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]

Financial Data and Key Metrics Changes - Q3 2025 revenues were $363.7 million, reflecting growth of nearly 3% compared to $353.6 million in the prior year period [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, aided 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 - Year-to-date revenues in gaming and entertainment were up approximately 2%, with Q3 being Humble Bundle's best quarter of the year [9] - Connectivity division delivered 2% year-over-year revenue growth, with year-to-date revenues up 7% [11] - Advertising and performance marketing 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] - The focus remains on maximizing value for shareholders while continuing to operate the current profitable business structure [6] - The company is committed to a disciplined acquisition program and has closed seven acquisitions in the first nine months of 2025 [22][23] Management's Comments on Operating Environment and Future Outlook - Management noted that the disconnect between the current market value and intrinsic value of the company is at its widest [31] - The company anticipates fiscal year 2025 total revenues and adjusted diluted EPS to be within the lower half of its guidance range [24] - Management expressed optimism about the performance of various segments despite broader industry headwinds [56] 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 1.7 times trailing 12 months adjusted EBITDA [22] - Free cash flow for Q3 2025 was $108.2 million, 35% higher than the prior year period [25] Q&A Session Summary Question: Insights on valuation disconnect - Management acknowledged the valuation disconnect and noted that the recent segment-level reporting has attracted interest from strategic and private equity investors [30][32] Question: Strategic review and potential divestitures - Management stated that no specific properties are off-limits and that they are open to exploring opportunities for select units [38][39] Question: Impact of AI reviews on traffic - Management indicated that the company is well-positioned against fluctuations in search traffic, with only 17.5% of total revenue being web traffic dependent [40] Question: M&A opportunities and market dynamics - Management expressed interest in acquiring smaller dislocated properties and emphasized the balance between share buybacks and acquisitions [65] Question: Future growth and business model considerations - Management confirmed a preference for acquiring leadership brands and emphasized the importance of cash-on-cash returns in their investment strategy [81][82]

Financial Data and Key Metrics Changes - In Q3 2025, revenues increased to $363.7 million, up nearly 3% from $353.6 million in the prior year [16] - Adjusted EBITDA for Q3 2025 was $124.1 million, a slight decline of less than 1% from $124.7 million year-over-year [17] - Adjusted diluted EPS rose by more than 7% to $1.76 from $1.64 in Q3 2024, aided by share buybacks that reduced the weighted average diluted shares by 7.5% [17][25] Business Line Data and Key Metrics Changes - Tech and shopping revenue fell by 2% in Q3, with adjusted EBITDA down 12%, primarily due to the wind down of game publishing activities [8][19] - 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 by 2% in Q3, driven by strong performance in consumer VPN and cloud backup [12] Market Data and Key Metrics Changes - The connectivity division achieved 2% year-over-year revenue growth, with year-to-date revenues up 7% [11] - Gaming and entertainment revenues were approximately 4% lower year-over-year, but adjusted EBITDA grew nearly 3% [9] - Advertising and performance marketing revenues grew by 5.9% year-over-year, while subscription and licensing revenues increased by 2% [18] Company Strategy and Development Direction - The company is evaluating potential opportunities to unlock shareholder value, having engaged outside advisors for this purpose [4][5] - There is a focus on maximizing value for shareholders while maintaining a profitable and growing business structure [5][26] - The company is committed to a disciplined acquisition strategy, having closed seven acquisitions in the first nine months of 2025 [22][23] Management's Comments on Operating Environment and Future Outlook - Management noted that the disconnect between the current market value and intrinsic value of the company is at its widest [29] - The company anticipates fiscal year 2025 total revenues and adjusted diluted EPS to be within the lower half of its guidance range [24] - Management expressed optimism about the performance of various segments despite broader industry headwinds [39] 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 1.7 times trailing 12 months adjusted EBITDA [22] - Free cash flow for Q3 2025 was $108.2 million, representing a 35% increase year-over-year [25] - The company plans to continue its stock repurchase program, having repurchased 3 million shares year-to-date [23] Q&A Session Summary Question: Insights on valuation disconnect - Management acknowledged the valuation disconnect and noted that the recent segment-level disclosures have attracted interest from strategic and private equity investors [28][29] Question: Strategic review and potential divestitures - Management stated that no specific properties are off-limits for divestiture, but exploring opportunities for select units is likely to be more value-accretive [31] Question: Impact of AI on traffic and revenue - Management indicated that the company is well-positioned against fluctuations in search traffic, with only 35% of total revenue dependent on web traffic [32] Question: Future M&A opportunities - Management expressed optimism about acquiring smaller properties that may not have weathered recent market changes as well as continuing to buy back shares [44][45] Question: Philosophical shift in acquisitions - Management clarified that the focus remains on cash-on-cash returns and that there is no change in the overall approach to acquisitions [51]

Summary of Ziff Davis (ZD) 2025 Conference Call Company Overview - **Company**: Ziff Davis (ZD) - **Date**: September 03, 2025 - **Key Speakers**: Vivek Shah (CEO), Dan Stone (President of Health and Wellness) Key Points Business Segmentation - Ziff Davis has restructured its business into five operating divisions to provide better insights to investors about its operations and growth characteristics [6][5][3] - The five segments include: 1. **Health and Wellness**: Focuses on pharma commercialization and digital health, with a 16% growth in the last quarter [12][35] 2. **Connectivity**: Anchored by Ookla Group, providing data and analytics for broadband networks, with a 14% growth [12][8] 3. **Tech and Shopping**: Includes brands like CNET and RetailMeNot, driving e-commerce and affiliate sales [8] 4. **Cybersecurity and Martech**: High recurring revenue with emerging growth characteristics [9] 5. **Gaming and Entertainment**: Anchored by IGN, the fastest-growing segment in the entertainment industry [9] Financial Performance - In Q2, Ziff Davis reported a 10% increase in revenues and a 12% increase in adjusted EBITDA, marking the strongest quarter in a while [11] - Four out of five segments experienced growth, with Health and Wellness and Connectivity being the standout performers [12][11] - The company anticipates mid-single-digit growth for the second half of the year, with Q4 expected to outperform Q3 seasonally [15] Impact of Generative AI - Approximately 35% of Ziff Davis's revenue is web traffic dependent, with 40% of that traffic coming from search [20] - The company has diversified its monetization models beyond web traffic, including performance marketing, subscriptions, and licensing [20] - The rise of zero-click searches has been a concern, but Ziff Davis has adapted by diversifying its engagement strategies [22][24] - The company is engaged in a lawsuit against OpenAI regarding copyright and trademark violations, emphasizing the need for fair compensation for content usage [31] Health and Wellness Segment Insights - The Health and Wellness segment generated approximately $380 million in revenue with a 37% EBITDA margin [36] - The segment targets three healthcare verticals: pharma commercialization, digital health and wellness, and provider services [36] - Ziff Davis has a unique position in the market by engaging both healthcare professionals and consumers [44] Mergers and Acquisitions Strategy - Ziff Davis has a disciplined approach to M&A, focusing on strong, durable brands that can adapt to technological shifts [80][82] - The company has a significant cash reserve of $600 million and a borrowing capacity of $700 million, providing ample opportunity for acquisitions [88] - The current market presents interesting buying opportunities due to fear surrounding digital media assets and AI's perceived threats [95] AI Utilization - Ziff Davis is leveraging AI to enhance customer-facing products and improve internal productivity [70][72] - The company has standardized AI training across its workforce, focusing on tools that meet data privacy and security concerns [70] - AI applications include customer engagement, ad copy testing, and audience profiling for pharma clients [49][50] Regulatory Environment - There are concerns about potential regulations around pharma advertising, but the company does not foresee significant impacts on its business [62][63] Additional Insights - The company emphasizes the importance of data as a competitive advantage, particularly in the context of AI [84] - Ziff Davis is committed to communicating its intrinsic value to the marketplace more effectively [67]

Financial Data and Key Metrics Changes - Q2 2025 revenues were $352.2 million, reflecting growth of nearly 10% compared to $320.8 million in the prior year period [23] - Adjusted EBITDA for Q2 2025 was $107.7 million, up nearly 12% from $96.3 million in the prior year [23] - Adjusted diluted EPS increased to $1.24 from $1.18 in 2024, reflecting growth of more than 5% [23] - Adjusted EBITDA margin for the quarter was 30.6% [23] - Free cash flow for Q2 2025 was $26.9 million, 7.5% higher than the prior year period [32] Business Line Data and Key Metrics Changes - Four of the five reportable segments grew in revenues in Q2 2025, with the Digital Media segment growing nearly 13% [8] - Tech and Shopping's revenues grew over 11%, with adjusted EBITDA growth of over 5% [9] - Gaming and Entertainment revenues grew nearly 8%, with adjusted EBITDA growth of almost 24% [10] - Health and Wellness revenues increased nearly 16%, with adjusted EBITDA up 11% [11] - Connectivity revenues were up over 14%, with adjusted EBITDA growth of over 12% [13] - Cybersecurity and Martech segment's revenue declined less than 1% but posted over 5% adjusted EBITDA growth [15] Market Data and Key Metrics Changes - Advertising and performance marketing revenues grew 15.5% year over year, while subscription and licensing revenues grew by 5% [25] - Other revenues declined by $2.2 million year over year, primarily due to a decline in the contribution from the Hungable Games publishing business [26] Company Strategy and Development Direction - The company is committed to repurchasing shares and has completed five tuck-in acquisitions in the first half of the year [7] - The focus remains on identifying and integrating durable high-quality assets while maintaining a disciplined approach to capital allocation [20] - The company aims for double-digit total revenue growth, with expectations of mid-30s adjusted EBITDA margins in the long term [51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Cybersecurity and Martech segment returning to growth in Q3 [8] - The company anticipates at least mid-single-digit revenue growth for both Q3 and Q4 2025, with Q4 potentially being stronger than Q3 [31] - Health and Wellness and Connectivity businesses are expected to be the largest contributors to second-half growth [31] Other Important Information - The company has a healthy balance sheet with $457 million in cash and cash equivalents and $140 million in long-term investments [27] - The company has repurchased nearly 1.4 million shares since the beginning of Q2 2025, totaling over $170 million since June 30, 2024 [29] Q&A Session Summary Question: What are you hoping to communicate to the market regarding intrinsic value versus current public market valuation? - Management hopes investors will assess each of the five segments, noting that four segments collectively grew 13% and that there are differing levels of growth and margin profiles [36][38] Question: Can you update us on trends in the ad market? - The ad business grew a little over 15%, with health and wellness being very strong and gaming up mid-teens [44][50] Question: Can you unpack the incremental EBITDA margin and any factors affecting it? - Management indicated that there are no specific changes in cost structure affecting margins, and advised looking at performance over multiple quarters for a clearer picture [55][60] Question: What are the trends in health and wellness advertising participation? - The increase in advertiser participation is attributed to expanding beyond pharma to include more health and wellness brands [80][82]