We used the sales proceeds to redeem $30.9 million of the company’s $150 million convertible note at par value plus accrued interest of $0.6 million. We eliminated the company’s revolving credit facility by repaying it in full for $35.5 million, which includes the outstanding balance plus accrued interest and certain fees. And we will finance the strategic restructuring program we announced last month, estimated in the range of $2.5 million to $4 million. The remaining cash proceeds will be retained for working capital optimization and general corporate purposes. As you can see, we have already made meaningful strides in strengthening our balance sheet and improving overall liquidity. And looking ahead, as we lean into our highest margin revenue streams, we expect to make even more progress towards becoming a cash-profitable business.
So before I share our financial outlook for the first quarter, let me provide some context. Starting with revenues. As I discussed earlier, our revenue performance reflects the challenges of the market with a bundled portfolio of brands, going to market that is, with a bundled portfolio of brands during a time in which our advertising partners have had a pullback or delay spending against the backdrop of prolonged uncertainty in the macroeconomic environment. As Jonah outlined earlier, we have made some strategic and organizational shifts to adapt our business and drive revenue improvement in this environment. Specifically, we’ve refocused the business around our owned and operated websites and apps, where trends in both time spent and revenue have performed better relative to the distributed network.
We have prioritized our most scalable and highest margin revenue streams, programmatic advertising and affiliate commerce, which drove more than $130 million in 2023 revenue and fared significantly better in Q4 in terms of year-over-year revenue trends relative to our direct sales channel and branded content business. And we have adopted a brand-first go-to-market approach. This includes operating with a much leaner direct sales team as we leverage our existing tech and infrastructure to drive programmatic advertising revenues. Each of our brands continue to resonate in the marketplace, with a leadership position among its core audience and a differentiated value proposition for advertisers. So building on this, we see an opportunity to drive improved revenue trends over time in programmatic advertising and affiliate commerce.
As we bring our brands to market individually, continue to introduce AI-assisted formats to drive audience engagement on our owned and operated websites and apps where we have much more control over monetization and deepen our relationships with our retail partners. In terms of adjusted EBITDA, our Q1 outlook reflects a partial benefit of our recently announced restructuring program. As a reminder, the program is expected to drive approximately $23 million in annualized compensation cost savings. We expect the program to be fully executed by the end of April. And so looking ahead, we expect that our Q2 operating expenses will be much more representative of our ongoing cost structure. And from a year-over-year perspective, we expect to drive significant improvement in Q1 adjusted EBITDA despite the top line pressure.
So with that, I’d turn to our financial outlook. All figures and comparables are presented on a continuing operations basis. For Q1 2024, we expect overall revenues in the range of $42 million to $44 million, or 20% to 23% lower than the year ago quarter. And we expect adjusted EBITDA losses in the range of $10 million to $12 million, an improvement of approximately $7 million year-over-year at the midpoint. Before I wrap up, I want to highlight that the changes we have made, specifically to prioritize our high-margin programmatic and affiliate businesses and significantly reducing our cash cost structure have positioned us to build a much stronger balance sheet in 2024, and take meaningful steps to becoming a cash positive business. Thank you.
I’ll hand the call back to Amita so we can take questions.
Amita Tomkoria: Great. Thanks, Matt. We have received a bunch of questions ahead of the call and during the call, which I’ve gathered here. So we’ll go ahead and get right into it. Jonah, the first question is for you, around the impact of AI. Can you talk a little bit more about like how we might and when we might see some of this impact showing up in the numbers?
Jonah Peretti: Yes. Thanks for the question. So the first impact of AI will be on our core business, which is programmatic and affiliate revenue lines, in particular. What’s so exciting about our programmatic and affiliate businesses is they’re both highly scalable, tech-enabled revenue lines that are high margin, and you can get a lot of leverage for applying additional technology to those business lines. If you look at the recent developments in AI, particularly with LLMs, it’s now possible to have a machine read all of our content and understand it, and that’s a huge difference. And the ability to actually understand our content means that opportunities for contextual advertising for programmatic are greatly enhanced. It wouldn’t have been possible until very recently to have someone who can like have a person read all of our articles and pick the perfect ads to contextually align with that article.
But with AI actually able to understand the content of articles that kind of alignment and contextual alignment of advertising is possible. The same with shopping, the ability of — if everyone had their own personal shopper who knows all the things that you’ve bought previously, knows the things you’re browsing and interested in maybe buying and can make personalized recommendations to you. That’s something that we feel will be able to drive additional transactions in the future. So those are the two big areas where we’re seeing AI apply to our existing business. But I think there are going to be new businesses — new business lines that haven’t been invented yet, as AI starts to power a new medium. And I think we have a great opportunity at BuzzFeed to help invent that new medium where content is — will be possible that just wasn’t possible before.
