BZFD - Earnings call transcript Q2 2022

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Operator

Good afternoon, and welcome to the BuzzFeed Inc.

Second Quarter 2022 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I'd now like to turn the conference over to Amita Tomkoria, Senior Vice President of Investor Relations. ahead. go Please

Amita Tomkoria

to Call. Welcome Second XXXX Quarter Hi, Amita BuzzFeed Tomkoria, Conference I'm Relations. SVP Earnings everyone. Inc.'s of Investor

today CEO, and and are President, me Martin; DellaFortuna. CFO, Jonah Marcela Felicia Joining Peretti; Founder

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

may use and relevant and business. EBITDA non-GAAP our adjusted we operational operational Jonah. allow at release believe and The the on the investors.buzzfeed.com. available non-GAAP strength to to present measures performance GAAP financial release. call, managing for included are investor investors method because is website goals adjusted A to develop to the EBITDA We press they a of an I'll us and to budgets in press to GAAP establish And non-GAAP investors today's presentation pass margin used this useful allows view our management. for manner similar business performance call reconciliation by information our and of and During measure in now are earnings both The to of measures. our financial measures

Jonah Peretti

increasingly share first I context you complexity outlook. for an on you share call, us. business with and quarter that the everyone, how and environment. results I discussion, current uncertain will will for and of perspective to To today's are navigate we provide discuss volatile the economic the our second preparing Hi, On operating my thank joining

many are seemingly and and so disruptions, today, here world economically, communities, sit through around a we the individuals businesses politically. As endless list socially of managing

Our impacted. deeply been audience target has

of In people fact, the brunt we that challenges. are these bearing young believe

few political past polarizing and and with uncertain a they met to rising and the costs, have social Over professional been debate years, start their college and careers. disruptive

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category-leading help do are media and Gen of Each leading our representing already an young the young make our can voices, important the Through entertainment find but role play also joy our to more. better youth world for elevate and people place. we them brand a brands We Z we content, believe millennials, their amplify voices a can audiences. has and can We of empower I of diverse moments their the along experiences way. Internet the to in and

teams our for demonstrated macroeconomic $XXX bold our of own are to audience, of line to rapid by proprietary this data work May increasing here. million, We delivering fueled by grew Complex, scale. and uncertainty, our BuzzFeed to resiliency pace million. cross-platform outlook. year-over-year XX% our second continued wake the in in with above the both vertical our We in Revenues massive mission In revenues their financial company focus results and video to the teams $X.X the in empowering EBITDA young and people be quarter, short-form levels by and and adjusted resulting in living first-party shift pre-pandemic

third-party for a us meet brand-safe, audiences and U.S. platforms social reach growing to stronger partner the is time by young grow reporting, to led continue to tougher, and market TikTok. out year-over-year, as are conditions According effectively than media spent While overall our trusted demand Advertisers seek proposition to culturally-relevant value continued on content. ever.

to by reported did continues be our pressured platform trends QX. time the audience ongoing in spent shift, encouraging in Although we consumption some observe

vertical clients programs. digital of data across audiences on to video engagement industry-leading rose quarter. than Instagram and platforms content on with challenge teams These consuming to platforms platforms than creator-led QX TikTok, persist. content new to first-party video views to our continues demand pure-play views any YouTube vastly platform instrumental prior navigating quarter, is that Comscore, set in across development challenges and to challenges Reels, content video vertical incredible first-to-market Instagram getting views proprietary prior are them formats more content reliable into the the spend. for more surpassed consumption TikTok spend billion and Quarterly own grow for about data, influencers exclusive an by Shorts help platforms content fuel and partners is reach vertical their to publish advertising millennial on QX time our video to platform. we audiences these continuing and on next. going fend audience on data And continues platforms gain Against target solutions More and world demand Z powering any off the competition. our QX. creator our $X grow, time, the The the partners backdrop, with our their company. are reaching vertical to for where and attracting and any their the Gen And effectively Our spoke highest of versus for formats. our creators help tripling Last to major I work quarter. increasing ad level media content momentum creator Reels and first more biggest products, leaning Tasty grow broadly, are rich other audiences and the According need we of across are this in lab alone This than fueled putting the facing,

impact macro clear that inflationary having short-form shift chain we of on with deterioration combination to massive an the environment. to in contending is vertical advertising also pressures, and rising are addition spend. supply ongoing It video, disruptions the interest rates In the is a

year-over-year XXXX, and during to first grow but rapidly that we been trends, auto, we to In have pressured, growth. the QX across last robust were year. restaurants of the exhibited results the emerging Tech category. ads decline. Research, did our the services recession of slowed rate largest Notably, services continued through year-over-year and retail According recovered CPG while Morgan not declines growth know flat. And terms half mixed in financial quarter for most Stanley end to performance-based namely of from saw categories, our the in the

record this know a for digital drive We advertising. we XXXX year going for our returns was in and not helping growth budgets Media strong environment. partners that are advertising are also away,

get budgets know identify our we As help can ROI-focused squeezed, them creative, clients solutions.

the able With been to across of clients we key addition performance-based our have over relationship multiple with products last few expand the years, categories.

annual ROI-driven a rooted partnership continues number of in model are fact, us In client to products. well. And our relationships this serve efficient media

amid are the our That effectively. expect efficient beyond shift QX we to macroeconomic platform dual ahead, levels. trend ongoing way from extends said, profits executing being role our budgets campaigns the that of simply environment, possible. the limited dynamics this help need revenues they hearing deploy to clear Looking most feedback QX clients' consistent in and clients our and below uncertainty, we In

partner, returns. to strategic them We are spend helping critical allocate maximize a limited

approach product to needs sales cementing enable effectively as position us one-stop Our diversified to consultative priorities advertisers. adapt further and as our and a for offering quickly shift, clients' our shop

between to media resilient, diversified with digital are shift commerce. and advertising ability company We different the like content, a models

allows to cost have worked We adapt us to that conditions. a create market to structure flexible

We to QX. integration proactively structure are efforts initiatives, allowed we have demand in match and by we do hiring aligning employ and our end, monetization. yield cost economic seismic to video navigated has guided the priority am so in I anticipated are process results and earlier will To The successfully our again. the industry we a highest to this multiple critical announced environment. vertical creators This downturns shifts, beginning confident us year

more reduce will see also streamline over coming entrepreneurially. processes, also We footprint cash quarters. us actions to these help Together, the and our our preserve estate operate real opportunities

I'm Inc. President team and to background we operational across publicly-traded excited roles an growth. and me years and her media will extensive experience broad of optimize to global partner BuzzFeed's to perspective that the financial, business deal-making welcome BuzzFeed XX at as our As in brings tech operations, chapter Marcela's company. further next make confident of She Marcela Martin of I'm invaluable

Marcela Martin

and opportunity the company's with mission to a the you, you Thank help and inspired by to company's to with such high-performing execute forward and look team. the growth strategy. talented and join to about long-term prospects shape BuzzFeed thrilled and work partnering team against I'm I'm excited the Jonah. and

Jonah Peretti

to forward looking collaborating. really Marcela. Thanks, I'm

outlook. Before producers world. our And call most striving generational to readers, through shareholders most continued network media company ever generation online and for changing audiences. the place. thank younger who millennial the are diverse, Felicia, take and socially I I to financial facilitate the and talented for pass over of of want I guard take as are the over this make partners our I has our Internet the to poised a uplift that, vision the will and preferred the you The to support generation want better engaged is to and help results acknowledge to on we most their we call our execute turn With continually as to to journalists a seen. proud also world Gen the voices Z to Felicia

Felicia DellaFortuna

and HuffPost. our go-to-market than of results a outlook critical $XXX.X clients in revenue brands May returns environment. delivered Revenues grew a unified end looking Jonah, With good strategic Complex, a partner challenging we the for larger across growing of and advertising strength the product you, our line our more reflecting afternoon, to ever, range quarter audience, to year-over-year second strategy XX% of We EBITDA. with diversified adjusted million, and maximize Thank low offering to and BuzzFeed, Tasty everyone. in are a wider a both

our third-party also operated As our owned engagement revenue and platforms. and measure we audience reporting, across a to complement properties

spent, in TikTok, we our video time quarter, QX not formats on quarterly to presence discussed, does second short-form than to as are our tracking, U.S. declined ever views published as XXX across As driven Jonah million newer rapidly, TikTok short-form further increasing time. internal And we reported well over gain level positioned vertical share. monetize videos include before. by their giving which vertical reaching Comscore, are to that continues grow in more us highest XX% by on and Facebook with confidence year-over-year or platforms based format to the rapidly Reels, these continue hours video audience

platforms reporting our newer yet by formats, standard on trends we engagement vertical reflect audience and around are across industry video content Although does encouraged time not platforms. spent the

by to business. declines results QX of Advertising revenues our Networks, platforms. and properties year-over-year operated Turning as owned growth grew XXXX. million the closed on acquisition results third-party The to XXXX our which in XX% December $XX.X offset Complex include on

As and among our revenues also contributed trends rate ago spending clients. revenues the million. in acquisition of period. results during The the as and revenue decelerated include expected, to million grew year Commerce against spending, a expected QX declined XXXX the results. ad in to slowdown contributed year-over-year primarily XX% pandemic line versus backdrop to Complex elevated growth to $XX.X in of Studios $XX.X pressure as XX% downward Networks. pricing macro the the BuzzFeed advertising year-over-year, the QX Content with tech retail

the to Facebook. with last business emerging traffic shopping through as audience generated still of Additionally, discussed our majority quarter, our commerce content is

increased time. low in end of As the Adjusted performance. for quarter are revenue revenues line EBITDA was a our the the impacted competition result, outlook, for million, with by also $X.X commerce with the consistent audience

company; recognition related million with our largely did depreciation and the to to increase of impact prior to with assets acquisition its $X expense, the EBITDA, financing. quarter-over-quarter compensation, employees charges incurred $X associated of public year-over-year becoming of in Complex in note by to recognition not that of restricted also million granted stock a convertible $XX million Networks; interest our We and driven the certain intangible the stock-based including adjusted amortization higher attributable and of years

equivalents gain a the $XX our cash $XX the warrant to million approximately financing note quarter of ended relating of also and convertible with and liabilities. million. recognized We We revaluation cash

year-over-year time capturing time, discussed, declines provide of the Before expect consumption in our platforms. including across spent are an currently outlook on digital vertical I financial the trends in traditional fastest-growing some me business vertical are we with continued quarter, we and to time current metric, increasing discuss order seeing outlook. Instagram formats share in as spent. because our pressuring first for let And share Starting of captured video the reported for the the are context video spent, audience not third TikTok platforms, time

we are are However, the progress across these encouraged newer by we making platforms.

distribution we backdrop. presence we that drive by evidence to macroeconomic positioned vertical monetization TikTok On base our of As be as are continue content broader grow client continue our to we well see over video across discussed, increase on the revenues, budgets and scaled to ad time. across pressured platforms, Jonah our

a in to as QX. and slow revenue As content growth to result, expect we advertising compared both QX

Towards this the quarter, relative to lower revenues for more to caution in second of In increasing trends of this an historical quarter end at of committing number the into half QX witnessed exercise in back business. turn, the we is levels year. current the visibility in spending point our clients

expect by relative pressure shift be we to continues ongoing platforms QX. audience in to third-party pricing on consumption as QX time, impacted in Additionally, the

year-over-year driven by comp. versus to performance July's in and trends Prime revenues QX considerable QX, during Day expect We commerce strong Amazon improvement show easing

we of our to proactive to Adjusted cost environment. the macroeconomic terms In structure EBITDA, steps taking are weakening align

to turn cash Successful against expected expect we and realize outlook we QX integration over reduce drive to With are reductions And this our we the are benefits QX We sequentially quarters. plans taking preserve actions earlier these drive our us slow year. as footprint, operating of quarters. real that, and also for to the announced others, estate will coming will further to I the hiring lower XXXX. help among future in financial expenses actions the execution

to revenues of range to the grow overall X% in year-over-year. expect X% We

$X million. stock-based to expect $X.X we generate the to expect EBITDA $XX the million million adjusted in losses of We range of range expenses and million in compensation to $X.X

further leading the biggest we ongoing am dual shift company successfully for call turn expect In questions. shop headwinds, to presents so cement to our are a trusted platform rigor, that dynamics partners a our environment the and doing position navigate can increased you. facing Thank as I the can operating with your one-stop confident clients. they now help Although advertising so, marketplace challenges weakening the we a youth over some the we media and our of in macro operator the today. take I'll near-term

Operator

We will session. [Operator And John question-and-answer of now Blackledge begin Instructions] go come question will first from our the Please ahead Cowen.

John Blackledge

any the And and - then commerce. would to half the year, well. think I the another if there's three environment questions ad shift of in around the discuss the talked then just was couple you softness visibility, what - and maybe, the the about A on should guidance much macro advertising, And you. about softness, guide, content versus the Jonah, video. seeing informed how think as guide? another imagine short-form Felicia of helpful back could thank limited to I just of And but how way by be that Okay, impact ad how segments, you're you. the Thank just current it, driven just XQ

Jonah Peretti

Thanks, John.

QX. pulling where I then back. So seeing in sectors, the somewhat a mentioned came given in but a seeing sector not strong of strength area of on lot less in one the But certain spending seeing signals, We spending the industry, advertising. probably market. that we're and tech very first also in we're We're lot they're mean, advertisers tech have financial and on was question mixed signals happened consumer in the marketing then on bullish in shifts services the surprisingly, advertising,

we that seeing be a able the to guidance make which anticipate cautious us our we changes somewhat market. are of to see we're in signals, lot So causes that might with mixed forward sure to

predict short-form portfolio shifts. larger that focus not shift. of your bundle advertising to do, market so terms partner but in and what that is market advertising lines in macro side that market shifts revenue the about to on market the of to the content and in segments is try a less can I and perfectly would going different platforms most and the and shifts. question like this have this adapt to that the we main and of is diversified commerce and a about Our is then more say package with we're seeing then And as the video we

Felicia DellaFortuna

to question. color, add To John, incremental your

So couple discussing have over last dynamics we shift, of in platform been that terms the of the the of quarters.

mature with the Facebook have emerging most in And on to being an commerce continue platform, the of so still commerce being business, the we impact revenue QX.

we in you back half comps have the XXXX QX highs easing as addition as of in versus because However, of in the first the Prime we as Day XXXX. half, the do had know, pandemic well

in that mixed overall For vertical advertising, seeing mentioned signals we are the Jonah spending.

macro to retail to seeing larger perspective. So they're Overall, positive like entertainment signals operated pressure pricing continues QX diversified a an as tech have as owned the spent from environment, then offering. business network continue our noticed would to our note well we time scaled from distributed the property. and relates associated it shift then services. advertising also content, challenged lastly, perspective, product impacted we in verticals I be financial And while with content be on in have our our and as and And

leaning promotional still total content is our branded However, content. heavily into

headwinds do for And most the so to promotional QX. we impacted the in therefore, content be branded with expect macroeconomic

John Blackledge

very you, helpful. thank Okay,

Felicia DellaFortuna

and part, last noted, forgot. just which The I I

from we tend QX. a your In lift terms to historical QX, do seasonal question of same in on see as perspective, we expect the that

the So that that will quarters And the follow seen. do we've seasonality being historical anticipate quarter. advertising largest believe that we we still

Jonah Peretti

and YouTube that we and longer-form short-form to traditional noted, video, our vertical will the by video advertising and that forms But Instagram, more TikTok, like providers as rev just that Facebook, rev as monetization products comes revenue on all know a that more vertical back all share, various for video creators. Facebook of share percentage are content one note impacts with YouTube, And Yeah. small to also Felicia on advertising more starts shift platform share there of on vertical rev the is the through that short-form the that solutions major that revenue. be platforms, bring video replaced working for

And more revenue, so out building that revenue model in passive happens, as start anticipating monetization. and be advertising platforms these we're shift and and platform their as rev figure platform share there'll this

John Blackledge

Right, okay. Thanks I appreciate that. so much.

Jonah Peretti

you. Thank

Operator

comes go from next question of ahead. The Navon Bank Please of America. Brent

Brent Navon

the Hi, thanks for taking question.

you the into conservative at approach in way that anything on as have of guide taking advertising is into the can progression it maybe at visibility point, quarter whether on helpful. of this been a you that the building worsening into just Or you're like remain any follow-up a quarter we Just macro? July, revenues, the and visibility have frame would a trends should very just and same? the progressing the how months through conditions And how be and look

Felicia DellaFortuna

the note QX than we As discretion at that the I the quarter, we back point, that seeing end the of less prior, did caution from the us were and typically the start a that advertisers historical in using see. perspective is of have of at do towards we this is And more visibility result QX. commitments

note have would I And a and sales direct we clients. $X above. However, revenue strong had overall of perspective, those does majority from clients that our an come with historically, spend revenue - rate very from retention that the million

of partners. to and to is consultative we all relates innovative as visibility our it continue lower, while strategic be So

Brent Navon

think also the you potentially time to get frame at trying looking to you costs for EBITDA the cut do could line protect after Any these you go way things the Thanks it. over potentially structure follow-up, if operational a be magnitude that to alluded and where you savings into worse? could. there. can And looking cost as just the color I see to Got expenses just of

Felicia DellaFortuna

noted and perspective, historical a cost in multiple actions QX QX. So in we

QX And part you at can Complex so what see is integration. the looking in in

gross which made we hiring were overall at into well savings of align which our from which the cost improvement savings improvement half. So result QX, QX. structure was is In is as as better revenue audience to with QX, while as operating cost sequential that the our indicator significant out that actions focus are a first to to looking we evaluating in the actions result anticipating brand guidance and we made an a of cost on as mentioned have QX as incremental in critical QX expense of our footprint, portfolio of in in margin, cost incremental demands. real well the we Jonah And as should estate look also result then there

Brent Navon

so the Thanks Understood. color. for much

Jonah Peretti

Brent. Thanks

Operator

next Our Jason Kreyer of Please comes Craig-Hallum. question go from ahead.

Jason Kreyer

Thank you.

start that metrics if that working presence you like O provided, outgrow platforms bifurcate if metrics if total kind to third seeing visibility you audience between outpace TikTok, start start audience can and the you happening just I the about. or then TikTok in that elsewhere? to that into wondering you're time you have can with those don't a to are spent been and curious see can the On with point that And the curious you looks But party what's what I of O. reach. third-party guess, growing guys on growth you you've - those and declines on that see you but And know on when reported metrics, think talking there's

Felicia DellaFortuna

Jonah provide that the trends to and then can color it TikTok. to So pass we're on can incremental I I start for seeing

network. majority distributed from owned the from the the on advertising total I question, answer our and perspective, June sorry, is say, operated first operated - across months your running traffic will properties revenue own from mix owned a of the came the of XX% that terms revenue components our ended properties, XXXX, mix of and to from XX, properties, the in distributed or network. traffic, the for X came Of operated came So not and of of XX% advertising and

of to in about QX. so And that's think one terms point

see include trends because to the YouTube decline to metric. relates in - did increasing in network positive with but spent sorry, based time those see perspective, we that network, the declines year-over-year their materially Facebook. on CMS, in do partially we is not however, We sequential QX also we QX saw on content it distributed report on As a incremental the distributed they from QX And the that video offsetting did, from short-form very Facebook. that Facebook

Jonah Peretti

what as matures, now will are that would is not by expect measured things be the eventually I And to that measured. parties Yes. industry being happen third

we've And third-party third-party early where or something video validate and or demand business partners over the before, advertisers it's Nielsen they're to that building those and then so have, on YouTube seen that's whether platforms. Facebook some measurement. And other these of measurement didn't time, Comscore really on scale and the

turned the well. monetization, But platforms, without tremendous with we start third-party so grew we'll Facebook measurement, the measurement the any provide launched meantime, then hard video, or Facebook lot is And the that other earlier, that that measurement. extended scale. initially years share content and expect we or to It's as will both that About to platforms to comes the Tasty as ways a where predict the time, content. require don't to content something built for something ago monetization branded time see I when measure of UpShots period And those they built again, that during things is fully not mentioned comes of solutions to monetization over come. some and other the into third-party solutions, video And rev platform, video the placement, licensing, like that on. that share that's from and just and monetize product we six and build that that exactly had We in ways saw and rev but when views. and monetize Tasty added then share, without in other to measurement - rev

over of behaviors see and I new then these and these ways for going and to new So to grow think years, of behaviors. of to whole monetization around new measurement formats media that and new platforms grow couple consuming next ecosystem you're the for

what And towards. so now preparing we're and that's building for

Jason Kreyer

reach And audience. program wanted where type - you Wondering sits this and happen else talked of to where in that Jonah, creator where that at ask, then a helps I of needs kind about targeted you're content you solution there? that to what also adoption

Jonah Peretti

key getting the which from really really program. response creators, tremendous So to because they're we're important is

program Our creator has XXX over creators.

they If kind we be their or real produce. deals and them lonely and it are wouldn't on burn and content In that they independent in a get creator on brand immediate BuzzFeed really to on YouTube, subscribe could have trying having of people They TikTok being we these have and platforms. to brands or be that of partner to team with that an our pretty ability been they our like iconic is creators for out and Instagram to and these there some our can to that partnerships that to other constantly you content struggle from whether it's to don't they able When and own. out up to make the offer, get get very cases, sales more lot access get to access last long, and in more and credibility studios brands. shows content content get your bring the and making

footage in network. send we and shows package them that we distribute content that of across our into us Some

become itself So well them it's a because is to lends a these line. to us more well vertical platforms. both lends across of revenue. us, ability gives And them and is it revenue people, expand all itself advertising a more creator-first great content and our way for video and reach additional famous, of lot generate help And it course, of more then, for

on the feels where platform really and a lot creators in And So the the by we're industry real something are not it direction. in is themselves this the that excited something set building industry like really needs. are missing gap There's a and them. best the Complex up media of the our to bring and that network BuzzFeed them of a strength the brands Tasty we can program. and really and of with network And HuffPost to kind and media provide a give platforms and creator

Jason Kreyer

receptive Maybe they part, Instagram like from like of studio a same you that feedback YouTube last creator or or you - are on that get the on do how an a that you've created? can kind programs content to TikTok

Jonah Peretti

all mean so I right. Yes. -

perspective, it So creator important. is from I definitely which mentioned really the

are platform of really yourself, I off don't for a the may controversial people out advertisers envelope to up engagement two interest to more get the BuzzFeed and and order spin create to from if And are not with. they content an our bunch get turns like that views your perspective, there the wants as stuff to user-generated there, other point In of to kind and is attention - really platform having advertisers extreme bad be don't or has platform's then by this in activities brand-safe even a content. helping space. The high-quality there's who to do feel platforms push is a And ways, you posting you're with be matter backing platforms honestly, major the get without perspectives some and really people that just stuff content because that ways that you like really something want on in it's some advertisers that for we're followers. particularly not this all really or And dynamics need And or more seeing stuff drama incentive associated creator advertiser you in because content of content really the out of the out, to because they and makes view the people. think potentially important. great of looking advertiser get also lot are that the it do and want vertical they're video you though bad challenges the an

been of even platforms sure safe, of to the increase And for multiple has is volume then content really and creators to paid And a content and service make helping by integrity train how better on platforms, brand on to some how occasions. creators we we've brand that. help So the vetting train content. that provide make the helping and

really, program because a content is another help. with scale area high-quality of created in for creator value. with by welcome categories something where we're so their creators of the they and safety need lot they diverse up these a with lot diverse work brand that helping is platforms them with particularly audience, content And our doing And diverse really it's really platforms that

another so value the appreciate. of really we is that where platform a the can add And that's area lot

just sum as as advertisers So are the about excited this, the the very platforms. I guess, up, well to creators

to have very parties so three for far, in keep those of well. going to order the we happy so program And all work and it's

Jason Kreyer

All right, Thank Felicia. you, perfect. thanks Jonah,

Operator

question-and-answer like Peretti would I remarks. to conference closing session. our back over for Jonah concludes turn the any to This

Jonah Peretti

several weeks. you. today. for joining call the and We investor forward seeing you events all you at look upcoming Thank next to Thank the conferences over

Operator

has conference Thank attending and you today's for now may concluded. now presentation, disconnect. The you

BuzzFeed (BZFD) 13 Aug 222022 Q2 Earnings call transcript