BuzzFeed, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This is an annual filing; the provided filing text does not provide clear standalone fourth-quarter financial results. Financial amounts below are in U.S. dollars.
Business context and reporting period
BuzzFeed operates digital media brands including BuzzFeed, HuffPost, Tasty and First We Feast. It earns revenue from advertising, content and commerce. Complex Networks, excluding First We Feast, was classified as discontinued operations and held for sale at year-end. Its sale was completed on February 21, 2024; First We Feast remains with BuzzFeed.
Key financial metrics
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $252.7 million | $342.6 million |
| Advertising revenue | $115.6 million | $166.9 million |
| Content revenue | $83.6 million | $121.5 million |
| Commerce and other revenue | $53.4 million | $54.1 million |
| Operating loss from continuing operations | $39.8 million | $128.4 million |
| Net loss from continuing operations | $60.3 million | $140.5 million |
| Net loss, including discontinued operations | $89.3 million | $201.3 million |
| Adjusted EBITDA (non-GAAP) | $(4.7) million | $0.3 million |
| Cash from continuing operating activities | $0.6 million | $0.6 million |
| Cash and cash equivalents at year-end | $35.6 million | $55.8 million |
Revenue fell 26% year over year. Advertising and content revenue each declined 31%; commerce and other declined 1%. Cost of revenue, excluding depreciation and amortization, was $142.4 million, or 56% of revenue, versus $194.3 million, or 57%, in 2022. The resulting gross margin was approximately 43.7%, compared with 43.3% in 2022 (derived from reported revenue and cost of revenue). Operating expenses declined, including general and administrative costs down 30% and research and development down 59%.
Cash used in operating activities across continuing and discontinued operations was $6.1 million; continuing operations generated $0.6 million. Investing activities used $14.7 million, principally for internal-use software. The company reported an accumulated deficit of $611.8 million.
At December 31, 2023, debt included $150.0 million principal of 8.5% convertible notes due December 2026 and $33.8 million borrowed under a revolving facility. The notes’ net carrying value was $125.0 million and the revolver was reported as $33.8 million. After year-end, BuzzFeed received $108.6 million cash from the Complex Networks sale, repaid approximately $33.8 million on the revolver and $30.9 million of notes, and terminated the revolver; approximately $119.1 million principal of notes remained as of March 7, 2024. The facility’s $15.5 million letters of credit were cash-collateralized with $17.1 million.
Material changes versus the prior comparable period
- Total revenue decreased by $89.9 million. Management attributed advertising weakness to lower demand and impressions, and content weakness to reduced client spending, fewer branded-content advertisers and the timing of feature-film deliveries.
- Cost reductions substantially lowered expenses, but Adjusted EBITDA moved from slightly positive to negative. The company recorded no continuing-operations impairment expense in 2023, compared with $66.5 million in 2022; the prior-year charge included $64.3 million of goodwill impairment.
- Time Spent, as defined by the company, decreased 3% to 306.3 million hours. The measure excludes Facebook from 2023 onward and excludes Complex Networks and First We Feast, limiting comparability.
- Complex Networks’ 2023 discontinued operations had revenue of $58.3 million and a net loss of $29.0 million, including a $9.5 million non-cash write-down on classification as held for sale.
Outlook, risks and unusual items
- Going concern and liquidity: Management and the independent auditor cited substantial doubt about BuzzFeed’s ability to continue as a going concern. Management said existing cash was expected to fund operations only through the third quarter of 2024, assuming noteholders exercise their put rights in the fourth quarter. The company stated it did not have sufficient cash on hand or projected cash flows to fund a potential note repurchase and could not assure additional financing or asset-sale proceeds.
- Debt and listing exposure: Noteholders may require cash repurchase on or after December 3, 2024, or upon a defined fundamental change. Nasdaq had extended the deadline to regain the $1.00 minimum bid-price requirement to May 28, 2024; delisting could trigger a note repurchase offer at 101% of principal plus accrued interest. The filing describes a possible reverse stock split as a compliance measure.
- Management outlook: BuzzFeed expected advertising softness to continue affecting 2024 revenue. It also anticipated near-term content revenue pressure from fewer branded-content advertisers and feature-film deliveries. Management is evaluating balance-sheet options, additional cost savings, asset sales and potential use of its at-the-market stock offering; no additional outside capital had been secured or deemed probable, apart from that offering subject to its conditions.
- Restructuring and divestiture: The February 2024 workforce reduction was expected to affect approximately 16% of the then-current workforce, with estimated charges of $2.5–$4.0 million, mainly in the first half of 2024. Management’s stated strategy is to refocus on scalable, higher-margin, technology-enabled revenue, including AI. Execution, savings and revenue benefits are uncertain.
- Controls: Management concluded disclosure controls and internal control over financial reporting were ineffective at December 31, 2023. Material weaknesses remained in the financial close process and IT general controls; remediation may extend beyond 2024.
- Other risks and contingencies: The business depends on advertising demand, audience engagement and third-party distribution platforms; Amazon accounts for the vast majority of affiliate commerce revenue. The filing also identifies AI, privacy, cybersecurity, foreign-exchange, impairment, dilution and labor risks. VPPA litigation and mass-arbitration claims are described; several VPPA matters were settled or provisionally settled after year-end, but settlement amounts are not clearly provided in the filing text. A separate arbitration dispute remained pending.
Most important facts for investors to verify
- Current unrestricted cash and near-term cash runway after the Complex Networks sale, debt repayments, collateral posting and restructuring costs.
- Whether noteholders exercise their December 2024 put rights, and BuzzFeed’s ability to refinance, repay or otherwise address the remaining approximately $119.1 million principal.
- Nasdaq bid-price compliance and any resulting reverse split, delisting or note-repurchase obligation.
- Whether revenue declines stabilize, particularly in advertising and branded content, and whether cost reductions produce sustainable positive cash flow.
- Final proceeds and financial effects of the Complex Networks sale, remaining obligations, and actual VPPA settlement costs.
- Progress in remediating the disclosed material weaknesses and improving financial reporting controls.