Digital media company BuzzFeed, poised to go public through its recently announced merger with a special purpose acquisition company (SPAC), touted a rebound in sales for the second quarter of 2021. The growth, however, comes off a sudden and steep revenue shortfall in Q2 last year due to the COVID-19 pandemic.
In the second quarter of 2021, BuzzFeed’s revenue grew 51% year over year, driven by accelerating growth in advertising and commerce revenues. Ad revenue increased 79% to $47.8 million, driven by higher pricing on programmatic revenue and an increase in the total number of impressions sold. Content revenue increased 5% to $24.2 million, reflecting the recovery from the impact of COVID-19 in the year-ago period, BuzzFeed said. Commerce and other revenue increased 82% to $17.1 million, driven primarily by an increase in the number of online transactions generated compared to last year.
BuzzFeed disclosed the Q2 results as part of its plan to merge with special purpose acquisition company 890 5th Avenue Partners, announced in June. As part of the transaction, valuing BuzzFeed at $1.5 billion, BuzzFeed is acquiring Complex Networks from Verizon and Hearst for $500 million. The Complex Networks deal is expected to close in the fourth quarter of 2021, and BuzzFeed is hoping to make additional acquisitions in the future.
“Our data-informed approach to content creation and capital allocation allows us to capitalize on secular trends in advertising and commerce and helped fuel our significant topline growth in the first half of the year,” BuzzFeed CEO Jonah Peretti said in announcing the results.
In May 2020, BuzzFeed said was furloughing 68 staffers without pay for three months, after implementing scaled salary reductions through the end of the year. Peretti said in a memo at the time the company was taking the cost-cutting measures because the drop-off in revenue amid the early part of the pandemic was bigger than anticipated.
BuzzFeed remains unprofitable — it posted a net loss of $789,000 for the second quarter of 2021 — but that was an improvement over a net loss of $5.8 million in Q2 of 2020. The company’s adjusted EBITDA for Q2 swung into positive territory, to $5.6 million for the quarter, versus an EBITDA loss of $1.4 million in the year-ago period.
“The acceleration of growth across our business in the first half of this year, combined with the ongoing shift in our revenue mix to the higher-margin revenue lines of advertising and commerce, drove significant margin improvement and a swing to positive Adjusted EBITDA in H1,” BuzzFeed CFO Felicia DellaFortuna said in a statement.
Meanwhile, revenue at Complex Networks fell 5% to $31.1 million in Q2, due primarily to the vestiges of Verizon’s shutdown of the Go90 mobile-video business in 2018. Excluding the impact of go90, Complex revenue would have grown 49% in the quarter. Adjusted EBITDA loss for Complex Networks in the quarter was $1.2 million.
Previously, BuzzFeed said it is targeting $521 million in 2021 revenue (50% from ads, 32% from content, and 18% from commerce) inclusive of Complex Networks, which would be up 24% from 2020.
In March of this year, BuzzFeed pink-slipped 70 HuffPost employees, after buying the site from Verizon, resulting in $3.2 million in severance costs. In the first half of 2019, BuzzFeed laid off more than 200 employees, which resulted in the company incurring $9.6 million in restructuring costs.