j2 Global(ZD) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION 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 This section presents the unaudited condensed consolidated financial statements and accompanying notes for the reporting period Condensed Consolidated Balance Sheets (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) 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) 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) 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) 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) 1. Basis of Presentation and Overview 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][163] 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] - 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][32] 2. Revenues 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][36][40][188] 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] 3. Acquisitions 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][53] - 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] 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 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] - 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] - 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] 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 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] 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 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] 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 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] - 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] - 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] - 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] - 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] - As of June 30, 2025, availability under the Credit Agreement was $348.9 million, net of letters of credit[112] 8. Commitments and Contingencies 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] - 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] - 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] 9. Income Taxes 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][204] - 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][203] - 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] 10. Stockholders' Equity 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][246] 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][247] - 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] 11. Share-Based Compensation 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] - 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] - 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] 12. Earnings Per Share 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][141] 13. Segment Information 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][164] 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 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 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 This section provides management's perspective on financial performance, condition, liquidity, and capital resources for the reporting period Forward-Looking Information - 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][161] 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] Segments - The Company has five reportable segments: Technology & Shopping, Gaming & Entertainment, Health & Wellness, Connectivity, and Cybersecurity & Martech, with prior period information presented comparably[164] Revenues Overview - 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][167][168][169] 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 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] Critical Accounting Policies and Estimates - No significant changes to critical accounting policies and estimates occurred during the six months ended June 30, 2025[180] - 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] Results of Operations for the Three and Six Months Ended June 30, 2025 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] - 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] Direct costs 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] Sales and Marketing 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] - 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] Research, Development, and Engineering 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] - 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] General, Administrative, and Other Related Costs 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] - 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] Depreciation and Amortization 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] - 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] Non-Operating Income and Expenses 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] - 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] - Other (loss) income, net, saw a substantial negative change primarily attributable to fluctuations in foreign currency gains or losses[199] Income Taxes 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][204] - 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][204] - 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] Equity Method Investment 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] Segment Results Technology & Shopping 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][210] - 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][211] Gaming & Entertainment 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][215] - 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][216] Health & Wellness 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][221] - 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][221] 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][225] - 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][226] Cybersecurity & Martech 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][230] - 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][231] Liquidity and Capital Resources Cash, Cash Equivalents, and Investments 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] 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] - As of June 30, 2025, net availability under the Credit Agreement was $348.9 million[237] - 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] Material Cash Requirements - 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] - 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] Cash Flows 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] - 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] - Net cash used in financing activities decreased by $24.9 million, primarily due to a smaller amount of cash used for share repurchases[245] Stock Repurchase Program - 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] 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] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses the company's exposure to interest rate and foreign currency market risks Interest Rate Risk - The Company's exposure to interest rate risk primarily relates to its investment portfolio and potential variable-rate borrowings under its credit facility[249] - 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] Foreign Currency Risk - 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] 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 This section reports on the effectiveness of the company's disclosure controls and internal control over financial reporting Evaluation of Disclosure Controls and Procedures - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[260] Management's Report on Internal Control over Financial Reporting - 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] PART II. OTHER INFORMATION This part provides supplementary informatio