NEW YORK - BuzzFeed, Inc. (NASDAQ:BZFD), whose stock has surged over 250% in the past year according to InvestingPro data, has finalized the sale of its culinary brand, First We Feast, to a group led by Soros Fund Management LLC for $82.5 million in cash, the company said Monday. With a current market capitalization of approximately $169 million, this transaction represents a significant move for the digital media company. This move has positioned BuzzFeed with a cash balance surpassing its remaining debt, according to a recent 8-K filing with the Securities and Exchange Commission.
The transaction is part of BuzzFeed's strategy to move away from lower-margin content and concentrate on higher-margin, tech-driven revenue streams such as programmatic advertising and affiliate commerce. This strategic shift comes as InvestingPro analysis shows the company maintaining a gross profit margin of 47% despite current profitability challenges. The company's CEO, Jonah Peretti, emphasized the importance of this shift to better leverage the potential of artificial intelligence in media.
As a result of this divestiture, First We Feast will be classified as a discontinued operation in BuzzFeed's financial reporting. The company has also provided guidance for its fourth-quarter earnings, projecting revenues between $54 million and $58 million and an Adjusted EBITDA of $4 million to $9 million. The company's CFO, Matt Omer, highlighted the anticipated year-over-year growth in key revenue sectors and the expected Adjusted EBITDA increase of $12.7 million from the previous year.
Since December 31, 2023, BuzzFeed has reduced its debt by over $150 million and is entering 2025 with a stronger balance sheet that should support further growth and profitability.
BuzzFeed acquired First We Feast as part of the Complex Networks purchase in December 2021. Complex was later sold to NTWRK in early 2024. UBS Investment Bank acted as the exclusive financial advisor for BuzzFeed in the sale of First We Feast, while Freshfields US LLP provided legal counsel.
The company is scheduled to release its fourth-quarter and full-year 2024 financial results on March 13, 2025, with a conference call to follow.
This news comes from a press release statement by BuzzFeed, Inc. and includes forward-looking statements regarding the company's strategic direction and anticipated performance.
In other recent news, BuzzFeed, Inc. has reported substantial growth in its Q3 financial performance, with a 7% year-over-year revenue increase to $64 million. This growth was primarily driven by strong performances in Programmatic Advertising and Affiliate Commerce. The company's adjusted EBITDA also saw a notable rise to approximately $11 million, a significant improvement from the breakeven point of the same period last year. These developments come as BuzzFeed continues to stabilize its business and emphasize high-margin revenue streams. However, despite the overall growth, pressures on direct sales channels led to a 3% year-over-year decline in overall advertising revenues. The company's focus on scalable and high-margin revenue streams, such as its successful Prime Day event, resulted in a 45% year-over-year increase in Commerce and other revenues. As BuzzFeed prepares to provide updates on its Q4 financial outlook and the results of its strategic review process, these recent developments indicate a company successfully navigating towards more profitable and scalable business segments.
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