Ziff Davis, Inc. (NASDAQ: ZD) (“Ziff Davis” or “the Company”)
today reported unaudited financial results for the third quarter
ended September 30, 2024.
“We are very pleased with our third quarter results,” said Vivek
Shah, Chief Executive Officer of Ziff Davis. “We are seeing
improvements in the businesses that we currently own, as well as
opportunities to leverage our strong balance sheet and free cash
flows to acquire businesses that we would like to own.”
THIRD QUARTER 2024 RESULTS
- Q3 2024 quarterly revenues increased 3.7% to $353.6 million
compared to $341.0 million for Q3 2023.
- Loss from operations increased to $29.3 million compared to
$13.3 million for Q3 2023. This includes a $85.3 million goodwill
impairment recognized in Q3 2024 compared to a $56.9 million
goodwill impairment recognized in Q3 2023.
- Net loss (1) increased to $48.6 million compared to $31.0
million for Q3 2023. This includes a $85.3 million goodwill
impairment recognized in Q3 2024 compared to a $56.9 million
goodwill impairment recognized in Q3 2023.
- Net loss per diluted share (1) increased to $1.11 in Q3 2024
compared to $0.67 for Q3 2023.
- Adjusted EBITDA (2) for the quarter increased 9.6% to $124.7
million compared to $113.7 million for Q3 2023.
- Adjusted net income (2) increased 4.3% to $72.1 million
compared to $69.1 million for Q3 2023.
- Adjusted net income per diluted share (1)(2) (or “Adjusted
diluted EPS”) for the quarter increased 9.3% to $1.64 compared to
$1.50 for Q3 2023.
- Net cash provided by operating activities was $106.0 million in
Q3 2024 compared to $72.8 million in Q3 2023. Free cash flow (2)
was $80.1 million in Q3 2024 compared to $45.6 million in Q3
2023.
- Ziff Davis ended the quarter with approximately $538.9 million
in cash, cash equivalents, and investments after deploying
approximately $96.1 million primarily related to share repurchases
and $154.9 million for current and prior year acquisitions.
The following table reflects results for the three and nine
months ended September 30, 2024 and 2023, respectively (in
millions, except per share amounts).
(Unaudited)
Three months ended September
30,
% Change
Nine months ended September
30,
% Change
2024
2023
2024
2023
Revenues
Digital Media
$283.6
$267.9
5.8%
$774.4
$754.9
2.6%
Cybersecurity and Martech
$70.0
$73.1
(4.1)%
$214.5
$219.2
(2.2)%
Total revenues (3)
$353.6
$341.0
3.7%
$988.9
$974.1
1.5%
(Loss) income from operations
$(29.3)
$(13.3)
(120.0)%
$35.1
$51.9
(32.3)%
Operating (loss) income margin
(8.3)%
(3.9)%
(4.4)%
3.6%
5.3%
(1.7)%
Net loss (1)
$(48.6)
$(31.0)
56.8%
$(1.0)
$(21.9)
(95.3)%
Net loss per diluted share (1)
$(1.11)
$(0.67)
65.7%
$(0.02)
$(0.47)
(95.7)%
Adjusted EBITDA (2)
$124.7
$113.7
9.6%
$321.7
$314.7
2.2%
Adjusted EBITDA margin (2)
35.3%
33.3%
2.0%
32.5%
32.3%
0.2%
Adjusted net income (1)(2)
$72.1
$69.1
4.3%
$184.3
$180.4
2.2%
Adjusted diluted EPS (1)(2)
$1.64
$1.50
9.3%
$4.08
$3.86
5.7%
Net cash provided by operating
activities
$106.0
$72.8
45.5%
$232.1
$227.8
1.9%
Free cash flow (2)
$80.1
$45.6
75.8%
$152.6
$145.4
5.0%
Notes:
(1)
GAAP effective tax rates were
approximately (34.9)% and (20.7)% for the three months ended
September 30, 2024 and 2023, respectively, and 149.0% and
(1,040.8)% for the nine months ended September 30, 2024 and 2023,
respectively. Adjusted effective tax rates were approximately 24.3%
and 22.9% for the three months ended September 30, 2024 and 2023,
respectively, and 23.9% and 23.8% for the nine months ended
September 30, 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 reaffirms its guidance for fiscal year 2024 as
follows (in millions, except per share data):
2024 Range of
Estimates
Low
High
Revenue
$
1,411.0
$
1,471.0
Adjusted EBITDA
$
500.0
$
521.0
Adjusted diluted EPS*
$
6.43
$
6.77
___________________ * Adjusted diluted EPS for 2024 excludes
amortization of acquired intangibles and the impact of any
currently unanticipated items, in each case net of tax. It is
anticipated that the Adjusted effective tax rate for 2024 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 non-operating matters that may arise in the
future.
Earnings Conference Call and Audio Webcast
Ziff Davis will host a live audio webcast and conference call
discussing its third quarter 2024 financial results on Friday,
November 8, 2024, 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, connectivity,
health and wellness, 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 2024 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 2024 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)
September 30, 2024
December 31, 2023
ASSETS
Cash and cash equivalents
$
386,122
$
737,612
Short-term investments
—
27,109
Accounts receivable, net of allowances of
$7,352 and $6,871, respectively
470,550
337,703
Prepaid expenses and other current
assets
94,345
88,570
Total current assets
951,017
1,190,994
Long-term investments
152,817
140,906
Property and equipment, net of accumulated
depreciation of $348,322 and $327,015, respectively
197,482
188,169
Intangible assets, net
470,774
325,406
Goodwill
1,572,854
1,546,065
Deferred income taxes
8,622
8,731
Other assets
65,879
70,751
TOTAL ASSETS
$
3,419,445
$
3,471,022
LIABILITIES AND STOCKHOLDERS’
EQUITY
Accounts payable
$
371,498
$
123,256
Accrued employee related costs
33,829
50,068
Other accrued liabilities
36,557
43,612
Income taxes payable, current
10,470
14,458
Deferred revenue, current
204,029
184,549
Other current liabilities
11,011
15,890
Total current liabilities
667,394
431,833
Long-term debt
863,741
1,001,312
Deferred income taxes
53,577
45,503
Income taxes payable, noncurrent
—
8,486
Deferred revenue, noncurrent
7,513
8,169
Other long-term liabilities
74,908
82,721
TOTAL LIABILITIES
1,667,133
1,578,024
Common stock
427
461
Additional paid-in capital
480,271
472,201
Retained earnings
1,335,083
1,491,956
Accumulated other comprehensive loss
(63,469
)
(71,620
)
TOTAL STOCKHOLDERS’ EQUITY
1,752,312
1,892,998
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
3,419,445
$
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 September
30,
Nine months ended September
30,
2024
2023
2024
2023
Total revenues
$
353,580
$
340,985
$
988,865
$
974,143
Operating costs and expenses:
Direct costs
53,243
55,526
152,900
148,677
Sales and marketing
127,418
125,062
369,184
360,916
Research, development, and engineering
15,255
17,597
49,824
53,328
General, administrative, and other related
costs
101,695
99,269
296,558
302,481
Goodwill impairment on business
85,273
56,850
85,273
56,850
Total operating costs and expenses
382,884
354,304
953,739
922,252
(Loss) income from operations
(29,304
)
(13,319
)
35,126
51,891
Interest expense, net
(4,024
)
(2,817
)
(7,597
)
(17,780
)
Loss on sale of businesses
—
—
(3,780
)
—
Loss on investments, net
—
(6,019
)
(7,654
)
(29,203
)
Other (loss) income, net
(2,633
)
(3,571
)
2,530
(5,982
)
(Loss) income before income tax expense
and (loss) income from equity method investment
(35,961
)
(25,726
)
18,625
(1,074
)
Income tax expense
(12,539
)
(5,335
)
(27,760
)
(11,180
)
(Loss) income from equity method
investment, net of tax
(77
)
90
8,095
(9,665
)
Net loss
$
(48,577
)
$
(30,971
)
$
(1,040
)
$
(21,919
)
Net loss per common share:
Basic
$
(1.11
)
$
(0.67
)
$
(0.02
)
$
(0.47
)
Diluted
$
(1.11
)
$
(0.67
)
$
(0.02
)
$
(0.47
)
Weighted average shares outstanding:
Basic
43,924,158
46,062,097
45,088,272
46,612,660
Diluted
43,924,158
46,062,097
45,088,272
46,612,660
ZIFF DAVIS, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED, IN
THOUSANDS)
Nine months ended September
30,
2024
2023
Cash flows from operating activities:
Net loss
$
(1,040
)
$
(21,919
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
151,945
167,333
Non-cash operating lease costs
8,392
7,248
Share-based compensation
30,633
24,393
Provision for credit losses on accounts
receivable
2,289
2,296
Deferred income taxes
(14,575
)
(25,658
)
Loss on sale of businesses
3,780
—
Goodwill impairment on business
85,273
56,850
(Income) loss from equity method
investments, net
(8,095
)
9,665
Loss on investments, net
7,654
29,203
Other
2,390
5,113
Decrease (increase) in:
Accounts receivable
46,576
11,043
Prepaid expenses and other current
assets
(8,152
)
(10,059
)
Other assets
(2,794
)
(7,961
)
Increase (decrease) in:
Accounts payable
(66,313
)
1,955
Deferred revenue
9,269
(6,820
)
Accrued liabilities and other current
liabilities
(15,150
)
(14,839
)
Net cash provided by operating
activities
232,082
227,843
Cash flows from investing activities:
Purchases of property and equipment
(79,476
)
(82,476
)
Acquisition of businesses, net of cash
received
(211,526
)
(9,492
)
Purchases of equity method investment
—
(11,790
)
Proceeds from sale of equity
investments
19,455
3,174
Proceeds on sale of business, net of cash
divested
7,860
—
Other
(884
)
(4,154
)
Net cash used in investing activities
(264,571
)
(104,738
)
Cash flows from financing activities:
Payment of debt
(134,989
)
—
Repurchase of common stock
(183,981
)
(107,341
)
Issuance of common stock under employee
stock purchase plan
4,525
4,725
Deferred payments for acquisitions
(7,442
)
(14,141
)
Other
(1,209
)
(53
)
Net cash used in financing activities
(323,096
)
(116,810
)
Effect of exchange rate changes on cash
and cash equivalents
4,095
1,536
Net change in cash and cash
equivalents
(351,490
)
7,831
Cash and cash equivalents at beginning of
year
737,612
652,793
Cash and cash equivalents at end of
year
$
386,122
$
660,624
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 on business. 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 in each period
presented, 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 on business. 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 loss to Adjusted EBITDA:
Three months ended September
30,
Nine months ended September
30,
2024
2023
2024
2023
Net loss
$
(48,577
)
$
(30,971
)
$
(1,040
)
$
(21,919
)
Interest expense, net
4,024
2,817
7,597
17,780
Loss on sale of businesses
—
—
3,780
—
Loss on investments, net
—
6,019
7,654
29,203
Other loss (income), net
2,633
3,571
(2,530
)
5,982
Income tax expense
12,539
5,335
27,760
11,180
Loss (income) from equity method
investments, net
77
(90
)
(8,095
)
8,165
Depreciation and amortization
51,351
55,854
151,945
167,333
Share-based compensation
10,161
6,774
30,633
24,393
Acquisition, integration, and other
costs
6,705
4,457
16,808
11,351
Disposal related costs
(22
)
1,633
551
1,842
Lease asset impairments and other
charges
527
1,485
1,370
2,583
Goodwill impairment on business
85,273
56,850
85,273
56,850
Adjusted EBITDA
$
124,691
$
113,734
$
321,706
$
314,743
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 (Loss) income from operations to Adjusted
EBITDA by segment:
Three months ended September
30, 2024
Digital Media
Cybersecurity and
Martech
Corporate
Total
Revenues
$
283,554
$
70,026
$
—
$
353,580
(Loss) income from operations
$
(24,750
)
$
14,889
$
(19,443
)
$
(29,304
)
Depreciation and amortization
43,339
7,979
33
51,351
Share-based compensation
3,408
1,178
5,575
10,161
Acquisition, integration, and other
costs
3,753
476
2,476
6,705
Disposal related costs
(390
)
—
368
(22
)
Lease asset impairments and other
charges
429
98
—
527
Goodwill impairment on a business
85,273
—
—
85,273
Adjusted EBITDA
$
111,062
$
24,620
$
(10,991
)
$
124,691
Three months ended September
30, 2023
Digital Media
Cybersecurity and
Martech
Corporate
Total
Revenues
$
267,934
$
73,051
$
—
$
340,985
(Loss) income from operations
$
(12,922
)
$
12,527
$
(12,924
)
$
(13,319
)
Depreciation and amortization
44,907
10,941
6
55,854
Share-based compensation
2,579
399
3,796
6,774
Acquisition, integration, and other
costs
4,138
263
56
4,457
Disposal related costs
452
203
978
1,633
Lease asset impairments and other
charges
1,379
106
—
1,485
Goodwill impairment on a business
56,850
—
—
56,850
Adjusted EBITDA
$
97,383
$
24,439
$
(8,088
)
$
113,734
____________ Figures above are net of intercompany costs and
revenues.
ZIFF DAVIS, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS)
The following table set forth a
reconciliation of Net loss to Adjusted net income with adjustments
presented on after-tax basis:
Three months ended September
30,
2024
Per diluted share*
2023
Per diluted share*
Net loss
$
(48,577
)
$
(1.11
)
$
(30,971
)
$
(0.67
)
Interest, net
60
—
336
0.01
(Gain) loss on sale of business
(9
)
—
3,433
0.07
Loss on investments, net
—
—
4,465
0.10
Loss (income) from equity method
investments, net
77
—
(90
)
—
Amortization
20,748
0.47
25,070
0.55
Share-based compensation
8,628
0.20
6,813
0.15
Acquisition, integration, and other
costs
5,455
0.13
1,334
0.03
Disposal related costs
25
—
1,144
0.02
Lease asset impairments and other
charges
381
0.01
689
0.01
Goodwill impairment on business
85,273
1.94
56,850
1.23
Adjusted net income
$
72,061
$
1.64
$
69,073
$
1.50
Nine months ended September
30,
2024
Per diluted share*
2023
Per diluted share*
Net loss
$
(1,040
)
$
(0.02
)
$
(21,919
)
$
(0.47
)
Interest, net
72
—
5,901
0.13
Loss on sale of business
103
—
3,521
0.08
Loss on investments, net
7,077
0.15
21,878
0.46
(Income) loss from equity method
investments, net
(8,095
)
(0.18
)
8,540
0.18
Amortization
62,012
1.38
75,488
1.62
Share-based compensation
25,835
0.57
20,811
0.44
Acquisition, integration, and other
costs
11,540
0.26
6,487
0.14
Disposal related costs
457
0.01
1,300
0.03
Lease asset impairments and other
charges
1,038
0.02
1,519
0.03
Goodwill impairment on business
85,273
1.89
56,850
1.22
Adjusted net income
$
184,272
$
4.08
$
180,376
$
3.86
_____________________ * The reconciliation of Net income (loss)
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 September
30, 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 on
business
Direct costs
$
(53,243
)
$
—
$
—
$
—
$
—
$
59
$
68
$
64
$
—
$
—
$
—
$
(53,052
)
Sales and marketing
$
(127,418
)
—
—
—
—
—
1,014
3,216
—
—
—
$
(123,188
)
Research, development, and engineering
$
(15,255
)
—
—
—
—
—
769
1,096
—
—
—
$
(13,390
)
General, administrative, and other related
costs
$
(101,695
)
—
—
—
—
28,444
8,310
2,329
(22
)
527
—
$
(62,107
)
Goodwill impairment on business
$
(85,273
)
—
—
—
—
—
—
—
—
—
85,273
$
—
Interest expense, net
$
(4,024
)
80
—
—
—
—
—
—
—
—
—
$
(3,944
)
Other loss, net
$
(2,633
)
—
(13
)
—
—
—
—
—
—
—
—
$
(2,646
)
Income tax expense (1)
$
(12,539
)
(20
)
4
—
—
(7,755
)
(1,533
)
(1,250
)
47
(146
)
—
$
(23,192
)
Loss from equity method investment,
net
$
(77
)
—
—
—
77
—
—
—
—
—
—
$
—
Total non-GAAP adjustments
$
60
$
(9
)
$
—
$
77
$
20,748
$
8,628
$
5,455
$
25
$
381
$
85,273
(1)
Adjusted effective tax rate was approximately 24.3% for the three
months ended September 30, 2024. The calculation is based on a
ratio where the numerator is the adjusted income tax expense of
$23,192 and the denominator is $95,253, which equals adjusted net
income of $72,061 plus adjusted income tax expense.
ZIFF DAVIS, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN
THOUSANDS)
Three months ended September
30, 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 on
business
Direct costs
$
(55,526
)
$
—
$
—
$
—
$
—
$
158
$
76
$
5
$
—
$
—
$
—
$
(55,287
)
Sales and marketing
$
(125,062
)
—
—
—
—
—
323
1,056
4
—
—
$
(123,679
)
Research, development, and engineering
$
(17,597
)
—
—
—
—
—
840
227
3
—
—
$
(16,527
)
General, administrative, and other related
costs
$
(99,269
)
—
—
—
—
32,986
5,535
3,169
1,626
1,485
—
$
(54,468
)
Goodwill impairment on business
$
(56,850
)
—
—
—
—
—
—
—
—
—
56,850
$
—
Interest expense, net
$
(2,817
)
388
(538
)
—
—
—
—
—
—
—
—
$
(2,967
)
Loss on investments, net
$
(6,019
)
—
—
6,019
—
—
—
—
—
—
—
$
—
Other (loss) income, net
$
(3,571
)
—
5,115
—
—
—
—
—
—
—
$
1,544
Income tax expense (1)
$
(5,335
)
(52
)
(1,144
)
(1,554
)
—
(8,074
)
39
(3,123
)
(489
)
(796
)
—
$
(20,528
)
Income from equity method investment,
net
$
90
—
—
—
(90
)
—
—
—
—
—
—
$
—
Total non-GAAP adjustments
$
336
$
3,433
$
4,465
$
(90
)
$
25,070
$
6,813
$
1,334
$
1,144
$
689
$
56,850
(1)
Adjusted effective tax rate was approximately 22.9% for the three
months ended September 30, 2023. The calculation is based on a
ratio where the numerator is the adjusted income tax expense of
$20,528 and the denominator is $89,601, which equals adjusted net
income of $69,073 plus adjusted income tax expense.
ZIFF DAVIS, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN
THOUSANDS)
Nine months ended September
30, 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 on
business
Direct costs
$
(152,900
)
$
—
$
—
$
—
$
—
$
246
$
191
$
335
$
—
$
—
$
—
$
(152,128
)
Sales and marketing
$
(369,184
)
—
—
—
—
—
2,865
5,706
—
—
—
$
(360,613
)
Research, development, and engineering
$
(49,824
)
—
—
—
—
—
2,930
2,590
40
—
—
$
(44,264
)
General, administrative, and other related
costs
$
(296,558
)
—
—
—
—
82,537
24,647
8,177
511
1,370
—
$
(179,316
)
Goodwill impairment on business
$
(85,273
)
—
—
—
—
—
—
—
—
—
85,273
$
—
Interest expense, net
$
(7,597
)
96
—
—
—
—
—
—
—
—
—
$
(7,501
)
Loss on sale of business
$
(3,780
)
—
3,780
—
—
—
—
—
—
—
—
$
—
Loss on investments, net
$
(7,654
)
—
—
7,654
—
—
—
—
—
—
—
$
—
Other income (loss), net
$
2,530
—
(4,903
)
—
—
—
—
(537
)
—
—
—
$
(2,910
)
Income tax expense
$
(27,760
)
(24
)
1,226
(577
)
—
(20,771
)
(4,798
)
(4,731
)
(94
)
(332
)
—
$
(57,861
)
Income from equity method investment,
net
$
8,095
—
—
—
(8,095
)
—
—
—
—
—
—
$
—
Total non-GAAP adjustments
$
72
$
103
$
7,077
$
(8,095
)
$
62,012
$
25,835
$
11,540
$
457
$
1,038
$
85,273
(1)
Adjusted effective tax rate was approximately 23.9% for the nine
months ended September 30, 2024. The calculation is based on a
ratio where the numerator is the adjusted income tax expense of
$57,861 and the denominator is $242,133, which equals adjusted net
income of $184,272 plus adjusted income tax expense.
ZIFF DAVIS, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN
THOUSANDS)
Nine months ended September
30, 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 on
business
Direct costs
$
(148,677
)
$
—
$
—
$
—
$
—
$
543
$
246
$
191
$
—
$
—
$
—
$
(147,697
)
Sales and marketing
$
(360,916
)
—
—
—
—
—
2,285
3,128
4
—
—
$
(355,499
)
Research, development, and engineering
$
(53,328
)
—
—
—
—
—
2,581
535
3
—
—
$
(50,209
)
General, administrative, and other related
costs
$
(302,481
)
—
—
—
(1,500
)
100,037
19,281
7,497
1,835
2,583
—
$
(172,748
)
Goodwill impairment on business
$
(56,850
)
—
—
—
—
—
—
—
—
—
56,850
$
—
Interest expense, net
$
(17,780
)
7,808
(538
)
—
—
—
—
—
—
—
—
$
(10,510
)
Loss on investments, net
$
(29,203
)
—
—
29,203
—
—
—
—
—
—
—
$
—
Other loss, net
$
(5,982
)
—
5,233
—
—
—
—
—
—
—
—
$
(749
)
Income tax expense
$
(11,180
)
(1,907
)
(1,174
)
(7,325
)
375
(25,092
)
(3,582
)
(4,864
)
(542
)
(1,064
)
—
$
(56,355
)
Loss from equity method investment,
net
$
(9,665
)
—
—
—
9,665
—
—
—
—
—
—
$
—
Total non-GAAP adjustments
$
5,901
$
3,521
$
21,878
$
8,540
$
75,488
$
20,811
$
6,487
$
1,300
$
1,519
$
56,850
(1)
Adjusted effective tax rate was approximately 23.8% for the nine
months ended September 30, 2023. The calculation is based on a
ratio where the numerator is the adjusted income tax expense of
$56,355 and the denominator is $236,731, which equals adjusted net
income of $180,376 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
$
—
$
232,082
Less: Purchases of property and
equipment
(28,129
)
(25,504
)
(25,843
)
—
(79,476
)
Free cash flow
$
47,429
$
25,060
$
80,117
$
—
$
152,606
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/20241107725756/en/
Alan Steier Investor Relations Ziff Davis, Inc.
investor@ziffdavis.com
Rebecca Wright Corporate Communications Ziff Davis, Inc.
press@ziffdavis.com
Ziff Davis (NASDAQ:ZD)
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