Ziff Davis Reports Fourth Quarter and Full Year 2024 Financial Results and Provides 2025 Guidance
NEW YORK--(BUSINESS WIRE)--February 24, 2025--
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).
Three months ended Years ended
December 31, December 31,
------------------ ------------------ -------- ------------------ --------
(Unaudited) 2024 2023 % Change 2024 2023 % Change
------------------ -------- -------- -------- -------- -------- --------
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 Years ended
December 31, 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 Years ended December
December 31, 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 & Gaming & Health & Cybersecurity Corporate
Shopping Entertainment Wellness Connectivity & Martech (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 & Gaming & Health & Cybersecurity Corporate
Shopping Entertainment Wellness Connectivity & Martech (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 & Gaming & Health & Cybersecurity Corporate
Shopping Entertainment Wellness Connectivity & Martech (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 & Gaming & Health & Cybersecurity Corporate
Shopping Entertainment Wellness Connectivity & Martech (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,
----------------------------------------
Per Per
diluted diluted
2024 share* 2023 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,
--------------------------------------------
Per
diluted Per diluted
2024 share* 2023 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
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Adjustments
-------------------------------------------------------------------------------------------------------------------------------------------------------
(Income) loss
(Gain) (Gain) loss from equity Acquisition,
loss on on method integration, Disposal Lease asset Adjusted
GAAP sale of investments, investments, Share-based and other related impairments and Goodwill non-GAAP
amount Interest, net business net net Amortization compensation costs costs other charges impairment amount
---------- ------------- --------- ------------- --------------- ---------------- ---------------- -------------- ---------- --------------- ------------ ------------
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
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Adjustments
-----------------------------------------------------------------------------------------------------------------------------------------------------------
(Income) loss
from equity Acquisition, Lease asset
(Gain) loss (Gain) loss on method integration, Disposal impairments Adjusted
GAAP on sale of investments, investments, Share-based and other related and other Goodwill non-GAAP
amount Interest, net business net net Amortization compensation costs costs charges impairment amount
---------- ------------- ------------ ---------------- --------------- ---------------- ---------------- -------------- ---------- ------------- ------------ ------------
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
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Adjustments
---------------------------------------------------------------------------------------------------------------------------------------------------------
(Income) loss
from equity Acquisition, Lease asset
(Gain) loss (Gain) loss on method integration, Disposal impairments Adjusted
GAAP on sale of investments, investments, Share-based and other related and other Goodwill non-GAAP
amount Interest, net business net net Amortization compensation costs costs charges impairment amount
---------- ------------- ------------ -------------- --------------- ---------------- ---------------- -------------- ---------- ------------- ------------ -------------
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
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Adjustments
----------------------------------------------------------------------------------------------------------------------------------------------------------
(Income) loss
from equity Acquisition, Lease asset
(Gain) loss (Gain) loss on method integration, Disposal impairments Adjusted
GAAP Interest, on sale of investments, investments, Share-based and other related and other Goodwill non-GAAP
amount net business net net Amortization compensation costs costs charges impairment amount
---------- ----------- ------------ ---------------- --------------- ---------------- ---------------- -------------- ----------- ------------- ------------ -------------
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/
CONTACT: Alan Steier
Investor Relations
Ziff Davis, Inc.
investor@ziffdavis.com
Rebecca Wright
Corporate Communications
Ziff Davis, Inc.
press@ziffdavis.com
(END) Dow Jones Newswires
February 24, 2025 18:00 ET (23:00 GMT)
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