0001410578-22-003403.txt : 20221114 0001410578-22-003403.hdr.sgml : 20221114 20221114164716 ACCESSION NUMBER: 0001410578-22-003403 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 107 CONFORMED PERIOD OF REPORT: 20220930 FILED AS OF DATE: 20221114 DATE AS OF CHANGE: 20221114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BuzzFeed, Inc. CENTRAL INDEX KEY: 0001828972 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 833022075 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-39877 FILM NUMBER: 221386909 BUSINESS ADDRESS: STREET 1: 111 E. 18TH STREET, 13TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10003 BUSINESS PHONE: 000-000-0000 MAIL ADDRESS: STREET 1: 111 E. 18TH STREET, 13TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10003 FORMER COMPANY: FORMER CONFORMED NAME: 890 5th Avenue Partners, Inc. DATE OF NAME CHANGE: 20201019 10-Q 1 bzfd-20220930x10q.htm 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from      to        

Commission file number: 001-39877

BuzzFeed, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

    

85-3022075

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

229 West 43rd Street New York, New York

10036

(Address of principal executive offices)

(Zip Code)

(646) 589-8592

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Class A Common Stock, $0.0001 par value per share

BZFD

The Nasdaq Stock Market LLC

Redeemable warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share

BZFDW

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes    No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes No

As of November 10, 2022, there were 125,981,696 shares of the registrant’s Class A common stock outstanding, 6,678,413 shares of the registrant’s Class B common stock outstanding and 6,478,031 shares of the registrant’s Class C common stock outstanding.

BUZZFEED, INC.

TABLE OF CONTENTS

Page

PART I

FINANCIAL INFORMATION

5

Item 1

Financial Statements (unaudited)

5

Condensed Consolidated Balance Sheets

5

Condensed Consolidated Statements of Operations

6

Condensed Consolidated Statements of Comprehensive Loss

7

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

8

Condensed Consolidated Statements of Cash Flows

10

Notes to Condensed Consolidated Financial Statements

11

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

31

Item 3

Quantitative and Qualitative Disclosures About Market Risk

45

Item 4

Controls and Procedures

45

PART II

OTHER INFORMATION

46

Item 1

Legal Proceedings

46

Item 1A

Risk Factors

47

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

51

Item 3

Defaults Upon Senior Securities

51

Item 4

Mine Safety Disclosures

51

Item 5

Other Information

51

Item 6

Exhibits

52

SIGNATURES

53

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q 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 (the “Exchange Act”), which statements involve substantial risks and uncertainties. Our forward-looking statements include, but are not limited to, 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 “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 in this Quarterly Report on Form 10-Q may include, for example, statements about:

anticipated trends, growth rates, and challenges in our business and in the markets in which we operate;
demand for products and services and changes in traffic;
changes in the business and competitive environment in which we operate;
developments and projections relating to our competitors and the digital media industry;
the impact of national and local economic and other conditions and developments in technology, each of which could influence the levels (rate and volume) of our advertising, the growth of our business and the implementation of our strategic initiatives;
poor quality broadband infrastructure in certain markets;
technological developments;
our success in retaining or recruiting, or changes required in, officers, key employees or directors;
our business, operations and financial performance, including expectations with respect to our financial and business performance, including financial projections and business metrics and any underlying assumptions thereunder and future business plans and growth opportunities;
our future capital requirements and sources and uses of cash, including our ability to obtain additional capital in the future;
expectations regarding future acquisitions, partnerships or other relationships with third parties;
government regulation, including revised foreign content and ownership regulations;
the continued impact of the COVID-19 pandemic and evolving strains of COVID-19 on our business and the actions we may take in the future in response thereto;
our ability to maintain the listing of our Class A common stock and warrants on Nasdaq; and
other factors detailed under the section entitled “Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2021.

3

The forward-looking statements contained in this Quarterly Report on Form 10-Q 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, uncertainties (some of which are beyond our control) 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, those factors described under the section entitled “Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2021. 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.

This Quarterly Report on Form 10-Q contains estimates and information concerning our industry, our business, and the market for our products and services, including our general expectations of our market position, market growth forecasts, our market opportunity, and size of the markets in which we participate, that are based on industry publications, surveys, and reports that have been prepared by independent third parties. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. Although we have not independently verified the accuracy or completeness of the data contained in these industry publications, surveys, and reports, we believe the publications, surveys, and reports are generally reliable, although such information is inherently subject to uncertainties and imprecision. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2021. These and other factors could cause results to differ materially from those expressed in these publications and reports.

Investors and others should note that we may announce material business and financial information to our investors using our investor relations website (https://investors.buzzfeed.com), U.S. Securities and Exchange Commission (“SEC”) filings, webcasts, press releases, and conference calls. We use these mediums to communicate with investors and the general public about our company, our products and services, and other issues. It is possible that the information that we make available may be deemed to be material information. We therefore encourage investors, the media, and others interested in our company to review the information that we post on our investor relations website.

4

PART I: FINANCIAL INFORMATION

ITEM 1: Financial Statements (unaudited)

BUZZFEED, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

September 30, 

2022

December 31,

    

(Unaudited)

    

2021

Assets

Current assets

Cash and cash equivalents

$

59,136

$

79,733

Accounts receivable (net of allowance for doubtful accounts of $1,748 as at September 30, 2022 and $1,094 as at December 31, 2021)

 

90,057

 

142,909

Prepaid and other current assets

 

33,461

 

29,017

Total current assets

 

182,654

 

251,659

Property and equipment, net

 

19,446

 

23,052

Right-of-use assets

61,303

Capitalized software costs, net

 

19,294

 

16,554

Intangible assets, net

125,124

136,513

Goodwill

194,079

194,881

Prepaid and other assets

 

16,079

 

14,555

Total assets

$

617,979

$

637,214

Liabilities and Equity

Current liabilities

Accounts payable

$

22,901

$

16,025

Accrued expenses

 

27,401

 

31,386

Deferred rent

 

 

4,894

Deferred revenue

 

5,055

 

1,676

Accrued compensation

 

27,657

 

37,434

Current lease liabilities

25,562

Other current liabilities

 

1,749

 

2,731

Total current liabilities

 

110,325

 

94,146

Deferred rent

 

 

12,504

Noncurrent lease liabilities

52,490

Debt

 

150,740

 

141,878

Derivative liability

1,350

4,875

Warrant liabilities

1,974

4,938

Other liabilities

 

3,385

 

3,992

Total liabilities

 

320,264

 

262,333

Commitments and contingencies

Redeemable noncontrolling interest

 

 

2,294

Stockholders’ equity

Class A Common stock, $0.0001 par value; 700,000 shares authorized; 125,982 and 116,175 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

 

13

 

11

Class B Common stock, $0.0001 par value; 20,000 shares authorized; 6,678 and 12,397 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

 

1

 

1

Class C Common stock, $0.0001 par value; 10,000 shares authorized; 6,478 issued and outstanding at September 30, 2022 and December 31, 2021

 

1

 

1

Additional paid-in capital

 

713,418

 

695,869

Accumulated deficit

 

(417,621)

 

(322,106)

Accumulated other comprehensive loss

 

(2,123)

(3,233)

Total BuzzFeed, Inc. stockholders’ equity

 

293,689

 

370,543

Noncontrolling interests

4,026

2,044

Total stockholders’ equity

297,715

372,587

Total liabilities and equity

$

617,979

$

637,214

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

BUZZFEED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited) (In thousands, except per share amounts)

Three Months Ended September 30, 

Nine Months Ended September 30, 

    

2022

    

2021

    

2022

    

2021

Revenue

$

103,733

$

90,096

$

302,051

$

251,848

Costs and Expenses

Cost of revenue, excluding depreciation and amortization

 

60,989

 

48,837

 

183,336

 

135,903

Sales and marketing

 

16,317

 

11,218

 

52,808

 

34,170

General and administrative

 

27,254

 

19,829

 

92,381

 

65,274

Research and development

 

5,900

 

5,686

 

23,345

 

19,285

Depreciation and amortization

 

9,198

 

5,407

 

26,292

 

15,033

Impairment expense

2,160

2,160

Total costs and expenses

 

121,818

 

90,977

 

380,322

 

269,665

Loss from operations

 

(18,085)

 

(881)

 

(78,271)

 

(17,817)

Other expense, net

 

(2,752)

 

(2,567)

 

(5,330)

 

(1,752)

Interest expense, net

(5,171)

(487)

(14,992)

(1,138)

Change in fair value of warrant liabilities

(395)

2,964

Change in fair value of derivative liability

300

3,525

Loss before income taxes

 

(26,103)

 

(3,935)

 

(92,104)

 

(20,707)

Income tax provision (benefit)

 

890

 

(353)

 

3,036

 

(5,011)

Net loss

 

(26,993)

 

(3,582)

 

(95,140)

 

(15,696)

Net income attributable to the redeemable noncontrolling interest

 

 

67

 

164

 

212

Net (loss) income attributable to noncontrolling interests

(137)

137

211

(173)

Net loss attributable to BuzzFeed, Inc.

$

(26,856)

$

(3,786)

$

(95,515)

$

(15,735)

Net loss per Class A, Class B and Class C common share:

Basic

$

(0.19)

$

(0.20)

$

(0.69)

$

(0.90)

Diluted

$

(0.19)

$

(0.20)

$

(0.69)

$

(0.90)

Weighted average common shares outstanding:

Basic

138,939

18,618

137,591

17,464

Diluted

 

138,939

18,618

 

137,591

 

17,464

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

BUZZFEED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited) (In thousands)

Three Months Ended September 30, 

Nine Months Ended September 30, 

    

2022

    

2021

    

2022

    

2021

Net loss

$

(26,993)

$

(3,582)

$

(95,140)

$

(15,696)

Other comprehensive income

 

 

 

 

Foreign currency translation adjustment

 

21

 

485

 

423

 

262

Other comprehensive income

 

21

 

485

 

423

 

262

Comprehensive loss

 

(26,972)

 

(3,097)

 

(94,717)

 

(15,434)

Comprehensive income attributable to the redeemable noncontrolling interest

 

 

67

 

164

 

212

Comprehensive (loss) income attributable to noncontrolling interests

 

(137)

 

137

 

211

 

(173)

Foreign currency translation adjustment attributable to noncontrolling interests

(234)

(687)

Comprehensive loss attributable to BuzzFeed, Inc.

$

(26,601)

$

(3,301)

$

(94,405)

$

(15,473)

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

BUZZFEED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited) (In thousands)

Nine Months Ended September 30, 2022

Accumulated

Total

Common Stock –

Common Stock –

Common Stock –

Additional

other

BuzzFeed, Inc.

Total

Class A

    

Class B

Class C

paid-in

Accumulated

comprehensive

stockholders’

Noncontrolling

stockholders’

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

capital

    

deficit

    

loss

equity

    

interests

    

equity

Balance at January 1, 2022

116,175

$

11

12,397

$

1

6,478

$

1

$

695,869

$

(322,106)

$

(3,233)

$

370,543

$

2,044

$

372,587

Net (loss) income

(44,894)

(44,894)

164

(44,730)

Stock-based compensation

3,940

3,940

3,940

Issuance of common stock in connection with share-based plans

411

1

358

359

359

Other comprehensive loss

(103)

(103)

(103)

Conversion of Class B common stocks to Class A common stock

103

(103)

Balance at March 31, 2022

116,689

$

12

12,294

$

1

6,478

$

1

$

700,167

$

(367,000)

$

(3,336)

$

329,845

$

2,208

$

332,053

Net (loss) income

(23,765)

(23,765)

184

(23,581)

Stock-based compensation

11,284

11,284

11,284

Issuance of common stock in connection with share-based plans

3,561

2

2

2

Shares withheld for employee taxes

(434)

(1,635)

(1,635)

(1,635)

Other comprehensive income (loss)

958

958

(453)

505

Reclassification of noncontrolling interest (see Note 10)

2,458

2,458

Conversion of Class B common stock to Class A common stock

5,608

(5,608)

Balance at June 30, 2022

125,424

$

12

6,686

$

1

6,478

$

1

$

709,818

$

(390,765)

$

(2,378)

$

316,689

$

4,397

$

321,086

Net loss

(26,856)

(26,856)

(137)

(26,993)

Stock-based compensation

3,635

3,635

3,635

Issuance of common stock in connection with share-based plans

569

1

-

1

1

Shares withheld for employee taxes

(19)

(35)

(35)

(35)

Other comprehensive income (loss)

255

255

(234)

21

Conversion of Class B common stock to Class A common stock

8

(8)

Balance at September 30, 2022

125,982

$

13

6,678

$

1

6,478

$

1

$

713,418

$

(417,621)

$

(2,123)

$

293,689

$

4,026

$

297,715

8

    

Nine Months Ended September 30, 2021

Accumulated 

Total

Common Stock –

Common Stock –

Common Stock –

Additional

other

BuzzFeed, Inc.

Total

Class A

Class B

Class C

paid-in

Accumulated

 comprehensive 

stockholders’

Noncontrolling

stockholders’

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

capital

    

deficit

    

loss

    

 (deficit) equity

    

interests

(deficit) equity

Balance at January 1, 2021

1,540

$

 

10,439

$

1

 

$

$

36,373

$

(346,818)

$

(3,359)

$

(313,803)

$

$

(313,803)

Net loss

 

 

 

 

 

 

 

(11,367)

 

 

(11,367)

 

(18)

 

(11,385)

Issuance of common stock

 

 

 

 

3,839

 

1

 

34,999

 

 

 

35,000

 

 

35,000

HuffPost Acquisition

 

 

 

 

2,639

 

 

24,064

 

 

 

24,064

 

2,122

 

26,186

Stock-based compensation

 

 

 

 

 

 

138

 

 

 

138

 

 

138

Issuance of common stock upon exercise of stock options

6

 

 

49

 

 

 

 

142

 

 

 

142

 

 

142

Other comprehensive loss

 

 

 

 

 

 

 

 

(329)

 

(329)

 

(329)

Balance at March 31, 2021

1,546

$

 

10,488

$

1

 

6,478

$

1

$

95,716

$

(358,185)

$

(3,688)

$

(266,155)

$

2,104

$

(264,051)

Net loss

(582)

(582)

(292)

(874)

Stock-based compensation

209

209

209

Issuance of common stock upon exercise of stock options

9

55

145

145

145

Merger of BuzzFeed Japan and HuffPost Japan

(510)

(510)

Other comprehensive income

105

105

105

Balance at June 30, 2021

1,555

$

10,543

$

1

6,478

$

1

$

96,070

$

(358,767)

$

(3,583)

$

(266,278)

$

1,302

$

(264,976)

Net (loss) income

(3,786)

(3,786)

137

(3,649)

Stock-based compensation