BuzzFeed, Inc. Q2 FY2024 earnings call

• Long-term approach to business management with focus on innovation and AI. - AI and interactive content driving improvements in audience loyalty, user logins, conversion, and profitability. - Audience time spent grew 5% QoQ, with 11% growth among Millennials and Gen Z. - Exceeded May profit outlook with $2.7 million adjusted EBITDA in Q2. - 90% of audience time spent on owned and operated properties. - Strong loyalty among audience with logged-in users growing and repeat visits increasing. - New homepage launch in June driving audience engagement and monetization. - Big Prime Day success with double-digit revenue growth.

Overall revenues for Q2 2024 declined 24% year-over-year to $46.9 million. Advertising revenues declined 19% year-over-year to $23.8 million, driven by direct sales pressure but with programmatic advertising growth. Content revenues declined 48% year-over-year to $11.4 million due to direct sales pressure. Commerce and other revenues grew 7% year-over-year to $11.7 million. Adjusted EBITDA for Q2 was $2.7 million, a $5 million improvement year-over-year. Programmatic advertising and affiliate commerce, the two largest and highest margin lines of business, saw year-over-year revenue growth.

• Q3 2024 overall revenues expected in range of $58 million to $63 million, 3% lower to 5% higher than year-ago quarter. - Adjusted EBITDA expected in range of $6 million to $11 million, approximately $8 million higher year-over-year at midpoint. - Momentum from Prime Day, programmatic advertising growth, and affiliate commerce growth driving the lift. - Stabilization in direct sold content and continued focus on owned and operated properties.

• Risk of cookie deprecation and dependence on third-party referrals for audience traffic. - Potential impact of external factors on advertising revenue, particularly with direct sold revenues expected in Q4 rather than Q3.

Q: Can you share more about how AI is helping move content launches forward and quantify cost benefit?

A: AI enables creating generators for content, increasing content output and audience interactivity. Upfront work over 1.5 years built platform to accelerate AI work, allowing quicker launches of interactive content with personalization.

Q: What are the expectations for election impact on traffic and advertising revenue?

A: Traffic strong on BuzzFeed and HuffPost with election, but ad spend expected in Q4 rather than Q3.

Q: What's driving the lift in Q3 guidance?

A: Positive trends in programmatic and affiliate, new content launches and revamped homepage driving audience engagement, best Prime Day ever, stabilization in direct sold content, and operating leverage from cost savings.

Q: Thoughts on balance sheet and impending lender option?

A: Focus on executing strategy, collaborative relationship with noteholders, evaluating strategic changes including divestitures.

Q: Is Q2 cash burn indicative of future?

A: Q2 cash burn not indicative, due to one-time expenditures like severance, working capital optimization, and interest payment not repeating in Q3, expecting more cash balance stability.