Good day, and thank you for joining us. Welcome to the BuzzFeed Inc. First Quarter 2024 Earnings Conference Call. I would now like to turn the call over to your speaker today, Amita Tomkoria, Head of Investor Relations.

Hello, everyone, and welcome to BuzzFeed Inc. First Quarter 2024 Earnings Conference Call. I'm Amita Tomkoria, 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 Box, 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 the 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. We are implementing a cost savings plan to reduce the size of our central teams and direct more dedicated resources to our individual brands. We are organizing our business around our most scalable, high-margin tech-led revenue streams in 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 with 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 5 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, we are 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 turning your pet into a plushie, where users can design a plushie toy that resembles their pet, trending AI generators like the Taylor Swift poet's 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 Nepogotchi and Under the Influencer, and content generators like Make Your Own Emoji, which skyrocketed to the top 10 most engaged BuzzFeed posts of all time, and the Shrek-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 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 4 consecutive months since December. Because we are so early to adopt GenAI, 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. 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 owned and operated, 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. We have a strong foundation from which to drive this transformation. Our strategic partnerships with the largest retailers in the world, including Amazon, Walmart, and Target, have positioned us well. I heard 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 of revenue for us. But our partnerships with retailers extend far beyond this affiliate model, encompassing a range of advertising products, including programmatic revenue buys and branded content campaigns. In 2023, we generated nearly $80 million in revenue for 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 Gross Merchandise Value on behalf of retailers. Increasingly, we are also a trusted destination for retailers as retail media networks look to fill growing ad inventory. We are growing our retailer relationships by tapping into retail media network budgets. Simply put, 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 it 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. 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 to reimagine BuzzFeed web and app experiences for our audience. Now I'll hand the call off to Matt to discuss our financial performance and outlook.

Thank you, Jonah. We closed the first quarter with great momentum in our business, some of which Jonah already touched on. Before I discuss our Q1 financial performance in more detail, let me recap some highlights from across the business. We delivered Q1 revenue and adjusted EBITDA in line with our March outlook, generating a $7 million improvement in adjusted EBITDA year-over-year despite a $10 million year-over-year decline in revenue. Our flagship property, buzzfeed.com, saw modest growth in direct traffic, up 3% versus Q4, a positive signal that traffic trends are beginning to stabilize as we complete the transition from being a Facebook-dependent business to one that drives traffic directly to our owned and operated platforms. Programmatic advertising revenues across BuzzFeed and HuffPost websites and apps grew year-over-year for the third consecutive quarter. Last month, we completed the restructuring program we announced in February, which is expected to yield approximately $23 million in annualized compensation cost savings. We paid down a significant portion of our outstanding debt, resulting in lower go-forward interest expense obligations, and we increased our cash balance by approximately $26 million quarter-over-quarter to $62 million, including restricted cash. This was driven by the proceeds from the sale of Complex, which closed in February. Consequently, we are well positioned to navigate the ongoing headwinds facing publishers and digital media at large sustainably and profitably. Moving on to our first quarter results. As a reminder, all financials and comparables presented here are on a continuing operations basis, which excludes Complex. Overall, revenues for Q1 2024 declined 18% year-over-year to $44.8 million, in line with our March outlook. Performance by revenue line was as follows: Advertising revenues declined 22% year-over-year to $21.4 million, driven by ongoing pressure on our direct sales channel and lower monetization on third-party platforms. By contrast, programmatic advertising revenues across our largest owned and operated properties, BuzzFeed and HuffPost, grew modestly for the third consecutive quarter, increasing 6% year-over-year. Advertising revenues are driven in large part by audience time spent with our content across platforms. In conjunction with advertising revenues, we continue to report U.S. time spent across our owned and operated properties and third-party platforms according to ComScore. In Q1, U.S. time spent as reported by ComScore declined 16% year-over-year to 67 million hours, driven primarily by the ongoing declines in referral traffic from third-party platforms. However, as Jonah discussed, we continue to see positive trends in direct traffic, which grew 3% quarter-over-quarter. Deposit revenues declined $3.1 million or 19% year-over-year to $13.1 million, driven primarily by nonrecurring custom content campaigns that were delivered in the year-ago quarter with no comparable revenue in the current quarter. Commerce and other revenues of $10.2 million declined by $1 million or 9% year-over-year. This was primarily due to less promotional spending by retailers and lower audience traffic as compared to the year-ago quarter. We generated first quarter adjusted EBITDA losses of $11.3 million, also in line with our March outlook. It is important to note that per U.S. GAAP, we have not allocated any of the share expenses to discontinued operations. As a result, our first quarter adjusted EBITDA includes Complex as a portion of our shared corporate expenses, which were significant. We ended the first quarter with cash and cash equivalents, including restricted cash, of approximately $62 million, a net increase of approximately $26 million versus the fourth quarter after paying down a significant portion of debt, partially funding our recent restructuring and improving working capital. This again was driven by the proceeds from the sale of Complex, which closed in February. Before I share our financial outlook for the second quarter, let me provide a little context. Starting with revenues. Building on Q1 momentum in direct traffic and programmatic revenues, as we lap the depreciation of Facebook Instant Articles and the closure of BuzzFeed News, we expect overall programmatic advertising revenue to return to modest year-over-year growth in Q2. However, we do expect ongoing pressure on the direct sales channel and lower third-party platform monetization to continue to impact year-over-year growth in overall revenues. In terms of adjusted EBITDA, our Q2 outlook reflects cost savings from our fully executed restructuring program announced in February. And as a reminder, the program is expected to drive approximately $23 million in annualized compensation cost savings. These savings are expected to be fully offset year-over-year revenue pressures that we are anticipating for Q2. With that, I will turn to our financial outlook. Again, all figures and comparables are presented on a continuing operations basis. For Q2 2024, we expect overall revenues in the range of $44 million to $49 million, or 21% to 30% lower than the year-ago quarter. We expect adjusted EBITDA in the range of $4 million in losses to $1 million in profits, approximately flat year-over-year at the midpoint. With a leaner cost base, a stronger balance sheet, and renewed focus on driving high-margin programmatic and affiliate revenues across our owned and operated properties, we are continuing to make meaningful strides towards returning the business to profitable, cash-positive growth. Thank you. I'll hand the call back to Amita, so we can take questions.

Thanks. I've gathered a bunch of questions here that we've received offline during the call. So, we'll get right into it. Jonah, maybe starting with you on the commerce business, you spoke a little bit about Retail Media Networks as it relates to your affiliate business and some of the retail partnerships that you have with Retail Media Networks continuing to show strong growth. What's the opportunity for BuzzFeed to leverage first-party data and the engaged audience that you have to attract some of these dollars?

Thanks, Amita. Yes, the retail media networks are a big opportunity for us. We see a lot of opportunity in that space. Just to take a step back, as I mentioned earlier, our model for commerce is a bit different than a lot of our peers. We really focus on product discovery. People come to BuzzFeed for all kinds of things—entertainment and useful information. Sometimes while they're there, they start discovering the shopping content and buy things. Other times, they might come there because they want to shop, but they want to shop for fun. They're not doing research on a particular product they might want to buy. It's much more about discovery, finding something you didn't know existed, being inspired to buy something new. Driving emotional responses in the buying process, finding new products, finding something for yourself that you didn't know you needed, and finding something that solves a common problem that people have. All of that is what drives our transactions and our shopping business. And as a result, we're able to capture a lot of rich first-party data because we see what people are responding to. For example, we have data on shoppers that are looking for particular categories. We have generational data about what kinds of other content they are reading. Are they parents? Are they Gen Z? Are they millennials? And then we have these amazing partnerships with the largest retailers in the world, including Amazon, Walmart, Target, and others. When that new product discovery is very easy to transact on, people are already accustomed to shopping on these major retailer sites. That’s why we were able to generate $80 million in revenue through retail relationships in 2023, which is approaching 1/3 of our revenue. I think this positions us really well for continuing to grow and expand our relationships with these retailers. When these retailers have the desire to extend advertising from their retail media networks, they can do that through a partner like us because they know we have great first-party data and that their customers are already shopping from BuzzFeed and discovering things. Integrating more deeply with our retail partners and using first-party data to establish those connections is a significant opportunity, and we're very engaged in that.

Thank you. Matt, maybe turning to you because you discussed the ComScore time spent trends and also some of what you're seeing on owned and operated. Can you talk about any green shoots specifically that you're seeing with respect to content initiatives that are driving owned and operated traffic and that might point us toward a potential return to growth over the next period of time?

Yes. Yes. Thanks for the question. I think, unfortunately, overall time spent continues to be pressured by the lower BuzzFeed referral traffic. However, we are seeing green shoots with respect to our direct audience. So, for example, our BuzzFeed web and app direct traffic grew 3% quarter-over-quarter. We are seeing deeper engagement among our most loyal audience. For example, the number of pages per web visitor has grown for 4 consecutive months since December. We are looking to build on this momentum in Q1 with a focus on audience loyalty and new content in the pipeline to help drive time spent.

And maybe back to you, Jonah. You and Matt both referenced the sale of Complex, and now that that's behind you, how do you think about the brand portfolio as it stands today? Are you thinking about additional asset sales? Or maybe you can talk about the role of each brand in the portfolio at this stage?

Sure. We have really amazing assets, and it's exciting that we continue to see inbound interest in our brands. It speaks to the strong reputation we've built around each of our brands in the marketplace, both with audiences and advertisers. We'll continue to be opportunistic to put our business in the strongest position to benefit from the work we're doing in AI and this next generation of more interactive content that we are very excited about. I think when you look at the programmatic and affiliate revenue lines, these are core, as both HuffPost and BuzzFeed have great audiences and dynamics to drive programmatic and affiliate revenues. We're seeing strong programmatic performance across both properties. Although HuffPost is newer to the affiliate commerce market, its large, engaged, and more affluent audience has helped that business grow. We believe the core programmatic and affiliate revenue lines for BuzzFeed and HuffPost are truly beneficial. These brands are poised to benefit from our work in AI, and we are hopeful to see more leverage added to those businesses. Another important point I've mentioned previously is empowering general managers and brand managers to operate entrepreneurially and realize their full potential. We try to provide support from centralized services, maintaining a lightweight cost-effective structure, allowing each brand to control their destiny and create value. This also means fostering collaboration by bringing employees back to the office and working together with our advisers to optimize our balance sheet, assess assets, and make the smartest deals for the company moving forward.

And then in terms of monetization, as you guys lean into programmatic, can you speak to some of the benefits that you've seen materialize so far? And maybe just how you expect that to translate from an overall revenue perspective and an EBITDA cash perspective over the longer term?

Yes, I can take that. One thing to note is that this was our third consecutive quarter of programmatic revenue growth across our largest owned and operated properties, BuzzFeed and HuffPost. As we approach the depreciation of Facebook Instant Articles and the closure of BuzzFeed News, we expect overall programmatic advertising revenues to return to modest year-over-year growth in Q2. Programmatic advertising is our largest and highest-margin revenue stream. As we continue to scale this revenue, the return to business growth is expected to drive improved EBITDA trends as well. You’re seeing some of that in the Q2 guidance approaching breakeven despite revenue pressures in other parts of the business. The savings from our restructuring are fully offsetting the revenue pressure that we're witnessing.

And maybe just to follow on from that, can you discuss how you're looking to drive margin expansion and cash generation over the course of the year?

Yes. As I touched on earlier, the restructuring program has driven approximately $23 million in annualized savings, providing a significant reduction to our cash cost structure. Moreover, focusing on our higher-margin programmatic and affiliate revenues means a greater percentage of our costs will relate to compensation-related expenses for creating our editorial content, which are more fixed in nature. This will result in higher margin expansion and cash generation as we continue to experience a seasonal lift in our revenues.

Our final question just on the topic, Jonah, the Google cookies deprecation and the shifting timeline around that. Has the delay changed any conversations that you are having with advertisers? Does this, from your perspective, reduce the risk of signal loss that might otherwise pressure CPM?

Sure. It's nice to have more time, although we felt ready for the change. The biggest impact will be the short-term adjustment period once it's rolled out. We've seen this with other changes, where it takes a bit for everyone to update and change their strategies. After a while, using other approaches, you can achieve revenue that's on par with your previous levels. We feel very confident about our first-party data focus on our owned and operated properties to provide excellent ad targeting. One reason brands like to partner with BuzzFeed is our ability to reliably target key audience demographics—people who are travelers, parents, shoppers, or those with specific interests, all within a safe environment of trusted content. Our audience is proactive, shares content, and engages, making them valuable for advertisers. We have many initiatives to help our first-party data be used to mitigate any potential downside risk from cookie deprecation. For instance, our logged-in user testing with partners like LiveRamp indicates that authenticated users have a 35% increase in CPMs. We have initiatives focused on increasing sales efforts around contextual positioning, alongside product enhancements and using AI to better understand contextual audiences. The advancements in AI are expected to offset or surpass some impacts of cookie depreciation.

Great. Thank you. That wraps our live Q&A session for today. Thanks, Jonah. Thanks, Matt. And thank you all for joining us on the call today. Operator, I'll hand it over to you.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.