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]