Q1 2025 BuzzFeed Inc Earnings Call
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Good day and welcome to Buzzfeed's first quarter, 2025 Earnings Conference call. At this time, all participants are on the list in only mode.
Speaker Change: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Vice President of Communications, Juliana Clifton. Please go ahead.
Speaker Change: Hi everyone. Welcome to Buzzfeed Inc's first quarter 2025 earnings conference call. I'm Julianna Clifton, VP of Communications for Buzzfeed, and joining me today are CEO Jonah Peretti and CFO Matt Omer.
Speaker Change: Before we begin, please note that our remarks today will include forward-looking statements. Actual results may differ materially from those contemplated by these statements.
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Speaker Change: Risks and factors that could cause actual results to differ materially are described in our Q-1 2025 earnings release and in our filings with the SEC, including our most recent annual report on Form 10K and our Q-1 2025 quarterly report on Form 10Q to be filed with the SEC.
Speaker Change: Any forward-looking statements that we make on this call are raised on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events.
Speaker Change: During this call, we present both GAP and non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA of Marching.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: A reconciliation of these gap to non-GAAP measures is included in today's earnings press release, which is available now on our investor relations website. Now we'll turn the call over to Jonah.
Amita Tomkoria, Unknown Executive, Amita Tomkoria, Jonah Peretti
Jonah Peretti: Thank you. Good afternoon, everyone. We're pleased to kick off 2025 on strong footing operationally, financially, and strategically.
Jonah Peretti: In Q1, we made continued progress on our dual focus, running a leaner, more profitable core publishing business while investing in transformative new applications powered by Generative AI.
Jonah Peretti: are publishing business benefits from strong trusted brands, Buzzfeed, HuffPost, and Tasty. These brands are led by creative teams who are skilled at curating the internet, covering the most important stories, and developing creative content ideas.
Jonah Peretti: They have access to the best publishing tools, new, including new AI tools that have allowed us to increase editorial output 17% this quarter, and a new tool used for some stories has increased article performance by an average of 25%.
Jonah Peretti: This is possible because AI assistance allows us to combine the best of both worlds, human taste with AI insight.
Jonah Peretti: On the monetization side, our lighthouse platform continues to improve with AI-powered ad targeting that actually understands our content, driving more contextually relevant placements for brands.
Jonah Peretti: We are less dependent on platforms than ever, with 62% of US traffic to Buzzfeed.com coming from direct visits, internal referrals, and app usage.
Jonah Peretti: All of these developments have been hard one by our team and it is gratifying to be in a much stronger position after several years of transformative work. We are excited to continue these efforts to achieve our goal of driving profitable growth at our maturing publishing businesses.
Amita Tomkoria, Unknown Executive, Amita Tomkoria, Jonah Peretti
Jonah Peretti: We are also looking forward to the future as AI models open the possibility of totally new businesses. As we may progress on developing BFI land, our new AI native social media app, we've been testing more AI powered user generated formats on Buzzfeed site. Our users have been very eager to create using these new formats.
Jonah Peretti: users who make AI creation on Buzzfeed spend over 20 times longer on our platform than casual Facebook referred users. Users who create and share their AI content spend 40 times longer on our platform than casual Facebook referred users.
Jonah Peretti: AI creations are shared seven times more than all other content types on our platform.
Jonah Peretti: We are seeing new users' behaviors emerge as our audience learns to create and play with AI-powered formats. We will accelerate the development of these formats and push them even further with the launch of BFI.
Jonah Peretti: Based on what we are already seeing on Buzzfeed, we believe there's a huge opportunity to drive significant growth and engagement and time spent on via violent transforming the depth of the depth of connection we have with our audience.
Jonah Peretti: We are making progress on development and can't wait to share more with you later this year. With that, I'll turn it over to Matt to walk you through our financials.
Amita Tomkoria, Unknown Executive, Amita Tomkoria, Jonah Peretti
Matt Omer: Thanks, Jonah. Our Q1 2025 results reflect continued progress in improving operational efficiency and positioning the business for long-term sustainability.
Matt Omer: While total revenue declined slightly year over year, we delivered meaningful improvements in both adjusted EBITDA and our bottom line, driven by a lean operating structure, cost management, and sharpened strategic focus on scalable revenue streams.
Matt Omer: As a reminder, all financial results are reported on a continuing operations basis and exclude complex and personal feasts. Here are our first quarter of 2025 results.
Matt Omer: Total revenue for the quarter was $36 million, compared to $37 million in Q1, 2024. This modest decline was primarily driven by declines in our Direct Sold Officer offering largely offset by continued improvements in programmatic advertising and affiliate commerce.
Matt Omer: Advertising revenues grew slightly year-over-year to $21.4 million compared to $21.9 million in Q1.24.
Matt Omer: This was our fourth consecutive quarter of growth in programmatic advertising, which increased by $2.5 million a year of year. That growth offset a $2.1 million of decline in direct-salt advertising, a category that was largely impacted as a strategic shift during our 2024 restructure.
Matt Omer: This shift continues to reduce volatility, increased predictability in our ad business.
Matt Omer: Concent revenues totaled $4.4 million, down from $6.7 million in the prior year.
Matt Omer: This decline was driven by fewer Drexel content deals, which fell by $3.2 million year over year.
Matt Omer: However, we did see a $900,000 increase in studio revenue which continues a very quarter to quarter depending on project timing. We remain thoughtful in how we allocate resources to branded and custom content focusing on margin and quality.
Matt Omer: Commerce and other revenue rose to $10.2 million from $9.3 million at the year ago. This growth was driven by a $1 million increase in organic affiliate commerce, marking the fourth straight quarter of Europe your growth in this category.
Matt Omer: Commerce remains one of our most efficient and scalable revenue lines, and we're expanding our efforts across key shopping windows, especially on our own and operating properties.
Amita Tomkoria, Unknown Executive, Amita Tomkoria, Jonah Peretti
Matt Omer: From a profitability perspective, we're seeing a real traction in the chain food made in 2024. Net loss from continued operations improved significantly to a loss of $12.5 million, compared to a loss of $27 million in the same quarter of 2024, cutting our losses by more than [inaudible]
Matt Omer: On the audience engagement side, our core brands continue to show resilience.
Matt Omer: Total time spent across our properties increased slightly to 67.9 million hours up from 67.3 million hours in Q1 2024.
Matt Omer: While modest, that growth came alongside a smaller content footprint, entire cost controls, reinforcing that are focused on loyalty and product quality works.
Matt Omer: Looking ahead, we remain focused on scaling our most profitable revenue streams, programmatic and affiliate, while investing in high upside new innovative projects like DF Island.
Matt Omer: We're operating with greater efficiency and we believe our strategy positions as well to drive long-term value for shareholders.
We are reaffirming our full year 2025 guidance as follows.
Matt Omer: Revenue in the range of $195 to $210 million and adjusted even up between $10 and $20 million in line with the outlook we've shared last quarter.
Matt Omer: Thanks again for joining us today. I'll now hand the call back to Jonah, so we can take some questions.
Amita Tomkoria, Unknown Executive, Amita Tomkoria, Jonah Peretti
Juliana Clifton: Thanks Matt. The first question we received is, can you touch on Buzzfeed's outlook for macro conditions and what you're hearing from advertisers regarding spend for the year? Jonah, I'll let you take this one.
Amita Tomkoria, Unknown Executive, Amita Tomkoria, Jonah Peretti
Speaker Change: Is taking an approach where they're trying to see what's going to happen in the next few weeks and months. We are in a pretty chaotic environment where the administration doesn't really roll things out. [inaudible]
Speaker Change: in a measured and orderly way. So there's a lot of surprises that could impact the macro economy. We're not sure. You know, for example, what will happen with tariffs with China? There could be huge tariffs. There could be small tariffs. It's really hard to know what will happen in the next. So, um...
Speaker Change: You know the next few months, I would say the the the overall economy seems fairly strong, but that uncertainty does cause some. Um.
Speaker Change: Some advertisers to kind of take a look and see the approach or pause.
Speaker Change: But it's not like a normal, you know, economic slowdown type of pause. It's like let's wait for the announcement next week or the change that might happen in the very near future before we.
Speaker Change: You know decide exactly what we're going to do for the year.
Unknown Speaker ... ... ... ... ...
Speaker Change: and so I think overall just being very adaptable and being able to move quickly as things develop is the best strategy.
Speaker Change: I'll also say that the biggest macro trend we're seeing is the continued improvement of generative AI.
Speaker Change: Technology. And I think that is going to have a larger impact on the economy than any of the noise we're seeing right now from from from the
you know, Trump administration.
Speaker Change: In the capacity of AI models have are going to have a massive impact on the economy and I think it's a huge opportunity for our business and a huge opportunity to drive economic growth.
Speaker Change: and I think that's going to, when we look back, you know, five years from now at this time period, I think we're going to think more about the macro effect of the AI revolution and we're going to think about some of the other noise that people are talking about right now.
Speaker Change: All right. The next question we received is, do you expect to lean into more programmatic revenue in a more uncertain macro? What would be the implication?
Jonah, I'll let you take this one.
[inaudible] I'm not sure if I'm right.
Speaker Change: Yeah, I mean, it's definitely in times where there's more uncertainty. Programmatic is great. It's very efficient. It can continue to run a lot of programmatic advertisers have. Yeah.
Speaker Change: You know set row as that they're looking for and they'll just continue to run and you know sometimes even uncapped as a as they um
Speaker Change: Are getting value from from the advertising so we really like programmatic avenue for that reason and it's tech enabled it's scalable. All right, let's go.
Speaker Change: We have a great team that's working on optimizing our programmatic and has been able to to get a lot of make a lot of improvements over the years there, you know, they mentioned before the lighthouse has also been helpful and. [inaudible]
bringing new technology to targeting and more contextual.
Speaker Change: types of placements. So we're we're definitely excited about programmatic revenue. I think it's it is a more resilient form of revenue even in a tougher economy. You'll see that
Speaker Change: that advertise is really like the the measurability and efficiency of programmatic advertising. So, you know, I would expect it to be
Speaker Change: at higher percentage, if we ended up in an unexpected macro kind of downturn, but it will be important regardless of what happens in the economy because it's very scalable, tech-enabled and measurable, so clients really like it.
Thank you.
Amita Tomkoria, Unknown Executive, Amita Tomkoria, Jonah Peretti
Speaker Change: Next question. Have you seen any changes from commerce partners as tariffs have been implemented? Do you see any risk to the commerce segment? Matt do you want to take this?
Speaker Change: Yeah, sure. So we have yet to see any meaningful impact from the terrace so far. Our comments business is diversified across various retail categories and partners, which gives us a lot of flexibility and ability to kind of measure and kind of monitor and ultimately reduce our risk exposure to the terrace.
Amita Tomkoria, Unknown Executive, Amita Tomkoria, Jonah Peretti
Speaker Change: What is your outlook for cash flow generation in 2025? How should we think about this conversion from EBITDA to FDF? Matt, do you want to take this?
Matt Omer: Yeah, so while we don't provide specific guidance on free cash flow, I'd say based on our guidance range, I'd expect positive cash flow from operations to be offset by modest to cat-backs and cat-wise software. You guys remind her as a primarily digital company or physical cat-backs.
Matt Omer: Needs are quite low, but we do capitalize a portion of our tech team's compensation and this was about $12 million in 2024. So I think you can use that as a proxy.
Amita Tomkoria, Unknown Executive, Amita Tomkoria, Jonah Peretti
Speaker Change: Thanks, Matt. Alright, that was our last question. Now I'm going to hand it back to the operator.
Amita Tomkoria, Unknown Executive, Amita Tomkoria, Jonah Peretti
Speaker Change: Thank you. As there are no further questions, this concludes today's conference call. Thank you all for participating. You may now disconnect.
Amita Tomkoria, Unknown Executive, Amita Tomkoria, Jonah Peretti
Speaker Change: Thank you for joining us today, and we'll see you in the next video.
Matthew Omer, Buzzfeed, Matthew Omer,
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Newspaper, Matthew Omer, Buzzfeed
Amita Tomkoria, Unknown Executive, Amita Tomkoria, Jonah Peretti
Amita Tomkoria, Unknown Executive, Amita Tomkoria, Jonah Peretti
Amita Tomkoria, Unknown Executive, Amita Tomkoria, Jonah Peretti
Speaker Change: Canada The Armoury By Henry River Cart Production Co-written By ATV RADIO onservices AUTHOR Harold Ashworth Atelier Of The Heart And The Soul
Matthew Omer, Matthew Omer, Buzzfeed
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