AP Photo/Ted Shaffrey, File
BuzzFeed brought in barely more than half as much money this summer as it did a year earlier, and its losses grew.
The digital publisher reported third-quarter revenue of $26.0 million, down 44% from $46.3 million a year earlier. Its net loss widened to $18.7 million from $7.4 million, according to its earnings release.
For people who work in digital media or buy ads there, the numbers show the pressure on a familiar business model: turning readers’ attention into advertising dollars and shopping commissions. BuzzFeed’s biggest percentage decline came from commerce and other revenue, the business that includes commissions when readers buy through its shopping coverage.
The shopping business took the hardest hit
Commerce and other revenue fell 71% to $4.8 million from $17.0 million. Advertising, still the largest revenue source, fell 31% to $15.4 million. Content revenue, which includes work such as sponsored material and licensed programming, dropped 20% to $5.8 million.
The weakness ran across all three reported revenue lines. It was not simply one bad advertising quarter offset by growth elsewhere.
BuzzFeed also reported a $4.8 million adjusted EBITDA loss, compared with positive adjusted EBITDA of about $753,000 a year earlier. That is a company-defined, non-GAAP measure that leaves out several expenses; it is separate from the $18.7 million net loss.
July’s cuts, not a new layoff announcement
Chairman and CEO Byron Allen described the period as a transitional quarter. He said the restructuring announced in July reduced the company’s workforce and dedicated contractors by approximately 35%.
Those cuts were already announced, not a new round disclosed with these results. Allen said the company expects them to produce approximately $30 million in annualized savings. That figure is an expectation for a yearly cost reduction, not savings already booked in this quarter.
BuzzFeed deferred its full-year financial outlook while it integrates the Allen Family Digital transaction from May and the July restructuring. That leaves investors without updated full-year financial guidance in this release.
Allen’s next bet is free streaming
For the fourth quarter, Allen said the company plans to take content across digital platforms and connected television as it works toward becoming a global free-streaming platform. The release sets out that ambition, but does not establish that the strategy has turned the business around.
BuzzFeed pointed to a shift in how people reach its own properties: direct visits and internal web and app referrals accounted for 67% of U.S. traffic, up from 65% in the previous quarter. The company said that reduces its dependence on outside platforms and their changing algorithms.
Keeping readers coming back is one part of the challenge. The quarter’s financial results show the other: earning enough from those visits to cover the cost of making the content.
JBizNews Desk | New York
© JBizNews.com. All rights reserved. Unauthorized reproduction or redistribution is strictly prohibited.
