Q1 2024 BuzzFeed Inc Earnings Call

May 13, 2024

Good day and thank you for standing by welcome to the Buzzfeed, Inc. First quarter 2024 earnings conference call. At this time all participants are in a listen only mode. Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today immediate Tom Korea.

Operator: Good day, and thank you for standing by. Welcome to the Buzzfeed Inc. First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Amita Tomkoria, Head of Investor Relations.

Tom Korea: Head of Investor Relations.

Tom Korea: Hello, everyone and welcome to the meetings first quarter 'twenty 'twenty four earnings conference call and let me, there's some Korea senior Vice President of Investor Relations. Joining me today are CEO, Jennifer Eddie and CFO, Matt Omar.

Amita Tomkoria: Meetings First Quarter 2024 Earnings Conference Call. I'm Amita Tomkoria, Senior Vice President of Investor Relations. Joining me today are CEO Jonah Peretti and CFO Matt Omer.

Amita Tomkoria: Before we get started, I would like to take this opportunity to remind you that our remarks today will include forward-looking statements, and actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in today's press release, our 2023 annual report on Form 10-K, and our Q1 2024 quarterly report on Form 10-Q to be filed with the SEC. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events.

Tom Korea: Before we get started I would like to take this opportunity to remind you that our remarks. Today will include forward looking statements actual results may differ materially from those contemplated by these forward looking statements.

Tom Korea: Factors that could cause these results to differ materially are set forth in today's press release, our 2023 annual report on Form 10-K, and our Q1 'twenty 'twenty four our quarterly report on Form 10-Q to be filed with the SEC.

Tom Korea: Any forward looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update these statements as a result of new information or future events.

Tom Korea: During this call we present, both GAAP and non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA margin.

Amita Tomkoria: During this call, we will present both GAAP and non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA margin. The use of non-GAAP financial measures allows us to measure the operational strength and performance of our business, to establish budgets, and to develop operational goals for managing our business. 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 managers.

Tom Korea: The use of non-GAAP financial measures allows us to measure the operational strength and performance of our business to establish budgets and to develop operational goals for managing our business we.

Tom Korea: 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.

Amita Tomkoria: A reconciliation of these gap-to-non-gap measures is included in today's earnings press release. Please refer to our investor relations website to find today's press release along with our investor letter. Now, I'll pass the call over to Jonah.

Tom Korea: A reconciliation of these GAAP to non-GAAP measures is included in today's earnings press release.

Tom Korea: Please refer to our Investor Relations website, you can find today's press release, along with our Investor letter.

Tom Korea: And now I'll pass the call over to Jeremy.

Jonah Peretti: Thank you, Amita. Good afternoon, everyone, and thank you for joining us today. Our flagship Buzzfeed brand continues to be the leading player in digital media, with vastly more time spent than other widely known digital and legacy properties like Vox, Bustle, People, Vanity Fair, and Vogue, according to Comscore. As I outlined last month in my annual letter to shareholders, Buzzfeed is leaning into AI to extend this leadership position and build a defining media company for the AI era.

Jeremy: Thank you Amanda good afternoon, everyone and thank you for joining us today.

Jeremy: Our flagship Buzzfeed brand continues to be the leading player in digital media with vastly more time spent than other widely known digital and legacy properties like box bustle people than it would be fair.

Jeremy: Turning to Comscore.

Jeremy: As I outlined last month in my annual letter to shareholders Buzzfeed is leaning into AI. This extend this leadership position and build the defining media company for the AI era.

Jonah Peretti: Over the past few months, we have made progress towards realizing this vision and have stabilized the business by selling complexes, strengthening our balance sheet with more cash and less debt, and implementing a cost savings plan to reduce the size of our central teams and direct more dedicated resources to our individual brands.

Jeremy: Over the past few months, we have made progress towards realizing this vision and have stabilized the business by selling complex.

Jeremy: <unk> in our balance sheet with more cash and less debt implementing a cash.

Jeremy: Cost savings plan to reduce the size of our central teams and direct more dedicated resources to our individual brands organizing our business around our most scalable high margin Tech led revenue streams and programmatic advertising and affiliate commerce.

Jonah Peretti: Organizing our business around our most scalable, high-margin tech-led revenue streams and programmatic advertising and affiliate commerce. In doing so, we completed the biggest step in our transformation, which was to refocus the company on our owned and operated sites and apps and away from platform-dependent models of distribution. We are now starting to see the impact of that shift. Our business evolved from one that was reliant on Facebook and third-party social platforms for audience traffic to now having the majority of our users come directly to our own and operated sites and apps. Today, direct traffic referrals are our largest source of traffic. In Q1, 90% of audience time spent with our content was on our owned and operated property.

Jeremy: In doing so we completed the biggest step in our transformation which was.

Jeremy: Which was to refocus the company on our owned and operated sites and apps and away from platform dependent models distributions.

We are now starting to see the impact of that shift our business evolved from one that was reliant on Facebook and third party social platforms for audience traffic to now having the majority of our users come directly to our owned and operated sites and apps.

Jeremy: Today direct traffic referrals are our largest source of traffic.

Jeremy: In Q1, 90% of audience time spent with our content was on our owned and operated properties.

Jonah Peretti: Even more promising, we are pulling the right levers and starting to see that audience grow. In Q1, direct traffic across BuzzFeed's web and app properties grew 3% versus Q4. This shift also means that we have to change how we think about success.

Jeremy: Even more promising we are pulling the right levers and starting to see that audience growth.

Jeremy: In Q1 direct traffic across Buzzfeed web and App properties grew 3% versus Q4.

Jeremy: This shift also means that we have to change how we think about success instead of focusing on scaling a casual audience, which was massive when they were they were referred from Facebook. We are focused on deepening engagement two of our most loyal users who visit us directly and turning more casual users into loyal users.

Jonah Peretti: Instead of focusing on scaling a casual audience, which was massive when they were referred from Facebook, we are focused on deepening the engagement of our most loyal users who visit us directly and turning more casual users into loyal users. A single page view of an article from a casual user has less value than a single page view from a loyal user on our interactive formats like games and chatbots, where they spend five minutes, take several kinds of actions, and are more likely to return.

Jeremy: A single page view to an article from a casual user has less value than a single page view from a loyal user on our interactive formats like games and chat bots, where they spend five minutes take several kinds of actions and are more likely to return.

Jonah Peretti: As we focus our AI work on making our platform an interactive, personalized, and differentiated experience, we are, in turn, discovering what resonates with our audience based on these signals. Over the past few months, we've rolled out several new features and formats, some of which have driven record levels of engagement. AI image filters like turning your pet into a plushie, where users can design a plushie toy that resembles their pet

Jeremy: As we focus our AI work on making our platform interactive personalized and differentiated experience. We are in turn discovering what resonates with our audience based on these signals over the past few months, we've rolled out several new features and formats, some of which have driven record levels of engagement.

Jeremy: AI image filters like turn your pet into a plushie, where users can design, a plushie toy that resembles our Pat trending AI generators like the trailer like the Taylor Swift tortured poets Department song generator.

Jonah Peretti: Trending AI Generators, like the Taylor Swift Poet's Department Song Generator, Utility Bots, like Shopee, the AI assistant designed to help shoppers find the perfect gift for everyone on their list, Chatbot Games, like Nepo Gotye and Under the Influencer, and Content Generators, like Make Your Own Emoji, which skyrocketed to the top 10 most engaged Buzzfeed posts of all time, and the Shrek Generator, which This work is increasing the engagement and loyalty of our direct audience and turning casual users into loyal ones, which are encouraging trends.

Jeremy: Utility bought like choppy the AI assistant designed to help shoppers find the perfect gift for everyone on their list Chatbot games like Napa Gotcha and under the Influencer.

Jeremy: And content generators like make your own emoji, which skyrocketed to the top 10, most engaged Buzzfeed post of all time and the <unk> generator, which turns your favorites the lab into a lovable ogre.

Jeremy: This work is increasing the engagement and loyalty of our direct audience and turning casual users into loyal ones.

Jeremy: Our encouraging trends.

Jonah Peretti: Not only have we been able to grow traffic, grow direct traffic to buzzfeed.com, but we've also seen deeper engagement among our most loyal audience, with a number of pages per web visitor growing for four consecutive months since December. Because we are so early to adopt Gen AI, we also expect to benefit from this technology's potential to act as an accelerant, as new models can be plugged into existing experiences without having to invest more in their development.

Jeremy: Not only have we been able to grow traffic.

Jeremy: Grow direct traffic to <unk> Dot com, we've also seen deeper engagement among our most loyal audience with a number of pages per web visit are growing for four consecutive months since December.

Jeremy: Because we are so clear because we are so early to adopt gen. AI. We also expect to benefit from this technology has potential to act as an accelerant.

Jeremy: As new models can be plugged into existing experiences without having to invest more in their development as we continue to update and introduce new AI powered content formats experiences, we expect to drive improvement in engagement loyalty and time spent per user.

Jonah Peretti: As we continue to update and introduce new AI-powered content formats and experiences, we expect to drive improvement in engagement, loyalty, and time spent per user. With many more content initiatives in the pipeline, our teams are hard at work to make our sites and apps more rewarding, engaging, and fun for users. In fact, just last week, we began rolling out a new Buzzfeed homepage design with novel ways to interact and engage with our content built right in.

Jeremy: With many more content initiatives in the pipeline. Our teams are hard at work to make our sites and apps more rewarding engaging and fun for users. In fact, just last week, we began rolling out a new bus seat homepage design with novel ways to interact and engage with our content felt right in <unk>.

Jonah Peretti: And we expect to build on this momentum as we unveil more of our work in the coming weeks and months. As we continue to lean into the power of our audience and existing tech infrastructure on O&O, we are also seeing positive trends on the revenue side. In Q1, programmatic advertising revenues across the BuzzFeed and HuffPost websites and apps grew year-over-year for the third consecutive quarter.

Jeremy: And we expect to build on this momentum as we unveil more of our work in the coming weeks and months.

Jeremy: As we continue to lean into the power of our audience and existing tech infrastructure on <unk>. We are also seeing positive trends on the revenue side in Q1 programmatic advertising revenues across the Buzzfeed and half post websites and apps grew year over year for the third consecutive quarter.

Jonah Peretti: While our overall revenue performance reflects ongoing pressure on our direct sales channel and lower monetization on third-party platforms, we are encouraged by this positive trend on our largest and highest-margin revenues. Our commerce business is another area where we see tremendous potential for the application of Gen AI to transform shopping, and we have a strong foundation from which to drive this transformation.

Jeremy: While our overall revenue performance reflects ongoing pressure on our direct sales channel and lower monetization on third party platforms. We are encouraged by this positive trend on our largest and highest margin revenue stream.

Jeremy: Our commerce business is another area, where we see tremendous potential for the application of AI to transform the shopping experience.

Jeremy: And we have a strong foundation from which to drive this transformation.

Jonah Peretti: We have strategic partnerships with the largest retailers in the world, including Amazon, Walmart, and Target. I shared previously that in 2023, our organic affiliate business drove more than $500 million in transactions on behalf of our retail partners and brought in approximately $50 million in revenue for us. But our partnerships with retailers extend far beyond this affiliate model and encompass a range of advertising products, including programmatic revenue buys and branded content campaigns. In 2023, we generated nearly $80 million in revenue through retailer relationships, representing more than 30% of our total 2023 revenue.

Jeremy: We have strategic partnerships with the largest retailers in the world, including Amazon Walmart and target I've shared previously that in 2023, our organic affiliate business drove more than $500 million in transactions on behalf of our retail partners and brought in approximately $50 million of revenue for us.

Jeremy: But our partnerships with retailers extends far beyond this affiliate model.

Jeremy: And a company in a range of advertising products, including programmatic revenue buys and branded content campaigns in 2023, we generated nearly.

Jeremy: $80 million in revenue through retailer relationships, representing more than 30% of our total 2023 revenue.

Jeremy: Retailers love to partner with Buzzfeed, because our commerce business is discovery based we create shopping content that introduces consumers to new products and inspires transactions with this approach our shopping content resonates with a wide addressable audience for retailers and advertisers as compared to other affiliates and published modeling models that narrow.

Jonah Peretti: Retailers love to partner with BuzzFeed because our commerce business is discovery-based. We create shopping content that introduces consumers to new products and inspires transactions. With this approach, our shopping content resonates with a wide addressable audience for retailers and advertisers as compared to other affiliate and published modeling models that narrowly focus on recommendations for a specific product. And we have a proven track record of driving meaningful GMV on behalf of retailers.

Jeremy: Focus on recommendations for a specific product and we have a proven track record of driving meaningful GMB on behalf of retailers.

Jonah Peretti: Increasingly, we are also a trusted destination for retailers as retail media networks look to fill growing ad inventory. And we are growing our retailer relationships by tapping into retail media network budgets. Very simply, as ad inventory grows, retailers are looking off-site to fill ad units, and Buzzfeed is a natural destination because we are already an established partner.

Jeremy: Increasingly we are also a trusted destination for retailers as retail media networks look to fill growing AD inventory and we are growing our retailer relationships by tapping into retail media network budgets very simply as AD as AD inventory grows retailers are looking offsite to fill AD units and Buzzfeed is.

Jeremy: Natural destination, but because we are already have established partner.

Jonah Peretti: Looking ahead, as we infuse our commerce approach with AI, we believe AI can help us develop a more personalized shopping experience for our audience, launch initiatives like dynamic insertion of recommended products, and introduce other models to take product curation to the next level and help us expand our relationship with retail. Before I pass the call to Matt, I wanna reiterate that we are only at the start of this journey to build the defining media company for the AI era.

Jeremy: Looking ahead as we infuse our commerce approach with AI, we believe AI can help us develop a more personalized shopping experience for our audience launch initiatives like dynamic insertion of recommended products and introduce other models to take product creation to the next level and help us expand our relationship with retailers.

Jeremy: Before I pass the call to Matt I want to reiterate that we are only at the start of this journey to build the defining media company for the AI era moving forward, we are focused on bringing our web sites and apps to life in new ways with the help of AI and in doing so we expect to build on some of the positive audience and revenue trends I shared with you.

Jonah Peretti: Moving forward, we are focused on bringing our websites and apps to life in new ways with the help of AI. And in doing so, we expect to build on some of the positive audience and revenue trends I shared with you and continue to push the boundaries of what is possible in our industry. Stay tuned as we bring more of this work together to re-imagine Buzzfeed web and app experiences for our audience. Now, I'll hand the call off to Matt to discuss our financial performance analysis.

And continue to push the boundaries of what is possible in our industry.

Stay tuned as we bring more of this work together into re imagining Buzzfeed web and App experiences for our audience now I'll hand, the call off to Matt to discuss our financial performance and outlook.

Matt Omer: Thank you Jonathan.

Matt Omer: We closed the first quarter with great momentum in our business, some of which Jonah already touched on. Before I discuss our Q1 financial performance in more detail, let me recap some highlights from across the business. We delivered Q1 revenue in adjusted EBITDA in line with our March outlook, generating a $7 million improvement in adjusted EBITDA year-over-year despite a $10 million year-over-year decline in revenue. Our flagship property, BuzzFeed.com, saw modest growth in direct revenue, up 3% versus Q4. A positive signal that traffic trends are beginning to stabilize as we complete the transition from being Facebook dependent to one that drives traffic directly to our own and operating platform.

Matt: We closed the first quarter with great momentum in our business some of which <unk> already touched on before.

Matt Omer: Programmatic advertising revenues across BuzzFeed and HubPost websites and AFSCME grew year over year for the third consecutive quarter. Last month, we completed the restructuring program we announced in February, which is expected to yield approximately $23 million in annualized compensation costs. We paid down a significant portion of our outstanding debt, resulting in lower go-forward interest expense obligations.

Matt: <unk>, our Q1 financial performance in more detail, let me recap some highlights from across the business.

Matt: We delivered Q1 revenue and adjusted EBITDA in line with our March outlook generating a $7 million improvement in adjusted EBITDA year over year, Despite a $10 million year over year decline in revenue.

Matt: Our flagship property Busby dot com saw modest growth in direct traffic up 3% versus Q4, a positive signal that traffic trends are beginning to stabilize as we complete the transition from being a Facebook dependent business to one that drives traffic directly to our owned and operated platforms.

Programmatic advertising revenues across both student hub post websites and apps grew year over year for the third consecutive quarter.

Matt: Last month, we completed the restructuring program, we announced in February which is expected to yield approximately $23 million in annualized compensation cost savings with <unk>.

Matt: Paid down a significant portion of our outstanding debt, resulting in lower go forward interest expense obligations.

Matt Omer: And we increased our cash balance by approximately $26 million quarter-over-quarter to $62 million, including restricted cash. This was driven by the proceeds from a sale of the complex, which closed in February. As a result, we are well positioned to navigate the ongoing headwinds facing publishers and digital media at large sustainably and profitably. Moving on to our first quarter results. As a reminder, all financials and comparables presented here are on a continuing operations basis, which excludes...

Matt: And we increased our cash balance by approximately $26 million quarter over quarter to $62 million, including restricted cash. This was driven by the proceeds from the sale of complex, which closed in February.

Matt: As a result, we are well positioned to navigate the ongoing headwinds facing publishers and digital media at large sustainably and profitably.

Matt: Moving onto our first quarter results.

Matt: As a reminder, all financials and comparable presented here are on a continuing operations basis, which excludes complex.

Matt Omer: Overall, revenues for Q1 2024 declined 18% year-over-year to $44.8 million, in line with our March outlook. Performance by revenue line was as follows. Advertising revenues declined 22% year-over-year to $21.4 million, driven by ongoing pressure on our direct sales channel and lower monetization on third-party platforms. By contrast, programmatic advertising revenues across our largest owned and operated properties, BuzzFeed and HuffPost, grew modestly for the third consecutive quarter, increasing 6% year over year. Advertising revenues are driven in large part by audience time spent with our content across platforms.

Matt: Overall revenues for Q1, 2024 declined 18% year over year to $44 8 million in.

Matt: In line with our March outlook for fourth by revenue line was as follows.

Matt: Advertising revenues declined 22% year over year to 21 $4 million driven by ongoing pressure on our direct sales channel and lower monetization on third party platforms. By contrast, programmatic advertising revenues across our largest owned and operated properties, but speeding up posts grew modestly for the third consecutive quarter <unk>.

Matt: Creasing, 6% year over year.

Matt: <unk> revenues are driven in large part by audience time spent with our content across platforms and conjunction with advertising revenues. We continue to report U S time spent across our owned and operated properties and third party platforms. According to Comscore.

Matt Omer: In conjunction with advertising revenues, we continue to report U.S. time spent across our own and operated properties and third-party platforms, according to comps. In Q1, U.S. time spent as reported by Comscore declined 16% year-over-year to 67 million hours, driven primarily by the ongoing declines in referral traffic from third-party platforms.

Matt: In Q1 U S time spent as reported by Comscore declined 16% year over year to 67 million hours driven primarily by the ongoing declines in referral traffic from third party platforms. However.

Matt Omer: However, as Jonah discussed, we continue to see positive trends in direct traffic, which grew 3% year over year, sorry, quarter over quarter. Content revenues declined $3.1 million, or 19% year over year, to $13.1 million, driven primarily by a non-recurring custom content campaign that was delivered in the year-ago quarter, with no comparable revenue in the current. Commerce and other revenues of $10.2 million declined $1 million, or 9%.

Matt: However, as Joe discussed we continue to see positive trends in direct traffic, which grew 3% year over year quarter over quarter.

Matt: Constant revenues declined $3 1 million or 19% year over year to $13 $1 million driven primarily by a nonrecurring custom content campaigns that was delivered in the year ago quarter.

Matt: With no comparable revenue in the current quarter.

Matt: Commerce and other revenues of $10 2 million declined 1, million% to 9% year over year. This was primarily due to less promotional spend by retailers and lower audience traffic as compared to the year ago quarter.

Matt Omer: This was primarily due to less promotional spend by retailers and lower audience traffic as compared to the year-ago quarter. We generated first quarter adjusted EBITDA losses of $11.3 million, also in line with our March outlook. It is important to note that, per U.S. GAAP, we have not allocated any of the shared expenses to discontinued operations.

Matt: We generated first quarter adjusted EBIT losses of $11 3 million also in line with our March outlook it.

Matt: It is important to note that per U S. GAAP, we have not allocated any of the share expenses to discontinued operations. As a result, our first quarter. Adjusted EBITDA includes complex as a portion of our shared corporate expenses, which were significant.

Matt Omer: As a result, our first quarter adjusted EBITDA includes Complex's portion of our shared corporate expenses, which were significant. We ended the first quarter with cash and cash equivalents, including restricted cash, of approximately $62 million, a net increase of approximately $26 million versus the fourth quarter after paying down a significant portion of debt, partially funding our recent restructuring, and improving working capital. This, again, was driven by the proceeds from the sale complex, which closed in February.

Matt: We ended the first quarter with cash and cash equivalents, including restricted cash of approximately $62 million.

Matt: A net increase of approximately $26 million versus the fourth quarter after paying down a significant portion of debt partially funding our recent restructuring and improving working capital. This again was driven by the proceeds from the sale of complex, which closed in February.

Matt Omer: Before I share our financial outlook for the second quarter, let me provide a little context, starting with Brevin. Building on Q1 momentum and direct traffic and programmatic revenues, as we lapped the deprecation of Facebook and articles, including the closure of BuzzFeed News, we expect overall programmatic advertising revenue to return to modest year-over-year growth in Q2. However, we do expect ongoing pressure on the direct sales channel and lower third-party platform monetization to continue to impact year-over-year growth in overall revenue.

Speaker Change: Before I share our financial outlook for the second quarter, let me provide a little context.

Speaker Change: With revenues.

Speaker Change: Building on Q1 momentum in direct traffic and programmatic revenues as we lap the deprecation of Facebook instant articles the closure of Buzzfeed news, we expect overall programmatic advertising revenue to return to modest year over year growth in Q2. However.

Speaker Change: However, we do expect ongoing pressure on the direct sales channel and lower third party platform monetization to continue to impact year over year growth in overall revenues.

Matt Omer: In terms of adjusted EBITDA, our Q2 outlook reflects the cost savings from our fully executed restructuring program announced in February. And as a reminder, the program is expected to drive approximately $23 million in annualized compensation costs. These savings are expected to be fully offset by the year-over-year revenue pressures that we are anticipating for Q2. With that, I will turn to our financial results. Again, all figures and comparables are presented on a continuing operation.

In terms of adjusted EBITDA, Our Q2 outlook reflects cost savings from our fully executed restructuring program announced in February and as a reminder, the program is expected to drive approximately $23 million annualized compensation cost savings.

Speaker Change: These savings are expected to be fully offset.

Speaker Change: Year over year revenue pressures that we are anticipating for Q2.

Speaker Change: With that I will turn to our financial outlook again, all figures and comparable and are presented on a continuing operations basis.

Matt Omer: For Q2 2024, we expect overall revenues in the range of 44 to 49 million, or 21 to 30% lower than the year ago. We expect EBITDA in the range of $4 million in losses to $1 million in profits, approximately flat year-over-year at the mid. With a leaner cost base, a stronger balance sheet, and renewed focus on driving high-margin programmatic and affiliate revenues across our own and operated properties, we are continuing to make meaningful strides towards returning the business to profitable cash positive growth. Thank you. I'll hand the call back to Amita so we can take it.

Speaker Change: For Q2, 2024, we expect overall revenues in the range of $44 million to $49 million or 21% to 30% lower than the year ago quarter. We.

We expect adjusted EBITDA in the range of $4 million in losses to $1 million in profits approximately flat flat year over year at the midpoint.

Speaker Change: With a leaner cost base stronger balance sheet and renewed focus on driving high margin programmatic and affiliate revenues across our owned and operated properties. We are continuing to make meaningful strides towards returning the business to profitable cash positive growth.

Speaker Change: Thank you I'll hand, the call back to meet it so we can take questions.

Meet: Thanks, Matt I've gathered a bunch of questions here that we've received offline during the call. So we'll get right into it.

Amita Tomkoria: Matt, I've gathered a bunch of questions here that we received offline and during the call. So we'll get right into it.

Amita Tomkoria: Jonah, maybe starting with you on the commerce business. You spoke a little bit about retail media networks as it relates to your affiliate business and some of the retail partnerships that you have with retail media networks continuing to show strong growth. What's the opportunity for Buzzfeed to leverage first-party data and the engaged audience that you have to attract some of this, some of these dollars?

Speaker Change: Maybe starting with you.

Speaker Change: On the Commerce business, you spoke a little bit about retail media networks as it relates to your <unk>.

Matt: Filiate business and some of the retail partnerships that you have with with retail media networks continuing to show strong growth, what's the opportunity for <unk> to leverage first party data.

Matt: <unk> engaged audience that you have to attract some of this some of these dollars.

Speaker Change: Thanks, Amit.

Jonah Peretti: Thanks, Amita. Yeah, retail media networks are a big opportunity for us. We see a lot of opportunity in that space. But just to take a step back, as I mentioned earlier, our model for commerce is a bit different than a lot of our peers. We really focus on product discovery. People come to Buzzfeed for all kinds of things, entertainment, and useful information, and sometimes, while they're there, they start discovering the shopping content and buy things. Other times, they might go there because they want to shop, but they want to shop for fun. They're not doing research on a particular product they might want to buy.

Speaker Change: Retail media networks are a big opportunity for us we see a lot of.

Speaker Change: Of opportunity in that space.

Speaker Change: Just to take a step back.

Speaker Change: As I mentioned earlier, our model for commerce is a bit different.

Speaker Change: That a lot of our peers.

Speaker Change: We really focus on product discovery.

Speaker Change: People come to us feed for all kinds of things entertainment and useful information and sometimes that while they're there.

Speaker Change: They start.

Speaker Change: Discovering the shopping content and.

Speaker Change: And buy things other times, they might come there because they want to shop, but they want to shop for fun, they're not doing research on a particular product they might want to buy it's much more about discovery finding something you didn't know existed being inspired to buy something new and so driving emotional responses in the buying process finding new products finding something for yourself you didn't know you need it.

Jonah Peretti: It's much more about discovery, finding something you didn't know existed, being inspired to buy something new, and so driving emotional responses in the buying process, finding new products, finding something for yourself you didn't know you needed, finding something that solves a problem that you have in your life that our amazing writers have known is a common problem that people have and have suggested a bunch of interesting products to solve that. All of that is what drives our transactions and our shopping business.

Speaker Change: It <unk>.

Speaker Change: Finding something that solves a problem that you have in your life that are amazing writers have known is a common problem that people have and have had suggested a bunch of interesting products to solve that all of that is what drives.

Our transactions.

Speaker Change: And our shopping business.

Jonah Peretti: And so, as a result, we're able to capture a lot of really rich first-party data because we see what people are responding to. For example, we have data on shoppers that are looking for particular categories. We have data about shoppers that are more generational, or you know, what kinds of other content are they reading? Are they parents? Are they Gen Z? Are they millennials?

Speaker Change: And so.

Speaker Change: As a result, we're able to capture a lot of really rich first party data.

Speaker Change: Because we see what are people responding to.

Speaker Change: For example, we have data on shoppers that are looking for particular categories. We have data about shoppers that is more generational.

Speaker Change: What kinds of other content are they reading or the parents are they gen. Z are they are they are millennials.

Jonah Peretti: And then we have these amazing partnerships with the largest retailers in the world, Amazon, Walmart, Target, and others, where that new product discovery is very easy to transact on. And when you find something on one of these major retailers, because there are places that people are already accustomed to shopping, often places where people already are logged in or have credit cards on file. And so that's why we were able to generate $80 million in revenue through retail relationships in 2023.

Speaker Change: And then we have these amazing partnerships with the largest retailers in the world Amazon Walmart target and others.

Speaker Change: There.

Speaker Change: That new product discovery can be.

Speaker Change: It's very easy to transact on and when you find something on one of these major retailers because they are places that people already accustomed choppy often places where people already are logged in or have credit cards on file.

Jonah Peretti: And, you know, that's approaching a third of our revenue. And so I think this positions us really well for continuing to grow and expand our relationships with these retailers, and also when these retailers have the desire to extend advertising from their RMMs, they can do that through a partner like us, because they know that we have great first-party data. We know a lot about shoppers. We know that they know that their customers are already shopping from BuzzFeed and discovering things and finding things on BuzzFeed.

Speaker Change: And so that's why we were able to generate $80 million in revenue through retail relationships in 2023.

Speaker Change: <unk>.

Speaker Change: Approaching a.

Speaker Change: A third of our revenue.

Speaker Change: And so I think that positions us really well for.

Speaker Change: Continuing to grow and expand our relationships with these retailers.

Speaker Change: And also when these retailers have.

Speaker Change: The desire to extend.

Speaker Change: Per advertising from their Rmm's date.

Speaker Change: They can do that through a partner like us because they know that we have great first party data, we know a lot about choppy years, we know that they know that their customers are already shopping from buzzfeed and discovering things that finding things on busey.

And so by extending.

Jonah Peretti: And so by extending their retail media networks across our inventory, they're able to get something really differentiated and help, particularly with incrementality, where people are discovering new things and clicking through and transacting. And so that's, it's a big area of focus, and integrating more deeply with our retail partners and going deeper on first-party data to make those connections is a big opportunity, and we're very deeply engaged in that.

Speaker Change: The retail their retail media networks across our inventory there Ain't really got something really differentiated NVA and help.

Speaker Change: Particularly with Incrementals city, where people are discovering new things and clicking through and transacting and so that's.

Speaker Change: It's a big area of focus and integrating more deeply with our retail partners and and going deeper on first party data to make those connections.

Speaker Change: <unk> is a big opportunity and were very deeply engaged in that.

Amita Tomkoria: Thank you. Matt, maybe I'm turning to you because you discussed the Comscore time spent trends and also some of what you're seeing on O&O. Can you talk about any brain shoots specifically that you're seeing with respect to content initiatives that are driving O&O traffic and that might point us toward a potential return to growth over the next period of time?

Speaker Change: Thank you.

Speaker Change: Matt maybe turning to you because you discussed the Comscore time spent trends and also some of what you're seeing.

Matt: Can you can you talk about any green shoots specifically that youre seeing with respect to content initiatives.

Matt: That are driving traffic and that might point us toward a potential return to growth over the next.

Matt: A period of time, yes.

Matt Omer: Yeah, yeah, thanks for the question. I think, unfortunately, overall time spent continues to be pressured by lower BuzzFeed referral traffic. However, we are seeing green shoots with respect to our direct audience. So, for example, our BuzzFeed web and app direct traffic grew 3% quarter after quarter. We're also seeing deeper engagement among our most loyal audience. For example, the number of page views per web visitor has grown for four consecutive months since December. And we're just looking to build on this momentum in Q1 with a focus on audience loyalty and new content.

Matt: Yes. Thanks for the question I think unfortunate overall time spent continues to be pressured by the lower Buzzfeed referral track traffic. However, we are seeing green shoots with respect to our direct audience. So for example, our bus fees web and App direct traffic grew 3% quarter over quarter. We're also seeing deeper engagement among our most loyal audience.

Matt: Ample the number of page views per web visitor has grown for four consecutive months since December.

Matt: We're just looking to build on this momentum in Q1 with a focus on audience loyalty and new content in the pipeline to help drive type stuff.

Matt: Hi.

Speaker Change: And maybe back to you John.

Amita Tomkoria: And maybe back to you, Jonah, you and Matt both referenced the sale of Complex, and just, you know, now that that's behind you guys, how do you think about the brand portfolio as it stands today? Are you thinking about additional asset sales, or maybe you can talk about the role of each brand in the portfolio at this stage?

Matt: You and Matt Hope referenced the sale of complex.

Speaker Change: Now that that's behind you guys.

John: Do you think about the brand portfolio as it stands today or are you are you thinking about additional asset sale, there or maybe you can talk about the role of each brand in the portfolio at this stage.

Jonah Peretti: Sure, we have really amazing assets, and it's exciting that we continue to see inbound interest in our brands. It speaks to the strong reputation we've built around each of our brands in the marketplace, both with audiences and advertisers. And we'll continue to be opportunistic in order to put our business in the strongest position to benefit from the work we're doing in AI and this next generation of more interactive content that we are very excited about.

Speaker Change: Sure. So we have really amazing assets and it's exciting that we continue to see inbound interest in our brands. It speaks to the strong reputation we have built around each of our brands in the marketplace.

Speaker Change: With audiences and advertisers.

Speaker Change: And we'll continue to be opportunistic in order to put our business in the strongest position to benefit from the work we're doing in AI and this next gen.

Speaker Change: Generation of of more interactive content that we are very excited about.

Jonah Peretti: I think when you look at the programmatic and affiliate revenue lines, which are, we really see as core, both HuffPost and BuzzFeed have really great audiences and brands and dynamics to drive programmatic and affiliate revenues. We're seeing, you know, a lot of strength and growth across both those properties.

I think when you look at.

Speaker Change: The programmatic and affiliate revenue lines, which are we really see us as core.

Both half post and Buzzfeed have really how great audiences and brands and dynamics to drive programmatic and affiliate revenues.

Jonah Peretti: And although HuffPost is newer to affiliate commerce, the large engaged audience and an audience that's a bit more affluent has really helped that business grow on HuffPost. And so we think the core programmatic and affiliate revenue lines really, BuzzFeed and HuffPost are really helping drive that. We also think these brands are able to benefit from our work in AI. And, and, and so we're excited to see additional leverage added to those businesses.

Speaker Change: Where we're seeing.

Speaker Change: Lot of strength in programmatic across both of those properties.

And although Huff post is newer to the affiliate commerce.

Speaker Change: The large engaged audience and an audience that is a bit more affluent has has really helped.

Speaker Change: That business grow.

Speaker Change: On how post and so we think.

Speaker Change: The core programmatic and affiliate revenue lines really busty enough posts are really helping drive that we also think these brands are poised to benefit from our work in AI and so we're excited to see additional leverage added to those businesses.

Jonah Peretti: Another thing that I think is important, which I talked about previously, is just putting more power in the hands of GMs and brand managers to make sure that each of our brands can operate very entrepreneurially and achieve their full potential. We try to provide support from centralized services, but in a very lightweight way that is cost-effective, and then allow each brand to really control its own destiny and be able to drive value that way.

Speaker Change: Another thing that.

Speaker Change: I think as important which I talked about previously it's just having putting more power in the hands of Gms and brand managers to make sure that each of our brands can operate very entrepreneurial and achieve their full potential.

Speaker Change: We try to provide.

Speaker Change: Sure.

Speaker Change: Support from centralized services, but in a very lightweight way that is cost effective and then allow the each brand to really control their own destiny and be able to drive to drive value that way.

Jonah Peretti: And then part of that is bringing employees back to the office in a very deliberate way to foster collaboration and continue to work with our advisors to optimize our balance sheet and to evaluate assets and to make the smartest decisions for the company moving forward.

Speaker Change: And then part of that is.

Speaker Change: Bringing employees.

Speaker Change: Back to the office in a very deliberate.

Way to foster collaboration.

Speaker Change: And continue to work with our advisors to optimize our balance sheet and to evaluate assets and to make the smartest meals for the company moving forward.

Speaker Change: Thank you.

Jonah Peretti: And then in terms of monetization, you know, as you guys lean into programmatic, can you speak to some of the benefits that you've seen materialize so far and maybe just how you expect that to translate from an overall revenue perspective and even a cash perspective over the longer term? Yeah, I can take that.

Speaker Change: And then in terms of monetization you guys lean into programmatic can you speak to some of the benefits that you've seen materialize, so far and maybe just how you expect that to translate from an overall revenue perspective.

Speaker Change: EBITDA cash perspective over that over the longer term, yes, I can take that one.

Jonah Peretti: You know, one thing I noticed or noted was this is our third consecutive quarter of programmatic revenue growth across our largest O&O properties, BuzzFeed and Outpost. So it's important to note as we lap the deprecation of Facebook Instant Articles and the closure of BuzzFeed News, we expect this overall programmatic advertising revenue to return to modest year-over-year growth in Q2. I mean, it's good to remind ourselves that programmatic advertising is our largest and highest-margin revenue stream.

I think I noticed are noted.

Speaker Change: Third consecutive quarter of programmatic revenue growth across our largest OTA properties Buzzfeed now.

Speaker Change: So it's important to note as we lap the deprecation of Facebook instant articles and the closure of both the news.

Speaker Change: We expect this overall program.

Speaker Change: Advertising revenues returned to modest year over year growth in Q2.

Speaker Change: It's good to remind that programmatic advertising is our largest and highest largest and highest margin revenue stream and so as we continue to scale. This revenue the return of business growth, we do expect to drive improve EBIT trends.

Jonah Peretti: And so as we continue to scale this revenue, the return to business growth, we do expect to drive improved EBITDA trends as well. And you're seeing some of that in the Q2 guide, approaching break-even despite the revenue pressures in other parts of the business. Q2 savings, again, from the restructuring, fully offsetting the revenue. Maybe just to follow on from that, like speaking of the restructuring, can you can you talk about how you're looking to drive or how you're thinking about margin expansion and cash generation kind of over the course of the balance of the year? Yeah, I mean it.

Speaker Change: Well it is seeing some of that in the Q2 guide approaching breakeven despite the revenue pressures in other parts of the business.

Speaker Change: Q2 savings again from the restructure of fully offsetting the revenue pressure that we're seeing.

Speaker Change: And maybe just a follow on from that like speaking up the restructuring can you can you talk about how you are looking to drive or how youre thinking about margin expansion and cash generation.

Speaker Change: During the course of the balance of the year.

Matt Omer: Yeah, I mean, as I touched on earlier in the restructuring programs reminders, that's driven Approximately 23 million dollars annualized savings, a meaningful reduction to our task cost structure Another important consideration is that, with our strategy to focus on our higher margin programmatic and affiliate revenues, a greater percentage of our costs are going to be related to our compensation-related expenses for the creation of our editorial content, which are more fixed in nature. This will result in higher margin expansion and cash generation as we continue to experience a seasonal lift in our revenues.

Speaker Change: Yes, I mean as I touched on earlier, the restructuring programs reminders thats driving approximately $23 million of annualized savings a meaningful reduction to our cash cost structure and another important consideration is as we with our strategy to focus on our higher margin programmatic and affiliate revenues are greater position percentage of our costs are going to be related to our compensated.

Speaker Change: Compensation related expenses for the creation of our editorial content, which are more fixed in nature. This will result in higher margin expansion and cash generation as we can to new experienced a seasonal lift in our revenues.

Amita Tomkoria: Thank you. And our final question, just on the topic, Jonah, of Google cookies deprecation and that kind of shifting timeline around that. Has the delay changed any conversations that you guys are having with advertisers? And, you know, the industry now obviously has more time to prepare. Does this, from your perspective, reduce the risk of signal loss that might pressure, might otherwise pressure CPM? Can you maybe give us your perspective?

Speaker Change: Thank you.

Speaker Change: And our final question just on the topic John.

Speaker Change: Google Cookie deprecation and that kind of shifting timeline around that has the delay changed any conversations that you guys are having with advertisers.

Speaker Change: As the industry now obviously has more time to prepare our business from your perspective reduce the risk of signal loss.

Speaker Change: Slight pressure by otherwise pressure CPM.

Speaker Change: Can you give us your perspective on that sure.

Jonah Peretti: Sure. It's nice to have more time, although we felt ready for the change. The biggest impact of this change will be the short-term period once it's rolled out of adjustment. And we've seen that with other changes like this, where it takes a bit for everyone to update and change their strategies, and then quickly, using other approaches, you can achieve revenue that's on par with what you were seeing previously. I think we feel very good about the way we have, particularly with this first party data focus on our own and operator properties, to be able to provide really excellent ad targeting.

Speaker Change: Sure. It's nice to have have more time, although we felt ready for the change the biggest impact.

Speaker Change: This change will be the short term period once that's rolled out of adjustment and we've seen that with other changes like this where.

Speaker Change: It takes a bit for everyone to update and change their strategies and then and then quickly using other approaches you can achieve.

Speaker Change: Revenue that's on par with what you were seeing previously.

Speaker Change: I think.

Speaker Change: We feel very good about the way we have.

Speaker Change: Particularly with this first party data focus on our owned and operated properties.

To be able to provide really excellent ad targeting.

Jonah Peretti: You know, one of the reasons that brands like to partner with Buzzfeed is that we have the ability to reliably target key audience demographics. You know, so people who are travel obsessed or parents or people who shop or people who have, you know, certain passions or interests.

Speaker Change: One of the reasons that brands like to partner with Buzzfeed is that we have the ability to work reliably target key audience demographics.

Speaker Change: So people, who are travel a SaaS or parents or people who are shopping our.

Speaker Change: People, who.

Speaker Change: Certain certain passions or interests.

Jonah Peretti: And we could do that all within a brand-safe environment of, you know, trusted content. And we also have an audience that, for lack of a better word, has a pulse. They buy things, they share content, they comment, they engage. And so having audiences that are really proactive and take action is, I think, really valuable for anyone who might be interested in having someone buy a product of theirs or share a product or talk about their product. So all of that really plays to our strengths.

Speaker Change: And we can do that all within a brand safe environment.

Speaker Change: Trusted content and.

Speaker Change: And we also have an audience that for.

Speaker Change: For lack of a better word has a pulse stay they buy things they share content a comment they engage and so having audiences that are really proactive and take action I think is really valuable for anyone who might be interested in having us someone buy a product or there is our share of product or talk about their product.

Speaker Change: So all of that really plays to our strength.

Jonah Peretti: And, you know, a little bit more in the weeds, we do have many initiatives that will help our first-party data be used to mitigate any potential downside risk from cookie depreciation. For example, in logged-in user testing, we partner with LiveRamp and see that a logged-in user has a 35% increase in CPMs when they're authenticated. UID partners with the Trade Desk. Universal ID has seen 4% of our users authenticated.

Speaker Change: And you know a little bit more in the weeds, we do have many initiatives that will.

Speaker Change: Help our first party data.

Speaker Change: He used to mitigate any potential downside risk from cookie depreciation.

Speaker Change: So logged in user testing, we partner with with live ramp.

Speaker Change: And see that a logged in user has a 35% increase in CPM when they're authenticated.

Speaker Change: <unk> partners with the trade desk universal ideas seen 4% of our users authenticated sales.

Jonah Peretti: Sales outreach to increase sales efforts around contextual positioning. We have some other things on the sales side. Our ad product roadmap includes product enhancements and contextual positioning and LLMs, using LLMs to understand contextual audiences even better. I think when, you know, particularly with these advances in AI, it's possible for an AI to actually read all of our content and increasingly be able to do that multimodal and then be able to suggest, What ad placements or contextual ad placements would make the most sense?

Speaker Change: Sales outreach to increase.

Speaker Change: <unk> efforts around contextual positioning we have some other things on the sales side.

Speaker Change: Our AD product roadmap includes product enhancements and contextual positioning.

Speaker Change: LMS.

Speaker Change: Using LMS to understand contextual audiences even better.

Speaker Change: I think when when.

Speaker Change: Particularly with these advances in AI.

Speaker Change: It is possible for NII to actually read all of our content and increasingly to be able to do that multi modal and then be able to.

Speaker Change: Suggest.

Speaker Change: What what AD placements our contextual.

Speaker Change: Placements would make the most sense and that's all pretty new if you think back to the sort of early era of magazines wherever you. All these niche magazines were launching so that you could advertise just the people who are into hiking and people who are into running and people earned a fishing and all of that kind of work that was done to spin up public publications to create <unk>.

Jonah Peretti: And that's all pretty new if you if you think back to the sort of early era of magazines where every met all these niche magazines were launching so that you could advertise just to people who are into hiking and people who are into running and people are into fishing and all of that kind of work that was done to spin up public publications to create contextual environments for advertising now You can do that in a dynamic automated AI powered way and so I think a lot of the advancements in that space are going to offset or more than offset some of the impacts of the cookie depreciation

Speaker Change: <unk> environment for advertising now you can do that in a dynamic automated AI powered way and so I think a lot of the.

Speaker Change: The advancements in that space are going to offset or more than offset some of the <unk>.

Speaker Change: Impacts of the cookie depreciation.

Great. Thank you.

Operator: Great, thank you. That wraps our live Q&A session for today. Thanks, Jonah. Thanks, Matt. And thank you all for joining us on the call today. Operator, I'll hand it over to you. Thank you. This concludes the conference. Thank you for your participation. You may now disconnect. You have been removed. You can find these coils, shapes & NEW designs in our ETSY store! Head over to www. Etsy.com to purchase all of our products! [inaudible] ?? ?? ?? ?? ?? ?? ?? ??

Speaker Change: <unk>, our live Q&A session for today, Thanks, Jonathan Thanks, Matt and thank you all for joining us on the call today, operator, I'll hand, it over to you.

Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect. You have been removed. Emita Tomkoria, Felicia DellaFortuna, Jonah Peretti, Marcela Martin, Matt Omer, Buzzfeed. You can find these coils, shapes & NEW designs in our ETSY store! Head to www. Etsy.com to purchase all of your favorite coils!

Speaker Change: Thank you. This concludes the conference. Thank you for your participation you may now disconnect.

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Operator: This is a production of the Center for Autism and Related Disorders, Center for Autism and Related Disorders, Welcome to the Buzzfeed Inc. First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Amita Tomkoria, Head of Investor Relations.

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Amita Tomkoria: Earnings Conference Call. I'm Amita Tomkoria, Senior Vice President of Investor Relations. Joining me today are CEO Jonah Peretti and CFO Matt Omer.

Speaker Change: Good day and thank you for standing by welcome to the Buzzfeed, Inc. First quarter 2024 earnings conference call. At this time all participants are in a listen only mode. Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today immediate Tom Korea head of Investor Relations.

Tom Korea: Hello, everyone and welcome to the meetings first quarter 2020 for our earnings conference call and let me to sum Korea Senior Vice President of Investor Relations. Joining me today are CEO, Jennifer Eddie and CFO, Matt Elmer.

Amita Tomkoria: Before we get started, I would like to take this opportunity to remind you that our remarks today will include forward-looking statements, and actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in today's press release, our 2023 annual report on Form 10-K and our Q1 2024 quarterly report on Form 10-Q, to be filed with the SEC. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events.

Tom Korea: Before we get started I would like to take this opportunity to remind you that our remarks today will include forward looking statements.

Tom Korea: Actual results may differ materially from those contemplated by these forward looking statements.

Tom Korea: Factors that could cause these results to differ materially are set forth in today's press release.

Tom Korea: 'twenty three annual report on Form 10-K, and our Q1 2020 for our quarterly report on Form 10-Q to be filed with the SEC.

Tom Korea: During this call we present, both GAAP and non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA margin.

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.

Tom Korea: A reconciliation of these GAAP to non-GAAP measures is included in today's earnings press release.

Tom Korea: Please refer to our Investor Relations website to find today's press release, along with our Investor letter.

Tom Korea: And now I'll pass the call over to Jonathan.

Jonathan: Thank you Amanda and good afternoon, everyone and thank you for joining us today are.

Jonathan: Our flagship Buzzfeed brand continues to be the leading player in digital media with vastly more time spent than other widely known digital and legacy properties like box bustle people Vanity fair in Vogue. According to Comscore as I outlined last month in my annual letter to shareholders Buzzfeed is leaning into AI. This extend this leadership position and build it.

Jonathan: Finding media company for the AI era.

Jonathan: Over the past few months, we have made progress towards realizing this vision and have stabilized the business by selling complex strengthening our balance sheet with more cash and less debt.

Jonathan: Implementation a cash <unk>.

Cost savings plan to reduce the size of our central teams and direct more dedicated resources to our individual brands organizing our business around our most scalable high margin Tech led revenue streams and programmatic advertising and affiliate commerce.

Jonathan: In doing so we completed the biggest step in our transformation, which was which was to refocus the company on our owned and operated sites and apps and away from platform dependent models distributions.

Jonathan: We are now starting to see the impact of that shift our business evolved from one that was reliant on Facebook and third party social platforms for audience traffic to now having the majority of our users come directly to our owned and operated sites and apps.

Jonah Peretti: Our business evolved from one that was reliant on Facebook and third-party social platforms for audience traffic to now having the majority of our users come directly to our owned and operated sites and apps. Today, direct traffic referrals are our largest source of traffic. In Q1, 90% of audience time spent with our content was on our owned and operated properties.

Jonathan: Today direct traffic referrals are our largest source of traffic.

Jonathan: In Q1, 90% of audience time spent with our content was on our owned and operated properties even.

Jonah Peretti: Even more promising, we are pulling the right levers and starting to see that audience grow. In Q1, direct traffic across Buzzfeed web and app properties grew 3% versus Q4. This shift also means that we have to change how we think about success.

Jonathan: Even more promising we are pulling the right levers and starting to see that audience growth.

In Q1 direct traffic across Buzzfeed web and App properties grew 3% versus Q4.

Jonathan: This shift also means that we have to change how we think about success instead of focusing on scaling a casual audience, which was massive when they were they were referred from Facebook. We are focused on deepening engagement two of our most loyal users who visit us directly and turning more casual users into loyal users.

Jonathan: A single page view to an article from a casual user has less value than a single page view from a loyal user on our interactive formats like games and chat bots, where they spend five minutes take several kinds of actions and are more likely to return.

Jonathan: As we focus our AI work on making our platform interactive personalized and differentiated experience. We are in turn discovering what resonates with our audience based on these signals over the past few months, we've rolled out several new features and formats, some of which have driven record levels of engagement.

Jonathan: AI image filters like turn your Pat into a plushie, where users can design, a plessey toy that resembles our Pat trending AI generators like the trailer like the Taylor Swift tortured poets Department song generator.

Jonah Peretti: Trending AI Generators, like the Taylor Swift Poets Department Song Generator, Utility Bots, like Shopee, the AI assistant designed to help shoppers find the perfect gift for everyone on their list, Chatbot Games, like Nepo Gotye and Under the Influencer, and Content Generators, like Make Your Own Emoji, which skyrocketed to the top 10 most engaged Buzzfeed posts of all time, and the Shrek Generator, which turned This work is increasing the engagement and loyalty of our direct audience and turning casual users into loyal ones, which are encouraging trends.

Jonathan: Utility Bob like choppy the AI assistant designed to help shoppers find the perfect gift for everyone on their list Chatbot games like Napa Gotcha and under the influence there.

Jonathan: And content generators like make your own emoji, which skyrocketed to the top 10, most engaged Buzzfeed post of all time and the <unk> generator, which turns your favorite to lab into a lovable ogre.

Jonathan: This work is increasing the engagement and loyalty of our direct audience and turning casual users into loyal ones.

Jonathan: Our encouraging trends.

Jonathan: Not only have we been able to grow traffic.

Jonathan: Grow direct traffic to <unk> Dot com, we've also seen deeper engagement among our most loyal audience with a number of pages per web visit are growing for four consecutive months since December.

Jonathan: Because we are so clear because we are so early to adopt Jan AI. We also expect to benefit from this technology has potential to act as an accelerant as new models can be plugged into existing experiences without having to invest more in their development as we continue to update and introduce new AI powered content formats experiences, we expect to drive <unk>.

Jonathan: <unk> and engagement loyalty and time spent per user.

Jonathan: With many more content initiatives in the pipeline. Our teams are hard at work to make our sites and apps more rewarding engaging and fun for users. In fact, just last week, we began rolling out a new Buzzfeed homepage design with novel ways to interact and engage with our content felt right in.

Jonathan: And we expect to build on this momentum as we unveil more of our work in the coming weeks and months.

Jonathan: As we continue to lean into the power of our audience and existing tech infrastructure on <unk>. We are also seeing positive trends on the revenue side in Q1 programmatic advertising revenues across the Buzzfeed and half post websites and apps grew year over year for the third consecutive quarter, while our overall revenue performance reflects ongoing.

Jonathan: Pressure on our direct sales channel and lower monetization on third party platforms. We are encouraged by this positive trend on our largest and highest margin revenue stream.

Jonathan: Commerce business is another area, where we see tremendous potential for the application of AI to transform the shopping experience.

Jonathan: And we have a strong foundation from which to drive this transformation.

Jonathan: We have strategic partnerships with the largest retailers in the world, including Amazon Walmart and target I shared previously that in 2023, our organic affiliate business drove more than $500 million in transactions on behalf of our retail partners and brought in approximately $50 million of revenue for us.

Jonah Peretti: I shared previously that in 2023, our organic affiliate business drove more than $500 million in transactions on behalf of our retail partners and brought in approximately $50 million in revenue for us. But our partnerships with retailers extend far beyond this affiliate model and encompass a range of advertising products, including programmatic revenue buys and branded content campaigns. In 2023, we generated nearly $80 million in revenue through retailer relationships, representing more than 30% of our total 2023 revenue.

Jonathan: But our partnerships with retailers extends far beyond this affiliate model.

Jonathan: And encompassing a range of advertising products, including programmatic revenue buys and branded content campaigns in 2023, we generated nearly.

Jonathan: $80 million in revenue through retailer relationships, representing more than 30% of our total 2023 revenue.

Jonathan: Retailers love to partner with Buzzfeed, because our commerce business is discovery base, we create shopping content that introduces consumers to new products and inspires transactions with this approach our shopping content resonates with a wide addressable audience for retailers and advertisers as compared to other affiliate and published modeling models that narrowly focused.

Jonathan: Recommendations for a specific product and we have a proven track record of driving meaningful GMB on behalf of retailers.

Jonathan: Increasingly we are also a trusted destination for retailers as retail media networks look to fill growing AD inventory and we are growing our retailer relationships by tapping into retail media network budgets very simply as AD as AD inventory grows retailers are looking off site to fill AD units and Buzzfeed is.

Jonathan: A natural destination, but because we are already have established partner.

Jonah Peretti: And Buzzfeed is a natural destination because we are already an established partner. Looking ahead, as we infuse our commerce approach with AI, we believe AI can help us develop a more personalized shopping experience for our audience, launch initiatives like dynamic insertion of recommended products, and introduce other models to take product curation to the next level and help us expand our relationship with retail. Before I pass the call to Matt, I wanna reiterate that we are only at the start of this journey to build the defining media company for the AI era.

Jonathan: Looking ahead as we infuse our commerce approach with AI, we believe AI can help us develop a more personalized shopping experience for our audience launch initiatives like dynamic insertion of recommended products and introduce other models to take product creation to the next level and help us expand our relationship with retailers.

Jonathan: Before I pass the call to Matt I want to reiterate that we are only at the start of this journey to build the defining media company for the AI era moving forward, we are focused on bringing our websites and apps to life in new ways with the help of AI and in doing so we expect to build on some of the positive audience and revenue trends I shared with you.

Matt: And continue to push the boundaries of what is possible in our industry.

Matt: Stay tuned as we bring more of this work together into re imagining Buzzfeed web and App experiences for our audience now I'll hand, the call off to Matt to discuss our financial performance and outlook.

Matt: Thank you Jonathan.

Matt Omer: We closed the first quarter with great momentum in our business, some of which Jonah already touched on. Before I discuss our Q1 financial performance in more detail, let me recap some highlights from across the business. We delivered Q1 revenue in adjusted EBITDA in line with our March outlook, generating a $7 million improvement in adjusted EBITDA year-over-year despite a $10 million year-over-year decline in revenue. Our flagship property, BuzzFeed.com, saw modest growth in direct traffic, up 3% versus Q4, a positive signal that traffic trends are beginning to stabilize as we complete the transition from being Facebook-dependent to one that drives traffic directly to our own and operated platform.

Matt: We closed the first quarter with great momentum in our business some of which Jonah already touched on before I discuss our Q1 financial performance in more detail, let me recap some highlights from across the business we.

Matt Omer: Programmatic advertising revenues across BuzzFeed and HuffPost websites and apps grew year over year for the third consecutive quarter. Last month, we completed the restructuring program we announced in February, which is expected to yield approximately $23 million in annualized compensation costs.

Matt: Programmatic advertising revenues across both student hub post websites and apps grew year over year for the third consecutive quarter.

Matt: Last month, we completed the restructuring program, we announced in February which is expected to yield approximately $23 million in annualized compensation cost savings.

Matt Omer: We paid down a significant portion of our outstanding debt, resulting in lower go forward interest expense obligations, and we increased our cash balance by approximately twenty six million dollars quarter per quarter to sixty two million dollars, including restricting. This was driven by the proceeds from a sale of a complex which closed in February. As a result, we are well positioned to navigate the ongoing headwinds facing publishers and digital media at large sustainably and profitably.

Matt: Paid down a significant portion of our outstanding debt, resulting in lower go forward interest expense obligations and we increased our cash balance by approximately $26 million quarter over quarter to $62 million, including restricted cash. This was driven by the proceeds from our sale of complex, which closed in February.

As a result, we are well positioned to navigate the ongoing headwinds facing publishers and digital media at large sustainably and profitably.

Matt Omer: Moving on to our first quarter results. As a reminder, all financials and comparables presented here are on a continuing operations basis, which excludes... Overall, revenues for Q1 2024 declined 18% year-over-year to $44.8 million, in line with our March outlook. Performance by revenue line was as follows. Advertising revenues declined 22% year-over-year to $21.4 million, driven by ongoing pressure on our direct sales channel and lower monetization on third-party. By contrast, programmatic advertising revenues across our largest owned and operated properties, BuzzFeed and HuffPost, grew modestly for the third consecutive quarter, increasing 6% year over year.

Matt: Moving onto our first quarter results.

Matt: As a reminder, all financials and comparable presented here are on a continuing operations basis, which excludes complex.

Matt: Overall revenues for Q1, 2024 declined 18% year over year to $44 8 million.

Matt: In line with our March outlook for fourth by revenue line was as follows.

Matt: Advertising revenues declined 22% year over year to $21 $4 million driven by ongoing pressure on our direct sales channel and lower monetization on third party platforms. By contrast, programmatic advertising revenues across our largest owned and operated properties Buzzfeed enough posts grew modestly for the third consecutive quarter inch.

Matt: Creasing, 6% year over year.

Matt Omer: Advertising revenues are driven in large part by audience time spent with our content across platforms. In conjunction with Advertising revenues, we continue to report U.S. time spent across our own and operated properties and third-party platforms, according to ComScore. In Q1, U.S. time spent as reported by ComScore declined 16% year-over-year to 67 million hours, driven primarily by the ongoing declines in referral traffic from third-party platforms.

Matt: Advertising revenues are driven in large part by audience time spent with our content across platforms and conjunction with advertising revenues. We continue to report U S time spent across our owned and operated properties and third party platforms. According to Comscore.

Matt: In Q1 U S time spent as reported by Comscore declined 16% year over year to 67 million hours driven primarily by the ongoing declines in referral traffic from third party platforms.

Matt Omer: However, as Jonah discussed, we continue to see positive trends in direct traffic, which grew 3% year over year, sorry, quarter over quarter. Content revenues declined $3.1 million, or 19% year over year, to $13.1 million, driven primarily by non-recurring custom content campaigns delivered in the year of a quarter, with no comparable revenue in the current. Commerce and other revenues of $10.2 million declined $1 million, or 9%.

Matt: However, as John discussed we continue to see positive trends in direct traffic, which grew 3% year over year quarter over quarter.

Matt: Content revenues declined $3 1 million or 19% year over year to $13 $1 million driven primarily by a nonrecurring custom content campaigns that was delivered in the year ago quarter.

Matt: With no comparable revenue in the current quarter.

Matt: Commerce and other revenues of $10 $2 million declined $1 million or 9% year over year. This was primarily due to less promotional spend by retailers and lower audience traffic as compared to the year ago quarter.

Matt Omer: This was primarily due to less promotional spend by retailers and lower audience traffic as compared to the year-ago quarter. We generated first-quarter adjusted EBITDA losses of $11.3 million, also in line with our March outlook. It is important to note that, per U.S. GAAP, we have not allocated any of the shared expenses to discontinued operations.

Matt: We generated first quarter adjusted EBITDA losses of $11 3 million also in line with our March outlook.

Matt Omer: As a result, our first quarter adjusted EBITDA includes Complex's portion of our shared corporate expenses, which were significant. We ended the first quarter with cash and cash equivalents, including restricted cash, of approximately $62 million, a net increase of approximately $26 million versus the fourth quarter, after paying down a significant portion of debt, partially funding our recent restructuring, and improving working capital. This, again, was driven by the proceeds from the sale of Complex, which closed in February.

Matt: We ended the first quarter with cash and cash equivalents, including restricted cash of approximately $62 million and net increase of approximately $26 million versus the fourth quarter after paying down a significant portion of debt partially funding our recent restructuring and improving working capital. This again was driven by the proceeds from the sale of complex, which closed in February.

Speaker Change: Before I share our financial outlook for the second quarter, let me provide a little context.

Speaker Change: Starting with revenues.

Speaker Change: Building on Q1 momentum in direct traffic and programmatic revenues as we lap the deprecation of Facebook instant articles and the closure of Buzzfeed News, we expect overall programmatic advertising revenue to return to modest year over year growth. In Q2. However, we do expect ongoing pressure on the direct sales channel and lower third party platform monetization to continue to impact year over year growth.

Speaker Change: <unk> overall revenues.

Matt Omer: In terms of adjusted EBITDA, our Q2 Outlook reflects cost savings from our fully executed restructuring program announced in February. And as a reminder, the program is expected to drive approximately $23 million in annualized compensation costs. These savings are expected to be fully offset by the year-over-year revenue pressures that we are anticipating for Q2. With that, I will turn to our financial results. Again, all figures and comparables are presented on a continuing operation.

Speaker Change: In terms of adjusted EBITDA, Our Q2 outlook reflects cost savings from our fully executed restructuring program announced in February and as a reminder, the program is expected to drive approximately $23 million annualized compensation cost savings.

Speaker Change: These savings are expected to be fully offset.

Speaker Change: Year over year revenue pressures that we are anticipating for Q2.

Speaker Change: With that I will turn to our financial outlook again, all figures and comparable and are presented on a continuing operations basis for.

Matt Omer: For Q2 2024, we expect overall revenues in the range of 44 to 49 million, or 21 to 30% lower than the year ago. We expect a just EBITDA in the range of $4 million in losses to $1 million in profit, approximately flat year-over-year at the mid... With a leaner cost base, a stronger balance sheet, and renewed focus on driving high-margin programmatic and affiliate revenues across our own and operated properties, we are continuing to make meaningful strides towards returning the business to profitable, cash-positive growth. Thank you. I'll hand the call back to Amita so we can take it.

Speaker Change: For Q2, 2024, we expect overall revenues in the range of $44 million to $49 million or 21% to 30% lower than the year ago quarter. We.

Speaker Change: We expect adjusted EBITDA in the range of $4 million in losses to $1 million in profits approximately flat flat year over year at the midpoint.

Speaker Change: With a leaner cost base stronger balance sheet and a renewed focus on driving high margin programmatic and affiliate revenues across our owned and operated properties. We are continuing to make meaningful strides towards returning the business to profitable cash positive growth.

Speaker Change: Thank you I'll hand, the call back to me to so we can take questions.

Amita Tomkoria: Thanks, Matt. I've gathered a bunch of questions here that we received offline and during the call, so we'll get right into it. Jonah, maybe starting with you on the commerce business, you spoke a little bit about retail media networks as it relates to your affiliate business and some of the retail partnerships that you have. With retail media networks continuing to show strong growth, what's the opportunity for Buzzfeed to leverage first-party data and the engaged audience that you have to attract some of these dollars?

Speaker Change: Thanks, Matt I've gathered a bunch of questions here that we've received offline during the call. So we'll get right into it.

Speaker Change: Just starting with you.

Speaker Change: On the Commerce business, you spoke a little bit about retail media networks as it relates to your your affiliate business and some of the retail partnerships that you have.

Speaker Change: With with retail media networks, continuing to show strong growth, what's the opportunity for <unk> to leverage first party data.

Speaker Change: <unk> engaged audience that you have to attract some of this some of these dollars.

Speaker Change: Thanks, Amit.

Speaker Change: Retail media networks are a big opportunity for us we see a lot of.

Speaker Change: Of opportunity in that space.

Speaker Change: Just to take a step back.

Speaker Change: As I mentioned earlier, our model for commerce is a bit different.

Speaker Change: That a lot of our peers.

Speaker Change: Really focused on product discovery people kind of asking for all kinds of things entertainment and useful information and sometimes that while they're there.

Speaker Change: They start to.

Speaker Change: Discovering the shopping content in.

Jonah Peretti: It's much more about discovery, finding something you didn't know existed, being inspired to buy something new, and so driving emotional responses in the buying process, finding new products, finding something for yourself you didn't know you needed, finding something that solves a problem that you have in your life that our amazing writers have identified as a common problem that people have and have suggested a bunch of interesting products to solve. All of that is what drives our transactions and our shopping business.

Speaker Change: It.

Speaker Change: Our transactions and.

Speaker Change: In our shopping business.

Speaker Change: So.

Speaker Change: As a result, we're able to capture a lot of really rich first party data.

Speaker Change: Because we see what are people responding to.

Speaker Change: For example, we have data on shoppers that are looking for particular categories. We have data about shoppers that is more generation.

Speaker Change: What kinds of other content are they reading are they parents are they gen. Z are they are they are millennials.

Speaker Change: And then we have these amazing partnerships with the largest retailers in the world Amazon Walmart target and others.

Speaker Change: <unk>.

Speaker Change: That new product discovery can be.

Speaker Change: And so that's why we were able to generate $80 million in revenue through retail relationships in 2023.

Speaker Change: And that's approaching.

Speaker Change: A third of our revenue.

Speaker Change: And so I think that positions us really well for.

Speaker Change: Continuing to grow and expand our relationships with these retailers.

Speaker Change: And also when these retailers have.

Speaker Change: The desire to extend.

Speaker Change: Per advertising from their Rmm's date.

Speaker Change: Date, they can do that through a partner like us because they know that we have great first party data, we know a lot about choppy years, we know that they know that their customers are already shopping from buzzfeed and discovering things and finding things on buzzfeed.

Speaker Change: And so by extending.

Speaker Change: The retail their retail media networks across our inventory theyre able to get something really differentiated NVA and help.

Particularly with Incrementals city, where people are discovering new things and clicking through and transacting and so that's.

Speaker Change: It's a big area of focus and integrating more deeply with our retail partners and and going deeper on first party data to make those connections.

Speaker Change: <unk> is a big opportunity and were very deeply engaged in that.

Amita Tomkoria: Thank you. Matt, maybe turning to you, you know, because you discussed the Comscore time spent trends and also some of what you're seeing on O&O. Can you talk about any brain shoots specifically that you're seeing with respect to content initiatives that are driving O&O traffic and that might point us toward a potential return to growth over the next? a period of time? Yeah, yeah, thanks for the question. I think, unfortunately...

Speaker Change: Thank you.

Speaker Change: Matt maybe turning to you because we discussed the Comscore time set trends and also what youre seeing.

Al can you can you talk about any green shoots specifically that youre seeing with respect to content initiatives that are driving <unk> traffic and that my point us toward.

Speaker Change: <unk> return to growth over the next.

Speaker Change: A period of time, yes.

al: Yes. Thanks for the question I think unfortunate overall time spent continues to be pressured by lower Buzzfeed referral tracking traffic.

al: We are seeing green shoots with respect to our direct audience. So for example, our bus fees web and App direct traffic grew 3% quarter over quarter. We're also seeing deeper engagement among our most loyal audience.

al: Sample the number of page views per web visitor has grown for four consecutive months since December.

al: Really just looking to build on this momentum in Q1 with a focus on audience loyalty and new content in the pipeline to help drive time spent.

Hi.

Speaker Change: And maybe back to you Donna you.

Donna: You and Matt Hope reference.

Donna: The sale of complex.

Now that that's behind you guys.

Donna: How do you think about the brand portfolio as it stands today or are you are you thinking about additional asset sale, there or maybe you can talk about sort of the role of each brand in the portfolio at this stage.

Speaker Change: Sure. So we have really amazing that assets and it's exciting that we continue to see inbound interest in our brands. It speaks to the strong reputation we have built around each of our brands in the marketplace.

Speaker Change: Both with audiences and advertisers.

Speaker Change: And we'll continue to be opportunistic in order to put our business in the strongest position to benefit from the work we're doing in AI and this next <unk>.

Speaker Change: Generation of of more interactive content that we are very excited about.

Jonah Peretti: I think when you look at the programmatic and affiliate revenue lines, which we really see as core, both HuffPost and BuzzFeed really have great audiences and brands and dynamics to drive programmatic and affiliate revenues. We're seeing, you know, a lot of strength and growth across both those properties.

I think when you look at.

Speaker Change: The programmatic and affiliate revenue lines, which are we really see us as core.

Speaker Change: Both half post and Buzzfeed have really how great audiences and brands and dynamics to drive programmatic and affiliate revenues.

Jonah Peretti: And although HuffPost is newer to affiliate commerce, the large engaged audience and an audience that's a bit more affluent have really helped that business grow on HuffPost. And so we think the core programmatic and affiliate revenue lines are really BuzzFeed and HuffPost are really helping drive that. We also think these brands are poised to benefit from our work in AI, and so we're excited to see additional leverage added to those businesses.

Speaker Change: Where we're seeing.

Speaker Change: Strength in programmatic across both of those properties.

Speaker Change: And although Huff post is newer to the affiliate commerce.

Speaker Change: The large engaged audience and an audience that is a bit more affluent has has really helped.

Speaker Change: That business grow.

Speaker Change: On how post and so we think so.

Speaker Change: The core programmatic and affiliate revenue lines really busty enough posts are really helping drive that we also think these brands are poised to benefit from our high end and so we're excited to see additional leverage added to those businesses.

Speaker Change: Another thing that.

Speaker Change: We try to provide.

Speaker Change: And then part of that is.

Speaker Change: Bringing employees.

Speaker Change: Back to the office in a very deliberate way to foster collaboration.

Speaker Change: And continue to work with our advisors to optimize our balance sheet and to evaluate assets and to make the smartest meals for the company moving forward.

Amita Tomkoria: And then in terms of monetization, you know, as you guys lean into programmatic, can you speak to some of the benefits that you've seen materialize so far, and maybe just how you expect that to translate from an overall revenue perspective and even a cash perspective over the longer term? Yeah, I can take that. You know, one thing I noticed or noted was that this is our third consecutive quarter of programmatic revenue growth across our largest O&O properties, BuzzFeed and Outposts.

Speaker Change: Thank you.

Speaker Change: In terms of monetization.

Speaker Change: His lean into programmatic, yes can you speak to some of the benefits that you've seen materialized. So far and maybe just how you expect that to translate from an overall revenue perspective, and an EBITDA cash perspective over that over the longer term, yes, I can take that.

Speaker Change: One thing I noticed or noted that was our third consecutive quarter of programmatic revenue growth across our largest OTA properties Buzzfeed now.

Amita Tomkoria: So it's important to note as we lap the deprecation of Facebook instant articles and the closure of BuzzFeed News, we expect overall programmatic advertising revenues to return to modest year-over-year growth in Q2. I mean, it's good to remind you that programmatic advertising is our largest and highest-margin revenue stream. And so as we continue to scale this revenue, the return to business growth, we do expect to drive improved EBITDA trends as well.

Speaker Change: So it's important to note as we lap the deprecation of Facebook instant articles and the closure of both the news we expect this overall program.

Speaker Change: Programmatic advertising revenue to return to modest year over year growth in Q2.

Speaker Change: It's good to remind that programmatic advertising is our largest and highest largest and highest margin revenue stream.

Speaker Change: So as we continue to scale. This revenue the return of business growth, we do expect to drive improved EBIT trends as well and you're seeing some of that in the Q2 guide approaching breakeven. Despite the revenue pressures in other parts of the business.

Amita Tomkoria: And you're seeing some of that in the Q2 guide, approaching break-even despite the revenue pressures in other parts of the business. Q2 savings, again, from the restructure are fully offsetting the revenue. Maybe just to follow on from that, like speaking of the restructuring, can you talk about how you're looking to drive or how you're thinking about margin expansion and cash generation kind of over the course of the balance of the year? Yeah, I mean

Speaker Change: Q2 savings again from the restructure of fully offsetting the revenue pressure that we're seeing.

Speaker Change: And maybe just a follow on from that like taking out the restructuring can you can you talk about how you are looking to drive or how youre thinking about margin expansion and cash generation.

Over the course of the balance of the year, Yes, I mean as I touched on earlier the restructuring programs. As a reminder, that's driving approximately $23 million annualized savings a meaningful reduction to our cash cost structure and another important consideration.

Matt Omer: Yeah, I mean, as I touched on earlier, the restructuring program, just a reminder, is set to drive approximately 23 million dollars in annualized savings, a meaningful reduction to our task cost structure. Another important consideration is that as we focus on our higher margin programmatic and affiliate revenues, a greater percentage of our costs are going to be related to our compensation-related expenses for the creation of our editorial content, which are more fixed in nature. This will result in higher margin expansion and cash generation as we continue to experience a seasonal lift in our revenues.

Speaker Change: Iteration is as with our strategy to focus on our higher margin programmatic and affiliate revenues are greater position percentage of our costs are going to be related to our compensated compensation related expenses for the creation of our editorial content, which are more fixed in nature. This will result in higher margin expansion and cash generation as we can to new experienced seasonal.

Speaker Change: Lift in our revenues.

Amita Tomkoria: Thank you. And our final question, just on the topic, Jonah, of Google cookies deprecation and that kind of shifting timeline around that, has the delay changed any conversations that you guys are having with advertisers? And, you know, the industry now obviously has more time to prepare. Does this, from your perspective, reduce the risk of signal loss that might pressure, might otherwise pressure CPM? Can you maybe give us your perspective on that?

Speaker Change: And our final question just on the topic John.

Speaker Change: Google Cookie deprecation.

Speaker Change: Kind of shifting timeline around that has the delay changed any conversations that you guys are having with advertisers and.

Speaker Change: As the industry now obviously has more time to prepare our business from your perspective reduce the risk of signal loss that might pressure by otherwise pressure CPM needs.

Speaker Change: Maybe give us your perspective on that.

Jonah Peretti: Sure. It's nice to have more time, although we felt ready for the change. The biggest impact of this change will be the short-term period, once it's rolled out, of adjustment. And we've seen that with other changes like this, where, you know, it takes a bit for everyone to update and change their strategies, and then quickly, using other approaches, you can achieve revenue that's on par with what you were seeing previously. I think... We feel very good about the way we have, particularly with this first-party data focus on our owned and operated properties, to be able to provide really excellent ad targeting.

Speaker Change: Sure. It's nice to have have more time, although we felt ready for the change the biggest impact for.

Speaker Change: This change will be the short term period once that's rolled out of adjustment and we've seen that with other changes like this where.

Speaker Change: It takes a bit for everyone to update and change their strategies and then and then quickly using other approaches you can achieve.

Speaker Change: Revenue that's on par with what you were seeing previously.

Speaker Change: I think.

Speaker Change: We feel very good about the way we have have.

Speaker Change: With this first party data focus on our owned and operated properties to.

Speaker Change: To be able to provide really excellent ad targeting.

Jonah Peretti: One of the reasons that brands like to partner with Buzzfeed is that we have the ability to reliably target key audience demographics, so people who are travel-obsessed or parents or people who shop or people who have certain passions or interests, and we could do that all within a brand-safe environment of trusted content. And we also have an audience that, for lack of a better word, has a pulse. They buy things, they share content, they comment, they engage, and so having audiences that are really proactive and take action is, I think, really valuable for anyone who might be interested in having someone buy a product of theirs or share a product or talk about their product. So all of that really plays to our strengths.

Speaker Change: One of the reasons that brands like to partner with Buzzfeed is that we have the ability to work reliably target key audience demographics.

Speaker Change: So people, who are travel a SaaS or parents or people who are shopping our.

Speaker Change: People, who.

Speaker Change: Certain certain passions or interests.

And we can do that all within a brand safe environment of trusted content and.

Speaker Change: And we also have an audience that for.

Speaker Change: So all of that really plays to our to our strength.

Jonah Peretti: And a little bit more in the weeds, we do have many initiatives that will help our first-party data be used to mitigate any potential downside risk from cookie depreciation. For example, logged-in user testing, we partner with LiveRamp and see that a logged-in user has a 35% increase in CPMs when they're authenticated. UID partners with the Trade Desk Universal ID have seen 4% of our users authentic

Speaker Change: And you know a little bit more in the weeds, we do have many initiatives that will.

Speaker Change: <unk>, our first party data.

Speaker Change: <unk> be used to mitigate any potential downside risk from cookie depreciation.

Speaker Change: So logged in user testing, we partner with with live ramp.

Speaker Change: And see that a logged in user has a 35% increase in CPM when they're authenticated.

Speaker Change: <unk> partners with the trade desk Universal idea seen 4% of our users authenticated.

Jonah Peretti: Sales outreach to increase sales efforts around contextual positioning. We have some other things on the sales side. Our ad product roadmap includes product enhancements and contextual positioning, and using LLMs to understand contextual audiences even better. I think when, particularly with these advances in AI, it's possible for an AI to actually read all of our content and increasingly be able to do that multimodal, and then be able to suggest what ad placements or contextual ad placements would make the most sense.

Speaker Change: Sales outreach to increase.

Speaker Change: Sales efforts around contextual positioning we have some other things on the sales side.

Our AD product roadmap includes product enhancements and contextual positioning.

Speaker Change: And <unk> used it.

Speaker Change: Using LMS to understand contextual audience is even better.

Speaker Change: When when.

Speaker Change: Particularly with these advances in AI.

Speaker Change: It is possible for NII to actually read all of our content and increasingly to be able to do that multi modal and then be able to.

Speaker Change: Suggest.

Speaker Change: What AD placements our contextual ad.

Speaker Change: AD placements would make the most sense and that's all pretty new if you think back to the sort of early era of magazines wherever it all these niche magazines were launching so that you could advertise just the people who are in the hiking and people who are into running and people earned a fishing and all of that kind of work that was done to spin up public publications to create <unk>.

Jonah Peretti: And that's all pretty new if you if you think back to the sort of early era of magazines wherever he met all these niche magazines were launching so that you could advertise just to people who are into hiking and people who are into running and people are into fishing and all of that kind of work that was done to spin up public publications to create contextual environments for advertising now You can do that in a dynamic automated AI powered way and so I think a lot of the advancements in that space are going to offset or more than offset some of the impacts of the cookie depreciation

Speaker Change: External environment for advertising now you can do that in a dynamic automated AI powered way and so I think a lot of that.

Speaker Change: Advancements in that space are going to offset or more than offset some of the impacts of the cookie depreciation.

Amita Tomkoria: Great, thank you. That wraps up our live Q&A session for today. Thanks, Jonah. Thanks, Matt. And thank you all for joining us on the call today. Operator, I'll hand it over to you.

Speaker Change: Great. Thank you that wraps our live Q&A session for today. Thanks, John Thank you, Matt and thank you all for joining us on the call today, operator, I'll hand, it over to you.

Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

Speaker Change: Thank you. This concludes the conference. Thank you for your participation you may now disconnect.

Q1 2024 BuzzFeed Inc Earnings Call

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