From:Joel Gascoigne
To:Shareholders
Subject:January 2023 Shareholder Update
Date:February 10, 2023

January 2023 Shareholder Update

ℹ️ Sent to shareholders on February 10, 2023

Hi,

I’m back with a monthly shareholder update for Buffer. See below for our numbers, updates, and what’s coming up. As always, hit reply with comments or questions.

Key numbers

MRR
$1,501,120 -1.38%
ARR
$18,013,440 -1.38%
Customers
58,562 -1.61%
MAU
143,949 +5.56%
ARPU
$25.63 -1.00%
Team Size
79 +1 person
Net Income
$12,771.97 +109.03%
Bank Balance
$4,749,870 -6.23%
Runway
42 months 3 years, 6 months
  • As a reminder, we expect a higher pace of MRR decline for a few months as we have introduced a way for customers to migrate to our latest plans, and on average our new plans have a lower price point.
  • With that said, we are seeing very strong growth in our leading indicators (more below).
  • We were happy to see a small net profit for January.
  • One other reminder - we are planning for a ~$1m reduction in cash in the coming months due to our VAT liability in the UK.

Note-worthy updates and reflections

Leading indicator growth

As I mentioned last month, we’re pursuing a “down and wide” strategy of moving down-market to serve individuals (creators, entrepreneurs, influencers, professionals) as well as small businesses, and increasing the breadth of our product and serve customers beyond just their social media needs. With this in mind, we’ve been doubling, tripling down on freemium and streamlining various user flows. This has proven to give us some immediate wins in our most leading indicators, and thankfully these are being retained through the funnel too. Here are our January numbers of key leading indicators, and growth compared to December:

  • Signups: 81,971 (+30.11%)
  • Activations: 23,019 (+25.78%)
  • New customers: 3,614 (+35.10%)

We’re still seeing a decline top-line, however in the coming months as we maintain strong leading indicators and see our legacy customers continue to migrate to our latest pricing, we expect to see a flattening of the decline and a shift to growth.

Mastodon as a channel

Our big launch in January was Mastodon, and despite still being an emerging platform, we saw very high engagement and excitement around our support for Mastodon scheduling. See all the details of our offering, and if you’re already on Mastodon then follow Buffer here, and I’m here! Mastodon is a fundamentally different type of platform, being federated (essentially decentralized) and based on open standards. As a business built on a variety of networks, this is a unique type of network that makes sense for us to invest in. Mastodon is a key milestone for us, being our 10th channel.

Twitter API changes

You have likely spotted the API changes announced via @TwitterDev. This will unfortunately have an impact on us. Twitter is the largest line item of our COGS, and it is set to increase significantly. Thankfully, we have a 12-year relationship with Twitter and strong advocacy within the company and are working closely with them on a new package for our API access and usage levels. Customers will not be impacted on February 13, and we do not expect to make any immediate changes to our offering. Our goal is to maintain our offering and assure customers that we are a stable platform throughout the numerous changes that will happen over the coming weeks.

What’s coming up

AI assisted functionality

We’re launching our AI Assistant in open beta next week! We’re starting with AI as a writing sidekick within the composer in our new Ideas / Create section (preview here). We’re building this on OpenAI, and we plan to start with a lightweight credit system tiered based on the pricing plan a customer is on. As we see usage, we’ll be able to calibrate the pricing and figure out what makes sense overall. Our hope and expectation is that the AI Assistant is used in ways that lead people to share more via Buffer, so we see expansion of revenue that offsets our costs. This launch will put a stake in the ground that we are incorporating AI in a thoughtful, useful way and over time AI can pop up and help in many parts of the product.

YouTube as a channel

We’re in the discovery and design phase of building YouTube as a publishing channel within Buffer, and are aiming to launch in the next couple of months. We’ve found great success in adding new channels in the past year, and YouTube is of course a very significant one to add to the product. Since our pricing is per channel, we expect to see a positive impact to growth of rolling this out. We will be further along in development by next month’s update, so I’ll share a little more detail on the UX and functionality then.

Thanks for your support,

More Updates

September and Q3 2024

Crossing $19M in ARR, Threaded posts for Mastodon, Notify Me scheduling for TikTok and YouTube Shorts, Q3 2024 Reflection

August 2024

Signups, Twitter/ 𝕏 long-form posts, Threaded posts and content warnings for Mastodon

October 2024

Record month for signups, Support for 20 images in Threads posts, Deep Work Quarter

July 2024

Bluesky Launch, LinkedIn Personal Profile Analytics, SOC2 Compliance

June 2024

Threads Launch, Duplicate Action, Profitability, Q2 Reflection

May 2024

Facebook Stories Scheduling, Improved Channel Connection Flow, Performance Reviews, Team Wide Support Time (TWST), Profitability

April 2024

Create Launch, Facebook Group Reminders, Marketing, Profitability

March 2024

Retreat, Growth & Q1 Results, Mobile Apps Growth, New Board View, Launch of Instagram Universal Publishing

January 2024

LinkedIn Documents and First Comment, Reorder Images in a Scheduled Post, Paste Images and Videos into the Composer, 100k Signups

February 2024

Positive year-over-year growth rate, More flexibility in link shortening, Various UX and conversion rate improvements, Preparing for retreat, and working towards larger updates

2023 Annual Shareholder Letter

2023 was a turnaround year for Buffer by a variety of measures. Read our annual letter to shareholders with 2023 results, current strategy, the progress and changes we’ve made, and what to expect for 2024.

October 2023

AI Assistant becomes Social Media Smart, Tags and upgraded organization features, New Buffer crossed $1M MRR, Exec Team meetup, Operating Principles

September 2023

Notes, Quick navigator, Q3 reflection

August 2023

Facebook Reels Scheduling, Mailchimp email capture from your Start Page, Start Page Incident with Meta

July 2023

Buffer Build Week 2023, Buffer Suggestions, Open Beta, Referral Program

June 2023

YouTube Shorts, Revamped Post Analytics, Q2 Reflection

April + May 2023

Revamped Zapier Integration, Stripe checkout and Stripe tax, AI in the main composer + post suggestions, Instagram Stories scheduling

March 2023

AI for highlighted text and new prompts, Keeping Buffer free campaign, Stripe Checkout to facilitate tax collection

February 2023

Our banking position, Buffer’s AI assistant, Integrations in ideas area, Post previews

January 2023

Leading indicator growth, Mastodon as a channel, Twitter API changes