BuzzFeed will be profitable this year, driven by a profitable third and fourth quarter, CEO Jonah Peretti announced today.
“If current trends continue, we will drive flat year-over-year revenue for 2020, which is remarkable given the circumstances, and there’s a real chance we’ll beat last year’s revenue,” he wrote in a note to staff.
This is the first profitable third quarter for BuzzFeed since 2014, which was also the last year BuzzFeed was profitable till now.
The company saw double-digit growth in its Direct Sold business, and 50% YOY growth in the Organic Affiliate business.
BuzzFeed drove year-over-year growth in owned-and-operated display revenue, as well.
In the second quarter, BuzzFeed’s business was in a “dire” state, he noted, due to the effects of the COVID-19 pandemic on the economy. Affiliate programs were paused, and big advertising deals were halted or canceled.
“In March, we went from expecting to be profitable for the year, to simply trying to limit the damage to under $20 million in losses,” Peretti wrote.
He attributed the rebound to three things: BuzzFeed’s “swift and strategic” response to the economic effects of the pandemic, the company’s diversified revenue model, and the flexibility, innovation and performance of its business, content and tech teams.
Employees who were impacted by the graduated salary reductions in April will be backpaid by the end of the year. Restoration payments will also go to freelancers who worked 70% or more during the salary reduction period. Payments will be made in the next month.
Peretti also noted that layoffs and salary reductions minimized BuzzFeed’s losses.
In March, the company said it would trim salaries by 5% to 10% for staff and 14% to 25% for executives. As part of the plan to avoid job cuts, Peretti halted his own salary. By May, BuzzFeed was forced to implement more cost-cutting efforts. At the time, BuzzFeed furloughed dozens of employees, and said pay cuts would be extended for the rest of the year.