The Rundown: BuzzFeed Inc. revenue up by 26% despite hits to commerce business, expects similar momentum in Q2

By Sara Guaglione

Despite significant declines in BuzzFeed Inc.’s commerce business, overall revenue was up 26% year over year in the first quarter of 2022 — its first quarter as a fully combined company, which includes BuzzFeed, HuffPost and Complex Networks — compared to the same quarter in 2021. This was primarily due to increases in advertising and content revenue, which grew 26% and 65% year over year, respectively.

But commerce revenue was hit the hardest out of BuzzFeed’s three main businesses, dipping by 27% year over year to $10.6 million. The publisher’s profitability also took a hit, though the loss was within what the company expected. Back in March, the company said it expected losses in the range of $15 to $20 million in Q1 2022, and the actual figure came in at a $16.8 million loss, a 294% drop year over year.

The key numbers:

BuzzFeed Inc. revenue increased 26% in Q1 2022, compared to the same quarter in 2021, to $91.6 million. Notably, BuzzFeed Inc.’s Q1 2022 earnings includes Complex Networks’ revenue, while Q1 2021 did not, as BuzzFeed’s acquisition closed in December of last year.
Ad revenue (display, pre-roll and mid-roll video products sold directly and programmatically) grew 26% year over year to $48.7 million.
Content revenue (long and short form custom content, and film and TV projects from BuzzFeed Studios and Complex Networks) grew 65% year over year to $32.3 million, “driven primarily by the acquisition of Complex Networks,” BuzzFeed CFO Felicia DellaFortuna said during an investors call on May 16.
Commerce revenue (affiliate sales and product licensing revenue) dipped 27% year over year to $10.6 million.
Time spent declined 4% year over year to 184 million hours across BuzzFeed Inc’s owned-and-operated properties and on third-party platforms.
Adjusted EBITDA dropped 294%, or from $4.3 million in Q1 2021 to $16.8 million in Q1 2022 (net loss was $44.6 million, compared to a net loss of $11.3 million in the first quarter of 2021).
BuzzFeed projected Q2 2022 revenue will be up by at least 20% year over year “to surpass $100 million,” BuzzFeed CEO Jonah Peretti said during the earnings call.

How declines in time spent on Facebook are hurting BuzzFeed’s business

BuzzFeed’s audience is continuing to spend more time on Instagram and TikTok and less time on Facebook, putting pressure on BuzzFeed’s commerce and advertising businesses. BuzzFeed mainly monetizes via branded or custom video content on those two platforms, which still have limited revenue share opportunities compared to Facebook.

Time spent declined primarily on third-party platforms but also on BuzzFeed’s owned and operated platforms, DellaFortuna said. BuzzFeed’s time spent metric relies on measurements from Comscore and Facebook and does not capture time spent on TikTok, Instagram, Snapchat or Twitter, she said.

While BuzzFeed’s advertising revenue grew year over year in Q1 2022, that growth primarily came from BuzzFeed’s owned-and-operated properties as the ad revenue generated on third-party platforms was lower year over year “consistent with the trend in time spent,” said DellaFortuna.

The time spent decline is also a reason why BuzzFeed’s commerce business has taken …read more

Source:: Digiday