j2 Global(ZD) - 2025 Q2 - Quarterly Results

Executive Summary Ziff Davis reported strong Q2 2025 financial results, exceeding expectations with significant revenue and Adjusted EBITDA growth, alongside strategic capital deployment CEO Commentary 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] - New segment reporting provides greater transparency into key businesses[2] - Connectivity and Health & Wellness businesses achieved breakthrough results[2] Q2 2025 Financial Highlights 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] Consolidated Financial Performance 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) 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 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 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 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] Segment Performance Analysis 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 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 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 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] Non-GAAP Financial Measures and Reconciliations 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 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] - 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] - Free cash flow is defined as Net cash from operating activities, less purchases of property and equipment, plus changes in contingent consideration[25] Reconciliation of Net Income to Adjusted EBITDA 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 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 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 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 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] - Its portfolio includes leading brands in technology, shopping, gaming, entertainment, health, wellness, connectivity, cybersecurity, and martech sectors[10] Earnings Conference Call 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] - Access is available by phone or via **www.ziffdavis.com**[9](index=9&type=chunk) Safe Harbor Statement 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] - These statements are subject to numerous assumptions, risks, and uncertainties that could cause actual results to differ materially[11] - Risk factors include the Company's ability to grow revenues, profitability, cash flows, economic conditions, acquisitions, competition, and regulatory changes[11][13]