Financial Data and Key Metrics Changes - Q3 2025 revenues were $363.7 million, reflecting growth of nearly 3% compared to $353.6 million in Q3 2024 [16] - Adjusted EBITDA for Q3 2025 was $124.1 million, a slight decline of less than 1% from $124.7 million in the prior year [17] - Adjusted diluted EPS increased by more than 7% to $1.76 from $1.64 in Q3 2024, driven by share buybacks [17][25] Business Line Data and Key Metrics Changes - Tech and shopping revenue dropped 2% in Q3, with adjusted EBITDA down 12%, primarily due to the wind down of game publishing activities [8][20] - Health and wellness segment saw a 13% year-over-year revenue growth and 18% adjusted EBITDA growth, marking high watermarks for the division [10] - Cybersecurity and martech revenue grew 2% in Q3, driven by strong performance in consumer VPN and cloud backup [12] Market Data and Key Metrics Changes - Connectivity division delivered 2% year-over-year revenue growth, with year-to-date revenues up 7% [11] - Gaming and entertainment revenues were about 4% lower year-over-year, but adjusted EBITDA grew nearly 3% [9] - Advertising and performance marketing revenues grew 5.9% year-over-year, while subscription and licensing revenues grew by 2% [18] Company Strategy and Development Direction - The company is evaluating potential opportunities to unlock shareholder value, engaging outside advisors for this purpose [5][6] - There is a focus on maximizing value for shareholders while maintaining a profitable and growing business structure [6][7] - The company aims to continue its acquisition program while also engaging in share buybacks to capitalize on perceived valuation disconnects [15][23] Management's Comments on Operating Environment and Future Outlook - Management noted that the disconnect between the current market value and intrinsic value is at its widest, prompting a strategic review [31] - The company remains optimistic about its performance despite industry headwinds, particularly in segments like health and wellness [55] - Management anticipates that fiscal year 2025 results will fall within the lower half of the guidance range, with Q4 expected to be the largest revenue quarter [24] Other Important Information - The company has significant cash reserves of $503.4 million and long-term investments of $119.6 million, with a gross leverage of 1.7x trailing 12 months adjusted EBITDA [22] - Year-to-date free cash flow was $261.2 million, indicating strong cash generation capabilities [25] - The company has repurchased over 3.6 million shares since the start of 2025, deploying $109 million in share buybacks [23] Q&A Session Summary Question: What are the thoughts on valuation disconnects? - Management believes the disconnect between current and intrinsic value is at its widest, with interest from strategic and private equity investors [31][32] Question: Are there any properties considered off-limits for divesting? - Management stated that nothing is off the table, but exploring opportunities for select units is likely to be more value-accretive than considering the entire company [38][39] Question: How is the company positioned regarding AI search impacts? - Management indicated that the company is well-positioned and insulated from fluctuations in search traffic, with only 17.5% of revenue exposure coming from search [40] Question: What is the outlook for advertising growth in Q4? - Management expects subscription growth to outpace advertising growth in Q4, with some softness in product launches impacting advertising [58] Question: What are the M&A opportunities in the current market? - Management sees potential for aggressive acquisitions of smaller dislocated properties, balancing share buybacks and acquisitions [65][66] Question: Is there a shift towards targeting different growth profiles in M&A? - Management emphasized a continued focus on cash-on-cash returns and free cash flow, without signaling a change in their acquisition strategy [81][83]

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