BuzzFeed, a leading digital media and entertainment company, recently reported its financial results for the three months ended June 30. Despite a decline in revenues and profits, the company remains optimistic about its strategic and organizational changes, as well as its focus on AI and creator programs to drive growth.
In the second quarter, BuzzFeed’s revenues reached $77.9 million, representing a decline of 27 percent compared to the same period in 2022. This decline was primarily driven by a 33 percent drop in advertising revenue, which amounted to $35.4 million. The company attributed this decrease to increased competition for advertising dollars and audience time. Content revenue also fell by 22 percent to $31.5 million. Meanwhile, commerce and other revenues decreased by 17 percent to $11 million due to the absence of the metaverse event ComplexLand, which took place a year ago.
As part of its cost-cutting measures, BuzzFeed recently shuttered BuzzFeed News and implemented overall workforce reductions of about 15 percent. Despite these measures, the company reported a net loss of $27.8 million for the second quarter, wider than the $23.6 million net loss in the same period last year but narrower than the $36.3 million net loss reported in the previous quarter. BuzzFeed’s adjusted EBITDA loss for the second quarter was $0.1 million, missing its previous guidance of $0 to $4 million but still an improvement compared to the adjusted EBITDA of $2.1 million in the second quarter of 2022.
BuzzFeed CEO Jonah Peretti emphasized that the strategic and organizational changes discussed at the company’s Investor Day in May have been fully executed. These changes have put BuzzFeed’s rich library of intellectual property (IP) and its owned-and-operated properties at the center of its operating model to create innovative, audience-driven content.
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However, BuzzFeed experienced a 9 percent decrease in time spent by users on its platforms, with a total of 96 million hours. Peretti attributed this decline to consolidation among major platforms, such as Facebook, which prioritize vertical videos and consequently contribute fewer traffic referrals to BuzzFeed’s content. In response, BuzzFeed plans to focus on AI and its creator programs. The company has increased its output of AI-assisted content, such as Infinity Quizzes and Chatbot Games, and plans to continue this trend in the third quarter. Additionally, BuzzFeed is prototyping new generative AI formats to further enhance its content offerings. The company also aims to expand its creator program, which connects influencers and advertisers to create content, and build partnerships with more creators.
To counter the impact of audience traffic consolidation on major platforms, BuzzFeed is committed to driving traffic directly to its owned-and-operated properties. It has introduced new AI-assisted content formats to increase engagement and offer innovative advertising opportunities to clients. The company has prioritized destination news content to grow the audience for HuffPost’s front page.
BuzzFeed highlighted the success of its YouTube interview show, Hot Ones, with episodes featuring celebrities like Jennifer Lawrence reaching more than 100 million viewers across platforms. The company’s food network, Tasty, recently launched an AI-bot to help users find recipes or cooking tips, further enhancing user engagement.
Looking ahead, BuzzFeed expects revenues of $73 million to $78 million and an adjusted EBITDA of a $1 million loss to $4 million profit for the third quarter. The company remains positive about its growth prospects as it continues to adapt to the evolving digital landscape and leverage AI and creator partnerships to deliver compelling content and drive audience traffic.
