Post-Transaction the Company is Operating
with a Cash Balance that Exceeds Remaining Debt
BuzzFeed, Inc. (Nasdaq: BZFD) (the “Company”) today announced
the closing of its sale of First We Feast to a consortium led by an
affiliate of Soros Fund Management LLC in an $82.5 million all-cash
deal. The proceeds of the transaction combined with a partial
prepayment of the Company’s outstanding convertible notes has the
Company operating with a cash balance that exceeds its remaining
debt. Refer to the Company’s 8-K filed with the SEC on December 12,
2024 for additional details.
The divestiture of First We Feast completes the Company’s
strategic shift away from lower-margin content products, allowing
for a greater focus on high-margin, tech-enabled revenue lines:
programmatic advertising and affiliate commerce.
“The sale of First We Feast and continued reduction of our
convertible debt marks an important step in BuzzFeed, Inc.’s
strategic transformation into a media company positioned to fully
benefit from the ongoing AI revolution,” said BuzzFeed founder
and CEO Jonah Peretti. “In the coming years, we will continue
to invest in our most scalable and tech enabled services, launching
new AI-powered interactive experiences, and delivering for our
loyal audience and business partners.”
During the fourth quarter of 2024, the Company concluded that
First We Feast was classified as a held for sale asset and met the
criteria for discontinued operations in accordance with U.S. GAAP.
Therefore, the performance of First We Feast will be presented as a
discontinued operation within our financial results.
Today the Company also issued guidance for the fourth quarter
ending December 31, 2024 on a continuing operations basis, which
excludes expected fourth quarter contributions from First We
Feast.
- Fourth quarter revenues on a continuing operations basis are
expected to be in the range of $54 million to $58 million.
- Fourth quarter Adjusted EBITDA1 on a continuing operations
basis is now expected to be in the range of $4 million to $9
million.
“As we close out 2024, we are poised to deliver year-over-year
growth in Programmatic Advertising and Affiliate Commerce combined
revenue for the third consecutive quarter,” said Matt Omer, CFO
of BuzzFeed, Inc. “Our focus on these high-margin businesses
has also positioned us to drive significant improvement in Adjusted
EBITDA profitability this year, with Adjusted EBITDA expected to
grow by $12.7 million at the midpoint versus 2023 — and that's
without one full quarter of the $23 million of annualized
compensation savings implemented in Q1 2024.”
“We now have removed more than $150 million of debt since
December 31, 2023 and enter 2025 with a stronger balance sheet, so
that we can focus on growth and driving expanded
profitability.”
The Company acquired “First We Feast” as a part of “Complex
Networks” in December 2021 for approximately $198 million in cash
and 2.5 million split-adjusted shares of equity. “Complex” was sold
to NTWRK earlier this year for $108.6 million plus $5.7 million in
related fees received from NTWRK.
The Company plans to release its fourth quarter and full year
2024 financial results on March 13, 2025, after the market closes.
BuzzFeed, Inc. Founder and CEO Jonah Peretti and CFO Matt Omer will
host a conference call to discuss the results at 5:00 PM ET.
The financial results conference call will be available via
webcast at investors.buzzfeed.com under the heading News and
Events. A replay will be made available at the same URL. To
participate in the conference call, interested parties must
register in advance.
UBS Investment Bank served as the exclusive financial advisor to
BuzzFeed, Inc. on the transaction. Freshfields US LLP served as
external legal counsel to BuzzFeed, Inc.
About BuzzFeed, Inc.
BuzzFeed, Inc. is home to the best of the Internet. Across pop
culture, entertainment, shopping, food and news, our brands drive
conversation and inspire what audiences watch, read, and buy now —
and into the future. Born on the Internet in 2006, BuzzFeed is
committed to making it better: providing trusted, quality,
brand-safe news and entertainment to hundreds of millions of
people; making content on the Internet more inclusive, empathetic,
and creative; and inspiring our audience to live better lives.
Non-GAAP Financial Measures
Adjusted EBITDA is a non-GAAP financial measure and represents a
key metric used by management and our board of directors to measure
the operational strength and performance of our business, to
establish budgets, and to develop operational goals for managing
our business. We define Adjusted EBITDA as net income (loss) from
continuing operations, excluding the impact of net income (loss)
attributable to noncontrolling interests, income tax (benefit)
provision, interest expense, net, other (income) expense, net,
depreciation and amortization, stock-based compensation, change in
fair value of warrant liabilities, change in fair value of
derivative liability, restructuring costs, transaction-related
costs, and other non-cash and non-recurring items that management
believes are not indicative of ongoing operations.
We believe Adjusted EBITDA is relevant and useful information
for investors because it allows investors to view performance in a
manner similar to the method used by our management. There are
limitations to the use of Adjusted EBITDA and our Adjusted EBITDA
may not be comparable to similarly titled measures of other
companies. Other companies, including companies in our industry,
may calculate non-GAAP financial measures differently than we do,
limiting the usefulness of those measures for comparative purposes.
Adjusted EBITDA should not be considered a substitute for measures
prepared in accordance with GAAP.
While Adjusted EBITDA is a non-GAAP financial measure, we have
not provided guidance for the most directly comparable GAAP
financial measure — net income (loss) from continuing operations —
due to the inherent difficulty in forecasting and quantifying
certain amounts that are necessary to forecast such a measure.
Forward-Looking Statements
Certain statements in this press release may be considered
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which statements
involve substantial risks and uncertainties. Our forward-looking
statements include, but are not limited to, statements regarding
the benefits of the First We Feast transaction, our expected future
performance (including future revenue, pro forma enterprise value,
cash balance and our guidance for the quarter and year ended
December 31, 2024), market opportunities for BuzzFeed, HuffPost,
and Tasty, and the overall digital publishing market and statements
regarding our management team’s expectations, hopes, beliefs,
intentions or strategies regarding the future. In addition, any
statements that refer to projections, forecasts or other
characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking statements. The words
“affect,” “anticipate,” “believe,” “can,” “contemplate,”
“continue,” “could,” “estimate,” “expect,” “forecast,” “intend,”
“may,” “might,” “plan,” “possible,” “potential,” “predict,”
“project,” “seek,” “should,” “target,” “will,” “would” and similar
expressions may identify forward-looking statements, but the
absence of these words does not mean that a statement is not
forward-looking. Forward-looking statements include all matters
that are not historical facts. The forward-looking statements
contained in this press release are based on current expectations
and beliefs concerning future developments and their potential
effects on us. There can be no assurance that future developments
affecting us will be those that we have anticipated. These
forward-looking statements involve a number of risks, (some of
which are beyond our control) uncertainties or other assumptions
that may cause actual results or performance to be materially
different from those expressed or implied by these forward-looking
statements. These risks and uncertainties include, but are not
limited to: (1) developments relating to our competitors and the
digital media industry, including overall demand of advertising in
the markets in which we operate; (2) demand for our products and
services or changes in traffic or engagement with our brands and
content; (3) changes in the business and competitive environment in
which we and our current and prospective partners and advertisers
operate; (4) macroeconomic factors including: adverse economic
conditions in the United States and globally, including the
potential onset of recession; current global supply chain
disruptions; potential government shutdowns or a failure to raise
the U.S. federal debt ceiling or to fund the federal government;
the ongoing conflicts between Russia and Ukraine and between Israel
and Hamas and any related sanctions and geopolitical tensions, and
further escalation of trade tensions between the United States and
China; the inflationary environment; high unemployment; high
interest rates, currency fluctuations; and the competitive labor
market; (5) our future capital requirements, including, but not
limited to, our ability to obtain additional capital in the future,
to settle conversions of our unsecured convertible notes,
repurchase the notes upon a fundamental change such as the
delisting of our Class A common stock or repay the notes in cash at
their maturity, including upon the holders of the notes requiring
repayment of their notes, any restrictions imposed by, or
commitments under, the indenture governing our unsecured notes or
agreements governing any future indebtedness, and any restrictions
on our ability to access our cash and cash equivalents; (6)
significant volatility in the trading of our Class A common stock
as a result of the potential inability to repay the notes upon
request by the holders of the notes; (7) developments in the law
and government regulation, including, but not limited to, revised
foreign content and ownership regulations, and the outcomes of
legal proceedings, regulatory disputes or governmental
investigations to which we are subject; (8) the benefits of our
cost savings measures; (9) our success divesting of companies,
assets or brands we sell or in integrating and supporting the
companies we acquire; (10) technological developments including
artificial intelligence; (11) the impact of activist shareholder
activity, including on our strategic direction; (12) our success in
retaining or recruiting, or changes required in, officers, other
key employees or directors; (13) use of content creators and
on-camera talent and relationships with third parties managing
certain of our branded operations outside of the United States;
(14) the security of our information technology systems or data;
(15) disruption in our service, or by our failure to timely and
effectively scale and adapt our existing technology and
infrastructure; (16) our ability to maintain the listing of our
Class A common stock and warrants on The Nasdaq Stock Market LLC;
and (17) those factors described under the sections entitled “Risk
Factors” in the Company’s annual and quarterly filings with the
Securities and Exchange Commission.
Should one or more of these risks or uncertainties materialize,
or should any of our assumptions prove incorrect, actual results
may vary in material respects from those projected in these
forward-looking statements. There may be additional risks that we
consider immaterial or which are unknown. It is not possible to
predict or identify all such risks. We do not undertake any
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.
_____________________________ 1 As presented throughout,
Adjusted EBITDA is a Non-GAAP Financial Measure; refer to "Non-GAAP
Financial Measures" for additional details.
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version on businesswire.com: https://www.businesswire.com/news/home/20241212770493/en/
Media & Investor
Relations Juliana Clifton, BuzzFeed:
juliana.clifton@buzzfeed.com Lizzie Grams, BuzzFeed:
lizzie.grams@buzzfeed.com
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