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0001084048false00010840482024-02-212024-02-21

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (date of earliest event reported) February 21, 2024

Ziff Davis, Inc.
(Exact name of registrant as specified in its charter)
Delaware
0-25965
47-1053457
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)
114 5th Avenue, 15th Floor
New York, New York 10011
(Address of principal executive offices)

(212) 503-3500
(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.01 par value ZD Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o On February 21, 2024, Ziff Davis, Inc. (the “Company”) issued a press release (the “Press Release”) announcing its preliminary unaudited financial results for the fourth quarter and year ended December 31, 2023 and financial guidance for fiscal year 2024.




Item 2.02 Results of Operations and Financial Condition.


A copy of the Press Release is furnished as Exhibit 99.1 to this Form 8-K.

Item 7.01 Regulation FD Disclosure.

On February 22, 2024, at 8:30 a.m. Eastern Time, the Company will host its fourth quarter and year-end 2023 earnings conference call and webcast. Via the webcast, the Company will present portions of its February 2024 Investor Presentation, which contains a summary of the Company’s preliminary unaudited financial results for the fiscal quarter and fiscal year ended December 31, 2023, financial estimates for fiscal year 2024, and certain other financial and operating information regarding the Company. A copy of this presentation is furnished as Exhibit 99.2 to this Form 8-K.

NOTE: The information in Item 2.02 and Item 7.01 and the accompanying Exhibits 99.1 and 99.2 are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number Description
99.1
99.2
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Such forward-looking statements are subject to numerous assumptions, risks and uncertainties that could cause actual results to differ materially from those described in such statements. Such forward-looking statements are based on management’s expectations or beliefs as of February 21, 2024. Factors that might cause such differences include, but are not limited to, a variety of economic, competitive, and regulatory factors, many of which are beyond the Company’s control and are described in our most recent Annual Report on Form 10-K filed by us with the Securities and Exchange Commission (the “SEC”) and the other reports we file from time to time with the SEC. We undertake no obligation to revise or publicly release any updates to such statements based on future information or actual results.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
   
    
Ziff Davis, Inc.
(Registrant)
 
       
Date: February 21, 2024 By: /s/ Jeremy Rossen
    Jeremy Rossen
Executive Vice President, General Counsel and Secretary

EX-99.1 2 zd20231231pressrelease.htm EX-99.1 Document
Exhibit 99.1
Ziff Davis Reports Fourth Quarter and Full Year 2023 Financial Results and
Provides 2024 Guidance

NEW YORK, NY -- Ziff Davis, Inc. (NASDAQ: ZD) (“Ziff Davis” or “the Company”) today reported unaudited financial results for the fourth quarter and year ended December 31, 2023.

“We have a positive and encouraging outlook on 2024 that reflects a return to healthy growth rates at the company,” said Vivek Shah, Chief Executive Officer of Ziff Davis. “At the same time, we are well-positioned to act with conviction and decisiveness in the M&A market to further grow our business."

FOURTH QUARTER 2023 RESULTS

•Q4 2023 quarterly revenues decreased 1.7% to $389.9 million compared to $396.7 million for Q4 2022. 
•Income from operations decreased 13.6% to $80.7 million compared to $93.5 million for Q4 2022.
•Net income from continuing operations(1) decreased 8.3% to $63.4 million compared to $69.2 million for Q4 2022.
•Net income(1) decreased 6.1% to $63.4 million compared to $67.5 million for Q4 2022.
•Net income per diluted share from continuing operations(1) decreased 5.8% to $1.29 in Q4 2023 compared to $1.37 for Q4 2022.
•Adjusted EBITDA(2) for the quarter decreased 0.4% to $167.6 million compared to $168.3 million for Q4 2022.
•Adjusted net income from continuing operations(2) increased 1.0% to $107.0 million compared to $106.0 million for Q4 2022.
•Adjusted net income per diluted share from continuing operations(1)(2) (or “Adjusted diluted EPS”) for the quarter increased 3.1% to $2.33 compared to $2.26 for Q4 2022.
•Net cash provided by operating activities from continuing and discontinued operations was $92.1 million in Q4 2023 compared to $43.2 million in Q4 2022. Free cash flow(2) was $65.9 million in Q4 2023 compared to $17.8 million in Q4 2022.
•Ziff Davis ended the quarter with approximately $905.6 million in cash, cash equivalents, and investments. No funds were deployed in Q4 2023 for current year acquisitions.

FULL YEAR 2023 RESULTS

•2023 yearly revenues decreased 1.9% to $1.36 billion compared to $1.39 billion for 2022.
•Income from operations decreased 33.3% to $132.6 million compared to $198.9 million for 2022 partially due to the recognition of a $56.9 million goodwill impairment during 2023, which exceeded the recognition of a $27.4 million goodwill impairment during 2022.
•Net income from continuing operations(1) decreased 36.6% to $41.5 million compared to $65.5 million for 2022 primarily due to the recognition of a $56.9 million goodwill impairment during 2023, which exceeded the net impact of a $20.7 million goodwill impairment, net of tax, and a $7.7 million gain on extinguishment of debt, net of tax, both of which were recognized during 2022.
•Net income(1) decreased 35.0% to $41.5 million compared to $63.8 million for 2022.
•Net income per diluted share from continuing operations(1) decreased 36.0% to $0.89 in 2023 compared to $1.39 for 2022.
•Adjusted EBITDA(2) for the year decreased 4.9% to $482.3 million compared to $507.2 million for 2022.
•Adjusted net income from continuing operations(2) decreased 8.1% to $287.4 million compared to $312.6 million for 2022.
•Adjusted diluted EPS(1)(2) for the year decreased 6.9% to $6.19 compared to $6.65 for 2022.
•Net cash provided by operating activities was $320.0 million in 2023 compared to $336.4 million in 2022. Free cash flow(2) was $211.2 million in 2023 compared to $230.3 million in 2022.
•Ziff Davis deployed approximately $108.5 million related to share repurchases in 2023.

1


The following table reflects results for the three month and year ended December 31, 2023 and 2022, respectively (in millions, except per share amounts).
(Unaudited)
Three months ended December 31, % Change
Year ended
December 31,
% Change
2023 2022 2023 2022
Revenues
Digital Media $317.9 $321.7 (1.2)% $1,072.8 $1,078.4 (0.5)%
Cybersecurity and Martech $72.0 $75.0 (4.0)% $291.2 $312.6 (6.8)%
Total revenues(3)
$389.9 $396.7 (1.7)% $1,364.0 $1,391.0 (1.9)%
Income from operations
$80.7 $93.5 (13.6)% $132.6 $198.9 (33.3)%
Operating income margin
20.7% 23.6% (2.9)% 9.7% 14.3% (4.6)%
Net income from continuing operations
$63.4 $69.2 (8.3)% $41.5 $65.5 (36.6)%
Net income
$63.4 $67.5 (6.1)% $41.5 $63.8 (35.0)%
Net income per diluted share from continuing operations(1)
$1.29 $1.37 (5.8)% $0.89 $1.39 (36.0)%
Adjusted EBITDA(2)
$167.6 $168.3 (0.4)% $482.3 $507.2 (4.9)%
Adjusted EBITDA margin(2)
43.0% 42.4% 0.6% 35.4% 36.5% (1.1)%
Adjusted net income from continuing operations(2)
$107.0 $106.0 1.0% $287.4 $312.6 (8.1)%
Adjusted diluted EPS from continuing operations(1)(2)
$2.33 $2.26 3.1% $6.19 $6.65 (6.9)%
Net cash provided by operating activities from continuing and discontinued operations
$92.1 $43.2 n/m $320.0 $336.4 (4.9)%
Free cash flow from continuing and discontinued operations(2)
$65.9 $17.8 n/m $211.2 $230.3 (8.3)%
Notes:
(1)
GAAP effective tax rates were approximately 17.0% and 27.0% for the three months ended December 31, 2023 and 2022, respectively, and 32.2% and 44.2% for the year ended December 31, 2023 and 2022, respectively. Adjusted effective tax rates were approximately 22.5% and 23.2% for the three months ended December 31, 2023 and 2022, respectively, and 23.3% and 22.9% for the year ended December 31, 2023 and 2022, 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 report.
(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 2024 outlook is as follows (in millions, except per share data):
2023 Actual
2024 Range of Estimates
Growth
(unaudited) Low High Low High
Revenue $ 1,364.0  $ 1,411.0  $ 1,471.0  3.4  % 7.8  %
Adjusted EBITDA $ 482.3  $ 500.0  $ 521.0  3.7  % 8.0  %
Adjusted diluted EPS* $ 6.19  $ 6.43  $ 6.77  3.9  % 9.4  %
* 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 guidance 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.

2


Earnings Conference Call and Audio Webcast
Ziff Davis will host a live audio webcast and conference call discussing its fourth quarter and year-end 2023 financial results on Thursday, February 22, 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, cybersecurity, and martech. For more information, visit www.ziffdavis.com.
Contact:
Alan Steier
Investor Relations
Ziff Davis, Inc.
investor@ziffdavis.com

Rebecca Wright
Corporate Communications
Ziff Davis, Inc.
press@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 and the “Ziff Davis Guidance” section regarding the Company’s expected fiscal 2024 financial performance. 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; subscriber 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 and in the “Ziff Davis Guidance” portion regarding the Company’s expected fiscal 2024 financial performance 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.
3


ZIFF DAVIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN THOUSANDS)
December 31,
2023 2022
ASSETS    
Cash and cash equivalents $ 737,612  $ 652,793 
Short-term investments 27,109  58,421 
Accounts receivable, net of allowances of $6,871 and $6,868, respectively
337,703  304,739 
Prepaid expenses and other current assets 88,570  68,319 
Total current assets 1,190,994  1,084,272 
Long-term investments 140,906  127,871 
Property and equipment, net of accumulated depreciation of $327,015 and $255,586, respectively
188,169  178,184 
Intangible assets, net 325,406  462,815 
Goodwill 1,546,065  1,591,474 
Deferred income taxes 8,731  8,523 
Other assets 70,751  80,131 
TOTAL ASSETS $ 3,471,022  $ 3,533,270 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Accounts payable $ 123,256  $ 120,829 
Accrued employee related costs 50,068  42,178 
Other accrued liabilities 43,612  39,539 
Income taxes payable, current 14,458  19,712 
Deferred revenue, current 184,549  187,904 
Other current liabilities 15,890  22,286 
Total current liabilities 431,833  432,448 
Long-term debt 1,001,312  999,053 
Deferred revenue, noncurrent 8,169  9,103 
Deferred income taxes 45,503  79,007 
Income taxes payable, noncurrent 8,486  11,675 
Other long-term liabilities 82,721  109,373 
TOTAL LIABILITIES 1,578,024  1,640,659 
Common stock 461  473 
Additional paid-in capital 472,201  439,681 
Retained earnings 1,491,956  1,537,830 
Accumulated other comprehensive loss (71,620) (85,373)
TOTAL STOCKHOLDERS’ EQUITY 1,892,998  1,892,611 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 3,471,022  $ 3,533,270 

4


ZIFF DAVIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
Three months ended December 31, Year ended December 31,
2023 2022 2023 2022
Total revenues $ 389,885  $ 396,700  $ 1,364,028  $ 1,390,997 
Operating costs and expenses:
Direct costs
48,615  50,847  197,292  195,554 
Sales and marketing 126,449  129,764  487,365  490,777 
Research, development, and engineering 15,532  18,210  68,860  74,093 
General, administrative, and other related costs
118,569  104,421  421,050  404,263 
Goodwill impairment on business —  —  56,850  27,369 
Total operating costs and expenses 309,165  303,242  1,231,417  1,192,056 
Income from operations
80,720  93,458  132,611  198,941 
Interest expense, net (2,251) (5,423) (20,031) (33,842)
Gain on debt extinguishment, net —  —  —  11,505 
Gain (loss) on investments, net —  1,029  357  (46,743)
Unrealized gain (loss) on short-term investments held at the reporting date, net
1,065  7,020  (28,495) (7,145)
Other (loss) income, net (3,486) (4,525) (9,468) 8,437 
Income from continuing operations before income taxes and income (loss) from equity method investment, net
76,048  91,559  74,974  131,153 
Income tax expense (12,962) (24,726) (24,142) (57,957)
Income (loss) from equity method investment, net of income taxes
336  2,347  (9,329) (7,730)
Net income from continuing operations 63,422  69,180  41,503  65,466 
Loss from discontinued operations, net of income taxes —  (1,709) —  (1,709)
Net income
$ 63,422  $ 67,471  $ 41,503  $ 63,757 
Net income per common share from continuing operations:
Basic $ 1.39  $ 1.47  $ 0.89  $ 1.39 
Diluted $ 1.29  $ 1.37  $ 0.89  $ 1.39 
Net loss per common share from discontinued operations:
Basic $ —  $ (0.04) $ —  $ (0.04)
Diluted $ —  $ (0.03) $ —  $ (0.04)
Net income per common share:
Basic $ 1.39  $ 1.44  $ 0.89  $ 1.36 
Diluted $ 1.29  $ 1.34  $ 0.89  $ 1.36 
Weighted average shares outstanding:
Basic 45,772,689  46,915,647  46,400,941  46,954,558 
Diluted 50,985,086  52,114,995  46,464,261  47,025,849 
5


ZIFF DAVIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
                                                               Year ended December 31,
2023 2022
Cash flows from operating activities:
Net income
$ 41,503  $ 63,757 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 236,966  233,400 
Non-cash operating lease costs 11,141  13,412 
Share-based compensation 31,920  26,601 
Provision for credit losses (benefit) on accounts receivable 2,809  (255)
Deferred income taxes, net (30,017) (12,991)
Gain on extinguishment of debt, net —  (11,505)
Goodwill impairment on business 56,850  27,369 
Changes in fair value of contingent consideration (200) (2,575)
Loss from equity method investments 9,329  7,730 
Unrealized loss on short-term investments held at the reporting date 28,495  7,145 
(Gain) loss on investment, net (357) 46,743 
Other 5,159  3,637 
Decrease (increase) in:
Accounts receivable (35,371) 14,948 
Prepaid expenses and other current assets (8,700) 9,665 
Other assets (5,574) (16,240)
Increase (decrease) in:
Accounts payable 9,419  (20,246)
Deferred revenue (6,802) (20,962)
Accrued liabilities and other current liabilities (26,608) (33,189)
Net cash provided by operating activities
319,962  336,444 
Cash flows from investing activities:
Purchases of property and equipment (108,729) (106,154)
Acquisition of businesses, net of cash received (9,492) (104,094)
Investment in available-for-sale securities —  (15,000)
Purchase of equity investments (11,858) — 
Proceeds from sale of equity investments 3,174  4,527 
Other (503) (50)
Net cash used in investing activities (127,408) (220,771)
Cash flows from financing activities:
Payment of debt —  (166,904)
Proceeds from term loan —  112,286 
Debt extinguishment costs —  (756)
Repurchase of common stock (108,527) (78,291)
Issuance of common stock under employee stock purchase plan 8,727  9,431 
Proceeds from exercise of stock options —  148 
Deferred payments for acquisitions (15,241) (16,116)
Other 250  (630)
Net cash used in financing activities
(114,791) (140,832)
Effect of exchange rate changes on cash and cash equivalents 7,056  (16,890)
Net change in cash and cash equivalents 84,819  (42,049)
Cash and cash equivalents at beginning of year 652,793  694,842 
Cash and cash equivalents at end of year $ 737,612  $ 652,793 
6


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) or Adjusted net income (loss) from continuing operations, Adjusted net income (loss) per diluted share or Adjusted net income (loss) per diluted share from continuing operations, 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 and (2) they are used by our institutional investors and 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 excluding these items 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) or Net income (loss) from continuing operations with adjustments to reflect the addition or elimination of certain items including:
•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 a non-cash debt-for-equity exchange effectuated to settle amounts of senior secured term loans of the Company under its Credit Agreement with common stock of Consensus Cloud Solutions, Inc. (“Consensus”) owned by the Company. 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;
•Unrealized (gain) loss on short-term investments held at the reporting date, net. This is a non-cash item as it relates to the change in the carrying value of our investment in Consensus depending on the share price of Consensus common stock and does not represent core business operating results of the Company;
•(Gain) loss on investments, net. This item relates to the disposition of a portion of our investment in Consensus. The amount of gain or loss depends on the share price of Consensus common stock and does not represent core business operating results of the Company;
•Other (income) expense, 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 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. This also includes the reduction in value of certain acquired intangible assets that represent the 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;
7


•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, including adjustments to contingent consideration, lease terminations, retention bonuses, other acquisition-specific items, and other costs, such as severance and legal settlements. These expenses do not represent core business operating results of the Company;
•Disposal related costs associated with disposal of certain businesses. 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) or Adjusted net income (loss) from continuing operations is defined as Net income (loss) or Net income (loss) from continuing operations with adjustments to reflect the addition or elimination of certain statement of operations items including, but not limited to:
•Interest costs, 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 a non-cash debt-for-equity exchange effectuated to settle amounts of senior secured term loans of the Company under its Credit Agreement with common stock of Consensus owned by the Company. 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;
•Unrealized (gain) loss on short-term investments held at the reporting date, net. This is a non-cash item as it relates to the change in the carrying value of our investment in Consensus depending on the share price of Consensus common stock and does not represent core business operating results of the Company;
•(Gain) loss on investments, net. This item relates to the disposition of a portion of our investment in Consensus. The amount of gain or loss depends on the share price of Consensus common stock 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 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 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, including adjustments to contingent consideration, lease terminations, retention bonuses, other acquisition-specific items, and other costs, such as severance and legal settlements. These expenses do not represent core business operating results of the Company;
•Disposal related costs associated with disposal of certain businesses. 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 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.
8


Adjusted net income (loss) per diluted share or Adjusted net income (loss) per diluted share from continuing operations is calculated by dividing Adjusted net income (loss) or Adjusted net income (loss) from continuing operations by the diluted weighted average shares of common stock outstanding that excludes 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.


9


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 from continuing operations to Adjusted EBITDA:
Three months ended December 31, Year ended December 31,
2023 2022 2023 2022
Net income from continuing operations
$ 63,422  $ 69,180  $ 41,503  $ 65,466 
Interest expense, net 2,251  5,423  20,031  33,842 
Gain on debt extinguishment, net —  —  —  (11,505)
Unrealized (gain) loss on short-term investments held at the reporting date, net
(1,065) (7,020) 28,495  7,145 
(Gain) loss on investments, net —  (1,029) (357) 46,743 
Other loss (income), net
3,486  4,525  9,468  (8,437)
Income tax expense
12,962  24,726  24,142  57,957 
(Income) loss from equity method investment, net
(336) (2,347) 7,829  7,730 
Depreciation and amortization 69,633  58,520  236,966  233,400 
Share-based compensation 7,527  5,795  31,920  26,601 
Acquisition, integration, and other costs 9,649  9,753  21,000  17,426 
Disposal related costs 375  —  2,217  1,328 
Lease asset impairments and other charges (338) 778  2,245  2,178 
Goodwill impairment on business —  —  56,850  27,369 
Adjusted EBITDA $ 167,566  $ 168,304  $ 482,309  $ 507,243 


10


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, 2023
Digital
Media
Cybersecurity
and Martech
Corporate Total
Revenues $ 317,939  $ 71,946  $ —  $ 389,885 
Income (loss) from operations
$ 88,709  $ 5,430  $ (13,419) $ 80,720 
Depreciation and amortization 51,168  18,457  69,633 
Share-based compensation 2,661  932  3,934  7,527 
Acquisition, integration, and other costs 9,220  420  9,649 
Disposal related costs 251  —  124  375 
Lease asset impairments and other charges (544) 206  —  (338)
Adjusted EBITDA $ 151,465  $ 25,445  $ (9,344) $ 167,566 

    
Three months ended December 31, 2022
Digital
Media
Cybersecurity and Martech Corporate Total
Revenues $ 321,670  $ 75,030  $ —  $ 396,700 
Income (loss) from operations $ 95,015  $ 11,554  $ (13,111) $ 93,458 
Depreciation and amortization 46,361  12,149  10  58,520 
Share-based compensation 2,225  563  3,007  5,795 
Acquisition, integration, and other costs 7,784  1,179  790  9,753 
Lease asset impairments and other charges 791  (13) —  778 
Adjusted EBITDA $ 152,176  $ 25,432  $ (9,304) $ 168,304 
Figures above are net of intercompany costs and revenues.

11


ZIFF DAVIS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS)
    
Year ended December 31, 2023
Digital
Media
Cybersecurity
and Martech
Corporate Total
Revenues $ 1,072,819  $ 291,209  $ —  $ 1,364,028 
Income (loss) from operations
$ 140,839  $ 43,210  $ (51,438) $ 132,611 
Income from equity method investment, net —  —  (1,500) (1,500)
Depreciation and amortization 184,320  52,618  28  236,966 
Share-based compensation 12,680  4,186  15,054  31,920 
Acquisition, integration, and other costs 19,913  887  200  21,000 
Disposal related costs 704  202  1,311  2,217 
Lease asset impairments and other charges 1,774  471  —  2,245 
Goodwill impairment on a business 56,850  —  —  56,850 
Adjusted EBITDA $ 417,080  $ 101,574  $ (36,345) $ 482,309 

    
Year ended December 31, 2022
Digital
Media
Cybersecurity and Martech Corporate Total
Revenues $ 1,078,391  $ 312,606  $ —  $ 1,390,997 
Income (loss) from operations $ 198,171  $ 50,960  $ (50,190) $ 198,941 
Depreciation and amortization 184,658  48,714  28  233,400 
Share-based compensation 10,433  4,280  11,888  26,601 
Acquisition, integration, and other costs 14,121  2,111  1,194  17,426 
Disposal related costs 11  —  1,317  1,328 
Lease asset impairments and other charges 1,631  547  —  2,178 
Goodwill impairment on a business 27,369  —  —  27,369 
Adjusted EBITDA $ 436,394  $ 106,612  $ (35,763) $ 507,243 
Figures above are net of intercompany costs and revenues.


12


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 from continuing operations to Adjusted net income from continuing operations with adjustments presented on after-tax basis:
Three months ended December 31,
2023 Per diluted share* 2022 Per diluted share*
Net income from continuing operations $ 63,422  $ 1.29  $ 69,180  $ 1.37 
Interest costs, net
(20) —  120  — 
Loss on sale of business
276  0.01  —  — 
Unrealized gain on short-term investments held at the reporting date, net
(775) (0.02) (2,839) (0.06)
Gain on investments, net
—  —  (1,024) (0.02)
Income from equity method investment, net
(336) (0.01) (2,347) (0.05)
Amortization 31,105  0.68  28,696  0.61 
Share-based compensation 6,289  0.14  6,044  0.13 
Acquisition, integration, and other costs 7,011  0.15  7,401  0.16 
Disposal related costs 238  0.01  395  0.01 
Lease asset impairments and other charges (224) —  559  0.01 
Goodwill impairment on business —  —  (222) — 
Dilutive effect of the convertible debt
—  0.08  —  0.10 
Adjusted net income from continuing operations $ 106,986  $ 2.33  $ 105,963  $ 2.26 


Year ended December 31,
2023 Per diluted share* 2022 Per diluted share*
Net income from continuing operations $ 41,503  $ 0.89  $ 65,466  $ 1.39 
Interest costs, net
5,881  0.13  374  0.01 
Gain on debt extinguishment, net —  —  (9,094) (0.19)
Loss on sale of business
3,797  0.08  —  — 
Unrealized loss on short-term investments held at the reporting date, net
21,371  0.46  22,674  0.48 
(Gain) loss on investments, net (268) (0.01) 46,275  0.99 
Loss from equity method investment, net
8,204  0.18  7,730  0.16 
Amortization 106,593  2.30  119,170  2.53 
Share-based compensation 27,100  0.58  23,209  0.49 
Acquisition, integration, and other costs 13,498  0.29  13,278  0.28 
Disposal related costs 1,538  0.03  1,449  0.03 
Lease asset impairment and other charges 1,295  0.04  1,640  0.03 
Goodwill impairment on business 56,850  1.22  20,414  0.43 
Dilutive effect of the convertible debt —  —  —  0.02 
Adjusted net income from continuing operations $ 287,362  $ 6.19  $ 312,585  $ 6.65 
* The reconciliation of Net income from continuing operations per diluted share to Adjusted net income from continuing operations per diluted share may not foot since each is calculated independently.

13


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, 2023
GAAP amount Adjustments Adjusted non-GAAP amount
Interest costs, net (Gain) loss on sale of business Unrealized (gain) loss on short-term investments held at the reporting date, 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
Direct costs
$ (48,615) $ —  $ —  $ —  $ —  $ 124  $ 15  $ 2,561  $ —  $ —  $ (45,915)
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
$ (118,569) —  —  —  —  44,867  6,460  5,243  375  (338) $ (61,962)
Interest expense, net $ (2,251) (11) —  —  —  —  —  —  —  —  $ (2,262)
Unrealized gain on short-term investments held at period end, net
$ 1,065  —  —  (1,065) —  —  —  —  —  —  $ — 
Other loss, net
$ (3,486) —  422  —  —  —  —  459  —  —  $ (2,605)
Income tax expense $ (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)
14


ZIFF DAVIS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS)

Three months ended December 31, 2022
GAAP amount Adjustments Adjusted non-GAAP amount
Interest costs, net Unrealized (gain) loss on short-term investments held at the reporting date, net (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 of business
Direct costs
$ (50,847) $ —  $ —  $ —  $ —  $ 221  $ 52  $ 245  $ —  $ —  $ —  $ (50,329)
Sales and marketing $ (129,764) —  —  —  —  —  636  3,825  —  —  —  $ (125,303)
Research, development, and engineering $ (18,210) —  —  —  —  —  455  528  —  —  —  $ (17,227)
General, administrative, and other related costs
$ (104,421) —  —  —  —  37,641  4,652  5,155  —  778  —  $ (56,195)
Interest expense, net $ (5,423) 96  —  —  —  —  —  —  —  —  —  $ (5,327)
Gain on investment, net $ 1,029  —  —  (1,029) —  —  —  —  —  —  —  $ — 
Unrealized gain on short-term investments held at period end, net
$ 7,020  —  (7,020) —  —  —  —  —  —  —  —  $ — 
Other loss, net
$ (4,525) —  —  —  —  —  —  (195) 314  —  —  $ (4,406)
Income tax expense $ (24,726) 24  4,181  —  (9,166) 249  (2,157) 81  (219) (222) $ (31,950)
Income from equity method investment, net
$ 2,347  —  —  —  (2,347) —  —  —  —  —  —  $ — 
Total non-GAAP adjustments $ 120  $ (2,839) $ (1,024) $ (2,347) $ 28,696  $ 6,044  $ 7,401  $ 395  $ 559  $ (222)
15


ZIFF DAVIS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS)

Year ended December 31, 2023
GAAP amount Adjustments Adjusted non-GAAP amount
Interest costs, net (Gain) loss on sale of business Unrealized (gain) loss on short-term investments held at the reporting date, net (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 of business
Direct costs
$ (197,292) $ —  $ —  $ —  $ —  $ —  $ 667  $ 262  $ 2,752  $ —  $ —  $ —  $ (193,611)
Sales and marketing $ (487,365) —  —  —  —  —  —  2,686  4,796  —  —  $ (479,879)
Research, development, and engineering $ (68,860) —  —  —  —  —  —  3,245  712  —  —  $ (64,900)
General, administrative, and other related costs
$ (421,050) —  —  —  —  (1,500) 144,904  25,727  12,740  2,210  2,245  —  $ (234,724)
Goodwill impairment on business $ (56,850) —  —  —  —  —  —  —  —  —  —  56,850  $ — 
Interest expense, net $ (20,031) 7,797  (538) —  —  —  —  —  —  —  —  —  $ (12,772)
Gain on investment, net $ 357  —  —  —  (357) —  —  —  —  —  —  —  $ — 
Unrealized loss on short-term investments held at period end, net $ (28,495) —  —  28,495  —  —  —  —  —  —  —  —  $ — 
Other loss, net $ (9,468) —  5,655  —  —  —  —  —  459  —  —  —  $ (3,354)
Income tax expense $ (24,142) (1,916) (1,320) (7,124) 89  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  $ 21,371  $ (268) $ 8,204  $ 106,593  $ 27,100  $ 13,498  $ 1,538  $ 1,295  $ 56,850 

16


ZIFF DAVIS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS)

Year ended December 31, 2022
GAAP amount Adjustments Adjusted non-GAAP amount
Interest costs, net (Gain) loss on debt extinguishment Unrealized (gain) loss on short-term investments held at the reporting date, net (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 of business
Direct costs
$ (195,554) $ —  $ —  $ —  $ —  $ —  $ 1,000  $ 341  $ 364  $ —  $ —  $ —  $ (193,849)
Sales and marketing $ (490,777) —  —  —  —  —  —  3,083  6,293  —  —  —  $ (481,401)
Research, development, and engineering $ (74,093) —  —  —  —  —  —  2,503  1,199  —  —  —  $ (70,391)
General, administrative, and other related costs
$ (404,263) —  —  —  —  —  156,922  20,674  9,570  1,328  2,178  —  $ (213,591)
Goodwill impairment on business $ (27,369) —  —  —  —  —  —  —  —  —  —  27,369  $ — 
Interest expense, net $ (33,842) 433  —  —  —  —  —  —  —  —  —  —  $ (33,409)
Gain on debt extinguishment, net $ 11,505  —  (12,060) —  —  —  —  —  —  —  —  —  $ (555)
Loss on investment, net $ (46,743) —  —  —  46,743  —  —  —  —  —  —  —  $ — 
Unrealized loss on short-term investments held at period end, net
$ (7,145) —  —  7,145  —  —  —  —  —  —  —  —  $ — 
Other income, net $ 8,437  —  —  —  (624) —  —  —  (195) 203  —  —  $ 7,821 
Income tax expense $ (57,957) (59) 2,966  15,529  156  —  (38,752) (3,392) (3,953) (82) (538) (6,955) $ (93,037)
Loss from equity method investment, net $ (7,730) —  —  —  —  7,730  —  —  —  —  —  —  $ — 
Total non-GAAP adjustments $ 374  $ (9,094) $ 22,674  $ 46,275  $ 7,730  $ 119,170  $ 23,209  $ 13,278  $ 1,449  $ 1,640  $ 20,414 

17


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:
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 

2022 Q1 Q2 Q3 Q4 YTD
Net cash provided by operating activities from continuing and discontinued operations
$ 116,511  $ 75,973  $ 100,735  $ 43,225  $ 336,444 
Less: Purchases of property and equipment (30,502) (23,374) (26,891) (25,387) (106,154)
Free cash flow from continuing and discontinued operations
$ 86,009  $ 52,599  $ 73,844  $ 17,838  $ 230,290 


18
EX-99.2 3 zdq42023earningspresenta.htm EX-99.2 zdq42023earningspresenta
www.ziffdavis.com©2024 Ziff Davis. All rights reserved. FOURTH QUARTER AND FULL YEAR 2023 RESULTS February 21, 2024 Exhibit 99.2


 
2 Certain statements in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, particularly those regarding our 2024 Financial Guidance. Such forward-looking statements are subject to numerous assumptions, risks and uncertainties that could cause actual results to differ materially from those described in those statements. These forward-looking statements are based on management’s expectations or beliefs as of February 21, 2024 ("Release Date"). Readers should carefully review the Risk Factors slide of this presentation, as well as the risk factors set forth in our most recent Annual Report on Form 10-K filed by us with the Securities and Exchange Commission (“SEC”) and the other reports we file from time to time with the SEC. We undertake no obligation to revise or publicly release any updates to such statements based on future information or actual results. Such forward-looking statements address the following subjects, among others: • Future operating results • Ability to acquire businesses on acceptable terms and integrate and recognize synergies from acquired businesses • Deployment of cash and investment balances to grow the company • Subscriber growth, retention, usage levels, and average revenue per account • Digital Media and Cybersecurity and Martech growth • International growth • New products, services, features, and technologies • Corporate spending including stock repurchases • Intellectual property and related licensing revenues • Liquidity and ability to repay or refinance indebtedness • Systems capacity, coverage, reliability, and security • Regulatory developments and taxes All information in this presentation speaks as of the Release Date and any redistribution or rebroadcast of this presentation after that date is not intended and will not be construed as updating or confirming such information. Capitalized terms not otherwise defined in this presentation have the meanings set forth in Ziff Davis' earnings press release issued on the Release Date. Third-Party Information All third-party trademarks, including names, logos and brands, referenced by the Company in this presentation are property of their respective owners. All references to third-party trademarks are for identification purposes only and shall be considered nominative fair use under trademark law. Industry, Market and Other Data Certain information that may be contained in this presentation concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity and market size, is based on reports from various sources. Because this information involves a number of assumptions and limitations, you are cautioned not to give undue weight to such information. We have not independently verified market data and industry forecasts provided by any of these or any other third-party sources referred to in this presentation. In addition, projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. These and other factors could cause results to differ materially from those expressed in the estimates made by third parties and by us. Non-GAAP Financial information Included in this presentation are certain financial measures that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP") and are designed to supplement, and not substitute, Ziff Davis’ financial information presented in accordance with GAAP. The non-GAAP measures as defined by Ziff Davis may not be comparable to similar non-GAAP measures presented by other companies, limiting their usefulness for comparison purposes. The presentation of such measures, which may include adjustments to exclude unusual or non-recurring items, should not be construed as an inference that Ziff Davis’ future results or leverage will be unaffected by other unusual or non-recurring items. Please see the appendix to this presentation for how we define these non-GAAP measures, a discussion of why we believe they are useful to investors and certain limitations thereof, and reconciliations thereof to the most directly comparable GAAP measures. Divested Businesses Unless otherwise specified, all financial data and operating metrics presented herein for Ziff Davis are presented giving effect to the February 2021 divestiture of the Voice assets in the United Kingdom, as well as the September 2021 sale of the Company’s B2B Backup businesses, together, (the “Divested Businesses”), and the separation of Consensus Cloud Solutions, Inc. (“Consensus”) as described in the Form 10 filed by Consensus with the Securities and Exchange Commission, as if they had occurred prior to the periods presented. Safe Harbor for Forward-looking Statements


 
3 Some factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements contained in this presentation include, but are not limited to, our ability and intention to: • Achieve business and financial objectives in light of burdensome domestic and international telecommunications, internet or other regulations, including regulations related to data privacy, access, security, retention, and sharing; • Successfully manage our growth, including but not limited to our operational and personnel-related resources, and integration of newly acquired businesses; • Successfully adapt to technological changes and diversify services and related revenues at acceptable levels of financial return; • Successfully develop and protect our intellectual property, both domestically and internationally, including our brands, content, copyrights, patents, trademarks and domain names from infringement by third parties, and avoid infringing upon the proprietary rights of others; • Manage certain risks associated with environmental, social and governmental matters, including related reporting obligations, that could adversely affect our reputation and performance; • Recruit and retain key personnel and maintain the beneficial aspects of our corporate culture globally; • Avoid disruptions to our operations, financial position, and reputation as a result of the collapse of certain banks and potentially other financial institutions; and • Other factors set forth in our most recent Annual Report on Form 10-K filed by us with the SEC and the other reports we file from time to time with the SEC. • Sustain growth or profitability, particularly in light of an uncertain U.S. or worldwide economy, including the possibility of an economic downturn or recession, closure or restricted operating conditions for businesses, inflation, supply chain disruptions, and other factors and their related impact on customer acquisition and retention rates, customer usage levels, and credit and debit card payment declines; • Maintain and increase our customer base and average revenue per user; • Generate sufficient cash flow to make interest and debt payments, reinvest in our business, and pursue desired activities and businesses plans while satisfying restrictive covenants relating to debt obligations; • Acquire businesses on acceptable terms and successfully integrate and realize anticipated synergies from such acquisitions; • Continue to expand our businesses and operations internationally in the wake of numerous risks, including adverse currency fluctuations, difficulty in staffing and managing international operations, higher operating costs as a percentage of revenues, or the implementation of adverse regulations; • Maintain our financial position, operating results and cash flows in the event that we incur new or unanticipated costs or tax liabilities, including those relating to federal and state income tax and indirect taxes, such as sales, value-added and telecommunication taxes; • Accurately estimate the assumptions underlying our effective worldwide tax rate; • Maintain favorable relationships with critical third-party vendors that are financially stable; • Create compelling digital media content facilitating increased traffic and advertising levels and additional advertisers or an increase in advertising spend, and effectively target digital media advertisements to desired audiences; • Manage certain risks inherent to our business, such as costs associated with fraudulent activity, system failure or security breach; effectively maintaining and managing our billing systems; time and resources required to manage our legal proceedings; liability for legal and other claims; or adhering to our internal controls and procedures; • Compete with other similar providers with regard to price, service, functionality; Risk Factors


 
4 $396.7 $389.9 Q4 2022 Q4 2023 (1.7)% $168.3 $167.6 Q4 2022 Q4 2023 $2.26 $2.33 Q4 2022 Q4 2023 (0.4)% 3.1% 1. See slides 14-20 for a GAAP reconciliation of Adjusted EBITDA and Adjusted Diluted EPS. Adjusted EBITDA (1) (in millions) Adjusted Diluted EPS (1) Revenue (in millions) Q4 2023 Consolidated Financial Snapshot (1)


 
5 $1,391.0 $1,364.0 FY 2022 FY 2023 (1.9)% $507.2 $482.3 FY 2022 FY 2023 $6.65 $6.19 FY 2022 FY 2023 (4.9)% (6.9)% 1. See slides 14-20 for a GAAP reconciliation of Adjusted EBITDA and Adjusted Diluted EPS. Adjusted EBITDA (1) (in millions) Adjusted Diluted EPS (1) Revenue (in millions) Q4 2023 Consolidated Financial Snapshot (1)


 
6 $242 $233 Q4 2022 Q4 2023 (3.7)% $788 $747 FY 2022 FY 2023 (5.2)% 2022 2023 Quarterly Advertising Metrics Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net Revenue Retention (2) 106.6% 99.6% 94.1% 92.0% 91.2% 89.8% 88.9% 87.1% Advertisers (3) 1,950 2,016 1,953 2,044 1,737 1,924 1,785 1,943 Quarterly Revenue per Advertiser (4) $87,214 $93,848 $95,710 $118,370 $89,857 $91,000 $102,525 $119,975 1. Figures exclude intercompany eliminations. 2. Net Advertising Revenue Retention = (Revenue Recognized by Prior Year Advertisers in Current Year Period (excluding revenue from acquisitions during the stub period)) / (Revenue Recognized by Prior Year Advertisers in Prior Year Period (excluding revenue from acquisitions during the stub period)). Excludes advertisers that generated less than $10,000 of revenue in the measurement period; combined retention is the weighted average net advertising revenue retention of the company. 3. Excludes advertisers that spent less than $2,500 in the quarter within certain divisions. 4. Total gross quarterly advertising revenues divided by advertisers as defined in footnote (3). Quarterly Revenues (1) (in millions) Fiscal Year Revenues (1) (in millions) Advertising Performance


 
7 $140 $146 Q4 2022 Q4 2023 4.1% $557 $575 FY 2022 FY 2023 3.1% 2022 2023 Quarterly Subscription and Licensing Metrics Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Customers (2) 2,131 2,417 3,121 3,143 3,175 3,231 3,300 3,266 Average Quarterly Revenue per Customer (3) $63.86 $57.02 $45.81 $44.69 $44.78 $43.75 $43.92 $44.77 Churn Rate (4) 3.51% 3.09% 3.72% 4.02% 3.30% 3.52% 3.20% 2.86% 1. Figures exclude any intercompany eliminations. 2. Quarterly average of the month-end customer counts; inclusive of the Digital Media and Cybersecurity & Martech businesses. Resellers without visibility into the number of underlying customers served by the reseller are counted as one customer. Key operating metrics in prior periods in the table above have been adjusted for our Digital Media segment to remove certain customers who have paused their subscription for more than one month and to include certain subscribers that are within the estimated active usage period of a lifetime subscription. As a result, 2022 Subscription and Licensing Metrics were adjusted as follows: Customers for Q1, Q2, Q3, and Q4 decreased by (71), (58), (25), and (1) thousand, respectively; Average Quarterly Revenue per Customer for Q1, Q2, Q3, and Q4 increased by $2.06, $1.33, $0.36, and $0.02, respectively; and Churn Rate for Q1, Q2, Q3, and Q4 (decreased) increased by (0.01%), (0.03%), 0.01%, and (0.01%), respectively. 2023 Subscription and Licensing Metrics were adjusted as follows: Customers for Q1, Q2, and Q3 increased by 37, 56, and 68 thousand, respectively; Average Quarterly Revenue per Customer for Q1, Q2, and Q3 decreased by ($0.53), ($0.77), and ($0.93), respectively; and Churn Rate for Q1, Q2, and Q3 (decreased) increased by (0.03%), 0.01%, and (0.02%), respectively. Figures are listed in 000s. 3. Total gross quarterly subscription and licensing revenues divided by customers as defined in footnote (2). 4. “Churn Rate” = A / B. A = (average revenue per customer in the prior month) x (number of cancels in current month), calculated at each business and aggregated. B = subscription and licensing revenue in the current month, calculated at each business and aggregated. Churn rate is presented on a quarterly basis. For Ookla, this is calculated by taking the sum of the monthly revenue from the specific cancelled agreements. Quarterly Revenues (1) (in millions) Fiscal Year Revenues (1) (in millions) Subscription and Licensing Performance


 
8 2021 2022 2023 Year over Year Growth Rates Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Organic Revenue (1) 9% 20% 12% 2% 10% (3%) (5%) (7%) (7%) (5%) (6%) (6%) 0% (2%) (4%) Total Revenue 29% 42% 35% 10% 27% 5% 2% (1%) (3%) 1% (3%) (3%) 0% (2%) (2%) 1. The Company considers revenue from an acquired business to become organic revenue in the first month in which the Company can compare that full month in the current year against the corresponding full month under its ownership in the prior year. Organic Growth (1)


 
9 ($ in millions) December 31, 2023 Cash and Cash Equivalents $ 738 Short-term Investments 27 Long-term Investments 141 Total Cash and Investments $ 906 4.625% High-Yield Notes $ 460 1.75% Convertible Notes 550 Total Gross Debt (1) $ 1,010 Multiple of FY 2023 Adj. EBITDA Gross Debt $ 1,010 2.1x Gross Debt less Cash $ 272 0.6x Gross Debt less Cash and Investments $ 104 0.2x 1. Reflects the face amount of the outstanding debt. Ziff Davis Capital Structure


 
2023 FINANCIAL GUIDANCE


 
11 Revenue at Midpoint Revenue Growth Advertising 5-7% growth Subscription and Licensing 3-5% growth Other Low double digit growth Distributions of Revenues First Quarter >20% of full year revenues Fourth Quarter ~30% of full year revenues Corporate Non-GAAP Tax Rate 23.25% - 25.25% Diluted Share Count (1) ~46MM 1. Does not include any potential dilution from the outstanding 1.75% convertible notes. 2024 Outlook (Forward-Looking Statements)


 
12 Our annual guidance of Revenues, Adjusted EBITDA, and Adjusted Diluted EPS (1) Ziff Davis FY 2024 Guidance Range $ in millions, except for per share amounts Low Midpoint High Midpoint YoY % Increase vs 2023A Revenue $1,411 $1,441 $1,471 5.6% Adjusted EBITDA (1) $500 $511 $521 5.8% Adjusted Diluted EPS (1) $6.43 $6.60 $6.77 6.6% 1. Refer to slides 14-20 for examples of adjustments to Adjusted EBITDA and Adjusted Diluted EPS. A reconciliation of forward-looking Adjusted EBITDA and Adjusted Diluted EPS to the corresponding GAAP guidance 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. 2024 Guidance (Forward-Looking Statements)


 
SUPPLEMENTAL INFORMATION


 
14 $ in 000's Ziff Davis Three months ended December 31, 2022 2023 Net income from continuing operations $ 69,180 $ 63,422 Interest expense, net 5,423 2,251 Unrealized gain on short-term investments held at the reporting date (7,020) (1,065) Gain on investments, net (1,029) — Other loss, net 4,525 3,486 Income tax expense 24,726 12,962 Income from equity method investment, net (2,347) (336) Depreciation and amortization 58,520 69,633 Share-based compensation 5,795 7,527 Acquisition, integration, and other costs 9,753 9,649 Disposal related costs — 375 Lease asset impairments and other charges 778 (338) Adjusted EBITDA $ 168,304 $ 167,566 Note: Adjusted EBITDA is defined as Net income (loss) or Net income (loss) from continuing operations with adjustments to reflect the addition or elimination of certain items including: Interest expense, net; (Gain) loss on debt extinguishment, net; (Gain) loss on sale of business; Unrealized (gain) loss on short-term investments held at the reporting date, net; (Gain) loss on investments, net; Other (income) expense, net; Income tax (benefit) expense; (Income) loss from equity method investments, net; Depreciation and amortization; Share-based compensation; Acquisition, integration, and other costs, including adjustments to contingent consideration, lease terminations, retention bonuses, other acquisition-specific items, and other costs, such as severance and legal settlements; Disposal related costs associated with disposal of certain businesses; Lease asset impairments and other charges; and Goodwill impairment on business. GAAP Reconciliation - Adjusted EBITDA


 
15 $ in 000's Ziff Davis Year ended ended December 31, 2022 2023 Net income from continuing operations $ 65,466 $ 41,503 Interest expense, net 33,842 20,031 Gain on debt extinguishment, net (11,505) — Unrealized loss on short-term investments held at the reporting date 7,145 28,495 Loss (gain) on investments, net 46,743 (357) Other (income) loss, net (8,437) 9,468 Income tax expense 57,957 24,142 Loss from equity method investment, net 7,730 7,829 Depreciation and amortization 233,400 236,966 Share-based compensation 26,601 31,920 Acquisition, integration, and other costs 17,426 21,000 Disposal related costs 1,328 2,217 Lease asset impairments and other charges 2,178 2,245 Goodwill impairment on business 27,369 56,850 Adjusted EBITDA $ 507,243 $ 482,309 Note: Adjusted EBITDA is defined as Net income (loss) or Net income (loss) from continuing operations with adjustments to reflect the addition or elimination of certain items including: Interest expense, net; (Gain) loss on debt extinguishment, net; (Gain) loss on sale of business; Unrealized (gain) loss on short-term investments held at the reporting date, net; (Gain) loss on investments, net; Other (income) expense, net; Income tax (benefit) expense; (Income) loss from equity method investments, net; Depreciation and amortization; Share-based compensation; Acquisition, integration, and other costs, including adjustments to contingent consideration, lease terminations, retention bonuses, other acquisition-specific items, and other costs, such as severance and legal settlements; Disposal related costs associated with disposal of certain businesses; Lease asset impairments and other charges; and Goodwill impairment on business. GAAP Reconciliation - Adjusted EBITDA


 
16 Q4 2023 GAAP amount Interest costs, net (Gain) loss on sale of business Unrealized (gain) loss on short-term investments held at the reporting date, net (Income) loss from equity method investments, net Amortization Share-based compensation Acquisition, integration, and other costs Disposal related costs Lease asset impairments and other charges Adjusted non-GAAP amount $ in 000's Direct costs $(48,615) $– $– $– $– $124 $15 $2,561 $– $– $(45,915) 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 $(118,569) – – – – 44,867 6,460 5,243 375 (338) $(61,962) Interest expense, net $(2,251) (11) – – – – – – – – $(2,262) Unrealized gain on short-term investments held at period end, net $1,065 – – (1,065) – – – – – – $– Other loss, net $(3,486) – 422 – – – – 459 – – $(2,605) Income tax expense $(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) Q4 2022 GAAP amount Interest costs, net Unrealized (gain) loss on short-term investments held at the reporting date, net (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 of business Adjusted non-GAAP amount $ in 000's Direct costs $(50,847) $– $– $– $– $221 $52 $245 $– $– $– $(50,329) Sales and marketing $(129,764) – – – – – 636 3,825 – – – $(125,303) Research, development, and engineering $(18,210) – – – – – 455 528 – – – $(17,227) General, administrative, and other related costs $(104,421) – – – – 37,641 4,652 5,155 – 778 – $(56,195) Interest expense, net $(5,423) 96 – – – – – – – – – $(5,327) Gain on investment, net $1,029 – – (1,029) – – – – – – – $– Unrealized gain on short-term investments held at period end, net $7,020 – (7,020) – – – – – – – – $– Other loss, net $(4,525) – – – – – – (195) 314 – – $(4,406) Income tax expense $(24,726) 24 4,181 5 – (9,166) 249 (2,157) 81 (219) (222) $(31,950) Income from equity method investment, net $2,347 – – – (2,347) – – – – – – $– Total non-GAAP Adjustments $120 $(2,839) $(1,024) $(2,347) $28,696 $6,044 $7,401 $395 $559 $(222) Q4 2023 and Q4 2022 Reconciliation of GAAP to Non-GAAP Financial Measures


 
17 2023 GAAP amount Interest costs, net (Gain) loss on sale of business Unrealized (gain) loss on short-term investments held at the reporting date, net (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 of business Adjusted non-GAAP amount $ in 000's Direct costs $(197,292) $– $– $– $– $– $667 $262 $2,752 $– $– $– $(193,611) 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 $(421,050) – – – – (1,500) 144,904 25,727 12,740 2,210 2,245 – $(234,724) Goodwill impairment on business $(56,850) – – – – – – – – – – 56,850 $– Interest expense, net $(20,031) 7,797 (538) – – – – – – – – – $(12,772) Gain on investment, net $357 – – – (357) – – – – – – – $– Unrealized loss on short-term investments held at period end, net $(28,495) – – 28,495 – – – – – – – – $– Other loss, net $(9,468) – 5,655 – – – – – 459 – – – $(3,354) Income tax expense $(24,142) (1,916) (1,320) (7,124) 89 375 (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 $21,371 $(268) $8,204 $106,593 $27,100 $13,498 $1,538 $1,295 $56,850 2022 GAAP amount Interest costs, net (Gain) loss on debt extinguishment Unrealized (gain) loss on short-term investments held at the reporting date, net (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 of business Adjusted non-GAAP amount $ in 000's Direct costs $(195,554) $– $– $– $– $– $1,000 $341 $364 $– $– $– $(193,849) Sales and marketing $(490,777) – – – – – – 3,083 6,293 – – – $(481,401) Research, development, and engineering $(74,093) – – – – – – 2,503 1,199 – – – $(70,391) General, administrative, and other related costs $(404,263) – – – – – 156,922 20,674 9,570 1,328 2,178 – $(213,591) Goodwill impairment on business $(27,369) – – – – – – – – – – 27,369 $– Interest expense, net $(33,842) 433 – – – – – – – – – – $(33,409) Gain on debt extinguishment, net $11,505 – (12,060) – – – – – – – – – $(555) Loss on investment, net $(46,743) – – – 46,743 – – – – – – – $– Unrealized loss on short-term investments held at period end, net $(7,145) – – 7,145 – – – – – – – – $– Other income, net $8,437 – – – (624) – – – (195) 203 – – $7,821 Income tax expense $(57,957) (59) 2,966 15,529 156 – (38,752) (3,392) (3,953) (82) (538) (6,955) $(93,037) Loss from equity method investment, net $(7,730) – – – – 7,730 – – – – – – $– Total non-GAAP Adjustments $374 $(9,094) $22,674 $46,275 $7,730 $119,170 $23,209 $13,278 $1,449 $1,640 $20,414 FY 2023 and FY 2022 Reconciliation of GAAP to Non-GAAP Financial Measures


 
18 $ in 000's Ziff Davis Three months ended December, 31 Year ended December, 31 2022 2023 2022 2023 Net cash provided by operating activities from continuing and discontinued operations $ 43,225 $ 92,119 $ 336,444 $ 319,962 Less: Purchases of property and equipment (25,387) (26,253) (106,154) (108,729) Free cash flow (1) from continuing and discontinued operations $ 17,838 $ 65,866 $ 230,290 $ 211,233 1. Free cash flow is defined as Net cash provided by operating activities, less purchases of property and equipment, plus changes in contingent consideration. GAAP Reconciliation - Free Cash Flow (1)


 
19 $ in 000's (except for per share amounts) Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Advertising $ 177,288 $ 198,385 $ 198,794 $ 263,608 $ 170,067 $ 189,198 $ 186,921 $ 241,949 $ 156,082 $ 175,083 $ 183,008 $ 233,081 Subscription and licensing 117,937 124,591 135,488 134,451 136,070 137,811 142,972 140,467 142,164 141,357 144,909 146,252 Other 3,961 7,293 11,625 10,992 9,184 10,601 12,195 14,363 8,981 9,626 13,085 10,552 Less: Intercompany eliminations (118) (292) (356) (423) (253) (254) (215) (79) (85) (50) (17) — Adjusted Revenues $ 299,068 $ 329,977 $ 345,551 $ 408,628 $ 315,068 $ 337,356 $ 341,873 $ 396,700 $ 307,142 $ 326,016 $ 340,985 $ 389,885 Direct costs 37,906 44,306 45,797 45,286 45,686 45,601 52,233 50,329 45,373 47,037 55,287 45,915 Sales and marketing 105,048 118,479 124,178 137,513 116,503 121,014 118,581 125,303 113,577 118,243 123,679 124,389 Research, development, and engineering 18,679 16,764 18,319 20,923 17,580 18,675 16,909 17,227 16,956 16,726 16,527 14,695 General, administrative, and other related costs 55,776 53,253 57,532 59,778 52,079 52,001 53,316 56,195 58,011 60,269 54,468 61,962 Adjusted Operating income $ 81,659 $ 97,175 $ 99,725 $ 145,128 $ 83,220 $ 100,065 $ 100,834 $ 147,646 $ 73,225 $ 83,741 $ 91,024 $ 142,924 Adjusted Depreciation 14,244 14,899 15,613 16,487 17,568 17,972 19,280 20,658 21,108 22,935 22,710 24,642 Adjusted EBITDA $ 95,903 $ 112,074 $ 115,338 $ 161,615 $ 100,788 $ 118,037 $ 120,114 $ 168,304 $ 94,333 $ 106,676 $ 113,734 $ 167,566 Adjusted Net Income (1) from continuing operations $ 53,066 $ 63,230 $ 66,085 $ 105,064 $ 57,929 $ 74,424 $ 74,269 $ 105,963 $ 51,726 $ 59,577 $ 69,073 $ 106,986 Adjusted Diluted EPS (2) excluding divested businesses $ 1.19 $ 1.41 $ 1.40 $ 2.18 $ 1.23 $ 1.58 $ 1.58 $ 2.26 $ 1.10 $ 1.27 $ 1.50 $ 2.33 1. Adjusted net income (loss) or Adjusted net income (loss) from continuing operations is defined as Net income (loss) or Net income (loss) from continuing operations with adjustments to reflect the addition or elimination of certain statement of operations items including, but not limited to: Interest costs, net; (Gain) loss on debt extinguishment, net; (Gain) loss on sale of business; Unrealized (gain) loss on short-term investments held at the reporting date, net; (Gain) loss on investments, net; (Income) loss from equity method investments, net; Amortization of patents and intangible assets that we acquired; Share-based compensation; Acquisition, integration, and other costs, including adjustments to contingent consideration, lease terminations, retention bonuses, other acquisition-specific items, and other costs, such as severance and legal settlements; Disposal related costs associated with disposal of certain businesses; Lease asset impairments and other charges; and Goodwill impairment on business. 2. Adjusted Diluted EPS is calculated by dividing Adjusted net income (loss) or Adjusted net income (loss) from continuing operations by the diluted weighted average shares of common stock outstanding that excludes the effect of convertible debt dilution. Quarterly Adjusted Income Statement Excluding the Divested Businesses


 
20 $ in 000's (except for per share amounts) Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Revenues Stated Revenues $ 311,657 $ 341,293 $ 355,144 $ 408,628 $ 315,068 $ 337,356 $ 341,873 $ 396,700 $ 307,142 $ 326,016 $ 340,985 $ 389,885 Adjustments for divested businesses (12,589) (11,316) (9,593) — — — — — — — — — Total Adjusted Revenues $ 299,068 $ 329,977 $ 345,551 $ 408,628 $ 315,068 $ 337,356 $ 341,873 $ 396,700 $ 307,142 $ 326,016 $ 340,985 $ 389,885 Direct costs Stated Direct Costs $ 43,137 $ 48,333 $ 49,062 $ 45,286 $ 45,686 $ 45,599 $ 52,233 $ 50,329 $ 45,373 $ 47,037 $ 55,287 $ (45,915) Adjustments for divested businesses (5,231) (4,027) (3,265) — — — — — — — — — Total Adjusted Direct Costs $ 37,906 $ 44,306 $ 45,797 $ 45,286 $ 45,686 $ 45,599 $ 52,233 $ 50,329 $ 45,373 $ 47,037 $ 55,287 $ (45,915) Sales and Marketing Stated Sales and Marketing $ 106,848 $ 120,166 $ 125,410 $ 137,513 $ 116,503 $ 121,014 $ 118,581 $ 125,303 $ 113,577 $ 118,243 $ 123,679 $ (124,389) Adjustments for divested businesses (1,800) (1,687) (1,232) — — — — — — — — — Total Adjusted Sales and Marketing $ 105,048 $ 118,479 $ 124,178 $ 137,513 $ 116,503 $ 121,014 $ 118,581 $ 125,303 $ 113,577 $ 118,243 $ 123,679 $ (124,389) Research, Development, and Engineering Stated Research, Development, and Engineering $ 18,933 $ 17,041 $ 18,534 $ 20,923 $ 17,580 $ 18,675 $ 16,909 $ 17,227 $ 16,956 $ 16,726 $ 16,527 $ (14,695) Adjustments for divested businesses (254) (277) (215) — — — — — — — — — Total Adjusted Research, Development and Engineering $ 18,679 $ 16,764 $ 18,319 $ 20,923 $ 17,580 $ 18,675 $ 16,909 $ 17,227 $ 16,956 $ 16,726 $ 16,527 $ (14,695) General, administrative, and other related costs Stated General, administrative, and other related costs $ 56,903 $ 53,671 $ 58,067 $ 59,778 $ 52,079 $ 52,002 $ 53,316 $ 56,195 $ 58,011 $ 60,269 $ 54,468 $ (61,962) Adjustments for divested businesses (1,127) (418) (535) — — — — — — — — — Total Adjusted General, administrative, and other related costs $ 55,776 $ 53,253 $ 57,532 $ 59,778 $ 52,079 $ 52,002 $ 53,316 $ 56,195 $ 58,011 $ 60,269 $ 54,468 $ (61,962) Adjusted EBITDA (1) Stated Adjusted EBITDA $ 100,705 $ 116,977 $ 119,709 $ 161,615 $ 100,788 $ 118,037 $ 120,114 $ 168,304 $ 94,333 $ 106,676 $ 113,734 $ 167,566 Adjustments for divested businesses (4,802) (4,903) (4,371) — — — — — — — — — Total Adjusted EBITDA (1) $ 95,903 $ 112,074 $ 115,338 $ 161,615 $ 100,788 $ 118,037 $ 120,114 $ 168,304 $ 94,333 $ 106,676 $ 113,734 $ 167,566 Adjusted Diluted EPS (1) Stated Adjusted Diluted EPS $ 1.24 $ 1.50 $ 1.49 $ 2.18 $ 1.23 $ 1.58 $ 1.58 $ 2.26 $ 1.10 $ 1.27 $ 1.50 $ 2.33 Adjustments for divested businesses (0.05) (0.09) (0.09) — — — — — — — — — Total Adjusted Diluted EPS (1) $ 1.19 $ 1.41 $ 1.40 $ 2.18 $ 1.23 $ 1.58 $ 1.58 $ 2.26 $ 1.10 $ 1.27 $ 1.50 $ 2.33 Reconciliation of Financial Results Excluding the Divested Businesses 1. Refer to slides 14,15, and 19 for definitions of Adjusted EBITDA and Adjusted Diluted EPS.