j2 Global(ZD) - 2025 Q1 - Quarterly Results

Financial Performance First Quarter 2025 Financial Highlights Ziff Davis reported a 4.5% revenue increase to $328.6 million in Q1 2025, with net income up 128.1% to $24.2 million, though Adjusted EBITDA slightly decreased and free cash flow turned negative - CEO Vivek Shah expressed satisfaction with Q1 performance, which surpassed internal targets, citing accelerating revenue growth, a healthy M&A cadence, and an active share buyback program as reasons for optimism for the rest of the year[2] Q1 2025 vs Q1 2024 Financial Results (in millions, except per share amounts) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $328.6 | $314.5 | 4.5% | | Income from operations | $35.1 | $35.9 | (2.0)% | | Net income | $24.2 | $10.6 | 128.1% | | Net income per diluted share | $0.56 | $0.23 | 143.5% | | Adjusted EBITDA | $100.2 | $100.8 | (0.6)% | | Adjusted diluted EPS | $1.14 | $1.27 | (10.2)% | | Net cash provided by operating activities | $20.6 | $75.6 | (72.7)% | | Free cash flow | $(5.0) | $47.4 | (110.6)% | Q1 2025 Revenue by Segment (in millions) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | Technology & Shopping | $81.7 | $69.3 | 17.9% | | Gaming & Entertainment | $38.0 | $36.6 | 3.8% | | Health & Wellness | $85.8 | $80.0 | 7.3% | | Connectivity | $55.8 | $53.1 | 5.0% | | Cybersecurity & Martech | $67.3 | $75.5 | (10.8)% | - During Q1 2025, the company deployed approximately $39.2 million for acquisitions and $34.9 million for share repurchases[5] Fiscal Year 2025 Guidance Ziff Davis reaffirmed its full-year 2025 guidance, projecting revenues between $1.44 billion and $1.50 billion, and Adjusted EBITDA between $505 million and $542 million Fiscal Year 2025 Guidance (in millions, except per share data) | Metric | Low Estimate | High Estimate | | :--- | :--- | :--- | | Revenues | $1,442 | $1,502 | | Adjusted EBITDA | $505 | $542 | | Adjusted diluted EPS | $6.64 | $7.28 | - The Adjusted effective tax rate for 2025 is anticipated to be between 23.25% and 25.25%[7] Consolidated Financial Statements Condensed Consolidated Balance Sheets As of March 31, 2025, Ziff Davis reported total assets of $3.52 billion, a decrease from $3.70 billion, primarily due to reduced cash and accounts receivable, while total liabilities also decreased Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $431,007 | $505,880 | | Total current assets | $1,072,319 | $1,272,069 | | TOTAL ASSETS | $3,515,875 | $3,704,334 | | Total current liabilities | $704,774 | $899,647 | | Long-term debt | $864,829 | $864,282 | | TOTAL LIABILITIES | $1,694,510 | $1,893,452 | | TOTAL STOCKHOLDERS' EQUITY | $1,821,365 | $1,810,882 | Condensed Consolidated Statements of Operations Total revenues grew to $328.6 million in Q1 2025, with net income significantly increasing to $24.2 million, positively impacted by an equity method investment and absence of prior year's investment loss Statement of Operations Summary (in thousands) | Line Item | Three months ended Mar 31, 2025 | Three months ended Mar 31, 2024 | | :--- | :--- | :--- | | Total revenues | $328,636 | $314,485 | | Total operating costs and expenses | $293,506 | $278,624 | | Income from operations | $35,130 | $35,861 | | Income before income tax expense | $26,196 | $19,503 | | Net income | $24,239 | $10,627 | | Diluted EPS | $0.56 | $0.23 | Condensed Consolidated Statements of Cash Flows Net cash from operating activities significantly decreased to $20.6 million in Q1 2025, leading to negative free cash flow, primarily due to working capital changes Cash Flow Summary (in thousands) | Cash Flow Activity | Three months ended Mar 31, 2025 | Three months ended Mar 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $20,613 | $75,558 | | Net cash used in investing activities | $(64,829) | $(71,481) | | Net cash used in financing activities | $(35,006) | $(6,311) | | Net change in cash and cash equivalents | $(74,873) | $(2,833) | | Cash and cash equivalents at end of period | $431,007 | $734,779 | Non-GAAP Financial Measures and Reconciliations Explanation of Non-GAAP Financial Measures The company uses non-GAAP measures like Adjusted EBITDA, Adjusted net income, and Free cash flow to provide insights into core business performance by excluding non-cash or non-recurring items - The company uses non-GAAP measures for internal financial and operational decision-making, period-to-period comparisons, and determining annual incentive compensation for executives[21] - Key non-GAAP measures are defined as follows: - Adjusted EBITDA: Net income adjusted for items like interest, taxes, D&A, share-based compensation, and acquisition costs - Adjusted net income: Net income adjusted for items like amortization, share-based compensation, and acquisition costs - Free cash flow: Net cash from operating activities less purchases of property and equipment[24][25][26] Reconciliation of GAAP to Non-GAAP Measures This section details reconciliations from GAAP to non-GAAP metrics, adjusting for items like depreciation, amortization, share-based compensation, and acquisition costs to bridge Net Income to Adjusted EBITDA and Adjusted Net Income, and operating cash flow to Free Cash Flow Reconciliation of Net Income to Adjusted EBITDA For Q1 2025, Net Income of $24.2 million was reconciled to Adjusted EBITDA of $100.2 million, with major adjustments including depreciation, amortization, and share-based compensation, offset by equity method investment income Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $24,239 | $10,627 | | Depreciation and amortization | $55,832 | $48,453 | | Share-based compensation | $9,752 | $8,872 | | (Income) loss from equity method investments, net of tax | $(6,630) | $645 | | Loss on investment, net | — | $10,705 | | Other adjustments | $17,585 | $21,159 | | Adjusted EBITDA | $100,178 | $100,751 | Q1 2025 Adjusted EBITDA by Segment (in thousands) | Segment | Revenues | Adjusted EBITDA | | :--- | :--- | :--- | | Technology & Shopping | $81,690 | $21,006 | | Gaming & Entertainment | $38,026 | $12,146 | | Health & Wellness | $85,786 | $29,355 | | Connectivity | $55,820 | $28,059 | | Cybersecurity & Martech | $67,314 | $22,178 | | Corporate | — | $(12,566) | | Total | $328,636 | $100,178 | Reconciliation of Net Income to Adjusted Net Income GAAP Net Income of $24.2 million ($0.56 per diluted share) was adjusted to a non-GAAP Adjusted Net Income of $48.9 million ($1.14 per diluted share) for Q1 2025, primarily by adding back amortization and share-based compensation Reconciliation of Net Income to Adjusted Net Income (in thousands, except per share) | Description | Q1 2025 | Per diluted share | Q1 2024 | Per diluted share | | :--- | :--- | :--- | :--- | :--- | | Net income | $24,239 | $0.56 | $10,627 | $0.23 | | Amortization | $21,868 | $0.51 | $20,085 | $0.44 | | Share-based compensation | $9,816 | $0.23 | $7,786 | $0.17 | | (Income) loss from equity method investment, net of tax | $(6,630) | $(0.16) | $645 | $0.01 | | Other adjustments | $(353) | $(0.01) | $19,329 | $0.42 | | Adjusted net income | $48,940 | $1.14 | $58,472 | $1.27 | Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow In Q1 2025, net cash from operating activities of $20.6 million resulted in a negative Free Cash Flow of $(5.0) million after accounting for property and equipment purchases, a significant decline from Q1 2024 Free Cash Flow Reconciliation (in thousands) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $20,613 | $75,558 | | Less: Purchases of property and equipment | $(25,619) | $(28,129) | | Free cash flow | $(5,006) | $47,429 |