Financial Data and Key Metrics Changes - For the full year 2025, Ziff Davis grew revenues by 3.5% and adjusted EBITDA increased slightly, generating almost $290 million in free cash flow [4][16] - In Q4 2025, revenues declined by 1.5% to $406.7 million, and adjusted EBITDA decreased by 5% to $163.2 million, with an adjusted EBITDA margin of 40.1% [15][16] - Fiscal year 2025 total revenue was $1,451.3 million, with adjusted EBITDA of $495.1 million and an adjusted diluted EPS of $6.63, reflecting a slight increase from the previous year [16][25] Business Line Data and Key Metrics Changes - The Tech and Shopping segment experienced an 18% decline in revenues, significantly impacting overall performance, while the other four segments grew over 6% [4][5] - The Health and Wellness segment achieved record revenue and adjusted EBITDA, growing year-over-year revenues by 8.6% [7][8] - Connectivity revenues increased by 11%, driven by strong growth in services like Speedtest and Downdetector [8][9] Market Data and Key Metrics Changes - The gaming and entertainment segment saw a revenue growth of 1.5% in Q4, consistent with its full-year growth rate [6] - The advertising and performance marketing revenue declined by 4.4% in Q4 2025, while subscription and licensing revenue increased by 4% [18][19] - The overall revenue decline associated with the exited games publishing business was approximately $14 million, impacting consolidated revenue growth by about 1% [20] Company Strategy and Development Direction - The company is focused on delivering profitable growth and strong free cash flow generation in 2026, with expectations of mid-single-digit revenue decline in the Tech and Shopping segment [11][23] - Ziff Davis plans to continue its active M&A strategy, seeking high-quality brands in high-value categories, leveraging its strong cash flow generation [22][47] - The company is also exploring opportunities in AI content licensing, emphasizing the need for proper compensation frameworks [12][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds in the Tech and Shopping segment due to declining web search traffic affecting affiliate commerce revenues [5][32] - The outlook for 2026 includes expectations of low to mid-single-digit revenue growth in Gaming and Entertainment, Health and Wellness, and Cybersecurity and MarTech segments [11][12] - Management expressed confidence in overcoming current challenges in Tech and Shopping, anticipating improvements in the second half of 2026 [11][40] Other Important Information - The company repurchased approximately 4.8 million shares for nearly $174 million in fiscal year 2025, with an additional 740,000 shares repurchased since January 1, 2026 [21][22] - Ziff Davis closed seven acquisitions in 2025, investing a total of $68.7 million to support its M&A program [22][26] - The company has significant leverage capacity, with gross leverage at 1.8 times trailing 12 months adjusted EBITDA [20] Q&A Session Summary Question: AI search tailwinds in Tech and Shopping - Management noted that lost search traffic can be offset by other engagement sources, but high-intent consumer traffic is harder to replace, particularly in affiliate commerce [31][32] Question: Growth rate expectations for Tech and Shopping - Management believes Tech and Shopping should achieve mid-single-digit growth in the long term, despite current challenges [45][46] Question: M&A opportunities in the current market - Management sees unique opportunities in the digital media space due to compelling valuations and intends to focus on high-quality brands [47][48] Question: Trends in the advertising market - Management indicated that the advertising market is segmented, with Gaming & Entertainment and Health & Wellness showing stable growth, while Tech and Shopping faces challenges [50][51] Question: Impact of AI on Health & Wellness - Management expressed confidence that search dynamics are not a concern for Health & Wellness, as much of the inventory is not search-based [56][57]

Financial Data and Key Metrics Changes - For the full year 2025, Ziff Davis reported a revenue growth of 3.5% and adjusted EBITDA growth was slight, generating almost $290 million in free cash flow [4][16] - In Q4 2025, revenues declined by 1.5% to $406.7 million, and adjusted EBITDA decreased by 5% to $163.2 million, with an adjusted EBITDA margin of 40.1% [15][16] - Fiscal year 2025 total revenue increased to $1,451.3 million, with adjusted EBITDA rising to $495.1 million, resulting in an adjusted EBITDA margin of 34.1% [16][25] Business Line Data and Key Metrics Changes - The Tech and Shopping segment experienced an 18% revenue decline, significantly impacting overall performance, while the other four segments grew over 6% [4][5] - The Health and Wellness segment achieved record revenue and adjusted EBITDA, growing year-over-year revenues by 8.6% [7][8] - Connectivity revenues increased by 11%, driven by new customers and service adoption [8][9] Market Data and Key Metrics Changes - The CNET Group saw video and social views grow 100% in Q4 and over 80% for the full year 2025, reaching 1 billion views [5][6] - Direct-to-consumer revenues from the IGN Store and Humble Bundle reached almost $90 million in 2025, with significant growth in social engagement [7][8] Company Strategy and Development Direction - The company is focused on delivering profitable growth and strong free cash flow generation in 2026, with expectations of mid-single-digit revenue decline in Tech and Shopping for the first half of the year [11][23] - Ziff Davis plans to continue its active M&A strategy, seeking high-quality brands in high-value categories, leveraging its strong cash flow generation [22][47] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds in the Tech and Shopping segment due to declining web search traffic affecting affiliate commerce revenues, but expressed confidence in offsetting these declines through alternative engagement sources [5][11] - The outlook for 2026 anticipates continued growth in Gaming and Entertainment, Health and Wellness, and Cybersecurity and MarTech segments, with double-digit growth expected in Connectivity [11][12] Other Important Information - The company repurchased approximately 4.8 million shares for nearly $174 million in fiscal year 2025, with an additional 740,000 shares repurchased in 2026 [21][22] - The exit from the game publishing business is expected to eliminate distractions and volatility in the Tech and Shopping segment [17][18] Q&A Session Summary Question: Can you expand on AI search tailwinds in Tech and Shopping? - Management noted that lost search traffic can be offset by other engagement sources, but high-intent traffic from search is harder to replace, particularly affecting affiliate commerce [29][31] Question: What is the expected growth rate for Tech and Shopping? - Management believes Tech and Shopping should achieve mid-single-digit growth in the long term, despite current challenges [45][46] Question: What are the trends in the ad market? - The ad market is segmented, with Gaming & Entertainment and Health & Wellness showing stable growth, while Tech and Shopping faces challenges primarily in affiliate commerce [50][51]

Financial Data and Key Metrics Changes - For the full year 2025, Ziff Davis reported a revenue growth of 3.5% and adjusted EBITDA growth was slight, generating nearly $290 million in free cash flow [4][15] - In Q4 2025, revenues declined by 1.5% to $406.7 million, and adjusted EBITDA decreased by 5% to $163.2 million, with an adjusted EBITDA margin of 40.1% [14][15] - Fiscal year 2025 total revenue increased to $1,451.3 million, with adjusted EBITDA rising to $495.1 million, resulting in an adjusted EBITDA margin of 34.1% [15][25] Business Line Data and Key Metrics Changes - The Tech and Shopping segment experienced an 18% revenue decline, significantly impacting overall performance, while other segments grew over 6% [4][5] - Gaming and Entertainment revenues grew by 1.5% in Q4, consistent with its full-year growth rate [5] - The Health and Wellness segment achieved record revenue and adjusted EBITDA, growing year-over-year revenues by 8.6% [6][7] - Connectivity revenues increased by 11%, driven by new customer acquisitions and service adoption [7][8] - Cybersecurity and MarTech revenues grew by 2.7%, primarily due to strong performance in the cybersecurity vertical [8][9] Market Data and Key Metrics Changes - The CNET Group saw video and social views grow by 100% in Q4 and over 80% for the full year 2025, reaching 1 billion views [5] - Direct-to-consumer revenues from Humble Bundle and IGN Store reached nearly $90 million in 2025 [6] Company Strategy and Development Direction - The company is focused on delivering profitable growth and strong free cash flow generation in 2026, with expectations of mid-single-digit revenue decline in Tech and Shopping for the first half of the year [10][23] - Ziff Davis plans to continue its active M&A strategy, having closed 7 acquisitions in 2025 and looking for high-quality brands in high-value categories [22][47] - The company is evaluating potential strategic opportunities to unlock shareholder value, which has led to the decision to defer issuing formal guidance [9][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds in the Tech and Shopping segment due to declining web search traffic affecting affiliate commerce revenues, but expressed confidence in offsetting these declines through alternative engagement sources [5][31] - The outlook for 2026 includes expectations of low to mid-single-digit revenue growth in Gaming and Entertainment, Health and Wellness, and Cybersecurity and MarTech, with continued double-digit growth anticipated in Connectivity [10][11] - Management emphasized the importance of maintaining margins despite revenue challenges, with a focus on cost containment and strategic adjustments [41][42] Other Important Information - The company repurchased approximately 4.8 million shares in 2025, reducing the number of shares outstanding by more than 10% [20][25] - The board of directors increased the stock repurchase authorization by 10 million shares, valid until February 2036 [21] Q&A Session Summary Question: AI search tailwinds in Tech and Shopping - Management noted that lost search traffic can be offset by other engagement sources, but high-intent consumer traffic is harder to replace, particularly in the Tech and Shopping segment [31][32] Question: Growth rate expectations for Tech and Shopping - Management believes Tech and Shopping should achieve mid-single-digit growth in the long term, despite current challenges [45][46] Question: Trends in the ad market - The ad market is segmented, with Gaming & Entertainment and Health & Wellness showing stable growth, while Tech and Shopping faces challenges primarily in affiliate commerce [51][52] Question: Impact of AI on Health & Wellness - Management expressed confidence that search dynamics are not a concern for Health & Wellness, as much of the inventory is not search-based [56][57] Question: M&A opportunities in the current market - Management indicated that while some may hesitate to transact due to AI-related uncertainties, there are still opportunities for acquisitions, particularly for high-quality brands [59][60]

Core Insights - The company experienced a 1.5% drop in total revenues in Q4 2025, primarily due to an 18% decline in the Tech & Shopping segment, attributed to lower search engine referrals impacting affiliate commerce [1] Revenue Performance - Full year 2025 revenue grew despite significant headwinds in the Tech & Shopping segment [1] - The Health & Wellness segment achieved record results driven by AI-powered data tools and increased pharma ad spend, particularly from GLP-1 related campaigns and the Lose It! app [1] - Connectivity reached record Q4 revenues with 11% growth, fueled by the launch of Speedtest Pulse and increased service adoption among enterprise and broadband providers [1] Segment Analysis - The Tech & Shopping weakness was linked to a $25 million year-over-year drop in affiliate commissions, with half of this decline occurring in Q4 due to diminished high-intent search traffic [1] - Management is pivoting Tech & Shopping toward video, social, and licensing to offset declines in affiliate commerce, noting that CNET Group video and social views grew 100% in Q4 and 80% for the full year 2025 to 1 billion views [1] Strategic Moves - The company successfully exited the volatile Games Publishing business in Q4 to eliminate operational distractions and capture tax savings while retaining rights to future performance payments [1]

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]