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0001084048false00010840482024-08-072024-08-07

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) August 7, 2024

Ziff Davis, Inc.
(Exact name of registrant as specified in its charter)
Delaware
0-25965
47-1053457
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)

114 5th Avenue, 15th Floor New York, New York  10011
(Address of principal executive offices) (Zip Code)

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

Former name or former address, if changed since last report: Not Applicable

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
The 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 August 7, 2024, Ziff Davis, Inc. (the “Company”) issued a press release (the “Press Release”) announcing its preliminary unaudited financial results for the second quarter ended June 30, 2024 and reaffirming its 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 August 8, 2024, at 8:30 a.m. Eastern Time, the Company will host its second quarter 2024 earnings conference call and webcast. Via the webcast, the Company will present portions of its August 2024 Investor Presentation, which contains a summary of the Company’s preliminary unaudited financial results for the fiscal quarter ended June 30, 2024, 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 8.01 Other Events.

On August 2, 2024, the Board of Directors of Ziff Davis (the “Board”), authorized (i) an increase in its existing share repurchase program pursuant to which the Company may purchase up to an additional 5 million shares of the Company’s outstanding common stock, par value $0.01 per share (“Common Stock”) (the “Additional Authorization”) and (ii) an extension of the expiration date of the share repurchase program from August 6, 2025 to August 2, 2029. As a result of the Additional Authorization, the aggregate number of shares of Common Stock under the repurchase program increased from up to 10 million shares of Common Stock to up to 15 million shares of Common Stock, with 8,241,308 shares of Common Stock remaining under the repurchase program as of August 2, 2024. The share repurchase program does not obligate the Company to purchase any particular number of shares of Common Stock. The share repurchase program may be terminated, suspended, increased or decreased by the Board in its discretion at any time. Under the stock repurchase program, the Company may repurchase shares through open market purchases, privately-negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 of the Exchange Act.

The Company is also authorized to enter into written trading plans under Rule 10b5-1 of the Exchange Act. Adopting a trading plan that satisfies the conditions of Rule 10b5-1 allows a company to repurchase its shares at times when it might otherwise be prevented from doing so due to self-imposed trading blackout periods or pursuant to insider trading laws. Under any Rule 10b5-1 trading plan, the Company’s third-party broker, subject to Securities and Exchange Commission (“SEC”) regulations regarding certain price, market, volume and timing constraints, would have authority to purchase the Company’s Common Stock in accordance with the terms of the plan. The Company has previously entered into and may from time to time in the future enter into Rule 10b5-1 trading plans to facilitate the repurchase of its Common Stock pursuant to its share repurchase program.

The Company cannot predict when or if it will repurchase any additional shares of Common Stock as such repurchases will depend on a number of factors, including constraints specified in any Rule 10b5-1 trading plans, price, general business and market conditions, and alternative investment opportunities. Information regarding share repurchases is available in the Company’s periodic reports on Form 10-Q and 10-K filed with the SEC as required by the applicable rules of the Exchange Act.

Forward-looking Statements

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this Form 8-K are “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995, including statements relating to the Company’s plans regarding share repurchases. 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 the Company’s ability to implement its plans regarding share repurchases, market conditions, and, 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; its 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 the Company’s ability to adhere to its 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 the Company’s filings with the SEC. For a more detailed description of the risk factors and uncertainties affecting the Company, refer to its most recent Annual Report on Form 10-K and the other reports filed by the Company from time-to-time with the SEC, each of which is available at www.sec.gov. The forward-looking statements included in this Form 8-K speak only as of the date of this Form 8-K, and the Company undertakes no obligation to revise or update these statements.

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)




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: August 7, 2024 By: /s/ Jeremy Rossen
    Jeremy Rossen
Executive Vice President, General Counsel and Secretary
    

EX-99.1 2 zd2024630pressrelease.htm EX-99.1 Document
Exhibit 99.1
Ziff Davis Reports Second Quarter 2024 Financial Results and
Reaffirms 2024 Guidance

NEW YORK, NY -- Ziff Davis, Inc. (NASDAQ: ZD) (“Ziff Davis” or “the Company”) today reported unaudited financial results for the second quarter ended June 30, 2024.

“Our recent acquisition activity gives us confidence that we are back on the path to steady and compounding growth,” said Vivek Shah, Chief Executive Officer of Ziff Davis. “We are prepared to continue to act with conviction and decisiveness on accretive, value-driving opportunities."

SECOND QUARTER 2024 RESULTS

•Q2 2024 quarterly revenues decreased 1.6% to $320.8 million compared to $326.0 million for Q2 2023. 
•Income from operations decreased 26.5% to $28.6 million compared to $38.9 million for Q2 2023.
•Net income (1) increased to $36.9 million compared to $16.7 million for Q2 2023.
•Net income per diluted share (1) increased to $0.77 in Q2 2024 compared to $0.36 for Q2 2023.
•Adjusted EBITDA (2) for the quarter decreased 9.8% to $96.3 million compared to $106.7 million for Q2 2023.
•Adjusted net income (2) decreased 9.8% to $53.7 million compared to $59.6 million for Q2 2023.
•Adjusted net income per diluted share (1)(2) (or “Adjusted diluted EPS”) for the quarter decreased 7.1% to $1.18 compared to $1.27 for Q2 2023.
•Net cash provided by operating activities was $50.6 million in Q2 2024 compared to $39.7 million in Q2 2023. Free cash flow (2) was $25.1 million in Q2 2024 compared to $14.5 million in Q2 2023.
•Ziff Davis ended the quarter with approximately $839.7 million in cash, cash equivalents, and investments after deploying approximately $84.0 million primarily related to share repurchases and $17.2 million for current and prior year acquisitions.

The following table reflects results for the three and six months ended June 30, 2024 and 2023, respectively (in millions, except per share amounts).
(Unaudited)
Three months ended June 30, % Change Six months ended June 30, % Change
2024 2023 2024 2023
Revenues
Digital Media $251.8 $252.8 (0.4)% $490.9 $487.0 0.8%
Cybersecurity and Martech $69.0 $73.2 (5.8)% $144.4 $146.2 (1.2)%
Total revenues (3)
$320.8 $326.0 (1.6)% $635.3 $633.2 0.3%
Income from operations
$28.6 $38.9 (26.5)% $64.4 $65.2 (1.2)%
Operating income margin
8.9% 11.9% (3.0)% 10.1% 10.3% (0.2)%
Net income (1)
$36.9 $16.7 121.3% $47.5 $9.1 425.2%
Net income per diluted share (1)
$0.77 $0.36 113.9% $1.02 $0.19 436.8%
Adjusted EBITDA (2)
$96.3 $106.7 (9.8)% $197.0 $201.0 (2.0)%
Adjusted EBITDA margin (2)
30.0% 32.7% (2.7)% 31.0% 31.7% (0.7)%
Adjusted net income (1)(2)
$53.7 $59.6 (9.8)% $112.2 $111.3 0.8%
Adjusted diluted EPS (1)(2)
$1.18 $1.27 (7.1)% $2.45 $2.37 3.4%
Net cash provided by operating activities
$50.6 $39.7 27.3% $126.1 $155.0 (18.6)%
Free cash flow (2)
$25.1 $14.5 72.9% $72.5 $99.8 (27.4)%
Notes:
(1)
GAAP effective tax rates were approximately 19.9% and 27.2% for the three months ended June 30, 2024 and 2023, respectively, and 27.9% and 23.7% for the six months ended June 30, 2024 and 2023, respectively. Adjusted effective tax rates were approximately 23.3% and 24.8% for the three months ended June 30, 2024 and 2023, respectively, and 23.6% and 24.3% for the six months ended June 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 report.
(3) The revenues associated with each of the businesses may not foot precisely since each is presented independently.

1


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 second quarter 2024 financial results on Thursday, August 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.
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, 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.
2


ZIFF DAVIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN THOUSANDS)
June 30, 2024 December 31, 2023
ASSETS    
Cash and cash equivalents $ 687,234  $ 737,612 
Short-term investments —  27,109 
Accounts receivable, net of allowances of $7,302 and $6,871, respectively
450,389  337,703 
Prepaid expenses and other current assets 93,525  88,570 
Total current assets 1,231,148  1,190,994 
Long-term investments 152,421  140,906 
Property and equipment, net of accumulated depreciation of $334,243 and $327,015, respectively
192,278  188,169 
Intangible assets, net 385,820  325,406 
Goodwill 1,626,270  1,546,065 
Deferred income taxes 8,752  8,731 
Other assets 67,125  70,751 
TOTAL ASSETS $ 3,663,814  $ 3,471,022 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Accounts payable $ 367,888  $ 123,256 
Accrued employee related costs 29,974  50,068 
Other accrued liabilities 28,446  43,612 
Income taxes payable, current 6,695  14,458 
Deferred revenue, current 198,382  184,549 
Other current liabilities 12,420  15,890 
Total current liabilities 643,805  431,833 
Long-term debt 1,002,460  1,001,312 
Deferred income taxes 66,349  45,503 
Income taxes payable, noncurrent —  8,486 
Deferred revenue, noncurrent 6,816  8,169 
Other long-term liabilities 74,497  82,721 
TOTAL LIABILITIES 1,793,927  1,578,024 
Common stock 447  461 
Additional paid-in capital 476,232  472,201 
Retained earnings 1,471,543  1,491,956 
Accumulated other comprehensive loss (78,335) (71,620)
TOTAL STOCKHOLDERS’ EQUITY 1,869,887  1,892,998 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 3,663,814  $ 3,471,022 

3


ZIFF DAVIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
Three months ended June 30, Six months ended June 30,
2024 2023 2024 2023
Total revenues $ 320,800  $ 326,016  $ 635,285  $ 633,158 
Operating costs and expenses:
Direct costs
52,590  47,421  99,657  93,151 
Sales and marketing 124,766  119,934  241,766  235,854 
Research, development, and engineering 16,795  17,817  34,569  35,731 
General, administrative, and other related costs
98,080  101,949  194,863  203,212 
Total operating costs and expenses 292,231  287,121  570,855  567,948 
Income from operations
28,569  38,895  64,430  65,210 
Interest expense, net (1,804) (10,483) (3,573) (14,963)
Loss on sale of businesses
—  —  (3,780) — 
Unrealized loss on short-term investments held at the reporting date, net
—  (3,196) (10,705) (23,541)
Gain on investments
3,051  —  3,051  357 
Other income (loss), net
5,267  (1,503) 5,163  (2,411)
Income before income tax expense and income (loss) from equity method investment
35,083  23,713  54,586  24,652 
Income tax expense
(6,990) (6,461) (15,221) (5,845)
Income (loss) from equity method investment, net of income taxes
8,817  (573) 8,172  (9,755)
Net income
$ 36,910  $ 16,679  $ 47,537  $ 9,052 
Net income per common share:
Basic $ 0.81  $ 0.36  $ 1.04  $ 0.19 
Diluted $ 0.77  $ 0.36  $ 1.02  $ 0.19 
Weighted average shares outstanding:
Basic 45,492,809  46,798,800  45,676,726  46,892,504 
Diluted 50,665,112  46,798,800  50,889,579  46,892,504 
4


ZIFF DAVIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
                                                               Six months ended June 30,
2024 2023
Cash flows from operating activities:
Net income $ 47,537  $ 9,052 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 100,594  111,479 
Non-cash operating lease costs 5,538  5,924 
Share-based compensation 20,472  17,619 
Provision for credit losses on accounts receivable 1,336  1,819 
Deferred income taxes, net (7,869) (18,330)
Loss on sale of businesses
3,780  — 
(Gain) loss from equity method investments
(8,172) 9,755 
Unrealized loss on short-term investments held at the reporting date, net 10,705  23,541 
Gain on investments
(3,051) (357)
Other 1,779  3,834 
Decrease (increase) in:
Accounts receivable 44,215  20,470 
Prepaid expenses and other current assets (9,138) (13,038)
Other assets (375) (4,030)
Increase (decrease) in:
Accounts payable (80,548) (1,332)
Deferred revenue 13,108  (1,777)
Accrued liabilities and other current liabilities (13,789) (9,594)
Net cash provided by operating activities
126,122  155,035 
Cash flows from investing activities:
Purchases of property and equipment (53,633) (55,250)
Acquisition of businesses, net of cash received (56,698) (9,492)
Proceeds from sale of equity investments 19,455  3,174 
Proceeds on sale of business, net of cash divested 7,860  — 
Other (124) (3,753)
Net cash used in investing activities (83,140) (65,321)
Cash flows from financing activities:
Repurchase of common stock (87,928) (62,678)
Issuance of common stock under employee stock purchase plan 4,525  4,724 
Deferred payments for acquisitions (7,417) (6,679)
Other (940) 21 
Net cash used in financing activities
(91,760) (64,612)
Effect of exchange rate changes on cash and cash equivalents (1,600) 1,195 
Net change in cash and cash equivalents (50,378) 26,297 
Cash and cash equivalents at beginning of year 737,612  652,793 
Cash and cash equivalents at end of year $ 687,234  $ 679,090 
5


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;
•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) 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 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;
6


•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;
•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. 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 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).
7


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.


8


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

The following table sets forth a reconciliation of Net income to Adjusted EBITDA:
Three months ended June 30, Six months ended June 30,
2024 2023 2024 2023
Net income
$ 36,910  $ 16,679  $ 47,537  $ 9,052 
Interest expense, net 1,804  10,483  3,573  14,963 
Loss on sale of businesses
—  —  3,780  — 
Unrealized loss on short-term investments held at the reporting date, net
—  3,196  10,705  23,541 
Gain on investments, net
(3,051) —  (3,051) (357)
Other (income) loss, net
(5,267) 1,503  (5,163) 2,411 
Income tax expense
6,990  6,461  15,221  5,845 
(Income) loss from equity method investments, net
(8,817) (927) (8,172) 8,255 
Depreciation and amortization 52,141  56,856  100,594  111,479 
Share-based compensation 11,600  9,217  20,472  17,619 
Acquisition, integration, and other costs 3,837  3,369  10,103  6,894 
Disposal related costs 77  60  573  209 
Lease asset impairments and other charges 40  (221) 843  1,098 
Adjusted EBITDA $ 96,264  $ 106,676  $ 197,015  $ 201,009 


9


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 June 30, 2024
Digital
Media
Cybersecurity
and Martech
Corporate Total
Revenues $ 251,816  $ 68,984  $ —  $ 320,800 
Income (loss) from operations
$ 35,019  $ 11,547  $ (17,997) $ 28,569 
Depreciation and amortization 43,334  8,800  52,141 
Share-based compensation 4,258  1,222  6,120  11,600 
Acquisition, integration, and other costs 1,489  471  1,877  3,837 
Disposal related costs —  20  57  77 
Lease asset impairments and other charges (65) 105  —  40 
Adjusted EBITDA $ 84,035  $ 22,165  $ (9,936) $ 96,264 

    
Three months ended June 30, 2023
Digital
Media
Cybersecurity and Martech Corporate Total
Revenues $ 252,820  $ 73,196  $ —  $ 326,016 
Income (loss) from operations $ 36,668  $ 13,565  $ (11,338) $ 38,895 
Income from equity method investment, net
—  —  (1,500) (1,500)
Depreciation and amortization 45,259  11,590  56,856 
Share-based compensation 4,070  1,283  3,864  9,217 
Acquisition, integration, and other costs 3,256  113  —  3,369 
Disposal related costs —  —  60  60 
Lease asset impairments and other charges (275) 54  —  (221)
Adjusted EBITDA $ 88,978  $ 26,605  $ (8,907) $ 106,676 
Figures above are net of intercompany costs and revenues.


10


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 income to Adjusted net income with adjustments presented on after-tax basis:
Three months ended June 30,
2024 Per diluted share* 2023 Per diluted share*
Net income
$ 36,910  $ 0.77  $ 16,679  $ 0.36 
Interest, net
17  —  5,509  0.12 
(Gain) loss on sale of business
(3,668) (0.08) 88  — 
Unrealized loss on short-term investments held at the reporting date, net
—  —  2,416  0.05 
Gain on investments, net
(2,591) (0.06) —  — 
Income from equity method investments, net
(8,817) (0.19) (552) (0.01)
Amortization 21,179  0.47  25,796  0.55 
Share-based compensation 9,421  0.21  7,181  0.15 
Acquisition, integration, and other costs 1,214  0.03  2,576  0.05 
Disposal related costs 60  —  44  — 
Lease asset impairments and other charges 14  —  (160) — 
Dilutive effect of the convertible debt
—  0.03  —  — 
Adjusted net income
$ 53,739  $ 1.18  $ 59,577  $ 1.27 



Six months ended June 30,
2024 Per diluted share* 2023 Per diluted share*
Net income
$ 47,537  $ 1.02  $ 9,052  $ 0.19 
Interest, net
12  —  5,565  0.12 
Loss on sale of business
112  —  88  — 
Unrealized loss on short-term investments held at the reporting date, net
9,668  0.21  17,681  0.38 
Gain on investments, net
(2,591) (0.06) (268) (0.01)
(Income) loss from equity method investments, net
(8,172) (0.18) 8,630  0.18 
Amortization 41,264  0.90  50,418  1.08 
Share-based compensation 17,207  0.38  13,998  0.30 
Acquisition, integration, and other costs 6,085  0.13  5,153  0.11 
Disposal related costs 432  0.01  156  — 
Lease asset impairments and other charges 657  0.01  830  0.02 
Dilutive effect of the convertible debt
—  0.03  —  0.02 
Adjusted net income
$ 112,211  $ 2.45  $ 111,303  $ 2.37 
* The reconciliation of Net income per diluted share to Adjusted net income per diluted share may not foot since each is calculated independently.

11


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 June 30, 2024
GAAP amount Adjustments
Adjusted
 non-GAAP amount
Interest, 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
Direct costs
$ (52,590) $ —  $ —  $ —  $ —  $ —  $ 82  $ 62  $ 101  $ —  $ —  $ (52,345)
Sales and marketing $ (124,766) —  —  —  —  —  —  1,093  1,949  —  —  $ (121,724)
Research, development, and engineering $ (16,795) —  —  —  —  —  —  1,071  1,271  —  —  $ (14,453)
General, administrative, and other related costs
$ (98,080) —  —  —  —  —  27,774  9,374  516  77  40  $ (60,299)
Interest expense, net $ (1,804) 23  —  —  —  —  —  —  —  —  —  $ (1,781)
Gain on investment, net
$ 3,051  —  —  —  (3,051) —  —  —  —  —  —  $ — 
Other income, net
$ 5,267  —  (4,890) —  —  —  —  —  (537) —  —  $ (160)
Income tax expense (1)
$ (6,990) (6) 1,222  —  460  —  (6,677) (2,179) (2,086) (17) (26) $ (16,299)
Income from equity method investment, net
$ 8,817  —  —  —  —  (8,817) —  —  —  —  —  $ — 
Total non-GAAP adjustments $ 17  $ (3,668) $ —  $ (2,591) $ (8,817) $ 21,179  $ 9,421  $ 1,214  $ 60  $ 14 
(1)    Adjusted effective tax rate was approximately 23.3% for the three months ended June 30, 2024. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $16,299 and the denominator is $70,039, which equals adjusted net income of $53,739 plus adjusted income tax expense.

12


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

Three months ended June 30, 2023
GAAP amount Adjustments Adjusted
non-GAAP amount
Interest, 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
Direct costs
$ (47,421) $ —  $ —  $ —  $ —  $ —  $ 189  $ 94  $ 101  $ —  $ —  $ (47,037)
Sales and marketing $ (119,934) —  —  —  —  —  —  1,038  653  —  —  $ (118,243)
Research, development, and engineering $ (17,817) —  —  —  —  —  —  958  133  —  —  $ (16,726)
General, administrative, and other related costs
$ (101,949) —  —  —  —  (1,500) 33,732  7,127  2,482  60  (221) $ (60,269)
Interest expense, net $ (10,483) 7,346  —  —  —  —  —  —  —  —  —  $ (3,137)
Unrealized loss on short-term investments held at period end, net
$ (3,196) —  —  3,196  —  —  —  —  —  —  —  $ — 
Other loss, net
$ (1,503) —  118  —  —  —  —  —  —  —  —  $ (1,385)
Income tax expense (1)
$ (6,461) (1,837) (30) (780) —  375  (8,125) (2,036) (793) (16) 61  $ (19,642)
Loss from equity method investment, net
$ (573) —  —  —  —  573  —  —  —  —  —  $ — 
Total non-GAAP adjustments $ 5,509  $ 88  $ 2,416  $ —  $ (552) $ 25,796  $ 7,181  $ 2,576  $ 44  $ (160)
(1)     Adjusted effective tax rate was approximately 24.8% for the three months ended June 30, 2023. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $19,642 and the denominator is $79,214, which equals adjusted net income of $59,577 plus adjusted income tax expense.














13



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

Six months ended June 30, 2024
GAAP amount Adjustments Adjusted non-GAAP amount
Interest, 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
$ (99,657) $ —  $ —  $ —  $ —  $ —  $ 187  $ 123  $ 271  $ —  $ —  $ —  $ (99,076)
Sales and marketing $ (241,766) —  —  —  —  —  —  1,851  2,490  —  —  —  $ (237,425)
Research, development, and engineering $ (34,569) —  —  —  —  —  —  2,161  1,494  40  —  —  $ (30,874)
General, administrative, and other related costs
$ (194,863) —  —  —  —  —  54,093  16,337  5,848  533  843  —  $ (117,209)
Interest expense, net $ (3,573) 16  —  —  —  —  —  —  —  —  —  —  $ (3,557)
Loss on sale of business
$ (3,780) —  3,780  —  —  —  —  —  —  —  —  —  $ — 
Gain on investment, net $ 3,051  —  —  —  (3,051) —  —  —  —  —  —  —  $ — 
Unrealized loss on short-term investments held at period end, net $ (10,705) —  —  10,705  —  —  —  —  —  —  —  —  $ — 
Other income, net
$ 5,163  —  (4,890) —  —  —  —  —  (537) —  —  —  $ (264)
Income tax expense $ (15,221) (4) 1,222  (1,037) 460  —  (13,016) (3,265) (3,481) (141) (186) —  $ (34,669)
Income from equity method investment, net
$ 8,172  —  —  —  —  (8,172) —  —  —  —  —  —  $ — 
Total non-GAAP adjustments $ 12  $ 112  $ 9,668  $ (2,591) $ (8,172) $ 41,264  $ 17,207  $ 6,085  $ 432  $ 657  $ — 
(1)     Adjusted effective tax rate was approximately 23.6% for the six months ended June 30, 2024. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $34,669 and the denominator is $146,880, which equals adjusted net income of $112,211 plus adjusted income tax expense.
14


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

Six months ended June 30, 2023
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
Direct costs
$ (93,151) $ —  $ —  $ —  $ —  $ —  $ 385  $ 170  $ 186  $ —  $ —  $ (92,410)
Sales and marketing $ (235,854) —  —  —  —  —  —  1,962  2,072  —  —  $ (231,820)
Research, development, and engineering $ (35,731) —  —  —  —  —  —  1,741  308  —  —  $ (33,682)
General, administrative, and other related costs
$ (203,212) —  —  —  —  (1,500) 67,051  13,746  4,328  209  1,098  $ (118,280)
Interest expense, net $ (14,963) 7,420  —  —  —  —  —  —  —  —  —  $ (7,543)
Gain on investment, net
$ 357  —  —  —  (357) —  —  —  —  —  —  $ — 
Unrealized loss on short-term investments held at period end, net
$ (23,541) —  —  23,541  —  —  —  —  —  —  —  $ — 
Other loss, net
$ (2,411) —  —  —  —  —  —  —  —  —  —  $ (2,293)
Income tax expense $ (5,845) (1,855) —  (5,860) 89  375  (17,018) (3,621) (1,741) (53) (268) $ (35,827)
Loss from equity method investment, net $ (9,755) —  —  —  —  9,755  —  —  —  —  —  $ — 
Total non-GAAP adjustments $ 5,565  $ —  $ 17,681  $ (268) $ 8,630  $ 50,418  $ 13,998  $ 5,153  $ 156  $ 830 
(1)     Adjusted effective tax rate was approximately 24.3% for the six months ended June 30, 2023. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $35,827 and the denominator is $147,131, which equals adjusted net income of $111,303 plus adjusted income tax expense.
15


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  $ —  $ —  $ 126,122 
Less: Purchases of property and equipment (28,129) (25,504) —  —  (53,633)
Free cash flow $ 47,429  $ 25,060  $ —  $ —  $ 72,489 

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 


16
EX-99.2 3 zdq22024earningspresenta.htm EX-99.2 zdq22024earningspresenta
www.ziffdavis.com©2024 Ziff Davis. All rights reserved. SECOND QUARTER 2024 RESULTS August 7, 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 August 7, 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 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. 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 "Supplemental Information" to this presentation for details related to how we define these non-GAAP measures and reconciliations thereof to the most directly comparable GAAP measures. 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. 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: • 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; the 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; • 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 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; • Meet our publicly announced guidance or other expectations about our business and future operating results; • Avoid disruptions to our operations, financial position, and reputation as a result of the collapse of certain banks and potentially other financial institutions; and • Respond to 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, continuing inflation, supply chain disruptions, and other factors and their related impacts 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, execute on our investment strategies, successfully manage our growth, and 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; • Manage certain risks related to the unauthorized use of our content and the infringement of our intellectual property rights by developers and users of generative artificial intelligence ("AI"); • Prevent system failures, security breaches, and other technological issues; • 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; Risk Factors


 
4 $326.0 $320.8 Q2 2023 Q2 2024 (1.6)% $106.7 $96.3 Q2 2023 Q2 2024 $1.27 $1.18 Q2 2023 Q2 2024 (9.8)% (7.1)% 1. See "Supplemental Information" for non-GAAP reconciliations. Adjusted EBITDA (1) (in millions) Adjusted diluted EPS (1) Revenues (in millions) Q2 2024 Consolidated Financial Snapshot


 
5 $175 $170 Q2 2023 Q2 2024 (2.7)% $760 $743 TTM Q2 2023 TTM Q2 2024 (2.3)% 2022 2023 2024 Quarterly Advertising and Performance Marketing Metrics Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Net Revenue Retention (2) 94.1% 92.0% 91.2% 89.8% 88.9% 87.1% 91.6% 90.5% Customers (3) 1,953 2,044 1,737 1,924 1,785 1,943 1,631 1,682 Quarterly Revenue per Customer (4) $95,710 $118,370 $89,857 $91,000 $102,525 $119,975 $95,695 $101,273 1. Figures exclude intercompany eliminations. 2. Net Advertising and Performance Marketing Revenue Retention = (The Trailing Twelve Months Revenue Recognized by Prior Year Customers in Current Year Period (excluding revenue from acquisitions during the stub period)) / (The Trailing Twelve Months Revenue Recognized by Prior Year Customers in Prior Year Period (excluding revenue from acquisitions during the stub period)). This excludes customers that generated less than $10,000 of revenue in the measurement period; combined retention is the weighted average net advertising and performance marketing revenue retention of the Company. 3. Excludes customers that spent less than $2,500 in the quarter. 4. Represents total gross quarterly advertising and performance marketing revenues divided by customers as defined in footnote (3). Quarterly Revenues (1) (in millions) TTM Revenues (1) (in millions) Advertising and Performance Marketing


 
6 $141 $142 Q2 2023 Q2 2024 0.3% $567 $582 TTM Q2 2023 TTM Q2 2024 2.6% 2022 2023 2024 Quarterly Subscription and Licensing Metrics (2) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Customers (3) 3,121 3,143 3,175 3,231 3,300 3,266 3,343 3,420 Average Quarterly Revenue per Customer (4) $45.81 $44.69 $44.78 $43.75 $43.92 $44.77 $44.55 $41.74 Churn Rate (5) 3.72% 4.02% 3.30% 3.52% 3.20% 2.86% 3.09% 3.61% 1. Figures exclude any intercompany eliminations. 2. Refer to the "Supplemental Information" for Quarterly Subscription and licensing metrics for each of the Digital Media and Cybersecurity and Martech segments. 3. Represents the quarterly average of the end of month customer counts. Resellers within Cybersecurity and Martech segment are counted as one customer when there is not visibility into the number of underlying customers served by the reseller. For Digital Media, the metric includes the sale of perpetual software licenses, revenue for which is recorded at a point-in-time rather than over-time. Figures are listed in 000s. 4. Represents quarterly gross subscription and licensing revenues divided by customers as defined in footnote (3). The metric includes the sale of perpetual software licenses, revenue for which is recorded at a point-in-time rather than over-time. 5. Churn rate is calculated as (i) the average revenue per customer in the prior month multiplied by the number of cancellations in the current month, calculated at each business and aggregated; divided by (ii) subscription and licensing revenue in the current month, calculated at each business and aggregated. Within the Digital Media segment, the churn rate calculation for Ookla includes the sum of the monthly revenue from the specific cancelled agreements in the numerator. The metric includes the sale of perpetual software licenses, revenue for which is recorded at a point-in-time rather than over-time. Quarterly Revenues (1) (in millions) TTM Revenues (1) (in millions) Subscription and Licensing


 
7 2022 2023 2024 Year over Year Growth Rates Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Organic Revenues (1) (7%) (7%) (6%) (6%) 0% (2%) 0% (5%) Total Revenues (1%) (3%) (3%) (3%) 0% (2%) 2% (2%) Organic Growth (1) 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. Similarly, the Company excludes revenue from divested assets beginning with the quarter of the disposal of the asset, as well as from the prior year's comparable period(s).


 
8 ($ in millions) June 30, 2024 Cash and Cash Equivalents $ 687 Short-term Investments — Long-term Investments 153 Total Cash and Investments $ 840 4.625% High-Yield Notes $ 460 1.75% Convertible Notes 550 Total Gross Debt (1)(2) $ 1,010 Multiple of Q2 2024 TTM Adj. EBITDA Gross Debt $ 1,010 2.1x Gross Debt less Cash $ 323 0.7x Gross Debt less Cash and Investments $ 170 0.4x Ziff Davis Capital Structure 1. Reflects the face amount of the outstanding debt. 2. On July 16, 2024, the Company issued $263.1 million in aggregate principal amount of new 3.625% Convertible Notes due 2028 and paid an aggregate of approximately $135.0 million in cash in exchange for approximately $400.9 million in aggregate principal amount of the Company’s 1.75% Convertible Notes (collectively, the “Exchange Transaction”) pursuant to separate, privately negotiated exchange agreements with certain holders of the 1.75% Convertible Notes. Following the Exchange Transaction, total gross debt of the Company was $872.2 million and was comprised of $460.0 million of 4.625% Senior Notes due in 2030, $149.1 million of 1.75% Convertible Notes due in 2026, and $263.1 million of 3.625% of Convertible Notes due in 2028.


 
2024 FINANCIAL GUIDANCE


 
10 Ziff Davis reaffirms its annual guidance of Revenues, Adjusted EBITDA (1), 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 Revenues $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. See "Supplemental Information" for non-GAAP reconciliations. 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


 
12 Non-GAAP Financial Measures The below non-GAAP financial measures are not measures presented in accordance with GAAP, and our use of these terms may vary from that of other companies, limiting their usefulness for comparison purposes. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. These non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations determined in accordance with GAAP. Non-GAAP financial measures exclude the certain items listed below. We believe that excluding these items from the non-GAAP measures facilitates comparisons to historical operating results and comparisons to peers, many of which exclude similar items. We believe that non-GAAP financial measures provide meaningful supplemental information regarding operational performance. We further believe these measures are useful to investors in that they allow for greater transparency of certain line items in the Company’s financial statements. 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; (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) loss, net; Income tax (benefit) expense; (Income) loss from equity method investments, net; Depreciation and amortization; Share-based compensation; Acquisition, integration, and other costs; Disposal related costs; Lease asset impairments and other charges; and Goodwill impairment on business. 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; (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; Share-based compensation; Acquisition, integration, and other costs; Disposal related costs; Lease asset impairments and other charges; and Goodwill impairment on business. Adjusted diluted EPS 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.


 
13 $ in 000's Ziff Davis Three months ended June 30, 2024 2023 Net income $ 36,910 $ 16,679 Interest expense, net 1,804 10,483 Unrealized loss on short-term investments held at the reporting date, net — 3,196 Gain on investments, net (3,051) — Other (income) loss, net (5,267) 1,503 Income tax expense 6,990 6,461 Income from equity method investments, net (8,817) (927) Depreciation and amortization 52,141 56,856 Share-based compensation 11,600 9,217 Acquisition, integration, and other costs 3,837 3,369 Disposal related costs 77 60 Lease asset impairments and other charges 40 (221) Adjusted EBITDA $ 96,264 $ 106,676 Non-GAAP reconciliation: Adjusted EBITDA


 
14 $ in 000's Ziff Davis Three months ended June 30, 2024 2024 Per diluted share (1) 2023 Per diluted share (1) Net income $ 36,910 $ 0.77 $ 16,679 $ 0.36 Interest, net 17 — 5,509 0.12 (Gain) loss on sale of business (3,668) (0.08) 88 — Unrealized loss on short-term investments held at the reporting date, net — — 2,416 0.05 Gain on investments, net (2,591) (0.06) — — Income from equity method investments, net (8,817) (0.19) (552) (0.01) Amortization 21,179 0.47 25,796 0.55 Share-based compensation 9,421 0.21 7,181 0.15 Acquisition, integration, and other costs 1,214 0.03 2,576 0.05 Disposal related costs 60 — 44 — Lease asset impairments and other charges 14 — (160) — Dilutive effect of the convertible debt — 0.03 — — Adjusted net income $ 53,739 $ 1.18 $ 59,577 $ 1.27 Non-GAAP reconciliation: Adjusted net income and Adjusted diluted EPS 1. The reconciliation of Net income per diluted share to Adjusted net income per diluted share may not foot since each is calculated independently.


 
15 Q2 2024 GAAP amount Interest, 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 Adjusted non-GAAP amount $ in 000's Direct costs $(52,590) $– $– $– $– $– $82 $62 $101 $– $– $(52,345) Sales and marketing $(124,766) – – – – – – 1,093 1,949 – – $(121,724) Research, development, and engineering $(16,795) – – – – – – 1,071 1,271 – – $(14,453) General, administrative, and other related costs $(98,080) – – – – – 27,774 9,374 516 77 40 $(60,299) Interest expense, net $(1,804) 23 – – – – – – – – – $(1,781) Gain on investment, net $3,051 – – – (3,051) – – – – – – $– Other income, net $5,267 – (4,890) – – – – – (537) – – $(160) Income tax expense (1) $(6,990) (6) 1,222 – 460 – (6,677) (2,179) (2,086) (17) (26) $(16,299) Income from equity method investment, net $8,817 – – – – (8,817) – – – – – $– Total non-GAAP adjustments $17 $(3,668) $— $(2,591) $(8,817) $21,179 $9,421 $1,214 $60 $14 Q2 2023 GAAP amount Interest, 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 Adjusted non-GAAP amount $ in 000's Direct costs $(47,421) $– $– $– $– $– $189 $94 $101 $– $– $(47,037) Sales and marketing $(119,934) – – – – – – 1,038 653 – – $(118,243) Research, development, and engineering $(17,817) – – – – – – 958 133 – – $(16,726) General, administrative, and other related costs $(101,949) – – – – (1,500) 33,732 7,127 2,482 60 (221) $(60,269) Interest expense, net $(10,483) 7,346 – – – – – – – – – $(3,137) Unrealized loss on short-term investments held at period end, net $(3,196) – – 3,196 – – – – – – – $– Other loss, net $(1,503) – 118 – – – – – – – – $(1,385) Income tax expense (2) $(6,461) (1,837) (30) (780) – 375 (8,125) (2,036) (793) (16) 61 $(19,642) Loss from equity method investment, net $(573) – – – – 573 – – – – – $– Total non-GAAP adjustments $5,509 $88 $2,416 $— $(552) $25,796 $7,181 $2,576 $44 $(160) Reconciliation of GAAP to Non-GAAP Financial Measures 1. Adjusted effective tax rate was approximately 23.3% for the three months ended June 30, 2024. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $16,299 and the denominator is $70,039, which equals adjusted net income of $53,739 plus adjusted income tax expense. 2. Adjusted effective tax rate was approximately 24.8% for the three months ended June 30, 2023. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $19,642 and the denominator is $79,214, which equals adjusted net income of $59,577 plus adjusted income tax expense.


 
16 $ in 000's Ziff Davis Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Net cash provided by operating activities $ 50,564 $ 39,728 $ 126,122 $ 155,035 Less: Purchases of property and equipment (25,504) (25,233) (53,633) (55,250) Free cash flow $ 25,060 $ 14,495 $ 72,489 $ 99,785 Non-GAAP reconciliation: Free Cash Flow


 
17 Digital Media 2022 2023 2024 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Customers (1)(6) 1,554 1,638 1,715 1,808 1,905 1,908 2,037 2,148 Average quarterly revenue per customer (3)(6) $41.64 $39.28 $40.34 $37.74 $37.73 $38.92 $36.07 $33.86 Churn rate (4)(5)(6) 4.01% 4.23% 3.57% 3.69% 3.14% 2.37% 2.97% 3.19% Cybersecurity and Martech 2022 2023 2024 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Customers (1)(2) 1,567 1,505 1,460 1,423 1,395 1,358 1,306 1,272 Average quarterly revenue per customer (3) $49.90 $49.84 $50.01 $51.43 $52.37 $52.98 $57.79 $54.25 Churn rate (4) 3.51% 3.87% 3.17% 3.38% 3.28% 3.38% 3.22% 4.03% Consolidated Total 2022 2023 2024 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Customers (1)(2)(6) 3,121 3,143 3,175 3,231 3,300 3,266 3,343 3,420 Average quarterly revenue per customer (3)(6) $45.81 $44.69 $44.78 $43.75 $43.92 $44.77 $44.55 $41.74 Churn rate (4)(5)(6) 3.72% 4.02% 3.30% 3.52% 3.20% 2.86% 3.09% 3.61% Key Operating Metrics by Segment - Subscription and Licensing 1. Represents the quarterly average of the end of month customer counts. Figures are listed in 000s. 2. Resellers within Cybersecurity and Martech segment are counted as one customer when there is not visibility into the number of underlying customers served by the reseller. 3. Represents quarterly gross subscription and licensing revenues divided by customers as defined in footnote (1). 4. Churn rate is calculated as (i) the average revenue per customer in the prior month multiplied by the number of cancellations in the current month, calculated at each business and aggregated; divided by (ii) subscription and licensing revenue in the current month, calculated at each business and aggregated. 5. Within the Digital Media segment, the churn rate calculation for Ookla includes the sum of the monthly revenue from the specific cancelled agreements in the numerator. 6. The metric includes the sale of perpetual software licenses, revenue for which is recorded at a point-in time rather than over-time.