Look at The New York Times Co.’s Q1 earnings report, released and webcast today, this way: The Times — for now — is doing an above-average job of managing the print-to-digital transition. Several pieces of data confirm that belief.

A couple of numbers tell us a lot: In the first quarter, the Times took in $40 million in digital-only subscription revenue. That number has been growing; it ended up at about $150 million for 2013. But in that same quarter, the Times’ overall circulation revenue increased by only $4 million, year over year.

On the face of it, the numbers don’t make sense. Why is the overall circ revenue increase so small, given how much digital circ revenue continues to grow at a good pace — 18 percent year over year, now creating a paid digital-only circulation number of 799,000? Put simply, print circulation continues to tumble dramatically. It’s down in copies sold — 6.5 percent daily, 2 percent Sunday. While the Times put more print price increases into the market over the last 15 months, its print readership continues to drop rather dramatically.

The Times is still growing digital-only circulation (albeit at lower prices than in print), reporting 799,000 than print. It added more net digital subscribers in the first quarter of 2014 than in any quarter in 2013. But the key element is successfully — if only marginally — managing this transition. The goal: Keep that reader revenue growing, even as the Times loses paid (and higher priced) print.

One important point: The cost of fulfilling those digital subs is far lower than the print ones. That’s the 2018-20 story: Get to that future fairly intact, and the business becomes far more profitable. This is the story the Financial Times — in many ways the Times’ model — has been able to start telling. In its last report, it reported only a 1 percent increase in revenues, but a 17 percent jump in profit. Farther along in the digital transition, its profit picture is improving more quickly.

One other data point tells us about this tightrope transition success: The Times reported a 4 percent print ad revenue increase for the first quarter. The entire newspaper industry lost 8.6 percent of its print revenue last year (see today’s earlier story, “The newsonomics of slipping digital performance”), so being up 4 percent is significant. Times Co. CEO Mark Thompson made a major point of April being a tough month and the ad waters still being very choppy. (In other words, don’t expect 4 percent growth again in Q2.)

But for Q1, consider that the Times is shedding lots of print customers, but still growing print ad revenue and managing to still grow reader revenue. Give Thompson one gold star for now: His first mandate is to improve revenue growth, and this is the third quarter in a row he’s done that.

Many challenges, and rocks, lie ahead:

• Digital advertising was up just 2 percent (comparable to 1.5 percent at U.S. dailies generally). New ad head Meredith Levien is especially bullish on the kind of native advertising that is populating NYT Now; a half-dozen top-drawer advertisers are running campaigns. Profit was marginally down (to $22 million from $28 million), and will continue to be pressured. NYT Now costs money to produce, as will the new opinion (later spring) and food (summer) digital niche products.
• Further, as NYT digital chief Denise Warren pointed out, the marketing of those products and of digital circulation overall increases near-term costs. Warren, of course, wouldn’t say how well NYT Now and the new upsell Premier product are doing so far, less than a month after launch. It sounded, though, like NYT Now was taking off faster. If that’s right, it’s good news for regional publishers looking at adapting its low-cost, mobile-first model.
• Those local publishers have a parallel, but different challenge, than the Times. The Times has the whole world to sell to; it said today it will start offering its subscriptions in local currencies to bolster that push. The local press — dailies and many others — must work smaller markets. But then again, the relationships they have on their doorsteps, with readers, merchants, and community institutions, are unlike those to which the Times has access.

Tomorrow, a conference in New Jersey, “Innovating the Local News Ecosystem” (livestream tomorrow at 9ET here, #innovatelocal on Twitter), will focus on those local challenges and opportunities. Sponsored by the School of Communication and Media at Montclair State University, it has a packed agenda (I’m on a morning panel with USA Today publisher Larry Kramer, Jim Brady, Tiffany Shackelford, and host/Montclair State school director Merrill Brown). Still, what we’re learning from The New York Times, across the Hudson, shouldn’t be too far from our conversation.