Ziff Davis : First Quarter 2025 Q1 2025 Supplemental Materials

Published: 2025-05-09 08:02:55 ET ZD

Published on 05/09/2025 at 08:02

FIRST QUARTER SUPPLEMENTAL MATERIALS

May 8, 2025

The below 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.

$ in 000's

Ziff Davis

Three months ended March 31,

2025

2024

Net income

$ 24,239

$ 10,627

Interest expense, net

6,131

1,769

Loss on sale of businesses

3,780

Loss on investments, net

10,705

Other loss, net

2,803

104

Income tax expense

8,587

8,231

(Income) loss from equity method investment, net of tax

(6,630)

645

Depreciation and amortization

55,832

48,453

Share-based compensation

9,752

8,872

Acquisition, integration, and other costs

(557)

6,266

Disposal related costs

496

Lease asset impairments and other charges

803

Adjusted EBITDA

$ 100,178

$ 100,751

Q1 2025

Technology & Shopping

Gaming & Entertainment

Health & Wellness

Connectivity

Cybersecurity & Martech

Corporate (1)

Total

$ in 000's

Revenues

$ 81,690

$ 38,026

$ 85,786

$ 55,820

$ 67,314

$ -

$ 328,636

(Loss) income from operations

$ (3,963)

$ 8,774

$ 16,962

$ 19,512

$ 11,323

$ (17,478)

$ 35,130

Depreciation and amortization

22,405

2,618

12,928

7,380

10,387

114

55,832

Share-based compensation

1,153

329

1,363

670

967

5,270

9,752

Acquisition, integration, and other costs

1,651

338

(1,812)

497

(754)

(477)

(557)

Disposal related costs

Lease asset impairments and other charges

(241)

(86)

255

Adjusted EBITDA

Q1 2024

$ 21,006

Technology & Shopping

$ 12,146

Gaming & Entertainment

$ 29,355

Health & Wellness

$ 28,059

Connectivity

$ 22,178

Cybersecurity & Martech

$ (12,566)

Corporate (1)

$ 100,178

Total

$ in 000's

Revenues $ 69,267 $ 36,640 $ 79,978 $ 53,148 $ 75,452 $ - $ 314,485

(Loss) income from operations

$ (6,635)

$ 10,515

$ 8,600

$ 19,359

$ 19,428

$ (15,406)

$ 35,861

Depreciation and amortization

17,914

2,392

13,399

7,001

7,740

48,453

Share-based compensation

1,178

188

1,341

633

1,134

4,398

8,872

Acquisition, integration, and other costs

1,663

334

2,858

(47)

864

594

6,266

Disposal related costs

366

130

496

Lease asset impairments and other charges

138

477

188

803

Adjusted EBITDA $ 14,624 $ 13,429 $ 26,198 $ 26,946 $ 29,643 $ (10,089) $ 100,751

Corporate includes certain unallocated overhead costs that were historically presented within the Digital Media reportable segment. 4

$ in 000's

Ziff Davis

Three months ended March 31,

2025

Per diluted share (1)

2024

Per diluted share (1)

Net income

$ 24,239

$ 0.56

$ 10,627

$ 0.23

Interest, net

(5)

Loss on sale of businesses

3,780

0.08

Loss on investments, net

9,668

0.21

(Income) loss from equity method investment, net of tax

(6,630)

(0.16)

645

0.01

Amortization

21,868

0.51

20,085

0.44

Share-based compensation

9,816

0.23

7,786

0.17

Acquisition, integration, and other costs

(442)

(0.01)

4,871

0.11

Disposal related costs

372

0.01

Lease asset impairment and other charges

643

0.01

Dilutive effect of the convertible debt

0.01

Adjusted net income

$ 48,940

$ 1.14

$ 58,472

$ 1.27

The reconciliation of Net income per diluted share to Adjusted net income per diluted share may not foot since each is calculated independently. 5

Q1 2025

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

Adjusted non-GAAP amount

$ in 000's

Direct costs

$(47,208)

$63

$66

$(47,079)

Sales and marketing

$(127,680)

986

982

$(125,712)

Research, development, and engineering

$(15,876)

790

(65)

$(15,151)

General, administrative, and other related costs

$(46,910)

7,913

(1,540)

$(40,516)

Depreciation and amortization

$(55,832)

28,791

$(27,041)

Interest expense

$(6,131)

$(6,050)

Income tax expense (1)

$(8,587)

(20)

(6,923)

115

$(15,344)

Income from equity method investment, net of tax

$6,630

(6,630)

Total non-GAAP adjustments

$61

$(6,630)

$21,868

$9,816

$(442)

$27

Q1 2024

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

Adjusted non-GAAP amount

$ in 000's

Direct costs

$(45,887)

$61

$170

$(45,656)

Sales and marketing

$(117,000)

758

541

$(115,701)

Research, development, and engineering

$(17,774)

1,090

223

$(16,421)

General, administrative, and other related costs

$(49,510)

6,963

5,332

456

803

$(35,956)

Depreciation and amortization

$(48,453)

26,424

$(22,029)

Interest expense

$(1,769)

(7)

$(1,776)

Loss on sale of business

$(3,780)

3,780

Loss on investments, net

$(10,705)

10,705

Income tax expense (2)

$(8,231)

(1,037)

(6,339)

(1,086)

(1,395)

(124)

(160)

$(18,370)

Loss from equity method investment, net of tax

$(645)

645

Total non-GAAP adjustments

$(5)

$3,780

$9,668

$645

$20,085

$7,786

$4,871

$372

$643

Adjusted effective tax rate was approximately 23.9% for the three months ended March 31, 2025. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $15,344 and the denominator is $64,284, which equals adjusted net income of $48,940 plus adjusted income tax expense.

Adjusted effective tax rate was approximately 23.9% for the three months ended March 31, 2024. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $18,370 and the 6

denominator is $76,841, which equals adjusted net income of $58,472 plus adjusted income tax expense.

$ in 000's

Ziff Davis

Three months ended March 31,

2025

2024

Net cash provided by operating activities

$ 20,613

$ 75,558

Less: Purchases of property and equipment

(25,619)

(28,129)

Free cash flow

$ (5,006)

$ 47,429

2023

2024

2025

Year over Year Growth Rates

Organic Revenues (1)

(6%)

(2%)

(5%)

(2%)

(5%)

(3%)

Total Revenues

(3%)

(2%)

The Company includes revenues from an acquired business in organic revenues in the first month in which the Company can compare that full month in the current year against the corresponding full month

under its ownership in the prior year. Similarly, the Company excludes revenues from divested assets beginning with the quarter of the disposal of the asset, as well as from the prior year's comparable

period(s). 8

2024

2025

Technology & Shopping

Net advertising and performance marketing revenue retention (1)

91.0%

90.0%

Customers (2)

575

573

Quarterly revenue per customer (3)

$114,621

$138,701

Gaming & Entertainment

Net advertising and performance marketing revenue retention (1)

89.0%

92.2%

Customers (2)

318

311

Quarterly revenue per customer (3)

$71,561

$78,362

Health & Wellness

Net advertising and performance marketing revenue retention (1)

94.0%

94.9%

Customers (2)

794

703

Quarterly revenue per customer (3)

$79,629

$94,652

Net advertising and performance marketing revenue retention equals (i) the trailing twelve months revenues recognized related to prior year customers in the current year period (excluding revenues from acquisitions during the stub period) divided by (ii) the trailing twelve months revenues recognized related to prior year customers in the prior year period (excluding revenues from acquisitions during the stub period). This excludes customers that generated less than $10,000 of revenues in the measurement period.

Excludes customers that generated less than $2,500 in the quarter.

Represents total gross quarterly advertising and performance marketing revenues divided by customers as defined in footnote (2). 9

2024

2025

Gaming & Entertainment

Customers (1)(2)

451,000

531,000

Average quarterly revenue per customer (2)(3)

$30.76

$25.68

Health & Wellness

Customers (1)(2)

1,564,000

1,820,000

Average quarterly revenue per customer (2)(3)

$7.41

$7.20

Connectivity

Customers (1)(2)

24,000

25,000

Average quarterly revenue per customer (2)(3)

$1,949

$2,013

Cybersecurity & Martech

Customers (1)(4)

1,306,000

1,250,000

Average quarterly revenue per customer (3)

$57.79

$53.85

Represents the quarterly average of the end of month customer counts (rounded).

The metric includes the sale of perpetual software licenses, when applicable, revenues for which is recorded at a point-in time rather than over-time.

Represents quarterly gross subscription and licensing revenues divided by customers as defined in footnote (1).

Resellers within Cybersecurity & Martech segment are counted as one customer when there is not visibility into the number of underlying customers served by the reseller. 10

Disclaimer

Ziff Davis Inc. published this content on May 08, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 09, 2025 at 11:49 UTC.