Company Overview - Ziff Davis, Inc. is a New York-based digital media conglomerate operating across five verticals: Technology & Shopping, Gaming & Entertainment, Health & Wellness, Connectivity, and Cybersecurity & Martech [2] - The company generated $1.4 billion in revenue in 2024, with $494 million in Adjusted EBITDAS (35% margin) and $346 million in Adjusted EBITA (25% margin) [2] - Ziff Davis has a market capitalization of $1.31 billion and net debt of $267 million [2] Business Strategy - Under CEO Vivek Shah, Ziff Davis has pursued an acquisitive strategy, completing over 90 acquisitions in 30 years, focusing on high-ROIC, niche digital assets that generate recurring revenues [3] - Approximately 40% of total revenue comes from advertising and subscription/licensing [3] - The company emphasizes disciplined capital allocation, reinvesting free cash flow into acquisitions, opportunistic share repurchases, and maintaining low leverage [3] Financial Performance - Ziff Davis trades at compelling multiples: 2.8x Adjusted EBITDAS, 3.9x Adjusted EBITA, and 5x Adjusted EPS, reflecting a significant discount to intrinsic value [3] - The management's track record of consistent returns on invested capital and aggressive share repurchases suggests the market is undervaluing the business [4] - Organic growth has shown improvement over recent years, and insider buying signals confidence in the company's future [4] Investment Thesis - The investment case for Ziff Davis is supported by strong free cash flow generation, competent management, and potential for value recognition through operational performance or eventual M&A [4] - The stock price has appreciated approximately 10.44% since previous coverage, reinforcing the thesis of undervaluation and high-margin stability [5] - The focus on segment-level performance, ROIC, and long-term acquisitive strategy is central to the company's value proposition [5]

Summary of Ziff Davis (ZD) FY Conference Call - May 14, 2025 Company Overview - Ziff Davis has built a portfolio through systematic acquisitions and growth in digital media and internet businesses, focusing on value creation across five vertical categories [4][14] - The company aims for organic growth and growth through acquisitions, with a diversified business model including advertising, subscription, and licensing revenue [4] Financial Performance - Reported a revenue growth of 5% in the quarter, with the Digital Media segment growing 9% [5] - Reaffirmed guidance for mid-single-digit growth across revenue, EBITDA, and EPS for the year [5] - Strong M&A activity expected to continue, with a healthy balance sheet [6] Advertising and Market Trends - Advertising revenues increased by 12% in Q1, with strong performance across tech, shopping, health, and gaming categories [7][11] - Health and wellness sector driven by a strong FDA drug pipeline, while gaming benefits from upcoming console releases [8][9] - Concerns about tariffs affecting the tech and shopping categories, but no immediate signs of impact observed [10][11] Segment Analysis Technology and Shopping - The CNET Group and RetailMeNot segment grew 14% in revenue and 44% in adjusted EBITDA, driven by organic growth and margin expansion [21] - B2B businesses have been a drag on growth but are now profitable [22] Gaming and Entertainment - IGN Entertainment segment grew mid-single digits, with strong advertising growth but some challenges in subscription offerings [26][28] - Anticipated growth from new gaming IP and streaming platforms [30] Health and Wellness - Everyday Health Group showed mid to high single-digit revenue growth and double-digit EBITDA growth, benefiting from a favorable pharma advertising environment [32][34] Connectivity - Ookla segment maintained flat revenue despite a 25% decline in wireless access point sales industry-wide, with expectations for growth as Wi-Fi 7 is introduced [41][42] Cybersecurity and Martech - This segment declined due to tough year-over-year comparisons, but there is optimism for sequential growth throughout the year [44][46] AI and Intellectual Property - Ziff Davis filed a lawsuit against OpenAI for unauthorized use of its content, emphasizing the need for compensation for IP usage [47][49] - 35% of the company's revenues are web traffic-based, with 40% of that from search, indicating a diversified revenue model [51][52] M&A Strategy - The company is focused on tuck-in acquisitions that are synergistic with existing businesses, with a robust pipeline across all segments [63][64] - Historical targets include 20% cash-on-cash returns and maintaining a gross debt to EBITDA ratio of three times [66] Market Outlook - The company is optimistic about returning to organic growth and a consistent M&A cadence, with all segments positioned for potential growth [76][78] - The management believes that the current market valuation does not reflect the company's performance and potential [68][70] Conclusion - Ziff Davis is positioned for growth across its diversified portfolio, with strong financial performance and a proactive approach to M&A and market challenges [80][81]