Good morning, and welcome to the BuzzFeed Inc.’s First Earnings Conference Call. At this time, all participants are on a listen-only mode. later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator instructions]. As a reminder, this call will be recorded. I would not like to introduce BuzzFeed’s Head of Investor Relations, Amita Tomkoria. You may begin.

Hello, and welcome to our fourth quarter and full year 2021 financial results conference call. My name is Amita Tomkoria. I am the Senior Vice President of Investor Relations. Joining us today is Founder and CEO, Jonah Peretti, and Chief Financial Officer, Felicia DellaFortuna. The press release and investor presentation are posted to our website at investors.BuzzFeed.com. Before I pass the call to Jonah, I'd like to cover a few reminders. Some of the statements that we make today regarding our business, operations, and financial performance, may be considered forward-looking, and such statements involve a number of uncertainties that could cause actual results to differ materially. Please refer to the cautionary language and risk factors described in our filings with the US securities And Exchange Commission. During the call, we will present both GAAP and non-GAAP financial measures in our financial results, which 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. As required by SEC rules and regulations, these non-GAAP financial measures are reconciled to their most comparable GAAP financial measures in our results published today. And now, I'll pass the call over to Jonah.

Good morning, everyone, and welcome to our first earnings call as a publicly traded company. BuzzFeed Inc. is home to some of the best brands on the internet, engaging the most diverse, most online, most socially connected generations the world has ever seen. Our mission is to spread truth, joy, and creativity on the internet. Across BuzzFeed, HuffPost, and Complex Networks, we reach an audience of more than 100 million viewers monthly with our pop culture, entertainment, food, shopping, and news content, inspiring real-world action and transactions. We measure our success in terms of engagement, monetization, and operating efficiency using three primary metrics, audience time spent across our owned and operated sites, Facebook, YouTube, and Apple News, revenues generated from our advertising content and commerce products, and our overall adjusted EBITDA. I'm incredibly proud of the results our team delivered in 2021. Audiences engaged with our brands more than ever before, consuming nearly 800 million hours of content in 2021. We grew revenues and adjusted EBITDA each by a robust double digit percentage year-over-year, and we achieved profitability for the second consecutive year. Our strong performance is a direct result of the passion, creativity, and hard work of our talented employees around the world. It is the internet visionaries, inspired creators, and journalists, who have shaped BuzzFeed, and defined pop culture on the internet over the years, and who will always be core to our success. Reflecting on the past year, 2021 was a year of many significant milestones for the company. We became the first publicly traded pure play digital media company, thanks to our partnership and support of 890 5th Avenue Partners. We welcomed Complex Networks into the company, further strengthening our stable of category-leading internet brands to include Complex, First We Feast, Pigeons & Planes, and IP…

Thank you, Jonah, and thank you, everyone, for joining us. It's great to be with you for our first earnings call as a public company. To echo Jonah's remarks, 2021 was a fantastic year for BuzzFeed. We delivered results in line with our December outlook, growing both revenues and adjusted EBITDA by double digit percentage year-over-year. And we achieved profitability on both a GAAP and non-GAAP basis for the second consecutive year. Before I review our results for the full year and the fourth quarter of 2021, I will provide a brief overview of our revenue and cost structure. We report revenues across three primary business lines, advertising, content, and commerce. Advertising revenues consist primarily of payments we receive from advertisers for ads distributed against our editorial and news content, including display, pre-roll, and mid-roll video products sold directly to brands and also programmatically. We distribute these ad products across our owned and operated sites, as well as third-party platforms, primarily Facebook, YouTube, and Apple News. Content revenues consist primarily of payments received from clients for custom assets, including both long form and short form content, from branded quizzes, to Instagram takeovers, to custom affiliate codes. Revenue for film and TV projects produced by Buzzfeed Studios and Complex Networks, are also included here. Commerce revenues consist primarily of affiliate commissions earned on transactions initiated from our editorial shopping content. Revenues from our experiential and product licensing businesses are also included. Our quarterly revenue profile generally reflects the seasonality of advertising spend and holiday shopping, with approximately one third of revenue, and the large majority of adjusted EBITDA typically generated in the fourth quarter. As a complement to our revenue reporting, we also provide a time spent metric, which captures the time audiences spend engaging with our content across our owned…

[Operator Instructions] Our first question comes from Jason Kreyer with Craig-Hallum.

Hey, good morning, guys. Thank you for taking questions. Jonah, just wanted to ask, so you're obviously making these incremental investments in your capabilities and short-term video. Just wondering if you can give us a flavor for how much of this is a greenfield investment versus how much can you leverage the existing capabilities on the long form video side. And then curious if there's a way to kind of isolate the cost or the investment that you're going to make over the course of the year.

Thanks for question, Jason. So, one of the advantages we have is we have a large library of content that we've created, and the ability to adapt that content to new platforms is something we've gotten really good at. So, if we have for example YouTube videos that people love, adapting them into vertical video for TikTok or for reels or for YouTube shorts, is something that we've had a lot of success doing. In addition, our tech and data science platform, lets us understand how audiences are interacting with content. So, when we approach a new platform, we're able to take that platform and use it to understand what's working, what's not working. What are people watching? What are they sharing? When are they dropping off and not watching till the end? And that allows us to correct and fix any issues with content to adapt it effectively to a new platform. So, it really - we start by doing it with very small teams. The investment is not that large because really a small team of really creative people are what you need to crack a platform, plus the technology platform we've already built, and the library of content we've already created, gives us a lot of leverage when we move into new platforms. And in fact, we've found that we've been able to ramp faster on new platforms, and that means that when a platform is very nascent and it's not clear that it's a winner, we don't need to invest or spend as much time on it, because we can wait and move very quickly once we have conviction that a platform is going to be a major player in the space and take share.

Okay, thanks. And then one more for me. Just wondering if you can talk about your access to permission first-party consumer data, kind of how you drive traffic to your own and your partner properties, and then how you're accessing the - how you're getting access granted by consumers that allows you to target them with not only content, but advertising.

Yes, that's a great question. I think BuzzFeed Inc., as well as other premium content companies that are creating content and distributing on owned and operated properties, have a really nice advantage in this environment where privacy is more important, because we're making content that allows for a contextual alignment of advertising. So, if you're watching a show called Sneaker Shopping on Complex, you're probably going to be interested in buying sneakers. And if you're - and interested in fashion, and if you're on Tasty's app and you're looking for recipes to cook for your family, we've seen that through shoppable recipe partnership with Walmart, people click through and actually buy groceries. So, there's a nice alignment for commerce and for advertising, just by having brands that people trust and making content that has contextual alignment. So, that's a big part of it. And then also having these significant owned and operated, both apps and website, gives us a lot of valuable data about a very large audience. And then when consumers are on other platforms like a YouTube or TikTok or Facebook, we have less data, but we have gotten very good at taking data from the APIs of these platforms and using machine learning and other tools and analysis to understand behavior, particularly consumer behavior in aggregate so that we can better serve the consumers and have worked on products like Lighthouse and others to help us really deliver for our advertisers who want to provide really contextual well-targeted advertising in an environment where that's harder to do because of new privacy rules.

All right, perfect. I will hop back in the queue. Thank you.

Operator, we’ll take the next question, please.

Our next question comes from John Blackledge with Cowen.

Great. Thanks. Maybe two for Jonah and one for Felicia. So, Jonah, is BuzzFeed monetizing the short form vertical video currently? And is there - or is this a kind of potential growth area over the course of ‘22 for the company? And then just curious, have you noticed a pause or impact to brand spend since the conflict in Ukraine started? And then for Felicia, just any further color on kind of key drivers of the 1Q EBITDA guidance. Thank you.

Sure. Thanks, John. So, in terms of short form content, we're really following a playbook that's a tried-and-true playbook that we learned with Tasty. And Tasty started when Facebook video was a new thing a little over five years ago, and there was no advertising or commerce monetization possible. But what we figured out is that you could create branded content, so product placement or branded content or with a partner where an advertiser would partner with us. And so, then as the platform evolved, they started to support advertising and commerce capabilities, and we added those to Tasty. And so, we expect there to be something similar with for example TikTok where right now - and with short form content on Instagram, where creator takeovers, branded content, things like that, are an effective way for us to monetize right now, but in the future, we expect there'll be more scalable commerce and advertising solutions. And so, we focus on attracting audience first, and then usually from that, we are able to have - build a good branded content business, and then from there, we can extend to commerce and advertising as the platforms evolve. So, we're really going through that process again, which is familiar to us from watching platforms develop in the past. And your second question was about the conflict in Ukraine. And I would say that we're not particularly exposed to the economy of - the Russian economy or the Ukrainian economy. It is obviously a terrible humanitarian crisis, and we are covering it in our news division. But as a business matter, I would say we’re really only exposed to the broader macroeconomic trends that business would face if the conflict affects the larger global economy.

Hi, John, it's Felicia. So, to your third question, in thinking about Q1 2022 adjusted EBITDA guidance from a year-over-year perspective, there are two main drivers to the change on a pro forma basis. about 50% of the change is associated with us now being public. So, for comparison, Q1 2021, the cost structure was on a private perspective. And in Q1 2022, we have incurred incremental costs as it relates to audit fees and D&O insurance just associated with being public. And the other 50% is associated with the change in revenue mix. So, as you know, commerce tends to be our highest margin, advertising second, and content is third. And so, as a result of commerce being a lower percentage of our total revenue in Q1 2022, that is impacting our bottom line from a year-over-year perspective.

Great. Thanks so much.

Operator, we'll take the next question, please.

Our next question comes from Brent Navon with Bank of America Securities.

Hi. Good morning. Thank you for taking the question. On your 1Q guidance, it sounds like at least in advertising, retail CPG is a little bit is softer, but it sounds like that is at least bouncing back initially as of now for 2Q. So, as we sort of think about the 1Q guide of pro forma revenue down low single, I mean, should we think about that as hopefully a trough for the year, as maybe these - assuming that nothing else changes, that those categories continue to get better as we think about just the regular cadence for 2022?

I would say in thinking about the Q1 2022 guidance, and to just give a bit more color on each of the revenue lines, so as we noted, in Q1 we are seeing similar trends on commerce that we did see in Q4. And as Jonah noticed - as Jonah noted, we have invested in shopping content for the faster growing platforms. We do expect to capitalize on the shift in future quarters and improve the runway for monetization over time. For advertising, as you have mentioned, we have seen strong demand from our advertising clients across all categories in Q2. We do continue to be challenged by the time on Facebook moving to TikTok and Instagram. And then for content, we have strengthened our business to offer more lightweight video advertising products, as well as long form original content. And so, we do expect to drive modest growth in Q1, as well as in the future. And the other important items to note is we do expect the comps to ease toward the back half of the year.

Got it. Thank you. That's helpful. And just to follow up on the short form videos and the investments that you're making around that, I mean, it sounds like some of this is shifting towards these newer platforms, I mean, is this something that we could potentially see a benefit from in the second half of this year, or is this something that may even take a little bit longer? Just any sense of timing of when we could potentially see benefit from a lot - from these new investments that you're making in the video area?

Yes. I would say we are already seeing benefits with our creator business, which a lot of our creator business is short form and creator grams and takeovers that are short form content-based types of engagements with brands. And that business has grown significantly year-over-year. And we think that there's a lot of opportunity. it's already a business that we're engaged in and is a component of our revenue. And so, I think we'll see short form grow throughout the year. I think it's important to note that the fact that short form isn't as well monetized, for example, as a shopping post or article or a longer form video, which has pre-roll or mid-roll on it, it's harder to do that with a very short video, means there are some monetization limitations to this kind of content. But we expect to see an evolution similar to what we saw with Facebook video between sort of five years ago to three years ago. And already, TikTok, for example, announced that they're doing longer - allowing longer TikToks on the platform, which is something that we predicted and expected, and to see that was reassuring because short videos are really great for engagement and growth and longer videos are better for monetization. And I think the platforms have to balance that. And so, we’re expecting to be able to navigate that quite well based on our past experience.

Got it. Thanks for taking the questions.

And I'm not showing any further questions at this time. I'd like to turn the call back over to Jonah for any further remarks.

Thank you, and thanks, everyone, for joining the call today. We really value your input, and welcome the opportunity to engage with you at upcoming investor conferences and events over the next few months. We're excited about this new phase as a public company, and are confident in our ability to lead the industry forward and create long-term value for audiences and shareholders alike. We look forward to updating you on our progress in quarters to come. Thank you.

Ladies and gentlemen, that concludes today's presentation. You may now disconnect, and have a wonderful day.