Summary of Ziff Davis Conference Call Company Overview - Ziff Davis is a digital media and internet company with a portfolio of content and ad-supported brands, subscription-supported software brands, and subscription-supported data businesses [4][5] - The company has a history of growth through systematic acquisitions over the past 15 years [4] Financial Performance and Strategic Initiatives - Approximately 60% of Ziff Davis's revenue comes from advertising, with the remainder from subscriptions and licensing [4] - The company is currently exploring value-creating opportunities, including potential divestitures, due to a perceived disconnect between its market valuation and intrinsic value [5][8] - Ziff Davis is trading at roughly three to four times EBITDA, despite having strong growth and margins [7][8] Segment Performance - **Health and Wellness**: This is the largest segment, showing a 13% top-line growth in Q3 and 18% adjusted EBITDA growth. The segment benefits from a robust pharma market and digital commercialization trends [11][12] - **Connectivity**: The Ookla business, which includes Speedtest, is undergoing a reset with new leadership and is expected to return to growth, projecting a low double-digit growth rate for the upcoming year [13][14] - **Cybersecurity and MarTech**: The cybersecurity segment, including Viper and IPVanish, is returning to growth, although it has taken longer than expected [15] - **Tech and Shopping**: This segment experienced a decline in Q3, primarily due to winding down a part of the business, but is expected to stabilize [15][16] - **Gaming and Entertainment**: This segment is characterized by volatility due to game release cycles but remains a strong brand with IGN Entertainment [17] AI and Market Trends - Ziff Davis generates about one-third of its revenue from web traffic, with search-related revenue accounting for mid-teens percentage of total revenue [23] - The company is observing increased search volume driven by AI, but also significant volatility in search rankings, which impacts traditional publishers [24][25] - Ziff Davis is focused on maintaining trust in content quality amidst the rise of AI-generated content [26] Product Development and Innovation - Ziff Davis is integrating AI into its products, such as the Lose It app, which uses visual technology for food logging, enhancing user engagement and retention [28][29] - The company is developing AI-based insight and ad platforms, leveraging audience signals for market research and ad targeting [30][34] Capital Allocation and M&A Strategy - Ziff Davis prioritizes M&A, having closed seven deals in the current year, while also investing heavily in stock buybacks [41][42] - The company is selective in M&A to ensure cash flow generation aligns with risk-reward profiles [41] - Recent investments in connectivity products aim to expand market presence and address customer needs [43][45] Conclusion - Ziff Davis is actively exploring ways to unlock value within its portfolio while maintaining a focus on growth through both organic and inorganic means. The company is optimistic about its segments, particularly health and wellness, and is strategically investing in AI and product development to enhance its market position [38][39][40]

Financial Data and Key Metrics Changes - Total company revenue declined about 3% year over year, primarily due to tough comparisons to last year's Paris Olympics, but excluding that impact, revenue increased nearly 3% driven by strong performance across six growth businesses [16][24] - EBITDA and adjusted EPS were consistent with last year, while free cash flow increased 45% to $4.9 billion [16][26] - Connectivity and platforms EBITDA declined by 3.7% this quarter, reflecting the costs associated with the strategic pivot [13][18] Business Line Data and Key Metrics Changes - Broadband subscribers declined by 104,000 in the quarter, with a deceleration in broadband ARPU growth resulting in 2.6% growth this quarter [19][20] - Wireless net additions hit a new record at 414,000, with nearly half of residential postpaid phone connects coming from customers taking a free line [21][88] - Business services revenue was up 6% and EBITDA grew by nearly 5% in the quarter, driven by advanced services like Cybersecurity Cloud Solutions [22] Market Data and Key Metrics Changes - The broadband environment remains intensely competitive, with a focus on simplifying pricing and improving customer experience [7][17] - The media segment, excluding the comparison to last year's Paris Olympics, saw revenue increase by 4%, with Peacock revenue growing at a mid-teens rate [24][102] Company Strategy and Development Direction - The company aims to be a winner in the multi-gig symmetrical broadband market, with a strategy focused on network, product, and customer experience [7][8] - A new pricing model has been introduced, simplifying offers and enhancing customer experience, which is expected to stabilize the broadband customer base [12][20] - The company is investing in sports content to enhance its media business, leveraging live sports to drive viewership and advertising revenue [14][102] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential despite near-term headwinds from the broadband repositioning and the onboarding of sports rights [28][52] - The leadership transition is seen as a positive step towards navigating the company's strategic pivot and achieving sustainable growth [31][33] Other Important Information - The company returned $2.8 billion to shareholders this quarter, including $1.5 billion in share repurchases and $1.2 billion in dividends [16][26] - The company maintains a healthy balance sheet, ending the quarter with net leverage at 2.3 times [27] Q&A Session Summary Question: Context around the evolution of ARPU and customer migration to new plans - Management indicated that due to investments, ARPU growth is unlikely in early 2026, but they are actively migrating customers to new pricing and packaging [42][46] Question: Anticipation of growth rate improvement in convergence - Management is optimistic about the growth rate improving as they continue to market new offers and promotions [44][50] Question: Trajectory of CMP EBITDA next year - Management acknowledged that investments in sales, marketing, and customer service are necessary to support the reset, which will impact EBITDA [60][68] Question: Speculation about Warner Brothers Discovery and implications for Verizon relationship - Management expressed confidence in the relationship with Verizon and emphasized that the bar is high for pursuing any M&A transactions [74][78] Question: Conversion of free wireless lines to pay next year - Management is focused on ensuring quality connections and has strategies in place to transition free lines to paid status effectively [84][88] Question: Advertising outlook and impact of programmatic - Management reported a strong advertising quarter, driven by sports, and noted the increasing use of programmatic and digital advertising [102][104]