Delivered Q2 Results in line with May
outlook
BuzzFeed, Inc. (“BuzzFeed” or the “Company”) (Nasdaq: BZFD), a
premier digital media company for the most diverse, most online,
and most socially engaged generations the world has ever seen,
today announced financial results for the second quarter ended June
30, 2023.
“The strategic and organizational changes we discussed at our
Investor Day in May have been fully executed, putting our rich
library of IP and scaled, owned-and-operated properties at the
center of our operating model to create innovative, audience-driven
content,” said Jonah Peretti, BuzzFeed Founder &
CEO.
Peretti continued, “In response to consolidation and
share gains across the major platforms that continue to impact
audience traffic to our content, we are laser focused on our
strategy to drive traffic directly to our owned-and-operated
properties. We have introduced new AI-assisted content formats to
increase engagement and offer innovative advertising opportunities
to our clients, rapidly expanded our creator network to participate
in the rise of vertical video, and prioritized destination news
content to grow our HuffPost front page audience.”
Second Quarter 2023 Financial and
Operational Highlights
- BuzzFeed delivered Q2 revenues of $77.9 million, declining
27% compared to the second quarter of 2022
- Advertising revenue declined 33% year-over-year to $35.4
million
- Content revenue declined 22% year-over-year to $31.5
million
- Commerce and other revenues declined 17% year-over-year
to $11.0 million
- Net loss was $27.8 million, compared to a net loss of
$23.6 million in the second quarter of 2022
- Adjusted EBITDA1 loss was $0.1 million, compared to
Adjusted EBITDA of $2.1 million in the second quarter of 2022
- Time Spent decreased 9% year-over-year to 96 million
hours2
- BuzzFeed ended the period with cash and cash equivalents
of approximately $41 million
_________________________ 1 Adjusted EBITDA is a non-GAAP
financial measure. Please refer to “Non-GAAP Financial Measures”
below for a description of how it is calculated and the tables at
the back of this earnings release for a reconciliation of our GAAP
and non-GAAP results. 2 Excludes Facebook; see below.
Third Quarter 2023 Financial
Outlook
For the third quarter of 2023:
- We expect overall revenues in the range of $73 to $78
million
- We expect Adjusted EBITDA in the range of $1 million in losses
to $4 million in profits
These statements are forward-looking and actual results may
differ materially as a result of many factors. Refer to
“Forward-Looking Statements” below for information on factors that
could cause our actual results to differ materially from these
forward-looking statements.
Please see “Non-GAAP Financial Measures” below for a description
of how Adjusted EBITDA is calculated. While Adjusted EBITDA is a
non-GAAP financial measure, we have not provided guidance for the
most directly comparable GAAP financial measure — net loss — due to
the inherent difficulty in forecasting and quantifying certain
amounts that are necessary to forecast such measure. Accordingly, a
reconciliation of non-GAAP guidance for Adjusted EBITDA to the
corresponding GAAP measure is not available.
Quarterly Conference
Call
BuzzFeed’s management team will hold a conference call to
discuss our second quarter 2023 results today, August 8, at 5PM ET.
The call will be available via webcast at investors.buzzfeed.com
under the heading News and Events, and parties interested in
participating must register in advance by clicking on this link.
Upon registration, all telephone participants will receive a
confirmation email detailing how to join the conference call,
including the dial-in number along with a unique PIN that can be
used to access the call. While it is not required, it is
recommended you join 10 minutes prior to the event start time. A
replay of the call will be made available at the same URL.
We have used, and intend to continue to use, the Investor
Relations section of our website at investors.buzzfeed.com as a
means of disclosing material nonpublic information and for
complying with our disclosure obligations under Regulation FD.
Definitions
BuzzFeed reports revenues across three primary business lines:
Advertising, Content and Commerce and other. The definition of
“Time Spent” is also set forth below.
- Advertising revenues are primarily generated from
advertisers for ads distributed against our editorial and news
content, including display, pre-roll and mid-roll video products
sold directly to brands and also programmatically. We distribute
these ad products across our owned and operated sites as well as
third-party platforms, primarily YouTube and Apple News.
- Content revenues are primarily generated from clients
for custom assets, including both long-form and short-form content,
from branded quizzes to Instagram takeovers to sponsored content
and content licensing. Revenues for film and TV projects are also
included here.
- Commerce and other revenues consist primarily of
affiliate commissions earned on transactions initiated from our
editorial shopping content. Revenues from our product licensing
businesses are also included here. Additionally, we generate other
revenues from the production of live and virtual events such as
ComplexCon and ComplexLand.
- Time Spent captures the time audiences spend engaging
with our content across our owned and operated sites, as well as
YouTube and Apple News, as measured by Comscore. This metric
excludes time spent with our content on platforms for which we have
minimal advertising capabilities that contribute to our Advertising
revenues, including Instagram, TikTok, Facebook, Snapchat and
Twitter. There are inherent challenges in measuring the total
actual number of hours spent with our content across all platforms;
however, we consider the data reported by Comscore to represent
industry-standard estimates of the time actually spent on our
largest distribution platforms with our most significant
monetization opportunities. Effective January 1, 2023, we exclude
time spent on Facebook from our measure of Time Spent as our
monetization strategy is increasingly focused on advertising on our
owned and operated properties, and Facebook now contributes an
immaterial amount of advertising revenue. Time Spent on Facebook,
as reported by Facebook, was approximately 15 million hours and 48
million hours for the three months ended June 30, 2023 and 2022,
respectively, and 37 million hours and 120 million hours for the
six months ended June 30, 2023 and 2022, respectively, which is not
included in Time Spent discussed above.
About BuzzFeed, Inc.
BuzzFeed, Inc. is home to the best of the Internet. Across pop
culture, entertainment, shopping, food and news, our brands drive
conversation and inspire what audiences watch, read, and buy now —
and into the future. Born on the Internet in 2006, BuzzFeed is
committed to making it better: providing trusted, quality,
brand-safe news and entertainment to hundreds of millions of
people; making content on the Internet more inclusive, empathetic,
and creative; and inspiring our audience to live better lives.
Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP
financial measures and represent key metrics used by management and
our board of directors to measure the operational strength and
performance of our business, to establish budgets, and to develop
operational goals for managing our business. We define Adjusted
EBITDA as net loss, excluding the impact of net income (loss)
attributable to noncontrolling interests, income tax (benefit)
provision, interest expense, net, other expense, net, depreciation
and amortization, stock-based compensation, change in fair value of
warrant liabilities, change in fair value of derivative liability,
restructuring costs, transaction-related costs, certain litigation
costs, public company readiness costs, and other non-cash and
non-recurring items that management believes are not indicative of
ongoing operations. Adjusted EBITDA margin is calculated by
dividing Adjusted EBITDA by revenue for the same period.
We believe Adjusted EBITDA and Adjusted EBITDA margin are
relevant and useful information for investors because they allow
investors to view performance in a manner similar to the method
used by our management. There are limitations to the use of
Adjusted EBITDA and Adjusted EBITDA margin and our Adjusted EBITDA
and Adjusted EBITDA margin may not be comparable to similarly
titled measures of other companies. Other companies, including
companies in our industry, may calculate non-GAAP financial
measures differently than we do, limiting the usefulness of those
measures for comparative purposes.
Adjusted EBITDA and Adjusted EBITDA margin should not be
considered a substitute for measures prepared in accordance with
GAAP. Reconciliations of non-GAAP financial measures to the most
directly comparable financial results as determined in accordance
with GAAP are included at the end of this press release following
the accompanying financial data.
Forward-Looking Statements
Certain statements in this press release may be considered
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which statements
involve substantial risks and uncertainties. Our forward-looking
statements include, but are not limited to, statements regarding
our management team’s expectations, hopes, beliefs, intentions or
strategies regarding the future. In addition, any statements that
refer to projections, forecasts (including our outlook for Q3 and
FY 2023) or other characterizations of future events or
circumstances, including any underlying assumptions, are
forward-looking statements. The words “affect,” “anticipate,”
“believe,” “can,” “contemplate,” “continue,” “could,” “estimate,”
“expect,” “forecast,” “intend,” “may,” “might,” “plan,” “possible,”
“potential,” “predict,” “project,” “seek,” “should,” “target,”
“will,” “would” and similar expressions may identify
forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking. Forward-looking
statements may include, for example, statements about: (1)
anticipated trends, growth rates, and challenges in our business
and in the markets in which we operate; (2) demand for products and
services and changes in traffic; (3) changes in the business and
competitive environment in which we operate; (4) developments and
projections relating to our competitors and the digital media
industry; (5) the impact of national and local economic and other
conditions and developments in technology, each of which could
influence the levels (rate and volume) of our advertising, the
growth of our business and the implementation of our strategic
initiatives; (6) poor quality broadband infrastructure in certain
markets; (7) technological developments including artificial
intelligence; (8) our success in retaining or recruiting, or
changes required in, officers, key employees or directors; (9) our
business, operations and financial performance, including
expectations with respect to our financial and business performance
and the benefits of our restructuring, including financial
projections and business metrics and any underlying assumptions
thereunder and future business plans and initiatives and growth
opportunities; (10) our future capital requirements and sources and
uses of cash, including, but not limited to, our ability to obtain
additional capital in the future, any impacts of bank failures or
issues in the broader United States financial system, any
restrictions imposed by our debt facilities, and any restrictions
on our ability to access our cash and cash equivalents; (11)
expectations regarding future acquisitions, partnerships or other
relationships with third parties; (12) developments in the law and
government regulation, including, but not limited to, revised
foreign content and ownership regulations; (13) the anticipated
impacts of current global supply chain disruptions, further
escalation of tensions between Russia and Western countries and the
related sanctions and geopolitical tensions, as well as further
escalation of trade tensions between the United States and China;
the inflationary environment; the tight labor market; the continued
impact of the COVID-19 pandemic and evolving strains of COVID-19;
and other macroeconomic factors on our business and the actions we
may take in the future in response thereto; and (14) our ability to
maintain the listing of our Class A common stock and warrants on
the Nasdaq Stock Market LLC.
The forward-looking statements contained in this press release
are based on current expectations and beliefs concerning future
developments and their potential effects on us. There can be no
assurance that future developments affecting us will be those that
we have anticipated. These forward-looking statements involve a
number of risks, uncertainties (some of which are beyond our
control) or other assumptions that may cause actual results or
performance to be materially different from those expressed or
implied by these forward-looking statements. These risks and
uncertainties include, but are not limited to, those factors
described under the sections entitled “Risk Factors” in the
Company’s annual and quarterly filings with the Securities and
Exchange Commission. Should one or more of these risks or
uncertainties materialize, or should any of our assumptions prove
incorrect, actual results may vary in material respects from those
projected in these forward-looking statements. There may be
additional risks that we consider immaterial or which are unknown.
It is not possible to predict or identify all such risks. We do not
undertake any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be required under applicable securities
laws.
BUZZFEED, INC. Financial
Highlights (Unaudited, dollars in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
%Change
2023
2022
%Change
Advertising
$
35,397
$
53,224
(33
)%
$
69,645
$
101,892
(32
)%
Content
31,479
40,284
(22
)%
53,097
72,563
(27
)%
Commerce and other
11,025
13,252
(17
)%
22,312
23,863
(6
)%
Total revenue
$
77,901
$
106,760
(27
)%
$
145,054
$
198,318
(27
)%
Loss from operations
$
(20,087
)
$
(24,888
)
19
%
$
(49,805
)
$
(60,186
)
17
%
Net loss
$
(27,836
)
$
(23,581
)
(18
)%
$
(64,097
)
$
(68,147
)
6
%
Adjusted EBITDA
$
(137
)
$
2,093
(107
)%
$
(20,328
)
$
(14,671
)
(39
)%
BUZZFEED, INC. Consolidated Balance Sheets
(Unaudited, dollars and shares in thousands, except per
share amounts)
June 30, 2023(Unaudited) December 31,2022
Assets Current assets Cash and cash equivalents
$
41,295
$
55,774
Accounts receivable (net of allowance for doubtful accounts of
$1,747 as at June 30, 2023 and $1,879 as at December 31, 2022)
70,855
116,460
Prepaid expenses and other current assets
22,244
26,373
Total current assets
134,394
198,607
Property and equipment, net
14,892
17,774
Right-of-use assets
56,537
66,581
Capitalized software costs, net
21,509
19,259
Intangible assets, net
113,737
121,329
Goodwill
91,632
91,632
Prepaid expenses and other assets
13,720
14,790
Total assets
$
446,421
$
529,972
Liabilities and Stockholders' Equity Current
liabilities Accounts payable
$
37,294
$
29,329
Accrued expenses
16,024
26,357
Deferred revenue
6,355
8,836
Accrued compensation
19,960
31,052
Current lease liabilities
22,016
23,398
Other current liabilities
5,037
3,900
Total current liabilities
106,686
122,872
Noncurrent lease liabilities
49,036
59,315
Debt
155,979
152,253
Derivative liability
60
180
Warrant liabilities
593
395
Other liabilities
440
403
Total liabilities
312,794
335,418
Commitments and contingencies
Stockholders’
equity Class A Common stock, $0.0001 par value; 700,000 shares
authorized; 136,615 and 126,387 shares issued and outstanding at
June 30, 2023 and December 31, 2022, respectively
14
13
Class B Common stock, $0.0001 par value; 20,000 shares authorized;
6,676 and 6,678 shares issued and outstanding at June 30, 2023 and
December 31, 2022, respectively
1
1
Class C Common stock, $0.0001 par value; 10,000 shares authorized;
0 and 6,478 shares issued and outstanding at June 30, 2023 and
December 31, 2022, respectively
-
1
Additional paid-in capital
720,231
716,233
Accumulated deficit
(587,026
)
(523,063
)
Accumulated other comprehensive loss
(2,370
)
(1,968
)
Total BuzzFeed, Inc. stockholders’ equity
130,850
191,217
Noncontrolling interests
2,777
3,337
Total stockholders’ equity
133,627
194,554
Total liabilities and stockholders’ equity
$
446,421
$
529,972
BUZZFEED, INC. Consolidated Statements of
Operations (Unaudited, dollars and shares in thousands, except per
share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Revenue
$
77,901
$
106,760
$
145,054
$
198,318
Costs and Expenses Cost of revenue, excluding depreciation and
amortization
50,507
61,529
97,851
122,347
Sales and marketing
14,135
18,688
29,436
36,491
General and administrative
21,356
32,565
43,358
65,127
Research and development
3,960
10,253
7,779
17,445
Depreciation and amortization
8,030
8,613
16,435
17,094
Total costs and expenses
97,988
131,648
194,859
258,504
Loss from operations
(20,087
)
(24,888
)
(49,805
)
(60,186
)
Other expense, net
(3,675
)
(3,440
)
(3,055
)
(2,578
)
Interest expense, net
(5,631
)
(5,032
)
(11,049
)
(9,821
)
Change in fair value of warrant liabilities
395
6,775
(198
)
3,359
Change in fair value of derivative liability
1,125
4,800
120
3,225
Loss before income taxes
(27,873
)
(21,785
)
(63,987
)
(66,001
)
Income tax (benefit) provision
(37
)
1,796
110
2,146
Net loss
(27,836
)
(23,581
)
(64,097
)
(68,147
)
Net income attributable to the redeemable noncontrolling interest
-
-
-
164
Net income (loss) attributable to noncontrolling interests
-
184
(260
)
348
Net loss attributable to BuzzFeed, Inc.
$
(27,836
)
$
(23,765
)
$
(63,837
)
$
(68,659
)
Net loss per Class A, Class B and Class C common share:
Basic and diluted
$
(0.20
)
$
(0.17
)
$
(0.45
)
$
(0.50
)
Weighted average common shares outstanding: Basic and diluted
141,950
137,381
141,330
136,906
BUZZFEED, INC. Consolidated
Statements of Cash Flows (Unaudited, USD in
thousands)
Six Months Ended June
30,
2023
2022
Operating activities: Net loss
$
(64,097
)
$
(68,147
)
Adjustments to reconcile net loss to net cash used in operating
activities: Depreciation and amortization
16,435
17,094
Unrealized (gain) loss on foreign currency
(809
)
2,811
Stock based compensation
3,379
15,224
Change in fair value of warrants
198
(3,359
)
Change in fair value of derivative liability
(120
)
(3,225
)
Amortization of debt discount and deferred issuance costs
2,915
2,527
Deferred income tax
341
2,088
Provision for doubtful accounts
(259
)
554
Loss (gain) on investment
3,590
(1,260
)
Gain on disposition of assets
(175
)
-
Non-cash lease expense
10,173
9,727
Changes in operating assets and liabilities: Accounts receivable
45,871
51,831
Prepaid expenses and other current assets and prepaid expenses and
other assets
1,653
(3,216
)
Accounts payable
9,889
(1,167
)
Accrued compensation
(11,102
)
(7,242
)
Accrued expenses, other current liabilities and other liabilities
(11,302
)
(7,733
)
Lease liabilities
(11,822
)
(11,592
)
Deferred revenue
(2,488
)
1,284
Cash used in operating activities
(7,730
)
(3,801
)
Investing activities: Capital expenditures
(471
)
(2,828
)
Capitalization of internal-use software
(7,676
)
(6,646
)
Proceeds from sale of asset
175
-
Cash used in investing activities
(7,972
)
(9,474
)
Financing activities: Proceeds from exercise of stock
options
29
360
Payment for shares withheld for employee taxes
(220
)
(1,635
)
Borrowings on Revolving Credit Facility
2,128
5,000
Payments on Revolving Credit Facility
(1,317
)
-
Proceeds from the issuance of common stock in connection with
at-the-market offering, net of issuance costs
765
-
Deferred reverse recapitalization costs
-
(585
)
Cash provided by financing activities
1,385
3,140
Effect of currency translation on cash and cash equivalents
(162
)
(1,409
)
Net decrease in cash and cash equivalents
(14,479
)
(11,544
)
Cash and cash equivalents at beginning of period
55,774
79,733
Cash and cash equivalents at end of period
$
41,295
$
68,189
BUZZFEED, INC. Reconciliation of GAAP
to Non-GAAP (Unaudited, USD in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net loss
(27,836
)
(23,581
)
(64,097
)
(68,147
)
Income tax (benefit) provision
(37
)
1,796
110
2,146
Interest expense, net
5,631
5,032
11,049
9,821
Other expense, net
3,675
3,440
3,055
2,578
Depreciation and amortization
8,030
8,613
16,435
17,094
Stock-based compensation
2,257
11,284
3,379
15,224
Change in fair value of warrant liabilities
(395
)
(6,775
)
198
(3,359
)
Change in fair value of derivative liability
(1,125
)
(4,800
)
(120
)
(3,225
)
Restructuring(1)
9,663
3,476
9,663
5,319
Transaction-related costs(2)
—
2,177
—
5,132
Litigation costs(3)
—
1,224
—
1,224
Public company readiness costs(4)
—
207
—
1,522
Adjusted EBITDA
$
(137
)
$
2,093
$
(20,328
)
$
(14,671
)
Adjusted EBITDA margin
(0.2
)%
2.0
%
(14.0
)%
(7.4
)%
Net loss as a percentage of revenue(5)
(35.7
)%
(22.1
)%
(44.2
)%
(34.4
)%
(1) Refer to Item 2. “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” within our Quarterly
Report on Form 10-Q for the period ended June 30, 2023 for a
discussion of the distinct restructuring activities during the
three and six months ended June 30, 2023 and 2022. We exclude
restructuring expenses from our non-GAAP measures because we
believe they do not reflect expected future operating expenses,
they are not indicative of our core operating performance, and they
are not meaningful in comparisons to our past operating
performance.
(2) Reflects transaction-related costs and other items which are
either not representative of our underlying operations or are
incremental costs that result from an actual or contemplated
transaction and include professional fees, integration expenses,
and certain costs related to integrating and converging IT
systems.
(3) Reflects costs related to litigation that are outside the
ordinary course of our business. We believe it is useful to exclude
such charges because we do not consider such amounts to be part of
the ongoing operations of our business and because of the singular
nature of the claims underlying the matter.
(4) Reflects one-time initial set-up costs associated with the
establishment of our public company structure and processes.
(5) Net loss as a percentage of revenue is included as the most
comparable GAAP measure to Adjusted EBITDA margin, which is a
Non-GAAP measure.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230807520304/en/
Media Carole Robinson, BuzzFeed:
carole.robinson@buzzfeed.com
Investor Relations Amita Tomkoria, BuzzFeed:
investors@buzzfeed.com
BuzzFeed (NASDAQ:BZFD)
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