BuzzFeed, Inc.

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.

Hi, everyone. Welcome to BuzzFeed Inc. First quarter 2024 earnings conference call. I am Amita Tumkoria, Senior Vice President of Investor Relations. Joining me today are CEO Jonah Peretti and CFO Matt Omer. 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. 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. During this call, we 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 management. A reconciliation of these GAAP to non-GAAP 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. And now I'll pass the call over to Jonah.

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. 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, implementing a 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. 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 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. 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. Instead of focusing on scaling a casual audience, which was massive when they were referred from Facebook, we are focused on deepening engagement of our most loyal users who visit us directly and turning more casual users into loyal users. 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 chatbots, where they spend five minutes, take several kinds of actions, and are more likely to return. 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. AI image filters, like turn your pet into a plushie, where users can design a plushie toy that resembles their pet. 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 NetBogachi and Under the Influencer, and content generators like Make Your Own Emoji, which skyrocketed to the top 10 most engaged BuzzFeed post of all time, and the Shrex generator, which turns your favorite celeb into a lovable ogre. This work is increasing the engagement and loyalty of our direct audience and turning casual users into loyal ones, which are encouraging trends. Not only have we been able to grow traffic grow direct traffic to BuzzFeed.com, we've also seen deeper engagement among our most loyal audience, with the 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. 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. 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. 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. Our commerce business is another area where we see tremendous potential for the application of GenAI to transform the shopping experience. And we have a strong foundation from which to drive this transformation. 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 extends far beyond this affiliate model and encompassing 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. 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 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. 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. 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 retailers. 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 and continue to push the boundaries of what is possible in our industry. Stay tuned as we bring more of this work together into reimagining BuzzFeed web and app experiences for our audience. Now I'll hand the call off to Matt to discuss our financial performance and outlook.