Revenue Growth Accelerates to 51% in
Q2
Six Month Revenue Growth of 31% Drives Swing
to Positive Adjusted EBITDA in H1
Expected to Complete Merger with 890 5th
Avenue Partners, Acquire Complex Networks and Become a Public
Company in Q4 2021
BuzzFeed, a leading tech-powered media company for digital
content and commerce for millennial and Gen Z audiences, today
announced results for the three and six months ended June 30, 2021.
890 5th Avenue Partners, Inc. (Nasdaq: ENFA, ENFAU, ENFAW) (“890”)
has amended the S-4 it filed on July 30, 2021 with this updated
financial information. The S-4 was filed in connection with
BuzzFeed’s proposed merger with a subsidiary of 890, a special
purpose acquisition company. On June 24, 2021, BuzzFeed and 890
announced their plan to merge (the “Merger”). As part of the
transaction, BuzzFeed will acquire Complex Networks from Verizon
and Hearst, subject to regulatory approval and closing conditions
(together with the Merger, the “Business Combination”).
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20210909005322/en/
Jonah Peretti (Photo: Business Wire)
Jonah Peretti, Founder and CEO of BuzzFeed commented, “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.” Peretti added, “This impressive
performance in the year to date lays the foundation for what we
expect to be an exciting second half, with the anticipated closing
of the acquisition of Complex Networks and our simultaneous
emergence as a public company.”
Felicia DellaFortuna, BuzzFeed’s CFO commented, “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.” DellaFortuna added, “Our ongoing commitment to
financial discipline and cost containment further contributed to
the improvement in our profitability while we benefited from the
very successful integration of HuffPost into our business.”
Q2 Performance Highlights
In the second quarter of 2021, BuzzFeed’s revenues grew 51% over
the corresponding period last year, driven by accelerating growth
in advertising and commerce revenues.
- Advertising 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.
- 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.
Adjusted EBITDA improved by $7.0 million to $5.6 million in Q2,
primarily driven by continued growth in overall revenue.
H1 Performance Highlights
In the first half of 2021, BuzzFeed’s revenues grew 31% over the
corresponding period last year, driven by strong growth in
advertising and commerce revenues.
- Advertising revenue increased 49% to $86.5 million, driven by
an increase in the total number of impressions sold and higher
pricing on programmatic revenue.
- Content revenue decreased 8% to $43.8 million, primarily
reflecting delays in customer spending at the beginning of the year
due to the disruption from COVID-19.
- Commerce and other revenue increased 80% to $31.5 million,
primarily reflecting an increase in the number of online
transactions generated compared to last year.
Adjusted EBITDA improved by $12.0 million to $1.3 million in the
first six months of the year, driven primarily by the strong
revenue performance.
Pending Complex Networks Acquisition
Revenues at Complex Networks fell 5% to $31.1 million in Q2, due
primarily to the winding down of the go90 partnership, which is
expected to be completed by the end of the year. Excluding the
impact of go90, revenues would have grown 49% in the quarter. The
Adjusted EBITDA loss for Complex Networks in the quarter was $1.2
million.
During the first six months of the year, revenues decreased 9%
to $53.1 million, driven largely by the winding down of the go90
partnership. Excluding the impact of go90, revenues would have
grown 27% in H1. The Adjusted EBITDA loss for Complex Networks in
H1 was $5.6 million.
The acquisition of Complex Networks is anticipated to close in
the fourth quarter of 2021.
Important Information and Where
to Find it
890 has filed with the SEC a
Registration Statement on Form S-4 (as may be amended from time to
time, the “Registration Statement”), which includes a preliminary
proxy statement/prospectus of 890, in connection with the Business
Combination. After the Registration Statement is declared
effective, 890 will mail a definitive proxy statement/prospectus
and other relevant documents to its stockholders. 890’s
stockholders and other interested persons are advised to read, when
available, the preliminary proxy statement/prospectus, and
amendments thereto, and definitive proxy statement/prospectus in
connection with 890’s solicitation of proxies for its stockholders’
meeting to be held to approve the Business Combination because the
proxy statement/prospectus will contain important information about
890, BuzzFeed and the Business Combination. The definitive proxy
statement/prospectus will be mailed to stockholders of 890 as of a
record date to be established for voting on the Business
Combination. Stockholders will also be able to obtain copies of the
Registration Statement on Form S-4 and the proxy
statement/prospectus, without charge, once available, at the SEC’s
website at www.sec.gov. In addition, the documents filed by 890 may
be obtained free of charge from 890 at
https://www.890fifthavenue.com/#investor-relations. Alternatively,
these documents, when available, can be obtained free of charge by
directing a request to: 890 5th Avenue Partners, Inc., 14 Elm
Place, Suite 206, Rye, New York 10580. 890 urges its investors,
shareholders and other interested persons to read, when available,
the preliminary proxy statement/prospectus as well as other
documents filed with the SEC because these documents will contain
important information about 890, BuzzFeed and the Business
Combination.
Cautionary Statement Regarding
Forward Looking Statements
Certain statements in this press
release may be considered forward-looking statements.
Forward-looking statements generally relate to future events or
890’s, BuzzFeed’s, or Complex Networks’ future financial or
operating performance. For example, statements about the expected
timing of the completion of the Business Combination, the benefits
of the Business Combination, the competitive environment, and the
expected future performance (including future revenue, pro forma
enterprise value, and cash balance) and market opportunities of
BuzzFeed are forward-looking statements. In some cases, you can
identify forward-looking statements by terminology such as “may,”
“should,” “expect,” “intend,” “will,” “estimate,” “anticipate,”
“believe,” “predict,” “potential” or “continue,” or the negatives
of these terms or variations of them or similar terminology. Such
forward-looking statements are subject to risks, uncertainties and
other factors which could cause actual results to differ materially
from those expressed or implied by such forward looking statements.
New risks and uncertainties may emerge from time to time, and it is
not possible to predict all risks and uncertainties.
These forward-looking statements are
based upon estimates and assumptions that, while considered
reasonable by BuzzFeed and its management, and Complex Networks and
its management, as the case may be, are inherently uncertain.
Factors that may cause actual results to differ materially from
current expectations include, but are not limited to: (1) the
occurrence of any event, change or other circumstances that could
give rise to the termination of the merger agreement between
BuzzFeed and 890; (2) the outcome of any legal proceedings that may
be instituted against 890, BuzzFeed, Complex Networks, the combined
company or others following the announcement of the Business
Combination; (3) the inability to complete the Business Combination
due to the failure to obtain approval of the stockholders of 890 or
to satisfy other conditions to closing; (4) changes to the proposed
structure of the Business Combination that may be required or
appropriate as a result of applicable laws or regulations or as a
condition to obtaining regulatory approval of the Business
Combination; (5) the ability to meet stock exchange listing
standards at or following the consummation of the Business
Combination; (6) the risk that the Business Combination disrupts
current plans and operations of BuzzFeed as a result of the
announcement and consummation of the Business Combination; (7) the
ability to recognize the anticipated benefits of the Business
Combination, which may be affected by, among other things,
competition, the ability of the combined company to grow and manage
growth profitably; continued market acceptance of, and traffic
engagement with, BuzzFeed’s content; expectations, beliefs and
objectives for future operations; BuzzFeed’s ability to further
attract, retain, and increase its traffic; BuzzFeed’s ability to
expand existing business lines, develop new revenue opportunities,
and bring them to market in a timely manner; BuzzFeed’s
expectations concerning relationships with strategic partners and
other third parties; BuzzFeed’s ability to maintain, protect and
enhance its intellectual property; future acquisitions or
investments in complementary companies, content or technologies;
BuzzFeed’s ability to attract and retain qualified employees; the
proceeds of the Business Combination and BuzzFeed’s expected cash
runway; demand for products and services; technological
developments and other potential effects of the Business
Combination on BuzzFeed; (8) costs related to the Business
Combination; (9) changes in applicable laws or regulations,
including revised foreign content and ownership regulations; (10)
changes in national and local economic and other conditions and
developments in technology, each of which could influence the
levels (rate and volume) of BuzzFeed’s subscriptions and
advertising, the growth of its businesses and the implementation of
its strategic initiatives; government regulation; (11) poor quality
broadband infrastructure in certain markets; (12) the possibility
that BuzzFeed or the combined company may be adversely affected by
other economic, business and/or competitive factors; and (13) other
risks and uncertainties set forth in the sections titled “Risk
Factors” and “Cautionary Note Regarding Forward-Looking Statements”
in 890’s registration statement on Form S-1, as amended by the
section titled “Risk Factors” in 890’s Quarterly Report on Form
10-Q for the quarterly period ended June 30, 2021, as filed by 890
with the SEC, the sections titled “Risk Factors” and “Cautionary
Note Regarding Forward-Looking Statements” in 890’s Registration
Statement on Form S-4 filed in connection with the Business
Combination, and additional risks and uncertainties set forth in
other filings with the SEC.
Nothing in this press release should
be regarded as a representation by any person that the
forward-looking statements set forth herein will be achieved or
that any of the contemplated results of such forward-looking
statements will be achieved. You should not place undue reliance on
forward-looking statements, which speak only as of the date they
are made. None of 890, Complex Networks, or BuzzFeed undertakes any
duty to update these forward-looking statements.
Participants in the
Solicitation
890, BuzzFeed, and their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies from 890’s shareholders in
connection with the proposed transaction. A list of the names of
such directors and executive officers and information regarding
their interests in the Business Combination will be contained in
the proxy statement/prospectus when available.
About 890 5th Avenue Partners,
Inc.
890 5th Avenue Partners, Inc. is a special purpose acquisition
company that specializes in converging technology, media, and
telecommunications opportunities. They are investment partners that
focus on supporting companies’ strategic growth within the media
and telecommunications industry, which is undergoing an
unprecedented amount of disruption over an extraordinarily
accelerated time frame. 890 5th Avenue Partners, Inc. is led by
seasoned media veterans who are uniquely positioned to advise both
legacy assets and emerging growth platforms to scale through
strategic combinations.
About BuzzFeed
BuzzFeed is the leading tech-powered, diversified media company
that reaches hundreds of millions globally through its
cross-platform news and entertainment network. The company produces
articles, lists, quizzes, videos, and original series; lifestyle
content through brands including Tasty, the world's largest social
food network; original reporting and investigative journalism
through BuzzFeed News and HuffPost; an industry-leading affiliate
business, strategic partnerships, licensing and product development
through BuzzFeed Commerce; and original productions across
broadcast, cable, SVOD, film and digital platforms for BuzzFeed
Studios.
About Complex Networks
Complex Networks is a global youth entertainment network
spanning major pop culture categories including streetwear and
style, food, music, sneakers and sports. Complex Networks is
diversified around three pillars: advertising, e-commerce, and
content where it creates and distributes original programming for
Gen Z and Millennial audiences through premium distributors such as
Netflix, Hulu, Turner, Corus, Facebook, Snap, YouTube, Roku and
more. Additionally, Complex Networks generates revenue through a
number of core business lines, including branded content and
advertising, licensing, events, e-commerce, and agency consulting
services.
The tables below set forth certain financial results of each of
BuzzFeed and Complex Networks for the second quarter and six months
of 2021 and 2020. This information is only a summary and should be
read in conjunction with BuzzFeed’s financial statements and
related notes and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations of BuzzFeed” and
Complex Networks’ financial statements and related notes and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations of Complex Networks,” each contained in the
Form S-4 filed by 890.
BuzzFeed
Financial Highlights
Three Months Ended June
30,
Six Months Ended June
30,
(In thousands)
2021
2020
% Change
2021
2020
% Change
Advertising
$
47,804
$
26,673
79%
$
86,453
$
58,054
49%
Content
24,241
23,109
5%
43,778
47,471
(8)%
Commerce and other
17,059
9,394
82%
31,521
17,529
80%
Total revenue
$
89,104
$
59,176
51%
$
161,752
$
123,054
31%
Loss from operations
$
(413)
$
(6,481)
NM
$
(16,936)
$
(20,480)
17%
Net loss
$
(789)
$
(5,770)
NM
$
(12,114)
$
(19,011)
36%
Adjusted EBITDA
$
5,574
$
(1,380)
NM
$
1,315
$
(10,669)
NM
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure and represents a
key metric used by management and BuzzFeed’s Board of Directors to
measure the operational strength and performance of BuzzFeed’s
business, to establish budgets, and to develop operational goals
for managing BuzzFeed’s business. BuzzFeed defines Adjusted EBITDA
as net income (loss), excluding the impact of net income (loss)
attributable to noncontrolling interests, income tax provision
(benefit), interest expense, interest income, other income, net,
depreciation and amortization, stock-based compensation,
restructuring costs, and other non-cash and non-recurring items
that management believes are not indicative of ongoing
operations.
BuzzFeed believes 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 its
management. There are limitations to use of Adjusted EBITDA and
BuzzFeed’s Adjusted EBITDA may not be comparable to similarly
titled measures of other companies. Other companies, including
companies in BuzzFeed’s industry, may calculate non-GAAP financial
measures differently than BuzzFeed does, limiting the usefulness of
those measures for comparative purposes.
Adjusted EBITDA should not be considered a substitute for income
(loss) from operations, net income (loss), or net income (loss)
attributable to BuzzFeed, Inc. that BuzzFeed has reported in
accordance with GAAP.
The following table presents a reconciliation of Net (loss)
income to Adjusted EBITDA, the most directly comparable financial
measure calculated in accordance with GAAP:
BuzzFeed Reconciliation of GAAP to
Non-GAAP Financial Measures
Three Months Ended June
30,
Six Months Ended June
30,
(In thousands)
2021
2020
2021
2020
Net loss
$
(789)
$
(5,770)
$
(12,114)
$
(19,011)
Income tax provision (benefit)
158
(209)
(4,658)
(785)
Interest expense
434
94
778
158
Interest income
(61)
(15)
(127)
(140)
Other income, net
(155)
(581)
(815)
(702)
Depreciation and amortization
4,357
4,727
9,626
9,150
Stock-based compensation
209
374
347
661
Restructuring(1)
-
-
3,645
-
Transaction costs(2)
1,421
-
4,633
-
Adjusted EBITDA
$
5,574
$
(1,380)
$
1,315
$
(10,669)
(1)
For six months ended June 30, 2021,
reflects costs associated with involuntary terminations of
employees across various roles and levels as part of the
integration of the HuffPost Acquisition.
(2)
Reflects legal, advisory, and consulting
fees associated with the proposed merger and acquisition.
Complex Networks
Financial Highlights
Three Months Ended June
30,
Six Months Ended June
30,
(In thousands)
2021
2020
% Change
2021
2020
% Change
Advertising
$
14,559
$
8,317
75%
$
26,117
$
19,376
35%
Content
12,604
23,714
(47)%
22,311
37,568
(41)%
E-Commerce and other
3,959
711
457%
4,656
1,283
263%
Total revenue (including related party
revenue of $0 and $11,809, and $0 and $16,275, respectively)
$
31,122
$
32,742
(5)%
$
53,084
$
58,227
(9)%
Loss from operations
$
(5,270)
$
(2,816)
(87)%
$
(14,634)
$
(9,828)
(49)%
Net loss
$
(4,128)
$
(807)
(412)%
$
(11,526)
$
(5,982)
(93)%
Adjusted EBITDA
$
(1,201)
$
(409)
(194)%
$
(5,644)
$
(4,982))
(13)%
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure and represents a
key metric used by Complex Networks’ management to evaluate Complex
Networks’ performance, identify trends, formulate financial
projections, and make strategic decisions. Complex Networks defines
Adjusted EBITDA as net (loss) income adjusted for (i) income tax
provision (benefit), (ii) interest expense (income), (iii)
depreciation and amortization, and (iv) certain other non-cash or
non-recurring items impacting net (loss) income.
Complex Networks believes that Adjusted EBITDA provides useful
information for investors because it allows investors to view
performance in a manner similar to the method used by its
management. There are limitations to Adjusted EBITDA and Complex
Networks’ 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 Complex Networks does, limiting the usefulness of
those measures for comparative purposes.
Adjusted EBITDA should not be considered a substitute for income
(loss) from operations, net income (loss), or net income (loss)
attributable to Complex Networks that it has reported in accordance
with GAAP.
The following table presents a reconciliation of Net (loss)
income to Adjusted EBITDA, the most directly comparable financial
measure calculated in accordance with GAAP:
Complex Networks Reconciliation of GAAP
to Non-GAAP Financial Measures
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
(In thousands)
Net loss
$
(4,128)
$
(807)
$
(11,526)
$
(5,982)
Add (deduct):
Interest expense (income)
20
(8)
20
(46)
Depreciation and amortization
2,660
2,407
4,996
4,846
Benefit for income taxes
(1,162)
(2,001)
(3,128)
(3,800)
Transaction costs (1)
1,409
-
3,994
-
Adjusted EBITDA
$
(1,201)
$
(409)
$
(5,644)
$
(4,982)
(1)
Consists of legal, advisory, and
consulting costs incurred in connection with the proposed
acquisition.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210909005322/en/
Media Carole Robinson, BuzzFeed:
carole.robinson@buzzfeed.com
Investor Relations Lana Adair, The Blueshirt Group:
investors@buzzfeed.com
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