BuzzFeed, Inc. Q1 FY2024 earnings call

• Business Transformation: BuzzFeed shifted focus to owned and operated sites and apps, reducing reliance on third-party platforms. Direct traffic now accounts for 90% of audience time spent with content.
• AI Initiatives: Rolled out AI features like image filters, generators, chatbot games, driving engagement. AI is expected to enhance personalized shopping and content experiences.
• Financial Highlights: Q1 revenue and adjusted EBITDA were in line with March outlook. Cash balance increased to $62 million from the sale of Complex. Restructuring program is expected to yield $23 million in annualized compensation cost savings.

In Q1 2024, overall revenues declined 18% year-over-year to $44.8 million. Advertising revenues decreased 22% year-over-year to $21.4 million, but programmatic advertising revenues across BuzzFeed and HuffPost grew 6% year-over-year for the third consecutive quarter. Deposit revenues dropped $3.1 million or 19% year-over-year to $13.1 million, driven by nonrecurring custom content campaigns. Commerce and other revenues of $10.2 million declined $1 million or 9% year-over-year due to less promotional spend by retailers and lower audience traffic. Revenue contribution: Programmatic advertising contributed to 6% year-over-year growth, deposit revenues had a 19% decline, and commerce and other revenues saw a 9% decrease.

For Q2 2024, overall revenues are expected to be in the range of $44 million to $49 million, 21% to 30% lower than the year-ago quarter. Adjusted EBITDA is expected to be in the range of $4 million in losses to $1 million in profits, approximately flat year-over-year at the midpoint. Focus on programmatic and affiliate revenues, leveraging owned and operated properties.

• Traffic Dependence: Continued pressure from third-party platform referrals affecting time spent and revenue.
• Cookie Deprecation: Potential impact on ad targeting and CPMs, though AI initiatives aim to mitigate risks.
• Retailer Spend: Commerce revenues affected by less promotional spend from retailers.

Q: Talk about leveraging first-party data for retail media networks.

A: Jonah Peretti discussed using first-party data from product discovery to target shoppers, leveraging partnerships with retailers like Amazon, Walmart, Target for growth.

Q: Green shoots in content initiatives driving O&O traffic.

A: Matt Omer mentioned 3% quarter-over-quarter growth in direct traffic, 4 consecutive months of increased pages per web visitor for loyal audience.

Q: Brand portfolio and asset sales.

A: Jonah Peretti noted strong brand reputation, focus on BuzzFeed and HuffPost for programmatic and affiliate revenues, opportunistic with asset sales.

Q: Monetization from programmatic and EBITDA impact.

A: Matt Omer highlighted 3 consecutive quarters of programmatic growth, expecting Q2 return to modest year-over-year growth, driving EBITDA improvement.

Q: Google cookies deprecation impact.

A: Jonah Peretti said more time helps, using first-party data, AI for ad targeting, and initiatives like log-in user testing to mitigate risks.