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Company Overview - Ziff Davis, Inc. is a New York-based digital media conglomerate operating across five verticals: Technology & Shopping, Gaming & Entertainment, Health & Wellness, Connectivity, and Cybersecurity & Martech [2] - The company generated $1.4 billion in revenue in 2024, with $494 million in Adjusted EBITDAS (35% margin) and $346 million in Adjusted EBITA (25% margin) [2] - Ziff Davis has a market capitalization of $1.31 billion and net debt of $267 million [2] Business Strategy - Under CEO Vivek Shah, Ziff Davis has pursued an acquisitive strategy, completing over 90 acquisitions in 30 years, focusing on high-ROIC, niche digital assets that generate recurring revenues [3] - Approximately 40% of total revenue comes from advertising and subscription/licensing [3] - The company emphasizes disciplined capital allocation, reinvesting free cash flow into acquisitions, opportunistic share repurchases, and maintaining low leverage [3] Financial Performance - Ziff Davis trades at compelling multiples: 2.8x Adjusted EBITDAS, 3.9x Adjusted EBITA, and 5x Adjusted EPS, reflecting a significant discount to intrinsic value [3] - The management's track record of consistent returns on invested capital and aggressive share repurchases suggests the market is undervaluing the business [4] - Organic growth has shown improvement over recent years, and insider buying signals confidence in the company's future [4] Investment Thesis - The investment case for Ziff Davis is supported by strong free cash flow generation, competent management, and potential for value recognition through operational performance or eventual M&A [4] - The stock price has appreciated approximately 10.44% since previous coverage, reinforcing the thesis of undervaluation and high-margin stability [5] - The focus on segment-level performance, ROIC, and long-term acquisitive strategy is central to the company's value proposition [5]

Group 1 - The presentation features Ziff Davis CEO Vivek Shah and Dan Stone, President of Health and Wellness, indicating a focus on the company's leadership and strategic direction [1] - The session includes a Q&A segment, suggesting an interactive approach to discussing the company's performance and future plans [1]

Summary of Ziff Davis (ZD) 2025 Conference Call Company Overview - **Company**: Ziff Davis (ZD) - **Date**: September 03, 2025 - **Key Speakers**: Vivek Shah (CEO), Dan Stone (President of Health and Wellness) Key Points Business Segmentation - Ziff Davis has restructured its business into five operating divisions to provide better insights to investors about its operations and growth characteristics [6][5][3] - The five segments include: 1. **Health and Wellness**: Focuses on pharma commercialization and digital health, with a 16% growth in the last quarter [12][35] 2. **Connectivity**: Anchored by Ookla Group, providing data and analytics for broadband networks, with a 14% growth [12][8] 3. **Tech and Shopping**: Includes brands like CNET and RetailMeNot, driving e-commerce and affiliate sales [8] 4. **Cybersecurity and Martech**: High recurring revenue with emerging growth characteristics [9] 5. **Gaming and Entertainment**: Anchored by IGN, the fastest-growing segment in the entertainment industry [9] Financial Performance - In Q2, Ziff Davis reported a 10% increase in revenues and a 12% increase in adjusted EBITDA, marking the strongest quarter in a while [11] - Four out of five segments experienced growth, with Health and Wellness and Connectivity being the standout performers [12][11] - The company anticipates mid-single-digit growth for the second half of the year, with Q4 expected to outperform Q3 seasonally [15] Impact of Generative AI - Approximately 35% of Ziff Davis's revenue is web traffic dependent, with 40% of that traffic coming from search [20] - The company has diversified its monetization models beyond web traffic, including performance marketing, subscriptions, and licensing [20] - The rise of zero-click searches has been a concern, but Ziff Davis has adapted by diversifying its engagement strategies [22][24] - The company is engaged in a lawsuit against OpenAI regarding copyright and trademark violations, emphasizing the need for fair compensation for content usage [31] Health and Wellness Segment Insights - The Health and Wellness segment generated approximately $380 million in revenue with a 37% EBITDA margin [36] - The segment targets three healthcare verticals: pharma commercialization, digital health and wellness, and provider services [36] - Ziff Davis has a unique position in the market by engaging both healthcare professionals and consumers [44] Mergers and Acquisitions Strategy - Ziff Davis has a disciplined approach to M&A, focusing on strong, durable brands that can adapt to technological shifts [80][82] - The company has a significant cash reserve of $600 million and a borrowing capacity of $700 million, providing ample opportunity for acquisitions [88] - The current market presents interesting buying opportunities due to fear surrounding digital media assets and AI's perceived threats [95] AI Utilization - Ziff Davis is leveraging AI to enhance customer-facing products and improve internal productivity [70][72] - The company has standardized AI training across its workforce, focusing on tools that meet data privacy and security concerns [70] - AI applications include customer engagement, ad copy testing, and audience profiling for pharma clients [49][50] Regulatory Environment - There are concerns about potential regulations around pharma advertising, but the company does not foresee significant impacts on its business [62][63] Additional Insights - The company emphasizes the importance of data as a competitive advantage, particularly in the context of AI [84] - Ziff Davis is committed to communicating its intrinsic value to the marketplace more effectively [67]

Core Insights - RetailMeNot has launched a "5 to Buy" September savings event, offering one-day-only cash back exclusives of up to 30% across five popular shopping categories every Tuesday in September [1][2][3] Group 1: Event Details - The "5 to Buy" event is designed to help consumers shop early for the holiday season, providing access to savings on trending products and brands [2][3] - Categories featured in the event include Home & Decor, Toys & Gaming, Health & Beauty, Tech & Smart Home, and Travel, with specific dates for each category [6][7] Group 2: Consumer Behavior Insights - RetailMeNot's analysis indicates that over half of shoppers plan to start their holiday shopping before November, influenced by potential tariffs and supply chain disruptions [3] - The app-only savings are positioned as a strategic way for consumers to maximize cash back rewards and save money [3] Group 3: Company Overview - RetailMeNot is a leading savings destination that connects consumers with retailers, brands, and restaurants through online and in-store coupon codes and cash back offers [4] - The company aims to make everyday life more affordable for consumers [4]

[PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements and accompanying notes for the reporting period [Condensed Consolidated Balance Sheets (Unaudited)](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Condensed Consolidated Balance Sheets | ASSETS / LIABILITIES AND STOCKHOLDERS' EQUITY | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------------------- | :----------------------------- | :------------------------------- | | **ASSETS** | | | | Cash and cash equivalents | $457,259 | $505,880 | | Accounts receivable, net | 523,008 | 660,223 | | Total current assets | 1,102,471 | 1,272,069 | | Goodwill | 1,619,482 | 1,580,258 | | Total Assets | $3,519,410 | $3,704,334 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Accounts payable and accrued expenses | $474,189 | $670,769 | | Total current liabilities | 692,839 | 899,647 | | Long-term debt | 865,380 | 864,282 | | Total Liabilities | 1,676,751 | 1,893,452 | | Total Stockholders' Equity | 1,842,659 | 1,810,882 | | Total Liabilities and Stockholders' Equity | $3,519,410 | $3,704,334 | [Condensed Consolidated Statements of Operations (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Unaudited)) Condensed Consolidated Statements of Operations | Metric (in thousands, except per share) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $352,209 | $320,800 | $680,845 | $635,285 | | Total operating costs and expenses | 318,726 | 292,231 | 612,232 | 570,855 | | Income from operations | 33,483 | 28,569 | 68,613 | 64,430 | | Net income | $26,343 | $36,910 | $50,582 | $47,537 | | Net income per common share: | | | | | | Basic | $0.63 | $0.81 | $1.20 | $1.04 | | Diluted | $0.62 | $0.77 | $1.19 | $1.02 | [Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20(Unaudited)) Condensed Consolidated Statements of Comprehensive Income (Loss) | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $26,343 | $36,910 | $50,582 | $47,537 | | Other comprehensive income (loss), net of tax: | | Foreign currency translation adjustment | 18,782 | (463) | 30,193 | (6,993) | | Change in fair value on available-for-sale investments, net of tax | 279 | 341 | 559 | 278 | | Other comprehensive income (loss), net of tax | 19,061 | (122) | 30,752 | (6,715) | | Comprehensive income | $45,404 | $36,788 | $81,334 | $40,822 | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Condensed Consolidated Statements of Cash Flows | Cash Flow Activity (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $77,687 | $126,122 | | Net cash used in investing activities | $(71,600) | $(83,140) | | Net cash used in financing activities | $(66,888) | $(91,760) | | Net change in cash and cash equivalents | $(48,621) | $(50,378) | | Cash and cash equivalents at end of period | $457,259 | $687,234 | [Condensed Consolidated Statements of Stockholders' Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Unaudited)) Condensed Consolidated Statements of Stockholders' Equity | Stockholders' Equity (in thousands, except shares) | Balance, January 1, 2025 | Net Income | Other Comprehensive Income | Issuance of Restricted Stock, net | Issuance of Shares under ESPP | Repurchase and Retirement of Common Stock | Share-based Compensation | Other, net | Balance, June 30, 2025 | | :------------------------------------------------- | :----------------------- | :--------- | :------------------------- | :-------------------------------- | :---------------------------- | :---------------------------------------- | :----------------------- | :--------- | :--------------------- | | Common stock (Shares) | 42,848,339 | — | — | 163,769 | 133,956 | (1,978,007) | — | — | 41,168,057 | | Common stock (Amount) | $428 | — | — | $2 | $1 | $(19) | — | — | $412 | | Additional paid-in capital | $491,891 | — | — | $(8,049) | $3,749 | $(24,583) | $21,479 | $11 | $484,498 | | Retained earnings | $1,401,034 | $50,582 | — | $3,623 | — | $(45,969) | — | $198 | $1,409,468 | | Accumulated other comprehensive loss | $(82,471) | — | $30,752 | — | — | — | — | — | $(51,719) | | Total Stockholders' Equity | $1,810,882 | $50,582 | $30,752 | $(4,424) | $3,750 | $(70,571) | $21,479 | $209 | $1,842,659 | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) [1. Basis of Presentation and Overview](index=9&type=section&id=1.%20Basis%20of%20Presentation%20and%20Overview) This note outlines the basis of preparation for the financial statements, key accounting policies, and the company's business overview - Ziff Davis is a vertically focused digital media and internet company with leading brands in technology, shopping, gaming and entertainment, health and wellness, connectivity, cybersecurity, and martech[26](index=26&type=chunk)[163](index=163&type=chunk) Accounts Receivable, net | Accounts Receivable, net (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Settlement receivables, net | $231,001 | $296,553 | | Trade receivables, net | 276,291 | 349,120 | | Other receivables | 15,716 | 14,550 | | **Accounts receivable, net** | **$523,008** | **$660,223** | Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------------------------- | :------------ | :---------------- | | Accounts payable | $140,398 | $164,352 | | Settlement payables, net | 257,069 | 408,747 | | Accrued employee related costs | 29,000 | 55,800 | | Other accrued liabilities | 47,722 | 41,870 | | **Accounts payable and accrued expenses** | **$474,189** | **$670,769** | - The company reclassified depreciation and amortization amounts for the three and six months ended June 30, 2024, to conform with the 2025 presentation[27](index=27&type=chunk) - New accounting pronouncements (ASU 2023-09 and ASU 2024-03/2025-01) will require additional disclosures for income taxes and disaggregated expenses, effective for annual periods beginning after December 15, 2024, and December 15, 2026, respectively[31](index=31&type=chunk)[32](index=32&type=chunk) [2. Revenues](index=10&type=section&id=2.%20Revenues) This note details the company's primary revenue streams and provides a disaggregated view by reportable segment and revenue source - Revenues are primarily generated from advertising and performance marketing, subscription and licensing, and other sources like hardware sales, online courses, and game publishing[34](index=34&type=chunk)[36](index=36&type=chunk)[40](index=40&type=chunk)[188](index=188&type=chunk) Disaggregated Revenue by Segment and Source | Revenue Source (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | **Technology & Shopping** | | | | | | Advertising and performance marketing | $78,798 | $69,253 | $158,274 | $135,160 | | Subscription and licensing | 2,626 | 1,866 | 4,804 | 3,561 | | Other | (648) | 1,448 | (612) | 3,113 | | **Total Technology & Shopping** | **$80,776** | **$72,567** | **$162,466** | **$141,834** | | **Gaming & Entertainment** | | | | | | Advertising and performance marketing | $32,251 | $28,175 | $56,622 | $50,930 | | Subscription and licensing | 13,965 | 14,806 | 27,611 | 28,691 | | Other | 10 | — | 19 | — | | **Total Gaming & Entertainment** | **$46,226** | **$42,981** | **$84,252** | **$79,621** | | **Health & Wellness** | | | | | | Advertising and performance marketing | $82,537 | $70,367 | $151,462 | $134,814 | | Subscription and licensing | 13,687 | 12,204 | 26,815 | 23,788 | | Other | 3,228 | 3,417 | 6,961 | 7,364 | | **Total Health & Wellness** | **$99,452** | **$85,988** | **$185,238** | **$165,966** | | **Connectivity** | | | | | | Advertising and performance marketing | $3,221 | $2,545 | $5,689 | $5,514 | | Subscription and licensing | 50,272 | 43,889 | 99,934 | 90,192 | | Other | 3,913 | 3,847 | 7,603 | 7,723 | | **Total Connectivity** | **$57,406** | **$50,281** | **$113,226** | **$103,429** | | **Cybersecurity & Martech** | | | | | | Subscription and licensing | $68,349 | $68,983 | $135,663 | $144,435 | | Other | — | — | — | — | | **Total Cybersecurity & Martech** | **$68,349** | **$68,983** | **$135,663** | **$144,435** | | **Total Revenues** | **$352,209** | **$320,800** | **$680,845** | **$635,285** | - As of June 30, 2025, approximately **$81.9 million** of transaction price is allocated to future performance obligations, with **38%** expected by December 31, 2025, **41%** by December 31, 2026, and **21%** thereafter[49](index=49&type=chunk) [3. Acquisitions](index=13&type=section&id=3.%20Acquisitions) This note details the company's acquisition strategy and provides an overview of acquisitions completed in 2025 and 2024 - The Company completed five immaterial acquisitions in the first six months of 2025 for a total consideration of **$64.0 million**, recognizing **$24.4 million** in goodwill and **$30.7 million** in definite-lived intangibles[52](index=52&type=chunk)[53](index=53&type=chunk) - In 2024, key acquisitions included TDS Gift Cards (digital gifting and branded payments) and CNET (digital media publication platform), both within the Technology & Shopping segment, totaling **$365.1 million**[55](index=55&type=chunk) 2024 Acquisitions Overview | 2024 Acquisitions (in thousands) | TDS | CNET | | :------------------------------- | :---------- | :---------- | | Cash | $142,957 | — | | Accounts receivable and other current assets | 171,290 | 16,904 | | Intangible assets | 108,340 | 100,500 | | Goodwill | 81,248 | 36,479 | | Total | $187,588 | $154,248 | [4. Investments](index=15&type=section&id=4.%20Investments) This note details the company's investment portfolio, including sales of equity interests and equity method investment activity - The Company sold its remaining 1,034,295 shares of Consensus Cloud Solutions, Inc. in Q2 2024 and no longer holds any shares as of December 31, 2024[60](index=60&type=chunk) - On April 24, 2025, the Company sold its minority interest in OpenEvidence for **$29.7 million**, including **$25.2 million** in cash and 143,161 shares of Common Stock[61](index=61&type=chunk) - The Company holds a corporate debt security with a carrying value and maximum exposure of approximately **$18.5 million** as of June 30, 2025, classified as available-for-sale, with cumulative gross unrealized gains of **$3.5 million**[64](index=64&type=chunk) Equity Method Investment (OCV Fund) | Equity Method Investment (OCV Fund) (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income from equity method investment, net of tax | $5,115 | $8,817 | $11,745 | $8,172 | | Distribution received (Q2 2025) | $9,196 | — | $9,196 | — | | Carrying value as of June 30, 2025 | $121,300 | | | | [5. Fair Value Measurements](index=17&type=section&id=5.%20Fair%20Value%20Measurements) This note outlines the company's fair value measurement practices, categorizing assets and liabilities into a three-tier hierarchy - The Company classifies fair value measurements into **Level 1** (quoted prices in active markets), **Level 2** (observable inputs other than quoted prices), and **Level 3** (unobservable inputs)[77](index=77&type=chunk) Assets and Liabilities Measured at Fair Value | Fair Value Measurements (in thousands) | June 30, 2025 (Fair Value) | December 31, 2024 (Fair Value) | | :------------------------------------- | :------------------------- | :----------------------------- | | **Assets:** | | | | Money market and other funds (Level 1) | $111,914 | $85,833 | | Investment in corporate debt securities (Level 3) | 18,534 | 17,788 | | **Total assets measured at fair value** | **$130,448** | **$103,621** | | **Liabilities:** | | | | Contingent consideration (Level 3) | $6,381 | $2,834 | | **Total liabilities measured at fair value** | **$6,381** | **$2,834** | Fair Value of Financial Instruments | Financial Instruments (in thousands) | June 30, 2025 (Carrying Value) | June 30, 2025 (Fair Value) | December 31, 2024 (Carrying Value) | December 31, 2024 (Fair Value) | | :----------------------------------- | :----------------------------- | :------------------------- | :--------------------------------- | :----------------------------- | | 4.625% Senior Notes | $460,038 | $423,235 | $457,211 | $420,935 | | 1.75% Convertible Notes | $149,109 | $141,803 | $148,186 | $139,976 | | 3.625% Convertible Notes | $263,147 | $247,221 | $258,885 | $259,200 | [6. Goodwill and Intangible Assets](index=20&type=section&id=6.%20Goodwill%20and%20Intangible%20Assets) This note details the changes in goodwill by segment and provides a breakdown of intangible assets and related amortization expense Changes in Goodwill by Segment | Goodwill (in thousands) | Balance as of January 1, 2025 | Goodwill acquired | Purchase accounting adjustments | Foreign exchange translation | Balance as of June 30, 2025 | | :---------------------- | :---------------------------- | :---------------- | :------------------------------ | :--------------------------- | :-------------------------- | | Technology & Shopping | $322,057 | — | $(128) | $2 | $321,931 | | Gaming & Entertainment | 68,301 | 11,743 | 48 | 775 | 80,867 | | Health & Wellness | 403,056 | 693 | — | 1,289 | 405,038 | | Connectivity | 256,942 | — | — | 2,783 | 259,725 | | Cybersecurity & Martech | 529,902 | 11,935 | 123 | 9,961 | 551,921 | | **Consolidated** | **$1,580,258** | **$24,371** | **$43** | **$14,810** | **$1,619,482** | - Goodwill for the Technology & Shopping segment includes accumulated impairment losses of **$169.5 million** as of June 30, 2025, and December 31, 2024[86](index=86&type=chunk) Intangible Assets Subject to Amortization | Intangible Assets Subject to Amortization (in thousands) | June 30, 2025 (Net) | December 31, 2024 (Net) | | :------------------------------------------------------- | :------------------ | :---------------------- | | Trade names and trademarks | $144,125 | $153,019 | | Customer relationships | 200,726 | 215,328 | | Other purchased intangibles | 52,775 | 57,402 | | **Total** | **$397,626** | **$425,749** | Amortization Expense | Amortization Expense (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Amortization expense | $30,600 | $27,800 | $59,400 | $54,100 | [7. Debt](index=21&type=section&id=7.%20Debt) This note provides a detailed breakdown of the company's long-term debt, including Senior and Convertible Notes and the Credit Agreement Long-term Debt Composition | Long-term Debt (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | 4.625% Senior Notes | $460,038 | $460,038 | | 1.75% Convertible Notes | 149,109 | 149,109 | | 3.625% Convertible Notes | 263,147 | 263,147 | | Total Notes | 872,294 | 872,294 | | Less: Unamortized discount | (4,987) | (5,676) | | Deferred issuance costs | (1,927) | (2,336) | | **Total long-term debt** | **$865,380** | **$864,282** | - The 4.625% Senior Notes mature in 2030, the 1.75% Convertible Notes mature in 2026, and the 3.625% Convertible Notes mature in 2028[88](index=88&type=chunk) - The Company repurchased approximately **$290 million** in aggregate principal of its 4.625% Senior Notes cumulatively as of June 30, 2025, with no repurchases during the three and six months ended June 30, 2025 and 2024[94](index=94&type=chunk) - As of June 30, 2025, the remaining principal amount of the 1.75% Convertible Notes was **$149.1 million**, following an exchange of approximately **$400.9 million** in July 2024[96](index=96&type=chunk) - The Company issued **$263.1 million** of new 3.625% Convertible Notes in July 2024 as part of an exchange transaction, maturing in 2028[102](index=102&type=chunk) - The Credit Agreement was amended in June 2024, increasing the revolving loan commitment to **$350.0 million** and extending the maturity date to June 2027 (or August 2026 under certain conditions)[109](index=109&type=chunk) - As of June 30, 2025, availability under the Credit Agreement was **$348.9 million**, net of letters of credit[112](index=112&type=chunk) [8. Commitments and Contingencies](index=25&type=section&id=8.%20Commitments%20and%20Contingencies) This note outlines the company's commitments, legal proceedings, and tax contingencies - The Company enters into commitments for cloud computing, IT, security, and revenue sharing arrangements with minimum guarantees[113](index=113&type=chunk) - The Company is involved in litigation and regulatory inquiries but does not believe, based on current knowledge, that any are likely to have a material adverse effect on its financial position, results of operations, or cash flows[114](index=114&type=chunk) - Reserves for non-income related tax matters were **$24.4 million** as of June 30, 2025, and **$25.2 million** as of December 31, 2024[118](index=118&type=chunk) [9. Income Taxes](index=25&type=section&id=9.%20Income%20Taxes) This note details the company's effective tax rates, uncertain tax positions, and the impact of recent tax legislation Effective Tax Rate | Effective Tax Rate | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Effective tax rate | 16.8% | 19.9% | 24.9% | 27.9% | - The decrease in the effective tax rate for Q2 2025 was primarily due to a **$3.2 million** discrete tax benefit from a partial reversal of the valuation allowance against U.S. capital loss carryforwards[120](index=120&type=chunk)[204](index=204&type=chunk) - The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, permanently extends certain tax measures, provides **100% bonus depreciation**, and allows full deductibility of R&D expenses, which is expected to reduce current income tax liabilities and increase deferred tax liabilities[125](index=125&type=chunk)[203](index=203&type=chunk) - Liabilities for uncertain income tax positions were **$31.3 million** as of June 30, 2025, and **$30.3 million** as of December 31, 2024[123](index=123&type=chunk) [10. Stockholders' Equity](index=26&type=section&id=10.%20Stockholders'%20Equity) This note details the company's share repurchase program, including authorizations and activity - The Board authorized an increase in the 2020 Program by an additional **five million shares**, bringing the total to **15 million shares**, and extended the expiration date to August 2, 2029[127](index=127&type=chunk)[246](index=246&type=chunk) Share Repurchases (2020 Program) | Share Repurchases (2020 Program) | Three months ended June 30, 2025 | Six months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2024 | | :------------------------------- | :------------------------------- | :----------------------------- | :------------------------------- | :----------------------------- | | Shares repurchased | 1,084,846 | 1,834,846 | 1,500,000 | 1,500,000 | | Aggregate cost (in thousands) | $35,200 | $66,100 | $84,900 | $84,900 | - Cumulatively as of June 30, 2025, **10,593,538 shares** have been repurchased under the 2020 Program at an aggregate cost of **$649.7 million**, with **4,406,462 shares** remaining available for repurchase[128](index=128&type=chunk)[247](index=247&type=chunk) - The Company repurchased **143,161 shares** of its Common Stock for approximately **$4.4 million** in connection with the sale of its minority equity ownership interest in OpenEvidence[129](index=129&type=chunk) [11. Share-Based Compensation](index=27&type=section&id=11.%20Share-Based%20Compensation) This note details the company's share-based compensation plans, recognized expense, and award activity Share-Based Compensation Expense | Share-Based Compensation Expense (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Direct costs | $68 | $62 | $131 | $123 | | Sales and marketing | 1,349 | 1,093 | 2,335 | 1,851 | | Research, development, and engineering | 937 | 1,071 | 1,727 | 2,161 | | General, administrative, and other related costs | 9,373 | 9,374 | 17,286 | 16,337 | | **Total share-based compensation expense** | **$11,727** | **$11,600** | **$21,479** | **$20,472** | - As of June 30, 2025, 435,135 shares underlying options and 2,167,387 restricted stock units were outstanding, with **1,903,576 additional shares available for grant** under the 2024 Plan[131](index=131&type=chunk) - PSUs granted in 2024 and 2025 vest based on the Company's relative **Total Shareholder Return (TSR)** target compared to a market index, with performance periods of two and three years for 2025 grants[134](index=134&type=chunk) - As of June 30, 2025, total unrecognized share-based compensation cost was **$1.0 million** for RSAs (0.6 years weighted-average period), **$46.9 million** for RSUs (2.1 years), and **$30.3 million** for PSUs (2.2 years)[138](index=138&type=chunk) [12. Earnings Per Share](index=29&type=section&id=12.%20Earnings%20Per%20Share) This note provides the detailed calculation of basic and diluted earnings per share Earnings Per Share Calculation (Three Months) | Earnings Per Share (in thousands, except per share) | Three months ended June 30, 2025 (Basic) | Three months ended June 30, 2025 (Diluted) | Three months ended June 30, 2024 (Basic) | Three months ended June 30, 2024 (Diluted) | | :-------------------------------------------------- | :--------------------------------------- | :----------------------------------------- | :--------------------------------------- | :----------------------------------------- | | Net income available to common shareholders | $26,343 | $26,926 | $36,910 | $39,069 | | Weighted-average outstanding shares (Basic) | 41,732,800 | 41,732,800 | 45,492,809 | 45,492,809 | | Dilutive effect of: Equity incentive plans | — | 17,313 | — | 14,232 | | Dilutive effect of: Convertible debt | — | 1,398,391 | — | 5,158,071 | | Weighted-average outstanding shares (Diluted) | 41,732,800 | 43,148,504 | 45,492,809 | 50,665,112 | | **Net income per share** | **$0.63** | **$0.62** | **$0.81** | **$0.77** | Earnings Per Share Calculation (Six Months) | Earnings Per Share (in thousands, except per share) | Six months ended June 30, 2025 (Basic) | Six months ended June 30, 2025 (Diluted) | Six months ended June 30, 2024 (Basic) | Six months ended June 30, 2024 (Diluted) | | :-------------------------------------------------- | :------------------------------------- | :--------------------------------------- | :------------------------------------- | :--------------------------------------- | | Net income available to common shareholders | $50,582 | $51,746 | $47,537 | $51,854 | | Weighted-average outstanding shares (Basic) | 42,143,165 | 42,143,165 | 45,676,726 | 45,676,726 | | Dilutive effect of: Equity incentive plans | — | 113,951 | — | 54,782 | | Dilutive effect of: Convertible debt | — | 1,398,391 | — | 5,158,071 | | Weighted-average outstanding shares (Diluted) | 42,143,165 | 43,655,507 | 45,676,726 | 50,889,579 | | **Net income per share** | **$1.20** | **$1.19** | **$1.04** | **$1.02** | - For the three months ended June 30, 2025, **1,484,631 shares** of stock options and restricted stock, and **2,631,470 shares** related to convertible debt, were excluded from diluted shares as they were anti-dilutive[140](index=140&type=chunk)[141](index=141&type=chunk) [13. Segment Information](index=30&type=section&id=13.%20Segment%20Information) This note presents financial information for the company's five reportable segments - The Company operates in five reportable segments: **Technology & Shopping**, **Gaming & Entertainment**, **Health & Wellness**, **Connectivity**, and **Cybersecurity & Martech**[142](index=142&type=chunk)[164](index=164&type=chunk) Segment Revenues | Segment Revenues (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Technology & Shopping | $80,776 | $72,567 | $162,466 | $141,834 | | Gaming & Entertainment | 46,226 | 42,981 | 84,252 | 79,621 | | Health & Wellness | 99,452 | 85,988 | 185,238 | 165,966 | | Connectivity | 57,406 | 50,281 | 113,226 | 103,429 | | Cybersecurity & Martech | 68,349 | 68,983 | 135,663 | 144,435 | | **Total segment revenues** | **$352,209** | **$320,800** | **$680,845** | **$635,285** | Segment Operating Income (Loss) | Segment Operating Income (Loss) (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Technology & Shopping | $(7,944) | $(8,067) | $(11,907) | $(14,701) | | Gaming & Entertainment | 11,255 | 8,198 | 20,029 | 18,713 | | Health & Wellness | 16,018 | 13,302 | 32,980 | 21,901 | | Connectivity | 18,804 | 21,702 | 38,316 | 41,060 | | Cybersecurity & Martech | 12,235 | 11,547 | 23,558 | 30,975 | | **Total segment operating income** | **$50,368** | **$46,682** | **$102,976** | **$97,948** | | Corporate | $(16,885) | $(18,113) | $(34,363) | $(33,518) | | **Income from operations** | **$33,483** | **$28,569** | **$68,613** | **$64,430** | Capital Expenditures | Capital Expenditures (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Technology & Shopping | $3,994 | $3,741 | $7,600 | $7,389 | | Gaming & Entertainment | 2,667 | 176 | 4,404 | 2,433 | | Health & Wellness | 10,347 | 9,188 | 19,723 | 17,671 | | Connectivity | 7,142 | 6,393 | 12,377 | 13,236 | | Cybersecurity & Martech | 5,735 | 5,996 | 11,220 | 12,914 | | **Total from reportable segments** | **$29,885** | **$25,494** | **$55,324** | **$53,643** | | Corporate | 248 | 10 | 428 | (10) | | **Total capital expenditures** | **$30,133** | **$25,504** | **$55,752** | **$53,633** | [14. Supplemental Cash Flow Information](index=34&type=section&id=14.%20Supplemental%20Cash%20Flow%20Information) This note provides supplemental cash flow information, including non-cash activities and cash paid for interest and taxes Non-cash Investing and Financing Activities | Non-cash Investing and Financing Activities (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------------------------- | :----------------------------- | :----------------------------- | | Sale of equity investments for common stock | $4,448 | — | | Excise tax on share repurchases | $431 | — | Supplemental Data | Supplemental Data (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------- | :----------------------------- | :----------------------------- | | Interest paid | $17,905 | $15,451 | | Income taxes paid, net of refunds | $39,823 | $35,337 | [15. Accumulated Other Comprehensive Loss](index=34&type=section&id=15.%20Accumulated%20Other%20Comprehensive%20Loss) This note summarizes the changes in accumulated other comprehensive income (loss), net of tax Changes in Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss (in thousands) | Balance as of January 1, 2025 | Other comprehensive income, net of tax | Balance as of June 30, 2025 | | :-------------------------------------------------- | :---------------------------- | :------------------------------------- | :-------------------------- | | Unrealized Gains on Investments | $2,112 | $559 | $2,671 | | Foreign Currency Translation | $(84,583) | $30,193 | $(54,390) | | **Total** | **$(82,471)** | **$30,752** | **$(51,719)** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial performance, condition, liquidity, and capital resources for the reporting period [Forward-Looking Information](index=35&type=section&id=Forward-Looking%20Information) - The report contains forward-looking statements regarding future results, business strategy, and acquisitions, subject to risks and uncertainties, including economic conditions, customer retention, cash flow generation, acquisition integration, international expansion, and regulatory changes[160](index=160&type=chunk)[161](index=161&type=chunk) [Overview](index=36&type=section&id=Overview) - Ziff Davis is a vertically focused digital media and internet company with leading brands in technology, shopping, gaming and entertainment, health and wellness, connectivity, cybersecurity, and martech, offering content, tools, and cloud-based services to consumers and businesses[163](index=163&type=chunk) [Segments](index=36&type=section&id=Segments) - The Company has five reportable segments: **Technology & Shopping**, **Gaming & Entertainment**, **Health & Wellness**, **Connectivity**, and **Cybersecurity & Martech**, with prior period information presented comparably[164](index=164&type=chunk) [Revenues Overview](index=36&type=section&id=Revenues%20Overview) - Primary revenue types include **Advertising and Performance Marketing** (online display/video ads, lead generation, commissions), **Subscription and Licensing** (cloud-based services, data products, software licenses, content access), and **Other** (hardware sales, online courses, game publishing)[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) Disaggregated Revenue by Segment and Source | Revenue Source (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | **Technology & Shopping** | | | | | | Advertising and performance marketing | $78,798 | $69,253 | $158,274 | $135,160 | | Subscription and licensing | 2,626 | 1,866 | 4,804 | 3,561 | | Other | (648) | 1,448 | (612) | 3,113 | | **Total Technology & Shopping** | **$80,776** | **$72,567** | **$162,466** | **$141,834** | | **Gaming & Entertainment** | | | | | | Advertising and performance marketing | $32,251 | $28,175 | $56,622 | $50,930 | | Subscription and licensing | 13,965 | 14,806 | 27,611 | 28,691 | | Other | 10 | — | 19 | — | | **Total Gaming & Entertainment** | **$46,226** | **$42,981** | **$84,252** | **$79,621** | | **Health & Wellness** | | | | | | Advertising and performance marketing | $82,537 | $70,367 | $151,462 | $134,814 | | Subscription and licensing | 13,687 | 12,204 | 26,815 | 23,788 | | Other | 3,228 | 3,417 | 6,961 | 7,364 | | **Total Health & Wellness** | **$99,452** | **$85,988** | **$185,238** | **$165,966** | | **Connectivity** | | | | | | Advertising and performance marketing | $3,221 | $2,545 | $5,689 | $5,514 | | Subscription and licensing | 50,272 | 43,889 | 99,934 | 90,192 | | Other | 3,913 | 3,847 | 7,603 | 7,723 | | **Total Connectivity** | **$57,406** | **$50,281** | **$113,226** | **$103,429** | | **Cybersecurity & Martech** | | | | | | Subscription and licensing | $68,349 | $68,983 | $135,663 | $144,435 | | Other | — | — | — | — | | **Total Cybersecurity & Martech** | **$68,349** | **$68,983** | **$135,663** | **$144,435** | | **Total Revenues** | **$352,209** | **$320,800** | **$680,845** | **$635,285** | [Performance Metrics](index=37&type=section&id=Performance%20Metrics) Advertising and Performance Marketing Metrics | Advertising and Performance Marketing Metrics | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :-------------------------------------------- | :------------------------------- | :------------------------------- | | **Technology & Shopping** | | | | Net advertising and performance marketing revenue retention | 95.0% | 90.0% | | Customers | 619 | 576 | | Quarterly revenue per customer | $127,299 | $120,230 | | **Gaming & Entertainment** | | | | Net advertising and performance marketing revenue retention | 93.7% | 88.0% | | Customers | 431 | 417 | | Quarterly revenue per customer | $74,830 | $67,565 | | **Health & Wellness** | | | | Net advertising and performance marketing revenue retention | 97.4% | 93.7% | | Customers | 866 | 839 | | Quarterly revenue per customer | $94,718 | $82,847 | Subscription and Licensing Metrics | Subscription and Licensing Metrics | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | **Gaming & Entertainment** | | | | Customers | 527,000 | 469,000 | | Average quarterly revenue per customer | $26.47 | $31.50 | | **Health & Wellness** | | | | Customers | 1,892,000 | 1,655,000 | | Average quarterly revenue per customer | $7.17 | $7.38 | | **Connectivity** | | | | Customers | 25,000 | 24,000 | | Average quarterly revenue per customer | $2,047 | $1,820 | | **Cybersecurity & Martech** | | | | Customers | 1,232,000 | 1,271,000 | | Average quarterly revenue per customer | $55.48 | $54.25 | - Management no longer uses Subscription and Licensing churn rate as a broad performance metric, focusing instead on total customers due to the impact of expiring licenses and generally low upfront customer acquisition costs[176](index=176&type=chunk) [Critical Accounting Policies and Estimates](index=39&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - No significant changes to critical accounting policies and estimates occurred during the six months ended June 30, 2025[180](index=180&type=chunk) - The Company assesses goodwill for impairment annually or more frequently if indicators exist. While the stock price was historically low as of June 30, 2025, it was not deemed a triggering event, but future declines could lead to impairment charges, especially for two reporting units in Technology & Shopping with no excess fair value over carrying value[181](index=181&type=chunk) [Results of Operations for the Three and Six Months Ended June 30, 2025](index=40&type=section&id=Results%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030,%202025) [Revenues](index=40&type=section&id=Revenues) Revenues | Revenues (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Percentage Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Percentage Change | | :---------------------- | :------------------------------- | :------------------------------- | :---------------- | :----------------------------- | :----------------------------- | :---------------- | | Total revenues | $352,209 | $320,800 | 9.8% | $680,845 | $635,285 | 7.2% | - Q2 2025 revenues increased by **$31.4 million (9.8% YoY)** due to a **$26.5 million** increase in advertising and performance marketing (Health & Wellness +$12.2M, Technology & Shopping +$9.5M) and a **$7.2 million** increase in subscription and licensing (Connectivity +$6.4M)[189](index=189&type=chunk) - Six-month revenues increased by **$45.6 million (7.2% YoY)** driven by a **$45.6 million** increase in advertising and performance marketing (Technology & Shopping +$23.1M, Health & Wellness +$16.6M) and a **$4.2 million** increase in subscription and licensing (Connectivity +$9.7M, Health & Wellness +$3.0M, partially offset by Cybersecurity & Martech -$8.8M)[190](index=190&type=chunk) [Direct costs](index=41&type=section&id=Direct%20costs) Direct Costs | Direct costs (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Percentage Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Percentage Change | | :-------------------------- | :------------------------------- | :------------------------------- | :---------------- | :----------------------------- | :----------------------------- | :---------------- | | Direct costs | $48,974 | $50,024 | (2.1)% | $96,182 | $95,911 | 0.3% | | As a percent of revenues | 13.9% | 15.6% | | 14.1% | 15.1% | | - Direct costs decreased by **$0.5 million (2.1% YoY)** in Q2 2025, primarily due to lower cloud computing, software, and other related expenses. For the six months, direct costs increased by **$0.3 million (0.3% YoY)** due to higher professional and third-party services and cloud computing costs, partially offset by lower employee expenses[191](index=191&type=chunk) [Sales and Marketing](index=41&type=section&id=Sales%20and%20Marketing) Sales and Marketing Expenses | Sales and Marketing (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Percentage Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Percentage Change | | :--------------------------------- | :------------------------------- | :------------------------------- | :---------------- | :----------------------------- | :----------------------------- | :---------------- | | Sales and marketing | $141,598 | $124,766 | 13.5% | $269,278 | $241,766 | 11.4% | | As a percent of revenues | 40.2% | 38.9% | | 39.6% | 38.1% | | - Sales and marketing expenses increased by **$16.8 million (13.5% YoY)** in Q2 2025, driven by a **$7.3 million** increase in employee expenses due to acquisitions, a **$3.6 million** increase in professional services, and a **$3.7 million** increase in partner payments[192](index=192&type=chunk) - For the six months, sales and marketing expenses increased by **$27.5 million (11.4% YoY)**, primarily due to an **$11.9 million** increase in employee expenses, a **$6.6 million** increase in professional services, a **$6.2 million** increase in partner payments, and a **$2.8 million** increase in advertising and marketing related expenses[192](index=192&type=chunk) [Research, Development, and Engineering](index=41&type=section&id=Research,%20Development,%20and%20Engineering) Research, Development, and Engineering Expenses | R&D, and Engineering (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Percentage Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Percentage Change | | :---------------------------------- | :------------------------------- | :------------------------------- | :---------------- | :----------------------------- | :----------------------------- | :---------------- | | Research, development, and engineering | $16,478 | $16,795 | (1.9)% | $32,354 | $34,569 | (6.4)% | | As a percent of revenues | 4.7% | 5.2% | | 4.8% | 5.4% | | - R&D expenses decreased by **$0.3 million (1.9% YoY)** in Q2 2025, mainly due to a **$1.1 million** decrease in employee expenses and a **$0.4 million** decrease in professional services, partially offset by a **$1.3 million** increase in cloud computing costs[193](index=193&type=chunk) - For the six months, R&D expenses decreased by **$2.2 million (6.4% YoY)**, primarily due to a **$3.4 million** decrease in employee expenses and a **$1.0 million** decrease in professional services, partially offset by a **$2.4 million** increase in cloud computing costs[193](index=193&type=chunk) [General, Administrative, and Other Related Costs](index=42&type=section&id=General,%20Administrative,%20and%20Other%20Related%20Costs) General, Administrative, and Other Related Costs | G&A and Other Related Costs (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Percentage Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Percentage Change | | :----------------------------------------- | :------------------------------- | :------------------------------- | :---------------- | :----------------------------- | :----------------------------- | :---------------- | | General, administrative, and other related costs | $54,070 | $48,505 | 11.5% | $100,980 | $98,015 | 3.0% | | As a percent of revenues | 15.4% | 15.1% | | 14.8% | 15.4% | | - G&A costs increased by **$5.6 million (11.5% YoY)** in Q2 2025, primarily due to a **$6.1 million** reduction in expense in 2024 from deferred acquisition payments not recurring in 2025, and a **$1.2 million** increase in professional services, partially offset by a **$1.0 million** decrease in employee expenses[194](index=194&type=chunk) - For the six months, G&A costs increased by **$2.9 million (3.0% YoY)**, driven by the non-recurrence of the **$6.1 million** reduction in 2024 and a **$1.5 million** increase in cloud computing costs, partially offset by a **$2.3 million** decrease in contingent consideration fair value and a **$2.1 million** decrease in sales taxes[194](index=194&type=chunk) [Depreciation and Amortization](index=42&type=section&id=Depreciation%20and%20Amortization) Depreciation and Amortization | Depreciation and Amortization (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Percentage Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Percentage Change | | :------------------------------------------- | :------------------------------- | :------------------------------- | :---------------- | :----------------------------- | :----------------------------- | :---------------- | | Depreciation and amortization | $57,606 | $52,141 | 10.5% | $113,438 | $100,594 | 12.8% | | As a percent of revenues | 16.4% | 16.3% | | 16.7% | 15.8% | | - Depreciation and amortization increased by **$5.5 million (10.5% YoY)** in Q2 2025, due to a **$3.4 million** increase in depreciation from capitalized software and a **$2.8 million** increase in amortization from new intangible assets acquired in 2024[195](index=195&type=chunk) - For the six months, D&A increased by **$12.8 million (12.8% YoY)**, driven by a **$7.6 million** increase in depreciation from capitalized software and a **$5.2 million** increase in amortization from new intangible assets[195](index=195&type=chunk) [Non-Operating Income and Expenses](index=42&type=section&id=Non-Operating%20Income%20and%20Expenses) Non-Operating Income and Expenses | Non-Operating Income and Expenses (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Percentage Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Percentage Change | | :----------------------------------------------- | :------------------------------- | :------------------------------- | :---------------- | :----------------------------- | :----------------------------- | :---------------- | | Interest expense, net | $(6,523) | $(1,804) | 261.6% | $(12,654) | $(3,573) | 254.2% | | Loss on sale of businesses | — | — | 0.0% | — | $(3,780) | (100.0)% | | Gain (loss) on investments, net | 4,340 | 3,051 | 42.2% | 4,340 | $(7,654) | (156.7)% | | Other (loss) income, net | $(5,786) | $5,267 | (209.9)% | $(8,589) | $5,163 | (266.4)% | | **Total non-operating expense** | **$(7,969)** | **$6,514** | (222.3)% | **$(16,903)** | **$(9,844)** | 71.7% | - Interest expense, net, increased significantly (**261.6% YoY** in Q2, **254.2% YoY** in six months) due to lower interest income on investments from declining cash equivalents and reduced rates[196](index=196&type=chunk) - Gain on investments, net, in Q2 and six months 2025 was due to the disposition of the minority equity ownership interest in OpenEvidence. In 2024, it related to changes in fair value and disposition of Consensus common stock[198](index=198&type=chunk) - Other (loss) income, net, saw a substantial negative change primarily attributable to fluctuations in foreign currency gains or losses[199](index=199&type=chunk) [Income Taxes](index=43&type=section&id=Income%20Taxes) Income Tax Expense | Income Tax Expense (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax expense | $4,286 | $6,990 | $12,873 | $15,221 | | Effective tax rate | 16.8% | 19.9% | 24.9% | 27.9% | - The decrease in the effective tax rate for Q2 2025 was primarily due to a **$3.2 million** discrete tax benefit from a partial release of the valuation allowance against U.S. capital loss carryforwards, partially offset by a **$0.5 million** discrete charge from foreign exchange tax impact on foreign dividends[202](index=202&type=chunk)[204](index=204&type=chunk) - The decrease in the effective tax rate for the six months ended June 30, 2025, was primarily due to a **$3.2 million** discrete tax benefit from a partial release of the valuation allowance, partially offset by a **$1.5 million** discrete tax charge related to share-based compensation vesting[202](index=202&type=chunk)[204](index=204&type=chunk) - The One Big Beautiful Bill Act (OBBBA) is expected to reduce current income tax liabilities and increase deferred tax liabilities, but not materially impact the effective tax rate[203](index=203&type=chunk) [Equity Method Investment](index=44&type=section&id=Equity%20Method%20Investment) Income from Equity Method Investment | Income from Equity Method Investment (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income from equity method investment, net of tax | $5,100 | $8,800 | $11,700 | $8,200 | - The decrease in income from equity method investment in Q2 2025 was due to a smaller increase in the value of the underlying investment (OCV Fund), while the increase for the six months was due to a greater increase in value[206](index=206&type=chunk) [Segment Results](index=44&type=section&id=Segment%20Results) [Technology & Shopping](index=44&type=section&id=Technology%20%26%20Shopping) Technology & Shopping Segment Performance | Technology & Shopping (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Percentage Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Percentage Change | | :----------------------------------- | :------------------------------- | :------------------------------- | :---------------- | :----------------------------- | :----------------------------- | :---------------- | | Revenues | $80,776 | $72,567 | 11.3% | $162,466 | $141,834 | 14.5% | | Operating costs and expenses | 88,720 | 80,634 | 10.0% | 174,373 | 156,535 | 11.4% | | Operating loss | $(7,944) | $(8,067) | (1.5)% | $(11,907) | $(14,701) | (19.0)% | - Q2 2025 revenues increased by **$8.2 million (11.3% YoY)**, primarily from a **$9.5 million** increase in advertising and performance marketing, driven by a 2024 acquisition in the Technology business. Operating costs increased by **$8.1 million (10.0% YoY)** due to acquisitions, mainly in D&A, employee expenses, and professional services[208](index=208&type=chunk)[210](index=210&type=chunk) - Six-month revenues increased by **$20.6 million (14.5% YoY)**, mainly from a **$23.1 million** increase in advertising and performance marketing due to a 2024 acquisition. Operating costs increased by **$17.8 million (11.4% YoY)** due to acquisitions, primarily in employee expenses, D&A, and professional services[209](index=209&type=chunk)[211](index=211&type=chunk) [Gaming & Entertainment](index=45&type=section&id=Gaming%20%26%20Entertainment) Gaming & Entertainment Segment Performance | Gaming & Entertainment (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Percentage Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Percentage Change | | :------------------------------------ | :------------------------------- | :------------------------------- | :---------------- | :----------------------------- | :----------------------------- | :---------------- | | Revenues | $46,226 | $42,981 | 7.5% | $84,252 | $79,621 | 5.8% | | Operating costs and expenses | 34,971 | 34,783 | 0.5% | 64,223 | 60,908 | 5.4% | | Operating income | $11,255 | $8,198 | 37.3% | $20,029 | $18,713 | 7.0% | - Q2 2025 revenues increased by **$3.2 million (7.5% YoY)**, primarily from a **$4.1 million** increase in advertising and performance marketing due to a 2024 acquisition. Operating costs increased slightly by **$0.2 million (0.5% YoY)**, mainly due to cloud computing costs, partially offset by lower employee expenses[213](index=213&type=chunk)[215](index=215&type=chunk) - Six-month revenues increased by **$4.6 million (5.8% YoY)**, mainly from a **$5.7 million** increase in advertising and performance marketing due to a 2024 acquisition. Operating costs increased by **$3.3 million (5.4% YoY)**, primarily due to cloud computing, partner payments, advertising, and D&A[214](index=214&type=chunk)[216](index=216&type=chunk) [Health & Wellness](index=45&type=section&id=Health%20%26%20Wellness) Health & Wellness Segment Performance | Health & Wellness (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Percentage Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Percentage Change | | :------------------------------- | :------------------------------- | :------------------------------- | :---------------- | :----------------------------- | :----------------------------- | :---------------- | | Revenues | $99,452 | $85,988 | 15.7% | $185,238 | $165,966 | 11.6% | | Operating costs and expenses | 83,434 | 72,686 | 14.8% | 152,258 | 144,065 | 5.7% | | Operating income | $16,018 | $13,302 | 20.4% | $32,980 | $21,901 | 50.6% | - Q2 2025 revenues increased by **$13.5 million (15.7% YoY)**, primarily from a **$12.2 million** increase in advertising and performance marketing, partly due to a 2025 acquisition. Operating costs increased by **$10.7 million (14.8% YoY)**, mainly due to partner payments, employee expenses, D&A, and advertising[219](index=219&type=chunk)[221](index=221&type=chunk) - Six-month revenues increased by **$19.3 million (11.6% YoY)**, mainly from a **$16.7 million** increase in advertising and performance marketing, partly due to a 2025 acquisition. Operating costs increased by **$8.2 million (5.7% YoY)**, primarily due to partner payments, cloud computing, and D&A[220](index=220&type=chunk)[221](index=221&type=chunk) [Connectivity](index=46&type=section&id=Connectivity) Connectivity Segment Performance | Connectivity (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Percentage Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Percentage Change | | :-------------------------- | :------------------------------- | :------------------------------- | :---------------- | :----------------------------- | :----------------------------- | :---------------- | | Revenues | $57,406 | $50,281 | 14.2% | $113,226 | $103,429 | 9.5% | | Operating costs and expenses | 38,602 | 28,579 | 35.1% | 74,910 | 62,369 | 20.1% | | Operating income | $18,804 | $21,702 | (13.4)% | $38,316 | $41,060 | (6.7)% | - Q2 2025 revenues increased by **$7.1 million (14.2% YoY)**, primarily from a **$6.4 million** increase in subscription and licensing, driven by network performance services. Operating costs increased by **$10.0 million (35.1% YoY)**, mainly due to the non-recurrence of a 2024 expense reduction, and increases in employee expenses and professional services[223](index=223&type=chunk)[225](index=225&type=chunk) - Six-month revenues increased by **$9.8 million (9.5% YoY)**, mainly from a **$9.7 million** increase in subscription and licensing, driven by network performance services. Operating costs increased by **$12.5 million (20.1% YoY)**, primarily due to the non-recurrence of a 2024 expense reduction, and increases in professional services and employee expenses[224](index=224&type=chunk)[226](index=226&type=chunk) [Cybersecurity & Martech](index=47&type=section&id=Cybersecurity%20%26%20Martech) Cybersecurity & Martech Segment Performance | Cybersecurity & Martech (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Percentage Change | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Percentage Change | | :------------------------------------- | :------------------------------- | :------------------------------- | :---------------- | :----------------------------- | :----------------------------- | :---------------- | | Revenues | $68,349 | $68,983 | (0.9)% | $135,663 | $144,435 | (6.1)% | | Operating costs and expenses | 56,114 | 57,436 | (2.3)% | 112,105 | 113,460 | (1.2)% | | Operating income | $12,235 | $11,547 | 6.0% | $23,558 | $30,975 | (23.9)% | - Q2 2025 revenues decreased by **$0.6 million (0.9% YoY)**, primarily due to a **$2.5 million** decrease in Martech subscription and licensing, partially offset by a **$1.9 million** increase in Cybersecurity subscription and licensing. Operating costs decreased by **$1.3 million (2.3% YoY)**, mainly due to lower employee expenses and advertising, partially offset by higher D&A[228](index=228&type=chunk)[230](index=230&type=chunk) - Six-month revenues decreased by **$8.8 million (6.1% YoY)** due to declines in subscription and licensing across both Martech and Cybersecurity. Operating costs decreased by **$1.4 million (1.2% YoY)**, mainly due to lower employee expenses, advertising, and other expenses, partially offset by higher D&A and partner payments[229](index=229&type=chunk)[231](index=231&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) [Cash, Cash Equivalents, and Investments](index=47&type=section&id=Cash,%20Cash%20Equivalents,%20and%20Investments) Cash, Cash Equivalents, and Investments | Cash, Cash Equivalents, and Investments (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $457,259 | $505,880 | | Long-term investments | 139,812 | 158,187 | | **Cash, cash equivalents and investments** | **$597,071** | **$664,067** | Cash, Cash Equivalents, and Investments by Jurisdiction | Cash, Cash Equivalents, and Investments by Jurisdiction (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------------------------- | :------------ | :---------------- | | Held in domestic jurisdiction | $508,190 | $581,315 | | Held in foreign jurisdiction | 88,881 | 82,752 | | **Total** | **$597,071** | **$664,067** | - The Company received a **$9.2 million** distribution from the OCV Fund during Q2 2025[235](index=235&type=chunk) [Financings](index=48&type=section&id=Financings) - The Credit Agreement was amended in June 2024, increasing the Aggregate Revolving Loan Commitment by **$250.0 million** to a total of **$350.0 million** and extending the maturity date[236](index=236&type=chunk) - As of June 30, 2025, net availability under the Credit Agreement was **$348.9 million**[237](index=237&type=chunk) - In July 2024, the Company issued **$263.1 million** of new 3.625% Convertible Notes due 2028 as part of an exchange for **$400.9 million** of 1.75% Convertible Notes[238](index=238&type=chunk) [Material Cash Requirements](index=48&type=section&id=Material%20Cash%20Requirements) - As of June 30, 2025, outstanding indebtedness was **$865.4 million**, total future minimum lease payments were **$35.2 million** (with **$10.8 million** due in the next 12 months), and liability for uncertain tax positions was **$31.3 million**[240](index=240&type=chunk) - The Company anticipates existing cash, cash generated from operations, and revolving credit facility availability will be sufficient to meet working capital, capital expenditures, and share repurchase needs for at least the next 12 months[241](index=241&type=chunk) [Cash Flows](index=48&type=section&id=Cash%20Flows) Summary of Cash Flows | Cash Flows (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Change | | :------------------------ | :----------------------------- | :----------------------------- | :----- | | Net cash provided by operating activities | $77,687 | $126,122 | $(48,435) | | Net cash used in investing activities | $(71,600) | $(83,140) | $11,540 | | Net cash used in financing activities | $(66,888) | $(91,760) | $24,872 | - Net cash from operating activities decreased by **$48.4 million** for the six months ended June 30, 2025, primarily due to significant working capital usage by TDS Gift Cards, which had a negative impact of **$(86.6) million**[243](index=243&type=chunk) - Net cash used in investing activities decreased by **$11.5 million**, mainly due to a distribution from the OCV Fund and higher proceeds from the sale of equity investments[244](index=244&type=chunk) - Net cash used in financing activities decreased by **$24.9 million**, primarily due to a smaller amount of cash used for share repurchases[245](index=245&type=chunk) [Stock Repurchase Program](index=49&type=section&id=Stock%20Repurchase%20Program) - The Board authorized an increase of **five million shares** to the 2020 Program, bringing the total to **15 million shares**, and extended the expiration date to August 2, 2029[246](index=246&type=chunk) Stock Repurchase Program Activity | Stock Repurchase Program (Six months ended June 30, 2025) | Total Number of Shares Repurchased | Aggregate Purchase Price (in thousands) | Shares Remaining Under Repurchase Authorization | | :-------------------------------------------------------- | :--------------------------------- | :-------------------------------------- | :---------------------------------------------- | | Under 2020 Program | 1,834,846 | $66,124 | 4,406,462 | - Cumulatively as of June 30, 2025, **10,593,538 shares** have been repurchased under the 2020 Program at an aggregate cost of **$649.7 million**[247](index=247&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to interest rate and foreign currency market risks [Interest Rate Risk](index=50&type=section&id=Interest%20Rate%20Risk) - The Company's exposure to interest rate risk primarily relates to its investment portfolio and potential variable-rate borrowings under its credit facility[249](index=249&type=chunk) - As of June 30, 2025, the Company had **$457.3 million** in cash and cash equivalents, primarily in short-maturity funds. Its outstanding long-term debt of **$865.4 million** has fixed interest rates, maturing between 2026 and 2030[250](index=250&type=chunk) [Foreign Currency Risk](index=50&type=section&id=Foreign%20Currency%20Risk) - The Company conducts business in several foreign markets (e.g., Canada, UK, EU, Japan) and is exposed to foreign currency risk from investments and intercompany debt in non-U.S. Dollar functional currencies[252](index=252&type=chunk) Foreign Exchange Losses | Foreign Exchange Losses (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Foreign exchange losses | $5,800 | $400 | $8,700 | $400 | Cumulative Translation Adjustments | Cumulative Translation Adjustments (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cumulative translation adjustments, net of tax | $18,800 | $(500) | $30,200 | $(7,000) | [Item 4. Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls and internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=51&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - The CEO and CFO concluded that the Company's disclosure controls and procedures were **effective** as of June 30, 2025[260](index=260&type=chunk) [Management's Report on Internal Control over Financial Reporting](index=51&type=section&id=Management's%20Report%20on%20Internal%20Control%20over%20Financial%20Reporting) - There have been **no changes** in the Company's internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[261](index=261&type=chunk) [PART II. OTHER INFORMATION](index=52&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part provides supplementary informatio

Financial Data and Key Metrics Changes - Q2 2025 revenues were $352.2 million, reflecting growth of nearly 10% compared to $320.8 million in the prior year period [23] - Adjusted EBITDA for Q2 2025 was $107.7 million, up nearly 12% from $96.3 million in the prior year [23] - Adjusted diluted EPS increased to $1.24 from $1.18 in 2024, reflecting growth of more than 5% [23] - Adjusted EBITDA margin for the quarter was 30.6% [23] - Free cash flow for Q2 2025 was $26.9 million, 7.5% higher than the prior year period [32] Business Line Data and Key Metrics Changes - Four of the five reportable segments grew in revenues in Q2 2025, with the Digital Media segment growing nearly 13% [8] - Tech and Shopping's revenues grew over 11%, with adjusted EBITDA growth of over 5% [9] - Gaming and Entertainment revenues grew nearly 8%, with adjusted EBITDA growth of almost 24% [10] - Health and Wellness revenues increased nearly 16%, with adjusted EBITDA up 11% [11] - Connectivity revenues were up over 14%, with adjusted EBITDA growth of over 12% [13] - Cybersecurity and Martech segment's revenue declined less than 1% but posted over 5% adjusted EBITDA growth [15] Market Data and Key Metrics Changes - Advertising and performance marketing revenues grew 15.5% year over year, while subscription and licensing revenues grew by 5% [25] - Other revenues declined by $2.2 million year over year, primarily due to a decline in the contribution from the Hungable Games publishing business [26] Company Strategy and Development Direction - The company is committed to repurchasing shares and has completed five tuck-in acquisitions in the first half of the year [7] - The focus remains on identifying and integrating durable high-quality assets while maintaining a disciplined approach to capital allocation [20] - The company aims for double-digit total revenue growth, with expectations of mid-30s adjusted EBITDA margins in the long term [51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Cybersecurity and Martech segment returning to growth in Q3 [8] - The company anticipates at least mid-single-digit revenue growth for both Q3 and Q4 2025, with Q4 potentially being stronger than Q3 [31] - Health and Wellness and Connectivity businesses are expected to be the largest contributors to second-half growth [31] Other Important Information - The company has a healthy balance sheet with $457 million in cash and cash equivalents and $140 million in long-term investments [27] - The company has repurchased nearly 1.4 million shares since the beginning of Q2 2025, totaling over $170 million since June 30, 2024 [29] Q&A Session Summary Question: What are you hoping to communicate to the market regarding intrinsic value versus current public market valuation? - Management hopes investors will assess each of the five segments, noting that four segments collectively grew 13% and that there are differing levels of growth and margin profiles [36][38] Question: Can you update us on trends in the ad market? - The ad business grew a little over 15%, with health and wellness being very strong and gaming up mid-teens [44][50] Question: Can you unpack the incremental EBITDA margin and any factors affecting it? - Management indicated that there are no specific changes in cost structure affecting margins, and advised looking at performance over multiple quarters for a clearer picture [55][60] Question: What are the trends in health and wellness advertising participation? - The increase in advertiser participation is attributed to expanding beyond pharma to include more health and wellness brands [80][82]

Financial Performance - Ziff Davis' Q2 2025 revenues increased by 9.8% to $352.2 million, compared to $320.8 million in Q2 2024 [15] - Adjusted EBITDA for Q2 2025 was $107.7 million, an 11.8% increase from $96.3 million in Q2 2024 [15] - Adjusted diluted EPS increased by 5.1% from $1.18 in Q2 2024 to $1.24 in Q2 2025 [15] Revenue Breakdown - Advertising and Performance Marketing revenue increased by 15.5%, from $170 million in Q2 2024 to $197 million in Q2 2025 [20] - Subscription and Licensing revenue increased by 5.0%, from $142 million in Q2 2024 to $149 million in Q2 2025 [20] Segment Performance - Technology & Shopping segment revenue increased by 11.3%, from $72.5 million in Q2 2024 to $80.8 million in Q2 2025 [26] - Gaming & Entertainment segment revenue increased by 7.5%, from $43.0 million in Q2 2024 to $46.2 million in Q2 2025 [32] - Health & Wellness segment revenue increased by 15.7%, from $86.0 million in Q2 2024 to $99.5 million in Q2 2025 [39] - Connectivity segment revenue increased by 14.2%, from $50.3 million in Q2 2024 to $57.4 million in Q2 2025 [45] - Cybersecurity & Martech segment revenue decreased by 0.9%, from $69.0 million in Q2 2024 to $68.3 million in Q2 2025 [52] Financial Guidance - Ziff Davis reaffirmed its FY 2025 revenue guidance with a midpoint of $1.472 billion, representing a 5.0% year-over-year increase [63] - Adjusted EBITDA guidance midpoint is $523 million, a 6.0% increase year-over-year [63] - Adjusted diluted EPS guidance midpoint is $6.96, a 5.1% increase year-over-year [63]

Core Insights - Ziff Davis reported quarterly earnings of $1.24 per share, exceeding the Zacks Consensus Estimate of $1.22 per share, and showing an increase from $1.18 per share a year ago, resulting in an earnings surprise of +1.64% [1] - The company achieved revenues of $352.21 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.61% and up from $320.8 million year-over-year [2] - Ziff Davis has consistently outperformed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The future performance of Ziff Davis shares will largely depend on management's commentary during the earnings call and the sustainability of the stock's price movement based on recent earnings and future expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.79 on revenues of $365.91 million, and for the current fiscal year, it is $6.98 on revenues of $1.46 billion [7] Industry Context - The Internet - Software industry, to which Ziff Davis belongs, is currently ranked in the top 32% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

[Executive Summary](index=1&type=section&id=1.%20Executive%20Summary) Ziff Davis reported strong Q2 2025 financial results, exceeding expectations with significant revenue and Adjusted EBITDA growth, alongside strategic capital deployment [CEO Commentary](index=1&type=section&id=1.1.%20CEO%20Commentary) CEO Vivek Shah noted Q2 2025 results exceeded expectations, marking the strongest quarterly revenue growth since 2021, with strong performance in Connectivity and Health & Wellness - Q2 2025 results **exceeded expectations** and marked the **strongest quarterly revenue growth since 2021**[2](index=2&type=chunk) - New segment reporting provides **greater transparency** into key businesses[2](index=2&type=chunk) - Connectivity and Health & Wellness businesses achieved **breakthrough results**[2](index=2&type=chunk) [Q2 2025 Financial Highlights](index=1&type=section&id=1.2.%20Q2%202025%20Financial%20Highlights) Ziff Davis reported Q2 2025 revenue growth of 9.8% to $352.2 million and Adjusted EBITDA growth of 11.8% to $107.7 million, despite a decrease in GAAP net income | Metric | Q2 2025 | Q2 2024 | % Change | | :-------------------------------- | :-------- | :-------- | :------- | | Revenues | $352.2M | $320.8M | 9.8% | | Income from operations | $33.5M | $28.6M | 17.2% | | Net income | $26.3M | $36.9M | (28.6)% | | Net income per diluted share | $0.62 | $0.77 | (19.5)% | | Adjusted EBITDA | $107.7M | $96.3M | 11.8% | | Adjusted diluted EPS | $1.24 | $1.18 | 5.1% | | Net cash provided by operating activities | $57.1M | $50.6M | 12.9% | | Free cash flow | $26.9M | $25.1M | 7.5% | - Ziff Davis deployed approximately **$11.4 million** for acquisitions and **$33.9 million** for share repurchases in Q2 2025[5](index=5&type=chunk) [Consolidated Financial Performance](index=1&type=section&id=2.%20Consolidated%20Financial%20Performance) The company's Q2 2025 financial results show strong revenue and operating income growth, but mixed net income performance and a significant decrease in year-to-date operating cash flow [Summary Financial Results (Q2 and YTD)](index=1&type=section&id=2.1.%20Summary%20Financial%20Results%20(Q2%20and%20YTD)) Ziff Davis reported Q2 and YTD 2025 revenue growth of 9.8% and 7.2% respectively, with increased operating income and Adjusted EBITDA, but Q2 GAAP net income decreased by 28.6% | Metric | Q2 2025 | Q2 2024 | % Change | YTD 2025 | YTD 2024 | % Change | | :-------------------------------- | :-------- | :-------- | :------- | :--------- | :--------- | :------- | | Total revenues | $352.2M | $320.8M | 9.8% | $680.8M | $635.3M | 7.2% | | Income from operations | $33.5M | $28.6M | 17.2% | $68.6M | $64.4M | 6.5% | | Operating income margin | 9.5% | 8.9% | 0.6% | 10.1% | 10.1% | —% | | Net income | $26.3M | $36.9M | (28.6)% | $50.6M | $47.5M | 6.4% | | Net income per diluted share | $0.62 | $0.77 | (19.5)% | $1.19 | $1.02 | 16.7% | | Adjusted EBITDA | $107.7M | $96.3M | 11.8% | $207.8M | $197.0M | 5.5% | | Adjusted EBITDA margin | 30.6% | 30.0% | 0.6% | 30.5% | 31.0% | (0.5)% | | Adjusted net income | $51.6M | $53.7M | (3.9)% | $100.6M | $112.2M | (10.4)% | | Adjusted diluted EPS | $1.24 | $1.18 | 5.1% | $2.38 | $2.45 | (2.9)% | | Net cash provided by operating activities | $57.1M | $50.6M | 12.9% | $77.7M | $126.1M | (38.4)% | | Free cash flow | $26.9M | $25.1M | 7.5% | $21.9M | $72.5M | (69.7)% | [Condensed Consolidated Balance Sheets](index=4&type=section&id=2.2.%20Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$3.52 billion** as of June 30, 2025, driven by lower cash and accounts receivable, while total liabilities decreased by **$216.7 million** | Balance Sheet Item | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :--------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | | Cash and cash equivalents | $457,259 | $505,880 | $(48,621) | | Accounts receivable, net | $523,008 | $660,223 | $(137,215) | | Total current assets | $1,102,471 | $1,272,069 | $(169,598) | | Goodwill | $1,619,482 | $1,580,258 | $39,224 | | TOTAL ASSETS | $3,519,410 | $3,704,334 | $(184,924) | | Total current liabilities | $692,839 | $899,647 | $(206,808) | | Long-term debt | $865,380 | $864,282 | $1,098 | | TOTAL LIABILITIES | $1,676,751 | $1,893,452 | $(216,701) | | TOTAL STOCKHOLDERS' EQUITY | $1,842,659 | $1,810,882 | $31,777 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=2.3.%20Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenues grew 9.8% to **$352.2 million**, but net income decreased by **28.6%** to **$26.3 million** due to higher interest expense and other net losses, despite a gain on investments | Statement of Operations Item (in thousands) | Q2 2025 | Q2 2024 | % Change (QoQ) | YTD 2025 | YTD 2024 | % Change (YoY) | | :------------------------------------------ | :-------- | :-------- | :------------- | :--------- | :--------- | :------------- | | Total revenues | $352,209 | $320,800 | 9.8% | $680,845 | $635,285 | 7.2% | | Total operating costs and expenses | $318,726 | $292,231 | 9.1% | $612,232 | $570,855 | 7.2% | | Income from operations | $33,483 | $28,569 | 17.2% | $68,613 | $64,430 | 6.5% | | Interest expense, net | $(6,523) | $(1,804) | 261.6% | $(12,654) | $(3,573) | 254.2% | | Gain (loss) on investments, net | $4,340 | $3,051 | 42.2% | $4,340 | $(7,654) | N/A | | Other (loss) income, net | $(5,786) | $5,267 | N/A | $(8,589) | $5,163 | N/A | | Net income | $26,343 | $36,910 | (28.6)% | $50,582 | $47,537 | 6.4% | | Diluted EPS | $0.62 | $0.77 | (19.5)% | $1.19 | $1.02 | 16.7% | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=2.4.%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) YTD 2025 net cash from operating activities decreased **38.4%** to **$77.7 million**, mainly due to lower accounts payable, while investing and financing cash outflows also decreased | Cash Flow Item (in thousands) | YTD 2025 | YTD 2024 | % Change (YoY) | | :------------------------------------ | :--------- | :--------- | :------------- | | Net cash provided by operating activities | $77,687 | $126,122 | (38.4)% | | Net cash used in investing activities | $(71,600) | $(83,140) | 13.9% | | Net cash used in financing activities | $(66,888) | $(91,760) | 27.1% | | Net change in cash and cash equivalents | $(48,621) | $(50,378) | 3.5% | | Cash and cash equivalents at end of period | $457,259 | $687,234 | (33.5)% | - A significant decrease in accounts payable (decrease of **$231.1 million** in 2025 vs **$80.5 million** in 2024) significantly reduced net cash from operating activities[18](index=18&type=chunk) [Segment Performance Analysis](index=1&type=section&id=3.%20Segment%20Performance%20Analysis) Ziff Davis's Q2 2025 performance was driven by strong revenue and Adjusted EBITDA growth across most segments, particularly Health & Wellness and Connectivity [Revenue by Segment](index=1&type=section&id=3.1.%20Revenue%20by%20Segment) Q2 2025 total revenues increased by **9.8%**, with Health & Wellness leading growth at **15.7%** to **$99.5 million**, while Cybersecurity & Martech saw a slight decline | Segment | Q2 2025 Revenue (in millions) | Q2 2024 Revenue (in millions) | % Change (QoQ) | YTD 2025 Revenue (in millions) | YTD 2024 Revenue (in millions) | % Change (YoY) | | :------------------------ | :---------------------------- | :---------------------------- | :------------- | :----------------------------- | :----------------------------- | :------------- | | Technology & Shopping | $80.8 | $72.5 | 11.3% | $162.4 | $141.8 | 14.5% | | Gaming & Entertainment | $46.2 | $43.0 | 7.5% | $84.3 | $79.6 | 5.9% | | Health & Wellness | $99.5 | $86.0 | 15.7% | $185.2 | $166.0 | 11.6% | | Connectivity | $57.4 | $50.3 | 14.2% | $113.2 | $103.4 | 9.5% | | Cybersecurity & Martech | $68.3 | $69.0 | (0.9)% | $135.7 | $144.5 | (6.1)% | | **Total revenues** | **$352.2** | **$320.8** | **9.8%** | **$680.8** | **$635.3** | **7.2%** | [Adjusted EBITDA by Segment](index=10&type=section&id=3.2.%20Adjusted%20EBITDA%20by%20Segment) Consolidated Adjusted EBITDA grew **11.8%** to **$107.7 million** in Q2 2025, with Health & Wellness contributing the most at **$33.4 million** and Gaming & Entertainment showing the highest percentage growth | Segment | Q2 2025 Adjusted EBITDA (in thousands) | Q2 2024 Adjusted EBITDA (in thousands) | % Change (QoQ) | | :------------------------ | :----------------------------------- | :----------------------------------- | :------------- | | Technology & Shopping | $18,266 | $17,345 | 5.3% | | Gaming & Entertainment | $15,189 | $12,282 | 23.7% | | Health & Wellness | $33,439 | $30,115 | 11.0% | | Connectivity | $27,152 | $24,160 | 12.4% | | Cybersecurity & Martech | $23,369 | $22,165 | 5.4% | | Corporate | $(9,761) | $(9,803) | 0.4% | | **Adjusted EBITDA (Total)** | **$107,654** | **$96,264** | **11.8%** | [Fiscal Year 2025 Guidance](index=2&type=section&id=4.%20Fiscal%20Year%202025%20Guidance) Ziff Davis reaffirmed its 2025 guidance, projecting revenues between **$1,442 million** and **$1,502 million**, Adjusted EBITDA between **$505 million** and **$542 million**, and Adjusted diluted EPS between **$6.64** and **$7.28** | Metric | 2025 Low Estimate (in millions) | 2025 High Estimate (in millions) | | :------------------ | :------------------------------ | :------------------------------- | | Revenues | $1,442 | $1,502 | | Adjusted EBITDA | $505 | $542 | | Adjusted diluted EPS | $6.64 | $7.28 | - The anticipated Adjusted effective tax rate for 2025 will be between **23.25%** and **25.25%**[7](index=7&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=7&type=section&id=5.%20Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section details the definitions and reconciliations of non-GAAP financial measures, including Adjusted EBITDA, Adjusted net income, and Free cash flow, to their most comparable GAAP measures [Non-GAAP Definitions and Rationale](index=7&type=section&id=5.1.%20Non-GAAP%20Definitions%20and%20Rationale) Ziff Davis uses non-GAAP measures like Adjusted EBITDA, Adjusted net income, and Free cash flow to provide a clearer view of core operations and facilitate period-to-period comparisons - Non-GAAP financial measures aid in **financial and operational decision-making**, period-to-period comparisons, and performance assessment[20](index=20&type=chunk) - Adjusted EBITDA is defined as Net income (loss) adjusted for items such as interest expense, taxes, depreciation, amortization, share-based compensation, and acquisition costs[23](index=23&type=chunk) - Free cash flow is defined as Net cash from operating activities, less purchases of property and equipment, plus changes in contingent consideration[25](index=25&type=chunk) [Reconciliation of Net Income to Adjusted EBITDA](index=9&type=section&id=5.2.%20Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) Q2 2025 Adjusted EBITDA of **$107.7 million** was reconciled from GAAP Net Income of **$26.3 million** by adding back depreciation, amortization, share-based compensation, and interest expense | Adjustment Item (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------ | :-------- | :-------- | :--------- | :--------- | | Net income (GAAP) | $26,343 | $36,910 | $50,582 | $47,537 | | Interest expense, net | $6,523 | $1,804 | $12,654 | $3,573 | | (Gain) loss on investment, net | $(4,340) | $(3,051) | $(4,340) | $7,654 | | Other loss (income), net | $5,786 | $(5,267) | $8,589 | $(5,163) | | Income tax expense | $4,286 | $6,990 | $12,873 | $15,221 | | Income from equity method investment, net of tax | $(5,115) | $(8,817) | $(11,745) | $(8,172) | | Depreciation and amortization | $57,606 | $52,141 | $113,438 | $100,594 | | Share-based compensation | $11,727 | $11,600 | $21,479 | $20,472 | | Acquisition, integration, and other costs | $3,987 | $3,837 | $3,430 | $10,103 | | Disposal related costs | — | $77 | $1 | $573 | | Lease asset impairments and other charges | $851 | $40 | $871 | $843 | | **Adjusted EBITDA** | **$107,654** | **$96,264** | **$207,832** | **$197,015** | [Reconciliation of Net Income to Adjusted Net Income](index=11&type=section&id=5.3.%20Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) Q2 2025 Adjusted net income was **$51.6 million**, reconciled from GAAP Net income of **$26.3 million** by adjusting for amortization, share-based compensation, acquisition costs, and investment gains | Adjustment Item (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------ | :-------- | :-------- | :--------- | :--------- | | Net income (GAAP) | $26,343 | $36,910 | $50,582 | $47,537 | | Interest, net | $61 | $17 | $122 | $12 | | Gain on sale of businesses | — | $(3,668) | — | $112 | | (Gain) loss on investments, net | $(4,340) | $(2,591) | $(4,340) | $7,077 | | Income from equity method investment, net of tax | $(5,115) | $(8,817) | $(11,745) | $(8,172) | | Amortization | $23,183 | $21,179 | $45,051 | $41,264 | | Share-based compensation | $7,842 | $9,421 | $17,658 | $17,207 | | Acquisition, integration, and other costs | $3,002 | $1,214 | $2,560 | $6,085 | | Disposal related costs | — | $60 | $1 | $432 | | Lease asset impairment and other charges | $656 | $14 | $683 | $657 | | Dilutive effect of the convertible debt | — | — | — | — | | **Adjusted net income** | **$51,632** | **$53,739** | **$100,572** | **$112,211** | | Adjusted diluted EPS | $1.24 | $1.18 | $2.38 | $2.45 | [Reconciliation of Net Cash from Operating Activities to Free Cash Flow](index=16&type=section&id=5.4.%20Reconciliation%20of%20Net%20Cash%20from%20Operating%20Activities%20to%20Free%20Cash%20Flow) YTD 2025 Free cash flow significantly decreased to **$21.9 million** from **$283.7 million** in the prior year, primarily due to a substantial reduction in net cash from operating activities | Cash Flow Item (in thousands) | Q1 2025 | Q2 2025 | YTD 2025 | Q1 2024 | Q2 2024 | YTD 2024 | | :------------------------------------ | :-------- | :-------- | :--------- | :-------- | :-------- | :--------- | | Net cash provided by operating activities | $20,613 | $57,074 | $77,687 | $75,558 | $50,564 | $126,122 | | Less: Purchases of property and equipment | $(25,619) | $(30,133) | $(55,752) | $(28,129) | $(25,504) | $(106,635) | | **Free cash flow** | **$(5,006)** | **$26,941** | **$21,935** | **$47,429** | **$25,060** | **$283,680** | [Additional Company Information](index=2&type=section&id=6.%20Additional%20Company%20Information) This section provides an overview of Ziff Davis, details for its earnings conference call, and a safe harbor statement regarding forward-looking information [About Ziff Davis](index=2&type=section&id=6.1.%20About%20Ziff%20Davis) Ziff Davis, Inc. (NASDAQ: ZD) is a vertically focused digital media and internet company with a diverse portfolio across multiple sectors - Ziff Davis is a **vertically focused digital media and internet company**[10](index=10&type=chunk) - Its portfolio includes leading brands in technology, shopping, gaming, entertainment, health, wellness, connectivity, cybersecurity, and martech sectors[10](index=10&type=chunk) [Earnings Conference Call](index=2&type=section&id=6.2.%20Earnings%20Conference%20Call) Ziff Davis will host a live audio webcast and conference call on Thursday, August 7, 2025, at 8:30 AM ET to discuss Q2 2025 financial results - A live audio webcast and conference call is scheduled for **Thursday, August 7, 2025, at 8:30 AM ET**[9](index=9&type=chunk) - Access is available by phone or via **www.ziffdavis.com**[9](index=9&type=chunk) [Safe Harbor Statement](index=2&type=section&id=6.3.%20Safe%20Harbor%20Statement) The press release includes forward-looking statements, such as CEO quotes and 2025 guidance, which are subject to risks and uncertainties that could cause actual results to differ materially - Certain statements, including the CEO's quote and fiscal 2025 guidance, are **forward-looking statements** under the Private Securities Litigation Reform Act of 1995[11](index=11&type=chunk) - These statements are subject to numerous assumptions, risks, and uncertainties that could cause **actual results to differ materially**[11](index=11&type=chunk) - Risk factors include the Company's ability to grow revenues, profitability, cash flows, economic conditions, acquisitions, competition, and regulatory changes[11](index=11&type=chunk)[13](index=13&type=chunk)