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 third quarter ended
September 30, 2023.
“We’ve taken significant steps to combat the ongoing traffic and
monetization challenges facing digital media companies. We continue
to be laser-focused on driving traffic directly to our owned and
operated websites and apps in order to reduce our dependence on the
major tech platforms for audience traffic, improve monetization and
pivot our business to adjust to the new realities of an altered
digital media landscape,” said Jonah Peretti, BuzzFeed Founder
& CEO.
Peretti continued, “Across our portfolio of premium
brands and IP, we reach millions of young people every day who
visit us directly to enjoy our content. And, with the strategic and
organizational changes we executed earlier this year, we are
well-positioned to drive a year-over-year improvement in Adjusted
EBITDA1 in Q4 and for the full year. Additionally, we are
continuing to protect our liquidity position as we work toward
building a sustainable long-term model for content creation.”
Third Quarter 2023 Financial and
Operational Highlights
- BuzzFeed delivered Q3 revenues of $73.3 million, declining
29% compared to the third quarter of 2022
- Advertising revenue declined 35% year-over-year to $32.6
million
- Content revenue declined 32% year-over-year to $26.2
million
- Commerce and other revenues marginally declined 3%
year-over-year to $14.5 million
- Net loss was $13.9 million, compared to a net loss of
$27.0 million in the third quarter of 2022
- Adjusted EBITDA1 was $3.1 million, compared to Adjusted
EBITDA loss of $2.4 million in the third quarter of 2022
- Time Spent decreased 19% year-over-year to 92 million
hours2
- BuzzFeed ended the period with cash and cash equivalents
of approximately $42 million
Fourth Quarter 2023 Financial
Outlook
For the fourth quarter of 2023:
- We expect overall revenues in the range of $99 to $110
million
- We expect Adjusted EBITDA in the range of $20 to $30
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.
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 third quarter 2023 results today, November 2, 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 11 million hours and 37
million hours for the three months ended September 30, 2023 and
2022, respectively, and 48 million hours and 157 million hours for
the nine months ended September 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 (loss) income
attributable to noncontrolling interests, income tax 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, impairment expense, 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 Q4 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 our products
and services or changes in traffic or engagement with our brands
and content; (3) changes in the business and competitive
environment in which we and our current and prospective partners
and advertisers 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)
our success in integrating and supporting the companies we acquire;
(7) poor quality broadband infrastructure in certain markets; (8)
technological developments, including artificial intelligence; (9)
our success in retaining or recruiting, or changes required in,
officers, key employees or directors; (10) 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; (11) our future capital
requirements and sources and uses of cash, including, but not
limited to, our ability to obtain additional capital in the future
and the actions we may need to take in order to generate capital to
fund our operations, any impacts of bank failures or issues in the
broader United States or global financial systems, any restrictions
imposed by our debt facilities, and any restrictions on our ability
to access our cash and cash equivalents; (12) expectations
regarding future acquisitions, partnerships or other relationships
with third parties; (13) developments in the law and government
regulation, including, but not limited to, revised foreign content
and ownership regulations and the outcomes of legal proceedings,
regulatory disputes and governmental investigations to which we are
subject; (14) the anticipated impacts of current global supply
chain disruptions; the war between Israel and Hamas or 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 (15) 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 September
30,
Nine Months Ended September
30,
2023
2022
%Change
2023
2022
%Change
Advertising
$
32,589
$
50,404
(35
)%
$
102,234
$
152,296
(33
)%
Content
26,250
38,416
(32
)%
79,347
110,979
(29
)%
Commerce and other
14,460
14,913
(3
)%
36,772
38,776
(5
)%
Total revenue
$
73,299
$
103,733
(29
)%
$
218,353
$
302,051
(28
)%
Loss from operations
$
(6,800
)
$
(18,085
)
62
%
$
(56,605
)
$
(78,271
)
28
%
Net loss
$
(13,932
)
$
(26,993
)
48
%
$
(78,029
)
$
(95,140
)
18
%
Adjusted EBITDA
$
3,067
$
(2,396
)
228
%
$
(17,261
)
$
(17,067
)
(1
)%
BUZZFEED, INC.
Consolidated Balance
Sheets
(Unaudited, dollars and shares
in thousands, except per share amounts)
September 30, 2023
December 31,
2022
Assets Current assets Cash and cash equivalents
$
42,470
$
55,774
Accounts receivable (net of allowance for doubtful accounts of
$1,996 as at September 30, 2023 and $1,879 as at December 31, 2022)
60,817
116,460
Prepaid expenses and other current assets
24,320
26,373
Total current assets
127,607
198,607
Property and equipment, net
13,415
17,774
Right-of-use assets
51,162
66,581
Capitalized software costs, net
22,110
19,259
Intangible assets, net
109,941
121,329
Goodwill
91,632
91,632
Prepaid expenses and other assets
15,340
14,790
Total assets
$
431,207
$
529,972
Liabilities and Stockholders' Equity Current
liabilities Accounts payable
$
41,610
$
29,329
Accrued expenses
17,713
26,357
Deferred revenue
8,273
8,836
Accrued compensation
14,724
31,052
Current lease liabilities
21,312
23,398
Other current liabilities
4,171
3,900
Total current liabilities
107,803
122,872
Noncurrent lease liabilities
43,424
59,315
Debt
157,061
152,253
Derivative liability
30
180
Warrant liabilities
489
395
Other liabilities
445
403
Total liabilities
309,252
335,418
Commitments and contingencies
Stockholders’
equity
Class A Common stock, $0.0001 par value;
700,000 shares authorized; 138,201 and 126,387 shares issued and
outstanding at September 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 September 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 September 30, 2023 and December 31, 2022, respectively
-
1
Additional paid-in capital
721,980
716,233
Accumulated deficit
(600,748
)
(523,063
)
Accumulated other comprehensive loss
(1,776
)
(1,968
)
Total BuzzFeed, Inc. stockholders’ equity
119,471
191,217
Noncontrolling interests
2,484
3,337
Total stockholders’ equity
121,955
194,554
Total liabilities and stockholders’ equity
$
431,207
$
529,972
BUZZFEED, INC.
Consolidated Statements of
Operations
(Unaudited, dollars and shares
in thousands, except per share amounts)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Revenue
$
73,299
$
103,733
$
218,353
$
302,051
Costs and Expenses
Cost of revenue, excluding depreciation
and amortization
39,836
60,989
137,687
183,336
Sales and marketing
10,300
16,317
39,736
52,808
General and administrative
19,080
27,254
62,438
92,381
Research and development
2,815
5,900
10,594
23,345
Depreciation and amortization
8,068
9,198
24,503
26,292
Impairment expense
-
2,160
-
2,160
Total costs and expenses
80,099
121,818
274,958
380,322
Loss from operations
(6,800
)
(18,085
)
(56,605
)
(78,271
)
Other expense, net
(1,307
)
(2,752
)
(4,362
)
(5,330
)
Interest expense, net
(5,904
)
(5,171
)
(16,953
)
(14,992
)
Change in fair value of warrant liabilities
104
(395
)
(94
)
2,964
Change in fair value of derivative liability
30
300
150
3,525
Loss before income taxes
(13,877
)
(26,103
)
(77,864
)
(92,104
)
Income tax provision
55
890
165
3,036
Net loss
(13,932
)
(26,993
)
(78,029
)
(95,140
)
Net income attributable to the redeemable noncontrolling interest
-
-
-
164
Net (loss) income attributable to
noncontrolling interests
(210
)
(137
)
(470
)
(211
)
Net loss attributable to BuzzFeed, Inc.
$
(13,722
)
$
(26,856
)
$
(77,559
)
$
(95,515
)
Net loss per Class A, Class B and Class C
common share:
Basic and diluted
$
(0.09
)
$
(0.19
)
$
(0.54
)
$
(0.69
)
Weighted average common shares outstanding: Basic and diluted
145,053
138,939
142,585
137,591
BUZZFEED, INC.
Consolidated Statements of
Cash Flows
(Unaudited, USD in
thousands)
Nine Months Ended September
30,
2023
2022
Operating activities: Net loss
$
(78,029
)
$
(95,140
)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization
24,503
26,292
Unrealized (gain) loss on foreign currency
30
4,906
Stock based compensation
5,178
18,859
Change in fair value of warrants
94
(2,964
)
Change in fair value of derivative liability
(150
)
(3,525
)
Amortization of debt discount and deferred issuance costs
4,475
3,863
Deferred income tax
404
1,957
Provision for doubtful accounts
(10
)
654
Loss (gain) on investment
3,500
(1,260
)
Gain on disposition of assets
(175
)
(500
)
Non-cash lease expense
15,460
14,962
Impairment expense
-
2,160
Changes in operating assets and liabilities:
Accounts receivable
54,823
50,761
Prepaid expenses and other current assets and prepaid expenses and
other assets
(1,540
)
(6,469
)
Accounts payable
14,421
4,133
Accrued compensation
(16,299
)
(9,048
)
Accrued expenses, other current liabilities and other liabilities
(10,451
)
(3,177
)
Lease liabilities
(18,028
)
(17,728
)
Deferred revenue
(569
)
3,367
Cash used in operating activities
(2,363
)
(7,897
)
Investing activities:
Capital expenditures
(761
)
(4,528
)
Capitalization of internal-use software
(10,920
)
(9,746
)
Proceeds from sale of asset
175
500
Cash used in investing activities
(11,506
)
(13,774
)
Financing activities:
Proceeds from exercise of stock options
29
360
Payment for shares withheld for employee taxes
(407
)
(1,670
)
Borrowings on Revolving Credit Facility
2,128
5,000
Payments on Revolving Credit Facility
(1,796
)
-
Proceeds from the issuance of common stock in connection with
at-the-market offering, net of issuance costs
902
-
Deferred reverse recapitalization costs
-
(585
)
Cash provided by financing activities
856
3,105
Effect of currency translation on cash and cash equivalents
(291
)
(2,031
)
Net decrease in cash and cash equivalents
(13,304
)
(20,597
)
Cash and cash equivalents at beginning of period
55,774
79,733
Cash and cash equivalents at end of period
$
42,470
$
59,136
BUZZFEED, INC.
Reconciliation of GAAP to
Non-GAAP
(Unaudited, USD in
thousands)
Three Months Ended September 30, Nine Months Ended
September 30,
2023
2022
2023
2022
Net loss
$
(13,932
)
$
(26,993
)
$
(78,029
)
$
(95,140
)
Income tax provision
55
890
165
3,036
Interest expense, net
5,904
5,171
16,953
14,992
Other expense, net
1,307
2,752
4,362
5,330
Depreciation and amortization
8,068
9,198
24,503
26,292
Stock-based compensation
1,799
3,635
5,178
18,859
Change in fair value of warrant liabilities
(104
)
395
94
(2,964
)
Change in fair value of derivative liability
(30
)
(300
)
(150
)
(3,525
)
Restructuring(1)
—
—
9,663
5,319
Impairment expense(2)
—
2,160
—
2,160
Transaction-related costs(3)
—
—
—
5,132
Litigation costs(4)
—
696
—
1,920
Public company readiness costs(5)
—
—
—
1,522
Adjusted EBITDA
$
3,067
$
(2,396
)
$
(17,261
)
$
(17,067
)
Adjusted EBITDA margin
4.2
%
(2.3
)%
(7.9
)%
(5.7
)%
Net loss as a percentage of revenue(6)
(19.0
)%
(26.0
)%
(35.7
)%
(31.5
)%
(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 September 30, 2023 for a
discussion of the distinct restructuring activities during the nine
months ended September 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 a non-cash impairment expense recorded during the
three months ended September 30, 2022 associated with certain
long-lived assets of our former corporate headquarters which was
fully subleased in the third quarter of 2022.
(3) 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.
(4) 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.
(5) Reflects one-time initial set-up costs associated with the
establishment of our public company structure and processes.
(6) 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/20231101363952/en/
Media Contact Carole Robinson, BuzzFeed:
carole.robinson@buzzfeed.com
Investor Relations Contact Amita Tomkoria, BuzzFeed:
investors@buzzfeed.com
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