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0001084048false00010840482024-11-072024-11-070001084048dei:FormerAddressMember2024-11-072024-11-07

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) November 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.)

360 Park Avenue S, 17th Floor New York, New York  10010
(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: 114 5th Avenue, 15th Floor New York, New York  10011

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

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

EX-99.1 2 zd2024930pressrelease.htm EX-99.1 Document
Exhibit 99.1
Ziff Davis Reports Third 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 third quarter ended September 30, 2024.

“We are very pleased with our third quarter results,” said Vivek Shah, Chief Executive Officer of Ziff Davis. “We are seeing improvements in the businesses that we currently own, as well as opportunities to leverage our strong balance sheet and free cash flows to acquire businesses that we would like to own.”

THIRD QUARTER 2024 RESULTS

•Q3 2024 quarterly revenues increased 3.7% to $353.6 million compared to $341.0 million for Q3 2023. 
•Loss from operations increased to $29.3 million compared to $13.3 million for Q3 2023. This includes a $85.3 million goodwill impairment recognized in Q3 2024 compared to a $56.9 million goodwill impairment recognized in Q3 2023.
•Net loss (1) increased to $48.6 million compared to $31.0 million for Q3 2023. This includes a $85.3 million goodwill impairment recognized in Q3 2024 compared to a $56.9 million goodwill impairment recognized in Q3 2023.
•Net loss per diluted share (1) increased to $1.11 in Q3 2024 compared to $0.67 for Q3 2023.
•Adjusted EBITDA (2) for the quarter increased 9.6% to $124.7 million compared to $113.7 million for Q3 2023.
•Adjusted net income (2) increased 4.3% to $72.1 million compared to $69.1 million for Q3 2023.
•Adjusted net income per diluted share (1)(2) (or “Adjusted diluted EPS”) for the quarter increased 9.3% to $1.64 compared to $1.50 for Q3 2023.
•Net cash provided by operating activities was $106.0 million in Q3 2024 compared to $72.8 million in Q3 2023. Free cash flow (2) was $80.1 million in Q3 2024 compared to $45.6 million in Q3 2023.
•Ziff Davis ended the quarter with approximately $538.9 million in cash, cash equivalents, and investments after deploying approximately $96.1 million primarily related to share repurchases and $154.9 million for current and prior year acquisitions.

The following table reflects results for the three and nine months ended September 30, 2024 and 2023, respectively (in millions, except per share amounts).
(Unaudited)
Three months ended September 30, % Change Nine months ended September 30, % Change
2024 2023 2024 2023
Revenues
Digital Media $283.6 $267.9 5.8% $774.4 $754.9 2.6%
Cybersecurity and Martech $70.0 $73.1 (4.1)% $214.5 $219.2 (2.2)%
Total revenues (3)
$353.6 $341.0 3.7% $988.9 $974.1 1.5%
(Loss) income from operations
$(29.3) $(13.3) (120.0)% $35.1 $51.9 (32.3)%
Operating (loss) income margin
(8.3)% (3.9)% (4.4)% 3.6% 5.3% (1.7)%
Net loss (1)
$(48.6) $(31.0) 56.8% $(1.0) $(21.9) (95.3)%
Net loss per diluted share (1)
$(1.11) $(0.67) 65.7% $(0.02) $(0.47) (95.7)%
Adjusted EBITDA (2)
$124.7 $113.7 9.6% $321.7 $314.7 2.2%
Adjusted EBITDA margin (2)
35.3% 33.3% 2.0% 32.5% 32.3% 0.2%
Adjusted net income (1)(2)
$72.1 $69.1 4.3% $184.3 $180.4 2.2%
Adjusted diluted EPS (1)(2)
$1.64 $1.50 9.3% $4.08 $3.86 5.7%
Net cash provided by operating activities
$106.0 $72.8 45.5% $232.1 $227.8 1.9%
Free cash flow (2)
$80.1 $45.6 75.8% $152.6 $145.4 5.0%
1


Notes:
(1)
GAAP effective tax rates were approximately (34.9)% and (20.7)% for the three months ended September 30, 2024 and 2023, respectively, and 149.0% and (1,040.8)% for the nine months ended September 30, 2024 and 2023, respectively. Adjusted effective tax rates were approximately 24.3% and 22.9% for the three months ended September 30, 2024 and 2023, respectively, and 23.9% and 23.8% for the nine months ended September 30, 2024 and 2023, respectively.
(2)
For definitions of non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures refer to section “Non-GAAP Financial Measures” further in this release.
(3) The revenues associated with each of the businesses may not foot precisely since each is presented independently.

ZIFF DAVIS GUIDANCE

The Company reaffirms its guidance for fiscal year 2024 as follows (in millions, except per share data):
2024 Range of Estimates
Low High
Revenue $ 1,411.0  $ 1,471.0 
Adjusted EBITDA $ 500.0  $ 521.0 
Adjusted diluted EPS* $ 6.43  $ 6.77 
* Adjusted diluted EPS for 2024 excludes amortization of acquired intangibles and the impact of any currently unanticipated items, in each case net of tax. It is anticipated that the Adjusted effective tax rate for 2024 will be between 23.25% and 25.25%.

A reconciliation of forward-looking Adjusted EBITDA and Adjusted diluted EPS to the corresponding GAAP financial measures is not available without unreasonable effort due, primarily, to variability and difficulty in making accurate forecasts and projections of non-operating matters that may arise in the future.

Earnings Conference Call and Audio Webcast
Ziff Davis will host a live audio webcast and conference call discussing its third quarter 2024 financial results on Friday, November 8, 2024, at 8:30AM ET. The live webcast and call will be accessible by phone by dialing (844) 985-2014 or via www.ziffdavis.com. Following the event, the audio recording and presentation materials will be archived and made available at www.ziffdavis.com.
About Ziff Davis
Ziff Davis, Inc. (NASDAQ: ZD) is a vertically focused digital media and internet company whose portfolio includes leading brands in technology, shopping, gaming and entertainment, connectivity, health and wellness, cybersecurity, and martech. For more information, visit www.ziffdavis.com.
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.
2


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.
3


ZIFF DAVIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN THOUSANDS)
September 30, 2024 December 31, 2023
ASSETS    
Cash and cash equivalents $ 386,122  $ 737,612 
Short-term investments —  27,109 
Accounts receivable, net of allowances of $7,352 and $6,871, respectively
470,550  337,703 
Prepaid expenses and other current assets 94,345  88,570 
Total current assets 951,017  1,190,994 
Long-term investments 152,817  140,906 
Property and equipment, net of accumulated depreciation of $348,322 and $327,015, respectively
197,482  188,169 
Intangible assets, net 470,774  325,406 
Goodwill 1,572,854  1,546,065 
Deferred income taxes 8,622  8,731 
Other assets 65,879  70,751 
TOTAL ASSETS $ 3,419,445  $ 3,471,022 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Accounts payable $ 371,498  $ 123,256 
Accrued employee related costs 33,829  50,068 
Other accrued liabilities 36,557  43,612 
Income taxes payable, current 10,470  14,458 
Deferred revenue, current 204,029  184,549 
Other current liabilities 11,011  15,890 
Total current liabilities 667,394  431,833 
Long-term debt 863,741  1,001,312 
Deferred income taxes 53,577  45,503 
Income taxes payable, noncurrent —  8,486 
Deferred revenue, noncurrent 7,513  8,169 
Other long-term liabilities 74,908  82,721 
TOTAL LIABILITIES 1,667,133  1,578,024 
Common stock 427  461 
Additional paid-in capital 480,271  472,201 
Retained earnings 1,335,083  1,491,956 
Accumulated other comprehensive loss (63,469) (71,620)
TOTAL STOCKHOLDERS’ EQUITY 1,752,312  1,892,998 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 3,419,445  $ 3,471,022 

4


ZIFF DAVIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
Three months ended September 30, Nine months ended September 30,
2024 2023 2024 2023
Total revenues $ 353,580  $ 340,985  $ 988,865  $ 974,143 
Operating costs and expenses:
Direct costs
53,243  55,526  152,900  148,677 
Sales and marketing 127,418  125,062  369,184  360,916 
Research, development, and engineering 15,255  17,597  49,824  53,328 
General, administrative, and other related costs
101,695  99,269  296,558  302,481 
Goodwill impairment on business 85,273  56,850  85,273  56,850 
Total operating costs and expenses 382,884  354,304  953,739  922,252 
(Loss) income from operations (29,304) (13,319) 35,126  51,891 
Interest expense, net (4,024) (2,817) (7,597) (17,780)
Loss on sale of businesses
—  —  (3,780) — 
Loss on investments, net
—  (6,019) (7,654) (29,203)
Other (loss) income, net
(2,633) (3,571) 2,530  (5,982)
(Loss) income before income tax expense and (loss) income from equity method investment
(35,961) (25,726) 18,625  (1,074)
Income tax expense
(12,539) (5,335) (27,760) (11,180)
(Loss) income from equity method investment, net of tax
(77) 90  8,095  (9,665)
Net loss
$ (48,577) $ (30,971) $ (1,040) $ (21,919)
Net loss per common share:
Basic $ (1.11) $ (0.67) $ (0.02) $ (0.47)
Diluted $ (1.11) $ (0.67) $ (0.02) $ (0.47)
Weighted average shares outstanding:
Basic 43,924,158  46,062,097  45,088,272  46,612,660 
Diluted 43,924,158  46,062,097  45,088,272  46,612,660 
5


ZIFF DAVIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
                                                               Nine months ended September 30,
2024 2023
Cash flows from operating activities:
Net loss $ (1,040) $ (21,919)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 151,945  167,333 
Non-cash operating lease costs 8,392  7,248 
Share-based compensation 30,633  24,393 
Provision for credit losses on accounts receivable 2,289  2,296 
Deferred income taxes (14,575) (25,658)
Loss on sale of businesses
3,780  — 
Goodwill impairment on business 85,273  56,850 
(Income) loss from equity method investments, net
(8,095) 9,665 
Loss on investments, net 7,654  29,203 
Other 2,390  5,113 
Decrease (increase) in:
Accounts receivable 46,576  11,043 
Prepaid expenses and other current assets (8,152) (10,059)
Other assets (2,794) (7,961)
Increase (decrease) in:
Accounts payable (66,313) 1,955 
Deferred revenue 9,269  (6,820)
Accrued liabilities and other current liabilities (15,150) (14,839)
Net cash provided by operating activities
232,082  227,843 
Cash flows from investing activities:
Purchases of property and equipment (79,476) (82,476)
Acquisition of businesses, net of cash received (211,526) (9,492)
Purchases of equity method investment —  (11,790)
Proceeds from sale of equity investments 19,455  3,174 
Proceeds on sale of business, net of cash divested 7,860  — 
Other (884) (4,154)
Net cash used in investing activities (264,571) (104,738)
Cash flows from financing activities:
Payment of debt (134,989) — 
Repurchase of common stock (183,981) (107,341)
Issuance of common stock under employee stock purchase plan 4,525  4,725 
Deferred payments for acquisitions (7,442) (14,141)
Other (1,209) (53)
Net cash used in financing activities
(323,096) (116,810)
Effect of exchange rate changes on cash and cash equivalents 4,095  1,536 
Net change in cash and cash equivalents (351,490) 7,831 
Cash and cash equivalents at beginning of year 737,612  652,793 
Cash and cash equivalents at end of year $ 386,122  $ 660,624 
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), Adjusted net income (loss) per diluted share, Free cash flow, and Adjusted effective tax rate (collectively the “non-GAAP financial measures”). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of our recurring core business operating results or, in certain cases, may be non-cash in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance and liquidity. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making, (2) certain measures are used to determine the amount of annual incentive compensation paid to our named executive officers, and (3) they are used by the analyst community to help them analyze the health of our business.
These non-GAAP financial measures are not measures presented in accordance with GAAP, and our use of these terms may vary from that of other companies, limiting their usefulness for comparison purposes. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. These non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations determined in accordance with GAAP.
Non-GAAP financial measures exclude the certain items listed below. We believe that excluding these items from the non-GAAP measures facilitates comparisons to historical operating results and comparisons to peers, many of which exclude similar items. We believe that non-GAAP financial measures provide meaningful supplemental information regarding operational performance. We further believe these measures are useful to investors in that they allow for greater transparency of certain line items in the Company’s financial statements.
Adjusted EBITDA is defined as Net income (loss) with adjustments to reflect the addition or elimination of certain items including, but not limited to:
•Interest expense, net. Interest expense is generated primarily from interest due on outstanding debt, partially offset by interest income generated from the interest earned on cash, cash equivalents, and investments;
•(Gain) loss on debt extinguishment, net. This is a non-cash expense that relates to extinguishments of long-term debt obligations. We believe this (gain) loss does not represent recurring core business operating results of the Company;
•(Gain) loss on sale of business. This gain or loss relates to the sales of businesses and does not represent recurring core business operating results of the Company;
•(Gain) loss on investments, net. This item includes realized gains and losses, unrealized gains and losses, and impairment charges on debt and equity investments. The amount of gain or loss depends on the share price for investments with readily determinable fair value and on observable price changes for investments without a readily determinable fair value, and does not represent core business operating results of the Company;
•Other (income) loss, net. This income or expense relates to other non-operating items and does not represent recurring core business operating results of the Company;
•Income tax (benefit) expense. This benefit or expense depends on the pre-tax loss or income of the Company, statutory tax rates, tax regulations, and different tax rates in various jurisdictions in which the Company operates and which the Company does not have the control over;
•(Income) loss from equity method investments, net. This is a non-cash expense as it relates primarily to our investment in OCV Fund I, LP (the “Fund”). We believe that gain or loss resulting from our equity method investment does not represent core business operating results of the Company;
•Depreciation and amortization. This is a non-cash expense at it relates to use and associated reduction in value of certain assets including equipment, fixtures, and certain capitalized internal-used software and website development costs, and identifiable definite-lived intangible assets of the acquired businesses;
•Share-based compensation. This is a non-cash expense as it relates to awards granted under the various share-based incentive plans of the Company. We view the economic cost of share-based awards to be the dilution to our share base;
•Acquisition, integration, and other costs. Includes adjustments to contingent consideration, lease terminations, retention bonuses, other acquisition-specific items, and other costs, such as severance, third-party debt modification costs, and legal settlements. These expenses do not represent core business operating results of the Company;
7


•Disposal related costs. These are expenses associated with the disposal of certain businesses that do not represent core business operating results of the Company;
•Lease asset impairments and other charges. These expenses are incurred in connection with impaired right-of-use (“ROU”) assets of the Company. Associated expenses are comprised of insurance, utility, and other charges related to assets that are no longer in use, and partially offset by the sublease income earned. These expenses do not represent core business operating results of the Company; and
•Goodwill impairment on business. This is a non-cash expense that is recorded when the carrying value of the reporting unit exceeds its fair value and does not represent core business operating results of the Company.
Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Total revenues.
Adjusted net income (loss) is defined as Net income (loss) with adjustments to reflect the addition or elimination of certain statement of operations items including, but not limited to:
•Interest, net. This reflects the difference between the imputed and coupon interest expense associated with the 4.625% Senior Notes and a charge that the Company determined to be penalty interest associated with the 1.75% Convertible Notes in each period presented, offset in part by a certain interest income earned by the Company. These net expenses do not represent core business operating results of the Company;
•(Gain) loss on debt extinguishment, net. This is a non-cash expense that relates to extinguishments of long-term debt obligations. We believe this gain or loss does not represent recurring core business operating results of the Company;
•(Gain) loss on sale of business. This gain or loss relates to the sales of businesses and does not represent recurring core business operating results of the Company;
•(Gain) loss on investments, net. This item includes realized gains and losses, unrealized gains and losses, and impairment charges on debt and equity investments. The amount of gain or loss depends on the share price for investments with readily determinable fair value and on observable price changes for investments without a readily determinable fair value, and does not represent core business operating results of the Company;
•(Income) loss from equity method investments, net. This is a non-cash income or expense as it relates primarily to our investment in the OCV Fund. We believe that gains or losses resulting from our equity method investment do not represent core business operating results of the Company;
•Amortization. Includes the amortization of patents and intangible assets that we acquired. This is a non-cash expense as it primarily relates to identifiable definite-lived intangible assets of the acquired businesses. We believe that acquired intangible assets represent cost incurred by the acquiree to build value prior to the acquisition and the amortization of this cost does not represent core business operating results of the Company;
•Share-based compensation. This is a non-cash expense as it relates to awards granted under the various incentive plans of the Company. We view the economic cost of share-based awards to be the dilution to our share base;
•Acquisition, integration, and other costs. Includes adjustments to contingent consideration, lease terminations, retention bonuses, other acquisition-specific items, and other costs, such as severance, third-party debt modification costs, and legal settlements. These expenses do not represent core business operating results of the Company;
•Disposal related costs. These are expenses associated with the disposal of certain businesses that do not represent core business operating results of the Company;
•Lease asset impairments and other charges. These expenses are incurred in connection with impaired ROU assets of the Company. Associated expenses are comprised of insurance, utility, and other charges related to assets that are no longer in use, and partially offset by the sublease income earned. These expenses do not represent core business operating results of the Company; and
•Goodwill impairment on business. This is a non-cash expense that is recorded when the carrying value of the reporting unit exceeds its fair value and does not represent core business operating results of the Company.
Adjusted net income (loss) per diluted share is calculated by dividing Adjusted net income (loss) by the diluted weighted average shares of common stock outstanding excluding the effect of convertible debt dilution.
Free cash flow is defined as Net cash provided by operating activities, less purchases of property and equipment, plus changes in contingent consideration (if any).
Adjusted effective tax rate is calculated based upon the GAAP effective tax rate with adjustments for the tax applicable to non-GAAP adjustments to Net income (loss), generally based upon the effective marginal tax rate of each adjustment.


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 loss to Adjusted EBITDA:
Three months ended September 30, Nine months ended September 30,
2024 2023 2024 2023
Net loss
$ (48,577) $ (30,971) $ (1,040) $ (21,919)
Interest expense, net 4,024  2,817  7,597  17,780 
Loss on sale of businesses
—  —  3,780  — 
Loss on investments, net —  6,019  7,654  29,203 
Other loss (income), net
2,633  3,571  (2,530) 5,982 
Income tax expense
12,539  5,335  27,760  11,180 
Loss (income) from equity method investments, net
77  (90) (8,095) 8,165 
Depreciation and amortization 51,351  55,854  151,945  167,333 
Share-based compensation 10,161  6,774  30,633  24,393 
Acquisition, integration, and other costs 6,705  4,457  16,808  11,351 
Disposal related costs (22) 1,633  551  1,842 
Lease asset impairments and other charges 527  1,485  1,370  2,583 
Goodwill impairment on business 85,273  56,850  85,273  56,850 
Adjusted EBITDA $ 124,691  $ 113,734  $ 321,706  $ 314,743 


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 (Loss) income from operations to Adjusted EBITDA by segment:
Three months ended September 30, 2024
Digital
Media
Cybersecurity
and Martech
Corporate Total
Revenues $ 283,554  $ 70,026  $ —  $ 353,580 
(Loss) income from operations
$ (24,750) $ 14,889  $ (19,443) $ (29,304)
Depreciation and amortization 43,339  7,979  33  51,351 
Share-based compensation 3,408  1,178  5,575  10,161 
Acquisition, integration, and other costs 3,753  476  2,476  6,705 
Disposal related costs (390) —  368  (22)
Lease asset impairments and other charges 429  98  —  527 
Goodwill impairment on a business 85,273  —  —  85,273 
Adjusted EBITDA $ 111,062  $ 24,620  $ (10,991) $ 124,691 

    
Three months ended September 30, 2023
Digital
Media
Cybersecurity and Martech Corporate Total
Revenues $ 267,934  $ 73,051  $ —  $ 340,985 
(Loss) income from operations $ (12,922) $ 12,527  $ (12,924) $ (13,319)
Depreciation and amortization 44,907  10,941  55,854 
Share-based compensation 2,579  399  3,796  6,774 
Acquisition, integration, and other costs 4,138  263  56  4,457 
Disposal related costs 452  203  978  1,633 
Lease asset impairments and other charges 1,379  106  —  1,485 
Goodwill impairment on a business 56,850  —  —  56,850 
Adjusted EBITDA $ 97,383  $ 24,439  $ (8,088) $ 113,734 
Figures above are net of intercompany costs and revenues.


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 loss to Adjusted net income with adjustments presented on after-tax basis:
Three months ended September 30,
2024 Per diluted share* 2023 Per diluted share*
Net loss
$ (48,577) $ (1.11) $ (30,971) $ (0.67)
Interest, net
60  —  336  0.01 
(Gain) loss on sale of business
(9) —  3,433  0.07 
Loss on investments, net —  —  4,465  0.10 
Loss (income) from equity method investments, net
77  —  (90) — 
Amortization 20,748  0.47  25,070  0.55 
Share-based compensation 8,628  0.20  6,813  0.15 
Acquisition, integration, and other costs 5,455  0.13  1,334  0.03 
Disposal related costs 25  —  1,144  0.02 
Lease asset impairments and other charges 381  0.01  689  0.01 
Goodwill impairment on business 85,273  1.94  56,850  1.23 
Adjusted net income
$ 72,061  $ 1.64  $ 69,073  $ 1.50 



Nine months ended September 30,
2024 Per diluted share* 2023 Per diluted share*
Net loss
$ (1,040) $ (0.02) $ (21,919) $ (0.47)
Interest, net
72  —  5,901  0.13 
Loss on sale of business
103  —  3,521  0.08 
Loss on investments, net 7,077  0.15  21,878  0.46 
(Income) loss from equity method investments, net
(8,095) (0.18) 8,540  0.18 
Amortization 62,012  1.38  75,488  1.62 
Share-based compensation 25,835  0.57  20,811  0.44 
Acquisition, integration, and other costs 11,540  0.26  6,487  0.14 
Disposal related costs 457  0.01  1,300  0.03 
Lease asset impairments and other charges 1,038  0.02  1,519  0.03 
Goodwill impairment on business 85,273  1.89  56,850  1.22 
Adjusted net income
$ 184,272  $ 4.08  $ 180,376  $ 3.86 
* The reconciliation of Net income (loss) per diluted share to Adjusted net income per diluted share may not foot since each is calculated independently.

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 September 30, 2024
GAAP amount Adjustments
Adjusted
 non-GAAP amount
Interest, net (Gain) loss on sale of business (Gain) loss on investments, net (Income) loss from equity method investments, net Amortization Share-based compensation Acquisition, integration, and other costs Disposal related costs Lease asset impairments and other charges Goodwill impairment on business
Direct costs
$ (53,243) $ —  $ —  $ —  $ —  $ 59  $ 68  $ 64  $ —  $ —  $ —  $ (53,052)
Sales and marketing $ (127,418) —  —  —  —  —  1,014  3,216  —  —  —  $ (123,188)
Research, development, and engineering $ (15,255) —  —  —  —  —  769  1,096  —  —  —  $ (13,390)
General, administrative, and other related costs
$ (101,695) —  —  —  —  28,444  8,310  2,329  (22) 527  —  $ (62,107)
Goodwill impairment on business $ (85,273) —  —  —  —  —  —  —  —  —  85,273  $ — 
Interest expense, net $ (4,024) 80  —  —  —  —  —  —  —  —  —  $ (3,944)
Other loss, net
$ (2,633) —  (13) —  —  —  —  —  —  —  —  $ (2,646)
Income tax expense (1)
$ (12,539) (20) —  —  (7,755) (1,533) (1,250) 47  (146) —  $ (23,192)
Loss from equity method investment, net
$ (77) —  —  —  77  —  —  —  —  —  —  $ — 
Total non-GAAP adjustments $ 60  $ (9) $ —  $ 77  $ 20,748  $ 8,628  $ 5,455  $ 25  $ 381  $ 85,273 
(1)    Adjusted effective tax rate was approximately 24.3% for the three months ended September 30, 2024. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $23,192 and the denominator is $95,253, which equals adjusted net income of $72,061 plus adjusted income tax expense.

12


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

Three months ended September 30, 2023
GAAP amount Adjustments Adjusted
non-GAAP amount
Interest, net (Gain) loss on sale of business (Gain) loss on investments, net (Income) loss from equity method investments, net Amortization Share-based compensation Acquisition, integration, and other costs Disposal related costs Lease asset impairments and other charges Goodwill impairment on business
Direct costs
$ (55,526) $ —  $ —  $ —  $ —  $ 158  $ 76  $ $ —  $ —  $ —  $ (55,287)
Sales and marketing $ (125,062) —  —  —  —  —  323  1,056  —  —  $ (123,679)
Research, development, and engineering $ (17,597) —  —  —  —  —  840  227  —  —  $ (16,527)
General, administrative, and other related costs
$ (99,269) —  —  —  —  32,986  5,535  3,169  1,626  1,485  —  $ (54,468)
Goodwill impairment on business $ (56,850) —  —  —  —  —  —  —  —  —  56,850  $ — 
Interest expense, net $ (2,817) 388  (538) —  —  —  —  —  —  —  —  $ (2,967)
Loss on investments, net $ (6,019) —  —  6,019  —  —  —  —  —  —  —  $ — 
Other (loss) income, net $ (3,571) —  5,115  —  —  —  —  —  —  —  $ 1,544 
Income tax expense (1)
$ (5,335) (52) (1,144) (1,554) —  (8,074) 39  (3,123) (489) (796) —  $ (20,528)
Income from equity method investment, net
$ 90  —  —  —  (90) —  —  —  —  —  —  $ — 
Total non-GAAP adjustments $ 336  $ 3,433  $ 4,465  $ (90) $ 25,070  $ 6,813  $ 1,334  $ 1,144  $ 689  $ 56,850 
(1)     Adjusted effective tax rate was approximately 22.9% for the three months ended September 30, 2023. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $20,528 and the denominator is $89,601, which equals adjusted net income of $69,073 plus adjusted income tax expense.














13



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

Nine months ended September 30, 2024
GAAP amount Adjustments Adjusted non-GAAP amount
Interest, net (Gain) loss on sale of business (Gain) loss on investments, net (Income) loss from equity method investments, net Amortization Share-based compensation Acquisition, integration, and other costs Disposal related costs Lease asset impairments and other charges Goodwill impairment on business
Direct costs
$ (152,900) $ —  $ —  $ —  $ —  $ 246  $ 191  $ 335  $ —  $ —  $ —  $ (152,128)
Sales and marketing $ (369,184) —  —  —  —  —  2,865  5,706  —  —  —  $ (360,613)
Research, development, and engineering $ (49,824) —  —  —  —  —  2,930  2,590  40  —  —  $ (44,264)
General, administrative, and other related costs
$ (296,558) —  —  —  —  82,537  24,647  8,177  511  1,370  —  $ (179,316)
Goodwill impairment on business $ (85,273) —  —  —  —  —  —  —  —  —  85,273  $ — 
Interest expense, net $ (7,597) 96  —  —  —  —  —  —  —  —  —  $ (7,501)
Loss on sale of business
$ (3,780) —  3,780  —  —  —  —  —  —  —  —  $ — 
Loss on investments, net $ (7,654) —  —  7,654  —  —  —  —  —  —  —  $ — 
Other income (loss), net
$ 2,530  —  (4,903) —  —  —  —  (537) —  —  —  $ (2,910)
Income tax expense $ (27,760) (24) 1,226  (577) —  (20,771) (4,798) (4,731) (94) (332) —  $ (57,861)
Income from equity method investment, net
$ 8,095  —  —  —  (8,095) —  —  —  —  —  —  $ — 
Total non-GAAP adjustments $ 72  $ 103  $ 7,077  $ (8,095) $ 62,012  $ 25,835  $ 11,540  $ 457  $ 1,038  $ 85,273 
(1)     Adjusted effective tax rate was approximately 23.9% for the nine months ended September 30, 2024. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $57,861 and the denominator is $242,133, which equals adjusted net income of $184,272 plus adjusted income tax expense.
14


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

Nine months ended September 30, 2023
GAAP amount Adjustments Adjusted non-GAAP amount
Interest, net (Gain) loss on sale of business (Gain) loss on investments, net (Income) loss from equity method investments, net Amortization Share-based compensation Acquisition, integration, and other costs Disposal related costs Lease asset impairments and other charges Goodwill impairment on business
Direct costs
$ (148,677) $ —  $ —  $ —  $ —  $ 543  $ 246  $ 191  $ —  $ —  $ —  $ (147,697)
Sales and marketing $ (360,916) —  —  —  —  —  2,285  3,128  —  —  $ (355,499)
Research, development, and engineering $ (53,328) —  —  —  —  —  2,581  535  —  —  $ (50,209)
General, administrative, and other related costs
$ (302,481) —  —  —  (1,500) 100,037  19,281  7,497  1,835  2,583  —  $ (172,748)
Goodwill impairment on business $ (56,850) —  —  —  —  —  —  —  —  —  56,850  $ — 
Interest expense, net $ (17,780) 7,808  (538) —  —  —  —  —  —  —  —  $ (10,510)
Loss on investments, net $ (29,203) —  —  29,203  —  —  —  —  —  —  —  $ — 
Other loss, net
$ (5,982) —  5,233  —  —  —  —  —  —  —  —  $ (749)
Income tax expense $ (11,180) (1,907) (1,174) (7,325) 375  (25,092) (3,582) (4,864) (542) (1,064) —  $ (56,355)
Loss from equity method investment, net $ (9,665) —  —  —  9,665  —  —  —  —  —  —  $ — 
Total non-GAAP adjustments $ 5,901  $ 3,521  $ 21,878  $ 8,540  $ 75,488  $ 20,811  $ 6,487  $ 1,300  $ 1,519  $ 56,850 
(1)     Adjusted effective tax rate was approximately 23.8% for the nine months ended September 30, 2023. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $56,355 and the denominator is $236,731, which equals adjusted net income of $180,376 plus adjusted income tax expense.
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  $ 105,960  $ —  $ 232,082 
Less: Purchases of property and equipment (28,129) (25,504) (25,843) —  (79,476)
Free cash flow $ 47,429  $ 25,060  $ 80,117  $ —  $ 152,606 

2023
Q1 Q2 Q3 Q4 YTD
Net cash provided by operating activities
$ 115,307  $ 39,728  $ 72,808  $ 92,119  $ 319,962 
Less: Purchases of property and equipment (30,017) (25,233) (27,226) (26,253) (108,729)
Free cash flow
$ 85,290  $ 14,495  $ 45,582  $ 65,866  $ 211,233 


16
EX-99.2 3 zdq32024earningspresenta.htm EX-99.2 zdq32024earningspresenta
www.ziffdavis.com©2024 Ziff Davis. All rights reserved. THIRD QUARTER 2024 RESULTS November 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. These forward-looking statements are based on management’s current expectations or beliefs as of November 7, 2024 (“Release Date”) 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 the Company’s filings with the Securities and Exchange Commission (“SEC”). For a more detailed description of the risk factors and uncertainties affecting the Company, refer to our 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 provided in this presentation, including those regarding our 2024 financial guidance, are based on limited information available to the Company as of the Release Date and are subject to change. Although management’s expectations may change after the Release Date, the Company undertakes no obligation to revise or update these statements. 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 the Company’s 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 customer; • 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 $341.0 $353.6 Q3 2023 Q3 2024 3.7% $113.7 $124.7 Q3 2023 Q3 2024 $1.50 $1.64 Q3 2023 Q3 2024 9.6% 9.3% 1. See "Supplemental Information" for non-GAAP reconciliations. Adjusted EBITDA (1) (in millions) Adjusted diluted EPS (1) Revenues (in millions) Q3 2024 Consolidated Financial Snapshot


 
5 $183 $194 Q3 2023 Q3 2024 5.8% $756 $753 TTM Q3 2023 TTM Q3 2024 (0.4)% 2022 2023 2024 Quarterly Advertising and Performance Marketing Metrics Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Net Revenue Retention (2) 92.0% 91.2% 89.8% 88.9% 87.1% 91.6% 90.5% 91.8% Customers (3) 2,044 1,737 1,924 1,785 1,943 1,631 1,682 1,733 Quarterly Revenue per Customer (4) $118,370 $89,857 $91,000 $102,525 $119,975 $95,695 $101,273 $111,722 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 $145 $147 Q3 2023 Q3 2024 1.8% $569 $584 TTM Q3 2023 TTM Q3 2024 2.7% 2022 2023 2024 Quarterly Subscription and Licensing Metrics (2) Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Customers (3) 3,143 3,175 3,231 3,300 3,266 3,343 3,420 3,490 Average Quarterly Revenue per Customer (4) $44.69 $44.78 $43.75 $43.92 $44.77 $44.55 $41.74 $42.21 Churn Rate (5) 4.02% 3.30% 3.52% 3.20% 2.86% 3.09% 3.61% 2.85% 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 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Organic Revenues (1) (7%) (6%) (6%) 0% (2%) 0% (5%) (2%) Total Revenues (3%) (3%) (3%) 0% (2%) 2% (2%) 4% Organic Growth (1) 1. The Company includes revenue from an acquired business in 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) September 30, 2024 Cash and Cash Equivalents $ 386 Long-term Investments 153 Total Cash and Investments $ 539 4.625% High-Yield Notes $ 460 1.75% Convertible Notes 149 3.625% Convertible Notes 263 Total Gross Debt (1) $ 872 Multiple of Q3 2024 TTM Adj. EBITDA Gross Debt $ 872 1.8x Gross Debt less Cash $ 486 1.0x Gross Debt less Cash and Investments $ 333 0.7x Ziff Davis Capital Structure 1. Reflects the face amount of the outstanding debt.


 
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; (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; (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 September 30, 2024 2023 Net loss $ (48,577) $ (30,971) Interest expense, net 4,024 2,817 Loss on investments, net — 6,019 Other loss, net 2,633 3,571 Income tax expense 12,539 5,335 Loss (income) from equity method investments, net 77 (90) Depreciation and amortization 51,351 55,854 Share-based compensation 10,161 6,774 Acquisition, integration, and other costs 6,705 4,457 Disposal related costs (22) 1,633 Lease asset impairments and other charges 527 1,485 Goodwill impairment on business 85,273 56,850 Adjusted EBITDA $ 124,691 $ 113,734 Non-GAAP reconciliation: Adjusted EBITDA


 
14 $ in 000's Ziff Davis Three months ended September 30, 2024 2024 Per diluted share (1) 2023 Per diluted share (1) Net loss $ (48,577) $ (1.11) $ (30,971) $ (0.67) Interest, net 60 — 336 0.01 (Gain) loss on sale of business (9) — 3,433 0.07 Loss on investments, net — — 4,465 0.10 Loss (income) from equity method investments, net 77 — (90) — Amortization 20,748 0.47 25,070 0.55 Share-based compensation 8,628 0.20 6,813 0.15 Acquisition, integration, and other costs 5,455 0.13 1,334 0.03 Disposal related costs 25 — 1,144 0.02 Lease asset impairments and other charges 381 0.01 689 0.01 Goodwill impairment on business 85,273 1.94 56,850 1.23 Adjusted net income $ 72,061 $ 1.64 $ 69,073 $ 1.50 Non-GAAP reconciliation: Adjusted net income and Adjusted diluted EPS 1. The reconciliation of Net income (loss) per diluted share to Adjusted net income per diluted share may not foot since each is calculated independently.


 
15 Q3 2024 GAAP amount Interest, net (Gain) loss on sale of business (Gain) loss on investments, net (Income) loss from equity method investments, net Amortization Share-based compensation Acquisition, integration, and other costs Disposal related costs Lease asset impairments and other charges Goodwill impairment on business Adjusted non-GAAP amount $ in 000's Direct costs $(53,243) $– $– $– $– $59 $68 $64 $– $– $– $(53,052) Sales and marketing $(127,418) – – – – – 1,014 3,216 – – – $(123,188) Research, development, and engineering $(15,255) – – – – – 769 1,096 – – – $(13,390) General, administrative, and other related costs $(101,695) – – – – 28,444 8,310 2,329 (22) 527 – $(62,107) Goodwill impairment on business $(85,273) – – – – – – – – – 85,273 $– Interest expense, net $(4,024) 80 – – – – – – – – – $(3,944) Other loss, net $(2,633) – (13) – – – – – – – – $(2,646) Income tax expense (1) $(12,539) (20) 4 – – (7,755) (1,533) (1,250) 47 (146) – $(23,192) Loss from equity method investment, net $(77) – – – 77 – – – – – – $– Total non-GAAP adjustments $60 $(9) $— $77 $20,748 $8,628 $5,455 $25 $381 $85,273 Q3 2023 GAAP amount Interest, net (Gain) loss on sale of business (Gain) loss on investments, net (Income) loss from equity method investments, net Amortization Share-based compensation Acquisition, integration, and other costs Disposal related costs Lease asset impairments and other charges Goodwill impairment on business Adjusted non-GAAP amount $ in 000's Direct costs $(55,526) $– $– $– $– $158 $76 $5 $– $– $– $(55,287) Sales and marketing $(125,062) – – – – – 323 1,056 4 – – $(123,679) Research, development, and engineering $(17,597) – – – – – 840 227 3 – – $(16,527) General, administrative, and other related costs $(99,269) – – – – 32,986 5,535 3,169 1,626 1,485 – $(54,468) Goodwill impairment on business $(56,850) – – – – – – – – – 56,850 $– Interest expense, net $(2,817) 388 (538) – – – – – – – – $(2,967) Loss on investments, net $(6,019) – – 6,019 – – – – – – – $– Other (loss) income, net $(3,571) – 5,115 – – – – – – – $1,544 Income tax expense (2) $(5,335) (52) (1,144) (1,554) – (8,074) 39 (3,123) (489) (796) – $(20,528) Income from equity method investment, net $90 – – – (90) – – – – – – $– Total non-GAAP adjustments $336 $3,433 $4,465 $(90) $25,070 $6,813 $1,334 $1,144 $689 $56,850 Reconciliation of GAAP to Non-GAAP Financial Measures 1. Adjusted effective tax rate was approximately 24.3% for the three months ended September 30, 2024. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $23,192 and the denominator is $95,253, which equals adjusted net income of $72,061 plus adjusted income tax expense. 2. Adjusted effective tax rate was approximately 22.9% for the three months ended September 30, 2023. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $20,528 and the denominator is $89,601, which equals adjusted net income of $69,073 plus adjusted income tax expense.


 
16 $ in 000's Ziff Davis Three months ended September 30, Nine months ended September 30, 2024 2023 2024 2023 Net cash provided by operating activities $ 105,960 $ 72,808 $ 232,082 $ 227,843 Less: Purchases of property and equipment (25,843) (27,226) (79,476) (82,476) Free cash flow $ 80,117 $ 45,582 $ 152,606 $ 145,367 Non-GAAP reconciliation: Free Cash Flow


 
17 Digital Media 2022 2023 2024 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Customers (1)(2) 1,638 1,715 1,808 1,905 1,908 2,037 2,148 2,239 Average quarterly revenue per customer (2)(3) $39.28 $40.34 $37.74 $37.73 $38.92 $36.07 $33.86 $34.56 Churn rate (2)(4)(5) 4.23% 3.57% 3.69% 3.14% 2.37% 2.97% 3.19% 2.59% Cybersecurity and Martech 2022 2023 2024 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Customers (1)(6) 1,505 1,460 1,423 1,395 1,358 1,306 1,272 1,251 Average quarterly revenue per customer (3) $49.84 $50.01 $51.43 $52.37 $52.98 $57.79 $54.25 $55.99 Churn rate (4) 3.87% 3.17% 3.38% 3.28% 3.38% 3.22% 4.03% 3.13% Consolidated Total 2022 2023 2024 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Customers (1)(2)(6) 3,143 3,175 3,231 3,300 3,266 3,343 3,420 3,490 Average quarterly revenue per customer (2)(3) $44.69 $44.78 $43.75 $43.92 $44.77 $44.55 $41.74 $42.21 Churn rate (2)(4)(5) 4.02% 3.30% 3.52% 3.20% 2.86% 3.09% 3.61% 2.85% 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. The metric includes the sale of perpetual software licenses, revenue for which is recorded at a point-in time rather than over-time. 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. 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.