impact of that cohort, we were pleased with the retention performance in the quarter.

And while that also meant sort of a relatively large sub mix from lower-priced single product subs, impact in quarters ARPU, we also continue to be pleased with pricing performance. at all the step-up points across the portfolio. And then with that color, I'll just go back to sort of the overarching question. Overall, strong digital subscriber growth is what we expect because the strategy continues to work as designed. We're focused on sustaining healthy underlying drivers of digital subscription revenue, and that means continuing as Meredith is set to add significant value into our products. generating that strong engagement over time and then asking users to pay a bit more over time as those products become even more differentiated and valuable.

Meredith Kopit Levien

And I'll just -- it's just like tie it all together, all of that is good for the ad business. And all of that sort of guards our confidence about the ads of the continued growth driver for the time. .

Anthony DiClemente

Thanks, Kannan. Let's take 1 last question, operator.

Operator

Our last question today comes from Doug Arthur with Huber Research.

Douglas Arthur

Yes, 2 quick ones. In terms of the pretty solid net add number, Meredith, do you think the election, the app you did on the portion of the app on the elections drove any of that? That's question one.

Meredith Kopit Levien

I mean my sort of answer to that is the model is really built to harness demand wherever it comes from, and that can be related to what's happening in the news cycle. What's happening closer could be related to any number of things. I will say we are incredibly pleased and proud with how our newsroom has covered elections at home and abroad. And I think you're going to continue to see us do that in a strong and differentiated way.

Douglas Arthur

Yes. Second question, in terms of your growth in digital subscription and digital advertising, any -- any color on whether the athletic was above or below or in line with those general rates?

Meredith Kopit Levien

We continue to be very optimistic and excited about the athletic. It definitely plays a meaningful role in our ad growth, and a lot of that has to do with engagement and what is happening where in the sports calendar, but we're -- it's an awesome proposition for advertisers, and it's got lots of running room, and we're super excited about it. And then it's also -- we're very, very happy to have it in the bundle, and you hear us talk about consistently strong subscriber engagement. That comes from across the portfolio.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Anthony DiClemente for any closing remarks.

Anthony DiClemente

Great. Thank you, everyone, for joining us for our earnings call, and we'll see you next quarter. .

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.