June 2023 Shareholder Update

ℹ️ Sent to shareholders on July 31, 2023

Hi there,

I’m back with a monthly Buffer shareholder update. See below for June numbers, a Q2 reflection as well as key updates and what’s on the horizon. If you have any questions or comments, hit reply to discuss.

• We’re very happy to see our holding steady pattern continue and in fact see a slight increase in MRR for June.
• We’re keeping an eye on the customer decline, which is solely tied to the legacy cohort of customers declining. Our New Buffer cohort (new pricing since mid-2021) continues to grow at a healthy pace. I expect that at some point in the second half of the year, we will see churn of the legacy cohort slow down, and we should see growth for this metric.
• We saw a number of annual renewals, as well as elevated employee expenses (severance + new teammates) which contributed to the unusual level of decline in our bank balance. Another contributor was our increased Twitter costs which have now kicked in.
• Despite our current losses we have very solid runway which allows us to continue to be patient and take a long-term view.

Note-worthy updates and reflections

YouTube Shorts

The big update for June was that we launched YouTube Shorts scheduling in Buffer, and as part of that launched YouTube as a new channel. This has already been by far our most successful channel addition in recent years, which is not hugely surprising given how requested YouTube has been for a while. We chose to launch initially with Shorts, which was a lighter lift due to the similarity to Reels and TikTok. Over time, we plan to consider how we can effectively support longer form video scheduling to YouTube and add more value for this channel. Read more

Revamped Post Analytics

We’ve started the process of upgrading Post Analytics across all channel types. With our launch of YouTube Shorts, we rolled out our new approach for Post Analytics, and we plan to have Post Analytics for all channels by the end of the year (including Mastodon, TikTok, Start Page, Google My Business).

Q2 reflection

Looking year-over-year, Q2 2023 has been our best quarter since Q2 2021. So far, the 2023 trajectory is far better than any of the past 3 years. It is clear that we are in a turnaround situation, a turnaround year. We’ll need to keep up our current momentum and execution, but so far 2023 is looking like a great year and change in trajectory for Buffer.

Reflecting quarter-over-quarter, Q2 2023 was significantly better than Q1 2023. In Q1 we declined 1.2% in MRR, whereas in Q2 we declined just 0.11%. In terms of customers, in Q1 we declined 1.03%, whereas in Q2 we declined 0.87%. All metrics are trending better when comparing Q2 to Q1, and when comparing 2023 YTD to 2022.

When it comes to leading indicator metrics for Q2, it has been a solid quarter. We had 232,938 signups, which was 38.02% higher than Q2 2022 where we had 168,775 signups. This level of growth is significant for us, as signups is now a key focus for us with our down and wide strategy focused on serving individuals as well as businesses, and our need for volume as well as revenue per customer.

And when it comes to ARPU, this metric has remained relatively stable. We grew ARPU 0.77% compared to Q1, and it has grown 0.11% YoY from Q2 2022. We are happy with this stability, as ARPU is not a metric we are currently focused on growing. Instead, MRR and Customers are metrics we are focused on stabilizing and then finding growth in again.

Thanks for reading - I’ll be back in touch in a couple of weeks with the July update.

Joel Gascoigne
Founder CEO, Buffer
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