Ziff Davis Q3: Digital Media Surges 5.8% Despite $48.6M Net Loss; EBITDA Up 9.6%

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Ziff Davis (NASDAQ: ZD) reported Q3 2024 financial results with revenue increasing 3.7% to $353.6 million. Despite revenue growth, the company recorded a net loss of $48.6 million, largely due to an $85.3 million goodwill impairment. Adjusted EBITDA grew 9.6% to $124.7 million, and adjusted net income increased 4.3% to $72.1 million. The Digital Media segment showed 5.8% growth, while Cybersecurity and Martech declined 4.1%. Free cash flow improved significantly to $80.1 million, up from $45.6 million in Q3 2023. The company maintained its 2024 guidance with expected revenue between $1,411.0-$1,471.0 million.

Ziff Davis (NASDAQ: ZD) ha riportato i risultati finanziari del terzo trimestre 2024, con un aumento del fatturato del 3,7% a 353,6 milioni di dollari. Nonostante la crescita dei ricavi, l’azienda ha registrato una perdita netta di 48,6 milioni di dollari, principalmente a causa di un impairment degli avviamenti di 85,3 milioni di dollari. L’EBITDA rettificato è cresciuto del 9,6% a 124,7 milioni di dollari, e l’utile netto rettificato è aumentato del 4,3% a 72,1 milioni di dollari. Il segmento Media Digitale ha mostrato una crescita del 5,8%, mentre Cybersecurity e Martech sono diminuiti del 4,1%. Il flusso di cassa libero è migliorato notevolmente a 80,1 milioni di dollari, rispetto ai 45,6 milioni di dollari nel terzo trimestre 2023. L’azienda ha mantenuto le previsioni per il 2024, con un fatturato atteso tra 1.411,0 e 1.471,0 milioni di dollari.

Ziff Davis (NASDAQ: ZD) informó los resultados financieros del tercer trimestre de 2024, con un aumento del 3,7% en los ingresos, alcanzando 353,6 millones de dólares. A pesar del crecimiento en los ingresos, la compañía registró una pérdida neta de 48,6 millones de dólares, en gran parte debido a un deterioro del fondo de comercio de 85,3 millones de dólares. El EBITDA ajustado creció un 9,6% hasta 124,7 millones de dólares, y el ingreso neto ajustado aumentó un 4,3% a 72,1 millones de dólares. El segmento de Medios Digitales mostró un crecimiento del 5,8%, mientras que Ciberseguridad y Martech disminuyeron un 4,1%. El flujo de caja libre mejoró significativamente a 80,1 millones de dólares, en comparación con los 45,6 millones de dólares en el tercer trimestre de 2023. La compañía mantuvo su guía para 2024, con ingresos esperados entre 1.411,0 y 1.471,0 millones de dólares.

지프 데이비스 (NASDAQ: ZD)는 2024년 3분기 재무 결과를 보고했으며, 수익이 3.7% 증가하여 3억 5,360만 달러에 달했습니다. 수익 성장에도 불구하고, 회사는 4,860만 달러의 순손실을 기록했으며, 이는 주로 8,530만 달러의 상각 손실 때문입니다. 조정된 EBITDA는 9.6% 증가하여 1억 2,470만 달러에 이르렀고, 조정된 순이익은 4.3% 증가하여 7,210만 달러에 도달했습니다. 디지털 미디어 부문은 5.8% 성장했으며, 사이버 보안과 마케팅 기술 분야는 4.1% 감소했습니다. 자유 현금 흐름은 8,010만 달러로 크게 개선되어, 2023년 3분기에는 4,560만 달러였습니다. 회사는 2024년에 대한 가이던스를 유지했으며, 예상 수익은 14억 1,100만에서 14억 7,100만 달러 사이입니다.

Ziff Davis (NASDAQ: ZD) a annoncé les résultats financiers du troisième trimestre 2024, avec un chiffre d’affaires en hausse de 3,7% à 353,6 millions de dollars. Malgré la croissance des revenus, l’entreprise a enregistré une perte nette de 48,6 millions de dollars, principalement due à une dépréciation de goodwill de 85,3 millions de dollars. L’EBITDA ajusté a augmenté de 9,6% pour atteindre 124,7 millions de dollars, et le résultat net ajusté a augmenté de 4,3% pour atteindre 72,1 millions de dollars. Le segment Médias Numériques a montré une croissance de 5,8%, tandis que la Cybersécurité et le Martech ont diminué de 4,1%. Le flux de trésorerie libre s’est fortement amélioré à 80,1 millions de dollars, contre 45,6 millions de dollars au troisième trimestre 2023. L’entreprise a maintenu ses prévisions pour 2024, avec des revenus attendus entre 1.411,0 et 1.471,0 millions de dollars.

Ziff Davis (NASDAQ: ZD) berichtete über die finanziellen Ergebnisse für das dritte Quartal 2024, wobei die Einnahmen um 3,7% auf 353,6 Millionen Dollar stiegen. Trotz des Umsatzwachstums verzeichnete das Unternehmen einen Nettoverlust von 48,6 Millionen Dollar, der hauptsächlich auf eine Wertminderung des Firmenwerts in Höhe von 85,3 Millionen Dollar zurückzuführen ist. Das bereinigte EBITDA wuchs um 9,6% auf 124,7 Millionen Dollar, und der bereinigte Nettogewinn stieg um 4,3% auf 72,1 Millionen Dollar. Der Bereich Digitale Medien zeigte ein Wachstum von 5,8%, während die Bereiche Cybersicherheit und Martech um 4,1% zurückgingen. Der freie Cashflow verbesserte sich erheblich auf 80,1 Millionen Dollar, verglichen mit 45,6 Millionen Dollar im dritten Quartal 2023. Das Unternehmen hielt an seiner Prognose für 2024 fest, mit erwarteten Einnahmen von 1.411,0 bis 1.471,0 Millionen Dollar.

Positive


  • Revenue increased 3.7% to $353.6 million

  • Adjusted EBITDA grew 9.6% to $124.7 million

  • Digital Media segment revenue up 5.8%

  • Free cash flow increased 75.8% to $80.1 million

  • Strong cash position of $538.9 million

Negative


  • Net loss increased to $48.6 million from $31.0 million

  • $85.3 million goodwill impairment charge

  • Cybersecurity and Martech revenue declined 4.1%

  • Operating loss margin worsened to -8.3% from -3.9%

Insights


Q3 2024 shows mixed results with some concerning elements. While revenues grew 3.7% to $353.6M, the company recorded a significant net loss of $48.6M, largely due to an $85.3M goodwill impairment. However, there are positive indicators: Adjusted EBITDA increased 9.6% to $124.7M and free cash flow jumped 75.8% to $80.1M.

The Digital Media segment performed well with 5.8% growth, while Cybersecurity and Martech declined 4.1%. The strong balance sheet with $538.9M in cash and investments positions the company well for potential acquisitions. The reaffirmed guidance suggests management’s confidence in meeting full-year targets despite challenges.

The divergence between GAAP and adjusted metrics warrants attention. While adjusted figures show improvement, the substantial goodwill impairment suggests potential overvaluation of past acquisitions. The company’s strategic focus on share repurchases ($96.1M) and acquisitions ($154.9M) demonstrates active capital deployment, but the effectiveness of these investments needs monitoring.

The improving EBITDA margin (35.3% vs 33.3% last year) indicates better operational efficiency. However, the negative operating margin of -8.3% and increased net loss per share to $1.11 raise concerns about sustainable profitability.












NEW YORK–(BUSINESS WIRE)–
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

 

 

Alan Steier

Investor Relations

Ziff Davis, Inc.

[email protected]

Rebecca Wright

Corporate Communications

Ziff Davis, Inc.

[email protected]

Source: Ziff Davis, Inc.








FAQ



What was Ziff Davis (ZD) revenue growth in Q3 2024?


Ziff Davis reported a 3.7% revenue growth in Q3 2024, reaching $353.6 million compared to $341.0 million in Q3 2023.


Why did Ziff Davis (ZD) report a net loss in Q3 2024?


Ziff Davis reported a net loss primarily due to an $85.3 million goodwill impairment charge recognized in Q3 2024.


What is Ziff Davis (ZD) revenue guidance for 2024?


Ziff Davis reaffirmed its 2024 revenue guidance range of $1,411.0 million to $1,471.0 million.


How much free cash flow did Ziff Davis (ZD) generate in Q3 2024?


Ziff Davis generated $80.1 million in free cash flow during Q3 2024, up from $45.6 million in Q3 2023.





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