Ziff Davis, Inc. (NASDAQ: ZD) (“Ziff Davis” or “the Company”)
today reported unaudited financial results for the fourth quarter
and year ended December 31, 2024.
“We believe 2024 marked an inflection point for the Company as
it returned to revenue, adjusted diluted EPS, and free cash flow
growth,” said Vivek Shah, Chief Executive Officer of Ziff Davis.
“We are also excited to introduce a new segment reporting structure
that we believe will aid investors in gaining a better
understanding and appreciation of our business.”
FOURTH QUARTER 2024 RESULTS
- Q4 2024 quarterly revenues increased 5.9% to $412.8 million
compared to $389.9 million for Q4 2023.
- Income from operations decreased to $78.5 million compared to
$80.7 million for Q4 2023.
- Net income (1) increased 1.0% to $64.1 million compared to
$63.4 million for Q4 2023.
- Net income per diluted share (1) increased to $1.43 in Q4 2024
compared to $1.29 for Q4 2023.
- Adjusted EBITDA (2) for the quarter increased 2.5% to $171.8
million compared to $167.6 million for Q4 2023.
- Adjusted net income (2) increased 3.0% to $110.2 million
compared to $107.0 million for Q4 2023.
- Adjusted net income per diluted share (1)(2) (or “Adjusted
diluted EPS”) for the quarter increased 10.7% to $2.58 compared to
$2.33 for Q4 2023.
- Net cash provided by operating activities was $158.2 million in
Q4 2024 compared to $92.1 million in Q4 2023. Free cash flow (2)
was $131.1 million in Q4 2024 compared to $65.9 million in Q4
2023.
- Ziff Davis ended the quarter with approximately $664.1 million
in cash, cash equivalents, and investments after deploying
approximately $6.4 million for current and prior year acquisitions
during the quarter and $1.2 million primarily related to share
repurchases.
FULL YEAR 2024 RESULTS
- 2024 yearly revenues increased 2.8% to $1.40 billion compared
to $1.36 billion for 2023.
- Income from operations decreased to $113.6 million compared to
$132.6 million for 2023. This includes a $85.3 million goodwill
impairment recognized in 2024 compared to a $56.9 million goodwill
impairment recognized in 2023.
- Net income (1) increased 51.9% to $63.0 million compared to
$41.5 million for 2023.
- Net income per diluted share (1) increased to $1.42 in 2024
compared to $0.89 for 2023.
- Adjusted EBITDA (2) for the year increased 2.3% to $493.5
million compared to $482.3 million for 2023.
- Adjusted net income (2) for the year increased 2.5% to $294.5
million compared to $287.4 million for 2023.
- Adjusted diluted EPS (1)(2) for the year increased 6.9% to
$6.62 compared to $6.19 for 2023.
- Net cash provided by operating activities was $390.3 million in
2024 compared to $320.0 million in 2023. Free cash flow (2) was
$283.7 million in 2024 compared to $211.2 million in 2023.
- Ziff Davis deployed approximately $225.4 million for current
and prior year acquisitions during the year and $185.2 million
related to share repurchases in 2024.
The following table reflects results for the three months and
year ended December 31, 2024 and 2023, respectively (in millions,
except per share amounts).
(Unaudited)
Three months ended
December 31,
% Change
Years ended December
31,
% Change
2024
2023
2024
2023
Revenues
Technology & Shopping
$132.9
$105.2
26.3%
$361.9
$330.6
9.5%
Gaming & Entertainment
$50.9
$49.2
3.5%
$180.3
$168.8
6.8%
Health & Wellness
$105.7
$106.5
(0.7)%
$362.4
$361.9
0.1%
Connectivity
$54.3
$57.0
(4.9)%
$213.6
$211.5
1.0%
Cybersecurity and Martech
$69.0
$72.0
(4.0)%
$283.5
$291.2
(2.6)%
Total revenues (3)
$412.8
$389.9
5.9%
$1,401.7
$1,364.0
2.8%
Income from operations
$78.5
$80.7
(2.7)%
$113.6
$132.6
(14.3)%
Operating income margin
19.0%
20.7%
(1.7)%
8.1%
9.7%
(1.6)%
Net income (1)
$64.1
$63.4
1.0%
$63.0
$41.5
51.9%
Net income per diluted share
(1)
$1.43
$1.29
10.9%
$1.42
$0.89
59.6%
Adjusted EBITDA (2)
$171.8
$167.6
2.5%
$493.5
$482.3
2.3%
Adjusted EBITDA margin (2)
41.6%
43.0%
(1.4)%
35.2%
35.4%
(0.2)%
Adjusted net income (1)(2)
$110.2
$107.0
3.0%
$294.5
$287.4
2.5%
Adjusted diluted EPS (1)(2)
$2.58
$2.33
10.7%
$6.62
$6.19
6.9%
Net cash provided by operating
activities
$158.2
$92.1
71.8%
$390.3
$320.0
22.0%
Free cash flow (2)
$131.1
$65.9
99.0%
$283.7
$211.2
34.3%
Notes:
(1)
GAAP effective tax rates were
approximately 18.3% and 17.0% for the three months ended December
31, 2024 and 2023, respectively, and 44.4% and 32.2% for the year
ended December 31, 2024 and 2023, respectively. Adjusted effective
tax rates were approximately 22.8% and 22.5% for the three months
ended December 31, 2024 and 2023, respectively, and 23.5% and 23.3%
for the year ended December 31, 2024 and 2023, respectively.
(2)
For definitions of non-GAAP financial
measures and reconciliations of GAAP to non-GAAP financial measures
refer to section “Non-GAAP Financial Measures” further in this
release.
(3)
The revenues associated with each of the
businesses may not foot precisely since each is presented
independently.
ZIFF DAVIS GUIDANCE
The Company’s full year 2025 outlook is as follows (in millions,
except per share data):
2024 Actual
2025 Range of
Estimates
Growth
(unaudited)
Low
High
Low
High
Revenue
$
1,402
$
1,442
$
1,502
2.9
%
7.2
%
Adjusted EBITDA
$
494
$
505
$
542
2.3
%
9.8
%
Adjusted diluted EPS*
$
6.62
$
6.64
$
7.28
0.3
%
10.0
%
_______________________
*
It is anticipated that the Adjusted
effective tax rate for 2025 will be between 23.25% and 25.25%.
A reconciliation of forward-looking Adjusted EBITDA and Adjusted
diluted EPS to the corresponding GAAP financial measures is not
available without unreasonable effort due primarily to variability
and difficulty in making accurate forecasts and projections of
certain non-operating items such as (Gain) loss on investments,
net, Other (income) loss, net, and other unanticipated items that
may arise in the future.
SEGMENT REALIGNMENT
Following changes to our internal reporting structure, the
Company concluded that it has five operating segments, which are
now presented as the following five reportable segments: 1)
Technology & Shopping, 2) Gaming & Entertainment, 3) Health
& Wellness, 4) Connectivity, and 5) Cybersecurity &
Martech. Prior period segment information is presented on a
comparable basis to conform to this new segment presentation with
no effect on previously reported consolidated results.
EARNINGS CONFERENCE CALL AND AUDIO WEBCAST
Ziff Davis will host a live audio webcast and conference call
discussing its fourth quarter and year-end 2024 financial results
on Tuesday, February 25, 2025, at 8:30AM ET. The live webcast and
call will be accessible by phone by dialing (844) 985-2014 or via
www.ziffdavis.com. Following the event, the audio recording and
presentation materials will be archived and made available at
www.ziffdavis.com.
ABOUT ZIFF DAVIS
Ziff Davis, Inc. (NASDAQ: ZD) is a vertically focused digital
media and internet company whose portfolio includes leading brands
in technology, shopping, gaming and entertainment, health and
wellness, connectivity, cybersecurity, and martech. For more
information, visit www.ziffdavis.com.
“Safe Harbor” Statement Under the Private Securities
Litigation Reform Act of 1995: Certain statements in this press
release are “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, including those
contained in Vivek Shah’s quote, the “Ziff Davis Guidance” section
regarding the Company’s expected fiscal 2025 financial performance,
and our discussion of net cash provided by operating activities and
free cash flow. These forward-looking statements are based on
management’s current expectations or beliefs and are subject to
numerous assumptions, risks, and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements. These factors and uncertainties
include, among other items: the Company’s ability to grow
advertising, licensing, and subscription revenues, profitability,
and cash flows, particularly in light of an uncertain U.S. or
worldwide economy, including the possibility of economic downturn
or recession; the Company’s ability to make interest and debt
payments; the Company’s ability to identify, close, and
successfully transition acquisitions; customer growth and
retention; the Company’s ability to create compelling content; our
reliance on third-party platforms; the threat of content piracy and
developments related to artificial intelligence; increased
competition and rapid technological changes; variability of the
Company’s revenue based on changing conditions in particular
industries and the economy generally; protection of the Company’s
proprietary technology or infringement by the Company of
intellectual property of others; the risk of losing critical
third-party vendors or key personnel; the risks associated with
fraudulent activity, system failure, or a security breach; risks
related to our ability to adhere to our internal controls and
procedures; the risk of adverse changes in the U.S. or
international regulatory environments, including but not limited to
the imposition or increase of taxes or regulatory-related fees; the
risks related to supply chain disruptions, inflationary conditions,
and rising interest rates; the risk of liability for legal and
other claims; and the numerous other factors set forth in Ziff
Davis’ filings with the Securities and Exchange Commission (“SEC”).
For a more detailed description of the risk factors and
uncertainties affecting Ziff Davis, refer to our most recent Annual
Report on Form 10-K and the other reports filed by Ziff Davis from
time-to-time with the SEC, each of which is available at
www.sec.gov. The forward-looking statements provided in this press
release, including those contained in Vivek Shah’s quote, in the
“Ziff Davis Guidance” portion regarding the Company’s expected
fiscal 2025 financial performance, and our discussion of net cash
provided by operating activities and free cash flows are based on
limited information available to the Company at this time, which is
subject to change. Although management’s expectations may change
after the date of this press release, the Company undertakes no
obligation to revise or update these statements.
ZIFF DAVIS, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(UNAUDITED, IN
THOUSANDS)
December 31,
2024
2023
ASSETS
Cash and cash equivalents
$
505,880
$
737,612
Short-term investments
—
27,109
Accounts receivable, net of allowances of
$8,148 and $6,871, respectively
660,223
337,703
Prepaid expenses and other current
assets
105,966
88,570
Total current assets
1,272,069
1,190,994
Long-term investments
158,187
140,906
Property and equipment, net of accumulated
depreciation of $361,710 and $327,015, respectively
197,216
188,169
Intangible assets, net
425,749
325,406
Goodwill
1,580,258
1,546,065
Deferred income taxes
7,487
8,731
Other assets
63,368
70,751
TOTAL ASSETS
$
3,704,334
$
3,471,022
LIABILITIES AND STOCKHOLDERS’
EQUITY
Accounts payable and accrued expenses
$
670,769
$
216,936
Income taxes payable, current
19,715
14,458
Deferred revenue, current
199,664
184,549
Other current liabilities
9,499
15,890
Total current liabilities
899,647
431,833
Long-term debt
864,282
1,001,312
Deferred revenue, noncurrent
5,504
8,169
Income taxes payable, noncurrent
—
8,486
Liability for uncertain tax positions
30,296
36,055
Deferred income taxes
46,018
45,503
Other noncurrent liabilities
47,705
46,666
TOTAL LIABILITIES
1,893,452
1,578,024
Common stock
428
461
Additional paid-in capital
491,891
472,201
Retained earnings
1,401,034
1,491,956
Accumulated other comprehensive loss
(82,471
)
(71,620
)
TOTAL STOCKHOLDERS’ EQUITY
1,810,882
1,892,998
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
3,704,334
$
3,471,022
ZIFF DAVIS, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS
EXCEPT SHARE AND PER SHARE DATA)
Three months ended December
31,
Years ended December
31,
2024
2023
2024
2023
Total revenues
$
412,823
$
389,885
$
1,401,688
$
1,364,028
Operating costs and expenses:
Direct costs
53,242
45,070
200,323
185,650
Sales and marketing
150,510
126,449
519,694
487,365
Research, development, and engineering
17,549
15,532
67,373
68,860
General, administrative, and other related
costs
53,029
52,483
203,461
195,726
Depreciation and amortization
59,971
69,631
211,916
236,966
Goodwill impairment
—
—
85,273
56,850
Total operating costs and expenses
334,301
309,165
1,288,040
1,231,417
Income from operations
78,522
80,720
113,648
132,611
Interest expense, net
(6,391
)
(2,251
)
(13,988
)
(20,031
)
Loss on sale of businesses
—
—
(3,780
)
—
Income (loss) on investments, net
—
1,065
(7,654
)
(28,138
)
Other income (loss), net
2,438
(3,486
)
4,968
(9,468
)
Income before income tax expense and
income (loss) from equity method investment
74,569
76,048
93,194
74,974
Income tax expense
(13,610
)
(12,962
)
(41,370
)
(24,142
)
Income (loss) from equity method
investment, net of tax
3,128
336
11,223
(9,329
)
Net income
$
64,087
$
63,422
$
63,047
$
41,503
Net income per common share:
Basic
$
1.51
$
1.39
$
1.42
$
0.89
Diluted
$
1.43
$
1.29
$
1.42
$
0.89
Weighted average shares outstanding:
Basic
42,577,188
45,772,689
44,457,071
46,400,941
Diluted
46,690,090
50,985,086
44,519,693
46,464,261
ZIFF DAVIS, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED, IN
THOUSANDS)
Years ended December
31,
2024
2023
Cash flows from operating activities:
Net income
$
63,047
$
41,503
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
211,916
236,966
Non-cash operating lease costs
10,923
11,141
Share-based compensation
40,915
31,920
Provision for credit losses on accounts
receivable
2,898
2,809
Deferred income taxes, net
(18,822
)
(30,017
)
Loss on sale of businesses
3,780
—
Goodwill impairment
85,273
56,850
Changes in fair value of contingent
consideration
—
(200
)
(Income) loss from equity method
investments
(11,223
)
9,329
Loss on investment, net
7,654
28,138
Other
3,601
5,159
Decrease (increase) in:
Accounts receivable
(153,121
)
(35,371
)
Prepaid expenses and other current
assets
(17,153
)
(8,700
)
Other assets
11,367
(5,574
)
Increase (decrease) in:
Accounts payable
171,280
9,419
Deferred revenue
5,043
(6,802
)
Accrued liabilities and other current
liabilities
(27,063
)
(26,608
)
Net cash provided by operating
activities
390,315
319,962
Cash flows from investing activities:
Purchases of property and equipment
(106,635
)
(108,729
)
Acquisition of businesses, net of cash
received
(217,570
)
(9,492
)
Purchase of equity investments
—
(11,858
)
Proceeds from sale of equity
investments
19,455
3,174
Proceeds from sale of businesses, net of
cash divested
7,860
—
Other
(565
)
(503
)
Net cash used in investing activities
(297,455
)
(127,408
)
Cash flows from financing activities:
Payment of debt
(134,989
)
—
Debt extinguishment costs
(277
)
—
Repurchase of common stock
(185,181
)
(108,527
)
Issuance of common stock under employee
stock purchase plan
8,371
8,727
Deferred payments for acquisitions
(7,842
)
(15,241
)
Other
(1,076
)
250
Net cash used in financing activities
(320,994
)
(114,791
)
Effect of exchange rate changes on cash
and cash equivalents
(3,598
)
7,056
Net change in cash and cash
equivalents
(231,732
)
84,819
Cash and cash equivalents at beginning of
year
737,612
652,793
Cash and cash equivalents at end of
year
$
505,880
$
737,612
Non-GAAP Financial
Measures
To supplement our condensed consolidated financial statements,
which are prepared and presented in accordance with U.S. generally
accepted accounting principles (“GAAP”), we use the following
non-GAAP financial measures: Adjusted EBITDA, Adjusted EBITDA
margin, Adjusted net income (loss), Adjusted net income (loss) per
diluted share, Free cash flow, and Adjusted effective tax rate
(collectively the “non-GAAP financial measures”). The presentation
of this financial information is not intended to be considered in
isolation or as a substitute for, or superior to, the financial
information prepared and presented in accordance with GAAP.
We use these non-GAAP financial measures for financial and
operational decision making and as a means to evaluate
period-to-period comparisons. We believe that these non-GAAP
financial measures provide meaningful supplemental information
regarding our performance and liquidity by excluding certain items
that may not be indicative of our recurring core business operating
results or, in certain cases, may be non-cash in nature. We believe
that both management and investors benefit from referring to these
non-GAAP financial measures in assessing our performance and when
planning, forecasting, and analyzing future periods. These non-GAAP
financial measures also facilitate management’s internal
comparisons to our historical performance and liquidity. We believe
these non-GAAP financial measures are useful to investors both
because (1) they allow for greater transparency with respect to key
metrics used by management in its financial and operational
decision-making, (2) certain measures are used to determine the
amount of annual incentive compensation paid to our named executive
officers, and (3) they are used by the analyst community to help
them analyze the health of our business.
These non-GAAP financial measures are not measures presented in
accordance with GAAP, and our use of these terms may vary from that
of other companies, limiting their usefulness for comparison
purposes. These non-GAAP financial measures are not based on any
comprehensive set of accounting rules or principles. These non-GAAP
financial measures have limitations in that they do not reflect all
of the amounts associated with the Company’s results of operations
determined in accordance with GAAP.
Non-GAAP financial measures exclude the certain items listed
below. We believe that excluding these items from the non-GAAP
measures facilitates comparisons to historical operating results
and comparisons to peers, many of which exclude similar items. We
believe that non-GAAP financial measures provide meaningful
supplemental information regarding operational performance. We
further believe these measures are useful to investors in that they
allow for greater transparency of certain line items in the
Company’s financial statements.
Adjusted EBITDA is defined as Net income (loss) with
adjustments to reflect the addition or elimination of certain items
including, but not limited to:
- Interest expense, net. Interest expense is generated primarily
from interest due on outstanding debt, partially offset by interest
income generated from the interest earned on cash, cash
equivalents, and investments;
- (Gain) loss on debt extinguishment, net. This is a non-cash
expense that relates to extinguishments of long-term debt
obligations. We believe this (gain) loss does not represent
recurring core business operating results of the Company;
- (Gain) loss on sale of business. This gain or loss relates to
the sales of businesses and does not represent recurring core
business operating results of the Company;
- (Gain) loss on investments, net. This item includes realized
gains and losses, unrealized gains and losses, and impairment
charges on debt and equity investments. The amount of gain or loss
depends on the share price for investments with readily
determinable fair value and on observable price changes for
investments without a readily determinable fair value, and does not
represent core business operating results of the Company;
- Other (income) loss, net. This income or expense relates to
other non-operating items and does not represent recurring core
business operating results of the Company;
- Income tax (benefit) expense. This benefit or expense depends
on the pre-tax loss or income of the Company, statutory tax rates,
tax regulations, and different tax rates in various jurisdictions
in which the Company operates and which the Company does not have
the control over;
- (Income) loss from equity method investments, net. This is a
non-cash expense as it relates primarily to our investment in OCV
Fund I, LP (the “Fund”). We believe that gain or loss resulting
from our equity method investment does not represent core business
operating results of the Company;
- Depreciation and amortization. This is a non-cash expense at it
relates to use and associated reduction in value of certain assets
including equipment, fixtures, and certain capitalized
internal-used software and website development costs, and
identifiable definite-lived intangible assets of the acquired
businesses;
- Share-based compensation. This is a non-cash expense as it
relates to awards granted under the various share-based incentive
plans of the Company. We view the economic cost of share-based
awards to be the dilution to our share base;
- Acquisition, integration, and other costs. Includes adjustments
to contingent consideration, lease terminations, retention bonuses,
other acquisition-specific items, and other costs, such as
severance, third-party debt modification costs and legal
settlements. These expenses do not represent core business
operating results of the Company;
- Disposal related costs. These are expenses associated with the
disposal of certain businesses that do not represent core business
operating results of the Company;
- Lease asset impairments and other charges. These expenses are
incurred in connection with impaired right-of-use (“ROU”) assets of
the Company. Associated expenses are comprised of insurance,
utility, and other charges related to assets that are no longer in
use, and partially offset by the sublease income earned. These
expenses do not represent core business operating results of the
Company; and
- Goodwill impairment. This is a non-cash expense that is
recorded when the carrying value of the reporting unit exceeds its
fair value and does not represent core business operating results
of the Company.
Adjusted EBITDA margin is calculated by dividing Adjusted
EBITDA by Total revenues.
Adjusted net income (loss) is defined as Net income
(loss) with adjustments to reflect the addition or elimination of
certain statement of operations items including, but not limited
to:
- Interest, net. This reflects the difference between the imputed
and coupon interest expense associated with the 4.625% Senior Notes
and a charge that the Company determined to be penalty interest
associated with the 1.75% Convertible Notes, offset in part by a
certain interest income earned by the Company. These net expenses
do not represent core business operating results of the
Company;
- (Gain) loss on debt extinguishment, net. This is a non-cash
expense that relates to extinguishments of long-term debt
obligations. We believe this gain or loss does not represent
recurring core business operating results of the Company;
- (Gain) loss on sale of business. This gain or loss relates to
the sales of businesses and does not represent recurring core
business operating results of the Company;
- (Gain) loss on investments, net. This item includes realized
gains and losses, unrealized gains and losses, and impairment
charges on debt and equity investments. The amount of gain or loss
depends on the share price for investments with readily
determinable fair value and on observable price changes for
investments without a readily determinable fair value, and does not
represent core business operating results of the Company;
- (Income) loss from equity method investments, net. This is a
non-cash income or expense as it relates primarily to our
investment in the OCV Fund. We believe that gains or losses
resulting from our equity method investment do not represent core
business operating results of the Company;
- Amortization. Includes the amortization of patents and
intangible assets that we acquired. This is a non-cash expense as
it primarily relates to identifiable definite-lived intangible
assets of the acquired businesses. We believe that acquired
intangible assets represent cost incurred by the acquiree to build
value prior to the acquisition and the amortization of this cost
does not represent core business operating results of the
Company;
- Share-based compensation. This is a non-cash expense as it
relates to awards granted under the various incentive plans of the
Company. We view the economic cost of share-based awards to be the
dilution to our share base;
- Acquisition, integration, and other costs. Includes adjustments
to contingent consideration, lease terminations, retention bonuses,
other acquisition-specific items, and other costs, such as
severance, third-party debt modification costs and legal
settlements. These expenses do not represent core business
operating results of the Company;
- Disposal related costs. These are expenses associated with the
disposal of certain businesses that do not represent core business
operating results of the Company;
- Lease asset impairments and other charges. These expenses are
incurred in connection with impaired ROU assets of the Company.
Associated expenses are comprised of insurance, utility, and other
charges related to assets that are no longer in use, and partially
offset by the sublease income earned. These expenses do not
represent core business operating results of the Company; and
- Goodwill impairment. This is a non-cash expense that is
recorded when the carrying value of the reporting unit exceeds its
fair value and does not represent core business operating results
of the Company.
Adjusted net income (loss) per diluted share is
calculated by dividing Adjusted net income (loss) by the diluted
weighted average shares of common stock outstanding excluding the
effect of convertible debt dilution.
Free cash flow is defined as Net cash provided by
operating activities, less purchases of property and equipment,
plus changes in contingent consideration (if any).
Adjusted effective tax rate is calculated based upon the
GAAP effective tax rate with adjustments for the tax applicable to
non-GAAP adjustments to Net income (loss), generally based upon the
effective marginal tax rate of each adjustment.
ZIFF DAVIS, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN
THOUSANDS)
The following table sets forth a
reconciliation of Net income to Adjusted EBITDA:
Three months ended December
31,
Years ended December
31,
2024
2023
2024
2023
Net income
$
64,087
$
63,422
$
63,047
$
41,503
Interest expense, net
6,391
2,251
13,988
20,031
Loss on sale of businesses
—
—
3,780
—
(Income) loss on investment, net
—
(1,065
)
7,654
28,138
Other (income) loss, net
(2,438
)
3,486
(4,968
)
9,468
Income tax expense
13,610
12,962
41,370
24,142
(Income) loss from equity method
investments, net
(3,128
)
(336
)
(11,223
)
7,829
Depreciation and amortization
59,971
69,633
211,916
236,966
Share-based compensation
10,282
7,527
40,915
31,920
Acquisition, integration, and other
costs
23,386
9,649
40,194
21,000
Disposal related costs
(350
)
375
201
2,217
Lease asset impairments and other
charges
(9
)
(338
)
1,361
2,245
Goodwill impairment
—
—
85,273
56,850
Adjusted EBITDA
$
171,802
$
167,566
$
493,508
$
482,309
ZIFF DAVIS, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN
THOUSANDS)
The following table sets forth Revenues
and a reconciliation of Income (loss) from operations to Adjusted
EBITDA by segment:
Three months ended December
31, 2024
Technology &
Shopping
Gaming &
Entertainment
Health & Wellness
Connectivity
Cybersecurity &
Martech
Corporate (1)
Total
Revenues
$
132,922
$
50,941
$
105,671
$
54,248
$
69,041
$
—
$
412,823
Income (loss) from operations
$
22,245
$
20,244
$
27,058
$
17,500
$
9,095
$
(17,620
)
$
78,522
Depreciation and amortization
25,313
2,869
13,849
9,397
8,505
38
59,971
Share-based compensation
1,164
190
1,411
638
1,097
5,782
10,282
Acquisition, integration, and other
costs
9,710
1,323
4,509
1,987
3,587
2,270
23,386
Disposal related costs
—
—
—
—
—
(350
)
(350
)
Lease asset impairments and other
charges
(179
)
94
—
—
76
—
(9
)
Goodwill impairment
—
—
—
—
—
—
—
Adjusted EBITDA
$
58,253
$
24,720
$
46,827
$
29,522
$
22,360
$
(9,880
)
$
171,802
Three months ended December
31, 2023
Technology &
Shopping
Gaming &
Entertainment
Health & Wellness
Connectivity
Cybersecurity &
Martech
Corporate (1)
Total
Revenues
$
105,222
$
49,230
$
106,449
$
57,038
$
71,946
$
—
$
389,885
Income (loss) from operations
$
25,621
$
22,147
$
24,169
$
17,281
$
5,430
$
(13,928
)
$
80,720
Depreciation and amortization
19,569
2,067
18,074
11,456
18,457
10
69,633
Share-based compensation
1,001
80
1,136
419
932
3,959
7,527
Acquisition, integration, and other
costs
4,114
551
3,421
1,109
420
34
9,649
Disposal related costs
180
—
—
—
—
195
375
Lease asset impairments and other
charges
(663
)
—
34
—
206
85
(338
)
Adjusted EBITDA
$
49,822
$
24,845
$
46,834
$
30,265
$
25,445
$
(9,645
)
$
167,566
_______________________
Figures above are net of inter-segment
revenues and operating costs and expenses.
(1)
Corporate includes certain unallocated
overhead costs that were historically presented within the Digital
Media reportable segment.
ZIFF DAVIS, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN
THOUSANDS)
Year ended December 31,
2024
Technology &
Shopping
Gaming &
Entertainment
Health & Wellness
Connectivity
Cybersecurity &
Martech
Corporate (1)
Total
Revenues
$
361,882
$
180,276
$
362,408
$
213,620
$
283,502
$
—
$
1,401,688
(Loss) income from operations
$
(71,072
)
$
54,001
$
67,207
$
79,374
$
54,961
$
(70,823
)
$
113,648
Depreciation and amortization
83,424
10,733
52,766
31,882
33,025
86
211,916
Share-based compensation
5,014
1,070
5,604
2,658
4,631
21,938
40,915
Acquisition, integration, and other
costs
18,554
2,727
9,788
(3,823
)
5,395
7,553
40,194
Disposal related costs
(24
)
—
—
—
20
205
201
Lease asset impairments and other
charges
223
93
15
—
756
274
1,361
Goodwill impairment
85,273
—
—
—
—
—
85,273
Adjusted EBITDA
$
121,392
$
68,624
$
135,380
$
110,091
$
98,788
$
(40,767
)
$
493,508
Year ended December 31,
2023
Technology &
Shopping
Gaming &
Entertainment
Health & Wellness
Connectivity
Cybersecurity &
Martech
Corporate (1)
Total
Revenues
$
330,557
$
168,821
$
361,923
$
211,518
$
291,209
$
—
$
1,364,028
(Loss) income from operations
$
(50,498
)
$
57,299
$
63,575
$
70,591
$
43,210
$
(51,566
)
$
132,611
Income from equity method investment,
net
—
—
—
—
—
(1,500
)
(1,500
)
Depreciation and amortization
83,271
10,368
59,870
31,793
52,618
(954
)
236,966
Share-based compensation
4,941
758
4,843
2,014
4,186
15,178
31,920
Acquisition, integration, and other
costs
4,452
2,441
10,004
2,820
887
396
21,000
Disposal related costs
633
—
—
—
202
1,382
2,217
Lease asset impairments and other
charges
1,019
—
510
—
471
245
2,245
Goodwill impairment
56,850
—
—
—
—
—
56,850
Adjusted EBITDA
$
100,668
$
70,866
$
138,802
$
107,218
$
101,574
$
(36,819
)
$
482,309
_______________________ Figures above are
net of inter-segment revenues and operating costs and expenses.
(1)
Corporate includes certain unallocated
overhead costs that were historically presented within the Digital
Media reportable segment.
ZIFF DAVIS, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS)
The following tables set forth a
reconciliation of Net income to Adjusted net income with
adjustments presented on after-tax basis:
Three months ended December
31,
2024
Per diluted share*
2023
Per diluted share*
Net income
$
64,087
$
1.43
$
63,422
$
1.29
Interest, net
60
—
(20
)
—
Loss on sale of business
—
—
276
0.01
Loss (income) on investments, net
942
0.02
(775
)
(0.02
)
Income from equity method investments,
net
(3,128
)
(0.07
)
(336
)
(0.01
)
Amortization
25,040
0.59
31,105
0.68
Share-based compensation
5,178
0.12
6,289
0.14
Acquisition, integration, and other
costs
18,265
0.43
7,011
0.15
Disposal related costs
(262
)
(0.01
)
238
0.01
Lease asset impairments and other
charges
7
—
(224
)
—
Dilutive effect of the convertible
debt
—
0.07
—
0.08
Adjusted net income
$
110,189
$
2.58
$
106,986
$
2.33
Years ended December
31,
2024
Per diluted share*
2023
Per diluted share*
Net income
$
63,047
$
1.42
$
41,503
$
0.89
Interest, net
132
—
5,881
0.13
Loss on sale of business
103
—
3,797
0.08
Loss on investments, net
8,019
0.18
21,103
0.45
(Income) loss from equity method
investments, net
(11,223
)
(0.25
)
8,204
0.18
Amortization
87,052
1.96
106,593
2.30
Share-based compensation
31,013
0.70
27,100
0.58
Acquisition, integration, and other
costs
29,805
0.67
13,498
0.29
Disposal related costs
195
—
1,538
0.03
Lease asset impairments and other
charges
1,045
0.02
1,295
0.04
Goodwill impairment
85,273
1.92
56,850
1.22
Adjusted net income
$
294,461
$
6.62
$
287,362
$
6.19
_______________________
*
The reconciliation of Net income per
diluted share to Adjusted net income per diluted share may not foot
since each is calculated independently.
ZIFF DAVIS, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN
THOUSANDS)
The following are the adjustments to
certain statement of operations items used to derive Adjusted net
income, which we believe provide useful information about our
operating results and enhance the overall understanding of past
financial performance and future prospects of the Company.
Three months ended December
31, 2024
GAAP amount
Adjustments
Adjusted
non-GAAP amount
Interest, net
(Gain) loss on sale of
business
(Gain) loss on investments,
net
(Income) loss from equity
method investments, net
Amortization
Share-based
compensation
Acquisition, integration, and
other costs
Disposal related costs
Lease asset impairments and
other charges
Goodwill impairment
Direct costs
$
(53,242
)
$
—
$
—
$
—
$
—
$
—
$
57
$
425
$
—
$
—
$
—
$
(52,760
)
Sales and marketing
$
(150,510
)
—
—
—
—
—
891
13,366
—
—
—
$
(136,253
)
Research, development, and engineering
$
(17,549
)
—
—
—
—
—
735
3,926
—
—
—
$
(12,888
)
General, administrative, and other related
costs
$
(53,029
)
—
—
—
—
—
8,599
5,669
(350
)
(9
)
—
$
(39,120
)
Depreciation and amortization
$
(59,971
)
—
—
—
—
34,965
—
—
—
—
—
$
(25,006
)
Goodwill impairment
$
—
—
—
—
—
—
—
—
—
—
—
$
—
Interest expense, net
$
(6,391
)
80
—
—
—
—
—
—
—
—
—
$
(6,311
)
Other income, net
$
2,438
—
—
—
—
—
—
(237
)
—
—
—
$
2,201
Income tax expense (1)
$
(13,610
)
(20
)
—
942
—
(9,925
)
(5,104
)
(4,884
)
88
16
—
$
(32,497
)
Loss from equity method investment,
net
$
3,128
—
—
—
(3,128
)
—
—
—
—
—
—
$
—
Total non-GAAP adjustments
$
60
$
—
$
942
$
(3,128
)
$
25,040
$
5,178
$
18,265
$
(262
)
$
7
$
—
_______________________
(1)
Adjusted effective tax rate was
approximately 22.8% for the three months ended December 31, 2024.
The calculation is based on a ratio where the numerator is the
adjusted income tax expense of $32,497 and the denominator is
$142,686, which equals adjusted net income of $110,189 plus
adjusted income tax expense.
ZIFF DAVIS, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN
THOUSANDS)
Three months ended December
31, 2023
GAAP amount
Adjustments
Adjusted
non-GAAP amount
Interest, net
(Gain) loss on sale of
business
(Gain) loss on investments,
net
(Income) loss from equity
method investments, net
Amortization
Share-based
compensation
Acquisition, integration, and
other costs
Disposal related costs
Lease asset impairments and
other charges
Goodwill impairment
Direct costs
$
(45,070
)
$
—
$
—
$
—
$
—
$
—
$
15
$
2,561
$
—
$
—
$
—
$
(42,494
)
Sales and marketing
$
(126,449
)
—
—
—
—
—
392
1,668
—
—
—
$
(124,389
)
Research, development, and engineering
$
(15,532
)
—
—
—
—
—
660
177
—
—
—
$
(14,695
)
General, administrative, and other related
costs
$
(52,483
)
—
—
—
—
—
6,460
5,243
375
(338
)
—
$
(40,743
)
Depreciation and amortization
$
(69,631
)
—
—
—
—
44,991
—
—
—
—
—
$
(24,640
)
Goodwill impairment
$
—
—
—
—
—
—
—
—
—
—
—
$
—
Interest expense, net
$
(2,251
)
(11
)
—
—
—
—
—
—
—
—
—
$
(2,262
)
Gain on investments, net
$
1,065
—
—
(1,065
)
—
—
—
—
—
—
—
$
—
Other loss, net
$
(3,486
)
—
422
—
—
—
459
—
—
—
$
(2,605
)
Income tax expense (1)
$
(12,962
)
(9
)
(146
)
290
—
(13,886
)
(1,238
)
(3,097
)
(137
)
114
—
$
(31,071
)
Income from equity method investment,
net
$
336
—
—
—
(336
)
—
—
—
—
—
—
$
—
Total non-GAAP adjustments
$
(20
)
$
276
$
(775
)
$
(336
)
$
31,105
$
6,289
$
7,011
$
238
$
(224
)
$
—
_______________________
(1)
Adjusted effective tax rate was
approximately 22.5% for the three months ended December 31, 2023.
The calculation is based on a ratio where the numerator is the
adjusted income tax expense of $31,071 and the denominator is
$138,057, which equals adjusted net income of $106,986 plus
adjusted income tax expense.
ZIFF DAVIS, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN
THOUSANDS)
Year ended December 31,
2024
GAAP amount
Adjustments
Adjusted non-GAAP
amount
Interest, net
(Gain) loss on sale of
business
(Gain) loss on investments,
net
(Income) loss from equity
method investments, net
Amortization
Share-based
compensation
Acquisition, integration, and
other costs
Disposal related costs
Lease asset impairments and
other charges
Goodwill impairment
Direct costs
$
(200,323
)
$
—
$
—
$
—
$
—
$
—
$
248
$
760
$
—
$
—
$
—
$
(199,315
)
Sales and marketing
$
(519,694
)
—
—
—
—
—
3,756
19,072
—
—
—
$
(496,866
)
Research, development, and engineering
$
(67,373
)
—
—
—
—
—
3,665
6,516
40
—
—
$
(57,152
)
General, administrative, and other related
costs
$
(203,461
)
—
—
—
—
—
33,246
13,846
161
1,361
—
$
(154,847
)
Depreciation and amortization
$
(211,916
)
—
—
—
—
117,748
—
—
—
—
—
$
(94,168
)
Goodwill impairment
$
(85,273
)
—
—
—
—
—
—
—
—
—
85,273
$
—
Interest expense, net
$
(13,988
)
176
—
—
—
—
—
—
—
—
—
$
(13,812
)
Loss on sale of business
$
(3,780
)
—
3,780
—
—
—
—
—
—
—
—
$
—
Loss on investments, net
$
(7,654
)
—
—
7,654
—
—
—
—
—
—
—
$
—
Other income (loss), net
$
4,968
—
(4,903
)
—
—
—
—
(774
)
—
—
—
$
(709
)
Income tax expense (1)
$
(41,370
)
(44
)
1,226
365
—
(30,696
)
(9,902
)
(9,615
)
(6
)
(316
)
—
$
(90,358
)
Income from equity method investment,
net
$
11,223
—
—
—
(11,223
)
—
—
—
—
—
—
$
—
Total non-GAAP adjustments
$
132
$
103
$
8,019
$
(11,223
)
$
87,052
$
31,013
$
29,805
$
195
$
1,045
$
85,273
_______________________
(1)
Adjusted effective tax rate was
approximately 23.5% for the year ended December 31, 2024. The
calculation is based on a ratio where the numerator is the adjusted
income tax expense of $90,358 and the denominator is $384,819,
which equals adjusted net income of $294,461 plus adjusted income
tax expense.
ZIFF DAVIS, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN
THOUSANDS)
Year ended December 31,
2023
GAAP amount
Adjustments
Adjusted non-GAAP
amount
Interest, net
(Gain) loss on sale of
business
(Gain) loss on investments,
net
(Income) loss from equity
method investments, net
Amortization
Share-based
compensation
Acquisition, integration, and
other costs
Disposal related costs
Lease asset impairments and
other charges
Goodwill impairment
Direct costs
$
(185,650
)
$
—
$
—
$
—
$
—
$
—
$
262
$
2,752
$
—
$
—
$
—
$
(182,636
)
Sales and marketing
$
(487,365
)
—
—
—
—
—
2,686
4,796
4
—
—
$
(479,879
)
Research, development, and engineering
$
(68,860
)
—
—
—
—
—
3,245
712
3
—
—
$
(64,900
)
General, administrative, and other related
costs
$
(195,726
)
—
—
—
(1,500
)
—
25,727
12,740
2,210
2,245
—
$
(154,304
)
Depreciation and amortization
$
(236,966
)
—
—
—
—
145,571
—
—
—
—
—
$
(91,395
)
Goodwill impairment
$
(56,850
)
—
—
—
—
—
—
—
—
—
56,850
$
—
Interest expense, net
$
(20,031
)
7,797
(538
)
—
—
—
—
—
—
—
—
$
(12,772
)
Loss on investments, net
$
(28,138
)
—
—
28,138
—
—
—
—
—
—
—
$
—
Other loss, net
$
(9,468
)
—
5,655
—
—
—
—
459
—
—
—
$
(3,354
)
Income tax expense (1)
$
(24,142
)
(1,916
)
(1,320
)
(7,035
)
375
(38,978
)
(4,820
)
(7,961
)
(679
)
(950
)
—
$
(87,426
)
Loss from equity method investment,
net
$
(9,329
)
—
—
—
9,329
—
—
—
—
—
—
$
—
Total non-GAAP adjustments
$
5,881
$
3,797
$
21,103
$
8,204
$
106,593
$
27,100
$
13,498
$
1,538
$
1,295
$
56,850
_______________________
(1)
Adjusted effective tax rate was
approximately 23.3% for the year ended December 31, 2023. The
calculation is based on a ratio where the numerator is the adjusted
income tax expense of $87,426 and the denominator is $374,788,
which equals adjusted net income of $287,362 plus adjusted income
tax expense.
ZIFF DAVIS, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN
THOUSANDS)
The following tables set forth a
reconciliation of Net cash provided by operating activities to Free
cash flow:
2024
Q1
Q2
Q3
Q4
YTD
Net cash provided by operating
activities
$
75,558
$
50,564
$
105,960
$
158,233
$
390,315
Less: Purchases of property and
equipment
(28,129
)
(25,504
)
(25,843
)
(27,159
)
(106,635
)
Free cash flow
$
47,429
$
25,060
$
80,117
$
131,074
$
283,680
2023
Q1
Q2
Q3
Q4
YTD
Net cash provided by operating
activities
$
115,307
$
39,728
$
72,808
$
92,119
$
319,962
Less: Purchases of property and
equipment
(30,017
)
(25,233
)
(27,226
)
(26,253
)
(108,729
)
Free cash flow
$
85,290
$
14,495
$
45,582
$
65,866
$
211,233
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250224073132/en/
Alan Steier Investor Relations Ziff Davis, Inc.
investor@ziffdavis.com
Rebecca Wright Corporate Communications Ziff Davis, Inc.
press@ziffdavis.com
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